IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

AMS STAFF LEASING, NA, LTD., §

 §

Plaintiff-counterdefendant,§

 §

VS. §

 §

ASSOCIATED CONTRACT §

TRUCKMEN, INC., et al., §

 §

Defendants- § Civil Action No. 3:04-CV-1344-D

counterplaintiffs- §

third-party plaintiffs, §

 §

VS. §

 §

PACESETTER NATIONAL §

CORPORATION d/b/a PACESETTER §

ADJUSTMENT COMPANY, §

 §

Third-party defendant. §

MEMORANDUM OPINION

 AND ORDER 

Plaintiff AMS Staff Leasing, NA (“AMS”) moves for summary

judgment as to the remaining two components of defendant Dave

Brandert’s (“Brandert’s”) fraud counterclaim and for leave to file

an amended reply to defendants’ counterclaims. For the reasons

that follow, the court grants the motion for summary judgment and

grants in part and denies in part as moot the motion for leave to

file an amended reply.

I

This lawsuit is the subject of two prior memorandum opinions

and orders of the court. See AMS Staff Leasing, NA v. Associated

Contract Truckmen, Inc., 2006 WL 1096777 (N.D. Tex. Apr. 26, 2006)

 

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1AMS I recounted the evidence in a light favorable to

Associated Contract Truckmen (“ACT”) and Brandert as the summary

judgment nonmovants and drew all reasonable inferences in their

favor. See AMS I, 2005 WL 314284, at *1 n.5 (citing Clift v.

Clift, 210 F.3d 268, 270 (5th Cir. 2000)). AMS II viewed the facts

and drew all reasonable inferences in favor of AMS because it was

the nonmovant with respect to defendants’ summary judgment motion.

AMS II, 2006 WL 1096777, at *1 n.2. Because Brandert is the

nonmovant again in the context of AMS’s summary judgment motion,

the court views the evidence and draws all reasonable inferences in

his favor, except to the extent he is bound by deemed admissions.

2The court held that AMS did not assert a breach of contract

action against Brandert. See AMS I, 2005 WL 3148284, at *6.

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(Fitzwater, J.) (“AMS II”); AMS Staff Leasing, NA v. Associated

Contract Truckmen, Inc., 2005 WL 3148284 (N.D. Tex. Nov. 21, 2005)

(Fitzwater, J.) (“AMS I”). The court assumes the parties’

familiarity with facts and procedural histories set out in these

opinions and rulings, and it adds as necessary factual discussions

that view the evidence favorably to Brandert as the summary

judgment nonmovant and draw all reasonable inferences in his

favor.1

In AMS I the court, inter alia, granted AMS’s motion for

summary judgment as to AMS’s breach of contract claim against

defendant Associated Contract Truckmen (“ACT”),2 ACT’s and

Brandert’s breach of contract counterclaims, ACT’s fraud

counterclaim, and two of four grounds of Brandert’s fraud

counterclaim. See AMS I, 2005 WL 3148284, at *7, *9-*10. The

court denied AMS’s motion as to its claims against ACT and Brandert

for fraud, fraudulent inducement, and negligent misrepresentation,

 

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3

The third-party action of ACT and Brandert against Pacesetter

National Corporation d/b/a Pacesetter Adjustment Company was

dismissed on December 14, 2005. See AMS II, 2006 WL 1096777, at *1

n.4.

4In conjunction with its reply brief, AMS has filed on June

28, 2006 a supplemental appendix. Because AMS did not first obtain

leave of court to file the appendix, the court has not considered

it in deciding AMS’s summary judgment motion. See Dethrow v.

Parkland Health Hosp. Sys., 204 F.R.D. 102, 104 (N.D. Tex. 2001)

(Fitzwater, J.) (holding that party may not file summary judgment

reply appendix without first obtaining leave of court).

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and it denied summary judgment as to two of four grounds for

Brandert’s fraud counterclaim. Id. at *8-*10. In AMS II the court,

inter alia, granted ACT and Brandert’s motion for partial summary

judgment, dismissing AMS’s remaining claims. AMS II, 2006 WL

10976777, at *3-*6.3 From the standpoint of AMS’s affirmative

claims, only the remedial portion of its breach of contract claim

against ACT remains to be litigated.

Following these decisions, only two grounds of Brandert’s

fraud counterclaim remained, id. at *6, and the court granted AMS’s

motion for leave to file a second summary judgment motion, id. at

*7 (citing N.D. Tex. Civ. R. 56.2(b)). AMS now moves for summary

judgment as to the remaining two components of Brandert’s fraud

counterclaim4

 and also moves for leave to file an amended reply to

defendants’ counterclaims.

 

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5Brandert and AMS object to the opposing party’s summary

judgment evidence. Because in deciding AMS’s summary judgment

motion the court has not considered any evidence to which Brandert

or AMS objects, the court overrules the objections as moot. In

particular, Brandert’s objections all relate to the declaration of

Eugene Eisenmann, and the court has not relied on his declaration.

AMS’s objections all relate to various correspondence and four

pages of Brandert’s deposition, none of which the court has relied

on.

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II

The court first considers AMS’s motion for summary judgment on

the two remaining components of Brandert’s fraud counterclaim.5

 

A

To establish a claim for fraud under Texas law, Brandert must

prove that AMS

(1) made a material representation, (2) that

was false when made, (3) [AMS] knew the

representation was false, or made it

recklessly without knowledge of its truth and

as a positive assertion, (4) [AMS] made the

representation with the intent that [Brandert]

should act upon it, and (5) [Brandert] acted

in reliance upon it and suffered injury as a

result.

AMS II, 2006 WL 1096777, at *2 (citing Great Plains Trust Co. v.

Morgan Stanley Dean Witter & Co., 313 F.3d 305, 322 (5th Cir. 2002)

(Fitzwater, J.)). Because AMS will not have the burden at trial as

to Brandert’s fraud counterclaim, it can obtain summary judgment by

pointing the court to the absence of evidence to support it.

Celotex Corp. v. Catrett, 477 U.S. 317, 324-25 (1986). If AMS does

so, Brandert must go beyond his pleadings and designate specific

facts showing there is a genuine issue for trial. See id. at 324;

 

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6AMS also relies on certain Requests for Admissions to contend

it is entitled to summary judgment. The court need not address

this argument.

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Little v. Liquid Air Corp., 37 F.3d 1069, 1075-76 (5th Cir. 1994)

(en banc) (per curiam). Summary judgment is mandatory where the

nonmoving party fails to meet this burden. Little, 37 F.3d at

1076. 

B

Brandert first alleges that AMS committed fraud when it

falsely represented that ACT was a named insured under AMS’s

workers’ compensation policy with National Fire Insurance Company

of Hartford (“National Fire”), a wholly owned subsidiary of

Continental Casualty Company (“CNA”), that the insurer was National

Fire, and that the policy afforded limits of $1 million of

coverage. AMS has satisfied its summary judgment burden and

pointed the court to the absence of evidence to support this ground

of Brandert’s counterclaim. Brandert must therefore go beyond his

pleadings and designate specific facts showing there is a genuine

issue for trial.6

Brandert does not argue that anyone represented to him that

ACT was a named insured on the policy, much less adduce evidence

that AMS falsely represented that ACT was a named insured. He has

thus failed to designate specific facts showing there is a genuine

issue for trial that AMS falsely represented that ACT was a named

insured on the policy. Accordingly, AMS is entitled to summary

 

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judgment on Brandert’s first allegation of fraud.

C

In the second component of his fraud counterclaim, Brandert

alleges that AMS falsely represented that the policy provided “all

states coverage.” AMS appears to seek summary judgment on two

grounds: first, that Brandert is precluded from establishing that

AMS made this false representation and, second, that there is an

absence of evidence to support fraud on this ground. 

AMS maintains that Brandert’s deposition testimony negates

each element of this component of his fraud counterclaim. It

posits that the testimony establishes that no one at AMS “told

Brandert that ACT would have all-states coverage” under the policy.

As evidence, AMS identifies portions of the testimony wherein

Brandert stated that specific individuals at AMS——Dave Wood, Andrew

Price (“Price”), and Chris Polk (“Polk”)——did not inform him that

AMS would have “all states coverage.” This evidence does not,

however, foreclose the possibility that another AMS representative

advised Brandert that the policy provided “all states coverage.”

AMS has also pointed the court to the absence of evidence to

support Brandert’s counterclaim. Brandert must therefore go beyond

his pleadings and designate specific facts showing there is a

genuine issue for trial regarding each element of this component of

his counterclaim.

Regarding the first element of fraud——a

 

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7

AMS disputes that Polk had authority to bind AMS or make

representations on its behalf. Although the court assumes arguendo

that Polk had such authority, it concludes for other reasons that

AMS is entitled to summary judgment.

8

Both parties concede that such a representation, if made, did

not encompass monopolistic states that required an employer to

procure workers’ compensation insurance through an entity that is

owned or regulated by the state government or to be self-insured.

See D. Br. 5; P. Br. 4. 

9AMS appears to contend that the representation was not false

because “the policy was good in ‘all states’ where AMS conducted

business.” P. Br. 17 (emphasis added). Brandert alleges only that

AMS falsely represented that the policy provided “all states

coverage.” And he adduces evidence sufficient to satisfy his

summary judgment burden of establishing that AMS made such a

representation and that the policy did not in fact cover all nonmonopolistic states. 

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representation——Brandert points to his deposition testimony that

Price advised him that ACT would have “all states coverage” under

the policy. D. Br. 6 (citing P. App. 101-02). He also directs the

court to his testimony that Polk told him that ACT would have “all

states coverage” under the policy. Id. (citing P. App. 102).7

Next, he contends that AMS knew the representation was false

because it (and not he) had a copy of the policy, showing the

states that were covered.8 As evidence, he points to the

declaration page of the policy, which lists the covered states but

does not include several non-monopolistic states. He has thus

pointed to evidence from which a reasonable trier of fact could

infer that AMS falsely represented that the policy provided “allstates coverage.”9

Brandert next posits that he acted in reliance on the

 

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10As do the parties, the court will refer to the two staff

leasing agreements of 2000 and 2001 collectively as the

“Agreements.” AMS II, 2006 WL 1096777, at *3 n.5.

11The court assumes that Brandert refers here to entering into

the Agreements in his capacity as President of ACT. Brandert was

not personally a party to the Agreements. See AMS II, 2006 WL

1096777, at *5; AMS I, 2005 WL 3148284, at *6. Indeed, in AMS I he

sought the shield of his status as a non-party in contending that,

“because he was not a party to the Agreements, and because AMS

acknowledges that it did not have a contract with him, the breach

of contract cause of action concerns only ACT.” AMS I, 2005 WL

3148284, at *6.

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representations by entering into the “Agreements.”10 He fails,

however, to identify facts that support his reliance on either of

the two statements in entering into the Agreements.11 For instance,

he does not identify when Price or Polk made either representation

or when the Agreements were entered into or renewed such that a

reasonable trier of fact could infer reliance. And he does not

point to any evidence that he——as opposed to ACT——was injured as a

result of the fact that ACT entered the Agreements believing the

policy provided “all-states coverage.” Rather, Brandert directs

the court to AMS’s calculation of its damages in clearing its name

and the attorney’s fees it expended in underlying litigation. D.

Br. 7 (citing D. App. 21). Evidence of AMS’s injury is not

evidence of Brandert’s injury. 

Accordingly, the court concludes that Brandert has failed to

satisfy his burden of designating specific facts that would permit

a reasonable trier of fact to find that he relied upon the false

representations or that he suffered injury as a result. “The

 

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12AMS also alleges that Brandert cannot adduce evidence

supporting the remaining two components of his fraud counterclaim

because he is prohibited from introducing evidence that should have

been disclosed under Rule 26(a)(1) pursuant to the magistrate

judge’s September 30, 2004 order. See AMS Staff Leasing, NA, Ltd.

v. Associated Contract Truckmen, Inc., No. 3:04-CV-1344-D, order at

2 (N.D. Tex. Sept. 30, 2004) (Stickney, J.). AMS also maintains

that Brandert lacks standing individually to assert ACT’s fraud

“that belongs exclusively to ACT.” Because the court concludes

that AMS is entitled to summary judgment on other grounds, it need

not reach these arguments.

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summary judgment nonmovant’s failure to adduce proof as to any

essential element of his cause of action renders all other facts

immaterial.” Edgar v. Gen. Elec. Co., 2002 WL 318331, at *4 (N.D.

Tex. Feb. 27, 2002) (Fitzwater, J.) (citing Celotex Corp., 477 U.S.

at 323). Because Brandert cannot meet his burden as to two of the

essential elements of this component of his fraud, AMS is entitled

to summary judgment dismissing this component of the fraud

counterclaim.12 

III

The court turns next to AMS’s motion for leave to file an

amended reply. AMS seeks to add a negative averment pursuant to

Fed. R. Civ. P. 9(a) that “Brandert has no standing or capacity to

bring a cause of action in his individual capacity because any

claim for fraud is owned by, and belongs solely to the

corporation.” P. Mot. for Leave to File Am. Reply at 2. Brandert

objects, except as to the amendments that AMS seeks to add to ¶¶ 6

and 26. Because the parties do not dispute the amendments to those

two paragraphs, the court grants this aspect of AMS’s motion for

 

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leave to file an amended reply. The court otherwise denies the

motion as moot because the court has determined on other grounds

that AMS is entitled to summary judgment dismissing Brandert’s

fraud counterclaim.

* * *

For the reasons set out, the court grants AMS’s May 25, 2006

motion for summary judgment. It grants in part and denies in part

as moot AMS’s May 25, 2006 motion to file an amended reply to

defendants’ counterclaims. As a result of the court’s rulings in

AMS I and AMS II and today, the only part of this case that remains

to be tried is the remedial portion of AMS’s breach of contract

claim against ACT. The court will set the case for a trial docket

by separate order.

SO ORDERED.

August 10, 2006.

_________________________________

SIDNEY A. FITZWATER

UNITED STATES DISTRICT JUDGE

 

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