1

In The

Court of Appeals

Ninth District of Texas at Beaumont

________________

NO. 09-19-00375-CV 

________________

ACE REAL PROPERTY INVESTMENTS, LP AND FORMOSA

PROPERTY MANAGEMENT COMPANY, INC., Appellants

V.

CEDAR KNOB INVESTMENTS, LLC, ET AL, Appellees

________________________________________________________________________

On Appeal from the 284th District Court

Montgomery County, Texas

Trial Cause No. 16-12-14842-CV

________________________________________________________________________

MEMORANDUM OPINION

The Court’s opinion and judgment of October 28, 2021 are withdrawn and the 

following are substituted in their place. The motion for rehearing is denied.

Ace Real Property Investments, LP (Ace) sued Cedar Knob Investments, LLC 

(Cedar Knob) and its President, Carmen Williams (Williams) for breach of contract, 

common law fraud, fraud by non-disclosure, statutory fraud, negligence, negligent 

misrepresentation, gross negligence and malice, and violations of the Texas Real 
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Estate Licensing Act arising out of a commercial real estate transaction in 

Montgomery County, Texas.

1, 2 Ace sought to hold Cedar Knob liable for Williams’s 

acts through respondeat superior and further sought to pierce the corporate veil and 

hold Williams personally liable. Cedar Knob counterclaimed against Ace and filed 

a third-party petition against Ace’s general partner, Formosa Property Management 

Company, Inc. (Formosa), for attorney’s fees. Cedar Knob also filed third-party 

claims against Home Run Realty—Commercial & Residential, Inc. (Home Run), 

Ace’s real estate broker.

The trial court granted Cedar Knob and Williams’s traditional and noevidence motions for summary judgment on all Ace’s claims and subsequently 

signed a final judgment disposing of all parties and claims. The final judgment 

provided Ace take nothing on all claims against Cedar Knob and Williams, and it 

awarded $249,513.90 in attorney’s fees to Cedar Knob and Williams, post-judgment 

1 Ace also sued Cedar Knob’s broker, Marcus & Millichap (“M&M”) but nonsuited that entity before judgment.

2Additionally, Ace named Linda Chaison as a defendant but never served her, 

and she never appeared. Although neither party contends that the judgment is not 

final or appealable, we review sua sponte jurisdictional issues. See M.O. Dental Lab 

v. Rape, 139 S.W.3d 671, 673 (Tex. 2004). “A judgment is final for purposes of 

appeal if it disposes of all pending parties and claims in the record[.]” Lehmann v. 

Har–Con Corp., 39 S.W.3d 191, 195 (Tex. 2001). Here, the Final Judgment 

“disposes of all claims and all parties before the Court.” Likewise, Ace 

acknowledges it never served Chaison, and she never appeared in its brief. Our 

review indicates this is a final, appealable judgment as nothing in the record indicates 

Ace intended to serve Chaison, and she never appeared or filed any pleadings. See 

M.O. Dental Lab, 139 S.W.3d at 674.
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interest, and costs. The final judgment provided that these awards could be recovered 

jointly and severally from Ace and its general partner, Formosa. Ace and Formosa 

appeal the trial court’s judgment in favor of Cedar Knob and Williams, the trial 

court’s order denying Plaintiff’s request for an extension of deadlines, and the trial 

court’s order granting Defendants’ motion to strike Ace’s economic expert. Ace and 

Formosa raise multiple issues, which can be grouped as challenges to: (1) the 

granting of the no-evidence summary judgment motion; (2) the granting of the 

traditional summary judgment motion; and (3) the granting of the motion to strike 

Ace’s economic expert and refusal to extend deadlines. We will affirm in part and

reverse in part.

I. Background

A. The Parties and Property

In 2010, Cedar Knob acquired a commercial property, formerly an auto 

dealership, from Buckalew Chevrolet. Cedar Knob renovated the property, turning 

it into multiple office spaces, and leased it to various tenants. In May 2015, Ace 

purchased the property, now known as Wilson Road Plaza, from Cedar Knob.

The purchase of the property began in late 2014, when Cedar Knob’s broker, 

M&M prepared an Offering Memorandum for the property, which listed the 

property’s CAP rate as 9.88% and provided a current rent roll and expense 

information. The Offering Memorandum also included a “Lease Expiration 
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Summary” showing that more than 84% of the existing tenants’ leases would expire 

by December of 2016. After seeing the property listed online, Shelley Chen, a real 

estate investor and Ace’s managing partner, had her agent, Nolan Nix of Home Run,

contact M&M to obtain more information on the property. As Ace’s primary 

decision-maker and a former C.P.A., Chen is an experienced real estate investor.

Chen’s agent, Nix, described her as a “very experienced” buyer and cited her 

extensive history of purchasing and selling properties. On February 23, 2015, upon 

Ace’s request for information on the property, M&M forwarded the Offering 

Memorandum, and the parties executed a letter of intent.

B. The Contract

On February 27, 2015, Ace executed a contract to purchase the property for 

$4,500,000, using the standard Texas Association of Realtors (TAR) Commercial 

Property Contract Form. That contract required the seller, Cedar Knob, to provide 

the following information: 

(a) a current rent roll of all leases affecting the Property certified by 

Seller as true and correct;

(b) copies of all current leases pertaining to the Property, including any 

modifications, supplements, or amendments to the leases;

(c) a current inventory of all personal property to be conveyed under 

this contract and copies of any leases for such personal property;

(d) copies of all notes and deeds of trust against the Property that Buyer 

will assume or that Seller will not pay in full on or before closing;

(e) copies of all current service, maintenance, and management 

agreements relating to the ownership and operation of the Property;

(f) copies of current utility capacity letters from the Property’s water 

and sewer service provider;
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(g) copies of all warranties and guaranties relating to all or part of the 

Property;

(h) copies of fire, hazard, liability, and other insurance policies that 

currently relate to the Property;

(i) copies of all leasing or commission agreements that currently relate 

to the tenants of all or part of the Property;

(j) a copy of the “as-built” plans and specifications and plat of the 

Property;

(k) copies of all invoices for utilities and repairs incurred by Seller for 

the Property in the 24 months immediately preceding the effective date;

(l) a copy of Seller’s income and expense statement for the Property 

from 1/1/12 to current;

(m) copies of all previous environmental assessments, geotechnical 

reports, studies, or analyses made on or relating to the Property; 

(n) real & personal property tax statements for the Property for the 

previous 2 calendar years; and

(o) Tenant reconciliation statements including, operating expenses, 

insurance and taxes for the Property from 1/1/12 to current; and

(p) Tax Form 8825 from 1/1/12 to 12/31/14.3

The contract further required Cedar Knob to provide estoppel certificates from each 

tenant leasing space in the property. The contract gave Ace the “unrestricted right to

terminate” the contract during the 30-day feasibility period, and Ace agreed to accept 

the property “in its present condition[.]” 

C. Cedar Knob’s Disclosures and Ace’s Inspection

Beginning on March 2, 2015, Cedar Knob provided documentation through 

M&M regarding the property. The information included lease agreements for all the 

tenants and a summary of the tenants with lease amounts, lease commencement 

3 Tax form 8825 was not part of the pre-printed form, rather the parties 

handwrote it into the contract and initialed it.
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dates, and lease expiration dates. The leases showed almost no tenants provided 

security deposits, which Nix acknowledged could be a sign of weaker tenants. 

Further, each lease contained a provision indicating that the lease was binding and 

inured to the benefit of the parties and “their respective . . . successors[] and 

permitted assigns.” The leases also contained the following provision:

F. Waiver: Landlord’s delay, waiver, or non-enforcement of 

acceleration, contractual or statutory lien, rental due date, or any other 

right will not be deemed a waiver of any other or subsequent breach by 

Tenant or any other term in this lease.

Cedar Knob sent Tax Form 8825 with additional explanations for the 2012

and 2013 income years indicating Cedar Knob had not always collected the full 

rental amounts specified in the leases, including “[m]ost of the tenants had free rent 

for several months in the beginning[]” because Cedar Knob was “still in the 

renovation stages on some parts of the center.” Both 8825s reflected losses. M&M 

forwarded a 2014 profit and loss statement, noting that it “is the rough 2014 P&L[]” 

and to “[k]eep in mind this is not approved by his CPA.” Cedar Knob also provided 

TAR form estoppel certificates with the lease amounts and additional written 

notations where rent reductions had been given. Cedar Knob continued answering

questions Ace sent through the agents, provided lease addendums for one of the 

larger tenants, and revised information about the common area maintenance charges 

(CAM) under the lease agreements between Cedar Knob and its tenants.
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As late as April 27, 2015, M&M sent inquiries from Ace to Cedar Knob 

regarding rent roll discrepancies with the estoppel certificates. Cedar Knob sent a 

spreadsheet showing the monthly rent amount with the estoppel certificates and 

referenced the notes on the estoppels, which M&M sent to Ace’s agent. Cedar Knob 

also explained, “New owner can charge what is on the lease agreements.” Finally, 

Williams provided an affidavit regarding any documentation and information they 

did not have required to be produced under the terms of the contract, and Nix 

testified Cedar Knob sent all requested information “per the contract[.]”

Chen and Nix visited the property and spoke with tenants. Nix testified they 

were never denied access to the property. In March of 2015, Ace inspected the

property and subsequently negotiated a $77,648 price reduction for necessary roof 

repairs. Nix sent an email to M&M complaining that it appeared the CAM amounts 

should be more, the seller was collecting less, and expressed concern about the 

buyer’s ability to collect “the actual CAMs.” Chen testified that after inspecting the 

property, they adjusted the price for a roof issue, and proceeded with closing.

On May 4, 2015, the parties extended the closing date again when Cedar Knob 

forwarded additional information which included its profit and loss statement for 

January 2015 through April 2015 and revised CAM spreadsheet through April 2015.

Prior to closing, Chen requested all the tenant files for the property, which Cedar 

Knob forwarded. Before closing, Cedar Knob also sent a spreadsheet of the May 
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rent collected for each tenant and included copies of checks showing the amounts 

paid, which showed several tenants paying less than the specified lease rental

amounts but consistent with the notes in the estoppel certificates and other written 

communications between the parties.

The summary judgment evidence also included Ace’s agent’s testimony 

agreeing that Cedar Knob provided estoppel certificates which made clear some 

tenants paid lower rent than the leases required. Nix testified this “was a concern, 

and it - - it was on the cover letter of the estoppel.” He said that “[t]here was no 

amendment to the lease . . . they were disclosed . . . the breaks or discounts they were 

given[]” and Shelly “was aware of everything that was going on[.]” Nix managed 

the property following the sale and testified that all but one space was leased and,

with one exception, the new tenants were paying higher rent than the previous 

tenants.

D. Appraisal

Several weeks before closing, Ace’s lender commissioned a third-party 

appraisal, which valued the property at $4,520,000. The appraisers utilized two 

different approaches to value the property, the income capitalization approach, and 

the sales comparison approach. The former considered cash flow, comparable rental 

rates from other properties, and historical operating information from the property, 

while the latter considered comparable improved sales and compared them to the 
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subject property. The appraisers then “[r]econciled the results from the applicable 

approaches to value into a reasonable value conclusion.”

E. Other Evidence Regarding Post-Purchase Rental Amounts

After closing, several tenants moved out and/or did not want to pay the rental 

amount in the leases; however, Chen represented that Ace could not enforce the 

leases since Cedar Knob had been collecting lesser amounts. Further, she explained 

Ace could not enforce the leases, “[b]ecause people will move out.”

F. Litigation and Discovery Issues

On December 23, 2016, Ace filed the underlying litigation. In its live 

pleading, Ace alleged that Cedar Knob “intentionally and/or negligently provided 

Plaintiff with false and/or misleading information” that Cedar Knob knew was false

when provided, preventing it from making an informed decision. Ace alleged it 

relied on the information when calculating the purchase price of the property, and 

had Ace known the information was false or misleading, it would not have purchased 

the property or paid “substantially less than $4,500,000.” Ace alleged causes of 

action for breach of contract, common law fraud, fraud by non-disclosure, statutory 

fraud, negligence, negligent misrepresentation, gross negligence and malice, and 

violations of the Texas Real Estate Licensing Act against Cedar Knob.4 Ace sought 

4 With respect to the real estate broker and agent defendants, Ace also alleged 

violations of the Texas Real Estate Licensing Act.
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to hold Cedar Knob liable for Williams’s acts through respondeat superior and 

further sought to pierce the corporate veil and hold Williams personally liable for its 

alleged damages. In addition to Ace’s complaint that it would have paid less for the 

property, it also seemed to assert a claim for loss of anticipated future rents. During 

discovery, Ace provided spreadsheets of alleged rent losses, which it included as 

part of the summary judgment evidence. 

On September 21, 2017, the trial court entered a Discovery Control Plan, and

set the case for trial on October 1, 2018. Ace filed a motion for continuance, which 

the trial court granted, moving the trial setting to May 13, 2019. On July 13, 2018, 

the parties signed an Agreed Scheduling Order that required Ace to designate its 

expert witnesses by November 2, 2018, that closed the discovery period on March 

1, 2019, and that set the matter for trial on May 13, 2019.

On November 2, 2018, Ace filed its Amended Designation of Experts. Ace 

designated Dr. Gary Kronrad, an economist, as an expert witness. The designation 

provided the following:

Dr. Kronrad is expected to testify as to [the] method of calculating and 

the amount of Plaintiff’s economic damages. Dr. Kronrad will add the 

dollars Plaintiff should have collected for the plaza, according to

Defendants, and then subtract it from the dollars actually collected for 

the plaza after the purchase. This is the uncollected amount. Dr. 

Kronrad will then divide the uncollected amount by the capitalization 

rate, which will equal the amount Plaintiff overpaid for the plaza. Dr. 

Kronrad is expected to testify as to the damages for the difference in 

the square footage of the plaza, according to the Defendant, and the 

actual square footage of the plaza. Dr. Kronrad is expected to testify as
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to the damages for the cost of undisclosed defects to the plaza that were 

discovered after the purchase of the plaza.5

On February 7, 2019, the parties filed an Agreed Motion for Continuance 

which the trial court granted, extending the discovery deadline to June 7, 2019, and 

setting the matter for its third trial setting of October 7, 2019. On May 24, 2019, Ace 

filed a motion to extend the discovery and dispositive motions deadlines.6 Cedar 

Knob opposed the extension of these deadlines and argued that Ace failed to exercise 

diligence in obtaining depositions, and with three different law firms representing 

Ace, there was no reason discovery should not be completed timely. The trial court 

denied Ace’s motion to extend the deadlines.

After M&M filed a motion to strike Ace’s expert, Dr. Gary Kronrad, Cedar 

Knob joined the motion. The defendants explained they took Chen’s deposition on 

November 28, 2018 and designated their experts a few weeks later. Beginning on 

January 2, 2019, the defendants requested deposition dates for Dr. Kronrad from 

Ace’s attorney. Ace failed to provide dates for Dr. Kronrad’s deposition prior to the 

close of the discovery period despite at least ten requests for dates. Following a 

hearing, the trial court granted the motion to strike. The court explained during the 

hearing that Ace had the responsibility to provide the defense with an expert report 

5 Ace’s designation for Chen used virtually identical language regarding the

calculation of damages.

6 Five days later, Ace filed a motion to quash Gary Kronrad’s deposition.
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or present the expert for deposition. The trial court also noted that there were nine 

other depositions in the case covered by another attorney representing Ace, and 

another attorney likewise could have covered Kronrad’s deposition if lead counsel 

was unavailable. The trial court also explained that extending the deadlines would 

be for a matter of months, not weeks, and the “case is old[,]” and would inevitably 

result in moving the trial again. Cedar Knob argued that Ace failed to comply with 

Rule 195.3, and there was no basis for an extension under Rule 252. The trial court 

explained that the rule requires the expert to “be produced reasonably promptly[,]”

and “there has been no emergent situation that would justify the delays that have 

gone on between December and now with this expert.”

II. Ace’s Expert and Deadline Extension

A. Expert 

Given the nature of Cedar Knob’s summary judgment and assertions there is 

no evidence to show that it caused damages to Ace, we first address Ace’s appellate 

complaint that the trial court improperly struck its economist and damages expert, 

Dr. Gary Kronrad. The motion to strike was filed pursuant to Texas Rule of Civil 

Procedure Rule 215, which governs discovery abuses and sanctions. See generally

Tex. R. Civ. P. 215. Rule 215.2 permits the trial court to impose sanctions if a party 

abuses the discovery process. See id. 215.2. 
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We review a trial court’s ruling on a motion for sanctions for an abuse of 

discretion. Cire v. Cummings, 134 S.W.3d 835, 838 (Tex. 2004); City of San Antonio 

v. Segura, No. 04-95-00348-CV, 1996 WL 525577, at *2 (Tex. App.—San Antonio 

1996, no writ) (reviewing a trial court’s decision on a motion to strike as a sanction 

for an abuse of discretion). When a party designates a person to testify and fails to 

comply with proper discovery requests, a trial court may enter an order prohibiting 

the disobedient party from introducing designated matters into evidence. See Tex. 

R. Civ. P. 215.2(b)(4); Adams v. Allstate Cty. Mut. Ins. Co., 199 S.W.3d 509, 513 

(Tex. App.—Houston [14th Dist.] 2006, pet. denied). Rule 215 sanctions must be 

just under the circumstances. In re Ford Motor Co., 988 S.W.2d 714, 718 (Tex. 

1998). We consider two factors in determining whether the trial court abused its 

discretion by ordering an unjust sanction: (1) whether there is a direct relationship 

between the offensive conduct and the sanctions; and (2) whether the trial court 

ordered an excessive sanction. See id. at 718. A discovery abuse sanction should not 

be more severe than necessary to satisfy its legitimate purpose. TransAmerican Nat. 

Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991). A trial court must consider 

the availability of less stringent sanctions and “whether such sanctions would fully 

promote compliance.” Adams, 199 S.W.3d at 513 (citing Powell, 811 S.W.2d at 

917). A party’s failure to promptly make an expert available for deposition is 
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sanctionable conduct under Texas Rule of Civil Procedure 215. Vaughn v. Ford 

Motor Co., 91 S.W.3d 387, 391-92 (Tex. App.—Eastland 2002, pet. denied).

In the present case, the trial court’s order striking Dr. Kronrad was directly 

related to Ace’s failure to present him for deposition or provide the opposing parties 

with an expert report, despite him being noticed for deposition on three occasions 

and after months of repeated requests for his oral deposition by the various 

defendants in the litigation. The trial court noted during the hearing that the case was 

very old, and that by extending any discovery deadlines, invariably, the case’s trial 

setting would have to be moved again.7 Further, the trial court explained that Ace 

had multiple attorneys representing it available to cover such a deposition in the 

event lead counsel was unavailable. Cf. Wilborn v. GE Marquette Med. Sys., Inc., 

163 S.W.3d 264, 270 (Tex. App.—El Paso 2005, pet. denied) (upholding a denial of 

a motion for continuance because appellants were represented by “able counsel” at 

all times). 

Ace failed to provide deposition dates until more than two months after the 

discovery period expired per the agreed docket control order and approximately 

7 At the hearing, Cedar Knob’s attorney explained that Ace’s attorney once 

again sought to extend the discovery deadline, which the various defendants would 

not agree to. When that happened, Ace’s attorney unilaterally noticed ten depositions 

of various defense witnesses. Those depositions took place, and another attorney 

representing Ace handled those depositions.
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eight months after Dr. Kronrad had been designated as an expert witness.

8 The trial 

court considered other lesser sanctions, including having Ace pay for an expedited 

deposition transcript; however, the trial court indicated it was not a viable option. 

The trial judge reasoned it would be considerable time and expense for the other 

party despite Ace’s representation it would present the witness at a more convenient 

location. The trial court reasoned that the second date proposed by Ace for taking 

the expert’s deposition was the day of the deadline for challenging any expert 

witness, which necessarily meant that deadline would have to be extended. The trial 

court explained that by granting Ace’s relief of extending the discovery deadline, 

“there will be no other option but to move the trial deadline” and “there has been no 

emergent situation that would justify the delays that have gone on between 

December and now with this expert.” The exclusion of testimony as a sanction will 

not be reversed unless the error probably resulted in the rendition of an improper 

judgment. See Tex. R. App. P. 44.1; see also Spohn Hosp. v. Mayer, 104 S.W.3d 

878, 883-84 (Tex. 2003) (explaining sanction resulted in “harmful error” and 

“probably caused the rendition of an improper judgment”). “[T]he exclusion or 

admission is likely harmless if the evidence was cumulative, or the rest of the 

evidence was so one-sided that the error likely made no difference in the judgment.”

8 In its brief, Ace concedes that counsel’s failure to promptly present Kronrad 

for deposition warranted some sanction.
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State v. Cent. Expressway Sign Assocs., 302 S.W.3d 866, 870 (Tex. 2009). Although 

Kronrad was Ace’s only retained expert, the damage model as listed in Ace’s 

disclosures, was “basic math,” and Ace had designated both Kronrad and Chen to 

testify regarding the damages calculation.9 “[A]n owner’s valuation testimony 

fulfills the same role that expert testimony does.” Nat. Gas Pipeline Co. of Am. v. 

Justiss, 397 S.W.3d 150, 157 (Tex. 2012). “[W]hen an entity’s agent testifies to the 

market value of the organization’s property, the legal effect is that the actual owner 

of the property is testifying.” Reid Rd. Mun. Util. Dist. No. 2 v. Speedy Stop Food 

Stores, Ltd., 337 S.W.3d 846, 853 (Tex. 2011). Accordingly, Ace could have had 

Chen, an accountant familiar with the commercial real estate transactions generally 

and specifically, this one, provide testimony as to damages. See Justiss, 397 S.W.3d 

at 157; Reid Rd., 337 S.W.3d at 853. Because another witness could have testified 

to this “basic math” damage model, we conclude that the trial court’s sanction was 

not unjust.

Based on this record, we conclude the trial court’s sanction of striking Ace’s 

expert did not constitute an abuse of discretion. “A just sanction must be directed 

against the abuse and toward remedying the prejudice suffered by the innocent 

party.” Adams, 199 S.W.3d at 513 (citing Powell, 811 S.W.2d at 917). The sanction 

9 The language in Ace’s designation of Chen and Kronrad regarding the 

damages calculation was virtually identical.
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was directly related to the party’s repeated refusal to promptly present its expert for 

deposition within the discovery period as required by the rules or otherwise provide 

an expert report. The record established the trial court considered a lesser sanction 

and articulated its reasoning for why it believed the lesser sanction would not be 

viable here, because the deadline had passed and would necessarily impede the other 

parties’ ability to effectively meet the deadline to timely challenge the expert absent 

moving the trial setting. We overrule this issue.

B. Deadline Extension

Ace contends that given the critical nature of Kronrad’s testimony, the trial 

court should have extended the deadlines to “prevent manifest injustice.” A trial 

“court may modify a discovery control plan at any time and must do so when the 

interest of justice requires.” Tex. R. Civ. P. 190.5. For many of the same reasons 

discussed above, the trial court did not abuse its discretion in refusing to modify the 

discovery deadlines in this case to allow Ace to comply with the discovery rules that 

would have allowed Dr. Kronrad to testify. The trial court explained that Ace, 

without good cause, failed to present Kronrad for deposition before the close of the 

discovery period despite repeated requests and did not provide the opposing parties 

with a written expert report from Dr. Kronrad. The trial could have also reasonably 

concluded Kronrad’s testimony would have been cumulative of Chen’s. Therefore, 

“the interest of justice” did not require the trial court to extend the deadlines to allow 
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compliance with the discovery rules in this instance. Having determined the trial 

court did not abuse its discretion by refusing to modify the docket control order and 

extend the deadlines, we overrule this issue.

III. Summary Judgment

A. Motion and Response

Cedar Knob filed a combined no-evidence and traditional motion for 

summary judgment. The trial court granted the traditional and no-evidence motion 

in its entirety without specifying the basis for its ruling. For Ace’s breach of contract, 

negligence, gross negligence, negligent misrepresentation, common law fraud, 

statutory fraud, and fraud by non-disclosure claims, Cedar Knob listed the requisite 

elements for each cause of action and asserted there was no evidence that its actions 

caused damage or injury to Ace.10 With respect to the corporate veil piercing theory, 

Cedar Knob listed the required elements and asserted there was no evidence of any 

of them. Cedar Knob also argued there was no evidence as to each element of Ace’s

claim under the Texas Real Estate Licensing Act. Finally, Cedar Knob moved for 

traditional summary judgment on its claim for attorney’s fees pursuant to the 

10 As to the gross negligence claim, Cedar Knob argued that because there was 

no evidence on the negligence claim, the gross negligence claim failed as a matter 

of law. Cedar Knob further argued there was no evidence that there was objectively 

an extreme degree of risk or that Cedar Knob had actual, subjective knowledge of 

the risk yet proceeded with conscious indifference to the rights, welfare, and safety 

of others.
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contract. In support of this claim, Cedar Knob provided its attorney’s affidavit and 

invoices.

Ace responded to the summary judgment motion. Among other things, the

evidence in the summary judgment record included the appraisal report, Williams’s 

testimony, Chen’s affidavit, Chen’s deposition testimony, Nix’s deposition 

testimony, Nate Newman’s deposition testimony (M&M agent), Aaron Morris’s 

deposition testimony (M&M), leases, estoppel certificates with explanations, 

various emails, spreadsheets, and a consolidated Profit & Loss Statement covering 

2012 to 2015 (“Omnibus P&L”) with transaction details regarding past income.

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Ace’s arguments focus on the Omnibus P&L, which it asserts Cedar Knob 

had while negotiating the sale of the property but failed to produce. The Omnibus 

P&L with transaction detail showed in one document what Cedar Knob had been 

collecting in rent. Ace contended that document showed Cedar Knob had been 

collecting less rent than the rent rolls and leases showed, and if it had known, it 

would not have purchased the property or would have purchased it for substantially 

less, and it suffered future loss rents as a result. The summary judgment record 

established that Cedar Knob provided documents that showed discrepancies in the 

rental amounts prior to the sale, and specifically, that Cedar Knob had collected less 

11 The parties refer to this as an “Omnibus 2013 – 2015 Profit Loss Statement.”
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rents from some tenants, but despite admitting it was aware of these discrepancies,

Ace proceeded to close on the transaction.

B. Standard of Review

We review a trial court’s decision to grant summary judgment de novo.

See Shell Oil Co. v. Writt, 464 S.W.3d 650, 654 (Tex. 2015) (citation omitted). We 

view the evidence in the light most favorable to the nonmovant. Id. (citing City of 

Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005)). In doing so, we indulge every 

reasonable inference and resolve any doubts against the motion. See City of Keller, 

168 S.W.3d at 824. “Undisputed evidence may be conclusive of the absence of a 

material fact issue, but only if reasonable people could not differ in their conclusions 

as to that evidence.” Buck v. Palmer, 381 S.W.3d 525, 527 (Tex. 2012) (citation 

omitted).

After adequate time for discovery, a party may move for summary judgment 

on the ground that there is no evidence of one or more essential elements of a claim 

on which the adverse party has the burden of proof. Tex. R. Civ. P. 166a(i). The 

motion must specify which elements have no evidence. See id. “The court must grant 

the motion unless the respondent produces summary judgment evidence raising a 

genuine issue of material fact.” Id.

When a no-evidence motion has been filed, it “is essentially a pretrial directed 

verdict, and we apply the same legal sufficiency standard in reviewing a no-evidence 
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summary judgment as we apply in reviewing a directed verdict.” King Ranch, Inc. 

v. Chapman, 118 S.W.3d 742, 750–51 (Tex. 2003) (citations omitted). A no 

evidence point will be sustained when (a) there is a complete absence of evidence of 

a vital fact, (b) the court is barred by rules of law or of evidence from giving weight 

to the only evidence offered to prove a vital fact, (c) the evidence offered to prove a 

vital fact is no more than a mere scintilla, or (d) the evidence conclusively establishes 

the opposite of the vital fact. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 

711 (Tex. 1997) (citation omitted).

A party moving for traditional summary judgment has the burden of 

establishing there is no genuine issue of material fact as to at least one requisite 

element of the asserted cause of action and that it is entitled to judgment as a matter 

of law. See Tex. R. Civ. P. 166a(c); Lightning Oil Co. v. Anadarko E&P Onshore, 

LLC, 520 S.W.3d 39, 45 (Tex. 2017) (citations omitted). When the trial court fails 

to specify the grounds on which it granted summary judgment, we must affirm if any 

of the summary judgment grounds are meritorious. FM Props. Operating Co. v. City 

of Austin, 22 S.W.3d 868, 872–73 (Tex. 2000) (citation omitted). If a defendant files 

a combined traditional and no-evidence summary judgment motion, we first review 

the judgment under the no-evidence standards of Rule 166a(i). See Ford Motor Co. 

v. Ridgway, 135 S.W.3d 598, 600–01 (Tex. 2004); Werth v. Johnson, 294 S.W.3d 

908, 909 (Tex. App.—Beaumont 2009, no pet.). Accordingly, we limit our 
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discussion of the summary judgment grounds to those necessary for the resolution 

of this appeal. See FM Props., 22 S.W.3d 872-73; Tex. R. App. P. 47.1.

C. Breach of Contract, Common Law Fraud, Statutory Fraud, Fraud by 

Nondisclosure, Negligent Misrepresentation, Negligence and Gross Negligence

Claims: No Evidence Cedar Knob Caused Ace Injury or Damage

To prove a claim for breach of contract, a party must establish: (1) formation 

of a valid contract; (2) performance by the plaintiff; (3) breach by the defendant; and 

(4) “the plaintiff sustained damages as a result of the breach.” USAA Tex. Lloyds Co.

v. Menchaca, 545 S.W.3d 479, 501 n.21 (Tex. 2018). The requisite elements of a 

negligence cause of action are legal duty, a breach of that duty, and damages 

proximately caused by the breach. Gharda USA, Inc. v. Control Solutions, Inc., 464 

S.W.3d 338, 352 (Tex. 2015) (citation omitted). For a breach of contract claim for 

the sale or purchase of real estate, the measure of damages is the difference between 

the contract price and the property’s market value at the time of the breach. Juen v. 

Rodriguez, 615 S.W.3d 362, 366 (Tex. App.—El Paso 2020, no pet.).

Gross negligence has two additional requirements: (1) viewed objectively 

from the actor’s standpoint, the complained-of act or omission involves an extreme 

degree of risk, considering the probability and magnitude of potential harm to others; 

and (2) the actor has actual, subjective awareness of the risk involved, but proceeds 

regardless in conscious indifference to the rights, safety, or welfare of others. Lee

Lewis Constr., Inc. v. Harrison, 70 S.W.3d 778, 785 (Tex. 2001).
23

Common-law fraud requires a plaintiff to prove “‘a material 

misrepresentation, which was false, and which was either known to be false when 

made or was asserted without knowledge of its truth, which was intended to be acted 

upon, which was relied upon, and which caused injury.’” See Zorrilla v. Aypco 

Constr. II, LLC, 469 S.W.3d 143, 153 (Tex. 2015) (quoting Formosa Plastics Corp. 

USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 47 (Tex.1998)). Texas 

recognizes two measures of damages for fraud, which include the out-of-pocket 

measure and the benefit-of-the-bargain measure. Id. (citation omitted).

Ace also pleaded a cause of action for statutory fraud.

The elements of statutory fraud in a real estate transaction are a: “(1) 

false representation of a past or existing material fact, when the false 

representation is (A) made to a person for the purpose of inducing that 

person to enter into a contract; and (B) relied on by that person in 

entering into that contract; or (2) false promise to do an act, when the 

false promise is (A) material; (B) made with the intention of not 

fulfilling it; (C) made to a person for the purpose of inducing that person 

to enter into a contract; and (D) relied on by that person in entering into 

that contract.”

Grove v. Franke, No. 09-18-00119-CV, 2019 WL 5243152, at *3 (Tex. App.—

Beaumont Oct. 17, 2019, pet. denied) (mem. op.) (quoting Flynn v. Keller Williams 

Inc., No. 04-12-00307-CV, 2013 WL 979196, at *2 (Tex. App.—San Antonio Mar. 

13, 2013, no pet.) (mem. op.); see also Tex. Bus. & Com. Code Ann. § 27.01(a). A 

person who makes the false representation described by the statute commits fraud 
24

and is liable to the person defrauded for actual damages. See Tex. Bus. & Com. Code 

Ann. § 27.01(b).

“The elements of fraud by nondisclosure require (1) a deliberate failure to 

disclose material facts, (2) by one who had a duty to disclose such facts, (3) to 

another who was ignorant of the facts and did not have an equal opportunity to 

discover them, (4) with the intent the listener act or refrain from acting, and (5) the 

listener relies on the nondisclosure resulting in injury.” Wise v. SR Dallas, LLC, 436 

S.W.3d 402, 409 (Tex. App.—Dallas 2014, no pet.) (citations omitted).

To establish a claim for negligent misrepresentation, a plaintiff must prove

“(1) the representation is made by a defendant in the course of its business, or in a 

transaction in which it has a pecuniary interest; (2) the defendant supplies false 

information for the guidance of others in their business; (3) the defendant did not 

exercise reasonable care or competence in obtaining or communicating the 

information; and (4) the plaintiff suffers pecuniary loss by justifiably relying on the 

representation.” E.R. Dupuis Concrete Co. v. Penn Mut. Life Ins. Co., 137 S.W.3d 

311, 321 (Tex. App.—Beaumont 2004, no pet.) (citing Federal Land Bank Ass’n v. 

Sloane, 825 S.W.2d 439, 442 (Tex. 1991)).

Cedar Knob moved for traditional and no-evidence motion for summary 

judgment on each of the foregoing causes of action asserted by Ace. See Tex. R. Civ. 

P. 166a(c), (i). Because there is no evidence Cedar Knob’s alleged 
25

misrepresentations or nondisclosure caused Ace damages, we will affirm the trial 

court’s summary judgment as to the breach of contract, negligence, gross negligence, 

common-law fraud, statutory fraud, fraud by non-disclosure, and negligent 

misrepresentation claims. To defeat summary judgment on each of its alleged 

claims, Ace was required to submit summary judgment proof that it suffered 

damages caused by Cedar Knob’s conduct. See Zorrilla, 469 S.W.3d at 153 

(common-law fraud); Menchaca, 545 S.W.3d at 501 n.21 (breach of contract); Van 

Duren v. Chife, 569 S.W.3d 176, 191 (Tex. App.—Houston [1st Dist.] 2018, no pet.) 

(“Damages are a necessary element of claims for negligence [and] negligent 

misrepresentation[.]”); BP American Prod. Co. v. Zaffirini, 419 S.W.3d 485, 506 

(Tex. App.—San Antonio 2013, pet. denied) (“Like common-law fraud, fraud by 

non-disclosure includes the elements of justifiable reliance and damage.”); Reardon 

v. LightPath Techs., Inc., 183 S.W.3d 429, 442 (Tex. App.—Houston [14th Dist.] 

2005, pet. denied.) (statutory fraud has essential element of damages). Ace provided 

no proper summary judgment evidence that it suffered any damages caused by Cedar 

Knob’s alleged misrepresentations or other alleged actions. 

The only evidence in the record regarding the property’s value was a real 

estate appraisal commissioned by Ace’s lender that valued the property at 

$4,520,000, which was higher than what Ace purchased it for. While a property 

owner may testify to her property’s value, that testimony must be based on its market 
26

value and cannot be speculative or conclusory. See Justiss, 397 S.W.3d at 159–61; 

Van Duren, 569 S.W.3d at 191. Here, the evidence does not show that the individual 

who appraised the real estate was the owner of the property Cedar Knob sold. An 

opinion of market value without the factual basis of such is no more than a scintilla 

of evidence. See Van Duren, 569 S.W.3d at 191–92 (explaining that market value 

opinion that did not include information that did not provide information about 

comparable sales and proximity to the property, timeframe of other sales and actual 

sale price, or other evidence supporting the affidavit such as appraisals or tax values 

was “no evidence of the market value”). Here, Ace wholly failed to provide proper 

summary judgment evidence of the property’s market value at the time of the 

purchase to support its claims that the value was less than it paid.

Ace challenges the appraisal contending that it relied on the same incorrect 

information Cedar Knob produced to Ace.12 Even if we assume this to be true, Ace 

did not provide any controverting evidence of the property’s market value. Neither 

Chen’s affidavit nor her deposition testimony provides evidence regarding the 

property’s market value at the time of purchase or explains how the purportedly false 

information impacted the property’s value. Chen generally averred that Ace would 

12 The appraisal report shows that the appraisers utilized two different 

appraisal methods, and one of them did not consider the rental income of the property 

in that analysis.
27

not have purchased the property or “would have paid a substantially lower price [for] 

the Wilson Road Plaza.” 

[P]roperty valuations may not be based solely on a property 

owner’s ipse dixit. An owner may not simply echo the phrase “market 

value” and state a number to substantiate his diminished value claim; 

he must provide the factual basis on which his opinion rests. This 

burden is not onerous, particularly in light of the resources available 

today. Evidence of price paid, nearby sales, tax valuations, appraisals, 

online resources, and any other relevant factors may be offered to 

support the claim. But the valuation must be substantiated; a naked 

assertion of “market value” is not enough. Of course, the owner’s 

testimony may be challenged on cross-examination or refuted with 

independent evidence. But even if unchallenged, the testimony must 

support a verdict, and conclusory or speculative statements do not.

Justiss, 397 S.W.3d at 159. With a no-evidence motion for summary judgment, 

simply undermining the movant’s evidence does not meet the non-movant’s burden 

to come forward with more than a scintilla of evidence on the challenged element. 

See Ridgway, 135 S.W.3d at 600 (explaining nonmovant “must produce summary 

judgment evidence raising a genuine issue of material fact to defeat” a no evidence 

motion). 

Ace also seems to seek damages for lost rents, as Chen testified that had she 

collected all the rents pursuant to the leases, Ace would have suffered no damages. 

We note an actionable false misrepresentation cannot be the promise of future rents 

or income, as they are generally statements of opinion rather than fact. See Kaheel 

Props., LLC v. Azteca Entm’t Enters., Inc., No. 11-16-00137-CV, 2018 WL 

2976357, at *6 (Tex. App.—Eastland June 14, 2018, no pet.) (mem. op.); Tukua 
28

Invs., LLC v. Spenst, 413 S.W.3d 786, 800 (Tex. App.—El Paso 2013, pet. denied).

The exceptions to this are if the opinion is known to be false by the speaker, and the 

speaker has special knowledge of past or present facts that the other party does not. 

Tukua Invs., 413 S.W.3d at 800. These do not apply here, as Cedar Knob disclosed 

by the estoppel certificates and accompanying notations that for some tenants, it did 

not collect the full rental amounts in the leases. The evidence in the record shows 

that Ace had knowledge that some tenants were paying less than the leased rental 

amounts.

Furthermore, as in Tukua, the leases at issue remained valid and enforceable. 

Ace failed to present any evidence otherwise. Instead, it made a calculated decision 

to not enforce the tenants’ leases for fear it would cause others to move out and now 

turns to Cedar Knob to collect that money. Accordingly, there is no evidence that 

any false misrepresentation caused Ace’s damages in the form of loss future rental 

income. Chen asserted in her affidavit that Cedar Knob overstated the amount of 

collected annual income for the property by $283,904.02 and testified in her 

deposition that she was unable to collect over $189,000 in rental income. Yet, neither

Chen’s affidavit nor any of the deposition testimony established how this alleged 

misrepresentation caused Ace’s loss of future rental income as opposed to Ace’s 

decision not to enforce the leases. Chen’s affidavit does not address the spreadsheets 

Ace produced purporting to show lost rental income. Despite detailed explanations 
29

about the testimony Chen would offer regarding the calculation of damages in its 

Responses to Request for Disclosure, neither Chen nor anyone else offered such 

testimony regarding this damage calculation either by affidavit, deposition or 

otherwise in proper response to the motion for summary judgment. 

Having determined there was no evidence that Cedar Knob’s alleged 

misrepresentations or nondisclosure caused Ace damages, the trial court properly 

granted Cedar Knob’s no-evidence summary judgment on these claims. See Tex. R. 

Civ. P. 166a(i). We overrule these issues. 

D. Texas Real Estate Licensing Act Claim

Cedar Knob also moved for no-evidence summary judgment on Ace’s Texas 

Real Estate Licensing Act claim. In a real estate transaction, a party is not liable for 

a license holder’s misrepresentation or concealment of a material fact unless the 

party: “(1) knew of the falsity of the misrepresentation or concealment; and (2) failed 

to disclose the party’s knowledge of the falsity of the misrepresentation or 

concealment.” Tex. Occ. Code Ann. § 1101.805(d). Cedar Knob argued that there 

was no evidence M&M misrepresented or concealed material facts during the 

property’s sale, that Cedar Knob knew of such a misrepresentation, or that Cedar 

Knob failed to disclose their knowledge of the falsity. We agree that the record is 

devoid of evidence establishing that M&M misrepresented or concealed material 

facts in the sale of the property. Having challenged the lack of evidence as to this 
30

element, Ace was required to come forward with more than a scintilla of evidence

of summary judgment evidence establishing that M&M misrepresented or concealed 

material facts or that Cedar Knob had knowledge of such a misrepresentation. See

Tex. R. Civ. P. 166a(i). Ace failed to do so. Instead, the summary judgment evidence 

established the opposite of this vital fact. The record showed that M&M actively 

conveyed information from Cedar Knob regarding rent collections. In addition to the 

rent rolls that showed the rental amounts specified in the leases, M&M sent estoppel 

certificates and Cedar Knob’s notes explaining that they collected lesser rents from 

some tenants. Ace failed to come forward with evidence creating a genuine issue of 

material fact showing a misrepresentation or concealment by M&M, which Cedar 

Knob knew of and failed to disclose. See Tex. Occ. Code Ann. § 1101.805(d); Tex. 

R. Civ. P. 166a(i). Accordingly, the trial court properly granted Cedar Knob’s noevidence summary judgment on this cause of action. See Tex. R. Civ. P. 166a(i).

E. Corporate Veil-Piercing Theory

Cedar Knob also moved for no-evidence summary judgment on Ace’s 

corporate veil-piercing theory wherein it sought to hold Williams individually liable.

Ace argued the court should pierce the corporate veil, because: (1) Williams caused 

Cedar Knob to be used for the purpose of perpetrating or did perpetrate an actual 

fraud on Ace primarily for her direct personal benefit; (2) organized and operated 

Cedar Knob as a mere tool or business conduit of another; (3) used Cedar Knob to 
31

circumvent a statute; (4) and/or used Cedar Knob to protect against the discovery of 

a crime or to justify a wrong; and/or (5) Cedar Knob was undercapitalized. In its noevidence motion for summary judgment, Cedar Knob argued there was no evidence 

of any of these allegations. 

Cedar Knob is a limited liability company, and Williams acted as its president. 

Members are generally not personally liable for the debts of a limited liability 

company. McCarthy v. Wani Venture, A.S., 251 S.W.3d 573, 590 (Tex. App.—

Houston [1st Dist.] 2007, pet. denied). As a limited liability company, state law 

principles for piercing the corporate veil apply. See id. Therefore, Ace could only 

hold Williams liable for its claims to the extent it pierced the corporate veil. See 

Willis v. Donnelly, 199 S.W.3d 262, 271 (Tex. 2006). Considering the no-evidence 

motion challenging each of Ace’s pleaded corporate veil-piercing theory allegations, 

the burden shifted to Ace to produce more than a scintilla of probative evidence 

creating a genuine issue of material fact on each of these allegations, which it failed 

to do. See Tex. R. Civ. P. 166a(i). The trial court properly granted Cedar Knob’s noevidence motion for summary judgment on the corporate veil-piercing theory. See

id.
32

F. Attorney’s Fees

Cedar Knob also moved for summary judgment on its contractual attorney’s

fees claims in the amount of $249,513.90. The TAR contract between Cedar Knob 

and Ace contained the following provision:

17. ATTORNEY’S FEES: If Buyer, Seller, any broker, or the title 

company is a prevailing party in any legal proceeding brought under or 

with relation to this contract or this transaction, such party is entitled to 

recover from the non-prevailing parties all costs of such proceeding and 

reasonable attorney’s fees. This Paragraph 17 survives termination of 

this contract.

In support of its claim, Cedar Knob included its counsel’s affidavit and 

attached invoices as summary judgment evidence. In the affidavit, counsel averred 

the fees were reasonable and necessary. Having provided this summary judgment 

evidence conclusively establishing its entitlement to fees, the burden shifted to Ace 

to produce evidence creating a genuine issue of material fact regarding the attorney’s

fees. See Tex. R. Civ. P. 166a(c). 

On appeal, Ace argues that Cedar Knob failed to segregate its fees. In its 

summary judgment response, Ace simply argued that the issue of attorney’s fees was 

not ripe, because the trial court had not yet ruled on the summary judgment motion

and objected to the evidence as premature. Ace’s summary judgment response did 

not challenge Cedar Knob’s failure to segregate fees. Failure to segregate attorney’s 

fees in a case with multiple causes of action, only some of which allow for recovery 

of attorney’s fees, can result in an award of zero attorney’s fees. See Green Int’l, Inc. 
33

v. Solis, 951 S.W.2d 384, 389 (Tex. 1997). However, if nobody objects that the fees 

are not segregated, the objection is waived. See id.; Haden v. David J. Sacks, P.C., 

332 S.W.3d 503, 516 (Tex. App.—Houston [1st Dist.] 2009, pet. denied). Assuming 

without deciding that some of these causes of action did not allow for the recovery 

of attorney’s fees, Ace waived any challenge to Cedar Knob’s failure to segregate. 

See Solis, 951 S.W.2d at 389; Haden, 332 S.W.3d at 516.

Cedar Knob conclusively established its entitlement to attorney’s fees. See

Tex. R. Civ. P. 166a(c). Once the movant establishes no genuine issue of material 

fact exists, and its entitlement to judgment as a matter of law, the burden shifts to 

the nonmovant to raise a fact issue precluding summary judgment. Lujan v. Navistar, 

Inc., 555 S.W.3d 79, 84 (Tex. 2018). Ace failed to present any evidence, in the form 

of controverting affidavit or otherwise, challenging the reasonableness, necessity or 

amount of Cedar Knob’s attorney’s feesthat would create a genuine issue of material 

fact. See id. Failing this, the trial court properly granted summary judgment that Ace 

should pay Cedar Knob’s attorney’s fees. See id.

Although Cedar Knob filed a third-party claim against Formosa asserting that 

it should be liable for its attorney’s fees as Ace’s general partner, the summary 

judgment motion did not request an award of attorney’s fees against Formosa

pursuant to the allegations expressed in Cedar Knob’s Third-Party Petition against 

Formosa, nor did the summary judgment order grant attorney’s fees against 
34

Formosa. The final judgment, however, indicates that Formosa and Ace would be 

jointly and severally liable for Cedar Knob’s attorney’s fees. Because Cedar Knob 

failed to request an award of attorney’s fees against Formosa in its summary 

judgment motion, the trial court improperly granted more relief than requested. See

Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 912 (Tex. 1997) (explaining 

that summary judgment must stand or fall on grounds stated in the motion and 

holding that where movant did not raise ground in motion, it was not entitled to 

summary judgment on that claim); see also Tex. R. Civ. P. 166a(c).

We sustain this issue in part as to the award of the attorney’s fees against 

Formosa. We overrule this issue with respect to the award of attorney’s fees against 

Ace.

IV. Conclusion

We conclude the trial court properly granted Cedar Knob’s no-evidence 

summary judgment on all Ace’s causes of action. We also conclude that the trial 

court properly granted Cedar Knob’s traditional summary judgment on attorney’s

fees as to Ace, but improperly held Formosa jointly and severally liable for such 

attorney’s fees and costs. Accordingly, we reverse the portion of the judgment 

awarding attorney’s fees and costs to Cedar Knob against Formosa and remand the 

case to the trial court to consider Formosa’s liability for attorney’s fees or costs as 

the general partner of Ace, if any. We affirm the remainder of the trial court’s 
35

judgment in favor of Cedar Knob and Williams. Judgment is rendered against the 

sureties on the appellants’ supersedeas bond for the performance of the judgment 

and for costs rendered against the appellants. Tex. R. App. P. 43.5.

AFFIRMED IN PART AND REVERSED AND REMANDED IN PART.

 ________________________________

 CHARLES KREGER 

 Justice

 

Submitted on April 13, 2021

Opinion Delivered January 13, 2022

Before Golemon, C.J., Kreger and Horton, JJ.