* Pursuant to 5TH CIR. R. 47.5, the court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

August 8, 2006

Charles R. Fulbruge III

Clerk

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

No. 04-40638

PORT ELEVATOR BROWNSVILLE, L.C.; SOUTHWEST GRAIN CO., INC.,

Plaintiffs-Counter Defendants-Appellees,

versus

BERSAIN GUTIERREZ; Et Al.,

Defendants,

IVONNE SOTO VEGA,

Defendant-Counter Claimant-Third Party Plaintiff-Appellant,

versus

CRAIG ELKINS, Individually and dba Port Elevator-Brownsville L.C.

and Southwest Grain Co., Inc.,

Third Party Defendant-Appellee.

Appeal from the United States District Court 

for the Southern District of Texas

(1:98-CV-23)

Before BARKSDALE, STEWART, and CLEMENT, Circuit Judges.

PER CURIAM:*

Ivonne Soto Vega appeals the summary judgment awarded Port

Elevator Brownsville, L.C.; Craig Elkins; and Southwest Grain Co.,

Inc., as well as the concomitant denial of her summary–judgment

motion, holding she take nothing on her state-law claims. This
2

extremely protracted litigation arises from Vega’s purchase of corn

and Port Elevator’s handling and disposition of it. VACATED IN

PART; AFFIRMED IN PART; AND REMANDED.

I.

In 1996, Vega, a Mexican citizen, bought approximately 5,000

metric tons of corn from AGI/Akron Group, Inc. (AGI), for $837,000

and directed it be sent to Port Elevator, a grain elevator in

Brownsville, Texas. Vega’s appellate brief asserts she told Bersain

Gutierrez “to see that the corn arrived at Port

Elevator–Brownsville, L.C.”. (As discussed infra, however, it is

unclear whether Vega made any such statement.)

On 31 October 1996, Port Elevator signed a rate and service

contract with Gutierrez of Sysco de Baja S.A. de C.V. and Walter

Puffelis of AGI for unloading corn from rail cars and for its

handling and storage. The contract required a minimum of one

million bushels of corn (25,401 metric tons) be deposited with Port

Elevator; and, in consideration for storing that amount, Port

Elevator offered a reduced storage rate. Under that contract, Port

Elevator could release the corn only upon Gutierrez’ written

instructions.

Three shipments of corn, in excess of 5,000 metric tons, were

delivered by Gutierrez/Sysco and Puffelis/AGI to Port Elevator in

1996; the contractually-required amount of one million bushels was

never delivered. Elevator manager Craig Elkins took delivery for
3

Port Elevator. It subsequently released more than 3,000 metric tons

of corn for Gutierrez, pursuant to his written instructions (as

required by the contract), although he failed to pay the amount owed

under the contract.

Based on the summary-judgment record, it does not appear that

Vega participated in the transactions by which Port Elevator

released corn for Gutierrez. In October 1997, Vega went to Port

Elevator to claim the corn, asserting she had found a buyer. Port

Elevator contested Vega’s ownership, and therefore, refused to

release corn to her.

Instead, in February 1998, for determining the corn’s

ownership, Port Elevator filed a complaint in interpleader against

Vega and Gutierrez, asserting diversity jurisdiction and invoking

Federal Rule of Civil Procedure 22 (allowing joinder of defendants

having claims against plaintiff so plaintiff can avoid double

liability). In conjunction with that complaint, Port Elevator sold

the contested corn, depositing the proceeds in the court’s registry.

In March 1999, Vega moved to dismiss, pursuant to Federal Rule

of Civil Procedure 12(b)(1)-(6), claiming, inter alia: diversity

jurisdiction did not exist because all defendants were citizens and

residents of Mexico; and the court lacked personal jurisdiction over

Vega. This motion was granted that October.

Port Elevator filed an amended interpleader complaint that

November (1999), asserting diversity jurisdiction and adding Sysco
4

as a defendant. In January 2001, Port Elevator filed its second

amended complaint, adding Southwest Grain as a plaintiff and

seeking: (1) “a declaration of the rights, duties, legal relations

and obligations of any interested party arising out of the

[applicable] contract”; (2) breach-of-contract damages of

$81,438.04, plus interest, based on the defendants’ failure to

deposit one million bushels of corn with Port Elevator; and (3)

attorney’s fees.

That same month, Vega answered and counterclaimed for

negligence, conversion, fraud, and violations of the Texas Deceptive

Trade Practices Act (DTPA), alleging Port Elevator and Southwest

Grain were jointly liable for her losses. That February, Vega filed

a third–party complaint against Elkins (the earlier-mentioned

elevator manager), claiming he was liable for the improper

disposition of her corn.

In March 2002, Port Elevator and Vega moved for summary

judgment. Port Elevator claimed Vega was liable for contractual

damages and attorney’s fees; it sought a declaration of the parties’

rights and liabilities, asserting Vega had produced no evidence

supporting her various claims. Vega sought to hold Port Elevator

liable for releasing her corn.

On 30 July 2002, the district court: awarded Port Elevator

summary judgment; and denied it for Vega, ordering she take nothing

on her claims. (Because neither Sysco nor Gutierrez appeared,

default judgment was entered against them in that order.) The court
5

also awarded Port Elevator attorney’s fees, to be later determined,

including under 28 U.S.C. § 1927 and pursuant to Texas law, as

discussed below.

In August 2002, Vega moved for new trial; that same month, she

filed a supplemental new-trial motion. On 14 March 2003, those

motions were denied because they were filed before entry of a final

judgment. In February 2004, Vega filed a motion to reconsider that

denial, which was also denied.

Final judgment was not entered until 30 March 2004. That same

day, an order was entered setting Port Elevator’s awarded attorney’s

fees at $58,200.

II.

Vega claims the district court erred in granting summary

judgment for Port Elevator and denying it for her. She maintains

the court erred by: (1) holding her liable for breach of contract

regarding the corn storage; (2) awarding Port Elevator $81,438.04

in damages; (3) denying her summary judgment and ordering she take

nothing on her state-law claims; and (4) awarding attorney’s fees,

including under § 1927 (attorney who unreasonably multiplies

proceedings liable for the cost and attorney’s fees his conduct

causes) and pursuant to Texas law. The parties agree Texas law

applies in this diversity action.

We review de novo a summary judgment under Federal Rule of

Civil Procedure 56, using the same standard as the district court.
6

E.g., U.E. Tex. One-Barrington, Ltd. v. Gen. Star Indem. Co., 332

F.3d 274, 276 (5th Cir. 2003). Such judgment is proper if “the

pleadings, depositions, answers to interrogatories, and admissions

on file, together with the affidavits, if any, show that there is

no genuine issue as to any material fact and that the moving party

is entitled to a judgment as a matter of law”. FED. R. CIV. P.

56(c). The evidence must be construed in the light most favorable

to the non-movant. E.g., Kee v. City of Rowlett, 247 F.3d 206, 210

(5th Cir.), cert. denied, 534 U.S. 892 (2001). A party opposing

summary judgment may not rest on the pleadings; instead, it must,

inter alia, provide specific facts showing the existence of a

genuine issue for trial. E.g., Ragas v. Tenn. Gas Pipeline Co., 136

F.3d 455, 458 (5th Cir. 1998).

A.

The district court held Vega liable as an undisclosed principal

for the corn-storage and handling contract signed by Gutierrez and

Elkins, ruling that Gutierrez signed in his capacity as Vega’s

agent. Vega contends the court improperly granted Port Elevator

summary judgment on its breach-of-contract claim because the

existence and scope of an agency relationship are questions of fact

for the jury; and that the summary-judgment evidence shows she did

not enter an agency relationship with Gutierrez. In addition, she

claims that, even if summary judgment was proper, the district court

erred in awarding the requested damages and attorney’s fees.
7

1.

Agency is the consensual relationship between parties where the

agent acts on the principal’s behalf and is subject to the

principal’s control. Edwards v. State, 97 S.W.3d 279, 289 (Tex.

App. 2003). Moreover,

[f]or an agency relationship to exist there

must be a meeting of the minds between the

parties to establish the relationship, and

there must be some act constituting the

appointment of one as the agent. The consent

may be express or implied; the intention of the

parties may be ascertained by their conduct.

Lone Star Partners v. Nationsbank Corp., 893 S.W.2d 593, 599-600

(Tex. App. 1994) (internal citation omitted).

Under our precedent, the existence of an agency relationship

in Texas is a mixed question of law and fact. Am. Int’l Trading

Corp. v. Petroleos Mexicanos, 835 F.2d 536, 539 (5th Cir. 1987).

The factfinder determines the parties’ factual relationship; the

court determines whether, under the established facts, an agency

relationship exists as a matter of law. Id. On the other hand, it

appears Texas cases differ on whether the existence of such a

relationship is a factual or legal question. Some treat it as a

factual question. E.g., Jorgensen v. Stuart Place Water Supply

Corp., 676 S.W.2d 191, 194 (Tex. App. 1984). Others allow the court

to make that determination. E.g., Mercedes-Benz of N. Am., Inc. v.

Dickenson, 720 S.W.2d 844, 858 (Tex. App. 1986). In any event, it

is undisputed that, if the facts are not at issue, the court may
8

make an agency determination. See Norton v. Martin, 703 S.W.2d 267,

272 (Tex. App. 1985). This, of course, is consistent with Rule 56,

allowing summary judgment when there are no genuine issues of

material fact and the movant is entitled to a judgment as a matter

of law.

Evidence of an agency relationship may be direct or

circumstantial. Id. The principal in an undisclosed agency

relationship is liable for a contract signed by the agent in the

agent’s name if the agent was acting within the scope of his

authority. See Latch v. Gratty, Inc., 107 S.W.3d 543, 546 (Tex.

2003). Generally, a principal is not liable for a contract when an

agent, who has authority to execute a contract on a principal’s

behalf, exceeds that authority. Cecil v. Zivley, 683 S.W.2d 853,

856 (Tex. App. 1984). Pursuant to Texas law, an agent’s actions

“are not presumed to be within the scope of his authority”. Charles

E. Beard, Inc. v. Cameronics Tech. Corp., 729 F. Supp. 528, 531

(E.D. Tex. 1989), aff’d, 939 F.2d 280 (5th Cir. 1991).

As noted, the district court held Vega liable as an undisclosed

principal for the contract signed by Gutierrez on the ground that

he signed it in his capacity as Vega’s agent. In her January 2001

Original Answer and Counterclaim, Vega alleged she had “instructed

BERSAIN GUTIERREZ to travel to Brownsville, Texas to oversee the

transfer of [Vega’s] corn to PORT ELEVATOR for storage”. (Emphasis

in original.)
9

Based largely on that allegation, the district court ruled

Gutierrez was Vega’s agent. The court erred by considering that

pleading allegation as summary–judgment evidence, especially in the

light of her below-discussed 25 May 2002 declaration. Cf. Geiserman

v. MacDonald, 893 F.2d 787, 793 (5th Cir. 1990) (stating pleadings

cannot be used to create issue of material fact). In any event,

that statement does not demonstrate, for summary-judgment purposes,

that Gutierrez had authority to execute the contract as Vega’s

agent.

In opposition to Port Elevator’s summary-judgment motion, Vega

submitted her above-referenced declaration (pursuant to 28 U.S.C.

§ 1746) “under penalty of perjury”, stating she never authorized

Gutierrez to act as her agent regarding the corn. See DIRECTV, Inc.

v. Budden, 420 F.3d 521, 530-31 (5th Cir. 2005) (stating 28 U.S.C.

§ 1746 creates exception to the rule that unsworn affidavits may not

be used to create a genuine issue of material fact precluding

summary judgment). In that declaration, Vega stated she instructed

AGI to send the corn to Port Elevator, but insisted she never

authorized an agent to enter into any agreement with Port Elevator.

The record does contain some evidence establishing some form

of relationship between Vega and Gutierrez; for example, Gutierrez

signed the “RECEIVED BY” line on invoices for some of the corn Vega

purchased. Viewing the evidence in the requisite light most

favorable to Vega, however, it does not establish, for summary-
10

judgment purposes, that she authorized Gutierrez to enter into the

contract. (In addition, other genuine issues of material fact

exist, including whether Vega’s name appeared on the corn contract

when it was signed and notarized.) Therefore, the summary judgment

regarding Vega’s liability on the contract was improper.

2.

Because we vacate the summary judgment awarded Port Elevator,

we do not reach whether the district court erred in awarding it

approximately $81,000 and attorney’s fees, including as awarded

under § 1927 and pursuant to Texas Civil Practice & Remedies Code

Annotated § 38.001. On remand, the district court should reconsider

the § 1927 award, including the limited persons to whom § 1927 may

be applied. It should also consider whether all the conditions for

awarding fees pursuant to § 38.001(8), including presentment of the

claim to the opposing party, were satisfied. See TEX. CIV. PRAC. &

REM. CODE § 38.002(1) (requiring claimant to present claim to

opposing party before recovering attorney’s fees); see also Jim Howe

Homes, Inc. v. Rogers, 818 S.W.2d 901, 904 (Tex. App. 1991) (holding

allegations in pleading do not constitute presentment).

B.

Vega also contends the district court erred in denying her

summary judgment and holding she take nothing on her negligence,

conversion, fraud, and DTPA claims. Summary judgment against those

claims was proper. (Port Elevator’s brief, also filed on behalf of
11

Elkins and Southwest Grain, contends there is no evidence either

that Elkins acted in his individual capacity or that Southwest Grain

controlled Port Elevator. This issue is minimally briefed. In any

event, because we affirm the dismissal of Vega’s claims, we need not

address this issue.)

1.

Under Texas law, a negligence claim has three elements: (1)

the defendant owed the plaintiff a duty; (2) the defendant breached

that duty; and (3) damages were proximately caused by that breach.

D. Houston, Inc. v. Love, 92 S.W.3d 450, 454 (Tex. 2002). Whether

a duty exists under a given set of facts is a threshold question of

law in any negligence action. Mission Petroleum Carriers, Inc. v.

Solomon, 106 S.W.3d 705, 710 (Tex. 2003). In determining whether

a duty exists, courts “consider various factors, including the risk,

foreseeability, and likelihood of injury weighed against the social

utility of the actor's conduct, the magnitude of the burden of

guarding against the injury, and the consequences of placing the

burden on the defendant”. Id. (internal quotation omitted).

Although she denies having the above-discussed written

contract with Port Elevator, Vega claims Port Elevator, as a

warehouseman, owed her a duty to safeguard her corn and not release

it without her authorization. Essentially, she claims Port Elevator

breached a bailment agreement. Such an agreement requires either

an express or implied contract. Sisters of Charity of the Incarnate
12

Word v. Meaux, 122 S.W.3d 428, 431 (Tex. App. 2003). Vega

repeatedly denies, however, being a party to any contract with Port

Elevator. Because Vega does not assert the existence of a contract,

her negligence claim fails. (Vega also raises two statutory

provisions to suggest Port Elevator was negligent. She raised

neither in her summary-judgment motion. We will not consider them

for the first time on appeal.)

2.

To prove conversion under Texas law, a plaintiff must

establish: (1) she owned, possessed, or had the right to immediate

possession of the personal property at issue; (2) the defendant

wrongfully exercised dominion or control over the property; and (3)

the defendant refused the plaintiff’s request to return the

property. Apple Imps. v. Koole, 945 S.W.2d 895, 899 (Tex. App.

1997). Further, to recover for conversion, the plaintiff must have

suffered damages. United Mobile Networks, L.P. v. Deaton, 939

S.W.2d 146, 147 (Tex. 1997). Refusal for a reasonable amount of

time to return property is not conversion if, in good faith, the

party holding the property is unsure who the rightful owner is.

Stein v. Mauricio, 580 S.W.2d 82, 83 (Tex. Civ. App. 1979).

As discussed, Vega claims she shipped the corn to be stored at

Port Elevator, but that she never signed a contract regarding that

storage. The undisputed evidence demonstrates the corn was stored

by Port Elevator, pursuant to the contract signed by Gutierrez.
13

Although Vega claims she never authorized Gutierrez to sign that

contract, she still maintains she had the corn sent to be stored at

Port Elevator. The undisputed evidence demonstrates Port Elevator

legally possessed it.

Therefore, to prove conversion, Vega must establish a wrongful

and unreasonable refusal to return the corn after she demanded its

return. She fails to do so. When Port Elevator was presented with

Vega’s claimed ownership and was unable to determine the rightful

owner, it filed this interpleader action, bringing in as claimants

Vega and Gutierrez. Needless to say, in the light of the summaryjudgment record, this was a reasonable step to establish the

rightful owner. Therefore, Port Elevator is not liable for

conversion. Id.; see also Smith v. Texas & N.O.R. Co., 127 S.W.

866, 868-69 (Tex. Civ. App. 1910) (stating that filing interpleader

action to determine rights was reasonable and relieved bailee of any

liability for conversion).

3.

The following elements are required to establish common-law

fraud pursuant to Texas law:

(1) that a material representation was made;

(2) the representation was false; (3) when the

representation was made, the speaker knew it

was false or made it recklessly without any

knowledge of the truth and as a positive

assertion; (4) the speaker made the
14

representation with the intent that the other

party should act upon it; (5) the party acted

in reliance on the representation; and (6) the

party thereby suffered injury.

In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001).

Vega claims Port Elevator falsely represents itself to the

public as a public warehouse that stores corn or grain and only

releases those commodities with the express consent of the owner.

This claim certainly does not rise to the level of fraud — Vega does

not even claim Port Elevator made any statement to her, let alone

a material representation. Therefore, Vega cannot establish Port

Elevator made a statement “with the intent that [she] act upon it”.

Id.

4.

Vega claims Port Elevator violated § 17.46(a) and (b)(5) of the

DTPA, resulting in damages. Relevant to this appeal, a consumer may

recover for violations of the DTPA when a defendant engages in 

(1) ... a false, misleading, or deceptive act

or practice that is:

(A) specifically enumerated in a subdivision

of Subsection (b) of Section 17.46 of this

subchapter; and

(B) relied on by a consumer to the consumer's

detriment[.]

TEX. BUS. & COM. CODE ANN. § 17.50(a). The above-referenced § 17.46

provides, inter alia:

(a) False, misleading, or deceptive acts or

practices in the conduct of any trade or

commerce are hereby declared unlawful and are
15

subject to action by the consumer protection

division under Sections 17.47, 17.58, 17.60,

and 17.61 of this code.

(b) Except as provided in Subsection (d) of

this section, the term "false, misleading, or

deceptive acts or practices" includes, but is

not limited to, the following acts:

....

(5) representing that goods or services have

sponsorship, approval, characteristics,

ingredients, uses, benefits, or quantities

which they do not have or that a person has a

sponsorship, approval, status, affiliation, or

connection which he does not[.]

Id. § 17.46(a), (b)(5).

As noted, Vega claims Port Elevator held itself out as a public

warehouse that would not release a stored commodity without the

commodity owner’s express consent. Port Elevator asserts Vega does

not qualify as a consumer for DTPA purposes because, as a stranger

to the corn-storage contract, she never purchased goods or services

from Port Elevator. (This, of course, is contrary to its claim that

it did have that contract with Vega through her agent.)

In any event, even if Vega qualifies as a consumer for DTPA

purposes, she provides no evidence establishing a DTPA violation.

Vega contends Port Elevator misrepresented the nature of its

business; but, as with her fraud claim, she points to no specific

misrepresentations. In fact, as discussed earlier, Vega fails to

demonstrate Port Elevator made any representations. Her unsupported
16

allegation is insufficient to withstand summary judgment. May v.

Dep’t of Air Force, 777 F.2d 1012, 1016 (5th Cir. 1985).

C.

Finally, Vega challenges the default judgment against Gutierrez

and Sysco de Baja. Neither appeared in district court nor appeals.

Vega cannot appeal on their behalf.

III.

For the foregoing reasons, the judgment is VACATED IN PART and

AFFIRMED IN PART and this matter is REMANDED for further proceedings

consistent with this opinion.

VACATED IN PART; AFFIRMED IN PART; AND REMANDED