OPINION
Opinion by
This аppeal arises from a dispute over the ownership of motor vehicles. In November 2000, Unlimited, 1 an automobile leasing company, and U.S. Bank signed a Dealer Agreement whereby U.S. Bank would provide funding for Unlimited’s purchase of vehicles in exchange for an assignment of Unlimited’s interest in the lease agreemеnts to those vehicles. In September 2002, Unlimited approached Prestige Ford, a dealership in Garland, about purchasing eight Ford motor vehicles that it intended to then lease to STV, Inc. Unlimited and STV signed lease agreements for the vehicles that same month. The lease agreements required STV to make its payments to U.S. Bank. STV took possession of the vehicles pending the sale from Prestige Ford to Unlimited. Prestige Ford contends it loaned the vehicles to STV pending the sale to Unlimited, and U.S. Bank contends the delivery of the vehicles to STV was effectively the delivery to Unlimited pursuant to a sale.
In October, U.S. Bank gave Unlimited a check for over $155,000 as payment for the vehicles. Unlimited in turn tendered a check to Prestige Ford. Unknown to U.S. Bank, the check from Unlimited to Prestige Ford was dishonored. When Prestige Ford was unable to collect from Unlimited, Prestige Ford asked STV to return the vehicles. STV returned the vehicles to Prestige Ford and also stoрped making lease payments to U.S. Bank. Prestige Ford then sold or leased the vehicles to persons unrelated to this lawsuit.
US Bank sued Prestige Ford for conversion and declaratory judgment claiming *275 that it has superior title to the vehicles. US Bank claimed its title was superior to Prestige Ford’s because U.S. Bank attainеd all right, title and interest in the vehicles when Unlimited and STV executed the lease agreements and because U.S. Bank was a good faith purchaser and/or buyer in the ordinary course of business. See Tex. Bus. & Com.Code Ann. § 2.401(a), 2.403(a), & 2.403(b) (Vernon 1994). US Bank sued STV claiming STV breached its contract when it stopped making lease payments.
In response, Prestige Ford аrgued that it was the legal owner of the vehicles because U.S. Bank never received the certificates of title to the vehicles and because Prestige Ford never sold the vehicles to Unlimited. STV argued its lease agreements with Unlimited failed for lack of consideration.
All parties filed for summary judgment on their respective claims. After a hearing, the trial court denied U.S. Bank’s motion and granted Prestige Ford and STVs joint motion on the conversion and breach of contract claims and granted Prestige Ford’s supplemental motion on the declaratory judgment action without stating the grounds for its decision. US Bank appеals the trial court’s judgment in favor of Prestige Ford and STV. For the reasons that follow, we affirm in part and reverse and remand in part.
STANDARD OF REVIEW
When both parties move for summary judgment, each bears the burden of establishing it is entitled to judgment as a matter of law.
City of Garland v. Dallas Morning News,
Analysis
A. Conversion Claim Against Prestige Ford
In its first and second issues, U.S. Bank argues the trial court erred by granting Prestige Ford’s motion for summary judgment and denying its motion for summary judgment because U.S. Bank proved it has superior title to the vehicles. US Bank argues three theories in support of its claim: (1) U.S. Bank acquired title to the vehicles pursuant to its Dealer Agreemеnt when Unlimited executed the lease agreements with STV, (2) U.S. Bank was a good faith purchaser for value, 2 and (3) U.S. *276 Bank was a buyer in the ordinary course of business. 3
In the summary judgment proceedings below, U.S. Bank argued it proved the elements of conversion against Prestige Ford as a matter of law. And Prestige Ford argued it disproved the first element of U.S. Bank’s conversion claim — lеgal ownership — as a matter of law.
Conversion is the wrongful exercise of dominion or control over the property of another in denial of, or inconsistent with, the other’s rights in the property.
Morey v. Page,
To prevail on its motion, U.S. Bank was required to prove, as a matter of law, that (1) it owned, had legal possession of, or was entitled to possession of the vehicles; (2) Prestige Ford assumеd and exercised dominion and control over the vehicles in an unlawful and unauthorized manner, to the exclusion of and inconsistent with U.S. Bank’s rights; and (3) Prestige Ford refused U.S. Bank’s demand for return of the vehicles.-
See Huffmeyer v. Mann,
Under its first theory, U.S. Bank argued it has superior title to the vehicles because its Dealer Agreement with Unlimited provided an assignment of Unlimited’s interest when Unlimited executed the lease agreements with STV. The Dealer Agreement provided:
[Unlimited] shall forward the executed documents to [US Bank] and such execution shall constitute a sale and assignment of all [Unlimitedj’s right, title and interest in the ... Vehicle....
The lease agreements between Unlimited and STV stated:
The authorized signature of [Unlimited] below has the effect of ... assigning to [US Bank] ... all right, title and interest in, and to the Vehicle....
U.S. Bank argued that these provisions proved that when Unlimited and STV executed the lease аgreements, U.S. Bank received all of Unlimited’s rights in the vehicles, whether or not U.S. Bank had received the certificates of title to the vehicles.
Under its second theory, U.S. Bank argued it received title to the vehicles as a good faith purchaser when Prestige Ford delivered the vehicles in exchange for Unlimited’s dishоnored check, which it argued *277 completed Prestige Ford’s performance under the contract. See Tex. Bus. & Com. Code Ann. §§ 2.401(b) & 2.403(a)(2). And under its third theory, U.S. Bank argued it received title to the vehicles as a buyer in the ordinary course of business when Prestige Ford entrusted the vehicles to Unlimited, a dealer in automobiles, by delivering them to STV. See id. § 2.403(b).
Prestige Ford argued that no valid assignment occurred from Unlimited to U.S. Bank under the Dealer Agreement because Prestige Ford never sold the vehicles to Unlimited, so Unlimited never acquired any right, title, or interest in the vehicles that it could assign, and because U.S. Bank did not fund the assignment and did not obtain certificates of title from Unlimited. Prestige Ford also argued U.S. Bank was not a good faith purchaser for value under sеction 2.401(b) and 2.403(a)(2) or a buyer in the ordinary course of business under section 2.403(b) because Prestige Ford never delivered the vehicles to U.S. Bank or to Unlimited; Prestige Ford loaned the vehicles to STV, which was not in the business of selling or leasing vehicles; and Prestige Ford never had a transaction of purchase with Unlimited.
Criticаl to the parties’ arguments under any of U.S. Bank’s theories is the nature of the transfer of the vehicles from Prestige Ford to STV. U.S. Bank contends the transfer was pursuant to a sale under the business and commerce code, while Prestige Ford contends the transfer was only a loan pending a sale.
As summary judgment evidence, U.S. Bаnk presented the affidavit of Carol Man-ry who stated that U.S. Bank funded over $155,000 for the purchase of the vehicles and that Prestige Ford refused to turn over the vehicles’ title documents to U.S. Bank. She also concluded that U.S. Bank had superior title to the vehicles by virtue of the Dealer Agreement with Unlimited.
Prestige Ford prеsented the affidavit of Charlie Nixon, its general manager, who stated that Unlimited expressed an interest in purchasing the eight vehicles but that “no contract for sale was ever entered between Prestige Ford and Cars Unlimited” and that “[w]hile this proposed sale was pending Prestige Ford loaned the eight vehicles in quеstion to STV.” Nixon explained in his affidavit that it is common practice in the industry for a car dealership to permit a prospective purchaser to drive a vehicle pending financing and execution of the required contracts, but that the purchaser understands the dealership still owns the vehicle.
Prestigе Ford also presented the affidavit of Debi Arnette, STV’s business manager. She stated that “STV received the eight Ford vehicles from Unlimited Cars, pending the receipt of the proper registration and tags for the vehicles, which was to be provided by Unlimited Cars.” She did not state that STV received the cars from Prestige Ford оr that STV received the cars on loan.
As a result, the summary judgment evidence does not resolve the dispute over the nature of the transfer of the vehicles from Prestige Ford to STV. Under all of U.S. Bank’s theories in its first and second issues (Dealer Agreement, good faith purchaser for value, and buyer in the ordinary coursе of business), it would have acquired only the interest Unlimited acquired. But if Unlimited never acquired any interest in the vehicles, then it had no interest to assign to U.S. Bank.
For example, under U.S. Bank’s theory, if Prestige Ford loaned the vehicles to STV, then there would be no delivery under a transaction of purchase under sections 2.401 and 2.403(a)(2) by which Unlimited would have received title to the *278 vehicles: Similarly, if Prestige Ford loaned the vehicles to STV and did not deliver them to Unlimited, it did not entrust the vehicles to a merchant who deals in goods of that kind under ■ section 2.403(b).,
The dispute about this issue demonstrates there are genuine issues of material fact precluding summary judgment fоr either party. As a result, we do not reach the merits of the underlying legal theories raised by U.S. Bank and Prestige Ford, but leave that to the trial court on remand.
We conclude the trial court erred by granting Prestige Ford’s motion for summary judgment on U.S. Bank’s conversion claim. We sustain U.S. Bank’s first and second points of error.
B. Declaratory Judgment Claim
In its third issue, U.S. Bank аrgues the trial court erred by granting Prestige Ford’s supplemental motion for summary judgment and denying its motion for summary judgment on U.S. Bank’s claim for declaratory relief that it has superior title to the vehicles.
The Declaratory Judgment Act provides a means by which a party “may have determined any question of construction оr validity arising under [a] statute ... [or] contract ... and obtain a declaration of rights, status, or other legal relations thereunder.” Tex. Civ. Pra.c. & Rem. Code Ann. § 37.004 (Vernon 1997). It is “not available to settle disputes already pending before a court.”
BHP Petroleum Co., Inc. v. Millard,
US Bank initially sued Prestige Ford for, among other things, conversion. As we have discussed, to prove conversion, ownership of or a superior right of possession to the vehicles must be shown. In its second amended petition, U.S. Bank sought declaratory relief that it is the legal owner of the vehicles, exemplary damages, and attorney’s feеs. US Bank had no need for declaratory relief on the ownership issue because it had already placed that issue before the trial court in its original and first amended petitions.
See BHP Petroleum,
Prestige Ford argues U.S. Bank’s declaratory judgment action was an effort to recover attorney’s fees in an action where attorney’s fees otherwise are not authorized.
See Hageman/Fritz, Byrne, Head & Harrison, L.L.P. v. Luth,
We conclude the trial court did not err by granting Prestige Ford’s supplemental motion for summary judgment on U.S. Bank’s declaratory judgment action. We overrule U.S. Bank’s third issue.
C. Breach of Contract Against STY
In its fourth issue, U.S. Bank argues the trial court erred in granting STV’s motion for summary judgment and denying its motion because STV breached the lease agreements when it stopped making lease payments. STV raised the affirmative defense of failure of consideration because it never received the registration and tags to the vehicles from Unlimited and because Unlimited could not have leased the vehicles to STV having never owned them. 4
Generally, failure of consideration occurs when, because of some supervening cause after an agreement is reached, the promised performance fails.
Stewart v. United States Leasing Corp.,
After STV executed the lease agreements, it paid over $23,000 in taxes and registration for the lease of the eight Ford vehicles yet never received the registration and also lost the use of the vehicles when Prestige Ford demanded their return. Having concluded that there is a fact issue about whether Unlimited ever acquired any right, title or interest in the vehicles so that it could in turn lease the vehicles to STV, we also conclude there is a fact issue as to whether the contract between STV and Unlimited failed for lack of cоnsideration.
We conclude the trial court erred by granting STV’s motion for summary judgment. We sustain U.S. Bank’s fourth issue.
Conclusion
We conclude the trial court erred by granting Prestige Ford’s motion for summary judgment on U.S. Bank’s conversion claim. We also conclude the trial court erred by granting STV’s motion for summary judgment on U.S. Bank’s breach of contract claim. We sustain U.S. Bank’s first, second, and fourth issues.
We conclude the trial court did not err by granting Prestige Ford’s supplemental motion for summary judgment and denying U.S. Bank’s motion on U.S. Bank’s declaratory judgment action. We overrule U.S. Bank’s third issue.
Accordingly, we affirm that part of the judgment ordering that U.S. Bank take nothing by way of its declaratory judgment action against Prestige Ford and STV. We reverse that part of the judgment ordering that U.S. Bank take nothing by way of its conversion and breach of contract claims against Prestige Ford and STV and remand those causes to the trial court for further proceedings consistent with this opinion.
Notes
. Unlimited is referred to as both Unlimited Cars and Cаrs Unlimited. For clarity, we will refer to it as Unlimited. Unlimited and U.S. Bank entered into an agreed judgment and Unlimited is not a party to this appeal.
. US Bank cites section 2.403(a)(2) of the business and commerce code, which states in part:
A purchaser of goods acquires all title which his transferor had... .A person with voidable title has power to transfer a good *276 title to a good faith purchaser for value. When goods have been delivered under a transaction of purchase the purchaser has such power even though ... (2) the delivery was in exchange for a check which is later dishonored....
Tex. Bus. & Com.Code Ann. § 2.403(a)(2) (Vernon 1994).
. US Bank cites the following provision оf the business and commerce code:
Any entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entruster to a buyer in the ordinary course of business....
Tex. Bus. & Com.Code Ann. § 2.403(b).
. STV contends that it raised these issues separately in its motion for summary judgment and that U.S. Bank failed to respond to the first argument. However, a fair reading of STV’s motion for summary judgment and U.S. Bank’s reply shows that U.S. Bank responded to all issues raised by STV.