Court Opinion

ID: 2888316
Source: CourtListenerOpinion
Date Created: 2015-09-07 20:06:57.373788+00
Date Added: 2024-06-11T13:31:45.593541
License: Public Domain

NO. 07-02-0168-CV

                                 IN THE COURT OF APPEALS

                         FOR THE SEVENTH DISTRICT OF TEXAS

                                          AT AMARILLO

                                             PANEL E

                                   SEPTEMBER 24, 2003
                             ______________________________

                   RAUL RESENDEZ a/k/a RESENDEZ & ASSOCIATES
                     a/k/a RESENDEZ & ASSOCIATES, INC.,

                                                              Appellant

                                                  v.

                  PACE CONCERTS, INC., SFX ENTERTAINMENT, INC.,
                          and PACE CONCERTS, LTD.,

                                                  Appellees
                          _________________________________

               FROM THE 215TH DISTRICT COURT OF HARRIS COUNTY;

                    NO. 00-14235; HON. LEVI J. BENTON, PRESIDING
                          _______________________________

Before QUINN and REAVIS, JJ., and BOYD, S.J.1

       Appellant Raul Resendez a/k/a Resendez & Associates a/k/a Resendez &

Associates, Inc. appeals from a summary judgment granted in favor of Pace Concerts, Inc.,

SFX Entertainment, Inc., and Pace Concerts, Ltd. The dispute involved whether Resendez

and Pace entered into a ten-year partnership to promote various musical concerts

worldwide. Pace argued, among other things, that any agreement between the parties

       1
       John T. Boyd, Chief Justice (Ret.), Seventh Court of Appeals, sitting by assignment. Tex. Gov’t
Code Ann. §75.002(a)(1) (Vernon Supp. 2003).
was unenforceable due to the Statute of Frauds and sought a declaratory judgment. In

turn, Resendez sought damages under various theories of law. The only one pertinent

here is fraudulent inducement. Upon hearing Pace’s motion for summary judgment, the

trial court concluded that the Statute of Frauds did indeed bar enforcement of the

partnership agreement described by Resendez for it was not in writing. So too did it award

Pace attorney’s fees under the authority of the Uniform Declaratory Judgments Act.

       Resendez now presents us with two issues. The first concerns the Statute of

Frauds and its effect upon a claim of fraudulent inducement. The second involves the

award of attorney’s fees. For the reasons which follow, we overrule issue one and its

subparts, dismiss issue two as moot, and affirm the judgment of the trial court.

             Issue One — Statute of Frauds and Fraud in the Inducement

       a.      Benefit of the Bargain Damages Allegedly Recoverable Despite Statute

       We first address Resendez’ contention that “benefit of the bargain damages are

recoverable for fraudulent inducement regardless of whether the fraudulently induced

agreement is enforceable under the Statute of Frauds” and conclude that they are not.

That conclusion is all but dictated by the recent Supreme Court decision in Haase v.

Glazner, 62 S.W.3d 795 (Tex. 2001). There, the court expressly held that “the Statute of

Frauds bars a fraud claim to the extent the plaintiff seeks to recover as damages the

benefit of a bargain that cannot otherwise be enforced because it fails to comply with the

Statute of Frauds.”2 Id. at 799. It so held after reasoning that a plaintiff’s receipt of

       2
        The court did not prevent recovery of “out-of-pocket” damages, however. Haase v. Glazner, 62
S.W.3d 795, 796 (Tex. 2001).

                                                 2
damages measured by the benefit of the bargain was tantamount to enforcing a contract

rendered unenforceable by the Statute of Frauds. Id. And, to permit the use of a particular

cause of action (in this case a fraud claim) to, in effect, enforce a contract unenforceable

due to the Statute of Frauds would be to render the Statute of Frauds meaningless. Id.

So, it held that the Statute barred the plaintiff from recovering the benefit of his bargain.

The same reasoning is no less applicable when the cause of action being pursued is fraud

occurring in the inducement of a contract and the damages sought are measured by the

benefit of the bargain.

       Fraudulent inducement is a mere sub-species of fraud, in general. Id. at 798-99.

And, assuming one can recover damages equal to the benefit of the bargain under both

theories, no practical distinction exists between the effect of seeking those particular

damages under either theory. In other words, and like the claimant in Haase, Resendez

is no less trying to do that which is barred by the Statute of Frauds; he is, for all practical

purposes, trying to enforce the agreement by recovering the benefit he would have

received under the contract. It does not matter that Resendez claims fraud in the

inducement, as opposed to fraud, because the result is the same; in each instance, the

Statute of Frauds is being deprived of any effect. And, it was that result which the

Supreme Court sought to prevent from occurring in Haase. So, Haase not only guides our

decision here but also compels us to conclude that Resendez cannot assert fraud in the

inducement to recover damages measured by the benefit of the bargain when the contract

manifesting the bargain is unenforceable due to the Statute of Frauds.

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       b.     Statute of Frauds Allegedly Inapplicable

       Next, we consider Resendez’ contention that “the Statute of Frauds does not

preclude enforcement of the partnership agreement because the statute . . . cannot be

used as an engine of fraud.” The extent and meaning of this contention is somewhat

unclear. Nevertheless, we derive two potential aspects from it. The first involves whether

the Statute of Frauds applies when the party seeking recovery avers a claim sounding in

fraud. The second concerns whether partial performance of the agreement rendered the

Statute inapplicable. Irrespective of which one Resendez actually intended to pursue,

neither obligates us to reverse the summary judgment.

       As to the former, we again look to Haase as controlling. There, the Supreme Court

had before it one seeking damages purportedly arising from fraud and another attempting

to defeat the claim by invoking the Statute of Frauds. The latter won. So, in effect, the

Supreme Court permits application of the Statute in those situations wherein a party seeks

damages recompensing a purported fraud.

       As to the matter of partial performance of an oral agreement, we acknowledge that

such may insulate the agreement against the Statute of Frauds. See e.g., Hooks v.

Bridgewater, 111 Tex. 122, 229 S.W. 1114, 1116 (1921) (involving the conveyance of

realty); Welch v. Coca-Cola Enterprises., Inc., 36 S.W.3d 532, 539 (Tex. App.– Tyler 2000,

no pet.) (involving the placement of vending machines on school property for five years).

Yet, before it can be so insulated, several criteria must be satisfied. For instance, 1) the

party attempting to enforce the accord must have acted in reliance upon it and suffered a

substantial detriment for which there is no adequate remedy and 2) his opponent must be

                                             4
in the position of reaping an unearned benefit if the Statute is applied. Exxon Corp. v.

Breezevale Ltd., 82 S.W.3d 429, 439 (Tex. App.– Dallas 2002, pet. denied); Welch v.

Coca-Cola Enterprises., Inc., 36 S.W.3d at 539. So too must it be shown that the

complainant’s partial performance was unequivocally referable to the agreement and

corroborative of the fact that the contract was actually made. Chevalier v. Lane’s Inc., 147
Tex. 106, 213 S.W.2d 530, 533-34 (1948); Exxon Corp. v. Breezevale Ltd., 82 S.W.3d at

439. Furthermore, since Resendez raised the spectre of part performance in an effort to

defeat Pace’s demand for summary judgment based on the Statute of Frauds, the burden

lays with him to present evidence sufficient to raise a question of fact upon each of the

various criteria mentioned. See Bates v. Schneider Nat’l Carriers, Inc., 95 S.W.3d 309,

312 (Tex. App.– Houston [1st Dist.] 2002, no pet.) (stating that if the summary judgment

movant establishes his affirmative defense as a matter of law, then the non-movant must

present evidence that raises a fact issue to avoid the defense); Whittenburg v. Cessna Fin.

Corp., 536 S.W.2d 444, 445 (Tex. App.– Houston [14th Dist.] 1976, writ ref’d n.r.e.) (stating

that where the non-movant has alleged an affirmative defense, he must offer proof that

there is a material fact issue on that affirmative defense). Yet, he did not do so. That is,

he neither discussed the criteria mentioned in Chevalier, Exxon, or Welch when asserting

that the Statute of Frauds cannot be “an engine of fraud” nor cited us to any evidence

purporting to illustrate the existence of each criteria at bar. More importantly, it is not our

duty to search the record for such unmentioned evidence. Casteel-Diebolt v. Diebolt, 912
S.W.2d 302, 305 (Tex. App.– Houston [14th Dist.] 1995, no pet.). Thus, Resendez failed

                                              5
to carry his burden on appeal of illustrating how and why his claim of part performance

barred the trial court from rendering summary judgment.

                             Issue Two — Attorney’s Fees

       In his second issue, Resendez contends that the trial court improperly awarded

attorney’s fees under the Declaratory Judgments Act. This is so, Resendez argues,

because Pace requested a judgment declaring that the parties were not currently and had

never been partners. Instead of so concluding, the trial court purportedly assumed there

was a partnership agreement but held it unenforceable since it violated the Statute of

Frauds.   Pace argues that this portion of the appeal should be dismissed because

Resendez voluntarily paid the judgment. We agree.

       Generally, when a judgment debtor voluntarily pays and thereby satisfies a

judgment rendered against him, the cause becomes moot and must be dismissed.

Continental Cas. Co. v. Huizar, 740 S.W.2d 429, 430 (Tex. 1987); Highland Church of

Christ v. Powell, 640 S.W.2d 235, 236 (Tex. 1982); Tubb v. Vinson Exploration, Inc., 892
S.W.2d 183, 184-85 (Tex. App.–El Paso 1994, writ denied). This rule exists to prevent a

litigant who “freely decided to pay a judgment” from “mislead[ing] his opponent into

believing that the controversy is over . . . .” Highland Church of Christ v. Powell, 640
S.W.2d at 236 (emphasis added). Yet, if payment is involuntary, the rule does not apply.

Riner v. Briargrove Park Property Owners, Inc., 858 S.W.2d 370 (Tex. 1993) (stating that

if a party does not voluntarily pay a judgment, his appeal is not moot). Nor is it applicable

if continuation of the appeal would not simply cause the court to venture into the realm of

                                             6
advisory opinions, that is, if some other issue remains ripe for adjudication. See Highland

Church of Christ v. Powell, 640 S.W.2d at 237 (refusing to hold the appeal moot because,

among other things, a “final decision in this case may give guidance regarding the future

tax liability of Highland on this property”); Employees Fin. Co. v. Lathram, 369 S.W.2d 927,

930 (Tex. 1963) (holding that payment rendered the appeal moot because there remained

nothing to try if the judgment were reversed and the cause remanded for new trial); 5 ROY

W. MC DONALD & ELAINE A. CARLSON, TEXAS CIVIL PRACTICE §30.19 (1999) (stating that

“[a]bsent some remaining controversy,” the appellate court must dismiss).

        As illustrated by the appellate record and material attached to the motion to dismiss

previously filed by Pace, the trial court signed a judgment against Resendez. Therein, it

awarded Pace, against Resendez, attorney’s fees of $25,000 for the trial of the declaratory

action it initiated, $15,000 if an appeal is perfected to an intermediate court of appeals,

and $5,000 if the Texas Supreme Court granted a petition for discretionary review. So too

did the trial court order that Resendez pay court costs and that the outstanding sums

accrue post-judgment interest at 10% per annum until paid. Pace subsequently abstracted

the judgment in Bexar County.3 On June 18, 2002, Resendez paid the sums outstanding

under the judgment from the proceeds of several parcels of realty he sold. In turn, Pace

executed a document releasing its abstract of judgment. These circumstances, according

        3
          While Pace abstracted the judgment, it also claims that it never attempted to execute upon the lien
created thereby. Consequently, we have nothing before us indicating that Resendez paid the judgment to
avoid execution. See Frank Silvestri Inv., Inc. v. Sullivan, 486 So. 2d 20, 21 (Fla Dist. Ct. App. 5th Dist. 1986)
(noting that most courts hold that payments made under threat of execution are involuntary).

                                                       7
to Pace, allegedly evinced the voluntary satisfaction of the judgment from which Resendez

appealed.

      In response, Resendez asserted that immediately prior to closing on the sale of the

property alluded to above, he “did not have adequate funds for living expenses [or] . . .

to pay off accumulated debt, including debt on the property, or the funds necessary to

operate any business . . . .” The “property being sold” was his “only immediate source of

these funds,” and it “was absolutely necessary for [him] to make the sale to survive,”

Resendez continued. Furthermore, the sales contract executed by Resendez and the

buyer purportedly required that any liens against the property be satisfied from the sale’s

proceeds. In short, Resendez argued that he paid the judgment under “implied duress.”

       At first blush, one may deduce from these allegations that Resendez was faced with

the choice of either paying the judgment or foregoing personal “surviv[al].” Yet, such a

conclusion would not necessarily be accurate for his affidavit also indicates that the sale

of the land could have proceeded despite the Pace judgment and lien created thereby.

One may infer this from Resendez’ comment that upon discovery of the judgment lien “the

buyers . . . attempted to lower the purchase price, which [he] refused to do.” Nowhere

does Resendez suggest that the buyers refused to proceed unless the lien was paid. Nor

did he insinuate that acceptance of the reduced offer of the buyer would not have allowed

him to “survive,” pay his debts, and satisfy his living expenses. Nor were we provided with

an itemization of his liabilities or assets with which to assess the veracity of his

representations about impoverishment and need. Rather, Resendez spoke in generalities

and conclusions which, under the law, are of little probative value. See Aldridge v. De Los

                                            8
Santos, 878 S.W.2d 288, 296 (Tex. App.– Corpus Christi 1994, writ dism’d w.o.j.) (holding

that conclusions contained in an affidavit have no probative value). Thus, one can

reasonably conclude that Resendez opted to pay the Pace judgment simply to maximize

his recovery from the sale of the land and not to secure his purported survival. Because

of this and given the conclusory nature of the allegations in Resendez’ affidavit, we cannot

say that payment of the judgment was involuntary.

       Furthermore, the obstacles which previously barred our dismissing the appeal, or

at least this portion of it, have gone. That is, we have disposed of the issues unrelated to

the question of attorney’s fees adversely to Resendez. So, we now dismiss, as moot, that

portion of the appeal which deals with the validity of the trial court’s decision to award

Pace attorney’s fees.

       Accordingly, issue one, including its subparts, is overruled. Issue two is dismissed

as moot. Finally, the judgment of the trial court is affirmed.

                                                 Brian Quinn
                                                    Justice

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