Court Opinion

ID: 9366879
Source: CourtListenerOpinion
Date Created: 2023-01-29 08:11:51.095358+00
Date Added: 2024-06-11T17:15:55.616850
License: Public Domain

Reversed and Remanded and Memorandum Opinion filed January 24, 2023.

                                     In The

                    Fourteenth Court of Appeals

                              NO. 14-21-00369-CV

                    QUION INVESTORS, INC., Appellant

                                        V.
           JIM GRIBBLE AND CAROLYN GRIBBLE, Appellees

                   On Appeal from the County Court at Law
                         Washington County, Texas
                       Trial Court Cause No. 2019-106

                         MEMORANDUM OPINION

      Quion Investors, Inc. sued Jim and Carolyn Gribble for breach of contract and
breach of trust based on a dispute involving a purported partnership between the
parties to purchase and rehabilitate a home for resale. The trial court granted the
Gribbles’ no-evidence motion for summary judgment on both causes of action.
Quion brings two issues on appeal, challenging the trial court’s exclusion of
statements in an affidavit in response to the summary judgment motion and the trial
court’s rendition of summary judgment. Concluding that the trial court abused its
discretion in excluding several challenged statements and Quion presented more
than a scintilla of evidence on the challenged elements of its claims—existence of a
valid contract and fiduciary relationship, we reverse and remand.

                                    Background

      Jeff Appel of Quion and Carolyn Gribble both attended a foreclosure sale in
Brenham, Texas. According to Quion, Appel and Carolyn agreed at the sale to “enter
into a partnership to purchase and rehabilitate the [subject] property for resale.”
Carolyn purchased the property at the foreclosure sale. Pursuant to the alleged
agreement, the Gribbles and Quion would split the purchase and rehabilitation costs
and proceeds equally. During the parties’ negotiations, Jim Gribble sent Appel
several emails stating that they no longer wanted to form a partnership. Jim also sent
Appel an email stating they never reached an agreement: “It was only IF WE could
reach agreement and never did.”

      Quion filed its original petition, asserting causes of action for breach of
contract and breach of trust. It alleged in relevant part that it entered into a verbal
partnership agreement with the Gribbles at the foreclosure sale and that “as partners,
the defendants owed a fiduciary duty to the Plaintiff.”

      The Gribbles moved for summary judgment in relevant part as follows:

      No Evidence to Support Breach of Contract Claim. Plaintiff’s cause
      of action for breach of contract is based on alleged breach of an alleged
      oral partnership or joint venture agreement. In order to prevail on the
      breach of contract claim, Plaintiffs must prove that the parties formed
      a partnership or joint venture. A take-nothing summary judgment on
      this claim is required because there is no evidence that Defendants
      formed a joint venture or partnership with Plaintiff. In particular, there
      is no evidence of:

      a.     An agreement between Defendants and Plaintiff to share the
             profits of the alleged venture;

                                          2
      b.      An agreement between Defendants and Plaintiff to be partners or
              joint venturers in the alleged venture;
      c.      An agreement between Defendants and Plaintiff for Plaintiff to
              participate in the control of the alleged venture; or

      d.      An agreement between Defendants and Plaintiff to share the
              losses of the alleged joint venture; or

      e.      An agreement between Defendants and Plaintiff that Plaintiff
              would contribute money or property to the alleged venture. . . .

      No Evidence to Support Breach of Trust Claim. . . . Because there is
      no evidence to support the elements of joint venture or partnership . . . ,
      there is no evidence of a fiduciary relationship, or a relationship that
      would support a breach of trust claim, and therefore Plaintiff’s claim
      must fail as a matter of law.

      Quion’s entire argument in response to the summary judgment motion
follows: “The attached affidavit of John Jeffrey Appel (Exhibit A) addresses every
element of the Plaintiff’s claim and includes an affidavit swearing to the facts in the
Plaintiff’s Original Petition. The allegations in the Original Petition should be
reviewed in the light most favorable to the Plaintiff.” Appel attested in relevant part:

           • “In my capacity as vice president of Quion[,] I was prepared to bid on
             the house . . . which was set for foreclosure that day when I met Carolyn
             Gribble who was also at the sale.”

           • “[W]e agreed to a partnership concerning bidding on this property[.] A
             partnership would split the cost of the purchase, rehabilitation and sale
             of the house. It would also split the profit from the sale after
             rehabilitation, if any as well as any losses incurred.”

           • “The partners were agreed on that date to be Quion . . . and Carolyn
             Gribble and her husband Jim. We agreed that Carolyn would bid at the
             foreclosure sale on behalf of the partnership.”

           • “I committed at the auction to Carolyn Gribble on behalf of Quion . . .
             to pay our half of the costs of the purchase price, rehabilitation costs
             and costs of the eventual sale of this property and share equally in the
                                           3
              profit or loss.”

           • “Following the auction and the successful high bid by Carolyn on
             behalf of the newly formed partnership, Randall Patterson, the
             president of Quion . . . arrived and I introduced him to Carolyn as her
             new partner. Carolyn did not object to this characterization.”

      The Gribbles objected to several statements in the affidavit. The trial court
sustained many of the objections and granted the motion, rendering final summary
judgment “disposing of all claims and all parties.”

                                      Discussion

      Quion challenges the trial court’s summary judgment in two issues,
contending the trial court (1) abused its discretion in sustaining objections to
statements in Appel’s affidavit, and (2) erred in rendering summary judgment in the
Gribbles’ favor.

      I.      Objections to Affidavit

      In its first issue, Quion asserts that the trial court abused its discretion in
sustaining objections to several statements in Appel’s affidavit. In particular, Quion
argues the statements are not conclusory, are based on personal knowledge, and were
provided in response to interrogatories served on Quion by the Gribbles.

      The rules of evidence control the admissibility of evidence in summary-
judgment proceedings, and we review a trial court’s decision to admit or exclude
summary-judgment evidence for abuse of discretion. Tex. R. Evid. 101(b); Seim v.
Allstate Tex. Lloyds, 551 S.W.3d 161, 163–64 (Tex. 2018). A trial court abuses its
discretion when it acts arbitrarily or without reference to any guiding rules and
principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex.
1985). We must uphold the trial court’s evidentiary ruling if there is any legitimate
basis for the ruling and will set aside the trial court’s judgment only if the “erroneous

                                           4
evidentiary ruling probably caused the rendition of an improper judgment.”
Enbridge Pipelines (E. Tex.) L.P. v. Avinger Timber, LLC, 386 S.W.3d 256, 264
(Tex. 2012); Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 906 (Tex.
2000); see Tex. R. App. P. 44.1(a)(1).

      Not Conclusory. The trial court sustained objections to the following
statements in Appel’s affidavit on the basis that they are “legal and/or factual
conclusion[s]”:

         • “We agreed to a partnership concerning bidding on this property . . . .”

         • “A partnership would split the cost of the purchase, rehabilitation and
           sale of the house.”

         • “It would also split the profit from the sale after rehabilitation, if any as
           well as any losses incurred.”

         • “The partners were agreed on that date to be Quion Investors . . . and
           Carolyn Gribble and her husband Jim.”

         • “We agreed . . . that Carolyn would bid at the foreclosure sale on behalf
           of the partnership.”

         • “When Carolyn and I agreed to a partnership . . .”

         • “Quion Investors . . . had relied on the previous verbal agreement with
           Carolyn Gribble.”

      Conclusory statements without factual support are not credible and are not
susceptible to being readily controverted. La China v. Woodlands Operating Co.,
417 S.W.3d 516, 520 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (citing Ryland
Group v. Hood, 924 S.W.2d 120, 122 (Tex. 1996) (per curiam)). Put another way, a
conclusory statement expresses “a factual inference without stating the underlying
facts on which the inference is based.” Id. (citing Arkoma Basin Expl. Co. v. FMF
Assocs. 1990–A, Ltd., 249 S.W.3d 380, 389 n.32 (Tex. 2008) (citing Black’s Law

                                          5
Dictionary 308 (8th ed. 2004)). Appel attested that he attended a foreclosure sale
and met Carolyn at the sale and they agreed to become partners to rehabilitate and
sell the subject property and split any profits or losses. He also said, albeit in an
inartful manner, that the partners would be Quion and the Gribbles. His other
statements recount the details of what the parties purportedly agreed to do. These
statements are not conclusory because they include facts that can be rebutted,
including the underlying facts from which the trial court could rule on the summary
judgment motion. See id. We conclude the trial court abused its discretion in
sustaining the above objections on the basis that they were legal or factual
conclusions.

      Based on Personal Knowledge. The Gribbles also objected to the following
statement on the basis that it was not based on personal knowledge: “The partners
were agreed on that date to be Quion Investors . . . and Carolyn Gribble and her
husband Jim.” The trial court did not rule on that objection. To preserve error for
formal defects, one must (1) timely object or move to strike, (2) state the specific
ground, unless it was apparent from the context, and obtain a ruling from the trial
court or object to the trial court’s refusal to rule. Tex. R. Evid. 103(a); Tex. R. App.
P. 33.1(a); Nationwide Coin & Bullion Reserve, Inc. v. Thomas, 625 S.W.3d 498,
504 (Tex. App.—Houston [14th Dist.] 2020, pet. denied). Lack of personal
knowledge is a defect of form, and the Gribbles did not object to the refusal to rule.
See id. Their objection to lack of personal knowledge is therefore waived. See id.

      Discovery Response. The trial court sustained an objection to the statement
“The partners were agreed on that date to be Quion Investors . . . and Carolyn Gribble
and her husband Jim” on the basis that Quion “failed to provide this information in
response to a discovery request.” The Gribbles sent Quion an interrogatory asking
Quion to state “[a]s best as possible, the exact words that were said by Carolyn

                                           6
Gribble, and by the person or persons communicating with her on behalf of” Quion.
Quion responded that Carolyn “agreed to form a partnership with the Plaintiff . . . .
Before the sale, Carolyn went outside to call her husband and returned to tell Mr.
Appel that both she and her husband agreed to the partnership . . . .” These
statements contain all the information provided by the sentence in the affidavit.
Carolyn agreed to form a partnership with the plaintiff. The plaintiff is Quion. And
Carolyn told Appel that both she and her husband would be partners. We conclude
the trial court abused its discretion by sustaining this objection. We sustain Quion’s
first issue.

       II.     Summary Judgment

       In its second issue, Quion contends that the trial court erred in granting the
no-evidence summary judgment in the Gribbles’ favor. As an initial matter, we
address the adequacy of Quion’s response to the motion. As discussed, the Gribbles
moved for summary judgment on Quion’s claims for breach of contract and breach
of trust. In its response, Quion simply stated that Appel’s attached affidavit
“addresses every element of the Plaintiff’s claim.”

       A nonmovant’s response to a summary judgment motion “must fairly apprise
the movant and the court of the issues the non-movant contends should defeat the
motion.” City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.
1979): see Tex. R. Civ. P. 166a(c) (“Issues not expressly presented to the trial court
by written motion, answer or other response shall not be considered on appeal as
grounds for reversal.”). Quion was not required to marshal its proof, but it was
required to “point out evidence that raises a fact issue on the challenged elements”
and not merely on the causes of actions generally. See Tex. R. Civ. P. 166a (cmt. to
1997 change); see Burns v. Canales, No. 14-04-00786-CV, 2006 WL 461518, at *4
(Tex. App.—Houston [14th Dist.] Feb. 28, 2006, pet. denied) (mem. op.). A trial

                                          7
court does not abuse its discretion when it does not consider summary judgment
proof to which a movant does not specifically direct the trial court’s attention. See
Burns, 2006 WL 461518, at *4; see also Guthrie v. Suiter, 934 S.W.2d 820, 826
(Tex. App.—Houston [1st Dist.] 1996, no writ) Ordinarily, a mere reference to
attached evidence is insufficient to avoid summary judgment. McConnell v.
Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993) (“[I]ssues a non-
movant contends avoid the movant’s entitlement to summary judgment must be
expressly presented by written answer to the motion or by other written response to
the motion and are not expressly presented by mere reference to summary judgment
evidence.”).

      Here, Quion attached a six-page affidavit to its response as evidence
challenging the no-evidence motion for summary judgment. Although the number
of pages is not dispositive, the response incorporates the affidavit. Ordinarily, a trial
court is not required to sort through all the non-movant’s evidence to determine if a
fact issue exists without any guidance concerning what evidence creates an issue on
a particular element. See Burns, 2006 WL 461518, at *4 (citing San Saba Energy,
L.P. v. Crawford, 171 S.W.3d 323, 330 (Tex. App.—Houston [14th Dist.] 2005, no
pet.). However, the Gribbles challenged one element of each claim (discussed
below), and the evidence consists of a short affidavit incorporated into the response.
Under these circumstances, we conclude the response adequately pointed to
evidence raising a fact issue regarding the challenged elements. See Tex. R. Civ. P.
166a (cmt. to 1997 change) (“[T]he respondent is not required to marshal its proof;
its response need only point out evidence that raises a fact issue on the challenged
elements.”). We turn to the merits of the summary judgment issue.

      We review a no-evidence summary judgment under a legal sufficiency
standard. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750–51 (Tex. 2003). A

                                           8
no-evidence summary judgment 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. Id. at 751. Thus, a
no-evidence summary judgment is improperly granted if the respondent brings forth
more than a scintilla of probative evidence to raise a genuine issue of material fact.
Tex. R. Civ. P. 166a(i); King Ranch, at 118 S.W.3d at 751. Less than a scintilla of
evidence exists when the evidence is so weak as to do no more than create a mere
surmise or suspicion of a fact. King Ranch, at 118 S.W.3d at 751. More than a
scintilla of evidence exists when the evidence rises to a level that would enable
reasonable and fair-minded people to differ in their conclusions. Id.

       Fact Question on Existence of Valid Contract. The Gribbles moved for
summary judgment on the breach of contract claim on the basis that no evidence
existed of an agreement (1) to be partners or joint venturers, (2) to participate in the
control of an alleged venture, (3) to share the losses or liabilities of an alleged
venture, or (4) that plaintiff would contribute money or property to an alleged
venture.1 These arguments all apply to the first element of a breach of contract
claim—the existence of a valid contract. See Mays v. Pierce, 203 S.W.3d 564, 575
(Tex. App.—Houston [14th Dist.] 2006, pet. denied). The elements of a valid
contract are (1) an offer, (2) an acceptance, (3) a meeting of the minds, (4) each
party’s consent to the terms, and (5) execution and delivery of the contract with the

       1
          Quion’s asserted claim is for breach of contract. According to the Gribbles, Quion
presented causes of action for “breach of the alleged partnership (or joint venture) agreement, and
the other for ‘breach of trust’, i.e. breach of fiduciary duty.” We note that the Gribbles did not
specially except to the original petition. Our analysis is based on Quion’s asserted breach of
contract claim.

                                                9
intent that it be mutual and binding. Tyco Valves & Controls, L.P. v. Colorado, 365
S.W.3d 750, 771 (Tex. App.—Houston [1st Dist.] 2012), aff’d, 432 S.W.3d 885
(Tex. 2014). “The elements of written and oral contracts are the same and must be
present for a contract to be binding.” Id. (citing Wal–Mart Stores, Inc. v. Lopez, 93
S.W.3d 548, 555 (Tex. App.—Houston [14th Dist.] 2002, no pet.)).

       Appel attested that he and Carolyn met at the foreclosure sale and “agreed to
a partnership [that] would split the cost of the purchase, rehabilitation and sale of the
house [and] also split the profit from the sale after rehabilitation.” He further stated,
“The partners were agreed on that date to be Quion Investors, Inc and Carolyn
Gribble and her husband Jim” and “When Carolyn Gribble and I agreed to a
partnership prior to the auction, I did not bid on this property because I relied on our
verbal agreement that she would hold title on behalf of the partnership. [sic] that we
had a partnership.” These statements raise more than a scintilla of evidence that
Quion and the Gribbles had a partnership agreement—in other words, Quion
presented some evidence that Appel made an offer on behalf of Quion, the Gribbles
accepted, the parties had a meeting of the minds and consented to the proposed
terms, and an oral contract was formed. Accordingly, the trial court erred in granting
summary judgment on Quion’s breach of contract claim.

       Fact Question on Fiduciary Duty. In its breach of trust claim, Quion alleged
that the Gribbles owed Quion a fiduciary duty that they breached “when they
terminated the partnership.” We interpret this as a breach of fiduciary duty claim.2
The Gribbles moved for no-evidence summary judgment on the grounds that no

       2
          The breach of trust claim tracks the elements of a breach of fiduciary duty claim. See
Heritage Gulf Coast Props., Ltd. v. Sandalwood Apartments, Inc., 416 S.W.3d 642, 650 (Tex.
App.—Houston [14th Dist.] 2013, no pet.) (“The elements of a claim for breach of fiduciary duty
are (1) a fiduciary relationship existed between the plaintiff and the defendant, (2) the defendant
breached its fiduciary duty, and (3) the breach resulted in injury to the plaintiff or benefit to the
defendant.”).

                                                 10
partnership agreement existed and there is no evidence of a fiduciary relationship.
To recover on a breach-of-fiduciary-duty claim, a plaintiff must first establish the
existence of a fiduciary relationship. Heritage Gulf Coast Props., Ltd. v. Sandalwood
Apartments, Inc., 416 S.W.3d 642, 650 (Tex. App.—Houston [14th Dist.] 2013, no
pet.); see also Meyer v. Cathey, 167 S.W.3d 327, 330–31 (Tex. 2005). Fiduciary
duties arise as a matter of law in certain formal relationships, including partnerships.
Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 674 (Tex. 1998). As discussed, Quion
presented some evidence that the parties entered into a partnership agreement. In
that same vein, there is more than a scintilla of evidence that the parties were partners
and thus had a fiduciary relationship. Accordingly, the trial court erred in granting
summary judgment on Quion’s breach of fiduciary duty claim.

                                      Conclusion

      We conclude Quion presented more than a scintilla of evidence on the
challenged elements of its claims—existence of a valid contract and a fiduciary
relationship. We reverse the trial court’s judgment and remand for further
proceedings.

                                         /s/    Frances Bourliot
                                                Justice

Panel consists of Chief Justice Christopher and Justices Bourliot and Spain.

                                           11