Court Opinion

ID: 3126020
Source: CourtListenerOpinion
Date Created: 2015-10-16 15:17:59.472272+00
Date Added: 2024-06-11T11:53:24.892472
License: Public Domain

NUMBER 13-08-00502-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

AMERICAN STEEL AND SUPPLY, INC.,	Appellant,

v.

COMMERCIAL METALS, INC. D/B/A
CMC STEEL FABRICATORS, INC. D/B/A
SAFETY STEEL SERVICES, INC., 	Appellee.
  

On appeal from the County Court at Law No. 2

of Nueces County, Texas.

 

MEMORANDUM OPINION

Before Justices Yañez, Rodriguez, and Benavides

Memorandum Opinion by Justice Benavides

	Appellant, American Steel and Supply, Inc. ("American Steel"), appeals from a no-evidence summary judgment granted in favor of appellee, Commercial Metals, Inc. d/b/a
CMC Steel Fabricators, Inc., d/b/a Safety Steel Services, Inc. ("Commercial Metals").  By
three issues, American Steel argues that the trial court erred by (1) denying its motion for
leave to amend an affidavit it submitted in response to Commercial Steel's motion for
summary judgment, (2) granting Commercial Steel's no-evidence motion for summary
judgment, and (3) denying American Steel's motion for a new trial.  We affirm.
I.  Background
	On January 27, 2000, American Steel filed suit against Commercial Metals in the
County Court at Law No. 4 of Nueces County.  American Steel alleged claims for fraud,
theft of trade secrets, and unfair competition.  Its original petition did not provide any
factual background for the claims. (1)  Commercial Metals filed an answer on March 27,
2000. (2)
	In January 6, 2005, Commercial Metals filed a no-evidence motion for summary
judgment.  See Tex. R. Civ. P. 166a(i).  Commercial Metals's motion alleged that there was
no evidence to support the causation or damages elements of American Steel's claims.  
	The summary judgment hearing was originally set for hearing on January 27, 2005,
in the County Court at Law No. 1.  American Steel filed a response to the no-evidence
motion on January 20, 2005.  The only evidence attached to the response was an affidavit
from Neal Ward, the owner of American Steel, and a document allegedly received from
Commercial Metals that represents Commercial Metals's sales of structural steel in Corpus
Christi.  Excluding the formal language included in affidavits, the affidavit stated in its
entirety:
Causation of Damages

 	After the events at issue, I lost business to Defendant.  I lost specific
customers.  I have received the attached list of sales made by Defendant. 
Many of these sales are to my clients.

		These clients originally bought structural steel from me and after the
events at issue based on Defendant's own records started buying from the
Defendant.  Defendant knew my pricing and my customer contacts and other
confidential information based on the wrongful conduct at issue.  After
Defendant stopped selling structural steal [sic] in this market place and fired
my former key employee that it wrongfully took, I recovered most of these
clients.  Business returned to normal.

Existence of Damages

 I earn on average 30% on gross sales after cost of goods sold. 
American Steel's other expenses remain reasonably constant within the
relevant range.  Thus, my lost profit is estimated with reasonable certain [sic]
at 30% of the gross sales by Defendant to my customers.  I receive at least
2/3s of the business of my regular customers.  Thus, my lost profit is
reasonably estimated at 20% of gross sales (2/3s of 1/3).  This is a
reasonable estimate with reasonable certainty based on my personal
knowledge of my busines [sic] and the consequences of the events at issue. 
The damages based on my calculations amount to the hundreds of
thousands of dollars.

On May 6, 2005, the trial court sent a letter to the parties stating that it was denying the
motion for summary judgment and asking the parties to submit an order.  No formal order
denying the motion for summary judgment appears in the record.  
	Almost a year later, on March 23, 2006, Commercial Metals moved for
reconsideration of the trial court's denial of its motion for summary judgment.  The motion
states that prior to the trial court's May 6, 2005 letter, the trial court indicated its intent to
allow oral argument on the motion but denied the motion before argument could be
scheduled.  The motion also noted that Commercial Metals had filed objections to
American Steel's response to its motion for summary judgment, but those objections do
not appear in the record.  Both parties agree that in April 2006, a hearing was held on
Commercial Metals's motion for reconsideration, although there is no reporter's record from
this hearing.  
	On May 4, 2006, American Steel filed a supplemental response to Commercial
Metals's motion for no-evidence summary judgment.  American Steel, however, did not file
any additional evidence in support of its response, nor did it provide any factual
background for the case, but relied on Ward's original affidavit. (3) 
	On May 31, 2007, American Steel filed an amended petition, reasserting its claims
for fraud, unfair competition, and theft of trade secrets, and adding claims for conversion
and  interference with contractual relations. (4)  According to American Steel's first amended
petition, in late 1998 and early 1999, Commercial Metals expressed an interest in
purchasing American Steel, and in that process, Commercial Metals asked for confidential
information from American Steel in order to perform "due diligence."  American Steel
asserts that Commercial Metals promised to keep this information confidential and
represented that Commercial Metals was not interested in American Steel's employees,
but later Commercial Metals hired away an American Steel employee and wrongfully
competed to take American Steel's customers. (5) 
	On March 31, 2008, Commercial Metals filed a second motion for no-evidence
summary judgment.  This motion referred to the prior motion for no-evidence summary
judgment challenging evidence of causation and damages and alleged that it was still
pending before the court, and it further challenged other elements of American Steel's
claims. 
	A hearing on Commercial Metals's motion to reconsider the original motion for
summary judgment was set for April 1, 2008, and on that day, American Steel filed an
objection to Commercial Metals's request for reconsideration of the first motion for no-evidence summary judgment, noting that the motion had been properly denied and that
trial was scheduled for May 19, 2008.  The docket sheet notes that a hearing was held on
the motion for reconsideration on April 1, but there is no reporter's record from that
hearing.
	On April 11, 2008, after the hearing on Commercial Metals's motion for
reconsideration, American Steel moved for leave to amend Ward's affidavit, which it had
submitted in response to Commercial Metals's first motion for summary judgment back in
2005,  "to give specific evidence of the allegations of fraud, conversion, theft of trade
secrets, unfair competition, statutory theft of trade secrets, interference with business
relations, interference with contractual relations, and unjust enrichment."  The motion for
leave to amend stated that the trial court had set a hearing on Commercial Metals's second
motion for no-evidence summary judgment for April 29, 2008.  The motion for leave to
amend alleges that David Bonilla had taken over the case for American Steel and that
when he had received the case, there was nothing in the record to indicate that the original
no-evidence motion for summary judgment filed in 2005 was still pending.  It further stated
that Commercial Metals could not claim to be surprised by the amendment to the affidavit
"because they are aware of the deficiencies of the affidavit."  
	The motion for leave attached a revised affidavit from Ward.  It included details
about the matters leading up to the law suit and about Commercial Metals's actions giving
rise to the claims.  With respect to causation and damages, the affidavit provided more
information, stating:
	11.	As a result of defendant using the confidential business information
they [sic] had been provided, defendant started selling structural steel
to our clients.  Defendant was selling the steel at a much lower price
than we had been selling it.

	12.	Defendant's [sic] had previously been more involved in selling rebar. 
The addition of selling structural steel came about after they obtained
our business records and hiring Doug Wright [an American Steel
employee].

	13.	As a result of defendant using the confidential business information
they [sic] had been provided, they [sic] were able to take our great
customer base immediately.

	14.	Defendant caused damages to American Steel in that it took one of
our key employees, Doug Wright, who had intimate knowledge of our
business operations and was a great asset to Defendant.

	15.	Doug Wright had knowledge of our inventory, equipment, sales force
needs, bidding practices, some payroll information, and pricing
markups with our customers.

	16.	Defendant was thus able to undercut our prices and wrongfully
compete with us, drastically impacting and injuring our business.
 
	17.  	Defendant offered future jobs to our employees.  This caused an
unstable atmosphere and resulted in employees leaving our
company, causing loss of profits as new employees had to be trained.
 
	18.	I earn on average 30% on gross sales after cost of goods sold. 
American Steel and Supply, Inc.'s other expenses remain reasonably
constant within the relevant range.  This, [sic] my lost profit is
estimated with reasonable certainty at 30% of gross sales by
Defendant to my customers.  I receive at least two-thirds of the
business of my regular customers.  Thus, my lost profit is reasonably
estimated at 20% of gross sales.

	Commercial Metals filed a response to the motion for leave to amend on April 21,
2008.  It argued that despite having notice that Commercial Metals believed Ward's first
affidavit did not meet the summary judgment standard, American Steel stood on that
affidavit for several years.  Commercial Metals asserted that at the April 1, 2008 hearing,
American Steel did not seek leave to amend its summary judgment evidence but stood on
its evidence.  Commercial Metals asserted that because American Steel had chosen to
stand on its evidence for three years and waited until after the hearing on Commercial
Metals's motion to reconsider, American Steel could not show "good cause" to amend the
affidavit and that it would be "fundamentally unfair" to allow amendment at that late date. 

	The trial court held a hearing on American Steel's motion for leave to amend Ward's
affidavit on April 18, 2008.  On April 23, 2008, the trial court denied American Steel's
motion for leave to amend Ward's affidavit.  The same day, the trial court "reconsidered"
and granted Commercial Metals's motion for no-evidence summary judgment on causation
and damages. (6) 
	American Steel moved the court to reconsider on May 19, 2008.  Then on May 22,
2008, American Steel filed a motion for new trial.  American Steel filed a notice of appeal
on July 14, 2008, and nevertheless, the trial court held a hearing on American Steel's
motion to reconsider and motion for new trial on July 25, 2008.  The trial court denied both
at the hearing.  This appeal ensued.  
II.  Motion for Leave to Amend Summary Judgment Evidence
 In a summary judgment proceeding, the nonmoving party may file and serve
opposing affidavits or other written responses no later than seven days prior to the
scheduled date of the hearing.  Tex. R. Civ. P. 166a(c).  The nonmoving party must obtain
leave to file evidence after the deadline.  Id.  By its first issue, American Steel contends
that the trial court abused its discretion by denying its motion for leave to amend Ward's
affidavit after the hearing on Commercial Metals's motion to reconsider the motion for no-evidence summary judgment.   American Steel argues that a late filing should be allowed
if the movant for leave establishes good cause by showing that the late filing is not
intentional or the result of conscious indifference, but was the result of mistake or accident,
and was not intended to cause delay or surprise.  Carpenter v. Cimarron Hydrocarbons
Corp., 98 S.W.3d 682, 688 (Tex. 2002). 
 	American Steel claims that it did not intentionally or as the result of conscious
indifference wait until April 2008 to amend Ward's affidavit; rather, its attorney, David
Bonilla, was not aware that Commercial Metals's motion for summary judgment was still
pending until the notice of hearing was filed on February 27, 2008. (7)  Furthermore,
American Steel argues that there was nothing in the record to indicate that Commercial
Metals's motion for reconsideration, filed in March 2006, was still pending.  Finally,
American Steel insists that it did not intend to delay the proceedings, but requested to
amend the affidavit as soon as it became aware that there was to be a hearing on
Commercial Metals's motion to reconsider.  All this, American Steel contends, shows that
the trial court abused its discretion in denying its motion for leave to amend Ward's
affidavit.  We disagree.
	First, we disagree that there was nothing in the record to indicate that Commercial
Metals's motion for no-evidence summary judgment was still pending.  There was never
a formal order issued denying the motion, and prior to David Bonilla becoming American
Steel's attorney, there was no ruling in the record on Commercial Metals's motion for
reconsideration. 
	Second,  American Steel had several opportunities to timely amend the affidavit, but
it did not avail itself of those opportunities.  American Steel admits that there was a hearing
on Commercial Metals's motion for reconsideration in April 2006.  American Steel took no
action to amend Ward's affidavit at that time, even though after that hearing, it
supplemented its written response to the motion for summary judgment.  
	Additionally, American Steel admits in its brief that it was "not aware that the
Defendant's Motion for 'No-Evidence' Motion [sic] for Summary Judgment was still pending
until the notice of hearing was filed on February 27, 2008."  Appellant's Brief at 9
(emphasis added).  American Steel, therefore, had over a month to seek to amend Ward's
affidavit before the April 1, 2008 hearing on the motion for reconsideration, yet it appeared
at the hearing, stood on its original affidavit, and did not request leave to amend until April
11, 2008, after the trial court held a hearing on the motion to reconsider.  
	American Steel does not explain why it could not have sought leave to amend at
these times throughout the course of these proceedings, see Tex. R. Civ. P. 166a(c), or
even during the month of time before the hearing when it concedes it had received notice
that the motion was pending.   Accordingly, the trial court was within its discretion to deny
the motion by holding that American Steel did not prove good cause.  See Carpenter, 98
S.W.3d at 688  (holding that the trial court did not abuse its discretion because plaintiff
offered "no explanation of the error from which the trial court might determine that an
accident or mistake had occurred"); see also State Office of Risk Mgmt. v. Alonso, 290
S.W.3d 254, 258 (Tex. App.-El Paso 2009, no pet.) (holding that the trial court did not
abuse its discretion in denying a motion for leave where counsel did not explain inaction
during all times leading up to the summary judgment).  Accordingly, we overrule American
Steel's first issue.  
III.  Summary Judgment
	By its second issue, American Steel argues that the trial court erred by granting the
no-evidence motion for summary judgment on causation and damages.  We disagree.  
	A movant for no-evidence summary judgment must allege that there is no evidence
of a material element of the adverse party's claims.  Tex. R. Civ. P. 166a(i); see Sw. Elec.
Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002).  The nonmovant is not required to
marshal its proof but must produce summary judgment evidence that raises a genuine
issue of material fact.  Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004);
Grant, 73 S.W .3d at 215.
	The nonmovant raises a genuine issue of material fact when he produces more than
a scintilla of evidence to support the existence of the challenged element.  Ridgway, 135
S.W.3d at 600.  More than a scintilla of evidence is that amount of evidence that would
allow reasonable and fair-minded people to disagree in their conclusions.  Id. at 601. 
Because a no-evidence motion for summary judgment is essentially a pretrial directed
verdict, we apply the legal sufficiency standard of review.  King Ranch, Inc. v. Chapman,
118 S.W.3d 742, 750-51 (Tex. 2003).  Therefore, we must view the evidence "in the light
most favorable to the party against whom the summary judgment was rendered, crediting
evidence favorable to that party if reasonable jurors could, and disregarding contrary
evidence unless reasonable jurors could not."  Mack Trucks, Inc. v. Tamez, 206 S.W.3d
572, 582 (Tex. 2006).
	Because we have held that the trial court did not abuse its discretion in refusing to
consider Ward's amended affidavit, we consider the original affidavit.  Commercial Metals
argues that the original affidavit contained conclusory statements that were not proper
summary judgment evidence.  We agree.  A conclusory statement is one that provides no
factual basis for the conclusion drawn.  Paragon Gen. Contractors, Inc. v. Larco Constr.,
Inc., 227 S.W.3d 876, 883 (Tex. App.-Dallas 2007, no pet.).  An affidavit containing
conclusory statements is substantively defective, and no objection is required in the trial
court.  Id.
 Ward's original affidavit provided no factual context for any of its conclusions.  With
respect to causation, the affidavit merely states "[a]fter the events at issue," certain events
occurred, including that American Steel lost business and American Steel's customers
purchased structural steel from Commercial Metals.   Nowhere, however, does the affidavit
explain what those events were, or how they caused American Steel to lose business.  We
hold that these statements do not constitute more than a scintilla of evidence to support
causation, and the trial court did not err in granting the motion for summary judgment.  See
LMB, Ltd. v. Moreno, 201 S.W.3d 686, 688-89 (Tex. 2006) (per curiam) (holding that an
affidavit that stated that "the conduct" of the defendant caused the plaintiff's injuries, but
did not describe the conduct, was conclusory and no evidence).  Accordingly, we overrule
American Steel's second issue.
IV.  Motion for New trial 
	By its third issue, American Steel argues that the trial court abused its discretion by
denying its motion for new trial.  Within this issue, American Steel relies on the same
arguments it used to support its first and second issues and has not presented any new
or different bases for its arguments.  For the same reasons set forth above, we overrule
American Steel's third issue.
V.  Conclusion
 Because we have overruled all of American Steel's issues, we affirm the trial court's 
summary judgment.

								_______________________________
								GINA M. BENAVIDES,
								Justice
 
Delivered and filed the
11th day of March, 2010.

1.  At that time, American Steel was represented by David Sibley.  
2.  Commercial Metals also asked for a transfer to County Court at Law No. 1 in accordance with Local
Rule 3 of the Nueces County Local Rules of Administration because the case was related to an earlier case
that had been non-suited.  See Nueces County Loc. R. of Admin. R. 3.  The docket sheet shows that the case
was transferred to County Court at Law No. 1 on November 1, 2000, although no order appears in the record. 
3.  On May 29, 2007, the case was administratively transferred to Nueces County Court at Law Number
2.  
4.  At this time, Gary Ramirez appeared on behalf of American Steel.  
5.  The docket sheet shows that on June 19, 2007, David Bonilla was substituted as counsel for
American Steel.  
6.  The order granting summary judgment expressly states that it is granting the no-evidence motion
filed by Commercial Metals in 2005.  Although American Steel amended its petition to add additional claims
after that motion was filed, the final summary judgment states that it is "final, disposes of all parties and
claims, and is appealable." See Lehman v. Har-Con Corp., 39 S.W.3d 191, 206 (Tex. 2001) (holding that
summary judgment order is final and appealable if it (1) actually disposes of all claims and parties, or (2)
clearly indicates the trial court's intent to render a final judgment).  American Steel does not argue on appeal
that the trial court erroneously disposed of the claims it added after the first motion for summary judgment was
filed; therefore, that issue is not before us.  See id. ("But if the language of the order is clear and unequivocal,
it must be given effect despite any other indications that one or more parties did not intend for the judgment
to be final. An express adjudication of all parties and claims in a case is not interlocutory merely because the
record does not afford a legal basis for the adjudication.  In those circumstances, the order must be appealed
and reversed."); San Jacinto River Auth. v. Duke, 783 S.W.2d 209, 210 (Tex. 1990).  Moreover, summary
judgment can be granted on later-pleaded causes of action if the grounds asserted in the motion show that
the plaintiff cannot recover on the later-pleaded causes of action.  Jones v. Ill. Employers Ins. of Wausau, 136
S.W.3d 728, 744 (Tex. App.-Texarkana 2004, no pet.) (citing Sharpe v. Roman Catholic Diocese of Dallas,
97 S.W.3d 791, 797 (Tex. App.-Dallas 2003, pet. denied); Pinnacle Data Servs., Inc. v. Gillen, 104 S.W.3d
188, 197 (Tex. App.-Texarkana 2003, no pet.)); see also Veritas Energy, LLC v. Brayton Operating Corp.,
No. 13-06-061-CV, 2008 WL 384169, at *7 (Tex. App.-Corpus Christi Feb. 14, 2008, pet. denied) (mem. op.). 
Because the arguments regarding damages and causation apply equally to the later-pleaded causes of action
in this case, the trial court's finding is also dispositive of the later-pleaded causes of action.  
7.  American Steel does not cite any portion of the record for this assertion, but as it is undisputed by
Commercial Metals, we take it as true that American Steel received notice of the hearing on the motion for
reconsideration on February 27, 2008.  Tex. R. App. P. 38.1(g).