### TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

ON MOTION FOR REHEARING

NO. 03

- 22

- 00311

- CV

The Bank of San Antonio and Texas Express Funding, LLC, Appellant s

v. Dewey Bryant and Paul Weaver , Appellee s

FROM THE 274TH DISTRICT COURT OF COMAL COUNTY NO. C2022-1752C , THE H ON ORABLE DIB WALDRIP, JUDGE PRESIDING

M E M O R A N D U M O P I N I O N

We withdraw our previous opinion and judgment issued on November 29, 2023, and substitute the following opinion and judgment in their place. We deny appell ants’ motion for rehearing. Appellants T he Bank of San Antonio ( BOSA) and Texas Express Funding, LLC (TEF) appeal from the district court ’ s order granting summary judgment in favor of appellees Dewey Bryant an d Paul Weaver. In two iss ues on appeal, appell an ts assert that the district court erred in granting s ummary judgment and abused its discretion in sustaining appellees ’ objections to their summary

- judgment evidence. We will affirm the district court ’ s o rd er.2 BACKGROUND
Th e parties to this app eal a re in the business of factoring , i.e., the “ process by which a business sells to another business, at a small discount, its right to collect money before the money is paid. ” Houston Lighting & Power Co. v. City of Wharton , 101 S.W.3d 633 , 636 (Tex. A pp.

— H ouston [1 st Dist.] 2003, pet. denied). According to the summary

- judgment
evidence admitted in the court below , representatives of BO SA met wi th Wayne Schroeder in
June 20 19 to discuss the formation of a new factoring company , TEF , that would be a who lly

o wned subsidiary of BOSA

. At the time of the ir meeting , Schro eder w as an emp loyee of another

company in the business of factoring , Southwest Bank Factoring , LLC (Southwest Factoring)

. Appell ees Bryant a n d Weaver were corporate officers in Southwest F act o r ing and its p arent company, Southwest Bank. 1 In an affidavit attached to appellees ’ motion for summary judgment, Bry ant averred :

On or about July 2, 2019, Schroeder informed me that he had found “ new in v estors ” to form a new factoring company, and th at ce rtain of Southwest Factoring ’ s customers with whom he had a personal relationship had already decided to become c ustomers of the new entity. On that date, Schroeder proposed that the new entity he repre s ented would payoff and acquire the accounts of South west Factoring ’ s customers, and requested a release from his Employment Agreement with Southwest Factoring. Prior to that discussion, I had no discussions with Schroeder ab out his forming a new company o r seeking investors to purchase any receivables from Southwest Factoring.

Bry ant continued,

1 Bryant wa s the President of Sout h west Factoring and the CEO of Sout hwest Ba nk; Weaver wa s the Vice

- President of Southwest Factoring and the Odessa Market President and Chief Lending Of ficer o f Southwest Bank.3 After o ur initial conversation where the terms of the payoff and transfer of accounts were proposed by Schroeder, Schroeder effectively stopped all work on behalf o f Southwest Factoring, and began representing the n ewly fo rm ed entity, Texas Express Funding, LLC ( “ TEF ” ) in the payoff and transfer of the accounts of the Factored Clients.
Weaver, who also attended the July 2 meeting with Bryant and Schroeder, made si m ilar
statements in his summ ary - judgment affida vit.
On July 9, 2019 , appellants filed with the Texas Secre tary of State a Certificate of
Formation for TEF that named Schroeder as a manager of TEF . The following day, Schroeder accepted an employment offer f rom BO SA , effective August 1 , 2019 , or “as s oon as po ssible , ” and began working on the payoff and transfer to TEF of accounts and loans owed to Southwest Factoring for several Southwest Factoring clients. O n July 31, 2019, Schroeder executed an

agreemen t with Sout hwest Fa ctoring releasing Schroeder from his employment with Southwest Factoring and providing for TEF ’ s purchase of several Southwest Factoring client accounts, pursuant to the further execution of separate b uyout a greement s for each client acc ou nt that was being transferred to TEF. Appr oximately o ne year later, appellants s ued Schroeder , Southwest Factoring, Southwest Bank, Bryant and Weaver in di vidually , and others for frau d . According to the allegations in appella nts ’ third a mended petitio n, “ the overwhelming majority of all of the cl ient
invoic es they purchased were either fraudulently prepared, hopelessly aged and uncollectable , ”

or “ worthless, ” resulting in over thirteen million dollars in damages to appellants

. More specif ically, appell an ts alleged that Schroeder made significant m isrepresen tations and omissions regarding the value of the transferred accounts and that TEF was fraudulently induced by those misrepresentations to enter into the July 31, 2019 p urch ase agreemen t and the corre s ponding4 buyout agreements , “ whereby Plaintiff T BOSA pai d millions of dollars (in anticipat ion of TEF receiving regulatory approval) to unwittingly assume loans and to purchase the accounts receivable and underlying invoices of seven (7) va rious businesse s from Defendants Southwest Bank Factoring, LL C and/or So uthwest Bank. ” Appellants fur ther alleged that “ [ h ] ad the
Defendants dis closed the truth about what Plaintiffs were induced to purchase, Plaintiffs would have never agreed to go forwa rd, and none of these damages would have ever been incurred. ”
BOSA ’ s cl aims against Bryan t and Wea ver individually were for fraudulent conce alment , i.e., fraud by nondisclosure, and vicarious liability for the tortious acts of Schroeder , under the
doctrin e of responde at superior

. Appellees filed a traditional motio n for summa ry judgment arguing , among other grounds , that app ellants ’ claim s for vicarious liability should be dismissed because Schroeder

was never an employee or agent of appellees in dividually , and that a ppe llants h ad no t pled and

c ould not establish th a t appellee s owed them any “duty of disclosure,” an essential element of
their “ fraudulent concealment ” claim

. They attached evidence to their motion, including the
affidavits of appellees menti oned above

. Ap pellants file d a response to the motion with a t tached
evi dence

. Appellees filed numerous written objections to this evi dence. Following a hearing , the district court sustained many of appellees ’ evidentiary objections , gra nted their m otion for

summar y ju dgment in its entirety , and ordered that appel l ants take nothing by way of their causes of action for fraud and under the doctrine of respondeat superior as against either appellee . The
district court also ordered that all claims and c auses o f action agai nst appellees be severed into a
separate cause , making th e summary judgment in their favor final and appealable

. Appella n t s filed a joint motion for new trial . In addition to challenging the merits
of the district court ’s s ummary - judgm ent ruling , appe llan ts also argued, for the first time, that5 their su mmary - ju dgment evidence that had been excluded was admissible. The district court overruled the motion by written order and explained in its order that it would not consider appellants ’ arguments regard ing the admissibility of the evidence b e c a u s e t h o s e a r g u m e n t s h a d

n o t b e e n r a i s e d a t a n y t i m e b e f o r e t h e c o u r t ’ s r u l i n g :

Before the date of the [summary

- judgment] hearing, counsel for Bryant and Weaver filed a substantial numbe r of objecti ons to the equal ly s ubstantial volume of evidence sought by Plainti f fs (Bank o f San Antonio and Texas Express Funding, LLC) to be admitted into the summary judgment record. From the Court ’ s recollection, Counsel for the Plaintiffs, when given t he opportuni ty on the record to respond to those objections, did not do so; rat h er, Plaint i ffs ’ counsel acceded, at the very least, to simply allow the Court to review the specific object ions to certain proffered exhibits and to rule thereon. At no time d id Plaintiff s ’ counsel refer the Court generally to any source of information n o r specific a lly to any exhibit in support of the admission of the Bank of San Antonio ’ s/ T exas Express Funding, LLC ’ s summary judgment evidence to attempt to refute any of the De fendants ’ ob jections. After arg ument, the Court took the matter under adviseme n t, and bot h sides submitted post

- hearing briefs at the direction of the Court regarding its consideration of the evidence or application of the law. Nothing within Plaintiffs ’ post

- hearin g brief responds to any of the Defendants ’ evidentiary objections t o the proff ere d exhibits.
In the absence of any information, direction , or reference by counsel to look elsewhere in support of proper admission into the summary judgment eviden tiary record , the Court comp lete d a thorough review of the objections as compar e d to the s pecif ic exhibits proffered by Plaintiffs, and the Court made rulings thereon accordingly. Considering the existing pleadings along with the evidence that was admitte d into the s ummary judgment evid entiary record, the Court granted the Defendant s ’ motion a s the record reflects.
Subsequently, counsel for Plaintiffs filed a “ Joint Motion for New Tria l ” (on behalf of both Plaintiffs). In the motion, counsel for the Plain tiffs, for t he very first ti me a nd at such late date, seeks to amend the record with purpo rted reasons why the Defendants ’ objections are not meritorious.

. . . Regardless of the merits (or lack thereof) to any such reason, it is too late. The Court has ruled on the objections as w ell a s ru led on the motion for summary judgment bas e d, respect ively, upon the timely presented evidentiary arguments and the existing pleadings.6 Nonetheless, the Court reviewed the Joint Motion for New Trial. Any leave of Court sought to r e - open the evide ntia ry considerations and rulings thereon is DENIED , and the M otion is, in all other things, OVERRULED without the necessity of any hearing thereon.
This appeal followed.

STANDAR D OF REVIEW

“ We review summary judgments de novo, taking as t rue all evidence fav orable to the nonmovant, and indulging every re a sonable in ference and resolving any doubts in the

nonmovant ’ s favor.” Energen Res. Corp. v. Wallace , 642 S.W.3d 502, 509 (Tex. 2022) . “When
the trial court does not specify the grounds for its ruling, a summ ary judgment must b e affirmed if any of the gro u nds on whi ch judgment is sought are meritorious.” Merriman v. XTO Energy,
Inc. , 407 S.W.3d 244, 248 (Tex. 2013). “A party moving for traditional summ ary judgment bears the burde n of proving there is no genui ne issue of materi al fact as to at least one es s ential ele ment of the cause of action being asserted and that it is entitled to judgment as a matter of law.” Lightning Oil Co.

v. Anadarko E&P Onsho re, LLC , 520 S.W.3d 39, 45 ( Tex. 2017). “[T]he burden the n shifts to
the non

- movant to disprove or raise an issue o f fact as to at least one of those elements.” Amedisys, Inc. v. Kingwood Home Health Care, LLC , 437 S.W.3d 507, 511 (Tex. 2014).
“The non

- m ovant has no burden to respo nd to or present evidence rega rding the
motion until the movant has carried i t s burden t o conclusively establish the cause of action or
defense on which its motion is based.” State v. Ninety Thousand Two Hundred Thirty

- Five
Dol lars & No Ce nts in U.S. Curr ency ($90,235) , 390 S.W.3d 289 , 292 (Tex. 2013). “On appeal,
the movant stil l bears the burden of showing that there is no genuine issue of material fact and7 that the movant is entitled to judgment as a matter of law.” Rhone

- P oulenc, Inc. v. Steel , 997 S .W.2d 217, 223 (Tex. 1999).

DISCUSSION
Merits of summary judgment
In their first issu e, appellants assert that the district court erroneously granted

sum mary judgment in favor of appe llees. According to appellants, there a re genuine i ssues of
materia l fact as to whether Schro e der was an agent of appellees , thereby trigger ing th e doctrine of respondeat superior , and whether appellees had a duty to disclose information regarding “ the
true status of the factoring invoices to be acquired b y TEF

. ”

“ Under the common

- law doctrine of re spondeat superior, or vicarious liability,

‘ liabi l ity for on e person ’ s fault may be imputed to another who is himself entirely without fault solely because of the relationship between them. ’ ” Painter v. Amerim ex Drilling I, L td. , 561 S.W.3d 125 , 130 (Tex. 2018) (quoting St. Joseph Hosp. v. Wolff , 94 S.W

. 3d 513, 54 0 (Tex. 2002) (plurality op.) )

. “ The doctrine has been explained as ‘ a deliberate allocation of risk ’ in
line with ‘ the general common law notion tha t one who is in a position to exercise some ge neral
control over the si tuation must exercise it or bear th e loss. ’ ” Id

. at 130

- 31 (quoting Wolff , 94 S.W.3d at 540 )

. “ Respondeat superior thus constitutes an exception to the general rule that a person has n o duty to contro l another ’ s conduct. ” Id . at 131 (citing Goodyear Tire & Rubber Co. v. Mayes , 2 36 S.W.3d 754, 757 (Tex. 2007) )

. In the employment context, an employer may be vicariously liable for its employee ’ s tortious act s if those acts are commit ted within the cour se and scope of th at employee ’ s employment. Id

. ; Bank of Texas, N.A. v. Glenny , 405 S.W.3 d 310 , 317 (Tex. App.

—8 Dallas 2013, no pet.) . However, when the employer is a corporation, it is the corporation itself that is vicariously liable for the actions of corporate employees , rather th an corporate officers or
other corporate agents , u nless the corporation is an “ alter ego ” of the corporate officer , which appellants do not allege here , or the corporate officer owes some independent duty to th e injured
party

. See Le itch v. Hornsby , 935 S .W.2d 114, 117 (Tex. 1996) ; see also Corley v. Am e rican
Well Control, Inc. , No. 09

- 11

- 00147

- CV , 2012 WL 4466361 , at *5 (Tex. App.

— Beaumont Sep. 27, 2012, no pet.) (mem. op.) ( “ Generally, duties owed by corporat ions are not con sidered to be obligations owed by corporate officers in their individual capaci t ies. ” )

. Here, the summary

- judgment evidence established that at all r elevant times alleged in the petition , Schro e der ’ s employer was either Southwest Factoring , TE F, or BOSA. Bryant and Weaver wer e corporate offic ers in Southwest Factoring, and e ach averred that
Schroeder “ was not and has never been [ his ] agent. ” They each explained :

Any authority I had to direct [Schr oeder ’s] work arose solely in my capacity as [corporate officer ] of Southwest F actoring, who was Schroeder ’ s employer during the time periods at i ssue, prior to his becoming an employee and agent of TEF and BOSA. I never directed or hired Wayne Schroeder to perform services for me personally, Schroeder did not ever in fact perform a ny services for m e personally, and I did not ever have any right to control his work in my individual capacity. I have never made any personal payment to Schroeder for the perf ormance of work or delivery of any goods or services, nor represent to any thir d party that he w as my individual employee, agent or representative

.
Thus, to the extent Southwest Factoring m ight be vicariously liable for Schroeder ’ s actions (a question we do not address in this appeal) , that liability would not extend to Bryant and Weaver
ind ividual ly , unless either of them owed a n independent duty t o appellants. Appellants contend that Bryant and Weaver owed them such a duty here , specifically a duty of disclosure regarding the value of the accounts t hat appellants purchased ,9 whic h is an essential element of their claim for frau d ulent concealment. See Blankinship

v. Brown , 399 S.W.3d 303 , 308 (Tex. App.

— Dallas 2013, p et. denied) (li sting elements of
fra udulent concealment, including duty of defendant to disclose facts); see also Schlumberger
Tech

. Corp. v. Swanson , 959 S.W.2d 1 7 1 , 181 (Tex. 1997) ( “ Fraud by non

- disclosure is simply a subcategory of fraud because, where a party has a duty to disclose , the non

- disclosure may be as misleading as a positive misrepresentation of facts. ” ).
“As a general rule, a failure to disclose i nformation does not constit ute fraud unless there is a duty to disclose the information.” Bradford v. Vento , 48 S.W.3d 749 , 755 (Tex. 2001). “Whether such a duty exists is a question of law.” Id

. “Genera lly, no duty of disclosure
arises without evidenc e of a confidential o r fiduciary relationship.” Ins urance Co. of N. Am.

v. Morris , 981 S.W.2d 667, 674 (Tex. 1998). Such re lationships seldom arise in arms

- length
commercial transactions between sellers an d buyers , and appellants do not allege that a

con f idential or fiduciar y relationship arose here

. See id

. Absent that , a duty to speak may arise
in an arms

- length transaction in three situations: “ (1) when one voluntarily discloses information,
he has a d uty to disc lo se the whole tr uth; (2) when one mak e s a representation, he has a duty to disclose new information when the new information makes the earlier representation misleading or untrue; and (3) when one makes a partial disclosure and conveys a false impression, h e has the duty to speak. ” Playboy E n ter s

. , Inc. v. Edito rial Caballero, S.A. de C.V. , 202 S.W.3d 250 , 260 (Tex. App.

— Corpus Christi

- Edinburg 2006, pet. denied). E ach of these situations requires the
seller to ma k e either an “ affirmative disc losure or representation ” or “ some partial disclo s ur e that triggered a duty to say more. ” Mercedes

- Benz USA, LLC v. Carduco, Inc. , 583 S.W.3d 553 , 561 (Tex. 2019)

.10 Here, however , neither Bryant nor Weaver made any suc h affirma tive representation or part ial disclo sure regarding the transferred accounts

. They each averred that from July 9 to July 31, 2019, the period when Schro eder was working on the payoff and transfer
of accounts from Southwest Factoring to TEF :

I did not personally speak to any person employed b y or otherwise representing TEF or the B ank of San Antonio, nor to my know ledge, did any other person from TEF or th e Bank of San Antonio make any attempt to communicate with me personally during that time. To be specific, I did not ever disclos e any info r m ation or make any representations wha t soever about the Fac tored Clients t o anyone associated with TEF or Bank of Sa n Antonio, except for Wayne Schroeder, who was the person at Southwest Factoring with the most knowledge of these Factored Client s

— including any representations to anyone at TEF o r Bank of San Antoni o about the “ aged ” status of the invoices for these Clien ts or the validity of and prospects for collection of the accounts and loans outstanding.

B ecause Bryant and Weaver had no confid ential or f iduciary relationship with appellants a nd
made no represent ations to them regarding the transferred accounts , no duty to disclose the value
of those ac counts arose under Texas law

. See Mercedes

- Benz , 583 S.W.3d at 56 1. In sum, appellants failed to r aise a genuine issue of material fact r egarding
whether Bryant and Weaver individually were vicariously liable for Schroeder ’ s actions and whether they had a duty to disclose the value of the accounts transferred to appellants. Accordingly, the district c o urt did not err in granting summary j u dgment in favor of appel lees. We overrule appellants ’ first issue. 2

2 Also in this issue, appellants argue briefly that their claims for “un just en r ichment and/or money h ad and rece ived , ” wh ich were equit able claims brought against defendants Southwest Fa ctoring and Southwest Bank, are not barred by summary judgment

. Because the summary - judgment order at issue in this appeal d oe s not apply to those d efendants or those cla ims , we do not addre ss th at conten tion here

.11 Evidentiary objections In their second issue, appellants assert t hat the district court abused it s discretion by sustaining appellee s ’ objections to their summary - judg ment evide n ce and by failing to
consider appellants ’ responses to those objections . According to appellants, their responses , which they raised for the first tim e in their motion for n ew trial, were timely and thus should
have been considered by the distric t court

. 3 Assuming without deciding that appellants preserved error in the court below by respond ing to the evidentiary objections for the first time in their motion for new trial, and further assuming without deciding that the district court abused its discreti o n by sustaining the
evidentia ry objections , we cannot conclude on this record that the exclusion of the challenged evidence, even if erroneous , entitles appellants to reversal o f the summary judgment

.

“ To reverse a judgment based on the erroneous exclus i on of evidence , the appellant must demonstrate that the exclusion probably resulted in an improper judgment. ” Chandler v. CSC Applied Techs., LLC , 376 S.W.3d 802, 824 (Tex. App

. – Houston [1st Dist.]

3 T here is a split in authority as to whether a non - movant in a summary

- judgment proceeding , to preserve error in the exclusion of the non

- movant’s summary

- judgment evidence, is requi r ed to first respond in the court bel o w to the movant ’ s objec tions and explain why the evidence is admissible

. See , e.g. , Miller v. Great Lakes Mgmt. Serv., Inc. , No. 02

- 16

- 00087

- CV, 2017 W L 1018592, at * 2 n.4 (Tex. App.

— Fort Worth, Mar. 16, 2017, no pet. ) (concluding that
res ponse is not req uired ) ; C ommunity Initi atives , Inc. v. Chase Bank , 153 S.W.3d 270 (Tex. App.

— El Pas o 2004, no pet.) (concluding that response is required ) ; Brooks v. Sherry Lane Nat ’ l Bank , 788 S.W.2d 874, 878 (Tex. App.

— Dallas 1990, n o writ) (same) ; see also David Hittne r & L ynne Liberato, Sum mary Judgments in Texas: State and Federal Practice , 60 S. T ex . L. R ev . 1, 63 (2019) ( recognizing split in authority )

. T he El Paso Court of Appeals has subsequently concluded that the response m a y be raised for the first time in a m otion for new trial. S ee Hawxhurst v. Austin ’ s Boat Tours , No. 08

- 19

- 00257

- CV, 2020 WL 5094673, at * 2 (Tex. App.

— El Paso Aug. 28, 2020, no pet.) ( mem. op.). T his Court ha s concluded that the response may not be raise d for the first time on appeal , see De es v. Thomas , No. 03

- 18

- 00372

- CV, 2019 WL 2847438, at *4 (Tex. App.

— Austin July 3, 2019, no pet.) , but has not decid ed whether the response may be raised for the first time in a motion for new trial . We need not decid e that question today.12 2012, pet. denied) (citing Interstate Northborough P ’ shi p v. State , 66 S.W.3d 213, 220 (Tex. 2001) ); see T ex
. R. A pp . P. 44.1(a)(1). “ A successful challenge to the trial court ’ s evidentiar y rulings generally requires the complaining party to demonstrate that the judgment turns on the particular evidence exclud e d. ” Id

. “ Ordinarily, w e wil l not reverse a judgment due to the erroneous exclusion of evidence when the evidence in question is cumulative and not controlling on a material issue dispositive to the case. ” Id

. T he excluded evidence in this case consist e d mostly of emails an d other
d ocuments sent by Schroeder contain ing representations regarding the accounts that Schroeder was selling ; affida vits by a BO SA officer and a BOSA lawyer describing the history of BOSA ’ s
involvement with Schro eder , TEF, and S out h west Fa ctoring ; and direct de posits and other
documents showing Schro e d er ’ s employment history . None of this evidence would have raised a genuine issue of material fact regarding the issues dispositive to this case , specifically whether Bryant and Weaver , individually, were vicarious ly liable for the actions of Schroeder and
whether Bryant and Weaver owed a duty of disclosure regarding the value of the accounts that appellants purchased from Schroeder.
The evidence that comes close st to ra ising a genuin e issue of material fact is the
affidavit of Schroeder , who expla in ed that he had discussions with Bryant and Weaver regarding
the accounts he was selling and that they told him that he was “ authorized to offer and sell these accounts to a third party. ” H o wever, Schro e der goes on to sta te that these discussions and
authorizations all occurred while he was employed by Southwest Factoring and that Bryant and
W eaver told him that he was “ au thorized to act as the agent and representative of Southwest
Bank Fact o ring, LLC , for the purpose of f inding a potential buyer and to consummate the sale of
these accounts. ” Nothing in Schroeder ’ s affidavit contradicts the statements made by Bryant and13 Weaver in their affidavits , recited above, that Bryant and Weaver were c o rporate officers in
Southwest F actoring, that Schroeder “was not and has never been [ their] agent ” personally , that

“ a ny authority [they] had to direct [Schroeder’s] work arose solely in [their] capacity as [corporate officer s ] of Southwest Factoring , ” an d that Schroeder did not perform any services for
or receive any payment from Bryant or Weaver personally

. Nor does anything in Schroeder ’ s
affidavit raise a genuine issue of material fact rega r ding whether Bryant or Weaver had a duty to
disclose the valu e of the accounts that appellant s purchased from Schroeder. On this record , w e
cannot conclude that t he district court ’ s exclusion of appellants ’ summary - judgment evidence,
even if err oneous, probably caused the rendition of an improper judgment

. We overrule appe llants ’ second issue

.

CONCLUSION
We affirm the district court ’ s order granting summary judgment.

________________ __________________________ Gisela D. Triana , Justi ce
Before Chief Justice Byrne, Justices Triana and Theofanis
Affirmed on Motion for Rehearing
Filed: July 3, 2024