Flood, John C, of DC, Inc. John C. Flood., Melville Davis and Robert Smiley , 2013 Tex. App. LEXIS 9717 ( 2013 )

AFFIRM; and Opinion Filed August 2, 2013.
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-12-00307-CV
JOHN C. FLOOD OF DC, INC. JOHN C. FLOOD, INC., AND MELVILLE DAVIS,
Appellants
V.
SUPERMEDIA, L.L.C., Appellee
On Appeal from the 162nd Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-10-16218
OPINION
Before Justices Lang, Myers, and Evans
Opinion by Justice Myers
Appellants John C. Flood of DC, Inc., John C. Flood, Inc., and Melville Davis appeal
from summary judgments granted in favor of appellee SuperMedia, L.L.C. In two issues,
appellants argue (1) the trial court erred by granting summary judgment for SuperMedia for
breach of contract without evidence SuperMedia was entitled to payment under any of the
contracts; and (2) the trial court erred by granting summary judgment against Melville Davis for
breach of a contract to which he was not a party. We affirm.
BACKGROUND AND PROCEDURAL HISTORY
Appellee SuperMedia, L.L.C., sued appellants John C. Flood of DC, Inc., J.C. Flood, Inc.
a/k/a John C. Flood, Inc., Melville Davis, individually, and Robert Smiley, individually, for
breach of contract and quantum meruit to collect amounts allegedly due for print media and
internet advertising services that appellee provided to appellants. Appellants filed an original
answer containing a general denial and asserting SuperMedia lacked capacity to sue, and that
appellants (defendants) Davis and Smiley were not liable in the capacity in which they were
sued. Appellants, however, did not verify their answer.
Appellee filed both traditional and no-evidence motions for summary judgment, to which
appellants timely responded. Appellants’ response included affidavits from Davis and Smiley.
Appellee filed written objections to appellants’ summary judgment evidence, challenging
statements in the Davis and Smiley affidavits. The trial court sustained all of the objections, and
appellants do not challenge the trial court’s ruling
On the morning of the hearing on appellee’s traditional and no-evidence motions for
summary judgment, less than an hour before the scheduled start of the hearing, appellants filed
an amended answer that contained a verified denial of appellee’s lack of capacity to sue and that
Davis and Smiley were not liable in the capacity in which they were sued. The amended answer
also alleged the affirmative defense of agency. The trial court granted appellee’s no-evidence
summary judgment motion on appellants’ affirmative defenses of estoppel, prior breach of
contract, failure of consideration, fraud, laches, and statue of frauds, and granted a partial
summary judgment that John C. Flood of DC, Inc. and Melville Davis owed appellee
$340,838.96, and that John C. Flood, Inc. owed appellee $233,649.56.1 The trial court’s order
states that appellee would have to file an election choosing whether the final judgment would be
against John C. Flood of DC, Inc. or Melville Davis for the $340,838.96.
The trial court’s order also states that liability for appellee’s attorney’s fees and for the
additional damages sought against John C. Flood of DC and Melville Davis would have to be
tried. Appellee non-suited its remaining claims for damages and attorney’s fees and elected to
take a final judgment against Melville Davis rather than John C. Flood of DC, Inc. The trial
1
Appellee nonsuited defendant Robert Smiley.
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court entered a final judgment against Davis for $340,838.96 and against John C. Flood, Inc. for
$233,649.56. In both its partial summary judgment order and the final judgment, the trial court
states that it considered the “pleadings timely filed.”
DISCUSSION
APPELLEE’S STANDING TO SUE
In their first point of error, appellants argue the trial court erred by granting summary
judgment for appellee based on breach of contract because there is no evidence appellee was
entitled to payment under any of the contracts. Appellants specifically argue that appellee failed
to establish its standing to bring suit, that appellee’s lack of standing to bring suit for breach of
contract negates an essential element of that cause of action, and that appellee cannot rely on
quantum meruit as an alternative theory of recovery. Appellee responds that it does indeed have
standing to bring this suit, but that appellants confuse “standing” and “capacity,” and that
appellants waived any argument about appellee’s capacity to sue or be sued because they did not
timely file a sworn denial pursuant to rule 93 of the Texas Rules of Civil Procedure.
Standard of Review
We review the trial court’s summary judgment de novo. Provident Life & Accident Ins.
Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). We apply the well-established standards for
reviewing summary judgments. See TEX. R. CIV. P. 166a(c), (i); Timpte Indus., Inc. v. Gish, 286
S.W.3d 306, 310–11 (Tex. 2009) (no-evidence summary judgment standards of review); Nixon v.
Mr. Property Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985) (traditional summary judgment
standards of review).
A no-evidence motion for summary judgment under rule 166a(i) must challenge specific
elements of the opponent’s claim or defense on which the opponent will have the burden of proof
at trial. TEX. R. CIV. P. 166a(i). The opponent must then present summary judgment evidence
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raising a genuine issue of material fact to support the challenged elements. Id. In reviewing a
no-evidence summary judgment motion, we “review the evidence presented by the motion and
response 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.” Timpte Indus., 286 S.W.3d at 310 (citing
Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006)); City of Keller v. Wilson, 168
S.W.3d 802, 827 (Tex. 2005); Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 208 (Tex.
2002)). A genuine issue of material fact exists if the non-movant produces more than a scintilla
of evidence supporting the existence of the challenged element. Fort Worth Osteopathic Hosp.,
Inc. v. Reese, 148 S.W.3d 94, 99 (Tex. 2004).
A motion for summary judgment on traditional grounds must show there is no genuine
issue as to a specified material fact and that, as a result, the moving party is entitled to judgment
as a matter of law. TEX. R. CIV. P. 166a(c). Thus, for a defendant to prevail on a traditional
motion for summary judgment, he must either disprove at least one element of the plaintiff’s
claim as a matter of law, or conclusively establish all elements of an affirmative defense.
Friendswood Dev. Co. v. McDade + Co., 926 S.W.2d 280, 282 (Tex. 1996); Kalyanaram v.
Univ. of Tex. Sys., 230 S.W.3d 921, 925 (Tex. App.––Dallas 2007, pet. denied). If the movant
meets its burden, then and only then must the non-movant party respond and present evidence
raising a fact issue as to the material facts in question. See Rhone–Poulenc, Inc. v. Steel, 997
S.W.2d 217, 222–23 (Tex. 1999).
Standing and Capacity
A party must have both standing to sue and capacity to sue. Austin Nursing Ctr., Inc. v.
Lovato, 171 S.W.3d 845, 848 (Tex. 2005). “‘Texas courts have had considerable difficulty in
defining the relationship of the twin doctrines of capacity and standing.’” Id. at 848 n.1 (quoting
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5 WILLIAM V. DORSANEO III, TEXAS LITIGATION GUIDE § 70.06[2] (2005)). “The issue of
standing focuses on whether a party has a sufficient relationship with the lawsuit so as to have a
‘justiciable interest’ in its outcome, whereas the issue of capacity ‘is conceived of as a procedural
issue dealing with the personal qualifications of a party to litigate.’” Austin Nursing Ctr., 171
S.W.3d at 849 (quoting 6A CHARLES ALAN WRIGHT, ARTHUR R. MILLER, AND MARY KAY KANE,
WRIGHT, MILLER & KANE, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2d § 1559, at 441 (2d ed.
1990)). “A plaintiff has standing when it is personally aggrieved, regardless of whether it is
acting with legal authority; a party has capacity when it has the legal authority to act, regardless
of whether it has a justiciable interest in the controversy.” Austin Nursing Ctr., 171 S.W.3d at
848–49 (quoting Nootsie Ltd. v. Williamson Cnty. Appraisal Dist., 925 S.W.2d 659, 661 (Tex.
1996)); see also Nine Greenway Ltd. v. Heard, Goggan, Blair & Williams, 875 S.W.2d 784, 787
(Tex. App.—Houston [1st Dist.] 1994, writ denied). Standing is a component of subject matter
jurisdiction and can never be waived. Austin Nursing Ctr., 171 S.W.3d at 849; Tex. Ass’n of Bus.
v. Tex. Air Control Bd., 852 S.W.2d 440, 443, 446 (Tex. 1993). Unlike standing, however, “an
argument that an opposing party does not have the capacity to participate in a suit can be
waived.” Nootsie, 925 S.W.2d at 662 (citing TEX. R. CIV. P. 93).
Standing
In Austin Nursing Center, the Texas Supreme Court explained that “standing” requires
there be “a real controversy between the parties” that “will be actually determined by the judicial
declaration sought.” Austin Nursing Ctr., 171 S.W.3d at 849 (quoting Nootsie, 925 S.W.2d at
662). In addition, to have standing a party must be “personally aggrieved” and the injury
“concrete and particularized, actual or imminent, not hypothetical.” Prize Energy Res., L.P. v.
Cliff Hoskins, Inc., 345 S.W.3d 537, 550 (Tex. App.––San Antonio 2011, no pet.); see also
Austin Nursing Ctr., 171 S.W.3d at 848. A party’s standing is determined at the time suit is
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filed, and we look to the facts alleged in the petition and may consider other evidence in the
record, if necessary, to resolve the question. Prize Energy Res., 345 S.W.3d at 550; see Everett
v. TK-Taito, L.L.C., 178 S.W.3d 844, 853 (Tex. App.––Fort Worth 2005, no pet.). An appellate
court considering standing for the first time on appeal must both construe the petition in favor of
the plaintiff and, if necessary, review the entire record to determine “if any evidence supports
standing.” Tex. Ass’n of Bus., 852 S.W.2d at 446.
Is Appellants’ “Standing” Complaint Actually a Complaint About “Capacity”?
Appellants’ argument is that appellee failed to establish it has standing to sue for
appellants’ alleged breaches of the advertising contracts. Appellants cite our opinion in OAIC
Commercial Assets, L.L.C. v. Stonegate Village, L.P., 234 S.W.3d 726, 738 (Tex. App.––Dallas
2007, pet. denied), where we stated that “[i]n order to establish standing to maintain a breach of
contract action, a plaintiff must show either third-party beneficiary status or privity.” In OAIC,
we added that, for purposes of standing, privity is established by proving the defendant was a
party to an enforceable contract with either the plaintiff or someone who assigned its cause of
action to the plaintiff. Id. Appellants insist they are challenging standing, not capacity, that
there is no evidence here of any privity of contract between SuperMedia and any of the
appellants, and no evidence SuperMedia may sue to enforce the contracts as a third-party
beneficiary. In their reply brief, appellants further explain:
Although they pleaded a lack of capacity, the defendants do not contend
that SuperMedia lacks the legal authority to bring suit, or that Melville Davis
cannot legally be sued as an individual. They are clearly contending that there is
no privity of contract between the parties and that SuperMedia failed to prove it
was a third-party beneficiary or an assignee of the contracts. These are issues of
standing, not capacity
(Emphasis added).
But appellants confuse standing with capacity. This Court has stated that a challenge to a
party’s privity of contract is a challenge to capacity, not standing, and requires compliance with
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rule 93 of the Texas Rules of Civil Procedure. Landry’s Seafood House-Addison, Inc. v. Snadon,
233 S.W.3d 430, 433-34 (Tex. App.—Dallas 2007, pet. denied) (citing King-Mays v. Nationwide
Mut. Ins. Co, 194 S.W.3d 143, 145 (Tex. App.—Dallas 2006, pet. denied)). “While the question
of whether a party is entitled to sue on a contract is often informally referred to as a question of
‘standing,’ it is not truly a standing issue because it does not affect the jurisdiction of the court; it
is, instead, a decision on the merits.” Heartland Holdings Inc. v. U.S. Trust Co. of Tex., 316
S.W.3d 1, 6-7 (Tex. App.—Houston [14th Dist.] 2010, no pet.); see also James M. Clifton, I, Inc.
v. Premillenium, Ltd., No. 05-08-01528-CV, 2010 WL 2089655 at *2 (Tex. App.—Dallas may
26, 2010, no pet.) (mem. op.). “When it is established that a breach of contract plaintiff lacks
entitlement to sue on a contract, the proper disposition may be summary judgment on the merits,
but it is not dismissal for want of jurisdiction.” Heartland, 316 S.W.3d at 7.
Although lawyers and courts occasionally state informally that an entity has no
‘standing’ to enforce a contract if that entity is not a party to the contract or a
third-party beneficiary of it, such an entity’s inability to sue goes to the merits and
does not deprive courts of jurisdiction.
Yatsuda Fire & Marine Ins. Co. v. Criaco, 225 S.W.3d 894, 898 (Tex. App.—Houston [14th
Dist.] 2007, no pet.). We thus agree with appellee that, in the case before us, the issue is not
whether appellee has standing to bring this action, but instead whether it can recover in the
capacity in which it sued, i.e., as SuperMedia. See Nine Greenway, 875 S.W.2d at 787 (whether
landlord was successor in interest to original landlord was issue of “capacity to sue,” not
“standing,” and tenants’ failure to file verified pleading resulted in waiver of landlord’s capacity
to sue, and landlord was not required to prove capacity in order to recover on claim against
tenants for breach of commercial lease agreement).2
2
While our OAIC decision cited by appellants suggests privity of contract raises an issue of standing, the defendants in OAIC filed a
plea to the jurisdiction, and one of the issues on appeal was whether the trial court lacked jurisdiction to enter judgment against defendants and in
favor of the plaintiff for breach of contract because the plaintiff lacked standing to bring suit for breach of the agreement. See OAIC, 234 S.W.3d
at 731 n.2, 734-35. In the present case, no plea to the jurisdiction was filed and neither party on appeal challenges the trial court’s jurisdiction.
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SuperMedia Has Standing to Sue
We further conclude that, were we to address the issue of standing, the pleadings and the
summary judgment evidence show SuperMedia has standing to bring this lawsuit. Appellee’s
first amended petition alleges that “SuperMedia, LLC, formerly known as Idearc Media LLC,
formerly known as Idearc Media Corp., [and] formerly known as Verizon Directories Corp.
(‘Plaintiff’ or ‘SuperMedia’) is a Delaware limited liability corporation doing business in the
State of Texas.” Idearc Media is the entity named on the contracts. Each of the names by which
appellee did business is referred to in the first amended petition as, collectively, “Plaintiff” or
“SuperMedia.” The first amended petition further alleges appellants executed contracts with
SuperMedia, that appellants agreed to pay SuperMedia for the publication of advertising
services, that SuperMedia provided the services, that appellants did not pay SuperMedia for
those services, and that appellants are thus indebted to SuperMedia. Appellee neither alleged nor
attempted to prove it was an assignee of Idearc Media’s interests or a third-party beneficiary of
its contracts––it specifically pleaded SuperMedia was formerly known as Idearc Media.
Furthermore, appellants’ response to appellee’s motions for summary judgment states that
appellees “actually owe Supermedia nothing as the ads it peddled to [appellees] are all defective
and objectively misleading to potential customers” (emphasis added), and that “Supermedia
breached the contract by failure to print ads without errors which caused [appellees’] injuries”
(emphasis added). See Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 568 (Tex.
2001) (holding that party’s statement of fact in a summary judgment response qualified as a
judicial admission that a trial court properly considered in granting summary judgment against
the party); Transcontinental Realty Invs., Inc. v. John T. Lupton Trust, 286 S.W.3d 635, 645-46
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(Tex. App.––Dallas 2009, no pet.) (treating statement in a summary judgment response as a
judicial admission).3
As for the summary judgment record, attached to appellee’s traditional motion for
summary judgment is an affidavit from Nancy Logue, who was responsible for managing
SuperMedia’s accounts receivable. Her affidavit alleges that the contracts are SuperMedia’s
business records, that appellants are customers of SuperMedia, that Supermedia published
advertising in compliance with the terms of the contracts at appellants’ request in return for an
agreement to pay for the advertising, that appellants had accounts with SuperMedia, and that
appellants owed SuperMedia money on those accounts. Therefore, construed in the light most
favorable to SuperMedia, the pleadings and evidence show a real controversy exists between the
parties that will be actually determined by the judicial declaration sought. See Austin Nursing
Ctr., 171 S.W.3d at 849.
Verified Pleas of Capacity to Sue or be Sued
Turning to the requirements of verified pleas, rule 93 of the Texas Rules of Civil
Procedure provides that pleadings asserting certain defenses shall be verified by affidavit “unless
the truth of such matters appear[s] of record.” TEX. R. CIV. P. 93; Haase v. Gim Res., Inc., No.
01-09-00696-CV, 2010 WL 3294247, at *4 (Tex. App.––Houston [1st Dist.] Aug. 19, 2010, no
pet.) (mem. op. on reh’g). Among other requirements, the rule provides that a pleading must be
verified by affidavit if it alleges the plaintiff does not have the legal capacity to sue or that the
defendant lacks the legal capacity to be sued; that the plaintiff is not entitled to recover in the
capacity in which it sues, or that the defendant is not liable in the capacity in which it is sued; or
3
Appellee also contends certain statements found in the Davis and Smiley affidavits that, for example, they spoke to the “Plaintiff’s
representative” about the advertising, “SuperMedia was at all times in control of the ads,” “SuperMedia breached its agreement,” and that “[t]he
Plaintiff and its advertising employees must be incredibly stupid.” The trial court struck these (and other) parts of the defendants’ affidavits, and
the court’s ruling is not being challenged on appeal. Accordingly, in our analysis we do not consider those parts of the affidavits that the record
shows the trial court struck. See Esty v. Beal Bank, S.S.B., 298 S.W.3d 280, 294 (Tex. App.––Dallas 2009, no pet.) (“Evidence which has been
excluded by written order or ruling of the trial court is not part of the summary judgment evidence to be considered.”).
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if the pleading alleges there is a defect in the parties, plaintiff or defendant. TEX. R. CIV. P.
93(1), (2), (4); see Sixth RMA Partners, LP v. Sibley, 111 S.W.3d 46, 56 (Tex. 2003) (“When
capacity is contested, Rule 93 requires that a verified plea be filed unless the truth of the matter
appears of record.”); Pledger v. Schoellkopf, 762 S.W.2d 145, 146 (Tex. 1988) (per curiam)
(“Rule 93(2) requires that a verified plea be filed anytime the record does not affirmatively
demonstrate the plaintiff’s or defendant’s right to bring suit or be sued in whatever capacity he is
suing.”). Rule 93’s application “is not limited to cases of representative capacity only. The rule
means just what it says.” Pledger, 762 S.W.2d at 146. The Texas Supreme Court has “not
hesitated in previous cases to hold that parties who do not follow Rule 93’s mandate waive any
right to complain about the matter on appeal.” Nootsie, 925 S.W.2d at 662; see also Nine
Greenway, 875 S.W.2d at 787 (“A party who fails to raise the issue of capacity through a
verified plea waives that issue at trial and on appeal.”); King-Mays, 194 S.W.3d at 145 (alleged
tortfeasor’s failure to file verified denial of insurer’s capacity to sue as subrogee resulted in
waiver). In addition, when a case falls within one of the categories defined by rule 93, a general
denial is insufficient; the defendant must provide a verified denial, supported by an affidavit
based on personal knowledge. See TEX. R. CIV. P. 93; Roark v. Stallworth Oil & Gas, Inc., 813
S.W.2d 492, 494 (Tex. 1991); Bluebonnet Fin. Assets v. Miller, 324 S.W.3d 603, 609 (Tex.
App.––El Paso 2010, no pet.).
Time Limits for Filing Amended Pleadings
Rule 63 of the Texas Rules of Civil Procedure provides that amended pleadings may be
filed within seven days of trial only with leave of court. TEX. R. CIV. P. 63. A summary
judgment proceeding is a trial within the meaning of rule 63. Goswami v. Metro. Sav. & Loan
Ass’n, 751 S.W.2d 487, 490 (Tex. 1988); McIntyre v. Wilson, 50 S.W.3d 674, 684 (Tex. App.––
Dallas 2001, pet. ref’d). Texas appellate courts apply a liberal interpretation in determining
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whether a trial court granted leave to late-file an amended pleading. Wilson v. Korthauer, 21
S.W.3d 573, 577 (Tex. App.––Houston [14th Dist.] 2000, pet. denied). On appeal, we will
presume the trial court granted leave to file a late pleading even though the filer failed to request
leave when (1) the record fails to show that the trial court did not consider the amended pleading;
and (2) there is not a sufficient showing of surprise or prejudice on the part of the opposing
party. Goswami, 751 S.W.2d at 490.
The first prong of Goswami is satisfied if the amended petition was part of the record
before the trial court and the judgment states that the trial court considered all the pleadings on
file. McIntyre, 50 S.W.3d at 684; Wilson, 21 S.W.3d at 578. If both of these questions are
answered in the affirmative, the first prong of the test is met. Wilson, 21 S.W.3d at 578. But
when the judgment does not affirmatively state that the court considered “all pleadings,” the
Goswami presumption does not apply. See, e.g., DMC Valley Ranch, L.L.C. v. HPSC Inc., 315
S.W.3d 898, 903 (Tex. App.—Dallas 2010, no pet.) (drawing distinction between judgments
referencing “all of the pleadings” and those referencing all “timely filed” pleadings); Domizio v.
Progressive Co. Mut. Ins. Co., 54 S.W.3d 867, 875-76 (Tex. App.—Austin 2001, pet. denied)
(summary judgment order states that it examined “the pleadings timely filed,” and thus an
amended pleading filed the day of the summary judgment motion was not considered by the trial
court); McIntyre, 50 S.W.3d at 684 (trial court did not consider a late-filed pleading in part
because the order does not recite the trial court considered “all the pleadings on file”).
Application of Rules 63 and 93
Appellants filed their “Original Answer, Response to Admissions, Requests for
Disclosures [sic]” on January 28, 2011, specifically denying “Plaintiff has the legal capacity to
sue or recover in the capacity in which it sues,” and asserting that “Defendants Davis and Smiley
are not liable in the capacity in which they are sued.” Appellants, however, did not verify their
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original answer with a sworn denial. See TEX. R. CIV. P. 93. The general denial in appellants’
original answer was insufficient to raise the issue of appellee’s lack of capacity to sue. See
Bluebonnet, 324 S.W.3d at 609. Appellants’ amended answer with a verified denial that
“Plaintiff has the legal capacity to sue or recover in the capacity in which it sues,” that “Davis
and Smiley are not liable in the capacity in which they are sued,” and alleging the affirmative
defense of agency on behalf of the individual defendants, was filed at 8:28 a.m. on August 16,
2011. This was forty-seven minutes before the scheduled start of the hearing on appellee’s
motions for summary judgment. But there is no indication in the record appellants ever sought
or obtained leave of court to file their amended answer on the date of the hearing. See TEX. R.
CIV. P. 63. Moreover, neither the partial summary judgment order nor the final judgment state
that the trial court considered all of the pleadings on file. On the contrary, they state that the
court considered the “pleadings timely filed.” By reciting that it considered the “timely filed”
pleadings, not “all of the pleadings,” the trial court indicated it did not consider appellants’
amended answer in the course of deciding appellee’s summary judgment motions. See, e.g.,
DMC Valley Ranch, 315 S.W.3d at 903.
Trial by Consent
Appellants, however, rely on Basic Capital Mgmt. v. Dynex Comm., Inc., 348 S.W.3d
894, 899 n.19 (Tex. 2011) (citing Roark, 813 S.W.2d at 495) to argue appellee’s assertions
regarding the lack of a rule 93 verified denial are waived because the issue was tried by consent
in the summary judgment proceeding. “Trial by consent may be appropriate in some limited
summary judgment contexts.” PAS, Inc. v. Engel, 350 S.W.3d 602, 610 (Tex. App.––Houston
[14th Dist.] June 28, 2011, no pet.); see also Martin v. New Century Mortg. Co., 377 S.W.3d 79,
83 n.2 (Tex. App.––Houston [1st Dist.] 2012, no pet.) (when claims are tried by consent, court
treats them as if they had been raised by the pleadings). Unpleaded affirmative defenses can
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serve as a basis for summary judgment when the defenses are raised in the summary judgment
motion and the opposing party does not object to lack of a proper pleading in either a written
response to the motion or before rendition of judgment. See Roark, 813 S.W.2d at 495; see also
Basic Capital, 348 S.W.3d at 899 (substance of defendant’s assertion that plaintiffs could not
recover for breaches of agreements because they were not parties to agreements was addressed in
cross-motions for summary judgment). This rule can include situations where an unpleaded
affirmative defense is raised for the first time in the response to a motion for summary judgment
and the movant responds to the defense on the merits without objecting. See Via Net v. TIG Ins.
Co., 211 S.W.3d 310, 313 (Tex. 2006) (per curiam) (“When [the plaintiff-nonmovant] asserted
the discovery rule for the first time in its summary judgment response, [the defendant-movant]
had two choices: it could object that the discovery rule had not been pleaded, or it could respond
on the merits and try the issue by consent.”).
The problem with appellants’ argument is that their response to appellee’s summary
judgment motions did not raise the issue of SuperMedia’s lack of capacity to bring suit. See
TEX. R. CIV. P. 166a(c) (“Issues not expressly presented to the trial court by written motion,
answer or other response shall not be considered on appeal as grounds for reversal.”); Stiles v.
Resolution Trust Corp., 867 S.W.2d 24, 26 (Tex. 1993) (“[W]e hold that a summary judgment
cannot be affirmed on grounds not expressly set out in the motion or response.”). Appellants
raised lack of capacity in their original petition, but that pleading was unverified, and their
amended answer, which was verified, was filed less than an hour before the scheduled start of the
summary judgment hearing––there is no indication appellants ever sought or obtained leave of
court. Consequently, we cannot conclude the issue of SuperMedia’s lack of capacity to sue was
tried by consent. See RE/MAX of Tex., Inc. v. Katar Corp., 961 S.W.2d 324, 328 (Tex. App.––
Houston [1st Dist.] 1997, pet. denied) (“[Trial by consent] is not intended to establish a general
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rule of practice and should be applied with care, and in no event in a doubtful situation.”).
Because appellants failed to timely file a verified pleading, they waived the issue of appellee’s
lack of capacity to sue, and it was not necessary that appellee prove its capacity. We overrule
appellants’ first issue.
MELVILLE DAVIS’S PERSONAL LIABILITY
In their second issue, appellants argue the trial court erred by granting summary judgment
against Davis for breaching a contract “to which he was not a party.” Appellants contend that
“[b]y signing the contracts as ‘CEO,’ Davis gave notice he was signing the contracts as an agent
for another,” and that, as a result, he should not be held individually liable. Appellee responds
that (1) Davis failed to timely file a verified denial that he is not liable in the capacity in which
he was sued and did not timely plead the affirmative defense of agency; and (2) alternatively,
failed to meet his summary judgment burden on the affirmative defense of agency.
As we discussed earlier, appellants’ original answer, which denied Davis was liable in the
capacity in which he was sued, was unverified. See TEX. R. CIV. P. 93. Additionally, appellants’
amended and verified answer denying Davis was individually liable, and alleging agency on his
behalf, was filed less than an hour before the start of the summary judgment hearing, and there is
no indication in the record appellants ever sought or obtained leave of court. See TEX. R. CIV. P.
63. The trial court’s order granting partial summary judgment and the final judgment both state
the court considered the “pleadings timely filed.” See, e.g., DMC Valley Ranch, 315 S.W.3d at
903. Appellants cite Davis’s affidavit, appended to appellants’ response to the motions for
summary judgment, for his assertion that he did not agree to be personally liable under the
contracts. That paragraph of the affidavit, however, was (among other parts of the affidavit)
objected to by appellee and struck by the trial court. The court’s ruling is not being challenged
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on appeal. We may not consider stricken evidence when reviewing a summary judgment. See
Esty, 298 S.W.3d at 294.4
Appellants do not dispute the lack of a timely verified denial, but they cite the statement
in rule 93 that pleadings do not need verification where “the truth of such matters appear[s] of
record,” see TEX. R. CIV. P. 93, and argue Davis was not required to verify his denial that he was
not a party to the contracts because “the truth of that contention was proven in the record.”
“There is a dearth of case law in Texas dealing with the ‘of record’ exception to the verification
requirement in Rule 93.” Cantu v. Holiday Inns, Inc., 910 S.W.2d 113, 116 (Tex. App.––Corpus
Christi 1995, writ denied). However, in InvestIN.com Corp. v. Europa Int’l, Ltd., we concluded
that an unverified supplemental answer properly raised the question of a party’s individual
liability when the “unambiguous language” of a settlement agreement included in the summary
judgment record demonstrated the party did not assume personal liability. 293 S.W.3d 819, 825
(Tex. App.––Dallas 2009, pet. denied). Because the “matter of Brigg’s capacity appear[ed] of
record in the summary judgment evidence,” we did not require verification of the supplemental
answer as a prerequisite to addressing the capacity question on appeal. Id.; see Cantu, 910
S.W.2d at 117 (“[We] hold that if the asserted defect in parties appears of record in the summary
judgment evidence in the case at bar, no verification is necessary.”); Haase, 2010 WL 3294247,
at *4 (summary judgment record did not contain uncontroverted evidence appellant lacked
capacity to sue); see also Harkness v. Harkness, 709 S.W.2d 376, 378 (Tex. App.—Beaumont
1986, writ dism’d) (admissions made in answers to interrogatories and requests for admissions
“appear of record” for purposes of rule 93); Howell v. Thompson, No. 11-09-00340-CV, 2011
4
Moreover, an affidavit attached to a response to a motion for summary judgment cannot constitute a verified denial. See Hall v.
Stephenson, 919 S.W.2d 454, 465 (Tex. App.—Ft. Worth 1996, writ denied) (a summary judgment affidavit is not a pleading); Freedman v.
Briarcroft Property Owners, Inc., 776 S.W.2d 212, 215 (Tex. App.—Houston [14th Dist.] 1989, writ denied) (affidavit filed in connection with
summary judgment motion did not satisfy requirement of verified plea because summary judgment affidavits do not constitute part of the live
pleadings of a case); Barth v. Hoffman-La Roche, Inc., No. 05-01-00302-CV, 2002 WL 1225684 at * 3 (Tex. App.—Dallas 2002, no pet.) (not
designated for publication) (a summary judgment response cannot establish a new cause of action or amend a live pleading).
–15–
WL 664763, at *1 (Tex. App.––Eastland Feb. 24, 2011, no pet.) (mem. op.) (per curiam)
(appellee’s pleading did not need to be verified because status as legal guardian “appear[ed] of
record;” appellant admitted in original petition filed in trial court that appellee had been
appointed legal guardian and order appointing appellee was attached to original petition).
Unlike InvestIN.com, the summary judgment record in this case does not contain
uncontroverted or “unambiguous” evidence Davis was not liable in the capacity in which he was
sued. Appellants point out that each agreement is signed by Davis as “CEO.” But though Davis
signed the contracts as “CEO,” his signature does not include the name of the company for
which he was signing, and the contracts reference the “business name” of the company being
advertised as, at various times, “Flood, John C Plumbing & Heati” [sic], “Flood, John C
Plumbing & Heating,” “Flood John C. Plumbing & Heating,” and “John C. Flood Inc.”5 It is
well-settled that an agent seeking to avoid personal liability on a contract must plead and prove
that the true name of the principal was fully disclosed to the other contracting party at the time
the parties entered into the contract. See Southwestern Bell Media, Inc. v. Trepper, 784 S.W.2d
68, 71 (Tex. App.––Dallas 1989, no writ); see also Wright Grp. Architects–Planners, P.L.L.C. v.
Pierce, 343 S.W.3d 196, 200 (Tex. App.––Dallas 2011, no pet.); Patel v. Creation Const., Inc.,
No. 05-11-00759-CV, 2013 WL 1277874, at *1 (Tex. App.––Dallas Feb. 27, 2013, no pet.)
(mem. op.). The burden is not on the party dealing with the agent to discover the existence of the
relationship merely because he had a means of discovering the agent’s representative capacity. A
to Z Rental Ctr. v. Burris, 714 S.W.2d 433, 435 (Tex. App.––Austin 1986, writ ref’d n.r.e.);
Anderson v. Smith, 398 S.W.2d 635, 637 (Tex. Civ. App.––Dallas 1965, no writ). Actual
5
It is undisputed that the true names of the corporate appellants are “John C. Flood of DC, Inc.” and “John C. Flood, Inc.”
–16–
knowledge of the existence and identity of the principal is required; the contracting party’s
suspicion is not sufficient. Trepper, 784 S.W.2d at 71.6
To support this argument, appellants cite Nancy Logue’s affidavit, attached to appellee’s
traditional motion for summary judgment, as evidence “SuperMedia’s own business records
showed that John C. Flood of DC was the customer in the contracts signed by Davis as CEO,”
and that “[i]t does not matter how [SuperMedia] acquired this knowledge, although it is
reasonable to infer that Davis simply told the sales representative.” Yet even if SuperMedia
learned the identity of Davis’s principal, the summary judgment evidence here does not show
when or how it acquired that knowledge. See Posey v. Broughton Farm Co., 997 S.W.2d 829,
832 (Tex. App.––Eastland 1999, pet. denied) (we look to time the parties entered into the
agreement to determine if there was sufficient disclosure of an agency relationship).
Additionally, and more precisely, Logue did not identify the “customer” in her affidavit but did
connect Davis to the account stating it was the “account of Defendants John C. Flood of DC and
Melville Davis.” Nor do the records, the contracts, attached to Logue’s affidavit identify a
“customer.” We therefore conclude Davis’s lack of liability in the capacity in which he was sued
does not “appear of record” in the summary judgment evidence. As a result, we do not consider
Davis’s capacity argument on appeal. See Nootsie, Ltd., 925 S.W.2d at 662. We overrule
appellants’ second issue.
We affirm the trial court’s judgment.
/Lana Myers/
LANA MYERS
JUSTICE
6
Appellants cite Trepper for the proposition that “signing contract as ‘president’ sufficient notice of agency,” but, in fact, we noted
that “[e]ven though by signing as president, Trepper may have fulfilled his first duty, he, nevertheless, failed in his second duty because he did
not disclose his true principal. Failing to fulfill both of his duties necessary to avoid personal liability, Trepper assumed personal liability when
he signed the contract.” Trepper, 784 S.W.2d at 72. In addition, there was no question Trepper properly pleaded agency as an affirmative
defense. See id. at 70.
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Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
JOHN C. FLOOD OF DC, INC., JOHN C. On Appeal from the 162nd Judicial District
FLOOD, INC., AND MELVILLE DAVIS, Court, Dallas County, Texas
Appellants Trial Court Cause No. DC-10-16218.
Opinion delivered by Justice Myers.
V. Justices Lang and Evans participating.
SUPERMEDIA, L.L.C., Appellee
In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED. It is ORDERED that appellee SUPERMEDIA, L.L.C., recover its costs of this
appeal from appellants JOHN C. FLOOD OF DC, INC., JOHN C. FLOOD, INC., and
MELVILLE DAVIS.
Judgment entered this 2nd day of August, 2013.
/Lana Myers/
LANA MYERS
JUSTICE
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