Court Opinion

ID: 3097396
Source: CourtListenerOpinion
Date Created: 2015-10-16 04:44:28.079703+00
Date Added: 2024-06-11T12:46:54.348202
License: Public Domain

Opinion issued September 18, 2014.

                                     In The

                           Court of Appeals
                                 For The

                       First District of Texas
                        ————————————
                           NO. 01-12-00085-CV
                           NO. 01-12-00346-CV
                         ———————————
       BP AUTOMOTIVE, L.P. D/B/A BOSSIER DODGE, Appellant
                                      V.
   RML WAXAHACHIE DODGE, L.L.C.; RML WAXAHACHIE FORD,
 L.L.C.; RLJ-MCLARTY-LANDERS AUTOMOTIVE HOLDINGS, L.L.C.;
           AND RML WAXAHACHIE GMC, L.L.C., Appellees

                                     ****
         BP AUTOMOTIVE, L.P. D/B/A BOSSIER DODGE, Appellant

                                       V.

        RLJ-MCLARTY-LANDERS AUTOMOTIVE GROUP, Appellee

                  On Appeal from the 87th District Court
                            Freestone County, Texas1
                   Trial Court Case Nos. 10-030-B & 10-030-B-1

                                    OPINION

        This appeal arises out of an asset purchase agreement contemplating the sale

of a car dealership’s assets. After the sale failed to close, the dealership sued the

prospective buyer, alleging breach of contract and several other causes of action.

The trial court granted the prospective buyer’s no-evidence and traditional motions

for summary judgment, and denied the dealership’s traditional motion for summary

judgment. These appeals followed. We affirm in part and reverse and remand in

part.

                                  BACKGROUND

The Parties

        Appellant, BP Automotive, L.P. [“Bossier Dodge”] is a Chrysler/Dodge

dealership located in Waxahachie, Texas, and its limited partners are W. Randy

Pretzer and L. Scott Bossier. BPRE, Ltd. [“BPRE”] is a related entity that owns

the real property upon which Bossier Dodge sits.

        Appellees, RML Waxahachie Dodge, L.L.C., RLJ-McLarty-Landers

Automotive Holdings, L.L.C., RML Waxahachie Ford, L.L.C., and RML

1
        The Texas Supreme Court transferred this appeal from the Court of Appeals for
        the Tenth District of Texas. Misc. Docket No. 12-9008 (Tex. Jan. 20, 2012); see
        TEX. GOV’T CODE ANN. § 73.001 (Vernon 2013) (authorizing transfer of cases).
                                           `2
Waxahachie GMC, L.L.C. [collectively, “RML”], are purportedly part of RLJ-

McLarty-Landers Automotive Group [“RLJ Group”], which owns 23 dealerships

and 36 franchises in seven states, including Texas2. Robert Johnson, Thomas

“Mack” McLarty, and Steve Landers, Jr. are board members of all of the entities

mentioned in this paragraph.

Bossier Dodge and RML Waxahachie Dodge Enter an Asset Purchase
Agreement

      In 2008, Bossier Dodge experienced financial difficulties and began looking

for a potential buyer for its assets.         On March 20, 2009, after months of

negotiations, RML Waxahachie Dodge executed an Asset Purchase Agreement

[“the APA”].     The parties agreed that Bossier Dodge would sell its fixtures,

inventory, and other dealership assets for $180,100. The APA provided that the

“Closing Date shall be on or before April 15, 2009, or as soon thereafter as

practical.” The APA also provided that “time is of the essence with respect to this

Agreement.” The same date that the APA was signed by the parties, RML also

entered a lease with the landowner, BPRE.

      In Article 5, titled “Covenants and Additional Agreements,” the parties

agreed to “use their respective best efforts at their own expense: (i) to obtain prior

to the earlier of the date required (if so required) or the Closing Date, all waivers,

2
      RLJ-McLarty-Landers Automotive Group filed a verified denial in the trial court
      contending that it is not a legal entity. That issue is not before us in this appeal.
                                            `3
permits, licenses, approvals, authorizations, qualifications, orders and consents of

all third parties and governmental authorities” required for “the consummation of

the transactions contemplated by this Agreement[.]”        One of the conditions

covered by this section was that RML Waxahachie Dodge was required to seek the

approval of Chrysler Motors, L.L.C. [“Chrysler”], and between March 25 and

March 30, 2009, RML sent the executed APA to Chrysler. According to RML,

Chrysler, as a condition of its assent, required the approval of a lender, Chrysler

Financial.   On April 17, 2009, RML informed Bossier Dodge that Chrysler

Financial had not provided the necessary financing and that Paul Hart, RML’s

representative, did not know why.

Chrysler Files for Bankruptcy and Bossier Dodge Closes Its Doors

      On April 30, 2009, Chrysler declared bankruptcy. As a result of the

bankruptcy, Bossier Dodge’s franchise agreement with Chrysler had to be assumed

or rejected in Chrysler’s bankruptcy proceedings. The day after Chrysler declared

bankruptcy, Bossier Dodge closed its doors and ceased doing business.          Two

weeks later, on May 15, 2009, Chrysler rejected Bossier Dodge’s franchise

agreement and the franchises of 788 other dealerships around the country.

RML Obtains Franchises from Reorganized Chrysler

      On July 8, 2009, the reorganized Chrysler awarded RML a franchise for a

Chrysler, Dodge, and Jeep dealership in Waxahachie. However, Chrysler was not

                                         `4
yet qualified to do business in Texas and, as a result, any franchise awarded could

not be licensed in Texas. RML’s position is that it could not close the APA

because it could not obtain the licenses and approvals necessary to operate a

franchise in Waxahachie, Texas.

RML Uses Space at the Dealership for a Short While

      In July, 2009, Bossier Dodge gave RML permission to use the service

department. This allowed some of Bossier Dodge’s employees to continue to work

(for RML) after Bossier Dodge closed. The parties dispute whether there was an

agreement as to payment for this use. Thereafter, RML placed two technicians in

the Waxahachie service department, and those technicians performed work for a

four-to-five week period.     During this period, RML paid for the utilities,

maintenance, and other services on the property. RML and Bossier Dodge dispute

whether there was an agreement to pay rent during this period.

      Regarding the issue of rent, it is noteworthy that RML and BPRE entered a

second lease on July 20, 2009, which was to “commence three business days after

the Lessor (sic) receives the necessary consents and authorizations from both

Chrysler Group LLC and the Texas Motor Vehicle Commission to conduct

business on the demised premises as a Chrysler franchised automotive dealer,”

which did not occur until March 2010.

                                        `5
Bankruptcy Proceedings Initiated

      On November 25, 2009, Bossier Dodge and BPRE filed an Adversary

Complaint against RML. See In Re: BPRE, L.P., Debtor, BPRE, L.P. and BP

Automotive, L.P. v. RML Waxahachie Dodge, L.L.C., et. al., Defendants, U.S.

Bankruptcy Court, Western District of Texas, Waco Division, Case No. 09-61289,

Adv. Case No. 09-06032, filed Nov. 25, 2009. On February 2, 2010, the chief

bankruptcy judge signed an order dismissing Bossier Dodge as a misjoined party

and dismissing all of its claims without prejudice. BPRE then filed an Amended

Adversary Complaint in which it complained of the following (1) breach of the

APA, (2) tortious interference with Franchise Agreements, (3) tortious interference

with prospective business relations, (4) civil conspiracy, (5) unfair competition by

misappropriation, (6) breach of the lease[s], (7) quantum meruit, (8) trespass to real

property, and (9) unjust enrichment.       BPRE also sought attorney’s fees and

exemplary damages.

The Underlying Lawsuit by Bossier Dodge

      After being dismissed from the Bankruptcy Proceeding, Bossier Dodge filed

the present suit in state court asserting claims of (1) breach of the APA, (2) tortious

interference with franchise agreements, (3) tortious interference with prospective

business relations, (4) unfair competition by misappropriation, (5) quantum meruit,

(6) unjust enrichment, (7) fraud, and (8) civil conspiracy. Many of these are

                                          `6
essentially the same as those pleaded in the bankruptcy proceedings, the essential

difference, of course, being the omission of BPRE’s lease claims.

Proceedings Continue in the Bankruptcy Court

      RML moved for partial summary judgment in the bankruptcy court on

BPRE’s claim for breach of the APA, which the Bankruptcy Judge, Hon. Ronald

B. King, granted because BPRE was not a party to the APA. Judge King also

made 29 findings of fact [“the King findings”], many of which concerned the

circumstances surrounding the execution of the APA.

      The Bankruptcy Proceeding was tried on July 19, 2010, after which the trial

judge, the Hon. John C. Akard, entered a Memorandum of Opinion, which also

contained findings of fact concerning the circumstances surrounding the formation

and performance of the APA [“the Akard findings”]. The trial judge entered a

purportedly final “Judgment,” denying all of BPRE’s claims in the adversary

proceeding.

The Underlying Suit Proceeds to Judgment

      RML then moved for a traditional summary judgment in the trial court

below, arguing that the bankruptcy proceedings—particularly the King findings

and the Akard findings—should be given collateral estoppel effect in the state

court proceeding. Bossier Dodge responded, arguing among other things, that the

bankruptcy court’s judgment was not final, thus no collateral estoppel would lie.

                                         `7
      RML also moved for a no-evidence summary judgment claiming that no

evidence supported any of the claims asserted by Bossier Dodge. Bossier Dodge

also moved for a traditional summary judgment, asserting that it had proved its

breach of contract and quantum meruit claims as a matter of law.

      The trial court granted RML’s motions, denied Bossier Dodge’s motion,

severed the claims against RML from those against RLJ Group, and signed a final

judgment that Bossier Dodge take nothing on its claims against RML. This appeal

followed.

Appellate Proceedings in the Bankruptcy Proceeding

      Meanwhile, BPRE appealed both Judge King’s and Judge Akard’s orders to

United States District Court for the Western District of Texas—Waco.            On

September 28, 2011, the federal district court affirmed as to all of BPRE’s claims,

except fraud and fraudulent inducement, which it concluded that the bankruptcy

court had failed to consider.     Thus, the federal district court affirmed the

bankruptcy court in part, and remanded the fraud and fraudulent inducement

claims for further proceedings. On remand, the bankruptcy court, on December 2,

2011 denied relief on those two claims also.

      BPRE again appealed to the federal district court, which, after applying the

“clearly erroneous” standard of review to the bankruptcy court’s fact findings and

                                        `8
de novo review to its conclusions of law and mixed questions of law and fact,

again affirmed the bankruptcy court.

      BPRE then appealed to the Fifth Circuit Court of Appeals, arguing that the

bankruptcy court lacked constitutional jurisdiction to enter a final, appealable

judgment.    The Fifth Circuit agreed, holding that only Article III courts, not

bankruptcy courts, could decide non-core bankruptcy issues, such as those in this

case, “that only seek to augment the bankruptcy estate.” In re BPRE, L.P., 735
F.3d 279, 291 (5th Cir. 2013). The Fifth Circuit then vacated the district court’s

judgment and remanded it to for further proceedings, noting:

      Because no party dispute that BPRE’s claims are not core
      [bankruptcy] proceedings, the bankruptcy court has the authority
      conferred by § 157(c)(1) to issue proposed findings of fact and
      conclusions of law as to BPRE’s state-law claims that are related to
      the bankruptcy estate in the event that the district court elects to refer
      the matter to the bankruptcy court for that limited purpose.

Id. Such findings of fact and conclusions of law would be reviewed de novo by the

district court. See id. at 282.

    SUMMARY JUDGMENT RULINGS IN CAUSE NO. 01-12-00085-CV

      In three issues on appeal, Bossier Dodge contends the trial court erred in

granting RML’s motions for summary judgment and in denying its motion.

Standards of Review

      We review the trial courts summary judgments de novo. Joe v. Two Thirty

Nine Joint Venture, 145 S.W.3d 150, 156 (Tex. 2004). Under the no-
                                         `9
evidence standard, a defendant may move for summary judgment after adequate

time for discovery on the ground that there is no-evidence of one or more essential

elements of a claim on which the plaintiff would have the burden of proof at

trial. See TEX. R. CIV. P. 166a(i). A no-evidence summary judgment is essentially a

pre-trial directed verdict; therefore, we apply the same legal-sufficiency

standard. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750–51 (Tex. 2003).

Under the “traditional” summary-judgment standard, a summary judgment should

be granted only when the movant establishes that there is no genuine issue as to

any material fact and that it is entitled to judgment as a matter of law. See TEX. R.

CIV. P. 166a(c); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215–

16 (Tex. 2003).

      When, as here, both parties file motions for summary judgment and the

court grants one and denies the other, we must decide all questions presented and

render the judgment that the trial court should have rendered. City of Garland v.

Dallas Morning News, 22 S.W.3d 351, 356 (Tex. 2000). In so doing, we first

review the order granting summary judgment and if we determine the order was

erroneous,   we    review    the    trial     court’s   action   in   overruling   the

denied motion. Lambrecht & Assoc., Inc. v. State Farm Lloyds,119 S.W.3d 16, 20

(Tex. App.—Tyler 2003, no pet.). When both parties move for summary judgment,

each party must carry its own burden, and neither can prevail because of the failure

                                            `10
of the other to discharge its burden. Guynes v. Galveston Cnty., 861 S.W.2d 861,

862 (Tex. 1993). We may either affirm the judgment or reverse and render the

judgment the trial court should have rendered, including one that denies both

motions. Gramercy Ins. Co. v. MRD Invs., Inc., 47 S.W.3d 721, 724 (Tex. App.—

Houston [14th Dist.] 2001, pet. denied). If we determine that a fact issue precludes

summary judgment for either party, we remand the claim for trial. See Univ. of

Tex. Health Sci. Ctr. v. Big Train Carpet of El Campo, Inc., 739 S.W.2d 792, 792

(Tex. 1987) (per curiam).

RML’s Traditional Motion for Summary Judgment

      In its motion for traditional summary judgment, RML argued that “the

Findings of Fact made by Judge King and the factual findings contained in the

Memorandum of Opinion entered by Judge Akard, as specified below should be

given collateral estoppel effect in the instant case and that Plaintiff be precluded

from litigating the factual issues contained therein in the instant case.” RML

attached the documents filed in the bankruptcy proceeding, including Judges

King’s and Ackard’s findings, as evidence in support of its motion.

      Bossier Dodge responded that “the issues [in the state court proceeding]

have not been fully litigated because all of the bankruptcy court’s findings of fact

and conclusions of law are subject to de novo review in the federal district court.”

                                         `11
      Based on the 5th Circuit’s recent opinion in In re BPRE, L.P, we agree that

the bankruptcy court proceedings are not a final judgment because only an Article

III court can decide non-core bankruptcy issues “that only seek to augment the

bankruptcy estate,” and, indeed, the Fifth Circuit has vacated the very judgments

upon which RML based its collateral estoppel argument. See 735 F.3d at 291.

And, even if the district court should choose to request the bankruptcy court to

issue proposed findings of fact and conclusions of law as to BPRE’s state-law

claims, subsequent review by the district court would be de novo. Id. at 282. A

trial court’s judgment is not final for purposes of collateral estoppel if a subsequent

appeal involves de novo review. See Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1,

6 (Tex. 1986).

      Because the bankruptcy court’s judgments have been vacated, and, in any

event would be subject to de novo review by the federal district court, they cannot

serve as a basis for collateral estoppel. As such, the trial court erred in granting

RML’s Traditional Motion for Summary Judgment.3

3
      Since submission in this case, the parties have informed this Court that the federal
      district court has since adopted the bankruptcy court’s findings of fact and has
      entered a final judgment that BP Automotive take nothing on its claims against
      RML. However, none of this information is in the record before the trial court or
      this Court, and RML’s motion for summary judgment was based only upon the
      bankruptcy court’s findings, not the district court’s later adoption of those
      findings. A summary judgment may be affirmed only upon the grounds uttered by
      the movant in its motion. Shih v. Tamisiea, 306 S.W.3d 939, 946 (Tex. App.—
      Dallas 2010, no pet.). Nothing herein, however, precludes RML from moving for
      summary judgment on the basis of subsequent federal court proceedings.
                                          `12
      We sustain Bossier Dodge’s first issue.

RML’s No-Evidence Motion for Summary

      In its second issue, Bossier Dodge argues that the trial court erred in

granting RML’s no-evidence motion for summary judgment because Bossier

Dodge produced more than a scintilla of evidence in support of each of its claims.

      Breach of Contract

      The elements of a breach of contract are: (1) the existence of a valid

contract; (2) performance or tendered performance by the plaintiff; (3) breach of

the contract by the defendant; and (4) damages sustained by the plaintiff as a result

of the breach. Dorsett v. Cross, 106 S.W.3d 213, 217 (Tex. App.—Houston [1st

Dist.] 2003, pet. denied).

      In its no-evidence motion, RML argued that “Plaintiff has not provided and

cannot provide any evidence of element 4 [damages].” In response, Bossier Dodge

argued that it had “brought forth more than a scintilla of probative evidence to

raise a genuine issue of material fact regarding the damages element of its breach

of contract claim.” To support this argument, Bossier Dodge attached a copy of

the APA, which detailed that it would have received $180,100 if the APA had

closed. Bossier Dodge attached the affidavit of W. Randy Pretzer, one of Bossier

Dodge’s partners, who testified that “[RML] delayed and refused to close the APA

                                        `13
by [April 15, 2009] as required by the contract[,] and that as a result “[RML] did

not pay Bossier Dodge the monies provided for in the APA.”

      We agree that the contract price, which was never paid as a result of RML’s

alleged breach of the APA, is more than a scintilla of evidence of the damages in

Bossier Dodge’s breach of contract claim.

      Thus, the trial court erred in granting RML’s no-evidence summary

judgment as to Bossier Dodge’s breach of contract claim.

      Tortious Interference with Existing Contracts

      The elements of a cause of action for tortious interference with a contract

are: (1) an existing contract subject to interference, (2) a willful and intentional act

of interference with the contract, (3) that proximately caused the plaintiff’s injury,

and (4) caused actual damage or loss. Prudential Ins. Co. of Am. v. Fin. Review

Serv., Inc., 29 S.W.3d 74, 77 (Tex. 2000). In its no-evidence motion for summary

judgment, RML argued that “[Bossier Dodge] has not provided and cannot provide

evidence with respect to its tortious interference with franchise agreements claim

against Defendants.”

      Bossier Dodge argues that “[RML] induced Chrysler to breach its franchise

agreement with Bossier Dodge after Chrysler’s bankruptcy so that RML WD

would be awarded the Chrysler, Dodge, and Jeep franchises in Waxahachi.” In

support, Bossier Dodge offers evidence that in April 2009, RMP filed a single

                                          `14
application for a Dodge, Chrysler, and Jeep franchise, and that RML told Bossier

Dodge that it had been awarded the franchises even before the franchise for

Bossier Dodge had been rejected. Bossier Dodge contends that “[RML’s] actions

caused Chrysler to reject Bossier Dodge’s franchises in May 2009.”

      However, Bossier Dodge presented no evidence that Chrysler was bound to

continue the franchise agreements that existed prior to its bankruptcy. Indeed, the

record shows that Chrysler was required to accept or reject the previously existing

franchises as part of its bankruptcy. Thus, there is no evidence of an existing

franchise agreement that was subject to interference once Chrysler declared

bankruptcy.

      And, the only willful or intentional act by RML mentioned by Bossier

Dodge in its brief is RML’s filing of an application for the Chrysler franchise,

presumably in competition with Bossier Dodge’s own application. There is no

evidence by Bossier Dodge showing that such competition was a prohibited act.

      There being no evidence of a continuing franchise agreement between

Chrysler and Bossier Dodge or a willful or intentional act of interference by RML,

the trial court properly granted RML’s no-evidence motion for summary judgment

on Bossier Dodge’s claims for tortious interference with an existing contract.

                                        `15
      Tortious Interference with Prospective Business Relations

      The elements of a claim for tortious interference with a prospective business

relationship are: (1) a reasonable probability that the plaintiff would have entered

into a business relationship; (2) an independently tortious or unlawful act by the

defendant that prevented the relationship from occurring; (3) the defendant did

such act with a conscious desire to prevent the relationship from occurring or the

defendant knew the interference was certain or substantially certain to occur as a

result of the conduct; and (4) the plaintiff suffered actual harm or damages as a

result of the defendant’s interference.” Baty v. ProTech Ins. Agency, 63 S.W.3d
841, 860 (Tex. App.—Houston [14th Dist.] 2001, pet. denied).

      RML argues on appeal that “[Bossier Dodge] failed to provide sufficient

evidence of elements 1, 2, 3, or 4 with respect to its tortious interference with

prospective business relations claims against RML.”

      Bossier Dodge responds by pointing to the affidavit of W. Randy Pretzer, in

which he testified to the following:

      Without [RML’s] subsequent occupation of the property and its false
      representations that it was going to purchase Bossier Dodge’s assets
      or that the assets had already been sold, Bossier Dodge would have
      been able to sell or rent its service equipment to other auto
      dealerships, auto repair organizations, car rental facilities, boating or
      other recreational activity dealership. In fact, in April 2010, Stacey
      Gillman of the Gillman Automotive Group approached [Pretzer] about
      purchasing the Bossier Dodge assets but when she attempted to view
      the assets, she was rebuffed by [RML] who incorrectly told her that
      the assets had already been sold—to them.
                                        `16
This testimony provides a scintilla of evidence that RML’s representation to

Gillman that Bossier Dodge’s assets had already been sold was to prevent Bossier

Dodge from selling the assets to her.

         Because there is more than a scintilla of evidence to support Bossier

Dodge’s claim for tortious interference with prospective business relations, the trial

court erred by granting RML’s no evidence motion for summary judgment on this

claim.

         Unfair Competition by Misappropriation

         The elements of an unfair competition or common law misappropriation

claim are: (1) the creation of plaintiff’s product (i.e., the trade secret information)

through extensive time, labor, skill, and money; (2) the defendant’s use of that

product in competition with the plaintiff, thereby gaining a special advantage in

that competition (i.e., a “free ride”) because defendant is burdened with little or

none of the expense incurred by the plaintiff; and (3) commercial damage to the

plaintiff. United States Sporting Prods., Inc. v. Johnny Stewart Game Calls, Inc.,

865 S.W.2d 214, 218 (Tex. App.—Waco 1993, writ denied).

         RML contends that Bossier Dodge “failed to provide any evidence of

elements 2 or 3 with respect to its unfair competition by misappropriation claim.”

In support of this claim, Bossier Dodge presented Pretzer’s affidavit, in which he

testified:
                                         `17
      [RML] began occupying the dealership property and using Bossier
      Dodge’s assets as early as May 2009, including transitioning their
      dealer inventory system. At this point, [RML] had access to Bossier
      Dodge’s customer lists, which were created over a several year period
      through much effort by employees and managers of Bossier Dodge.
      At no time did Bossier Dodge authorize Defendants to keep or use
      Bossier Dodge’s customer lists without payment because Bossier
      Dodge knew that any use of the customer lists would reduce their
      value (as the information contained would be less desirable to others.)

      There is also evidence in the showing that RML has serviced over 800

customers who appear on Bossier Dodge’s lists.

      Thus, Bossier Dodge has produced at least a scintilla of evidence to support

its claim that RML participated in unfair competition by misappropriating its

customer lists. Because Bossier Dodge presented a scintilla of evidence, the trial

court erred in granting RML’s no-evidence motion for summary judgment on

Bossier Dodge’s unfair competition by misappropriation claim.

      Quantum Meruit

      The elements of a quantum meruit claim are (1) valuable services or

materials provided by plaintiff to the defendant, (2) who accepted the services or

materials, (3) under such circumstances as would reasonably notify defendant that

the plaintiff expect to be paid. See Speck v. First Evangelical Lutheran Church of

Hous., 235 S.W.3d 811, 815 (Tex. App.—Houston [1st Dist.] 2007, no pet.)

      RML contends that “[Bossier Dodge] failed to provide sufficient evidence of

elements 3 or 4 with respect to its quantum meruit claim.” However, there is

                                       `18
summary judgment evidence that, for a period of time, RML had two technicians

working out of Bossier Dodge’s facilities. Pretzer testified about the use by RML

as follows:

         [RML] used Bossier Dodge’s assets between May and August 2009
         without ever paying for that use. Bossier Dodge never authorized use
         of its assets by anyone without payment.

Thus, Bossier Dodge has produced at least a scintilla of evidence in support of its

quantum meruit claim. As such, the trial court erred by granting RML’s no-

evidence motion for summary judgment on Bossier Dodge’s quantum meruit

claim.

         Fraud

         The elements of a fraud claim are: (1) that a material representation was

made; (2) the representation was false; (3) when the representation was made, the

speaker knew it was false or made it recklessly without any knowledge of the truth

and as a positive assertion; (4) the speaker made the representation with the intent

that the other party should act upon it; (5) the party acted in reliance on the

representation; and (6) the party thereby suffered injury. In re FirstMerit Bank,

N.A., 52 S.W.3d 749, 758 (Tex. 2001) (citing Formosa Plastics Corp. v. Presidio

Eng’rs & Contractors, Inc., 960 S.W.2d 41, 47 (Tex. 1998)).

         RML contends that “[Bossier Dodge] failed to provide sufficient evidence of

elements 1, 2, 3, 4, or 5.” In response, Bossier Dodge points to evidence in the

                                         `19
record that RML had made a material misrepresentation when its representatives

told Bossier Dodge that obtaining a Jeep franchise was not a condition necessary

for closing under the APA. An early draft of a letter of intent had indicated that

obtaining a Jeep dealership would be a condition to closing the APA, but Bossier

Dodge had the language removed because it did not possess the Jeep franchise and

could not control the timing of its acquisition by RML. In the meantime, RML had

applied for Chrysler, Dodge, and Jeep franchises.        Bossier Dodge presented

evidence that, had it known that RML was also pursuing a Jeep franchise, it never

would have entered the APA.

      Thus, Bossier Dodge has produced at least a scintilla of evidence in support

of its fraud/fraudulent inducement claim. As such, the trial court erred by granting

RML’s no-evidence motion for summary judgment on Bossier Dodge’s

fraud/fraudulent inducement claim.

      Civil Conspiracy

      The elements of civil conspiracy are (1) two or more persons, (2) an object

to be accomplished, (3) a meeting of the minds on the object or course of action,

(4) one or more unlawful, overt acts, and (5) damages as a proximate result. Tri v.

J.T.T., 162 S.W.3d 552, 556 (Tex. 2005).

      RML contends that “[Bossier Dodge] failed to provide sufficient evidence of

elements 1, 2, 3, 4 or 5 with respect to its civil conspiracy claim against [RML].”

                                        `20
In response, Bossier Dodge argues that there is, at least, circumstantial evidence

“indicating that Defendants conspired with each other, with Chrysler, and with the

Federal Government to tortuously interfere with Bossier Dodge’s existing and

prospective contracts and to commit fraud.” In support, Bossier Dodge points to

evidence that it contends indicates that RML had advance knowledge that Chrysler

would enter bankruptcy, and that none of its own franchises would be affected by

the bankruptcy. Bossier Dodge’s position is that Chrysler, RML, and/or the federal

government conspired “to have Chrysler award [RML] the exact same dealership

franchises that RML wrongfully failed to pay Bossier Dodge for as required by the

APA.”

      However, there was no evidence that Chrysler was required to continue

Bossier Dodge’s franchise agreement or to refrain from awarding a franchise to

RML. Thus, “conspiring” to award a franchise to RML cannot be an unlawful,

overt act in furtherance of a civil conspiracy. Thus, the trial court properly granted

RML’s no-evidence motion for summary judgment on Bossier Dodge’s civil

conspiracy claim.

      Conclusion as to RML’s No-Evidence Motion for Summary Judgment

      We sustain Bossier Dodge’s second issue as it relates to its breach of

contract, tortious interference with prospective business relations, unfair

competition by misappropriation, quantum meruit, and fraud, but overrule its

                                         `21
second issue as to its tortious interference with existing contracts and civil

conspiracy claims.

Bossier Dodge’s Traditional Motion for Summary Judgment

      In its third issue, Bossier Dodge argues that the trial court erred in denying

its own motion for summary judgment, in which it claimed that it had proved its

breach of contract and quantum meruit claims as a matter of law.

      Breach of Contract

      Bossier Dodge argues that the trial court erred in denying its traditional

motion for summary judgment because “[RML] breached the APA when it failed

to close on April 15, 2009, because the contract requires that the parties close on

that date unless it is logistically impossible and [RML] has never claimed that it

was logistically impossible to close.”

      However, the APA does not require closing by April 15, 2009 “unless

logistically impossible.” Rather, the APA requires closing by April 15, 2009 “or

as soon thereafter as practical.” RML contends that it was not “practical” to close

until it was able to secure a valid evidence of franchise and license to operate a car

dealership at the location. The parties’ disagreement as to when it was “practical”

to close presents a fact question for the jury to resolve. There being a fact issue on

the issue of whether RML breached the contract by failing to close on April 15,

2009, the trial court did not err in denying Bossier Dodge’s traditional motion for

                                         `22
summary judgment claiming that it had proved its breach of contract claim as a

matter of law.

      Quantum Meruit

      Bossier Dodge asserted that RML “used Bossier Dodge’s assets to perform

maintenance activities, make telephone calls, and to prepare for the operation of a

dealership without compensating Bossier Dodge for their use,” thus “Bossier

Dodge is entitled to partial summary judgment on its quantum meruit claim.”

      As stated earlier, the elements of quantum meruit are (1) valuable services or

materials provided by plaintiff to the defendant, (2) who accepted the services or

materials, (3) under such circumstances as would reasonably notify the defendant

that the plaintiff expect to be paid. See Speck, 235 S.W.3d at 815.

      In response to Bossier Dodge’s motion, RML challenged the third element.

Specifically, RML presented evidence of a July 8, 2009 email from Pretzer to

RML giving RML permission to let its technicians use the service department.

RML also presented evidence that Bossier Dodge never told it that payment was

expected in return for this use until it initiated this suit. This evidence is sufficient

to raise a fact issue as to whether “circumstances would reasonably notify” RML

that Bossier Dodge expected to be paid.         There being a fact issue on the third

element listed above, the trial court did not err by denying Bossier Dodge’s

traditional motion for summary judgment on its quantum meruit claim.

                                          `23
             CONCLUSION AS TO CAUSE NO. 01-12-00085-CV

      Because the bankruptcy court’s judgments have been vacated and would

nonetheless be subject to de novo review by the federal district court, they cannot

serve as a basis for collateral estoppel, and the trial court erred in granting RML’s

Traditional Motion for Summary Judgment.

      Because Bossier Dodge presented at least a scintilla of evidence to support

its breach of contract, tortious interference with prospective business relations,

unfair competition by misappropriation, quantum meruit, and fraud claims, the trial

court erred in granting RML’s no-evidence motion for summary judgment on those

claims. However, because Bossier Dodge’s evidence did not prove its breach of

contract or quantum meruit claims as a matter of law, the trial court did not err in

denying Bossier Dodge’s traditional motion for summary judgment on those

claims. Because neither party carried its summary judgment burden on these

issues, we reverse the trial court’s no-evidence summary judgment on Bossier

Dodge’s breach of contract, tortious interference with prospective business

relations, unfair competition by misappropriation, quantum meruit, and fraud

claims, and remand those claims for further proceedings.

      Because Bossier Dodge did not bring forth a scintilla of evidence to support

its claim for tortious interference with existing contracts, i.e., it had no evidence of

an existing contract with Chrysler after Chrysler’s bankruptcy, the trial court did

                                          `24
not err in granting RML’s no-evidence motion for summary judgment on Bossier

Dodge’s claim for tortious interference with existing contracts. Similarly, Bossier

Dodge did not bring forth a scintilla of evidence on its civil conspiracy claim, i.e.,

there was no evidence of an illegal act in furtherance of a conspiracy. Accordingly,

we affirm the trial court’s no-evidence summary judgment as to Bossier Dodge’s

tortious interference with existing contracts and civil conspiracy claims.

    SUMMARY JUDGMENT RULINGS IN CAUSE NO. 01-12-00346-CV

Additional Background

      In addition to the facts detailed above, the following information is relevant

to this Court’s resolution of Cause No. 01-12-00346-CV. When Bossier Dodge

sued RML Waxahachie Dodge, L.L.C., RLJ-McLarty-Landers Automotive

Holdings, L.L.C., RML Waxahachie Ford, L.L.C., and RML Waxahachie GMC,

L.L.C. [collectively, “RML,” the defendants in Cause No. 01-12-00085-CV], it

also sued RLJ-McLarty-Landers Automotive Group [“RLJ Group,” the defendant

in Cause No. 01-12-00346-CV] and asserted the same claims against RLJ Group as

were asserted against RML.      Each of the RML defendants filed verified denials,

asserting:

      Defendant also specifically denies that the named Defendant “RLJ-
      McLarty-Landers Automotive Group” is a separate entity. The
      Defendants have, in the past, referred to RLJ-McLarty-Landers
      Automotive Holdings, LLC as “RLJ-McLarty-Landers Automotive
      Group” to reflect the separate auto dealership entities in which RLJ-
      McLarty-Automotive Holdings, LLC holds an ownership interest, but
                                         `25
      it is nothing more than an informal reference to several limited
      liability companies with a common member.

Despite the denial that RLJ Group was nothing more than a pseudonym for RLJ-

McLarty-Landers Automotive Holdings, L.L.C., Bossier Dodge served discovery

requests on RJL Group. The RML defendants moved for a protective order on

behalf of RLJ Group, and Bossier Dodge moved to compel discovery from RLJ

Group. On February 24, 2011, the trial court “ORDERED that the party named

‘RLJ-McLarty-Landers Automotive Group’ is protected from the discovery sought

by Plaintiff on August 8, 2010, and October 1, 2010 and that no further discovery

may be sought from the party named ‘RLJ-McLarty-Landers Automotive Group’

in this proceeding.” Although there is no separate order, the trial court’s ruling

implicitly overrules Bossier Dodge’s motion to compel discovery from RLJ Group.

      All of the RLM defendants moved for traditional and no-evidence summary

judgment on March 8, 2011, and the trial court granted their motions on August 15,

2011. It then severed Bossier Dodge’s claims against RLJ Group into a separate

cause (trial court cause no. 10-030B-1 and appeal no. 01-12-00346-CV).

      Despite its claims that it was not a legal entity, RJL Group filed both

traditional and no-evidence motions for summary judgment that mirrored those

that the trial court had already granted in favor of the RLM defendants. Bossier

Dodge filed motions to show authority and for continuance, which the trial court

                                       `26
denied. On December 20, 2011, the trial court granted RLJ Group’s no-evidence

and traditional motions for summary judgment. This appeal followed.

      In several related issues on appeal, Bossier Dodge contends the trial court

erred in granting RLJ Group’s no-evidence and traditional motions for summary

judgment. Bossier Dodge also contends the trial court erred in granting RLJ

Group’s protective order and disallowing further discovery.

Standard of Review

      We review the trial court’s summary judgments de novo. Joe, 145 S.W.3d at

156. Under the no-evidence standard, a defendant may move for summary

judgment after adequate time for discovery on the ground that there is no

evidence of one or more essential elements of a claim on which the plaintiff would

have the burden of proof at trial. See TEX. R. CIV. P. 166a(i). A no-

evidence summary judgment is essentially a pre-trial directed verdict; therefore, we

apply the same legal-sufficiency standard. King Ranch, Inc., 118 S.W.3d at 750–

51. Under the “traditional” summary-judgment standard, a summary judgment

should be granted only when the movant establishes that there is no genuine issue

as to any material fact and that it is entitled to judgment as a matter of

law. See TEX. R. CIV. P. 166a(c); Knott, 128 S.W.3d at 215–16.

                                        `27
RLJ Group’s Motions for Traditional and No-Evidence Summary Judgment

      In its appellate brief, RLJ Group argues that “[t]he Trial Court’s summary

judgment rulings with respect to [the RML defendants] apply equally to RLJ

Group, as none of the determinations made by the Trial Court were dependent

upon the entity status of RLJ Group or any other party.” We agree.

      RLJ Group did not move for summary judgment, either no-evidence or

traditional, based on its argument that it was not a legal entity. Instead, its motions

mirror those filed by RML. Thus, for the reasons detailed above in Cause No. 01-

12-00085-CV, we hold that the trial court erred in granting RLJ Group’s traditional

motion for summary judgment because no collateral estoppel can be applied to the

bankruptcy court’s findings, which have been vacated and would nonetheless

subject to de novo review by the federal district court. We similarly hold that

Bossier Dodge presented at least a scintilla of evidence as to each of its claims,

except for the tortious interference with existing contract and civil conspiracy

claims. Therefore, the trial court also erred in granting RLJ Group’s no-evidence

motion for summary judgment on all claims except the tortious interference with

existing contracts and civil conspiracy claims.

Denial of Motion to Compel Discovery and Motion to Show Authority

      Bossier Dodge also complains that the trial court erred in granting the

summary judgments because it refused to compel discovery from RLJ Group and

                                         `28
granted the summary judgments without first holding a hearing to determine the

authority of RLJ Group’s attorneys to file motions on its behalf. Bossier Dodge

contends that “[i]ndeed, if a non-entity, the RLJ Group could not retain counsel or

file motions on its behalf.”

      In light of our reversal of the summary judgments and remand of Bossier

Dodge’s breach of contract, tortious interference with prospective business

relations, unfair competition by misappropriation, quantum meruit, and fraud

claims, we need not address whether the trial court also erred in granting the

summary judgments on these grounds because of its rulings on the discovery

motion and motion to show authority.

      Regarding the two claims that this Court affirmed—tortious interference

with existing contracts and civil conspiracy—Bossier Dodge cannot show that any

error in limiting discovery or failing to hold a hearing on the motion to show

authority probably caused the rendition of an improper judgment or prevented it

from properly presenting the case to this Court. See TEX. R. APP. P. 44.1. This

Court affirmed the no-evidence summary judgment as to the tortious interference

with existing contracts because, once Chrysler went into bankruptcy, it had to

either approve or reject Bossier Dodge’s franchise, i.e., there was no existing

franchise with which to interfere. And, this Court affirmed the no-evidence

summary judgment as to the civil conspiracy claim because Chrysler was not

                                       `29
required to continue Bossier Dodge’s franchise or to refrain from awarding a

franchise to RML. The trial court’s rulings on the discovery and authority issues,

even if erroneous, would have no effect of this Court’s ultimate holding on the

tortious interference with existing contracts and civil conspiracy claims. Thus, we

overrule Bossier Dodge’s claim on this issue.

             CONCLUSION AS TO CAUSE NO. 01-12-00346-CV

      Because the bankruptcy court’s judgments have been vacated and would

nonetheless be subject to de novo review by the federal district court, they cannot

serve as a basis for collateral estoppel, and the trial court erred in granting RLJ

Group’s Traditional Motion for Summary Judgment.

      Because Bossier Dodge presented at least a scintilla of evidence to support

its breach of contract, tortious interference with prospective business relations,

unfair competition by misappropriation, quantum meruit, and fraud claims, the trial

court erred in granting RLJ Group’s no-evidence motion for summary judgment on

those claims, and we reverse the no-evidence summary judgment on those claims

and remand them for further proceedings.

      Because Bossier Dodge did not bring forth a scintilla of evidence to support

its claims for tortious interference with existing contracts or civil conspiracy, the

trial court did not err in granting RLJ Group’s no-evidence motion for summary

judgment on Bossier Dodge’s claims for tortious interference with existing

                                        `30
contracts and civil conspiracy.   Accordingly, we affirm the trial court’s no-

evidence summary judgment as to these claims only.

      We overrule all pending motions.

                                               Sherry Radack
                                               Chief Justice

Panel consists of Chief Justice Radack and Justices Higley and Huddle.

                                         `31