Court Opinion

ID: 4030032
Source: CourtListenerOpinion
Date Created: 2016-08-31 11:03:17.060598+00
Date Added: 2024-06-11T14:01:42.644004
License: Public Domain

Opinion issued August 30, 2016

                                 In The

                           Court of Appeals
                                 For The

                       First District of Texas
                         ————————————
                           NO. 01-15-00604-CV
                         ———————————
   D&R CONSTRUCTORS, INC., MICHAEL RUSHING, STEPHANIE
  RUSHING, PENN RUSHING, AND FLORENCE RUSHING, Appellants
                                   V.
  TEXAS GULF ENERGY, INC., CS BANKERS V, LLC, TEXAS GULF
  FABRICATORS, LLC, TIMOTHY CONNOLLY, BRIAN G. HENDRY,
               AND LESTER H. SMITH, Appellees

                 On Appeal from the 270th District Court
                          Harris County, Texas
                    Trial Court Case No. 2013-00543

                       MEMORANDUM OPINION

     Appellants, D&R Constructors, Inc. (“D&R”) and Michael Rushing,

Stephanie Rushing, Penn Rushing, and Florence Rushing (collectively,
“the Rushings”), challenge the trial court’s judgment, entered after the trial court

granted a series of summary judgments, in favor of appellees, Texas Gulf Energy,

Inc. (“TGE”), and CS Bankers V, LLC (“CSB”), on their declaratory-judgment

actions against D&R and the Rushings. D&R and the Rushings further challenge

the trial court’s judgment entered against them on their various counterclaims

against appellees, TGE, CSB, Texas Gulf Fabricators, LLC (“TGF”), Timothy

Connolly (“Connolly”), Brian G. Hendry (“Hendry”), and Lester H. Smith

(“Smith”). In seven issues, D&R and the Rushings contend that the trial court

erred in granting summary judgment in favor of TGE and CSB on their

declaratory-judgment actions; granting summary judgment against D&R and the

Rushings on their counterclaims against CSB for wrongful foreclosure, TGF and

Hendry to quiet title, TGE, TGF, and Connolly for breach of contract, CSB, TGE,

TGF, and Connolly for quantum meruit, CSB, TGE, TGF, and Connolly for fraud,

TGE, TGF, and Connolly for negligent misrepresentation, TGE, Connolly, and

Hendry for tortious interference, TGE, TGF, and Connolly for breach of fiduciary

duty, CSB, TGE, TGF, and Connolly for conversion, and CSB, TGE, TGF, and

Connolly for conspiracy; granting relief beyond that requested in the summary-

judgment motions; granting summary judgment without an adequate time for

discovery; granting TGE and CSB summary judgment on their claims for

attorney’s fees; and granting Smith’s motion for sanctions.

                                         2
      We affirm.

                                      Background

      In their first amended petition, TGE and CSB1 alleged that in the summer of

2012, TGE, needing additional space to conduct its fabrication operations,2 was

interested in acquiring a fabrication facility at 6314 Wade Road, Baytown, Texas

(the “property”), which was owned by D&R, a fabrication company owned by the

Rushings. At the time, D&R, carrying a $600,000 tax debt, was in default on a

2004 “Revolving Real Estate Lien Note,” which was held by Comerica Bank

(“Comerica”)3 and secured by a deed of trust on the property.

      On July 11, 2012, TGE and the Rushings executed a “Letter of Intent” (the

“LOI”), in which they contemplated a joint venture to develop a new fabrication

and manufacturing company, Texas Gulf Fabrication, Inc.,4 as follows:

      1.     [TGE] and the Rushing Family agree to form a Marketing Joint
             Venture to develop new Fabrication and Manufacturing
             business for Texas Gulf Fabrication, Inc. The ownership of the
             Joint Venture will be 81% owned by the Rushing Family, . . .
             [and] 19% owned by [TGE].
      2.     [TGE] will deposit $100,000 on the execution of the definitive
             agreement, 10 days from [the] effective date. These funds are
             intended for the benefit of the Rushing Family . . . .

1
      CSB is an affiliate of TGE.
2
      E.g., pipe and vessel fabrication for the oil and gas industry.
3
      Comerica Bank is not a party to this appeal.
4
      Texas Gulf Fabrication, Inc. is an entity separate and distinct from appellee, Texas
      Gulf Fabricators, LLC (“TGF”).

                                             3
      3.     [TGE] will deposit $10,000 per month beginning August 2,
             2012 and continue for twelve months, on or about the first of
             each month, ending with the check on July 2, 2013. . . .
      4.     [TGE] will issue 5,000,000 of its common shares in the name of
             the Joint Venture. . . .
      5.     There will be a 2% Commission paid to the Joint Venture for
             assistance in developing new business[.] [I]t will be calculated
             as a product of 2% of gross revenue invoiced by clients
             attributed to the efforts of the Joint Venture during the first five
             years from date of inception. It is intended that these funds are
             for the benefit of the Rushing Family.
      ....
      7.     The Managing Board of the Joint Venture will consist of three
             members, appointed for two year terms, two from the Rushing
             Family, and one member appointed by the CEO of [TGE]. . . .
      8.     This agreement will be further refined into [a] comprehensive
             agreement, fully compliant with laws and regulations, and the
             Managing Board of the Joint Venture will authorize [its]
             managing member to execute the comprehensive agreement on
             behalf of the Joint Venture.

Michael Rushing, on behalf of the Rushings, David Mathews, CEO of TGE, and

Craig Crawford, executive vice president of TGE, executed the LOI with the word

“binding,” handwritten in and initialed, next to the title, “Letter of Intent.”

      On July 13, 2012, CSB, through a Loan Sale Agreement (“LSA”), purchased

from Comerica D&R’s defaulted note on the property. Comerica assigned the

note, deed of trust, rents, and security agreement to CSB. And the president of

D&R, Penn Rushing, executed a “Joinder of Debtor,” expressly consenting to the

LSA. The appended Joinder to the LSA states,

                                           4
      For purposes of inducing Purchaser [CSB] and Seller [Comerica] to
      enter into this Agreement, which results in a direct economic benefit
      to the undersigned Debtor [D&R], . . . [D&R] joins in the execution of
      this Agreement . . . (a) to evidence [its] consent to the
      transaction . . . (b) to confirm that (i) true and correct copies of the
      Loan Documents are attached . . . [and] (ii) none of the terms or
      provisions of the Loan Documents have been modified. . . .”

The Joinder further states that D&R “confirm[s]” that the loan matured on October

28, 2011 and the “Loan Documents are valid and enforceable against [D&R] and

the collateral identified therein, prior to Closing, as well as post Closing upon their

assignment to Purchaser [CSB].” And D&R acknowledged that “Purchaser [CSB]

and Seller [Comerica] . . . would not consummate the sale without [D&R’s]

Joinder in this Agreement.”

      TGE and CSB further alleged, however, that after execution of the LOI and

LSA, “certain members of the Rushing Family absolutely and unconditionally

refused to take any steps in furtherance of the joint venture until they received

money above and beyond what [was] contemplated in the LOI.” Thus, the parties

reached an impasse and did not execute a final agreement.

      On September 4, 2012, CSB foreclosed on the note and acquired the

property at a trustee’s sale. CSB’s acquisition, pursuant to the deed of trust,

included:

      All buildings and improvements located thereon and all goods,
      equipment, fixtures, inventory, machinery, furniture, furnishings and
      other personal property that is now owned or hereafter acquired by
      Grantors and now or hereafter affixed to, or located on, the above

                                          5
      described real estate [the property] and used or usable for any present
      or future operation of any building or buildings now or hereafter
      located on said land . . . .

      In late December 2012, CSB changed the locks on the property. Days later,

a CSB security officer at the facility saw Michael Rushing at the property loading

equipment and boxes into trucks. According to TGE and CSB, Michael removed

“approximately $50,000 to $100,000 in equipment, machinery and Property

belonging to [CSB].” TGE later obtained a temporary injunction, in which the trial

court ordered that the Rushings return the property. And “[a]lthough the Rushings

subsequently returned the majority of the equipment pursuant to [the trial court’s]

order,” TGE and CSB suffered damages.

      TGE and CSB sued the Rushings for conversion, alleging loss of use, loss of

value, and lost profits. TGE also sought a declaration that the LOI was “not a

binding, valid or enforceable agreement between TGE and the Rushing Family,”

“TGE [had] no obligation, monetary or otherwise, to the Rushing Family,” and

“any and all amounts paid by TGE to the Rushing Family [had to] be returned to

TGE.” Alternatively, TGE alleged that, to the extent the trial court found that the

LOI was a “binding and enforceable agreement between TGE and the Rushing

family,” the Rushings had breached the agreement. CSB sought a declaration that

                                        6
its foreclosure on the property was proper and valid and it, thus, held legal title to

the property. TGE and CSB also sought attorney’s fees.5

      D&R and the Rushings answered, generally denying the allegations and

asserting several counterclaims, in which they sought $12,500,000 in damages. In

their “Third Amended [Counterclaims],” D&R and the Rushings alleged that in

2012, Mathews, Crawford, and Connolly, who was an executive of TGE and CSB,

approached them about a joint venture with TGE, stating that they had an

“exorbitant amount of business” and financial support.6          And, in May 2012,

Mathews, Connolly, Hendry,7 and Smith8 attended a meeting at Smith’s house “to

discuss dealings with the Rushings.”

      On July 11, 2012, D&R and the Rushings executed the “binding” LOI, in

which TGE had “promised” the “purchase and subsequent dissolution of the debt”

that D&R owed to Comerica on the property.             According to D&R and the

Rushings, TGE had “promised” that it “and/or Texas Gulf Fabrication, Inc. [the

new venture] would purchase the debt and subsequently forgive it as part of their

contribution/obligations to their venture.”     They asserted that the lien on the

5
      See TEX. CIV. PRAC. & REM. CODE ANN. §§ 37.009, 38.001 (Vernon 2015).
6
      Although D&R and the Rushings discuss Crawford and Mathews, officers of
      TGE, in their counterclaims, Crawford and Mathews are not named defendants,
      and no judgment involving them appears in the record.
7
      Hendry is an owner of TGF.
8
      Smith, Hendry’s father-in-law, has no ownership interest or stated formal position
      in any of the entities at issue.

                                           7
property was then be held by the new venture, Texas Gulf Fabrication, Inc., of

which they would own 81 percent. Further, “in preparation for the [joint] venture,”

D&R executed “a lease”9 of the property, the lease payments of which were to

cover the monthly amount due on the note. And D&R and the Rushings “never

knowingly gave consent” for CSB to purchase the Comerica lien.

      D&R and the Rushings further alleged that in the months following the

execution of the LOI and lease, they, “[b]ased upon promises” by TGE, TGF,

Connolly, Crawford, and Mathews, “ceased their normal business pursuits and

started focusing on preparing and handling business for the venture.” TGE “hung

their sign” at the property, “act[ed] like everything had been done,” and “said the

money and final paperwork would be forthcoming any day.” However, the “final

paperwork was never delivered.”

      One day in December 2012, after D&R and the Rushings had begun

“threatening litigation,” Penn Rushing was at the property when a locksmith, at

Crawford’s behest, arrived to change the locks. After Penn was unable to reach

Crawford, he began moving personal items off-site.          Connolly then informed

Michael Rushing that he was “shutting the facility down.” According to D&R and

the Rushings, “the first time” that they were informed that CSB had foreclosed on

9
      The record reflects that D&R executed a “Commercial Lease” with the new entity
      under the joint venture, “Texas Gulf Fabricat[ion], Inc.,” to commence on June 1,
      2012 and continue for a term of ten years with a lease payment of $5,000 per
      month.

                                          8
the property was on January 8, 2012, when Michael Rushing was served with the

instant suit.

       In regard to its counterclaims for wrongful-foreclosure, D&R10 alleged that

CSB had “wrongfully foreclosed upon the [p]roperty without notice, acceleration,

or even making a demand for payment” and “violated” the statutory requirements

governing foreclosure proceedings11 and the terms of the deed of trust. D&R also,

on the ground that CSB’s title to the property was thus invalid and its subsequent

transfer of the property to TGF was void, asserted a claim to quiet title against both

CSB and TGF.

       In regard to their breach-of-contract counterclaim, D&R and the Rushings

argued that the LOI constituted a “binding contract” because it “did not leave any

material term open to further negotiation.” It included:

       the names of the parties, signatures, effective date of formation, and
       precise terms including: percentage of ownership (“81% Rushing
       Family . . . 19% owned by [TGE]”); issuance of shares and
       compensation (“[TGE] will issue 5,000,000 of [its] common shares in
       the name of the Joint Venture. These shares will vest over three years
       from the date of issuance, such date will be as close as reasonably
       possible to July 21, 2012.”); and formation of a managing Board to
       “consist of three members, appointed for two year terms, two from the
       Rushing Family and one member appointed by the CEO of [TGE].”).

10
       The Rushings non-suited their wrongful-foreclosure claims.
11
       See TEX. PROP. CODE ANN. § 51.002 (Vernon 2014).

                                           9
They further argued that TGE, TGF, and Connolly breached the LOI because they

“did not issue the required shares,” “pay the Rushings” as agreed; “pay the lease”;

or “consummate the managing board.” And “[t]herefore, damages can be assessed

and recovered by the Rushings.”

      In regard to their fraud counterclaim, D&R and the Rushings alleged that

CSB, TGE, TGF, and Connolly “materially misrepresented that the venture and the

July 2012 Binding [LOI] were going to come to fruition and benefit D&R and the

Rushings”; “the [n]ote purchase was part of the joint venture and that the lease

would cover all note payments”; the “note was to be owned by the joint venture”;

and the “note would be owned by the joint venture and not foreclosed.” And

Smith “orchestrated and directed [CSB, TGE, TGF, and Connolly] to make it

happen.”   These “material representations were false”; CSB, TGE, TGF, and

Connolly “knew” that they were “false”; the representations were made “with the

intent that they should be acted upon”; and D&R and the Rushings acted in

reliance upon them and suffered financial, emotional, and reputational harm, and a

loss of revenue and real and personal property.

      In regard to their counterclaim for negligent misrepresentation, D&R and the

Rushings alleged that TGE, TGF, and Connolly, through conversations, written

correspondence, and the LOI, “supplied” “false” information, which they did not

“exercise reasonable care or competence in obtaining or communicating.” And

                                        10
D&R and the Rushings justifiably relied upon the misrepresentations, which

proximately caused their damages.

      In regard to their counterclaim for breach of fiduciary duty against TGE,

TGF, and Connolly, D&R and the Rushings alleged that both an “informal

fiduciary relationship of trust and loyalty developed and existed” between them

and, “alternatively, a partnership and/or joint venture relationship developed,”

from which “‘formal’ fiduciary duties arose.” And TGE, TGF, and Connolly,

knowing that they would not actually “provide . . . the benefits and position that

had enticed the execution of the binding [LOI] in the first place,” “mis[led]” D&R

and the Rushings into “devoting their time and skills toward growing” the new

venture. These breaches of duty damaged D&R and the Rushings by “depriving

them of their property [and] fair compensation for their services.”

      In regard to their conversion counterclaim, D&R and the Rushings alleged

that CSB, TGE, TGF, and Connolly took “for their own use” “personal property

and equipment (tools, welding machines, studio equipment, dishes, etc.)”

belonging to the Rushings that were located on the property.

      In regard to their counterclaim for tortious interference, D&R and the

Rushings alleged that Connolly and Hendry “conspired to interfere and make it

impossible to make payments due under the [LOI]” and their “willful and

intentional actions occurred as they were aware that D&R and the Rushings had

                                         11
executed a Binding [LOI] . . . [and] a 10-year lease . . . for the property.”

Moreover, TGE “did not make the payments due under the lease in attempt to

interfere with the [LOI].”

      In regard to their conspiracy counterclaim, D&R and the Rushings alleged

that CSB, TGE, TGF, Connolly, Hendry, and Smith “all conspired” to “profit from

defrauding [them] by breaching the binding [LOI],” “fraudulently promising that

they were going to perform under [it],” and “taking the D&R property and not

fulfilling the terms they promised to the Rushing Family.”

      In regard to their counterclaim for quantum meruit against CSB, TGE, TGF,

and Connolly, D&R and the Rushings alleged that “[t]he acts above show that

D&R and the Rushings were deprived of their property, business and livelihood,”

and they sought the “return of their business and property or at least monetary

damages equivalent to the loss of services, material and property.”

      CSB moved for summary judgment on its declaratory judgment action and

D&R’s counterclaim for wrongful foreclosure, arguing that it was entitled to

judgment as a matter of law because “the evidence conclusively established that

[it] had complied with the statutory requirements for a non-judicial foreclosure”12

and the deed of trust. TGF and Hendry joined in CSB’s summary-judgment

motion, asserting that they were entitled to judgment as a matter of law on D&R’s

12
      See id.

                                         12
claim to quiet title. On August 28, 2014, the trial court granted CSB, TGF, and

Hendry summary judgment, dismissing D&R’s claims for wrongful foreclosure

and to quiet title. The trial court also issued a supplemental order declaring that

CSB’s foreclosure on the property was “proper, valid and complied with the terms

of the Deed of Trust and the laws of the State of Texas” and CSB “held legal title

to the [p]roperty.”

      Next, Lester Smith moved for summary judgment on the ground that there is

no evidence to support D&R and the Rushings’ claims against him for fraud and

conspiracy.    On October 31, 2014, the trial court granted “Final Summary

Judgment” in favor of Smith, dismissing all of the claims brought against him by

D&R and the Rushings. The trial court further awarded Smith $33,250.00 in

sanctions against D&R, the Rushings, and their attorney, George W. Gore, for

asserting “groundless” claims “in bad faith and for the purpose of harassment.”

      Next, TGF and Hendry then moved for summary judgment on the ground

that there is no evidence to support D&R and the Rushings’ claims against them

for breach of contract, fraud, negligent misrepresentation, breach of fiduciary duty,

conversion, conspiracy, tortious interference, and quantum meruit. On November

19, 2014, the trial court granted TGF and Hendry “Final Summary Judgment,”

dismissing all of D&R and the Rushings’ claims against them.

                                         13
      Next, TGE moved for summary judgment on D&R and the Rushings’

breach-of-contract counterclaim, arguing that it was entitled to judgment as a

matter of law because the LOI did not “meet the elements of a binding contract”;

“many material terms [were] missing”; it was “not sufficiently definite to be

enforceable”; the “Rushing Family never intended to be bound, or perform, under

the Proposal”; and there was “never a meeting of the minds between TGE and

Rushing Family.” On December 17, 2014, the trial court granted TGE partial

summary judgment, holding that the LOI was not a “binding, valid or enforceable

contract” and TGE had “no obligation, monetary or otherwise,” to the Rushings.

      CSB, TGE, and Connolly then moved for summary judgment on D&R and

the Rushings’ remaining claims against them on the ground that there is no

evidence to support the counterclaims. On February 3, 2015, the trial court granted

TGE, CSB, and Connelly’s no-evidence motions for summary judgment,

dismissing all of D&R and the Rushings’ remaining counterclaims against each of

them.13

      On April 13, 2015, the trial court issued a “Final Judgment,” in which it

incorporated all of its prior summary judgments and supplemental orders; held that

D&R and the Rushings “take nothing on their claims”; and awarded TGE and CSB

their attorney’s fees.

13
      TGE and CSB non-suited their conversion claims against D&R and the Rushings.

                                        14
                   Summary-Judgment Standard of Review

      We review a trial court’s summary judgment de novo. 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). In conducting our review, we take

as true all evidence favorable to the non-movant, and we indulge every reasonable

inference and resolve any doubts in the non-movant’s favor. Valence Operating,
164 S.W.3d at 661; Provident Life & Accident Ins., 128 S.W.3d at 215. If a trial

court grants summary judgment without specifying the grounds for granting the

motion, we must uphold the trial court’s judgment if any of the asserted grounds

are meritorious. Beverick v. Koch Power, Inc., 186 S.W.3d 145, 148 (Tex. App.—

Houston [1st Dist.] 2005, pet. denied). A party seeking summary judgment may

combine in a single motion a request for summary judgment under the no-evidence

standard with a request for summary judgment as a matter of law. Binur v. Jacobo,

135 S.W.3d 646, 650–51 (Tex. 2004).         When a party has sought summary

judgment on both grounds and the trial court’s order does not specify its reasons

for granting summary judgment, we first review the propriety of the summary

judgment under the no-evidence standard. See Ford Motor Co. v. Ridgway, 135
S.W.3d 598, 600 (Tex. 2004); see also TEX. R. CIV. P. 166a(i). If we conclude that

the trial court did not err in granting summary judgment under the no-evidence

                                       15
standard, we need not reach the issue of whether the trial court erred in granting

summary judgment as a matter of law. See Ford Motor Co., 135 S.W.3d at 600.

      To prevail on a no-evidence summary-judgment motion, the movant must

establish that there is no evidence to support an essential element of the

non-movant’s claim on which the non-movant would have the burden of proof at

trial. See TEX. R. CIV. P. 166a(i); Hahn v. Love, 321 S.W.3d 517, 523–24 (Tex.

App.—Houston [1st Dist.] 2009, pet. denied). The burden then shifts to the non-

movant to present evidence raising a genuine issue of material fact as to each of the

elements challenged in the motion. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572,

582 (Tex. 2006); Hahn, 321 S.W.3d at 524. A no-evidence summary judgment

may not be granted if the non-movant brings forth more than a scintilla of evidence

to raise a genuine issue of material fact on the challenged elements. See Ridgway,
135 S.W.3d at 600. More than a scintilla of evidence exists when the evidence

“rises to a level that would enable reasonable and fair-minded people to differ in

their conclusions.” Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711

(Tex. 1997).

      In a matter-of-law summary-judgment motion, the movant has the burden of

establishing that he is entitled to judgment as a matter of law and there is no

genuine issue of material fact. TEX. R. CIV. P. 166a(c); Cathey v. Booth, 900
S.W.2d 339, 341 (Tex. 1995). When a plaintiff moves for summary judgment on

                                         16
his own claim, he must conclusively prove all essential elements of his cause of

action. Rhone–Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); Anglo–

Dutch Petroleum Int’l, Inc. v. Haskell, 193 S.W.3d 87, 95 (Tex. App.—Houston

[1st Dist.] 2006, pet. denied).    When a defendant moves for a matter-of-law

summary judgment, he must either: (1) disprove at least one essential element of

the plaintiff’s cause of action, or (2) plead and conclusively establish each essential

element of his affirmative defense, thereby defeating the plaintiff’s cause of action.

See Cathey, 900 S.W.2d at 341; Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195,

197 (Tex. 1995); Lujan v. Navistar Fin. Corp., 433 S.W.3d 699, 704 (Tex. App.—

Houston [1st Dist.] 2014, no pet.). Once the movant meets its burden, the burden

shifts to the nonmovant to raise a genuine issue of material fact precluding

summary judgment. See Siegler, 899 S.W.2d at 197; Transcon. Ins. Co. v. Briggs

Equip. Trust, 321 S.W.3d 685, 691 (Tex. App.—Houston [14th Dist.] 2010, no

pet.). The evidence raises a genuine issue of fact if reasonable and fair-minded

jurors could differ in their conclusions in light of all of the summary-judgment

evidence. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex.

2007).

                                          17
                 Wrongful Foreclosure and Suit to Quiet Title

      In its first issue, D&R14 argues that the trial court erred in granting CSB

summary judgment on CSB’s declaratory-judgment action and on D&R’s

wrongful-foreclosure counterclaim15 because CSB did not conclusively establish

its right to judgment as a matter of law. See TEX. R. CIV. P. 166a(c). D&R further

argues that CSB’s own summary-judgment evidence establishes that “the

foreclosure was improper” because it “failed to comply” with the requirements of

the deed of trust and the “statutory requirements governing foreclosure.” See TEX.

PROP. CODE ANN. § 51.002 (Vernon 2014). In its second issue, D&R argues that

the trial court erred in granting TGF and Hendry summary judgment on its suit to

quiet title because CSB’s title was invalid, based on its “improper” foreclosure,

and, thus, its subsequent transfer of the property to TGF was void.

      To prevail on a wrongful-foreclosure claim, a plaintiff must establish (1) an

irregularity in the foreclosure sale that (2) caused it damages. Univ. Savings, Ass’n

v. Springwoods Shopping Ctr., 644 S.W.2d 705, 706 (Tex. 1982); Hous. Omni

USA Co. v. Southtrust Bank Corp., No. 01-07-00433-CV, 2009 WL 1161860, at *6

(Tex. App.—Houston [1st Dist.] Apr. 30, 2009, no pet.) (mem. op.).                An

14
      The Rushings non-suited their wrongful-foreclosure claims.
15
      Although TGF and Hendry had no role in the foreclosure proceeding, they joined
      in CSB’s motion for summary judgment on D&R’s wrongful-foreclosure
      counterclaim because CSB, after foreclosure, sold the property to TGF. Hendry is
      an owner of TGF.

                                         18
irregularity exists if a trustee does not comply with the statutory prerequisites

governing foreclosure and any conditions in the deed of trust. Hous. Omni USA

Co., 2009 WL 1161860, at *6; see also Hous. First Am. Savings v. Musick, 650
S.W.2d 764, 768 (Tex. 1983); Nat’l Commerce Bank v. Stiehl, 866 S.W.2d 706,

708 (Tex. App.—Houston [1st Dist.] 1993, no pet.); see also TEX. PROP. CODE

ANN. § 51.002.

      The deed of trust governing the property provides, in pertinent part, as

follows:

      If an event of a default hereunder shall occur, Beneficiary may, at
      Beneficiary’s election and by or through Trustee or otherwise, sell or
      offer for sale, in one or more sales, all or any part of the Mortgaged
      Property, . . . . with or without having first taken possession of same,
      to the highest bidder for cash (or credit on the indebtedness if
      Beneficiary is the highest bidder) at public auction. Such sale shall be
      made at the courthouse door of the County wherein the Mortgaged
      Property . . . is located, on the first Tuesday of any month between
      the hours of 10:00 a.m. and 4:00 p.m. after giving legally adequate
      written notice of sale of that portion of the Mortgaged Property to be
      sold, at least twenty-one (21) consecutive days prior to the date of
      said sale.
      ....
      . . . [S]uch notice and sale may be accomplished in such manner as
      permitted or required by . . . § 51.002 of the Texas Property Code . . . .

Texas Property Code section 51.002 provides, in pertinent part, as follows:

      (a)    A sale of real property under a power of sale conferred by a
             deed of trust or other contract lien must be a public sale at
             auction held between 10 a.m. and 4 p.m. of the first Tuesday of
             a month. Except as provided by Subsection (h), the sale must
             take place at the county courthouse in the county in which the

                                         19
             land is located, or if the property is located in more than one
             county, the sale may be made at the courthouse in any county in
             which the property is located. . . .
      (b)    . . . . [N]otice of the sale, which must include a statement of the
             earliest time at which the sale will begin, must be given at least
             21 days before the date of the sale by:
             (1)   posting at the courthouse door of each county in which
                   the property is located a written notice designating the
                   county in which the property will be sold;
             (2)   filing in the office of the county clerk of each county in
                   which the property is located a copy of the notice posted
                   under Subdivision (1); and
             (3)   serving written notice of the sale by certified mail on
                   each debtor who, according to the records of the
                   mortgage servicer of the debt, is obligated to pay the
                   debt.
      ....
      (c)    The sale must begin at the time stated in the notice of sale or
             not later than three hours after that time.
      ....
      (e)    Service of a notice under this section by certified mail is
             complete when the notice is deposited in the United States mail,
             postage prepaid and addressed to the debtor at the debtor’s last
             known address. The affidavit of a person knowledgeable of the
             facts to the effect that service was completed is prima facie
             evidence of service.
      ....
TEX. PROP. CODE ANN. § 51.002.

      CSB moved for summary judgment16 on its declaratory-judgment action and

D&R’s wrongful-foreclosure counterclaim, arguing that it was entitled to judgment

as a matter of law because “the evidence conclusively established that CSB

16
      See TEX. R. CIV. P. 166a(c).

                                          20
complied with the requirements of the deed of trust and statutory requirements of a

non-judicial foreclosure.17 See id. Because its foreclosure on the property was

proper and valid, it held legal title to the property.

      CSB’s summary-judgment evidence reveals that on August 14, 2012,

substitute trustee Robert Schlanger posted a “Notice of Substitute Trustee’s Sale”

at the Harris County Courthouse and filed the “Notice of Substitute Trustee’s Sale”

in the Office of the Harris County Clerk. In his affidavit, Schlanger testified that

he sent a “Notice of Posting” by certified mail to D&R at the Wade Street

property. In his “Notice of Posting,” Schlanger identified himself as the substitute

trustee and explained that D&R had, on October 28, 2004, executed a note in the

amount of $625,000.00; the note was secured by a deed of trust; the note and deed

of trust had been assigned to CSB; D&R previously had been notified that it was in

default on the note and had not cured the deficiency; and a foreclosure sale had

been set for September 4, 2012. See id. § 51.002(b). Schlanger listed his and

CSB’s contact information, and he offered D&R an opportunity to cure the default

before the sale. The “Notice of Posting” indicates that enclosed with it was a copy

of the “Notice of Substitute Trustee’s Sale.” The “Notice of Substitute Trustee’s

Sale” states that a foreclosure sale was scheduled to take place at 1:00 p.m. on

September 4, 2012, in “the interior area of the first floor lobby” or “covered area

17
      See TEX. PROP. CODE ANN. § 51.002.

                                            21
located outside” the “Family Law Center (a Harris County Courthouse located at

1115 Congress Street, Houston, Texas.” See id. § 51.002(a), (c). The record

includes a return receipt, showing that on August 14, 2012, Schlanger sent a

certified mailing to D&R at 6314 Wade Street, Baytown, Texas.                See id.

§ 51.002(e) (service of notice under this section complete when “deposited in the

United States mail, postage prepaid and addressed to the debtor at the last known

address”).

      CSB’s summary-judgment evidence establishes that it complied with the

challenged statutory requirements and terms of the deed of trust, which mirrors the

statute, in conducting its foreclosure of the property. See id. Thus, the burden

shifted to D&R to raise a genuine issue of material fact precluding summary

judgment. See Siegler, 899 S.W.2d at 197; Transcon. Ins. Co., 321 S.W.3d at 691.

      D&R first argues that there exists a fact issue regarding proper notice

because CSB’s “only evidence” that notice was sent is Schlanger’s affidavit;

Schlanger, in his affidavit, identifies “only three pages as being mailed”; and D&R

never received the notice.

      The affidavit of a person knowledgeable of the facts to the effect that service

was completed constitutes prima facie evidence of service. See TEX. PROP. CODE

ANN. § 51.002(e). And nothing in Schlanger’s affidavits, suggests that “only three

pages” were mailed. Schlanger testified that he sent a “Notice of Posting.” The

                                         22
“Notice of Posting” states that a “Notice of Substitute Trustee’s Sale” was

attached. Both notices appear together in the summary-judgment record. And

CSB was not required to prove that D&R actually received the notices. See id.;

Kainer v. ABMC Corp., No. 01-05-00338-CV, 2006 WL 407794, at *5–6 (Tex.

App.—Houston [1st Dist.] 2006, no pet.) (mem. op.).

      D&R next asserts that its “evidence of [CSB’s] interference with the

foreclosure notice’s service” is “sufficient to raise an issue of fact to be resolved by

a jury.” It directs us to the August 8, 2014 affidavit of Penn Rushing, as evidence

that TGE allowed the Rushings, who were working at the property at the time, to

receive mail for D&R at the property. D&R claims, however, that “[a] defective

notice letter was sent in the mail, but TGE personnel working at the [p]roperty

refused to sign for the letter and falsely advised the postman that D&R no longer

was there.” Notably, D&R seems to concede that Schlanger mailed his notice to

D&R. See TEX. PROP. CODE ANN. § 51.002(e).

      Regardless, D&R argues that the summary-judgment evidence indicates that

its receipt of the notice of foreclosure was “fraudulently blocked from delivery” by

TGE personnel working at the property because CSB’s return receipt includes a

notation “Attempted – Not Known; Unable to Forward” and, in its own

summary-judgment evidence, a “Mailing Standards of the United States Postal

Service, Domestic Mail Manual.” The Manual states that an endorsement of

                                          23
“Attempted – Not Known” means “Delivery Attempted, addressee not known at

place of address.”

      “The dispositive inquiry under section 51.002(e), however, is not receipt of

notice, but, rather, service of notice.” Adebo v. Litton Loan Servicing, L.P., No.

01-07-00708-CV, 2008 WL 2209703, at *4 (Tex. App.—Houston [1st Dist.] May

29, 2008, no pet.) (mem. op.); see TEX. PROP. CODE ANN. § 51.002(e) (“Service of

a notice under this section by certified mail is complete when the notice is

deposited in the United States mail, postage prepaid and addressed to the debtor at

the debtor’s last known address. . . .”). Thus, to create a fact issue to defeat CSB’s

showing of compliance with the notice requirements, D&R had to present

evidence that CSB’s notices were not “deposited in the mail, by certified mail,

postage prepaid, and addressed to [D&R], as stated in the affidavit” of the

substitute trustee. See Adebo, 2008 WL 2209703, at *4. D&R, in its appellate

brief, does not direct us to any evidence on this point.

      D&R also argues that there exists a fact issue regarding proper notice

because Schlanger was statutorily prohibited from acting as both a “debt collector”

and the substitute trustee.      See TEX. PROP. CODE ANN. §§ 51.0074(b)(1),

51.0075(b) (Vernon 2014). “A trustee may not be . . . assigned a duty under a

security instrument other than to exercise the power of sale in accordance with the

terms of the security instrument.”      Id. § 51.0074(b)(1).    And “[a] trustee or

                                          24
substitute trustee is not a debt collector.”     Id. § 51.0075(b).   Nothing in the

summary-judgment record suggests that Schlanger was assigned any duty other

than to exercise the power of sale in the deed of trust.

      D&R further asserts that CSB did not serve the guarantor, Penn Rushing,

with notice of foreclosure. To its response, D&R attached the affidavit of Penn

Rushing in which he testified that he is “the guarantor on the Note” and was “not

sent a notice of foreclosure.” However, “[g]uarantors, as opposed to the maker, of

a note secured by realty do not enjoy the right to notice of the foreclosure sale

under the Property Code’s notice provisions.” Bishop v. Nat’l Loan Inv’rs, L.P.,

915 S.W.2d 241, 245 (Tex. App.—Fort Worth 1995, writ denied) (citing section

51.002).   And nothing in the deed of trust required notice to a guarantor.

Moreover, in the note, “[e]ach [m]aker, surety, and endorser . . . expressly

waive[d] all notices.”

      Finally, D&R argues that there exists a fact issue regarding the validity of

CSB’s foreclosure because there is “no amount due” on the loan.              CSB’s

summary-judgment evidence shows that in July 2012, Comerica sold the note to

CSB and assigned to CSB its rights under the deed of trust. The loan documents

identify CSB and its address, facsimile number, email address, and representative,

Connolly. As discussed above, D&R executed in the LSA a “Joinder by Debtor,”

which states that the “Loan Documents,” defined as the deed of trust, assignment

                                          25
of rents, security agreement, and UCC financing statement, were “valid and

enforceable” by CSB against D&R and the “collateral identified therein,” i.e., the

property. The evidence shows that D&R’s loan matured on October 28, 2011 and

the outstanding balance on the note was $415,064.47. The deed of trust provides

that in the event of a default or “unpaid indebtedness,” the grantor, i.e., CSB, may

“without demand,” “notice of nonpayment,” “notice of acceleration,” or “any other

notice,” declare the entire unpaid balance “immediately due” and “shall have the

option to proceed with foreclosure in satisfaction of such default.”

      D&R does not direct us to any evidence that raises a fact issue regarding any

irregularities in CSB’s foreclosure. See Valence Operating, 164 S.W.3d at 661;

Provident Life & Accident Ins., 128 S.W.3d at 215. Taking as true all evidence

favorable to D&R and indulging every reasonable inference and resolving any

doubts in its favor, we conclude that CSB has conclusively disproved the existence

of an irregularity in the foreclosure sale, an essential element of D&R’s

wrongful-foreclosure cause of action. See Cathey, 900 S.W.2d at 341; Siegler, 899
S.W.2d at 197 (Tex. 1995); Lujan, 433 S.W.3d at 704.

      Accordingly, we hold that the trial court did not err in granting CSB

summary judgment on its declaratory-judgment action and D&R’s wrongful-

foreclosure counterclaim. We further hold that because there is no evidence that

CSB’s title is invalid, the trial court did not err in granting TGF and Hendry

                                         26
summary judgment on D&R’s suit to quiet title. See Essex Crane Rental Corp. v.

Carter, 371 S.W.3d 366, 387–88 (Tex. App.—Houston [1st Dist.] 2012, pet.

denied) (suit to quiet title relies on invalidity of defendant’s claim to property).

       We overrule D&R’s first and second issues.

                                 Breach of Contract

       In a portion of their fifth issue, D&R and the Rushings argue that the trial

court erred in granting TGE and Connolly18 summary judgment against them on

their breach-of-contract counterclaim because they presented evidence raising a

genuine issue of material fact on each element of the claim. See TEX. R. CIV. P.

166a(c), (i).

       The essential elements of a breach-of-contract claim 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 as a result of

the breach. B&W Supply, Inc. v. Beckman, 305 S.W.3d 10, 16 (Tex. App.—

Houston [1st Dist.] 2009, pet. denied). The elements of a valid contract are: (1) an

offer; (2) an acceptance in strict compliance with the terms of the offer; (3) a

meeting of the minds; (4) each party’s consent to the terms; and (5) execution and

delivery of the contract with the intent that it be mutual and binding. Williams v.

18
       D&R and the Rushings do not challenge the trial court’s summary judgment in
       favor of all the parties on every counterclaim. We address only those
       counterclaims raised in the appeal.

                                           27
Unifund CCR Partners Assignee of Citibank, 264 S.W.3d 231, 236 (Tex. App.—

Houston [1st Dist.] 2008, no pet.).       To be enforceable, a contract must be

sufficiently certain to enable a court to determine the rights and responsibilities of

the parties. See T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221

(Tex. 1992).

      In determining whether a contract is sufficiently definite to enable a court to

determine the parties’ obligations and provide a legal remedy, “we must construe

the contract as a whole” and “evaluate the overall agreement to determine what

purposes the parties had in mind at the time they signed” it. Fischer v. CTMI,

L.L.C., 479 S.W.3d 231, 239–40 (Tex. 2016). “[W]e may neither rewrite the

parties’ contract nor add to its language.” Id. (quoting Am. Mfrs. Mut. Ins. Co. v.

Schaefer, 124 S.W.3d 154, 162 (Tex. 2003)). Nor may we “consider only the parts

favoring one party and disregard the remainder.” Id. “[I]t is a rule universally

recognized that if an instrument admits of two constructions, one of which would

make it valid and the other invalid, the former must prevail.” Id. (“Forfeitures are

not favored in Texas, and contracts are construed to avoid them.”). Thus, if the

parties clearly intended to agree and a “reasonably certain basis for granting a

remedy” exists, we will conclude that the contract terms are definite enough to

provide that remedy. Id. When “the actions of the parties . . . show conclusively

that they have intended to conclude a binding agreement, even though one or more

                                         28
terms are missing or are left to be agreed upon[,] . . . courts endeavor, if possible,

to attach a sufficiently definite meaning to the bargain.” Id.

      TGE argued that it was entitled to judgment as a matter of law on D&R and

the Rushings’ breach-of-contract counterclaim because the LOI was not a valid,

enforceable agreement.     It asserted that the LOI is “silent as to the specific

members of the Rushing Family to be parties to the proposed marketing joint

venture and the specific duties to be performed by the Rushing Family in return for

their compensation.” Further the LOI expressly contemplates that it “will be

further refined into a comprehensive agreement” in the future.             And it is

undisputed that the parties did not subsequently enter into the contemplated

comprehensive agreement.

      TGE’s summary-judgment evidence includes a copy of the LOI and excerpts

from the depositions of Michael and Penn Rushing. We first note that the LOI

does not identify any specific members of the Rushing Family as parties to the

agreement, and it makes no mention of any promises or duties owed.                An

agreement that does not create any reciprocal duties is fatally defective.        See

Fiduciary Fin. Servs. of Sw., Inc. v. Corilant Fin., L.P., 376 S.W.3d 253, 257–58

(Tex. App.—Dallas 2012, pet. denied) (“letter of intent” fatally defective where it

created “no specific duties to be performed” in return for $250,000 salary).

                                          29
      Further, the LOI states that “[TGE] will deposit $100,000 on the execution

of the definitive agreement.” (Emphasis added.) And “[TGE] will deposit $10,000

per month beginning August 2, 2012 and continuing for twelve months.” Again, it

is undisputed that “the definitive agreement” was never executed. And the LOI

does not state where or to whom TGE was to make any deposits. Although the

LOI generally states that “funds are intended for the benefit of the Rushing

Family,” no specific person is identified. And, again, the LOI, in closing, states

that the parties intended for it to “be further refined into [a] comprehensive

agreement.”

      The terms of the LOI are simply not sufficiently definite to enable a court to

understand the parties’ legal obligations. See Fort Worth ISD v. City of Fort

Worth, 22 S.W.3d 831, 846 (Tex. 2000); Playoff Corp. v. Blackwell, 300 S.W.3d
451, 455 (Tex. App.—Fort Worth 2009, pet. denied) (contract terms reasonably

certain if “they provide a basis for determining the existence of a breach and for

giving an appropriate remedy”). Where, as here, “essential terms are so uncertain

that there is no basis for deciding whether the agreement has been kept or broken,

there is no contract.” See Corilant Fin., L.P., 376 S.W.3d at 256.

      Further, Michael Rushing, in his deposition, testified that he did not agree

with certain terms of the LOI, i.e., paragraphs one (purpose of the joint venture),

four (issuance of shares), and five (commissions), and there were “a lot of material

                                         30
terms” “missing,” i.e., “the payoff of [the] IRS debt” and the salaries, benefits,

duties, and terms of employment pertaining to him and Penn Rushing, who, as part

of the deal, were to be employed by TGF, the entity created under the joint

venture. Michael Rushing further testified that the LOI did not constitute a final

agreement, as follows:

      Q.     . . . [T]he reason you signed this [LOI] is because you always
             contemplated that there would be deal documents—
      A.     Right
      Q.     —down the road.
      A.     Right.
      Q.     And have you executed any other agreements or contracts?
      A.     No, sir.
      Q.     Okay.
      A.     They’re still coming.
      Q.     They’re still coming?
      A.     (Moves head up and down.)
      Q.     All right. In other words, the deal is not done yet, right?
      A.     That’s right.

And Penn Rushing similarly testified:

      Q.     . . . [D]id you think this was the definitive agreement?
      A.     I think that this was just a Letter of Intent for Binding [sic] until
             the lawyers got the—all the stuff draw[n] up. We are still
             waiting on lawyers at this point to draw up everything.
      ....
      Q.     In other words, this does not embody the entire agreement of
             the parties?

                                          31
       A.    This doesn’t have everything listed that they agreed upon with
             us, no.

Thus, D&R and the Rushings did not accept the LOI in strict compliance with its

terms and did not fully consent to its terms. See Williams, 264 S.W.3d at 236.

       “It is well settled law that when an agreement leaves material matters open

for future adjustment and agreement that never occur, it is not binding upon the

parties and merely constitutes an agreement to agree.” Fischer, 479 S.W.3d at

237.   And when, as here, an agreement to make a future agreement is not

sufficiently definite as to all of the future agreement’s essential and material terms,

the agreement to agree is “nugatory.” See id.

       We conclude that TGE met its burden to disprove an essential element of

D&R and the Rushings’ breach-of-contract counterclaim by establishing that the

LOI was not a valid contract. See Cathey, 900 S.W.2d at 341. As such, the burden

shifted to D&R and the Rushings to present evidence raising a genuine issue of

material fact precluding summary judgment. See id.

       D&R and the Rushings presented, as their summary-judgment evidence on

this point, a copy of the LOI; emails regarding mediation; a certificate of formation

of TGF; a copy of the lease; a series of email correspondence; and a September

2014 appraisal of the property, stating that the “‘as is’ value of the fee simple of

the property” was $1,448,000. They do not, however, direct us to anything within

                                          32
these materials that constitutes evidence that the LOI constituted a valid contract.

See Beckman, 305 S.W.3d at 16.

      D&R and the Rushings also presented the affidavits of Michael and Penn

Rushing. In their affidavits, however, they again, consistent with their deposition

testimony above, each stated that “Crawford and Mathews repeatedly promised

that the comprehensive agreement would be forthcoming.” And Penn Rushing

further testified that “[n]o comprehensive agreement was ever presented.”

Although D&R and the Rushings assert that they changed their positions in

reliance on the LOI, the summary-judgment evidence conclusively establishes that

the LOI was not a valid contract.

      We conclude that D&R and the Rushings did not meet their burden to bring

forth evidence raising a genuine issue of material fact precluding summary

judgment on their breach-of-contract counterclaim. See Siegler, 899 S.W.2d at

197; Mayes, 236 S.W.3d at 755 (evidence raises genuine issue of fact if reasonable

and fair-minded jurors could differ in their conclusions in light of all summary-

judgment evidence). We further conclude that this same evidence, which D&R

and the Rushings also presented in response to Connolly’s no-evidence motion for

summary judgment on their breach-of-contract counterclaim against him, does not

constitute more than a scintilla of evidence raising a genuine issue of material fact

                                         33
regarding the existence of a valid, enforceable contract. See TEX. R. CIV. P.

166a(i); Ridgway, 135 S.W.3d at 600.

      Accordingly, we hold that the trial court did not err in granting TGE and

Connolly summary judgment against D&R and the Rushings on their breach-of-

contract counterclaim.

      We overrule the portion of D&R and the Rushings’ fifth issue in which they

challenge the trial court’s rendition of summary judgment on their breach-of-

contract counterclaim.

                                 Quantum Meruit

      In a portion of their fifth issue, D&R and the Rushings argue that the trial

court erred in granting CSB, TGE, and Connolly summary judgment against them

on their counterclaim for quantum meruit because they presented more than a

scintilla of evidence raising a genuine issue of material fact on each element of the

claim. See TEX. R. CIV. P. 166a(i).

      To recover under a quantum meruit theory, a claimant must prove that

(1) valuable services were rendered or materials furnished; (2) for the person

sought to be charged; (3) which services and materials were accepted by the person

sought to be charged, used and enjoyed by him; (4) under such circumstances as

reasonably notified the person sought to be charged that the plaintiff in performing

such services was expecting to be paid by the person sought to be charged. Vortt

                                         34
Expl. Co. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990); Silver Oak

Custom Homes, LLC v. Tredway, No. 01-12-01035-CV, 2013 WL 3522916, at *4–

5 (Tex. App.—Houston [1st Dist.] July 11, 2013, no pet.) (mem. op.).

      In their summary-judgment motions, CSB, TGE, and Connolly each asserted

that there is “no evidence” that D&R or the Rushings “provided valuable services

or materials” and any such services or materials were “accepted.”

      D&R and the Rushings, in their response, asserted that they “expected a lot

of compensation for getting involved with [CSB, TGE, and Connolly].”

Specifically, “[n]ot only was there immediate cash ($100k never received that was

due in 10 days) but there was also supposed to be $34 million in value.” D&R and

the Rushings also asserted that they provided “services, equipment, and real

property”; it is “undisputed that the [p]roperty has been used for the benefit of

TGE and Connolly”; and each party was “aware of the LOI and that [D&R and the

Rushings] expected compensation.” In support of their assertions, D&R and the

Rushings direct us to the LOI; the lease; the certificate of formation of TGF; a June

4, 2012 letter from Connolly to Michael Rushing, proposing potential deal

structures; and a July 15, 2012 email from Connolly to Mathews, proposing

alternative deal structures.

      Nothing in D&R and the Rushings’ summary-judgment evidence, however,

establishes that they rendered “valuable services” or “furnished” “materials” to

                                         35
CSB, TGE, or Connolly. First, no specific services or materials are identified.

That D&R and the Rushings expected the bargain of the LOI, which never

materialized, cannot form the basis of a quantum meruit claim. See Richter v.

Wagner Oil Co., 90 S.W.3d 890, 895 (Tex. App.—San Antonio 2002, no pet.)

(“An expectation of a future business advantage or opportunity cannot form the

basis of a quantum meruit claim.”). Further, D&R and the Rushings do not direct

us to any authority that supports their assertion that a quantum meruit theory

applies to a provision of real property. See Vortt Expl. Co., 787 S.W.2d at 944

(quantum meruit claim requires proof “valuable services were rendered or

materials furnished”).

      Accordingly, we hold that the trial court did not err in granting CSB, TGE,

and Connolly summary judgment against D&R and the Rushings on their

counterclaim for quantum meruit.

      We overrule the portion of D&R and the Rushings’ fifth issue in which they

challenge the trial court’s rendition of summary judgment on their counterclaim for

quantum meruit.

                                      Fraud

      In a portion of their fifth issue, D&R and the Rushings argue that the trial

court erred in granting CSB, TGE, and Connolly summary judgment against them

on their fraud counterclaim because they presented more than a scintilla of

                                        36
evidence raising a genuine issue of material fact on each element of the claim. See

TEX. R. CIV. P. 166a(i).

      To prevail on a fraud claim, a plaintiff must establish that: (1) a material

misrepresentation 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 “actively and justifiably” acted in reliance on the representation; and

(6) the party thereby suffered injury. Exxon Corp. v. Emerald Oil & Gas Co., 348
S.W.3d 194, 217 (Tex. 2011); Aquaplex, Inc. v. Rancho La Valencia, Inc., 297
S.W.3d 768, 774 (Tex. 2009); Tredway, 2013 WL 3522916, at *5.

      TGE, CSB, and Connolly each asserted in their summary-judgment motions

that there is no evidence of any specific material misrepresentations that they made

to D&R or the Rushings. See Exxon Corp., 348 S.W.3d at 217.

      D&R and the Rushings presented, as their summary-judgment evidence in

support of their fraud claim, TGF’s certificate of formation; a copy of the LOI; and

a copy of the lease. They also included a June 4, 2012 letter from Connolly to

Michael Rushing, in which Connolly outlined the following proposal:

      6.     You [Rushing] would introduce us directly to your banker and
             we would purchase the note from the bank and then foreclose,
             thus assuring a clean title; or, alternatively, the bank forecloses
             and we bid at the foreclosure sale.

                                          37
      7.     We will form a marketing joint venture with your family
             members who do not have any IRS liability. The family brings
             customers, many years of industry relationships, and sales
             prospects, and we will bring capital as follows:
             $100,000 in cash, and $1,000,000 in additional capital
             [explained]
      8.     The JV is owned 81% by your family and 19% by TGE.
      9.     The JV brings in a minimum of $5 million in sales at any time
             over the next three years . . . .
             Gentlemen, the upside potential of this proposal is significant;
             already this year the common shares of TGE have traded at a
             value that would equal $2 million in value for these shares.
             Additionally, the minimum cash benefit you would see to your
             family is $220,000. . . . Please present this to your family
             members asap, so that we can help you maintain your many
             years of family involvement in this business.

(Emphasis added.) And D&R and the Rushings also included Connolly’s June 22,

2012 email to Hendry, in which Connolly summarized the “fabrication plant note

purchase”:

             Corporate Strategies, LLC,[19] has negotiated the purchase of a
      defaulted note on a fabrication plant in Baytown in the original
      amount of $625,000 from [Comerica]. The purchase price of the note
      is approximately $425,000, and is secured by [the property].
            The Business located at the facility today, [D&R], has decided
      to close. Following the death of the founder and embezzlement of
      IRS trust funds from payroll by the Company’s bookkeeper, the
      Company is unable to make payments on the first lien note due to
      [Comerica]. Comerica purchased Sterling Bank, which originated the
      note in October 2004. While the bookkeeper is now in jail after
      having been convicted for the theft, as a result of the embezzlement
      and non-payment of taxes by the D&R employee, the IRS has filed

19
      Connolly is chief executive officer of Corporate Strategies, LLC.

                                          38
      tax liens against the property. These liens are secondary to the
      Comerica Bank first lien note . . . .
             A real estate appraisal has been completed and the current
      appraised value of the property is $445,000. Additionally, various
      items of used/junked equipment are spread throughout the 5 acre site
      on Wade Road. An equipment appraisal was obtained . . . valuing the
      equipment at $113,000, but our inspection of the equipment has
      shown it is largely nonfunctional and may well cost more to repair
      than its current worth. . . .
             [TGE] wants to locate their new fabrication subsidiary at the
      site and is willing to lease it for $5,000 per month on a triple net basis
      for ten years. TGE will also have the option to buy the real estate
      from the note holders after they foreclose for $600,000, for one year
      following the date of signing their lease.

Moreover, D&R included a July 15, 2012 email from Mathews to Connolly. In the

email, Mathews explained that he had some concerns about employing Penn and

Michael Rushing; wanted to “reshap[e] the deal with the Rushings”; and suggested

that they “propose” different terms to the Rushings.

      D&R and the Rushings do not identify any specific misrepresentation in

their evidence. See Exxon Corp., 348 S.W.3d at 217. “It is not our duty [on

appeal] to sua sponte conceive of potential fact issues and then search the appellate

record for evidence supporting their existence.” Daniel v. Webb, 110 S.W.3d 708,

710 (Tex. App.—Amarillo 2003, no pet.); see also Bich Ngoc Nguyen v. Allstate

Ins. Co., 404 S.W.3d 770, 776–77 (Tex. App.—Dallas 2013, pet. denied) (“In the

absence of any guidance from the non-movant where the evidence can be found,

the trial and appellate courts are not required to sift through voluminous deposition

                                         39
transcriptions in search of evidence to support the non-movant’s argument that a

fact issue exists.” (internal quotations omitted)); Brookshire Katy Drainage Dist. v.

Lily Gardens, LLC, 333 S.W.3d 301, 308 (Tex. App.—Houston [1st Dist.] 2010,

pet. denied) (“[I]n determining whether a respondent to a no-evidence motion for

summary judgment has sufficient evidence to raise a genuine issue of material fact,

courts are not required to search the record without guidance.” (internal quotations

omitted)).

      D&R and the Rushings assert that TGE and Connolly “knew the deal could

not be performed as offered.” However, nothing in D&R and the Rushings’

summary-judgment evidence establishes that any specific statement was false

when made. See Exxon Corp., 348 S.W.3d at 217. As discussed above, the LOI

expressly contemplates a future agreement to be finalized.         And the emails

demonstrate ongoing attempts to negotiate and structure a deal. That the joint

venture was never finalized does not establish that any statements made during the

negotiation process were false at the time they were made. A failure to perform,

standing alone, constitutes no evidence of intent not to perform. Spoljaric v.

Percival Tours, Inc., 708 S.W.2d 432, 435 (Tex. 1986).

      We conclude that D&R and the Rushings did not bring forth more than a

scintilla of evidence to raise a genuine issue of material fact on the challenged

elements of their fraud counterclaim. See Ridgway, 135 S.W.3d at 600.

                                         40
      Accordingly, we hold that the trial court did not erred in granting CSB,

TGE, and Connolly summary judgment against D&R and the Rushings on their

fraud counterclaim.

      We overrule the portion of D&R and the Rushings’ fifth issue in which they

challenge the trial court’s rendition of summary judgment on their fraud

counterclaim.

                           Negligent Misrepresentation

      In a portion of their fifth issue, D&R and the Rushings argue that the trial

court erred in granting TGE and Connolly summary judgment against them on

their counterclaim for negligent misrepresentation because they presented more

than a scintilla of evidence raising a genuine issue of material fact on each element

of the claim. See TEX. R. CIV. P. 166a(i).

      To prevail on a negligent misrepresentation claim, a plaintiff must

demonstrate that the defendant: (1) made a representation in the course of his

business, or in a transaction in which he had a pecuniary interest; (2) supplied false

information for the guidance of others in their business; (3) did not exercise

reasonable care or competence in obtaining or communicating the information; and

(4) the plaintiff suffered pecuniary loss by justifiably relying on the representation.

Fed. Land Bank Ass’n. v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991); Swank v.

Sverdlin, 121 S.W.3d 785, 802 (Tex. App.—Houston [1st Dist.] 2003, pet. denied).

                                          41
The plaintiff must also prove that the defendant misrepresented an “existing” fact

in the course of the defendant’s business rather than a promise of future conduct.

See Swank, 121 S.W.3d at 802.

      TGE and Connolly each asserted in their summary-judgment motions that

there is no evidence that they made a material misrepresentation to D&R or the

Rushings. See Sloane, 825 S.W.2d at 442. In their response, D&R and the

Rushings asserted that Connolly “proposed deal points that were not possible and

were clearly nothing but an incentive for [D&R] to deal with [TGE and CSB].”

On appeal, D&R and the Rushings, in support of their argument that they raised a

genuine issue of material fact on each element of their claim for negligent

misrepresentation, rely on the LOI and June 4, 2012 letter from Connolly to

Michael Rushing. Again, as discussed above, nothing in the LOI or the June 4,

2012 letter establishes the falsity of any statements. See id.

      Accordingly, we hold that the trial court did not err in granting TGE and

Connolly summary judgment against D&R and the Rushings on their counterclaim

for negligent misrepresentation.

      We overrule the portion of D&R and the Rushings’ fifth issue in which they

challenge the trial court’s rendition of summary judgment on their counterclaim for

negligent misrepresentation.

                                          42
                               Tortious Interference

      In a portion of their fifth issue, D&R and the Rushings argue that the trial

court erred in granting TGE, Connolly, and Hendry20 summary judgment against

them on their counterclaim for tortious interference because they presented more

than a scintilla of evidence raising a genuine issue of material fact on each element

of the claim. See TEX. R. CIV. P. 166a(i).

      To prevail on a claim for tortious interference with an existing contract, a

plaintiff must show that (1) a contract existed that was subject to the defendants’

interference; (2) the defendants willfully and intentionally committed acts of

interference; (3) the defendants’ acts proximately caused damages; and (4) actual

damages or loss occurred. Browning—Ferris, Inc. v. Reyna, 865 S.W.2d 925, 926

(Tex. 1993); Rodarte v. Investeco Grp., LLC, 299 S.W.3d 400, 411 (Tex. App.—

Houston [14th Dist.] 2009, no pet.); Tredway, 2013 WL 3522916, at *6.

      Connolly and Hendry, in their summary-judgment motions, argued that they

were entitled to judgment against D&R and the Rushings because there was “no

evidence” of a valid contract subject to interference; no evidence that they willfully

or intentionally interfered with any contract; and no evidence that they were the

proximate cause of any damages. See Reyna, 865 S.W.2d at 926.

20
      D&R and the Rushings assert on appeal that CSB tortiously interfered with the
      lease. However, their live petition does not reflect that they sued CSB on this
      counterclaim.

                                         43
      In their summary-judgment response, D&R and the Rushings asserted that

TGE, Connolly, and Hendry knew that they were “joint venture partners” with

TGE and “had a lease.” Connolly and Hendry interfered with the LOI by causing

it to “never be materialized as promised” and interfered with the lease by “causing

no payments” to be made. And Hendry’s “offer to purchase the [p]roperty induced

TGE to breach the Binding [LOI] and breach the lease.”

      As their summary-judgment evidence on this point, D&R and the Rushings

direct us generally to the November 7, 2014 affidavit of Michael Rushing; the LOI;

the lease; a TGF stock redemption agreement executed by CSB; TGE’s motion for

leave to designate CSB, Connolly, Crawford, and others as responsible third

parties; a July 15, 2012 email from Mathews to Connolly, in which Mathews

opines that actually employing Michael and Penn Rushing will be problematic and

suggests various alternative deal structures that TGE could offer the Rushings; and

a July 24, 2012 email from Connolly to Mathews, stating that CSB’s foreclosure

on the property was moving forward.

      As discussed above, the LOI was not a valid contract. Thus, it was not a

contract “subject to interference.” See id. In regard to the lease, which states that

it was executed between D&R and the new venture that never materialized, D&R

and the Rushings do not direct us to any evidence that TGE, CSB, Connolly, or

Hendry committed any specific “act of interference.” Cf. Manautou v. Ebby

                                         44
Halliday Real Estate, Inc., No. 05-13-01035-CV, 2015 WL 870215, at *3 (Tex.

App.—Dallas Feb. 27, 2015, pet. denied) (mem. op.) (“When a trial court grants a

no-evidence motion for summary judgment, in order to adequately challenge on

appeal each possible ground for summary judgment, an appellant must cite the

specific evidence in the record that it relied upon to defeat the motion and describe

why that evidence raised a fact issue.”); Blake v. Intco Invs. of Tex., Inc., 123
S.W.3d 521, 525 (Tex. App.—San Antonio 2003, no pet.) (“An appellant has a

duty to show that the record supports her contentions.”); Brewer & Pritchard, P.C.

v. Johnson, 7 S.W.3d 862, 868 (Tex. App.—Houston [1st Dist.] 1999), aff’d, 73
S.W.3d 193 (Tex. 2002) (“general” assertions of existence of “genuine issues of

material fact” inadequate).

      Accordingly, we hold that the trial court did not err in granting TGE,

Connolly, and Hendry summary judgment against D&R and the Rushings on their

counterclaim for tortious interference.

      We overrule the portion of D&R and the Rushings’ fifth issue in which they

challenge the trial court’s rendition of summary judgment on their counterclaim for

tortious interference.

                              Breach of Fiduciary Duty

      In a portion of their fifth issue, D&R and the Rushings argue that the trial

court erred in granting TGE and Connolly summary judgment against them on

                                          45
their counterclaim for breach of fiduciary duty because they presented more than a

scintilla of evidence raising a genuine issue of material fact on each element of the

claim. See TEX. R. CIV. P. 166a(i).

      To prevail on their counterclaim for breach of fiduciary duty, D&R and the

Rushings were required to show: (1) a fiduciary relationship with TGE, TGF, and

Connolly; (2) a breach of fiduciary duty by TGE, TGF, and Connolly; and (3) that

such breach resulted in injury to D&R and the Rushings or in a benefit to TGE,

TGF, and Connolly. See Abetter Trucking Co. v. Arizpe, 113 S.W.3d 503, 508

(Tex. App.—Houston [1st Dist.] 2003, no pet.); see also Stauder v. Nichols, No.

01-08-00773-CV, 2010 WL 2306385, at *7 (Tex. App.—Houston [1st Dist.] June

10, 2010, no pet.) (mem. op.).

      D&R and the Rushings alleged in their counterclaim that “an informal

fiduciary relationship of trust and loyalty developed and existed” between them

and TGE and Connolly. Further, a “partnership and/or joint venture relationship

developed . . . involving the creation and operations” of the joint venture, “from

which ‘formal’ fiduciary duties arose.” And TGE and Connolly breached their

fiduciary duties to D&R and the Rushings by “misleading them into devoting their

time and skill” toward the joint venture, while knowing that D&R and the

Rushings would not be provided “the benefits and position that had enticed

execution of the [LOI] in the first place.” D&R and the Rushings asserted that

                                         46
such breaches deprived them of their property and fair compensation for their

services,” while allowing TGE “to profit greatly.”

      TGE and Connolly, in their motions for summary judgment, asserted that

there is no evidence of a fiduciary relationship between them and D&R or the

Rushings.

      As their evidence on this point, D&R and the Rushings generally direct us to

“affidavits,” without identifying any specific affidavit or testimony, and Mathews’s

July 15, 2012 email to Connolly, in which Mathews proposed various alternative

deal structures to present to the Rushings, without identifying any specific

language that raises a fact issue concerning the existence of a fiduciary

relationship. Cf. Manautou, 2015 WL 870215, at *3 (appellant must cite specific

evidence in record that it relied upon to defeat the motion and describe why that

evidence raised fact issue); Blake, 123 S.W.3d at 525 (“An appellant has a duty to

show that the record supports her contentions.”); Brewer, 7 S.W.3d at 868

(“general” assertions of existence of “genuine issues of material fact” inadequate).

      Accordingly, we hold that the trial court did not err in granting TGE and

Connolly summary judgment against D&R and the Rushings on its counterclaim

for breach of fiduciary duty.

                                         47
      We overrule the portion of D&R and the Rushings’ fifth issue, in which they

challenge the trial court’s rendition of summary judgment on their counterclaim for

breach of fiduciary duty.

                                     Conversion

      In a portion of their fifth issue, the Rushings21 argue that the trial court erred

in granting CSB, TGE, TGF, and Connolly summary judgment against them on

their conversion counterclaim because they presented more than a scintilla of

evidence raising a genuine issue of material fact on each element of the claim. See

TEX. R. CIV. P. 166a(i).

      Conversion is the unauthorized and wrongful assumption and exercise of

dominion and control over the personal property of another to the exclusion of or

inconsistent with the owner’s rights. Waisath v. Lack’s Stores, Inc., 474 S.W.2d
444, 447 (Tex. 1971). Conversion may be committed against one who has legal

possession regardless of the question of title. Robinson v. Nat’l Autotech, Inc., 117
S.W.3d 37, 39 (Tex. App.—Dallas 2003, pet. denied). A conversion defendant

must intend to assert some right in the property. Id. at 40. To prevail on a

conversion claim, a plaintiff must establish that it (1) owned, had legal possession,

or was entitled to possession of property; (2) the defendant assumed and exercised

dominion and control over the property in an unlawful and unauthorized manner to

21
      D&R does not appeal this issue.

                                          48
the exclusion of and inconsistent with the plaintiff’s rights; and (3) the defendant

refused the plaintiff’s demand for return of the property. Automek, Inc. v. Orandy,

105 S.W.3d 60, 63 (Tex. App.—Houston [1st Dist.] 2003, no pet.); MSMTBR, Inc

v. Mid-Atl. Fin. Co., No. 01-12-00501-CV, 2014 WL 3697736, at *9 (Tex. App.—

Houston [1st Dist.] July 24, 2014, no pet.) (mem. op.).

      CSB, TGE, TGF, and Connolly moved for summary judgment on the ground

that there is no evidence that the Rushings owned, possessed, or had a right to

immediate possession of personal property, that CSB, TGE, TGF, or Connolly

wrongfully exercised dominion and control over such personal property, and that

the Rushings suffered injury as a result.

      In their response, the Rushings argued that because only D&R signed the

deed of trust, and, thus, it covered only the personal property of D&R, it did not

cover the “equipment, personal items and various other items” of personal property

belonging to Michael, Penn, and Florence Rushing. In support of their argument,

the Rushings point only to the affidavit of Michael Rushing, who testified, in

pertinent part, as follows:

      6.     . . . I had personal property, including tools, a paint booth and
             other equipment at the facility and it has never been returned.
      ....
      9.     Through the years, I placed personal property at the facility as
             well as property that belongs to my company, Michael Rushing
             Construction. This property includes all kinds of equipment,
             hand tools, power tools, and many other items.

                                            49
      10.   A partial list of the items that belong to my company include
            item numbers 1–4, 6, 8, 17 and more from the Agreed
            Temporary Injunction entered in this matter on February 8,
            2013.    In addition, Exhibit D[22] attached to Plaintiffs’
            Application for TRO identifies many items that belong to my
            company including those listed above.
      11.   I was allowed to obtain possession of part of my property
            located at the [property]. However, I was not allowed to pick
            up any of my property that was being used in connection with
            operations. In addition, even though property was identified
            and the parties agreed it was Rushing property that did not
            belong to D&R . . . or Plaintiffs, and that I could remove the
            property pursuant to the injunction in place in this case,
            [Crawford] refused to allow me further entry to the [property]
            to actually pick up the property.

(Emphasis added.)

      In its January 28, 2013 temporary injunction, the trial court ordered the

Rushings to return twenty-five pieces of equipment and machinery that it found

had been removed from the property by the Rushings. Items numbered 1–4, 6, 8,

and 17 consisted of welding machines, plasma arc machines, and a lathe. Nothing

in the trial court’s order identifies the equipment as the Rushings’ personal

property. And the Rushings presented only Michael Rushing’s bare assertion in

his affidavit that some of the items listed in the trial court’s order belong to him

personally. See Ryland Grp. v. Hood, 924 S.W.2d 120, 122 (Tex. 1996)

(conclusory affidavits not sufficient to raise fact issues because not credible or

susceptible to being readily controverted). In sum, the Rushings did not present
22
      “Exhibit D” to “Plaintiffs Application for TRO” was not made part of the
      appellate record.

                                        50
any evidence that they owned, had legal possession, or were entitled to possession

of any specific piece of property. See Orandy, 105 S.W.3d at 63.

      Accordingly, we hold that the trial court did not err in granting CSB, TGE,

TGF, and Connolly summary judgment against the Rushings on their conversion

counterclaim.

      We overrule the portion of the Rushings’ fifth issue in which they challenge

the trial court’s rendition of summary judgment on their conversion counterclaim.

                                   Conspiracy

      In a portion of their fifth issue, D&R and the Rushings argue that the trial

court erred in granting CSB, TGE, and Connolly summary judgment against them

on their conspiracy counterclaim because they presented more than a scintilla of

evidence raising a genuine issue of material fact on each element of the claim. See

TEX. R. CIV. P. 166a(i).

      A civil conspiracy is a combination by two or more persons to accomplish

an unlawful purpose or to accomplish a lawful purpose by unlawful means.

Firestone Steel Prods. Co. v. Barajas, 927 S.W.2d 608, 614 (Tex. 1996); Miller v.

Raytheon Aircraft Co., 229 S.W.3d 358, 381 (Tex. App.—Houston [1st Dist.]

2007, no pet.). The essential elements of a civil conspiracy are: (1) two or more

persons; (2) an object to be accomplished; (3) a meeting of minds on the object or

course of action; (4) one or more unlawful, overt acts; and (5) damages as the

                                        51
proximate result. Tri v. J.T.T., 162 S.W.3d 552, 556 (Tex. 2005); Massey v. Armco

Steel Co., 652 S.W.2d 932, 934 (Tex. 1983); Miller, 229 S.W.3d at 381.

Independent liability for civil conspiracy does not exist. Miller, 229 S.W.3d at

381. Civil conspiracy is considered a derivative tort because a defendant’s liability

depends upon its participation in some underlying tort for which the plaintiff seeks

to hold the defendant liable. Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996);

Miller, 229 S.W.3d at 381. Thus, to prevail on a civil conspiracy claim, a plaintiff

must show that the defendant was liable for some underlying tort. See Trammell

Crow Co. No. 60 v. Harkinson, 944 S.W.2d 631, 635 (Tex. 1997); Tilton, 925
S.W.2d at 681; Miller, 229 S.W.3d at 381.

      Having concluded above that the trial court did not err in rendering its

summary judgments in favor of CSB, TGE, and Connolly on each of the alleged

underlying torts, we hold that the trial court did not err in granting summary

judgment in their favor on D&R and the Rushings’ conspiracy claim. See Ortiz v.

Collins, 203 S.W.3d 414, 422–23 (Tex. App.—Houston [14th Dist.] 2006, no pet.);

Harkinson, 944 S.W.2d at 635.

      We overrule the remaining portion of D&R and the Rushings’ fifth issue in

which they challenge the trial court’s rendition of summary judgment on their

conspiracy counterclaim.

                                         52
                                  Scope of Relief

      In their third issue, D&R and the Rushings argue that the trial court erred in

rendering its final judgment because it “ignored at least one cause of action” and

“exceed[ed] the relief requested in the [previous] summary judgment motions.”

They assert that the “multiple summary judgment motions” by TGE, TGF, and

Connolly “fail[ed] to address the[ir] promissory estoppel claims” raised in their

third amended petition, as follows:

      Quantum Meruit
      The acts above show that D&R and the Rushings were deprived of
      their property, business and livelihood due to the actions and promises
      of . . . TGE, [TGF], [Connolly], and CSB. Under quantum meruit
      and promissory estoppel, D&R and Rushings seek the return of their
      business and property or at least monetary damages equivalent to the
      loss of services, material and property.

(Emphasis added).

      Generally, summary judgments may only be granted upon grounds expressly

asserted in a summary-judgment motion. G&H Towing Co. v. Magee, 347 S.W.3d
293, 297 (Tex. 2011). A judgment that grants more relief than requested is subject

to reversal and remand. Lehmann v. Har–Con Corp., 39 S.W.3d 191, 202 (Tex.

2001) (“If the judgment grants more relief than requested, it should be reversed

and remanded, but not dismissed.”).

      Promissory estoppel is not an independent cause of action, but a defensive

doctrine that estops a promisor from denying the enforceability of a promise.

                                        53
Wheeler v. White, 398 S.W.2d 93, 96 (Tex. 1965). It applies where “there is a

promise that the promisor should reasonably expect to induce action or forbearance

of a definite and substantial character on the part of the promisee, and does induce

such action or forbearance, if injustice can be avoided only by enforcement of the

promise.” Harkinson, 944 S.W.2d at 636.

      As a threshold matter, however, a “plaintiff’s pleadings must be adequate for

the court to be able, from an examination of the plaintiff’s pleadings alone, to

ascertain with reasonable certainty,” without resorting to information another

source, “the elements of the plaintiff’s cause of action and the relief sought with

sufficient information upon which to base a judgment.” Stoner v. Thompson, 578
S.W.2d 679, 683 (Tex. 1979); see also TEX. R. CIV. P. 47(a); Fairdale Ltd. v.

Sellers, 651 S.W.2d 725, 725 (Tex. 1982). Here, merely including the words

“promissory estoppel” in the middle of an unrelated claim did not sufficiently state

a cause of action for promissory estoppel. Petitions are to be construed liberally in

favor of the pleader; however, “liberally does not require a court to read into a

petition what is plainly not there.” See Horizon/CMS Healthcare Corp. v. Auld, 34
S.W.3d 887, 897 (Tex. 2000) (if no special exceptions filed, courts should construe

pleadings liberally in favor of pleader); Wortham v. Dow Chem. Co., 179 S.W.3d
189, 199 (Tex. App.—Houston [14th Dist.] 2005, no pet.).

                                         54
      D&R and the Rushings further argue that the trial court erred in entering its

final judgment because it did not address their claim for “breach of the lease

agreement.” They do not, however, direct us to any point in the record in which

they asserted such a claim.

      We overrule D&R and the Rushings’ third issue.

                                      Discovery

      In their fourth issue, D&R and the Rushings argue that the trial court erred in

granting summary judgment before an adequate time for discovery had passed and

without first “compel[ling] discovery responses.”23 They assert that “at the time

the summary judgment motions were filed, parties were still well in the discovery

period[,] which did not expire until 2015”; although they “timely sought to compel

discovery,” the trial court “refused to rule”; “docket control orders were in place

prohibiting discovery for most of the case”; and “discovery was delayed” because

“multiple parties” were “not served.”

      D&R and the Rushings do not direct us to any record references in support

of their issue, and they do not cite any authority in support of their argument.

Accordingly, we hold that this issue is inadequately briefed and, thus, waived. See

TEX. R. APP. P. 38.1(i) (requiring brief to contain “a clear and concise argument for

23
      Although D&R and the Rushings, in their brief, state this issue as a challenge to
      the trial court’s rendition of a “temporary injunction,” the trial court’s temporary
      injunction is not at issue in this appeal.

                                           55
the contentions made, with appropriate citations to authorities and to the record”);

Fredonia State Bank v. Gen. Am. Life Ins. Co., 881 S.W.2d 279, 284–85 (Tex.

1994) (discussing “long-standing rule” that inadequate briefing waives issue on

appeal).

                                 Attorneys’ Fees

      In their seventh issue, D&R and the Rushings argue that the trial court erred

in awarding attorneys’ fees to TGE and CSB because it did so “without proper

segregation or support and which contradicts case law requiring trial on whether

the attorney’s fees are reasonable and necessary.” They assert that the issue of

whether attorney’s fees are reasonable and necessary must be submitted to a jury.

      In its final judgment, the trial court awarded CSB attorney’s fees in the

amount of $81,924.55 against the Rushings and D&R, jointly and severally. It also

awarded TGE attorney’s fees in the amount of $94,376.06 against the Rushings

and D&R, jointly and severally.      And it awarded TGE and CSB against the

Rushings and D&R, jointly and severally, attorney’s fees in the amount of

$50,000.00 in the event of an appeal to a court of appeals, $25,000.00 in the event

of a petition for review to the Texas Supreme Court, $15,000.00 in the event the

petition for review is granted and briefing required, and $10,000.00 for

representation through oral argument.

                                        56
      The Uniform Declaratory Judgment Act (“UDJA”) “entrusts attorney fee

awards to the trial court’s sound discretion, subject to the requirements that any

fees awarded be reasonable and necessary, which are matters of fact, and to the

additional requirements that fees be equitable and just, which are matters of law.”

Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998); Indian Beach Prop. Owners’

Ass’n v. Linden, 222 S.W.3d 682, 706 (Tex. App.–Houston [1st Dist.] 2007, no

pet.); see also TEX. CIV. PRAC. & REM. CODE ANN. § 37.009 (Vernon 2015) (“In

any proceeding under this chapter, the court may award costs and reasonable and

necessary attorney’s fees as are equitable and just.”). Because the grant or denial

of attorney’s fees is within the sound discretion of the trial court, its judgment will

not be disturbed on appeal in the absence of a clear showing that it abused its

discretion. Oake v. Collin Cty., 692 S.W.2d 454, 455 (Tex. 1985); Indian Beach

Prop., 222 S.W.3d at 706. A trial court does not abuse its discretion if some

evidence reasonably supports its decision. Butnaru v. Ford Motor Co., 84 S.W.3d
198, 211 (Tex. 2002); Indian Beach Prop., 222 S.W.3d at 706. A trial court abuses

its discretion when it acts arbitrarily or unreasonably and without reference to any

guiding rules or principles. Bocquet, 972 S.W.2d at 21; Indian Beach, 222 S.W.3d

at 706.   Here, because the trial court did not state the basis for its grant of

attorney’s fees, we may uphold its ruling on any basis supported by the evidence.

                                          57
Beard v. Endeavor Nat. Gas, L.P., No. 01-08-00180-CV, 2008 WL 5392026, at *8

(Tex. App.—Houston [1st Dist.] Dec. 19, 2008, pet. denied) (mem. op.).

      When     a   movant   includes   a        prayer   for   attorney’s   fees   in   its

summary-judgment motion, an attached affidavit constitutes testimony that may be

considered proof of the attorney’s fees incurred. Petrello v. Prucka, 415 S.W.3d
420, 431 (Tex. App.—Houston [1st Dist.] 2013, no pet.); see Gaughan v. Nat’l

Cutting Horse Ass’n, 351 S.W.3d 408, 423 (Tex. App.—Fort Worth 2011, pet.

denied). To create a fact issue, the nonmovant must, no later than thirty days after

it “receives a copy of the affidavit,” file a counter-affidavit contesting the

reasonableness of the attorney’s fees claim of the movant. See TEX. CIV. PRAC. &

REM. CODE ANN. § 18.001(b), (e) (Vernon 2015). Unless a controverting affidavit

is timely served, “an affidavit that the amount a person charged for a service was

reasonable at the time and place that the service was provided and that the service

was necessary is sufficient evidence to support a finding of fact by judge or jury

that the amount charged was reasonable or that the service was necessary.” Id.

§ 18.001(b); see Petrello, 415 S.W.3d at 431 (unless controverting affidavit filed,

attorney’s fees stated in affidavit presumed reasonable and necessary).

      On February 6, 2015, TGE and CSB served D&R and the Rushings with the

affidavit of counsel for TGE and CSB, Adam L. Tepper. See TEX. CIV. PRAC. &

REM. CODE ANN. § 18.001. Tepper testified that in January 2013, his firm began

                                           58
providing legal services to TGE and CSB in connection with this case; an itemized

statement of services and the charges for those services was attached and part of

his affidavit; the “services provided by [his firm] for the services, was reasonable

at the time and place that the services were provided”; and, as of November 30,

2015, the amount of $422,022.02 charged by his firm to TGE and CSB in

prosecution and defense of the claims in this matter was reasonable and necessary.

      On March 6, 2015, TGE and CSB moved for a summary judgment on their

request for attorney’s fees. See TEX. CIV. PRAC. & REM. CODE ANN. § 37.009. In

support of their motion, TGE and CSB attached the affidavits of their counsel,

Tepper and Gary M. Jewell, and their fee invoices from January 2013 to November

2014. Jewell, in his affidavit, testified at length regarding the factors underlying

the requested attorney’s fees. See Arthur Andersen & Co. v. Perry Equip. Corp.,

945 S.W.2d 812, 818 (Tex. 1997) (factors pertaining to reasonableness and

necessity of attorney’s fees). He opined that the attorney’s fees requested were

usual and customary for handling cases of this type in Harris County and the time

incurred was reasonable and necessary.          And “[a]t least $176,300.61 is a

reasonable attorney’s fee award in prosecuting both TGE and CS[B]’s suits for

declaratory relief in this case based on the time and labor required.”

      D&R and the Rushings did not file a controverting affidavit, challenging

TGE and CSB’s asserted attorney’s fees as unreasonable or unnecessary. See TEX.

                                          59
CIV. PRAC. & REM. CODE ANN. § 18.001(b); Petrello, 415 S.W.3d at 431 (unless

controverting affidavit filed, attorney’s fees stated in affidavit presumed reasonable

and necessary); Merch. Ctr., Inc. v. WNS, Inc., 85 S.W.3d 389, 397 (Tex. App.—

Texarkana 2002, no pet.) (although reasonableness of attorney’s fees under

Declaratory Judgment Act presents fact question, clear, direct, and uncontroverted

evidence of fees taken as true as matter of law where such evidence not rebutted).

      Further, D&R and the Rushings, in their summary-judgment response, did

not offer any evidence to create a fact issue. Rather, they asserted that the issue of

the reasonableness and necessity of attorney’s fees must be submitted to a jury. In

support of their assertion, they rely on Bocquet v. Herring, 972 S.W.2d 19 (Tex.

1998). In Bocquet, the Texas Supreme Court noted that the issue of whether

attorney’s fees are reasonable is “generally” a “question of fact for the jury’s

determination.” Id. at 21. This Court has previously held, however, that when a

trial court decides a case as a matter of law, as here, a party’s uncontroverted

affidavit establishes as the reasonable amount of attorney’s fees as a matter of law.

Petrello, 415 S.W.3d at 431 & n.2 (“While attorney’s fees are an issue for the jury

in cases in which the jury is the factfinder, an affidavit can establish the

reasonableness of attorney’s fees for summary judgment purposes.” (citing

Bocquet, 972 S.W.2d at 21)); Hunsucker v. Fustok, 238 S.W.3d 421, 432 (Tex.

App.—Houston [1st Dist.] 2007, no pet.).

                                         60
      When, as here, no controverting affidavit has been filed, no fact issue is

raised, and the trial court may grant summary judgment on the amount of

attorney’s fees asserted by the movant. Petrello, 415 S.W.3d at 431–32; see also

Hunsucker, 238 S.W.3d at 432 (trial court erred in not awarding fees after party

submitted uncontroverted affidavit establishing reasonableness of fees).

      D&R and the Rushings next argue, as they did in their summary-judgment

response, that the trial court erred in awarding TGE and CSB attorney’s fees

because the fees were not segregated between claims for which they were

recoverable and unrecoverable.

      Because “Texas law [does] not allow[] for recovery of attorney’s fees unless

authorized by statute or contract,” attorney’s fee claimants “have always been

required to segregate fees between claims for which they are recoverable and

claims for which they are not.” Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d
299, 310–11 (Tex. 2006). The need to segregate attorney’s fees is a question of

law, and the extent to which certain claims can or cannot be segregated is a mixed

question of law and fact. Id. at 312–13; CA Partners v. Spears, 274 S.W.3d 51, 81

(Tex. App.—Houston [14th Dist.] 2008, pet. denied). The party seeking to recover

attorney’s fees carries the burden of demonstrating that fee segregation is not

required. See Hong Kong Dev., Inc. v. Nguyen, 229 S.W.3d 415, 455 (Tex. App.—

Houston [1st Dist.] 2007, no pet.).

                                        61
      “[I]f any attorney’s fees relate solely to a claim for which such fees are

unrecoverable, a claimant must segregate recoverable from unrecoverable fees.”

Chapa, 212 S.W.3d at 313. “Intertwined facts do not make tort fees recoverable; it

is only when discrete legal services advance both a recoverable and unrecoverable

claim that they are so intertwined that they need not be segregated.” Id. at 313–14.

For example, the court in Chapa, noted that where segregation is required,

attorneys are not required to “keep separate time records when they draft[] the

fraud, contract, or DTPA paragraphs of [a] petition.” Id. at 314. Rather, “an

opinion [will] suffice[] stating that, for example, 95 percent of their drafting time

would have been necessary even if there had been no fraud claim. Id.; 7979

Airport Garage, L.L.C. v. Dollar Rent-a-Car Sys., Inc., 245 S.W.3d 488, 506 (Tex.

App.—Houston [14th Dist.] 2007, pet. denied).

      Here,   as   discussed   above,    TGE    and    CSB    asserted   only   their

declaratory-judgment actions; the trial court ruled in their favor; and they were

entitled to recover their attorney’s fees. See TEX. CIV. PRAC. & REM. CODE ANN.

§ 37.009. Their summary-judgment evidence includes the itemized invoices listing

the fees that they incurred and the affidavit of Jewell, in which he segregated the

attorney’s fees attributed to prosecuting TGE and CSB’s declaratory-judgment

actions from the fees incurred in defending them from D&R and the Rushings’

counterclaims. Jewell testified that “reasonable attorney’s fees in this matter to

                                         62
prosecute TGE and CS[B]’s respective declaratory judg[]ment actions, while

defending them . . . from the counterclaims of [the Rushings and D&R] from the

inception of the lawsuit through entry of final judgment is well over $444,000” and

“at least $176,300.61 is a reasonable attorney’s fee award in prosecuting both TGE

and CS[B]’s suits for declaratory relief in this case based on the time and labor

required.” Specifically,

      after conservatively segregating the amount of fees attributable [to]
      TGE and CS[B]’s separate requests for declaratory relief, the
      respective fees are as follows:

      a. $94,376.06 in reasonable and necessary attorney’s fees attributable
         to the prosecution of TGE’s suit for declaratory relief on the issue
         pertaining to the enforceability of the “Letter of Intent”; and

      b. $81,924.55 in reasonable and necessary attorney’s fees attributable
         to the prosecution of CS[B]’s suit for declaratory relief on the issue
         pertaining to the foreclosure of the subject property.

      We conclude that TGE and CSB, notwithstanding whether they were so

required,   did   segregate    their   attorney’s    fees   attributable   to     their

declaratory-judgment actions. See Chapa, 212 S.W.3d 299, 310–11; see, e.g.,

Petro-Hunt, L.L.C. v. Wapiti Energy, L.L.C., No. 01-10-01030-CV, 2012 WL
761144, at *11 (Tex. App.—Houston [1st Dist.] Mar. 8, 2012, pet. denied) (mem.

op.). Accordingly, we hold that the trial court did not err in awarding TGE and

CSB their attorney’s fees.

      We overrule D&R and the Rushings’ seventh issue.

                                         63
                                    Sanctions

      In their sixth issue, D&R and the Rushings argue that the trial court erred in

granting Smith’s motion for sanctions against them because “there is a good-faith

argument to extend existing law” and, thus, their pleading against Smith was not

“groundless.” They assert that “conspiracy to commit fraud should apply to a

puppet master who, while not directly committing fraud, directed the actions of

others who did and profited from it.”        They further assert that the sanctions

awarded are “excessive” and based on insufficient evidence.

      We review a trial court’s imposition of sanctions for an abuse of discretion.

Low v. Henry, 221 S.W.3d 609, 614 (Tex. 2007). A trial court abuses its discretion

in imposing sanctions if it acts “without reference to any guiding rules and

principles, such that its ruling was arbitrary or unreasonable.” Id. We presume

that pleadings are filed in good faith, and the party seeking sanctions bears the

burden of overcoming this presumption. Id. In reviewing a sanctions order, we

review the entire record to determine whether the trial court abused its discretion.

Am. Flood Research, Inc. v. Jones, 192 S.W.3d 581, 583 (Tex. 2006).

      The signatures of attorneys or parties “constitute a certificate by them” that

they have read their pleadings, motions, or other papers, and, to the best of their

knowledge, information, and belief formed after reasonable inquiry, “the

instrument is not groundless and brought in bad faith or groundless and brought for

                                        64
the purpose of harassment.” TEX. R. CIV. P. 13. A pleading is “groundless” when

it has “no basis in law or fact and [is] not warranted by good faith argument for the

extension, modification, or reversal of existing law.” Id. Bad faith is more than

bad judgment or negligence. Elkins v. Stotts-Brown, 103 S.W.3d 664, 669 (Tex.

App.—Dallas 2003, no pet.); Campos v. Ysleta Gen. Hosp. Inc., 879 S.W.2d 67, 71

(Tex. App.—El Paso 1994, writ denied). To show bad faith, the moving party

must present evidence of conscious wrongdoing for a dishonest, discriminatory, or

malicious purpose. Mattly v. Spiegel, Inc., 19 S.W.3d 890, 896 (Tex. App.—

Houston [14th Dist.] 2000, no pet.).

      If a pleading, motion, or “other paper” violates rule 13, the trial court “shall

impose an appropriate sanction” under rule 215, “upon the person who signed [the

pleading, motion, or other paper], a represented party, or both.” Id. Sanctions may

include court costs, litigation expenses, and “reasonable expenses, including

attorney fees.” TEX. R. CIV. P. 215.2(b).

      Texas Civil Practice and Remedies Code chapter 10 provides an alternative

basis upon which a court may impose sanctions. See TEX. CIV. PRAC. & REM.

CODE ANN. ch. 10 (Vernon 2015). It provides that the signing of a pleading or

motion as required by the Texas Rules of Civil Procedure constitutes a certificate

by the signatory that to the signatory’s best knowledge, information, and belief,

formed after reasonable inquiry:

                                            65
      (1)   the pleading or motion is not being presented for any improper
            purpose, including to harass or to cause unnecessary delay or
            needlessly increase in the cost of litigation;
      (2)   each claim, defense, or other legal contention in the pleading or
            motion 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;
      (3)   each allegation or other factual contention in the pleading or
            motion had evidentiary support or, for a specifically identified
            allegation or factual contention, is likely to have evidentiary
            support after a reasonable opportunity for further investigation
            or discovery; and
      (4)   each denial in the pleading or motion of a factual contention is
            warranted on the evidence or, or for a specifically identified
            denial, is reasonably based on a lack of information or belief.

TEX. CIV. PRAC. & REM. CODE ANN. § 10.001 (Vernon 2015).

      Upon a violation of section 10.001, a party may file a motion for sanctions,

describing the conduct. Id. § 10.002(a) (Vernon 2015). If a trial court grants a

party’s motion for sanctions, it may award “reasonable expenses and attorney’s

fees incurred in presenting or opposing the motion.” Id. § 10.002(c) (Vernon

2015). If no due diligence is shown, “the court may award to the prevailing party

all costs for inconvenience, harassment, and out-of-pocket expenses incurred or

caused by the subject litigation.” Id. The sanction may be imposed against the

person who “signed a pleading or motion in violation of [s]ection 10.001 . . . , a

party represented by the person, or both.” Id. § 10.004(a) (Vernon 2015).

      Here, Smith, in his motion for sanctions, asserted that on December 4, 2013,

D&R and the Rushings sued him for fraud and conspiracy. And Smith moved to

                                        66
dismiss the claims as meritless. D&R and the Rushings, in their response to

Smith’s motion to dismiss, asserted to the trial court that they “had been provided

with documents verifying the assertions contained in their petition regarding

[Smith]”; it was “clear” that Smith was “involved”; he was “a primary actor for

which his cohorts performed”; and “he would benefit from their dealings.”

      However, Penn Rushing, in his deposition, testifying on behalf of himself

and D&R, admitted that Smith “made no representations” to him or to D&R. And

Michael Rushing, in his deposition, admitted that he had never met or spoken with

Smith, and had sued him only because his name was mentioned in a meeting.

Notwithstanding this testimony, D&R and the Rushings then filed their third

amended counterclaims, in which they continued to allege that Smith had made the

same misrepresentations. Smith asserted that sanctions, in the form of reimbursing

his attorney’s fees, were appropriate and he had incurred at least $48,477.50 in

reasonable and necessary attorney’s fees to defend against D&R and the Rushings’

claims.

      In their response to Smith’s motion for sanctions, D&R and the Rushings

asserted that the evidence shows that Smith “set[] a meeting at [his] house with

other bad actors in this matter”; he agreed in a recorded statement to employing

unnamed persons in exchange for a “release”; and the property is now owned by

TGF, “which belongs to Hendry and possibly Smith.” (Emphasis added.)

                                        67
      At a hearing on Smith’s motion for sanctions, Penn Rushing testified that

“Smith never talked to me in his life.” Michael Rushing testified that Smith had

never made any representations to him, and he admitted that he knew this fact in

December 2013, when D&R and the Rushings filed their lawsuit against Smith.

He further testified that he had informed his counsel, Gore, of this fact and the only

reason that he sued Smith was because someone else had mentioned his name in a

meeting. And although he knew that Smith had never spoken to him and would

have to hire attorneys and incur legal expenses, Michael Rushing moved forward

with his claim that Smith had made fraudulent representations. Further, Gore

testified that he sued Smith in order to “br[ing] him in and investigate” and see if

“maybe [he] [could] come up with some cause of action.”

      Cody Stafford, an associate at Dobrowski, Larkin & Johnson, testified that

Smith had retained his firm to represent him against D&R and the Rushings in

their claims against him. Stafford explained the work performed on behalf of

Smith, and he stated that the amount of attorney’s fees attributable to that work

was $33,250.00.

      After the hearing, the trial court found that D&R and the Rushings “brought

groundless claims against [Smith]”; such “claims were brought in bad faith and for

the purpose of harassment”; their “attorney, George W. Gore, failed to conduct a

reasonable inquiry into the facts before filing claims against [Smith]”; and D&R,

                                         68
the Rushings, and Gore “acted in bad faith by filing . . . [their] Third Amended

Claims after being put on notice by the depositions of Penn Rushing and Michael

Rushing that the claims asserted against [Smith] were groundless.” Based on these

findings, the trial court ordered that D&R, the Rushings, and Gore, jointly and

severally, pay Smith $33,250.00 “as a sanction.”

      D&R and the Rushings complain on appeal that “while not directly

committing fraud,” “it seems that a puppet master should have liability,” and

“there is a good-faith argument to extend existing law.” This complaint, however,

does not comport with the complaint that they presented to the trial court. Because

they did not present to the trial court the complaint they now raise, we hold that

this portion of their issue is not preserved for our review. See TEX. R. APP. P. 33.1;

Wolfahrt v. Holloway, 172 S.W.3d 630, 639–40 (Tex. App.—Houston [14th Dist.]

2005, pet. denied).

      D&R and the Rushings also argue that the trial court’s award of attorney’s

fees to Smith as a sanction must be set aside because he presented his evidence of

attorney’s fees after he “rested [his] case,” and, thus, there is “no evidence” in

support of his attorney’s fees. “When attorney’s fees are assessed as sanctions, no

proof of necessity or reasonableness is required.” Miller v. Armogida, 877 S.W.2d
361, 365 (Tex. App.—Houston [1st Dist.] 1994), writ denied); Glass v. Glass, 826
S.W.2d 683, 688 (Tex. App.—Texarkana 1992, writ denied). The Texas Supreme

                                         69
Court has expressly held that the amount of attorney’s fees awarded as sanctions

under rule 215 is “solely within the sound discretion of the trial judge, only to be

set aside upon a showing of clear abuse of that discretion.” Brantley v. Etter, 677
S.W.2d 503, 504 (Tex. 1984); see also TEX. R. CIV. P. 215.

      D&R and the Rushings further assert that “the testimony presented on

attorney’s fees was for Hendry and Smith together” and there is “no evidence of

apportionment.” The record shows, however, that Stafford testified that his firm

had “invoiced” Smith and Hendry $65,397.93 for legal services in this case. And,

of this amount, $33,250.00 is solely related to D&R and the Rushings’ allegations

against Smith.

      Accordingly, we hold that the trial court did not abuse its discretion in

awarding Smith $33,250 as a sanction against D&R and the Rushings. See TEX.

CIV. PRAC. & REM. CODE ANN § 10.002(c), 10.004(a); TEX. R. CIV. P. 13.

      We overrule D&R and the Rushings’ sixth issue.

                                        70
                                   Conclusion

      We affirm the judgment of the trial court.

                                             Terry Jennings
                                             Justice

Panel consists of Chief Justice Radack and Justices Jennings and Lloyd.

                                        71