Court Opinion

ID: 2854123
Source: CourtListenerOpinion
Date Created: 2015-09-04 17:14:01.748546+00
Date Added: 2024-06-11T11:34:03.092753
License: Public Domain

COURT OF APPEALS
                            SECOND DISTRICT OF TEXAS
                                 FORT WORTH

                                  NO. 2-07-038-CV

JAMES R. WINN, M.D.                                                 APPELLANT

                                              V.

SPECTRUM PRIMARY CARE, INC.                                           APPELLEE

                                          ------------

            FROM THE 393RD DISTRICT COURT OF DENTON COUNTY

                                          ------------

                          MEMORANDUM OPINION 1

                                          ------------

      Appellant James R. Winn, M.D. appeals the summary judgment granted

in favor of Appellee Spectrum Primary Care, Inc. and the denial of his own

motion for summary judgment. In four issues, Appellant argues that the trial

court erred by granting summary judgment for Appellee, by denying summary

judgment for him, by failing and refusing to rule on his objections to Appellee’s

      1
          … See T EX. R. A PP. P. 47.4.
summary judgment evidence, and by failing to sustain his objections to, and

failing to exclude, Appellee’s summary judgment evidence. Because we hold

that the trial court did not err by granting summary judgment for Appellee on

Appellant’s bonus claim and that the trial court did err by granting summary

judgment on Appellant’s termination compensation claim, we affirm in part and

reverse and remand in part.

                        F ACTS AND P ROCEDURAL H ISTORY

      Appellant is a physician licensed in the state of Texas. Appellee provides

primary care services as a subcontractor at the primary care clinic at the Denton

V.A. Clinic in Denton, Texas (“the Clinic”). Appellant and Appellee entered into

an employment agreement on August 20, 2004 (the “Agreement”).                The

Agreement provided for a one-year term of employment, from September 1,

2004, to August 31, 2005, with an automatic renewal for successive one-year

terms after the end of the initial employment term. The Agreement further

provided that either party could terminate the Agreement at any time, for any

or no reason, on ninety days’ prior written notice to the other party.       The

Agreement allowed Appellee to terminate the Agreement immediately upon the

occurrence of certain conditions. Paragraph 7D of the Agreement listed one of

those conditions as “the inability or failure of [Appellant] to obtain or retain

                                       2
approval from Clinic, prime contractor, and V.A. to provide services at Clinic.”

Health Net is the prime contractor for the Clinic.

      On August 19, 2005, Appellee gave Appellant ninety days’ notice of

termination, to be effective November 20, 2005. But then on September 21,

2005, Appellee terminated Appellant’s employment effective immediately under

paragraph 7D of the Agreement after Dan Carlson, Health Net’s Director of

Veterans Affairs—Communication Based Outplacement Clinic, requested that

Appellee remove Appellant from the clinic.

      Appellant brought suit to recover the salary for the remaining portion of

the ninety-day notice period between September 21 and November 20

(“termination compensation”). He also sought to recover a $4,000 completion

bonus that, under the Agreement, was to be paid if Appellant completed twelve

months of full-time service. The Agreement stated that Appellant would be

entitled to the completion bonus “provided that this Agreement and full-time

employment service hereunder remains in full force and effect without

termination, reduction or notice thereof by either party for any or no reason

through such 12-month period.”

      Both parties moved for summary judgment. Appellant objected to the

affidavit of Sharon Krejci, vice president of Appellee, which was the only

summary judgment evidence Appellee included with its motion. The trial court

                                       3
notified the parties that Appellee’s motion was granted and that Appellant’s

motion was denied, but the court did not inform the parties of its ruling on

Appellant’s objections. Appellant filed a motion requesting the trial court to rule

on his objections and objecting to the court’s failure to rule. The trial court

subsequently entered its order granting summary judgment for Appellee and

denying summary judgment for Appellant.          The trial court did not issue a

separate order ruling on Appellant’s objections but stated in the order that “all

relief requested by any party that is not expressly granted or denied herein is

hereby denied.”

                              S TANDARD OF R EVIEW

      A plaintiff is entitled to summary judgment on a cause of action if it

conclusively proves all essential elements of the claim. 2     A defendant who

conclusively negates at least one essential element of a cause of action is

entitled to summary judgment on that claim.3          W e review a trial court’s

summary judgment de novo,4 and “[o]n appeal, the movant still bears the

      2
      … See T EX. R. C IV. P. 166a(a), (c); MMP, Ltd. v. Jones, 710 S.W.2d 59,
60 (Tex. 1986).
      3
     … IHS Cedars Treatment Ctr. of Desoto, Tex., Inc. v. Mason, 143
S.W.3d 794, 798 (Tex. 2004); see T EX. R. C IV. P. 166a(b), (c).
      4
       … Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215
(Tex. 2003).

                                        4
burden of showing that there is no genuine issue of material fact and that the

movant is entitled to judgment as a matter of law.” 5 When both parties move

for summary judgment and the trial court grants one motion and denies the

other, the reviewing court should review both parties’ summary judgment

evidence and determine all questions presented.6 The reviewing court should

render the judgment that the trial court should have rendered.7

                                     A NALYSIS

      Because      Appellant’s   objections   to   Krejci’s   affidavit   affect   our

determination of whether Appellee met its summary judgment burden, we

consider Appellant’s third and fourth issues first. In his third issue, Appellant

states that the trial court erred by failing and refusing to rule on Appellant’s

objections to Krejci’s affidavit.

      A trial court’s ruling on a party’s objections may be either express or

implied.8 After Appellant filed a motion requesting the trial court to rule on his

objections and objecting to the court’s failure to rule, the trial court entered its

      5
          … Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999).
      6
          … Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).
      7
          … Id.
      8
       … Frazier v. Yu, 987 S.W.2d 607, 610 (Tex. App.—Fort Worth 1999,
pet. denied).

                                         5
order granting summary judgment for Appellee and stating that “all relief

requested by any party that is not expressly granted or denied herein is hereby

denied.” Because Krejci’s affidavit was specifically and extensively objected to

in Appellant’s written objections and Appellant filed a written motion requesting

the trial court to rule on his objections and objecting to the court’s failure to

rule, the court was aware of Appellant’s objections. 9 By subsequently stating

in its order that it denied any requested relief not expressly granted or denied,

it implicitly overruled Appellant’s objections. 10 We therefore overrule this issue.

      In his fourth issue, Appellant contends that the trial court erred by

admitting Krejci’s affidavit into evidence.        Appellant objected to three

statements in Krejci’s affidavit: (1) “On September 15, 2005, Dan Carlson,

Director of Veteran Affairs–Community Based Outpatient Clinics with Health

Net, informed Spectrum that Health Net no longer approved of Dr. Winn

providing services at the Clinic”; (2) “It was my understanding that Mr. Carlson

was authorized to speak on behalf of Health Net, the prime contractor at the

      9
       … See id. (“Because the affidavits were specifically and extensively
objected to in Yu's written objections and motion to strike the affidavits, the
court was aware of their existence.”).
      10
         … See id.; see also Blum v. Julian, 977 S.W.2d 819, 823-24 (Tex.
App.—Fort W orth 1998, no pet.) (holding that the fact that the trial court
granted the appellee's motion for summary judgment created an inference that
it implicitly reviewed and overruled the appellant's objections).

                                         6
Clinic”; and (3) “Based on this communication by Health Net indicating Dr.

Winn no longer had the approval of the prime contractor to provide services at

the Clinic, I wrote a letter to Dr. Winn on September 21, 2005, notifying him

that the Agreement was immediately terminated.”

      We first consider Appellant’s objection to Krejci’s statement that she

understood Carlson was authorized to speak on behalf of Health Net. Appellant

objected that the statement is not clear, direct, positive, and unequivocal as

required by Texas Rule of Civil Procedure 166a and that the statement either

constitutes inadmissible hearsay or is based on inadmissible speculation.

      The statement is not based on inadmissible speculation, and the case

cited by Appellant11 is distinguishable.       In Ryland Group, the affiant’s

“understanding” was not based upon personal knowledge, or at least, the

affidavit gave no indication of the basis of the affiant’s understanding.12 In this

case, Krejci states in her affidavit that her job duties include oversight of

personnel matters and oversight of Appellee’s relationships with its prime

contractors, including Health Net.     It is therefore Krejci’s job to work with

Health Net on personnel matters; Appellant’s employment is undeniably a

      11
           … See Ryland Group, Inc. v. Hood, 924 S.W.2d 120 (Tex. 1996).
      12
           … See id. at 122.

                                        7
personnel matter. Her “understanding,” then, comes from personal experience

gained in the course of her employment, based upon a working relationship with

Health Net and other contractors. Because in this case, her statement was

based on personal knowledge and experiences gained from her job with

Appellee, the statement is not based on inadmissible speculation. 13

      Nor is the statement hearsay, because Krejci is not repeating an out-of-

court statement of another; she is giving a statement as to her own belief

based on her personal knowledge gained from her duties with Appellee.14 As

for Appellant’s objection that her statement is not clear, direct, and

unequivocal, he does not argue in what way her statement is not clear, direct,

and unequivocal, and we disagree with his contention. We overrule Appellant’s

arguments with respect to this statement.

      13
        … See Am. Heritage Apartments, Inc. v. Bowie County Appraisal Dist.,
196 S.W.3d 850, 854 (Tex. App.—Texarkana 2006, pet. denied) (stating that
affidavits supporting motions for summary judgment must be based on personal
knowledge); 1001 McKinney Ltd. v. Credit Suisse First Boston Mortgage
Capital, 192 S.W.3d 20, 27 (Tex. App.—Houston [14th Dist.] 2005, pet.
denied) (holding that affiant established that he had personal knowledge,
resulting from his employment, of the matters asserted in his affidavit).
      14
       … See T EX. R. E VID. 801(d) (“‘Hearsay’ is a statement, other than one
made by the declarant while testifying at the trial or hearing, offered in evidence
to prove the truth of the matter asserted.”).

                                        8
      We next consider Appellant’s objections to Krejci’s statement repeating

Carlson’s assertion that Health Net did not approve of Appellant’s employment.

He made several objections to this statement. He first contended that this

statement constitutes hearsay and probably hearsay within hearsay in that “it

purports to repeat a statement, (other than one made by Krejci made by a third

party) attempting to prove the truth of the matter asserted.” He further argued

that her affidavit states that Carlson’s statement was made to Appellee, rather

than directly to Krejci, thus further constituting hearsay within hearsay. Finally,

he objects that “the purported statement made by [Carlson] were [sic] based

upon communications she ‘understood’ that he had with [Health Net],” and the

repetition by Carlson of Health Net’s statement, repeated to Appellee and then

to Krejci, constitutes triple hearsay.

      Krejci does not aver in her affidavit that Carlson’s statement was based

upon communication that she understood that he had with someone else at

Health Net. No such statement appears in her affidavit. What she did say was

that her understanding is that when Carlson made a representation, he spoke

on behalf of Health Net, which is different from a statement that she

understood Carlson to be repeating someone else’s words. Accordingly, we

overrule Appellant’s argument that this statement constitutes triple hearsay.

                                         9
      We agree with Appellant, however, that Carlson’s statement constitutes

hearsay. The fact to be established here was that Health Net did not approve

of Appellant’s employment. The statement of Carlson was offered to prove that

fact.15 Because this statement contains hearsay, the trial court erred by not

excluding this statement, and we will not consider it in our review.16

      Finally, we consider Appellant’s objection on hearsay grounds to Krejci’s

statement that, based on Carlson’s statement, she notified Appellant that his

employment was terminated immediately. Appellant argued to the trial court

and maintains on appeal that this statement constitutes hearsay because it

“purports to repeat a statement, other than one made by [Krejci] made by a third

party attempting to prove the truth of the matter asserted in the statement.”

Appellant is correct that the portion of the sentence “indicating Dr. Winn no

longer had the approval of the prime contractor to provide services at the Clinic”

is hearsay. The rest of the statement is not hearsay; Krejci tells what action she

       15
            … See id.
       16
        … See Southland Corp. v. Lewis, 940 S.W.2d 83, 85 (Tex. 1997)
(holding that a private investigator’s affidavit that was based solely on his notes
from interviews was “clearly inadmissible hearsay” that was properly objected
to and therefore was not competent summary judgment proof); Souder v.
Cannon, 235 S.W.3d 841, 851 (Tex. App.—Fort Worth 2007, no pet.) (holding
that the appellants’ hearsay objection to a statement in an affidavit should have
been sustained and that this court would therefore not consider the statement
in our review).

                                       10
took and states that the action was based on a statement made by another.17

Thus, we hold that the trial court erred by not excluding the hearsay portion of

this statement but did not err by excluding the rest of the statement. Because

we have held that Krejci’s affidavit included statements constituting inadmissible

hearsay, we sustain in part Appellant’s fourth issue and hold that the trial court

erred by failing to exclude those statements.

      We now turn to Appellant’s arguments regarding the parties’ summary

judgment motions. In his first issue, Appellant argues that the trial court erred

by granting summary judgment for Appellee.

      We consider first his arguments with respect to the compensation bonus.

Under the Agreement, Appellant was entitled to receive the bonus for his

employment during the first twelve months “provided that [the] Agreement

. . . remains in full force and effect without termination . . . or notice thereof

. . . through such 12-month period.” [Emphasis added]

      Appellant acknowledges that he received notice of termination during the

twelve-month period. Appellant argues, however, that the Agreement does not

       17
        … See Williams v. Jennings, 755 S.W.2d 874, 885 (Tex.
App.—Houston [14th Dist.] 1988, writ denied) (“Many out-of-court statements
do not constitute hearsay. The fact that the words were uttered is sometimes
the fact to be established. Such testimony is received because the mere
utterance of the words has legal significance.”).

                                       11
provide that receiving notice of termination during a twelve-month period results

in his not being entitled to the bonus for that period. In his view the provision

requiring no notice of termination relates not to the time period during which the

notice is given, but rather to the employment term to which the notice refers.

That is, a court should not look to see if notice was given during the twelve-

month employment term for which the bonus would be payable. Instead, the

court should look to see if notice was given early enough such that Appellant’s

employment ended before the end of that particular twelve-month employment

term. Because the ninety-day notice came so late into the first twelve-month

term that by working those ninety-days Appellant remained at the Clinic for

twelve months and continued working into a second twelve-month period,

Appellant argues that he was entitled to the bonus based on his working the full

twelve months of the first term.

      We disagree.     The plain language of the Agreement states that for

Appellant to receive the bonus, the Agreement had to remain in effect through

the twelve-month term without termination and without notice of termination.

Appellant received notice of his termination before the end of the twelve-month

term, and thus the Agreement did not remain in effect without notice of

termination through the twelve-month term. Accordingly, we hold that under

                                       12
the Agreement, Appellant was not entitled to the bonus, and the trial court did

not err by granting summary judgment for Appellee on this claim.

       Appellant further argues that the trial court erred by granting summary

judgment for Appellee on his claim for termination compensation. We agree that

without the hearsay statements in Krejci’s affidavit, Appellee did not establish

that it terminated Appellant for cause.18 Appellee therefore did not establish

that it was entitled to summary judgment as a matter of law on this issue. We

sustain Appellant’s first issue as to the termination compensation.

       In Appellant’s second issue, Appellant argues that the trial court erred by

denying his motion for summary judgment.           Appellant argues that he was

entitled to judgment under Texas Rule of Civil Procedure 54 because he

specifically pleaded that all conditions precedent to recovery were performed or

had occurred.

       If a contract contains conditions precedent, a plaintiff seeking recovery for

breach of that contract must prove satisfaction of the conditions precedent.19

       18
            … See Southland Corp., 940 S.W.2d at 85; Souder, 235 S.W.3d at
851.
       19
        … Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276,
283 (Tex. 1998) (“A party seeking to recover under a contract bears the burden
of proving that all conditions precedent have been satisfied.”); see also Grimm
v. Grimm, 864 S.W.2d 160, 161-62 (Tex. App.—Houston [14th Dist.] 1993,
no writ).

                                        13
If a plaintiff pleads generally that all conditions precedent have been met, then

at trial the plaintiff must establish satisfaction of only those conditions

specifically denied by the defendant.20

      Appellant contends that Appellee did not specifically deny noncompliance

with conditions precedent to his recovery, and therefore he was entitled to

judgment.       But resolution of both of Appellant’s claims for damages—the

compensation        bonus   and   the   termination   compensation—depended     on

interpretation of the contract language and on the date of his termination notice.

Both parties submitted evidence relevant to the determination of when notice

was given and what effect the notice had on Appellee's obligations under the

contract, and Appellant did not object to the introduction of Appellee’s evidence

on the ground that it was not supported by Appellee’s answer. 21 And Appellant

admits in his reply brief that Appellee had the right to introduce evidence to

show that conditions precedent had not been met.              Appellee introduced

evidence that termination notice was given and when that notice was given.

Thus, Appellee’s failure to specifically deny Appellee’s satisfaction of conditions

       20
       … Grimm, 864 S.W.2d at 161-62 (“If a plaintiff pleads generally the
performance or occurrence of conditions precedent, the plaintiff need only
prove performance of those conditions specifically denied by the defendant.”).
       21
            … See T EX. R. A PP. P. 33.1(a).

                                           14
precedent did not establish Appellant’s right to judgment.22 We therefore reject

Appellant’s arguments with respect to conditions precedent to recovery under

the contract.

      Appellant also argues that he provided competent summary judgment

evidence showing that he retained approval to provide services at the clinic. In

the affidavit attached to Appellant’s motion for summary judgment, he

specifically avers that he did not fail to retain the approval of the clinic,

Appellee, or the Veterans’ Administration but says nothing about whether he

failed to retain Health Net’s approval. The only other evidence Appellant offered

consisted of a copy of the Agreement; a copy of the termination letter from

August 19, 2005; a copy of the termination letter of September 21, 2005; and

an affidavit of his attorney as to the amount of attorney’s fees. Because he did

not introduce any evidence as to whether he retained Health Net’s approval, he

has not established as a matter of law that he was not terminated for cause.

The trial court therefore did not err by not granting summary judgment for

Appellant. We overrule Appellant’s second issue.

      22
        … See Broesche v. Jacobson, 218 S.W.3d 267, 279 (Tex.
App.—Houston [14th Dist.] 2007, pet. denied) (“Although proof of performance
of any conditions precedent is an essential element of a plaintiff’s case, such
proof does not relieve the plaintiff of the burden of proving the other elements
of the claim.”).

                                       15
      We do not reach Appellant’s argument that if this court reverses the trial

court’s judgment and renders summary judgment in favor of Appellant, then he

is entitled to attorney’s fees.23

                                      C ONCLUSION

      Having sustained Appellant’s first and fourth issues in part, we reverse the

trial court’s judgment as to the termination compensation and remand that claim

for further proceedings. We affirm the remainder of the trial court’s judgment.

                                                    LEE ANN DAUPHINOT
                                                    JUSTICE

PANEL B:       LIVINGSTON, DAUPHINOT, and WALKER, JJ.

LIVINGSTON, J. concurs without opinion.

WALKER, J. dissents without opinion.

DELIVERED: April 24, 2008

       23
            … See T EX. R. A PP. P. 47.1.

                                            16