Court Opinion

ID: 2886752
Source: CourtListenerOpinion
Date Created: 2015-09-07 19:19:57.559209+00
Date Added: 2024-06-11T12:46:10.763403
License: Public Domain

NO. 07-01-0400-CV

                                 IN THE COURT OF APPEALS

                         FOR THE SEVENTH DISTRICT OF TEXAS

                                          AT AMARILLO

                                             PANEL E

                                     AUGUST 29, 2002
                             ______________________________

                          MARY ELLEN ZWANK and PHIL ZWANK,

                                                              Appellants

                                                  v.

                   JACKIE LYNN KEMPER d/b/a LYNN’S AUTO SALES,

                                                  Appellee
                          _________________________________

              FROM THE 99TH DISTRICT COURT OF LUBBOCK COUNTY;

                 NO. 99-505,211; HON. MACKEY HANCOCK, PRESIDING
                         _______________________________

Before QUINN and JOHNSON, J.J., and BOYD, SJ.1

       Mary and Phil Zwank (the Zwanks) appeal from a final summary judgment. Via two

issues, they contend that the trial court erred in granting same in favor of Jackie Lynn

Kemper (Kemper) d/b/a Lynn’s Auto Sales. This is allegedly so because some evidence

existed supporting each element of their respective causes of action. We affirm in part

and reverse in part.

       1
       John T. Boyd, Chief Justice (Ret.), Seventh Court of Appeals, sitting by assignment. Tex. Gov’t
Code Ann. § 75.002(a)(1) (Vernon Supp. 2002).
                                             Background2

        Mary Zwank and her daughter, Cynthia, saw a vehicle for sale in which Cynthia

expressed interest. The vehicle, a 1995 Jeep (Jeep), was parked in a supermarket parking

lot and displayed a “For Sale” sign. The only information on the sign was a telephone

number. Cynthia called the number and spoke with Mike Groves (Groves). Thereafter,

the two women went to Groves’ home to inspect the Jeep. While at the residence, they

informed Groves of their interest in acquiring the vehicle. At some point during this initial

visit, Groves told Mary that “[h]e’d gone over to New Mexico and acquired the vehicle . .

. [and] was selling it for a dealership.” He also informed them that “[h]e was working for

a dealership in town.”

        After engaging in other conversations with Groves over the next several days, the

Zwanks agreed to buy the car for $19,515.13. Groves had Mary fill out a “Buyer’s Order,”

and instructed her to write the words “Lynn’s Auto Sales” in the blank identifying the seller.

Lynn’s Auto Sales was Kemper’s trade name. Mary Groves did so and signed the

agreement as “buyer.” In the signature line for the seller, the phrase “Lynn’s A/S” was

written. Following this was the signature of “Mike Groves” as “officer.” Thereafter, Groves

signed the document, identifying himself as an officer of “Lynn’s A/S.” Mary also delivered

to him a check made payable to “Mike Groves” in the amount of $19,515.13.                          Finally,

        2
          Given the applicable standard of review, we interpret the evidence of record in a light most
favorable to the litigant’s attempting to defeat the motion for summary judgment, i.e. the Zwanks. Miller v.
Galveston/Houston Diocese, 911 S.W.2d 897, 898-99 (Tex. App.– Amarillo 1995, no writ) (requiring the
court to interpret the summary judgment evidence in a light most favorable to the non-movants).

                                                     2
Groves told her the title for the Jeep would be “forthcoming shortly” because “in the State

of Texas . . . the dealership had to send [the title] in . . . [and] you had to wait a few days

and get it that way.”

       On the same day of the sale, Groves deposited the check received from Mary into

the account of “Direct Auto.” Prior to the deposit, the balance of the account was

$4,445.87. Upon depositing the check, Groves wrote two checks for $14,200 and $6,620,

respectively, and made them payable Lubbock National Bank (LNB).3 The checks were

then used to acquire two cashier’s checks of equal amount from LNB made payable to

“Lynn’s Auto.” Kemper admitted to receiving the funds related to each of the two cashier’s

checks.

       Approximately a month later, Groves contacted John Mattox (Mattox) of Wholesale

Auto Center (Wholesale) and asked if Wholesale would be interested in buying the same

Jeep he purportedly sold the Zwanks.                   During the ensuing conversation, Mattox

“understood” that Groves was selling the vehicle on the behalf of Lynn’s Auto Sales.

Furthermore, Mattox had “done some business with Lynn” before. The two agreed upon

a price, and Wholesale’s account was drafted by Kemper for $18,500. The draft was

payable to Lynn’s Auto Sales and written by Kemper on behalf of Wholesale.                   In

determining whether to pay the draft when it was eventually presented to him for payment,

Mattox inquired into the location of the Jeep. Groves told him that it was in New Mexico,

the locale from which he acquired the vehicle before consummating the Zwank

transaction. Given that response, Mattox approved payment of the draft, and Kemper

       3
           This left a balance in the account of $2,199.82.

                                                      3
acknowledged receiving the proceeds of same. Title was transferred to Mattox, as

opposed to the Zwanks.

       Needless to say, dispute eventually arose as to who owned the Jeep. Mattox said

Wholesale did, while the Zwanks believed they did. Yet, the Zwanks delivered the vehicle

to Wholesale after it acquired an attorney. The latter had sent the Zwanks a letter

affording them three options. They could either return the vehicle, retain the vehicle and

be sued for conversion, or pay another $19,000 plus sum for it. The Zwanks opted to

release the vehicle to Wholesale.

       The Zwanks sued Kemper and Groves. Their causes of action sounded in breach

of contract, fraud, conversion, conspiracy and declaratory judgment. Discovery revealed

that Kemper originally authorized Groves to buy the Jeep “through Lynn’s Auto Sales” from

a Chevrolet dealer in New Mexico. Payment was made through a draft executed by

Groves against the account of Lynn’s Auto Sales with the approval of Kemper. Bender

Chevrolet (Bender) then assigned title to the Jeep to Lynn’s Auto Sales. Kemper also

authorized Groves to take and retain possession of the vehicle. Indeed, evidence

indicates that Kemper never obtained possession of it himself. Rather, Groves kept it until

the Jeep was released to the Zwanks. Moreover, Kemper admitted, via deposition, that

“any action that . . . Groves might have taken, as relates to either . . . buying or . . . selling

of a vehicle, either buying it on [Kemper’s] behalf or selling it to another dealer . . . or

individual . . . had to be approved by” Kemper. Finally, Kemper reported to the Internal

Revenue Service that he or his business paid Groves $52,239.00 in compensation for the

year 1998.

                                                4
       Kemper eventually filed both a traditional and no evidence motion for summary

judgment. The trial court granted it without specifying the ground or grounds upon which

it relied. Thereafter, the Zwanks appealed.

                                   Standard of Review

       The standards of review applicable to traditional and no evidence motions for

summary judgment are well-settled. Rather, than discuss them at length, we simply cite

the parties to Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548 (Tex. 1985)

and Kimber v. Sideris, 8 S.W.3d 672, 675 (Tex. App.--Amarillo 1999, no pet.) for a general

explanation of same.

                                  Application of Standard

       As previously mentioned, the Zwanks alleged causes of action sounding in

breached contract, fraud, conversion, conspiracy and declaratory judgment. In attempting

to defeat them via his traditional motion for summary judgment, Kemper alleged that: 1) he

“did nothing to imply . . . that Groves was [his] agent with respect to the sale of the . . .

Jeep”; 2) he “did not authorize Groves to sell the . . . Jeep . . . and that Kemper received

no proceeds that the Plaintiffs paid to Groves for such vehicle”; 3) he did not enter into or

breach any contract with the Zwanks or authorize Groves to enter into such a contract on

his behalf; 4) he did not defraud Zwanks, convert their “money,” or engage in a civil

conspiracy with Groves or Mattox; and, 5) the Zwanks were not entitled to a declaratory

judgment because no bank account of Groves was under the control or direction of

Kemper. Via his no evidence motion, Kemper alleged that there existed no evidence that

1) Groves acted on his behalf when selling the Jeep to the Zwanks, 2) Groves was acting

                                              5
as Kemper’s agent when the Jeep was sold to the Zwanks, 3) Kemper represented to the

plaintiffs that Groves was his agent, 4) Kemper benefitted from the transaction with the

Zwanks, 5) Kemper received proceeds from the sale to the Zwanks, 6) Kemper participated

“in any way with respect to Groves’ transaction with the” Zwanks, 7) Kemper “is guilty of

any acts or omissions that would constitute fraud,” 8) Kemper “converted any money of

the” Zwanks, 9) Kemper was involved in any conspiracy, 10) Kemper was involved “in any

contractual relationship” with the Zwanks, 11) Kemper breached any contract, and 12)

anyone other than Groves and the Zwanks are responsible for the Zwanks damages.4 We

now address each ground, though not necessarily in the order raised by Kemper.

        Declaratory Judgment

        Authority requires us to liberally construe the Zwanks’ pleadings. First American

Title Ins. Co. of Texas v. Willard, 949 S.W.2d 342, 352 (Tex. App. - - Tyler 1997, writ

denied). In doing so, we read the allegation regarding declaratory relief as requesting an

adjudication that Kemper received monies belonging to the Zwanks and that they should

be returned. So construed, the allegation is little more than one for money had and

received. See Staats v. Miller, 243 S.W.2d 686, 687 (Tex. 1951) (stating that all a plaintiff

need show to recover under a claim of money had and received “is that the defendant

holds money which in equity and good conscience belongs to” the plaintiff); Miller-

Rogaska, Inc. v. Bank One, Texas, N.A., 931 S.W.2d 655, 662 (Tex. App.--Dallas 1996,

        4
         As can be seen, the allegations do not comport with the requirements of Texas Rule of Civil
Procedure 166a(i). That is, Kemper’s allegations of no evidence are global and do not specify “the elements
as to which there is no evidence.” Such specificity is required according to Rule 166a(i). Yet, because the
Zwanks did not specially except to the allegations or otherwise complain of their form, we consider the
defects waived.

                                                    6
no writ) (stating the same); Gray v. Laketon Wheat Growers, 240 S.W.2d 353, 356 (Tex.

Civ. App.--Amarillo 1951, no writ) (stating the same). Moreover, evidence appears of

record indicating that some of the money Groves received from the Zwanks was eventually

deposited into the account of Kemper. Simply put, one cannot deposit $19,000 into an

account initially containing $4000 and then withdraw over $20,000 without encroaching on

the $19,000 deposit.      And, Kemper acknowledged receiving the $20,000 from Groves.

Consequently, a material issue of fact existed regarding the viability of the Zwanks’ request

for declaratory relief.

       Breach of Contract — No Agency Relationship

       The Zwanks alleged that they bought the Jeep from Groves who was acting as

agent for or on behalf of Kemper. So too did they allege that because they never received

title to the vehicle which Groves and Kemper subsequently sold to Wholesale after the

Zwanks paid for it, both Groves and Kemper breached their contract with the Zwanks.

Through summary judgment, Kemper attempted to defeat this cause of action by

contending that there existed no principal / agent relationship between Groves and

Kemper. Thus, Groves could not bind Kemper; nor could the latter be held vicariously

liable for Groves’ acts, the argument goes. The appellate record, however, contains some

evidence creating a material issue of fact on the matter.

       Generally, a principal / agent relationship is consensual in nature, and through it,

one party agrees to act for and on behalf of the other and be subject to his control.

Sorenson v. Shupe Bros. Co., 517 S.W.2d 861, 864 (Tex. Civ. App.--Amarillo 1974, no

writ). The control contemplated pertains to the details of the work; simply put, the right to

                                             7
control those details must exist for there to be an agency relationship. Royal Mortg. Corp.

v. Montague, 41 S.W.3d 721, 733 (Tex. App.--Fort Worth 2001, no pet.); Newspapers, Inc.

v. Love, 380 S.W.2d 582, 591 (Tex. 1964) (noting that the right to control the details of the

work is pivotal). Furthermore, the existence of an agency relationship need not be

established through direct evidence of an expressed agreement. Rather, it may be

inferred through circumstantial evidence or implied from the conduct of the parties. Royal

Mortg. Corp. v. Montague, 41 S.W.3d at 540.

       Next, Texas jurisprudence recognizes that one retained to make bargains and

contracts between other persons in matters of trade and commerce is a type of agent. Id.

at 734. Similarly, one who acquires property from a third person to convey to another is

the latter’s agent if it is agreed that the party acquiring the property is to act primarily for

the other’s benefit. Valley View Cattle Co. v. Iowa Beef Processors, Inc., 548 F.2d 1219,

1221 (5th Cir. 1977) (involving the purchase of cattle by Heller which were then sold to

Iowa Beef); American Employers Ins. Co. v. Kilgore, 412 S.W.2d 67,69 (Tex. Civ. App.--

1967, writ ref’d n.r.e.); Restatement (Second) of Agency §14K (1958). In other words, if

A acquires property from B to convey it to C, then A is the agent for C if it is agreed,

between A and C, that A is to act primarily for C, as opposed to A, during the transaction.

Finally, each proposition appears to be little more than a reiteration of a comment made

by the Texas Supreme Court in Newspapers, Inc. There, the court stated that in “absence

of evidence showing a different relationship between the parties, the fact that the alleged

servant was performing services peculiar to the principal’s business or affairs establishes

                                               8
prima facie that the relationship of master and servant exists between them.” Newspapers,

Inc. v. Love, 380 S.W.2d 582, 591-92 (Tex. 1964).5

        In the record before us, we find evidence that Groves and Kemper discussed the

purchase of the Jeep from Bender in New Mexico. During that discussion, Kemper

authorized Groves to buy the vehicle through Lynn’s Auto Sales. Upon receiving that

authorization, Groves executed, with Kemper’s authority, a site draft in the amount of

$17,850 payable to Bender. On the signature line of the draft appeared the following

inscription: “Lynn’s Auto Sales Mike Groves.” Thereafter, Kemper “personally authorize[d]

payment of [the] draft to Bender Chevrolet,” which payment was made on November 15,

1998. During the interim, Groves took possession of the vehicle with Kemper’s approval

and retained it. And, though he did not see the vehicle after Groves acquired it, Kemper

nonetheless arranged to have “Southwest Auto Sales to floor it for” him, i.e. Kemper, on

Southwest’s line of credit. So too did he ultimately receive from Groves some, if not all,

of the consideration paid by the Zwanks for the Jeep.

        Other evidence indicates that this was not the first time Groves bought vehicles on

behalf of Kemper d/b/a Lynn’s Auto Sales. Though he could not recall the year in which

“Groves first start[ed] working for” him or the number of times Groves bought vehicles

        5
          That the Supreme Court referred to a master / servant relationship in speaking does not detract
from the applicability of Newspapers, Inc. to a principal / agent relationship. It also referred to the master
as a principal in the passage quoted. Newspapers, Inc. v. Love, 380 S.W.2d 582, 591-92 (Tex. 1964). The
reason for this may be best explained by allusion to the Restatement (Second) of Agency. There, we are
told that a “master is a species of principal, and a servant is a species of agent.” Restatement (Second) of
Agency §2, comment a (1958). In other words, a master falls under the classification of a principal and a
servant under the classification of an agent, though not every agent may be a servant. Id. So, it would seem
that comments regarding the relationship of master /servant would be helpful in assessing the existence of
a principal / agent relationship.

                                                      9
through Lynn’s Auto, Kemper stated that he alone would authorize payment of the drafts

executed as part of those transactions. So too would he have to approve each purchase

and sale by Groves. And, upon Groves completing a purchase or sale, Kemper would pay

him a commission. Compensation given Groves by Kemper for the year 1998 (the year

in which the Zwanks attempted to buy the Jeep) approximated $52,239.

       Finally, concerning the ultimate disposition of the Jeep, Kemper directed that it be

sold, and title conveyed, to Wholesale for $18,500, despite Groves attempt to sell it to the

Zwanks. Moreover, the $18,500 sum was paid via a draft executed by Kemper on behalf

of Wholesale and identifying Lynn’s Auto Sales as the payee. On the signature line of the

draft, Kemper wrote: “Wholesale Auto Center Lubbock, Tx c/o John Mattox by Mike

Groves.”

       The foregoing is some evidence of an ongoing, consensual business relationship

between Kemper and Groves wherein the latter agreed to submit to the control of Kemper

regarding the details of the transactions involved. That is, Kemper not only decided

whether a vehicle should be bought but also loaned his credit (or that of his business) to

the transaction, determined how the acquisition was financed during the interim, allowed

Groves to execute commercial instruments on behalf of and obligating Lynn’s Auto as part

of the transaction, determined who would possess the vehicle until sold, and decided to

whom title would be transferred (despite Groves own efforts to sell the vehicle). And, in

exchange for his involvement in the transaction, Groves received substantial

compensation from Kemper (at least during the year 1998).

                                            10
        The circumstances described in the preceding paragraphs also constitutes some

evidence that Groves acquired and acquires property from a third person to convey to

Kemper and that in doing it, Groves acted primarily for the benefit of Kemper in acquiring,

retaining and ultimately disposing of it. In short, Groves may have received a commission

when the transaction was over, but he did not acquire the vehicle for himself or his own

business. He did not control its acquisition or final disposition. He merely acted on behalf,

pursuant to the direction, and for the primary benefit of Kemper, much like an paid

employee works for an employer. At the very least, a material issue of fact exists

regarding the matter.6 And, that the Zwanks may not have known of the principal in the

relationship at the time they dealt with Groves matters not. See First Nat. Bank of Wichita

Falls v. Fite, 131 Tex. 523, 115 S.W.2d 1105, 1109-10 (Tex. Comm’n App. 1938, opinion

adopted) (holding that an agent may make a contract for his undisclosed principal in his

own name, and the principal may sue or be sued on the contract); Sanroc Co. v.

Roadrunner Transp., Inc., 596 S.W.2d 320,322 (Tex. App.-Houston [1st Dist.] 1980, no writ)

(holding same). Thus, Kemper was not entitled, as a matter of law, to summary judgment

        6
          To the extent that Kemper may have placed in issue the extent of Groves’ authority to sell the Jeep,
we also note that a material question of fact exists as to that. Again, evidence indicates that 1) Kemper
authorized Groves to retain possession of the vehicle, 2) Groves previously sold vehicles for Kemper, 3)
Groves contacted Wholesale and negotiated the sale of the Jeep to it, 4) the Jeep was subsequently sold
to Wholesale, and 5) Kemper himself executed a draft on behalf of Wholesale obligating Wholesale to pay
Lynn’s Auto for the vehicle. Groves contacting and negotiating the transfer to Wholesale when added to
Kemper’s act of implicitly approving Groves’ actions by his (Kemper’s) executing the draft to secure payment
is some evidence indicating that Groves’ authority included negotiating the sale of the vehicle for Kemper.
See Hedley Feedlot, Inc. v. Weatherly Trust, 855 S.W.2d 826, 837 (Tex. App.--Amarillo 1993, writ denied)
(reiterating the general rule that an agent’s authority is presumed to be coextensive with the business
entrusted to his care).

                                                     11
on the issue of agency and the existence of a breach regarding the contract with the

Zwanks.7

        Fraud and Conversion

        Regarding the allegations of fraud, Kemper attempted to defeat them via summary

judgment by stating that he personally was guilty of no acts or omissions constituting fraud.

Given the context in which the ground was asserted, we read it as focusing upon the

purported independence of Groves. Due to that independence, Kemper apparently

believed that none of Groves’ acts could be attributed to him, i.e. Kemper.8 Evidence of

record creates a material issue of fact on the matter.

        As we stated while addressing the proceeding issue, a material issue of fact exists

regarding whether Kemper and Groves were involved in a principal / agent relationship.

Assuming that a fact-finder were to lend credence to that evidence and conclude that such

a relationship indeed existed, then the principal (Kemper) would be responsible for the

acts of the agent (Groves) undertaken within the scope of the relationship. Hedley

Feedlot, Inc. v. Weatherly Trust, 855 S.W.2d 826, 837 (Tex. App.--Amarillo 1993, writ

denied).      And, because the Zwanks alleged that Groves uttered one or more

misrepresentations during the course of their transaction with him and Kemper may be

liable for same given the potential agency relationship, a material issue of fact exists

        7
          A’s negotiating the sale of a car to B, receiving the negotiated price from B, delivering the vehicle
to B, informing B that title is forthcoming, then transferring title and, hence, ownership of the car to C is some
evidence creating a material issue of fact concerning the existence of a breached contract.
        8
         Again, we are relegated to interpreting the grounds uttered in Kemper’s summary judgment motion
since they are very indefinite when tested against the standards of Rule 166a(i) and the Zwanks failed to
specially except to them.

                                                       12
concerning whether Kemper was “guilty of any acts or omissions that would constitute

fraud . . . .”9

        Conversion

        Next, though indefinite and global, we read Kemper’s attack upon the claim of

conversion to be founded on grounds similar to those levied against the claim of fraud.

He apparently contends that since the Zwanks dealt exclusively with Groves, he (Kemper)

did nothing which could be construed as converting monies of the Zwanks. Thus, he was

supposedly entitled to summary judgment on the claim as a matter of law. We disagree.

        Much like the allegations regarding fraud, if Kemper and Groves were involved in

an agency relationship, then Groves’ tortious acts are imputable to Kemper if done within

the scope of his authority. Hedley Feedlot, Inc. v. Weatherly Trust, 855 S.W.2d at 837.

And, there exists a material issue of fact concerning whether such an agency relationship

existed when Groves negotiated the sale of the Jeep to the Zwanks, as discussed under

the prior issues. So, summary judgment on the ground asserted was improper.10

        Conspiracy

        Lastly, Kemper attempted to defeat the claim of conspiracy by alleging that there

was no evidence that he engaged in same. On appeal, the Zwanks argue that summary

        9
       We venture no opinion on whether the conduct of Groves constituted fraud. That was not the basis
of Kemper’s summary judgment, according to our construction of the grounds he asserted.
        10
          Since it was not raised below, we do not address whether the Zwanks had a viable claim for
conversion because monies were purportedly converted. See Estate of Townes v. Townes, 867 S.W.2d
414, 419 (Tex. App.--Houston [14th Dist.] 1993, writ denied) (holding that money is subject to conversion only
when it can be described or identified as a specific chattel and not where an indebtedness may be
discharged by the payment of money generally); Edlund v. Bounds, 842 S.W.2d 719, 727 (Tex. App.--Dallas
1992, writ denied) (holding the same).

                                                     13
judgment was improper because evidence indicated that Kemper and Groves conspired

to sell the Jeep to two different people.

       To prove a civil conspiracy, the claimant must establish, among other things, that

the participants in the alleged conspiracy had a meeting of the minds on the object or

course of action. Abraham Inv. Co. v. Payne Ranch, Inc., 968 S.W.2d 518, 528 (Tex.

App.--Amarillo 1998, pet. denied). The Zwanks cite us to no direct or circumstantial

evidence from which one could reasonably infer or conclude that Kemper and Groves

agreed to sell the Jeep first to the Zwanks and then to Wholesale.

       Nor are we cited to any evidence of record indicating that Kemper 1) specifically

intended to sell the vehicle to two separate parties at any time prior to the conveyance to

Wholesale or 2) knew of Groves efforts or intent to do so. See Firestone Steel Prod. Co.

v. Barajas, 927 S.W.2d 608, 614 (Tex. 1996) (holding that civil conspiracy requires specific

intent and knowledge of the harm or the wrongful conduct at the beginning of the

combination or agreement). That evidence exists indicating that Kemper may have

received the proceeds does not fill the void. This is so because nothing suggests that

Kemper handled the check issued by the Zwanks. Nor does any evidence illustrate that

he knew the source of the funds contained in Groves’ checking account or that the funds

used to pay the two checks issued him by Groves were monies originally transferred from

the Zwanks. Consequently, the Zwanks failed carry their burden of proof and present

some evidence on each element of their conspiracy claim.

                                            14
       Accordingly, we affirm the summary judgment to the extent that it denies recovery

upon the claim of civil conspiracy. However, we reverse it in all other respects and remand

the cause to the trial court for further proceedings.

                                                        Brian Quinn
                                                          Justice

Do not publish.

                                             15