Court Opinion

ID: 3122044
Source: CourtListenerOpinion
Date Created: 2015-10-16 14:18:14.850325+00
Date Added: 2024-06-11T07:38:26.603131
License: Public Domain

Opinion issued August 30, 2012

                                   In The

                            Court of Appeals
                                  For The

                        First District of Texas
                          ————————————
                            NO. 01-10-00218-CV
                          ———————————
                       HUNG TAN PHAN, Appellant
                                     V.
     AN DINH LE, TAN MINH CAO, HUY DINH TRUONG, Appellees

                  On Appeal from the 125th District Court
                           Harris County, Texas
                     Trial Court Case No. 2008-61891

                                 OPINION

      Appellant, Hung Tan Phan, appeals the trial court’s grant of summary

judgment for lack of standing on his claims against appellees, An Dinh Le, Tan

Minh Cao, and Huy Dinh Troung and its award of damages against Phan on Cao’s
and Truong’s counterclaims. In two issues, Phan argues (1) Phan had standing to

bring his claims against the defendants and (2) the evidence is legally insufficient

to support the trial court’s determination of liability.1

      We reverse and render.

                                     Background

      Phan was the president of an association known as LDNNA from 2004 to

2007. The association is composed of Vietnamese “frogmen”—that is, certain

members of the Vietnamese military that served the south Vietnamese government

during the Vietnamese war. The purpose of the association, at least in part, is to

raise money for disabled frogmen still in Vietnam and for families of deceased

frogmen still in Vietnam.

      In 2004, Phan assigned Le the authority to organize a fundraising event in

Houston, Texas. The LDNNA gave Le money to put together the event. That

money, along with all profits obtained from the fundraiser, was to be returned to

the LDNNA after the fundraiser.

      In October 2008, Phan filed suit, pro se, against Le and the other defendants,

who had also been involved in the Houston fundraiser. Phan asserted claims of

fraud and breach of fiduciary duty. Phan alleged that the defendants operated the

1
      Appellant raised three issues in his original brief. Following a correction in the
      record, however, appellant filed a supplemental brief and abandoned the third
      issue as moot.
                                            2
fundraiser in a manner that caused a net loss. He pleaded that he brought his suit

as “an individual, a private party,” but sought recovery for “[t]he monetary

damages of the LDNNA.”

      Defendants answered and asserted counterclaims for breach of fiduciary

duty, embezzlement, “illegal representation of the association,” and “frivolous

lawsuit and harassment.” The next month, defendants filed a motion for summary

judgment, arguing that Phan lacked standing to bring his claims.

      The defendants asserted in their motion for summary judgment that Phan

was bringing his claims on behalf of the LDNNA, that Phan was no longer

president or on the board of directors, and that Phan admitted in discovery that he

did not have standing to sue on behalf of the LDNNA. In support of this ground,

the defendants attached Phan’s response to their requests for admissions. In the

response to their requests for admissions, Phan admitted that he was no longer

president or a board member for the LDNNA, that he did not have the authority to

represent the LDNNA, and that he did not have standing to file suit on behalf of

the LDNNA.

      The defendants also asserted that summary judgment was proper on the basis

that Phan lacked personal knowledge of the events concerning the Houston

fundraiser. The only evidence they presented in support of this claim was an

                                         3
affidavit by Truong asserting that “Phan was not in the Organizing Committee [for

the Houston fundraiser], he did not have any personal knowledge.”

      Finally, the defendants asserted that summary judgment was proper on the

basis that there was no material fact issue “about the harms done to [Phan]

individually.”   The defendants did not present any evidence on this matter.

Instead, they relied on the portion of Phan’s petition where he prayed for “$34,000

to pay back to the LDNNA.”

      In his response to the motion for summary judgment, Phan argued he was

not bringing his claims against defendants on behalf of the LDNNA. Instead, Phan

argued, that he was liable to the LDNNA for the losses incurred. Accordingly, he

claimed that he was suing in his individual capacity to recover the losses for which

he was liable. To support his argument, he included a letter from the then-current

president of the LDNNA. The letter was written in Vietnamese, and Phan included

a copy of his own translation of the letter. In the translated copy, the letter asserts,

“You were the Association President at the time of the fundraising party. Pursuant

to the Association BYLAWS, . . . the Association President is still liable for the

Association treasury.” It also stated that “the Association is asking you to do

anything in your power (even taking legal action) to try to recover the lost

fundraising money.”

                                           4
      The trial court granted the defendants’ motion for summary judgment. Phan

later filed a motion for new trial on the issue of whether he lacked standing. Phan

attached to the motion for summary judgment, among other things, portions of the

LDNNA’s bylaws that he asserts supports his claim that he is liable for the losses

he alleged to have been incurred by the defendants. The motion for new trial was

denied as well.

      Le subsequently nonsuited his counterclaims against Phan. Cao and Truong

did not. At trial, Cao and Truong called Phan and Truong to testify in addition to

the defendants’ attorney on fees. Phan called only himself. At the conclusion of

the trial, the trial court awarded the defendants $8,000 in actual damages, $10,000

in punitive damages, and $2,000 in attorneys’ fees.2

      On appeal, Phan filed a brief arguing (1) Phan had standing to bring his

claims against the defendants and (2) the evidence is legally insufficient to support

the trial court’s determination of liability. Le filed a brief arguing that summary

judgment on Phan’s standing was proper. Cao and Truong did not file a brief.

2
      The judgment does not specifically identify the defendants that were awarded the
      damages rendered against Phan. Instead, the judgment refers only to the
      “Defendants/CounterPlaintiffs.” Because it was acknowledged by everyone at
      trial that Le had nonsuited his claims against Phan, we do not read the judgment to
      include Le as a recipient of the award or to suggest that any claims he had have
      been disposed with prejudice.
                                           5
                           Subject-Matter Jurisdiction

      In his second issue, Phan argues that the trial court erred by determining that

he lacked standing to assert his claims.

A.    Standard of Review

      A defendant can challenge the plaintiff’s standing in a motion for summary

judgment. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). The

summary-judgment movant must conclusively establish its right to judgment as a

matter of law. See MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986). Because

summary judgment is a question of law, we review a trial court’s summary

judgment decision de novo.       Mann Frankfort Stein & Lipp Advisors, Inc. v.

Fielding, 289 S.W.3d 844, 848 (Tex. 2009).

      To prevail on a “traditional” summary-judgment motion asserted under Rule

166a(c), a movant must prove that there is no genuine issue regarding any material

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

166a(c); Little v. Tex. Dep’t of Criminal Justice, 148 S.W.3d 374, 381 (Tex. 2004).

A matter is conclusively established if reasonable people could not differ as to the

conclusion to be drawn from the evidence. See City of Keller v. Wilson, 168
S.W.3d 802, 816 (Tex. 2005).

      To determine if there is a fact issue, we review the evidence in the light most

favorable to the nonmovant, crediting favorable evidence if reasonable jurors could

                                           6
do so, and disregarding contrary evidence unless reasonable jurors could not. See

Fielding, 289 S.W.3d at 848 (citing City of Keller, 168 S.W.3d at 827). We

indulge every reasonable inference and resolve any doubts in the nonmovant’s

favor. Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002). When the

trial court’s summary judgment order does not state the basis for the trial court’s

decision, we must uphold the order if any of the theories advanced in the motion

are meritorious. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216

(Tex. 2003).

B.    Standing

      Standing is a necessary component of subject-matter jurisdiction and cannot

be waived. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 445 (Tex.

1993). If a party lacks standing, the trial court does not have jurisdiction to hear

the case. Bland, 34 S.W.3d at 553–54.

      Standing “requires that the controversy adversely affect the party seeking

review.” McAllen Med. Ctr., Inc. v. Cortez, 66 S.W.3d 227, 234 (Tex. 2001). In a

standing analysis, we focus on whether the “party has a sufficient relationship with

the lawsuit so as to have a ‘justiciable interest’ in its outcome.” Austin Nursing

Ctr. v. Lovato, 171 S.W.3d 845, 848 (Tex. 2005). The general test for standing in

Texas requires that there “(a) shall be a real controversy between the parties, which

                                         7
(b) will be actually determined by the judicial declaration sought.” Tex. Ass’n of

Bus., 852 S.W.2d at 446.

      The defendants presented three grounds for summary judgment: (1) Phan

lacked standing to bring his claims, (2) Phan lacked any personal knowledge, and

(3) Phan did not suffer any harm.

      On the issue of standing, the defendants argued that Phan was no longer

president of the LDNNA and could not assert claims on its behalf. Their summary

judgment evidence consisted of Phan’s acknowledgements in his response to the

defendants’ requests for admissions that he was no longer president or a board

member for the LDNNA, that he did not have the authority to represent the

LDNNA, and that he did not have standing to file suit on behalf of the LDNNA.

      Phan responded, arguing that he was not bringing the lawsuit in any

representative capacity on behalf of the LDNNA. Instead, he argued he was suing

in his individual capacity. He asserted that the LDNNA’s bylaws made him liable

for the loss incurred as a result of the defendants’ actions because the event

occurred while he was president. To support his argument, he included a letter

from the then-current president of the LDNNA.          The letter was written in

Vietnamese, and Phan included a copy of his own translation of the letter. In the

translated copy, the letter asserts, “You were the Association President at the time

                                         8
of the fundraising party.       Pursuant to the Association BYLAWS, . . . the

Association President is still liable for the Association treasury.”

      In his brief on the merits, Le argues that Phan’s translation of the letter is not

admissible because Phan did not comply with rule 1009 of the Texas Rules of

Evidence. See TEX. R. EVID. 1009(a) (requiring, for purposes of admissibility,

translation of foreign language document to be served on parties 45 days prior to

trial along with affidavit of qualified translator). There was no objection in the

trial court to Phan’s evidence, however. Nor was there a ruling by the trial court

excluding the evidence.

      Defects to the form of evidence are waived without an objection and ruling

by the trial court. See Vice v. Kasprzak, 318 S.W.3d 1, 11 (Tex. App.—Houston

[1st Dist.] 2009, pet. denied) (holding defects to form of evidence are waived

without securing a ruling). Rule 1009 concerns when a translated document must

be admitted into trial and whether the accuracy of the translation can be submitted

to the factfinder. See TEX. R. EVID. 1009(a)–(d). It is not, then, a rule concerning

the substance of the translated document. Accordingly, any defects in the form of

Phan’s translation have been waived. See Vice, 318 S.W.3d at 11.

      The letter from the current president of the LDNNNA asserted that Phan is

liable for the LDNNA’s treasury for the period of time he was president. Phan

alleges that the LDNNA suffered a loss due to the defendant’s actions during that

                                           9
same time. Viewing the evidence in the light most favorable to the non-movant,

indulging every reasonable inference, and resolving any doubts in the non-

movant’s favor, we hold that Phan’s liability to the LDNNA for the defendants’

actions create a real controversy between the parties, which could be actually

determined by the judicial declaration sought.    See Texas Ass’n of Bus., 852
S.W.2d at 446.

      We sustain Phan’s second issue.

C.    Ripeness

      Nevertheless, the facts of this case compel us to address the issue of

ripeness. Ripeness is an element of subject-matter jurisdiction and, accordingly,

can be raised sua sponte by this Court on appeal. Mayhew v. Town of Sunnyvale,

964 S.W.2d 922, 928 (Tex. 1998).

      While standing focuses on the question of who may bring an action, ripeness

examines when that action may be brought. Patterson v. Planned Parenthood of

Hous. & Se. Tex., Inc., 971 S.W.2d 439, 442 (Tex. 1998). Ripeness is determined

based on the facts that exist at time suit was filed. See id. The inquiry concerns

“whether the case involves ‘uncertain or contingent future events that may not

occur as anticipated, or indeed may not occur at all.’” Id. (citing 13A CHARLES

ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3532 (2d ed. 1984)).

“A case is not ripe when determining whether the plaintiff has a concrete injury

                                        10
depends on contingent or hypothetical facts, or upon events that have not yet come

to pass.” Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 852 (Tex. 2000). “To

establish that a claim is ripe based on an injury that is likely to occur, the plaintiff

must demonstrate that the injury is imminent, direct, and immediate, and not

merely remote, conjectural, or hypothetical.” City of Hous. v. Mack, 312 S.W.3d
855, 862 (Tex. App.—Houston [1st Dist.] 2009, no pet.) (citing Gibson, 22 S.W.3d

at 852).

      Phan acknowledged to the trial court that the LDNNA had not sued the

defendants for the injury they allegedly caused the LDNNA. Nor has the LDNNA

filed suit against Phan or in any other way sought to recover from him any of the

alleged damages. In other words, while the LDNNA may seek to recover from

Phan, it has not chosen to do so yet. While Phan may potentially face liability for

the alleged losses, depending on the actions of the LDNNA, he currently has not

suffered any injury. See id. (plaintiff must show injury is imminent, direct, and

immediate); cf. Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 210

(Tex. 1999) (holding “and indemnity claim does not accrue until all of the potential

liabilities of the indemnitee become fixed and certain”).

      We hold that Phan’s claims against the defendants are not ripe. When the

evidence shows that the trial court lacks subject-matter jurisdiction, we vacate the

trial court’s judgment and dismiss the action. TEX. R. APP. P. 43.2(e); Brooks v.

                                          11
Northglen Ass’n, 141 S.W.3d 158, 164 (Tex. 2004) (vacating trial court’s judgment

and dismissing causes of action); see also Ab-Tex Beverage Corp. v. Angelo State

Univ., 96 S.W.3d 683, 686 (Tex. App.—Austin 2003, no pet.) (holding order that

dismisses lawsuit for want of jurisdiction is not res judicata of merits and does not

bar plaintiff from bringing same cause again once impediment to jurisdiction has

been removed).

                                 Legal Sufficiency

      In his second issue, Phan argues the evidence is legally insufficient to

support the trial court’s determination of liability on Cao and Truong’s claims

against him.

A.    Standard of Review

      In conducting a legal-sufficiency review of the evidence, we consider all of

the evidence in a light favorable to the verdict and indulge every reasonable

inference that supports it.   City of Keller, 168 S.W.3d at 824.       We consider

evidence favorable to the finding if a reasonable factfinder could consider it, and

disregard evidence contrary to the finding unless a reasonable factfinder could not

disregard it. Id. at 827. In an appeal of a judgment rendered after a bench trial, we

may “not invade the fact-finding role of the trial court, who alone determines the

credibility of the witnesses, the weight to give their testimony, and whether to

accept or reject all or any part of that testimony.” Volume Millwork, Inc. v. W.

                                         12
Hous. Airport Corp., 218 S.W.3d 722, 730 (Tex. App.—Houston [1st Dist.] 2006,

pet. denied).

B.    Analysis

      Cao and Truong asserted claims against Phan for breach of fiduciary duty,

embezzlement, “illegal representation of the association,” and “frivolous lawsuit

and harassment.” The trial court rendered judgment against Phan on the claims of

breach of fiduciary duty, embezzlement, and filing a frivolous lawsuit and

harassment. Phan argues the evidence is legally insufficient to support any of

these claims.

      Phan begins by noting that the trial court awarded $8,000 in actual damages.

Phan argues that there is no evidence to support this damage amount under any of

the claims identified in the judgment.

      The only testimony at trial that touches on damages suffered is a portion of

Truong’s testimony about his mental suffering from Phan’s actions.

      Q.        So you suffer[ed] mentally, right?

      A.        Yes, sir, very much so.

      Q.        And emotionally too, right?

      A.        Yes, sir. Not just me, a lot of people. He hurt a lot of people
                emotionally.

      Q.        And your Frogmen—your friends also [got] scared, right?

                                              13
         A.    They [were ] scared because, just like me, even [though] I’m
               [an] engineer I only know the numbers but the law I know
               nothing, zero.

         Phan argues in his brief, “Even assuming that mental anguish and emotional

distress can be recovered for breach of fiduciary duty, embezzlement, or filing a

frivolous or harassing lawsuit, this testimony does not . . . rais[e] a fact issue.” We

agree.

         An award of mental anguish damages will survive a legal sufficiency

challenge when a plaintiff has introduced direct evidence of the nature, duration,

and severity of their mental anguish, thus establishing a substantial disruption in

the plaintiff’s daily routine. Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex.

1995); Rice Food Markets, Inc. v. Williams, 47 S.W.3d 734, 738–39 (Tex. App.—

Houston [1st Dist.] 2001, pet. denied). When a plaintiff does not present evidence

of the nature, duration, or severity of mental anguish, the reviewing court must

determine whether there is “any evidence of a high degree of mental pain and

distress that is more than mere worry, anxiety, vexation, embarrassment, or anger

to support any award of damages.” Parkway Co., 901 S.W.2d at 444.

         There is no evidence of any emotional distress suffered by Cao, and Truong

did not present evidence of the nature, duration, or severity of his mental anguish.

His testimony regarding his emotional and mental distress does not reveal a high

degree of mental pain and distress that is more than mere worry, anxiety, vexation,

                                          14
embarrassment, or anger. We hold there is no evidence to support any damages for

Cao and Truong’s claims for breach of fiduciary duty and embezzlement.

      We are left, then, with Cao and Truong’s claim of frivolous lawsuit and

harassment. The trial court ordered Phan to pay $10,000, of which $8,000 were

“actual damages” and $2,000 were “attorneys’ fees.” The trial court awarded

another $10,000 for “exemplary damages.” Because the judgment includes an

award not based on expenses, court costs, or attorneys’ fees, our analysis is

controlled by section 10.001 of the Texas Civil Practices and Remedies Code. See

TEX. CIV. PRAC. & REM. CODE ANN. § 10.001 (Vernon 2002); Low v. Henry, 221
S.W.3d 609, 614 (Tex. 2007) (analyzing sanctions including award not based on

expenses, court costs, or attorney’s fees under section 10.001).

      Chapter 10 provides that the signature of attorneys or parties on a pleading

or motion constitutes a certificate by them that, to the best of their knowledge,

information, and belief formed after a reasonable inquiry, the instrument is not

being presented for an improper purpose, is warranted by existing law or by a

nonfrivolous argument for the extension, modification, or reversal of existing law

or the establishment of new law, and there is evidentiary support for each

allegation or contention. TEX. CIV. PRAC. & REM. CODE ANN. § 10.001. To award

sanctions under chapter 10, it must be shown that (1) the pleading or motion was

brought for an improper purpose; (2) there were no grounds for the legal arguments

                                         15
advanced; or (3) the factual allegations or denials lacked evidentiary support. Dike

v. Peltier Chevrolet, Inc., 343 S.W.3d 179, 183 (Tex. App.—Texarkana 2011, no

pet.); see also TEX. CIV. PRAC. & REM. CODE ANN. §§ 10.001, .004 (Vernon 2002).

      There is a presumption that pleadings are filed in good faith and the burden

is on the party moving for sanctions to overcome this burden. See TEX. R. CIV. P.

13; R.M. Dudley Constr. Co. v. Dawson, 258 S.W.3d 694, 709 (Tex. App.—Waco

2008, pet. denied). “The party moving for sanctions must prove the pleading

party’s subjective state of mind. In the case of section 10.001(1), the movant must

show, and the court must describe and explain, that the pleading was filed for the

improper purpose of harassment.” R.M. Dudley Constr., 258 S.W.3d at 710. The

pleading alone is not sufficient to establish that the pleading was filed in bad faith

or to harass. Id.

      At trial, the parties discussed a defamation lawsuit filed by Phan in

California against a number of frogmen. It is unclear from the record whether Cao

and Phan are relying on the California lawsuit or this suit to support their claim of

filing a frivolous lawsuit. Regardless, neither can support a determination of

liability under Cao and Truong’s claim.

      By the plain terms of the statute, the California lawsuit cannot be the basis

for an award of sanctions under section 10.001. That statute only applies to “[t]he

signing of a pleading or motion as required by the Texas Rules of Civil Procedure

                                          16
. . . .” TEX. CIV. PRAC. & REM. CODE ANN. § 10.001 (emphasis added). No

pleading or motion filed in the California lawsuit would meet this requirement.

      For the current lawsuit, there is no evidence that Phan’s suit was brought for

an improper purpose, that there were no grounds for the legal arguments, or that

the allegations lacked factual support. See Dike, 343 S.W.3d at 183 (listing bases

for awarding sanctions under section 10.001). There is evidence to support Phan’s

standing to file suit. While we have determined that Phan’s claim is not ripe, this

is not synonymous with lacking merit. We hold that the record does not support a

determination that the current suit was frivolous or harassing.3

      Finally, Phan correctly argues that, because none of the claims against him

are viable, the award of exemplary damages cannot stand. Under Texas law,

exemplary damages are not recoverable absent an award of actual damages.

Nabours v. Longview Sav. & Loan Ass’n, 700 S.W.2d 901, 904 (Tex. 1985); Hong

Kong Dev., Inc. v. Nguyen, 229 S.W.3d 415, 451 (Tex. App.—Houston [1st Dist.]

2007, no pet.).
3
      Even if we were to consider the sanctions award under Rule 13 of the Texas Rules
      of Civil Procedure—that is, even if we were to exclude the portion of the
      judgment not based on expenses, court costs, or attorneys’ fees from our
      consideration—the result would be the same. The California case could not be the
      basis for an award under the Texas Rules of Civil Procedure. See TEX. R. CIV. P.
      2 (explaining, “These rules shall govern the procedure in the justice, county, and
      district courts of the State of Texas . . . .”). And, for the same reasons given
      above, there is no indication that Phan’s pleading was groundless. See TEX. R.
      CIV. P. 13 (establishing signatures of parties to constitute certificate that the
      instrument is not groundless and creating presumption that pleadings are filed in
      good faith).
                                          17
      We sustain Phan’s second issue.

                                   Conclusion

      We vacate the trial court’s grant of summary judgment against Phan on his

claims against the defendants and dismiss those claims without prejudice.

Additionally, we reverse the trial court’s award of damages in favor of Cao and

Truong and against Phan and render a take-nothing judgment on those claims.

                                             Laura Carter Higley
                                             Justice

Panel consists of Justices Higley, Sharp, and Huddle.

                                        18