Court Opinion

ID: 2955162
Source: CourtListenerOpinion
Date Created: 2015-09-17 00:34:11.597305+00
Date Added: 2024-06-11T13:09:40.442815
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                      NO. 03-11-00674-CV

                         Mark Smith d/b/a Design Center, Appellant

                                                v.

              Autodesk, Inc. and Christopher S. Canada Enterprises, Inc. d/b/a
                          On-Site Computer Solutions, Appellees

    FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT
     NO. D-1-GN-07-002010, HONORABLE LORA J. LIVINGSTON, JUDGE PRESIDING

                            MEMORANDUM OPINION

               This is an appeal from a final summary judgment declaring that Mark Smith d/b/a

Design Center take nothing by his claims against Autodesk, Inc. and Christopher S. Canada

Enterprises, Inc. d/b/a On-Site Computer Solutions (“On-Site”) for failing to properly diagnose and

remedy technical problems with his computer software and system. We will affirm the trial

court’s judgment.

                     FACTUAL AND PROCEDURAL BACKGROUND

               Design Center is an interior-design business in Austin, Texas. On April 2, 2007,

Design Center contacted On-Site, an information-technology service provider, to change Design

Center’s computer passwords in advance of Smith’s plan to terminate the employment of

Kevin Knippa, Design Center’s in-house computer-networking consultant. On-Site responded to
the service request the same day and changed the passwords to help prevent Knippa from gaining

access to Design Center’s computer system. Before responding to the service call, however, On-Site

confirmed the nature of the service request via an email response to Design Center, which Knippa

saw the evening before his employment was terminated on April 3, 2007.1

               After Knippa’s termination, On-Site provided information technology consulting

services to Design Center on an on-call basis and began assisting Smith and Design Center with

computer networking problems they were experiencing, as well as problems using their AutoCAD

software; it is undisputed that Design Center’s AutoCAD issues predated On-Site’s initial

engagement on April 2, 2007.2 In order to solve the problems Smith and Design Center were having

with the AutoCAD software, Design Center employed On-Site to coordinate the communications

       1
        A computer-generated email confirming the service request was automatically sent to a
Design Center general email address and summarized the service request as follows:

       We received your request for support and understand its urgency.

       On-Site strives to address all requests in a timely manner. An On-site Consultant
       will contact you shortly to confirm the status and schedule for resolution.

       ....

       Amber emailed:
       Please call him [Smith] asap. He is letting go of his employee that has currently been
       helping/maintaining his network. He wants us to come in and change all passwords,
       setup security, etc.. [sic] again like we had it before. He doesn’t mind paying after
       hour’s rate [sic]. Old client that we haven’t done anything for since Brian W.

Knippa stated in an affidavit that he had read the email the afternoon before his employment
was terminated.
       2
          AutoCAD is a computer-assisted drafting and design software program with multiple
applications. It was used by Smith and Design Center for building and interior design.

                                                 2
among Design Center, Autodesk (the software publisher and licensor), and D.C. Cadd Company (the

software distributor). Smith testified that Design Center engaged On-Site merely to act as a liaison

with these companies and expected the software publisher or distributor to solve the problems with

AutoCAD. Autodesk provided remote troubleshooting in response to Design Center’s web-based

and telephone support requests.

               Design Center used On-Site’s services until June 3, 2007; thereafter, Brian Wachhaus

was hired to replace On-Site. At that time, the AutoCAD software was still not working to Smith’s

satisfaction, and Wachhaus continued to work with Autodesk and D.C. Cadd Company to resolve

the issues via remote troubleshooting. It took an additional two months before the problem was

resolved to Smith’s satisfaction. Wachhaus eventually concluded that a computer virus or worm

probably caused the AutoCAD problems.3

               Meanwhile, in July 2007, Smith sued Knippa, alleging that he had misappropriated

or destroyed Design Center’s confidential and trade-secret information and improperly accessed and

tampered with Design Center’s AutoCAD system. Smith later added claims against Autodesk,

D.C. Cadd, and On-Site for negligence and breach of fiduciary duty and against Autodesk and

D.C. Cadd for deceptive trade practices. See generally Tex. Bus. & Com. Code Ann. §§ 17.01-.926

(West 2011 & Supp. 2012) (“DTPA”). Smith asserted that Autodesk, D.C. Cadd, and On-Site

(1) failed to protect Design Center’s confidential and trade-secret information, (2) misrepresented

their qualifications to identify and remedy Design Center’s computer-software problems, (3) falsely

       3
        Wachhaus’s conclusion could not be independently verified because he erased the affected
computer’s hard drive, at Smith’s direction, after the underlying lawsuit was filed.

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asserted that they had corrected the computer-software problems, and (4) failed to remedy the

problems, all of which resulted in unreasonable delays for Smith’s business operations. Smith

further complained that On-Site negligently transmitted the email that alerted Knippa of his

imminent termination, which provided Knippa with an opportunity to sabotage Design Center’s

computer system, destroy documents, and misappropriate confidential and trade-secret information.

Smith claimed damages of $30,000 in fees he paid to Wachhaus to remedy his computer software

problems and $160,000 in fees he had to refund to his clients to settle their claims against him, which

allegedly resulted from delays caused by the defendants’ tortious conduct. He later reduced his lost

business damages claims to $115,000 after admitting that one of his clients had fired him several

months before the events giving rise to this lawsuit occurred.

               Both Autodesk and On-Site moved for summary judgment on all of Smith’s claims

and filed numerous objections to Smith’s summary-judgment evidence. The trial court granted both

motions without stating the grounds for its decision and without expressly ruling on the objections.

Nearly three months later, the trial court signed an order granting all of Autodesk’s objections to

Smith’s summary judgment evidence. However, there is no indication in the record that the trial

court ever ruled on On-Site’s objections.

               The claims against the remaining defendants—Knippa and D.C. Cadd—proceeded

to a jury trial, with the exception of Smith’s claim that Knippa tampered with his computer system,

which was apparently abandoned after both Smith and Wachhaus conceded that there was no

evidence that Knippa had done so. The jury found against Smith on all claims. Specifically, the jury

determined that (1) Knippa had not stolen Smith’s or Design Center’s trade secrets, (2) D.C. Cadd

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had not engaged in deceptive or unconscionable trade practices, and (3) Smith, but not D.C. Cadd,

was negligent in causing Smith’s damages. Following the jury’s verdict, the trial court rendered final

judgment in the case, making the prior summary judgments final for purposes of appeal.

               On appeal, Smith does not challenge the disposition of the claims against Knippa and

D.C. Cadd, nor does he complain about the summary judgment on his breach-of-fiduciary-duty

claims against Autodesk and On-Site. The only claims at issue here are the negligence and DTPA

claims against Autodesk and the negligence claim against On-Site, which are based on the alleged

failure to properly identify and remedy the problems with the AutoCAD software and the inadvertent

disclosure of Smith’s plans to terminate Knippa’s employment.4 Smith also contends that we must

disregard On-Site’s objections to his summary-judgment evidence because On-Site failed to secure

a ruling on the objections. Smith further contends that the trial court’s order granting Autodesk’s

objections is invalid because the court was required to rule on the objections when it granted the

summary-judgment motion.

                                           DISCUSSION

               We review the trial court’s summary-judgment rulings de novo, viewing the evidence

and reasonable inferences in the light most favorable to the non-movant. Valence Operating Co. v.

Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d
211, 215 (Tex. 2003). When, as here, multiple grounds are asserted in a summary-judgment motion

       4
          We might be inclined to conclude that Smith’s DTPA claim is waived based on inadequate
briefing, because it is mentioned in only a single sentence of the brief. See Tex. R. App. P. 38.1.
We need not do so, however, because there are other grounds on which to affirm the judgment in
Autodesk’s favor.

                                                  5
and the summary-judgment order does not specify a ground for the court’s rulings, the appellant must

show on appeal that each independent ground alleged is insufficient to support summary judgment.

See Pickett v. Texas Mut. Ins. Co., 239 S.W.3d 826, 840 (Tex. App.—Austin 2007, no pet.) (“When

the trial court does not specify the basis for its summary judgment, the appealing party must show

it is error to base it on any ground asserted in the motion.”); cf. Nobility Homes, Inc. v. Shivers,

557 S.W.2d 77, 83 (Tex. 1977) (holding that appellant’s failure to challenge each separate and

independent ground for recovery required affirmance of trial court’s judgment). Therefore, we will

affirm the summary judgments in this case if any ground presented in the summary-judgment

motions is meritorious or is unchallenged on appeal. See FM Props. Operating Co. v. City of Austin,

22 S.W.3d 868, 872 (Tex. 2000); Hand v. Old Republic Nat’l Title Ins. Co., No. 02-10-00347-CV,

2011 WL 1103725, at *2 (Tex. App.—Fort Worth Mar. 24, 2011, no pet.) (mem. op.); Pickett,
239 S.W.3d at 840.

               We begin by addressing the summary judgment in Autodesk’s favor. Autodesk filed

traditional and no-evidence motions for summary judgment, asserting a number of grounds,

including challenges to the damage elements of Smith’s claims. The damages Smith seeks in this

case are consequential damages—sums he paid to his dissatisfied customers and sums he paid to

Wachhaus for information technology services—which may be recoverable under both negligence

and DTPA theories of liability. See Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812,

816 (Tex. 1997) (observing that consequential damages are recoverable as actual damages under

common law and under DTPA and defining them as damages that “result naturally, but not

necessarily from the defendant’s wrongful acts”). Smith does not dispute that his only claimed

                                                 6
actual damages are consequential damages. Among other grounds, Autodesk sought summary

judgment on the basis that consequential damages are not recoverable in this case because (1) they

are barred by the express terms of his software-license and subscription agreements with Autodesk

and (2) they were not a foreseeable result of Autodesk’s allegedly wrongful conduct. See id. (“Under

the common law, consequential damages need not be the usual result of the wrong, but must be

foreseeable.”) (citing Mead v. Johnson Group, Inc., 615 S.W.2d 685, 687 (Tex. 1981)).

               On appeal, Smith challenges the first ground, but not the second, asserting only that

his claims are not subject to the terms and limitations in the software-license and subscription

agreements. Smith’s argument with regard to the applicability of his agreements with Autodesk does

not necessarily or inferentially address the lack-of-forseeability ground, which is a separate and

independent ground for summary judgment. Cf. Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473

(Tex. 1995) (appellant’s argument that newspaper could still be liable for publishing lawfully

obtained information was sufficient to address newspaper’s claim that it could publish some facts

with impunity simply because they were true). We therefore overrule Design Center’s challenge to

the trial court’s summary judgment in Autodesk’s favor without considering whether the trial court

timely sustained Autodesk’s objections to Smith’s summary-judgment evidence. See, e.g., King

v. Texas Emp’rs Ins. Ass’n, 716 S.W.2d 181, 183 (Tex. App.—Fort Worth 1986, no writ) (affirming

summary judgment because it “may have been granted, properly or improperly, on the ground set

forth in the motion, and the granting of the summary judgment on that ground [was not] challenged

by appellant” (citations omitted)).

                                                 7
               With regard to the summary judgment in On-Site’s favor, Smith asserts that summary

judgment was not proper on its negligence claim because genuine issues of material fact exist as to

each element of that claim. See Tex. R. Civ. P. 166a(c), (i) (summary judgment is proper if there

is no genuine issue of material fact and movant is entitled to judgment as matter of law). Among

other grounds, On-Site alleged that there was no evidence that it breached any duty owed to Smith

or Design Center and no evidence of causation. See Columbia Med. Ctr. of Las Colinas, Inc.

v. Hogue, 271 S.W.3d 238, 246 (Tex. 2008) (negligence cause of action arises when breach of legal

duty proximately causes damages). Viewing the evidence in the light most favorable to Smith and

without regard to On-Site’s objections to Smith’s evidence, we agree that the evidence fails to raise

a fact issue regarding essential elements of Smith’s negligence claim.

               Smith cites two circumstances underlying his negligence claim against On-Site. The

first relates to the email On-Site sent to Design Center on April 2, 2007, that inadvertently disclosed

Smith’s intent to terminate Knippa’s employment and which Smith alleges allowed Knippa to

misappropriate trade secrets and tamper with Design Center’s computers (if he were inclined to do

so). However, there is no evidence that Knippa actually engaged in any such wrongful conduct. In

addition, the undisputed evidence is that Design Center’s AutoCAD problems predated the April 2

email. Simply stated, the record is devoid of any evidence that the April 2 email—even if sent

negligently, which we do not decide—proximately caused the damages Smith seeks to recover in this

lawsuit. Therefore, summary judgment was proper as to this claim.

               The other alleged acts of negligence concern On-Site’s role in attempting to remedy

the problems with the AutoCAD software program. Smith testified that On-Site was engaged to act

                                                  8
as his liaison in communications with Autodesk and D.C. Cadd and that he expected those entities,

not On-Site, to fix the problems with AutoCAD:

       Q.      On-Site itself did not actually ever perform any of the work to try to fix the
               AutoCAD system that you were having—the problems with the system that
               you were having, correct?

       A.      Correct, except what I had asked them to do and which they were trying to do
               was to help be a liaison for the whole.

       Q.      Right, kind of coordinate your communications, the communications between
               yourself and Autodesk or [D.C. Cadd]?

       A.      And the actions that everyone was taking. I wanted to make sure On-Site was
               in the loop since they were doing my networking.

       Q.      Sure. But the entities that you actually understood at the time that were going
               to be fixing these problems with your AutoCAD system was either Autodesk
               or [D.C. Cadd], right?

       A.      With Europe specifically? Yes.

       Q.      With all the problems you were having during that two-month time period
               with the AutoCAD system?

       A.      With AutoCAD, yes.

Invoices, summaries, and emails attached to Smith’s affidavit and incorporated by reference are

consistent with Smith’s deposition testimony that On-Site’s role with respect to the AutoCAD

problems was limited to acting as a liaison or conduit for information between Smith or Design

Center and Autodesk or D.C. Cadd. There is no evidence that On-Site breached its duties in that

regard, and neither Smith nor Wachhaus could articulate what On-Site could or should have done

differently. Because Smith failed to produce more than a scintilla of evidence that On-Site breached

                                                 9
a duty owed to Smith or Design Center, the trial court did not err in granting summary judgment in

On-Site’s favor.

                                        CONCLUSION

               For the reasons stated, we affirm the trial court’s summary judgments in favor of

Autodesk and On-Site.

                                                    ____________________________________

                                                    J. Woodfin Jones, Chief Justice

Before Chief Justice Jones, Justices Pemberton and Rose

Affirmed

Filed: August 16, 2012

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