Court Opinion

ID: 4636763
Source: CourtListenerOpinion
Date Created: 2020-11-24 22:49:58.417797+00
Date Added: 2024-06-11T07:58:35.579757
License: Public Domain

Opinion issued November 19, 2020

                                     In The

                             Court of Appeals
                                    For The

                         First District of Texas
                            ————————————
                             NO. 01-19-00925-CV
                           ———————————
   MARGARET DARLING HAMILTON, AS TRUSTEE OF THE JOAN
  CAROL DEYOUNG-BURLAND TRUST, STEPHEN DEYOUNG, M.D.,
             AND DAVID DEYOUNG, Appellants
                                       V.
 WILLIAM L. MAYNARD, AS EXECUTOR OF THE ESTATE OF JUDY
   PAGE MAYNARD, WILLIAM L. MAYNARD, AND MAYNARD
                PROPERTIES, L.P., Appellees

                   On Appeal from the 270th District Court
                            Harris County, Texas
                      Trial Court Case No. 2011-18770

                         MEMORANDUM OPINION

      The trial court granted a no-evidence summary judgment. We reverse its

judgment and remand for further proceedings consistent with our opinion.
                                   BACKGROUND

      Joan DeYoung, Stephen DeYoung, and David DeYoung sued Judy Page

Maynard, William L. Maynard, Maynard Properties, L.P., and the law firm Beirne,

Maynard & Parsons, L.L.P. alleging that these defendants misappropriated property

belonging to a partnership in which each of the DeYoungs held a 3.596 percent

ownership interest. Joan and Judy both passed away while this suit was pending.

Beirne, Maynard & Parsons obtained summary judgment and the DeYoungs’ claims

against it were severed. The law firm is not a party to this appeal.

      The DeYoungs asserted the following claims against the remaining

defendants:

      •   breach of fiduciary duty against all the remaining defendants;

      •   conversion against Bill and Judy, who was later replaced as a defendant
          by Bill in his capacity as the executor of Judy’s estate; and

      •   breach of contract against Judy, who again was replaced as a defendant by
          Bill in his capacity as the executor of her estate.

The DeYoungs also asserted a claim for breach of the duty of loyalty and care, but

they later nonsuited this claim.

      The defendants filed a consolidated no-evidence and traditional motion for

summary judgment. In their no-evidence motion, the defendants did not state the

elements of the DeYoungs’ three claims or specify the challenged elements of these

claims by name. In its entirety, their no-evidence motion read:

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           Defendants contend that entry of a no evidence summary
      judgment is proper based on the following:

             There is No Evidence that Defendants Judy Page Maynard,
             William L. Maynard or Maynard Properties, L.P. Engaged in any
             Conduct Harmful to Plaintiffs or to Their Own Benefit.

      Plaintiff[s] cannot show any evidence that Defendants wrongfully
      engaged in any transactions that injured Plaintiffs or that Defendants
      received any personal benefit as a result of transactions related to the
      sale of partnership property. Proving these claims are obviously
      essential to Plaintiffs’ assertions. There are no depositions, answers to
      interrogatories, admissions on file, or any other admissible evidence to
      support the Plaintiffs’ claims. In the absence of such evidence,
      Plaintiffs cannot establish any evidence sufficient to sustain their case
      against Defendants. Thus, Defendant[s’] motion for summary judgment
      should be granted.

The defendants sought traditional summary judgment based on the affirmative

defense of limitations.

      In the DeYoungs’ response opposing summary judgment, they argued that the

trial court should deny the defendants’ no-evidence motion because it failed to

identify the specific elements of each claim being challenged as required by the no-

evidence summary-judgment rule. The DeYoungs argued that the trial court should

deny the defendants’ traditional motion for summary judgment based on limitations

“because they did not negate the discovery rule as a matter of law.”

      The defendants filed a reply, in which they reasserted their limitations

defense. The reply did not address no-evidence summary judgment.

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      The trial court granted the defendants’ no-evidence motion for summary

judgment. The summary judgment did not address the defendants’ motion for

traditional summary judgment based on limitations.

      After the trial court granted summary judgment but before this appeal was

filed, the DeYoungs filed a supplemental petition pleading the discovery rule. They

had not previously included the defense in their pleadings.

      The DeYoungs now appeal from the no-evidence summary judgment.

                                  DISCUSSION

      The DeYoungs argue the trial court erred in granting no-evidence summary

judgment because the defendants did not challenge specific elements of the

DeYoungs’ three claims. The defendants do not address this argument in their

appellate brief, except to assert that their summary-judgment motion provided fair

notice of their contention that there was no evidence that the defendants “engaged

in any transactions that injured” the DeYoungs.

      Instead, the defendants respond that this court should affirm the trial court’s

summary judgment because the DeYoungs did not provide any evidence:

      •   that Judy was a partner who owed them a fiduciary duty (and all other
          fiduciary-duty claims are derivative of the one against her);

      •   of an injury or damages to support their conversion claim; or

      •   that Judy was a party to a partnership agreement or other contract.

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In addition, the defendants argue that we should affirm the trial court’s judgment on

the alternative basis of limitations.

                     Standard of Review and Applicable Law

      We review summary judgments de novo. KMS Retail Rowlett v. City of

Rowlett, 593 S.W.3d 175, 181 (Tex. 2019). In a de novo review, we give no

deference to the trial court’s summary-judgment ruling and redetermine each issue

for ourselves. Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1998).

      A party may seek summary judgment on the ground that there is no evidence

of one or more essential elements of a claim on which an adverse party will bear the

burden of proof at trial. TEX. R. CIV. P. 166a(i). The party’s “motion must state the

elements as to which there is no evidence.” Id. To satisfy this requirement, the party

“must specifically identify the challenged elements.” Cmty. Health Sys. Prof’l Servs.

Corp. v. Hansen, 525 S.W.3d 671, 695 (Tex. 2017). The no-evidence summary-

judgment rule’s language mandates “strict enforcement of this requirement.” Id.

Thus, a party may not challenge an indeterminate subset of a claim’s elements. See

id. at 695–96 (challenge to “one or more” or “any of” elements of claim “is

insufficient to support summary judgment because this language does not clearly

identify which elements, whether some or all, are challenged”). Nor may a party

challenge the factual theories or allegations underlying a claim without connecting

that challenge to a specific element of the claim. Jose Fuentes Co. v. Alfaro, 418

                                          5
S.W.3d 280, 283 (Tex. App.—Dallas 2013, pet. denied). A no-evidence motion that

fails to specifically identify the challenged elements “is fundamentally defective and

insufficient to support summary judgment as a matter of law.” Mott v. Red’s Safe &

Lock Servs., 249 S.W.3d 90, 98 (Tex. App.—Houston [1st Dist.] 2007, no pet.). If

the motion specifically identifies the challenged elements, then the burden shifts to

the nonmovant to produce more than a scintilla of evidence in support of each one

to avoid no-evidence summary judgment. See B.C. v. Steak N Shake Operations, 598

S.W.3d 256, 259 (Tex. 2020) (per curiam); KMS Retail, 593 S.W.3d at 181.

      The trial court granted the defendants’ no-evidence summary-judgment

motion but did not rule on their traditional summary-judgment motion. When a trial

court’s order specifies a particular basis for summary judgment, we must review the

particular grounds the trial court ruled on and that the movant preserved for appellate

review and are necessary for final disposition of the appeal. Cincinnati Life Ins. Co.

v. Cates, 927 S.W.2d 623, 626 (Tex. 1996). We may also consider other summary-

judgment grounds that were before the trial court but on which it did not rule, if

doing so serves the interest of judicial economy. Id. We cannot affirm summary

judgment on grounds the movant did not assert in the motion. McAllen Hosps. v.

State Farm Cty. Mut. Ins. Co., 433 S.W.3d 535, 542 (Tex. 2014).

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                                      Analysis

          The Defendants’ No-Evidence Motion Is Fundamentally Defective

      The DeYoungs alleged claims for breach of fiduciary duty, conversion, and

breach of contract. The elements of each of these claims are distinct.

      The elements of a claim for breach of fiduciary duty are: (1) the existence of

a fiduciary duty; (2) breach of the duty; (3) causation; and (4) damages. First United

Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 220 (Tex. 2017).

      The elements of a conversion claim are: (1) the plaintiffs owned or possessed

property or were entitled to possess it; (2) the defendants unlawfully assumed and

exercised control over the property to the exclusion of, or inconsistent with, the

plaintiffs’ rights; (3) the plaintiffs demanded return of the property; and (4) the

defendants refused to return the property. Universal Plant Servs. v. Dresser-Rand

Grp., 571 S.W.3d 346, 363 (Tex. App.—Houston [1st Dist.] 2018, no pet.).

      The elements of a contract claim are: (1) formation of a valid contract; (2)

performance by the plaintiff; (3) breach by the defendant; and (4) damages from the

breach. S & S Emergency Training Sols. v. Elliott, 564 S.W.3d 843, 847 (Tex. 2018).

      In their no-evidence summary-judgment motion, the defendants neither stated

the elements of the DeYoungs’ claims nor identified which ones the defendants

challenged. The defendants instead asserted that there was no evidence that they had:

      •     engaged in any conduct harmful to the DeYoungs;

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      •   “wrongfully engaged in any transactions that injured” the DeYoungs; or

      •   “received any personal benefit as a result of transactions related to the sale
          of partnership property.”

      These no-evidence challenges do not correspond to specific elements of the

DeYoungs’ claims. Most of the defendants’ challenges are reasonably susceptible to

more than one meaning, and this ambiguity remains whether they are read together

or individually. Read together, the defendants’ no-evidence challenges plausibly

could be interpreted as denying that the defendants committed any wrongful acts or

that the defendants’ acts, wrongful or not, caused injury to the plaintiffs or caused

any damages. Read individually, the defendants’ challenge that they did not engage

in any conduct harmful to the DeYoungs could be read as denying causation or

damages. The defendants’ challenge that they did not wrongfully engage in any

transaction that injured the DeYoungs could be read as denying wrongdoing,

causation, damages, or some combination of the three. Finally, while the defendants’

denial that they benefited from the sale of partnership property challenges the factual

theory underlying the DeYoungs’ suit, the defendants did not connect this factual

challenge to a specific element of any of the DeYoung’ three claims.

      When, as here, the elements challenged are not specifically identified in the

no-evidence motion, we will not “read between the lines, infer, or glean from the

pleadings or proof” the grounds for summary judgment. Kadhum v. Homecomings

Fin. Network, No. 01-05-00705-CV, 2006 WL 1125240, at *4 (Tex. App.—Houston
                                          8
[1st Dist.] Apr. 27, 2006, pet. denied) (mem. op.); see, e.g., Culver v. Gulf Coast

Window & Energy Prods., No. 01-11-00080-CV, 2012 WL 151464, at *8 (Tex.

App.—Houston [1st Dist.] Jan. 19, 2012, pet. denied) (mem. op.) (motion asserting

“no evidence of discrimination” insufficient as matter of law because it failed to

challenge specific element of employment-discrimination claim). Because we can

only speculate as to the specific elements challenged by the defendants in their no-

evidence summary-judgment motion, it “is fundamentally defective and insufficient

to support summary judgment as a matter of law.” Mott, 249 S.W.3d at 98.

      On appeal, the defendants argue that their no-evidence motion gave fair notice

of the challenged elements. But in their appellate brief, the defendants do not set

forth the elements of the DeYoungs’ claims, state which of these specific elements

their motion implicitly challenged, or explain how the motion gave fair notice that

it did so. At any rate, even if the defendants’ fair-notice argument was more

persuasive, we have refused to recognize a fair-notice exception to the specificity

requirement of the no-evidence summary-judgment rule. Id.; accord Jose Fuentes

Co., 418 S.W.3d at 286–87. A fair-notice exception would contravene the directive

for “strict enforcement of this requirement.” Cmty. Health, 525 S.W.3d at 695.

        We Cannot Sustain Summary Judgment on Unasserted Grounds

      The defendants argue that we should affirm summary judgment on several

other no-evidence grounds. They assert that there is no evidence that Judy was a

                                         9
partner of the partnership or a party to the partnership agreement or another contract

and that there likewise is no evidence of damages that could support a claim for

conversion. But the defendants did not assert any of these grounds in their no-

evidence summary-judgment motion, and we cannot affirm summary judgment on

grounds not asserted in the motion. McAllen Hosps., 433 S.W.3d at 542.

          We Decline to Rule on the Defendants’ Limitations Argument

      The defendants asserted the affirmative defense of limitations as a basis for

traditional summary judgment in the trial court. Though the trial court did not rule

on this motion, we have discretion to consider this alternative ground if judicial

economy is served by doing so. Cates, 927 S.W.2d at 626. The defendants argue that

we ought to do so because “this case has been pending for just shy of nine years”

and is meritless. On the record before us, however, we decline to do so.

      Consideration of the defendants’ limitations defense will not serve judicial

economy because this defense could not dispose of all the DeYoungs’ claims even

if it has merit. The DeYoungs filed suit in March 2011. Some of their complaints

arise from property transfers in the 1990s. But others arise from property transfers

in April and May 2010. These later transfers, occurring less than a year before the

filing of suit, are not susceptible to a limitations defense, a fact which the defendants

tacitly concede in their appellate brief. Thus, assuming but not deciding the

defendants’ limitations defense has merit, this defense would not dispose of the suit.

                                           10
We would still have to remand the case to the trial court for further proceedings as

to the claims not barred by limitations. Moreover, the DeYoungs’ invocation of the

discovery rule potentially complicates the application of limitations to their claims

arising from property transfers in the 1990s. Given these circumstances and the state

of the appellate briefing, which does not address the issues of limitations and the

discovery rule in detail, we decline to consider the defense in the first instance. Cf.

Cates, 927 S.W.2d at 626 (refusing to consider other grounds for summary judgment

not ruled on by trial court because briefing focused on other issues).

                                  CONCLUSION

      We reverse the trial court’s no-evidence summary judgment and remand this

cause to the trial court for further proceedings consistent with our opinion.

                                               Gordon Goodman
                                               Justice

Panel consists of Justices Kelly, Goodman, and Countiss.

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