Southwest Pipe Services, Inc and Joe Briers v. Sunbelt Rentals, Inc. ( 2016 )

Opinion issued March 8, 2016
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-15-00124-CV
———————————
SOUTHWEST PIPE SERVICES, INC. AND JOE BRIERS, Appellants
V.
SUNBELT RENTALS, INC., Appellee
On Appeal from the County Court at Law No. 2
Fort Bend County, Texas
Trial Court Case No. 13-CCV-050901
MEMORANDUM OPINION
In this breach of contract case, Sunbelt Rentals, Inc. (“Sunbelt”) sued
Southwest Pipe Services, Inc. and its president Joe Briers (collectively, “Southwest
Pipe”) after Southwest Pipe rented machinery from Sunbelt and then failed to pay
for the rentals. Sunbelt moved for summary judgment on its own claim. The trial
court granted summary judgment and awarded Sunbelt $29,731.63 in damages. In
one issue, Southwest Pipe contends that, because it raised a fact issue by
designating a responsible third party, the trial court erroneously rendered summary
judgment in favor of Sunbelt.
We affirm.
Background
Sunbelt rents equipment and machinery to other companies for use in
various projects. Southwest Pipe removes pipelines, cleans the pipe, and then
resells the pipe. In January 2008, Sunbelt and Southwest Pipe entered into an
agreement whereby Sunbelt would periodically rent equipment to Southwest Pipe
for use in its pipe-removal projects. Briers signed a personal guaranty.
From November 2011 through January 2012, Southwest Pipe rented
equipment from Sunbelt for use in removing a pipeline in Upshur County, Texas.
Sunbelt submitted periodic invoices to Southwest Pipe, totaling $29,731.63, but
Southwest Pipe never paid any of these invoices. Sunbelt filed suit against
Southwest Pipe, alleging suit on a sworn account, breach of contract and breach of
Briers’ personal guaranty, and quantum meruit.
Southwest Pipe filed an amended answer and asserted, as an affirmative
defense, that Sunbelt’s “alleged damages were the result of a responsible third
2
party.” Shortly thereafter, Southwest Pipe filed a motion for leave to designate a
responsible third party. In the motion, Southwest Pipe alleged:
Southwest Pipe Services, Inc. hired Rodney Beshears as a sub-
contractor to remove an abandoned pipeline. Beshears, utilizing
equipment rented from [Sunbelt], almost immediately [began]
removing the pipe and selling it to a local scrap dealer and pocketing
the profits. As soon as [Southwest Pipe] discovered that Beshears was
misappropriating the pipe, [Southwest Pipe] filed a [temporary
restraining order] to stop Beshears. The [temporary restraining order]
was granted, but the [temporary injunction] was unsuccessful.
Beshears continued to use the rented equipment and continued to
remove and sell the pipe that belonged to [Southwest Pipe]. Thus,
Beshears is at least partially responsible for the rental bills claimed by
[Sunbelt].
Sunbelt did not file an objection to this designation, and the trial court signed an
order designating Beshears as a responsible third party.
Nearly one year later, in July 2014, Sunbelt moved for summary judgment
on its own claims. As summary judgment evidence, Sunbelt attached Southwest
Pipe’s credit application, Briers’ personal guaranty, and invoices relating to the
Upshur County project. Sunbelt argued that Southwest Pipe, and Briers as
guarantor, entered into an agreement with Sunbelt for Sunbelt to supply rental
equipment “to be used for the improvement of real property and various other
works performed by” Southwest Pipe. Sunbelt argued that Southwest Pipe had a
duty to pay Sunbelt for the rental equipment, but Southwest Pipe breached the
agreement by failing to pay for use of the equipment. Sunbelt further argued that it
was entitled to $29,731.63 in damages, plus pre- and post-judgment interest, and
3
attorney’s fees. It attached the affidavit of its counsel to support its request for
$2,500 in attorney’s fees.
In response, Southwest Pipe objected to Sunbelt’s use of the credit
application and the invoices, arguing that the documents were inadmissible hearsay
because Southwest Pipe had not attached a business records affidavit. Southwest
Pipe also argued that a fact issued existed as a result of the designation of Beshears
as a responsible third party. Specifically, Southwest Pipe argued “that Mr.
Beshears should be responsible for any alleged debts owed to [Sunbelt] because he
utilized the equipment for his own benefit.” Southwest Pipe pointed out that under
Texas’s proportionate liability scheme, the trial court shall grant leave to designate
a named person as a responsible third party unless another party files an objection
within fifteen days. Sunbelt did not file a motion objecting to the designation, so
the trial court was required to designate Beshears as a responsible third party, and
because the court did so, “[a] fact issue exists as to who is responsible for
payment” to Sunbelt.
On September 19, 2014, Sunbelt filed an amended motion for summary
judgment. This motion was substantively identical to Sunbelt’s first summary
judgment motion, but its exhibit containing Southwest Pipe’s credit application and
the unpaid invoices from the Upshur County project was accompanied by a
4
business records affidavit. Sunbelt set the motion for a hearing on November 12,
2014.
Southwest Pipe filed a response to the amended summary judgment motion
on November 10, 2014. Southwest Pipe again objected to Sunbelt’s summary
judgment evidence, arguing that the affiant of the business records affidavit failed
to establish that she was a custodian of records and that she was familiar with the
manner in which the records were created and maintained. The remainder of
Southwest Pipe’s response was identical to its response to Sunbelt’s first summary
judgment motion.
The trial court did not rule on Southwest Pipe’s objection to Sunbelt’s
summary judgment evidence. Instead, it granted Sunbelt’s summary judgment
motion and awarded Sunbelt $29,731.63 in damages, pre- and post-judgment
interest, and $2,500 in attorney’s fees. This appeal followed.
Summary Judgment
In its sole issue, Southwest Pipe contends that the trial court erred in
rendering summary judgment in favor of Sunbelt because Southwest Pipe
designated Beshears as a responsible third party, which creates a fact issue as to
who must pay Sunbelt.
5
A. Standard of Review
We review a trial court’s ruling on a summary judgment motion de novo.
Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). To prevail on a
traditional summary judgment motion, the movant bears the burden of proving that
no genuine issues of material fact exist and that it is entitled to judgment as a
matter of law. TEX. R. CIV. P. 166a(c); Mann Frankfort Stein & Lipp Advisors,
Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). When a plaintiff moves for
summary judgment on its own claim, it must prove that it is entitled to judgment as
a matter of law on each element of its cause of action. See MMP, Ltd. v. Jones,
710 S.W.2d 59, 60 (Tex. 1986) (per curiam); Cleveland v. Taylor, 397 S.W.3d 683,
696–97 (Tex. App.—Houston [1st Dist.] 2012, pet. denied).
A matter is conclusively established if reasonable people could not differ as
to the conclusion to be drawn from the evidence. See City of Keller v. Wilson, 168
S.W.3d 802, 816 (Tex. 2005); Cleveland, 397 S.W.3d at 697. If the movant meets
its burden, the burden then shifts to the nonmovant to raise a genuine issue of
material fact precluding summary judgment. See Centeq Realty, Inc. v. Siegler,
899 S.W.2d 195, 197 (Tex. 1995); Goodyear Tire & Rubber Co. v. Mayes, 236
S.W.3d 754, 755 (Tex. 2007) (per curiam) (stating that summary judgment
evidence raises fact issue if reasonable and fair-minded jurors could differ in their
conclusions in light of all evidence presented). To determine if the nonmovant
6
raised a fact issue, we review the evidence in the light most favorable to the
nonmovant, crediting favorable evidence if reasonable jurors could and
disregarding contrary evidence unless reasonable jurors could not. Fielding, 289
S.W.3d at 848 (citing City of Keller, 168 S.W.3d at 827); Cleveland, 397 S.W.3d at
697. We indulge every reasonable inference and resolve any doubts in the
nonmovant’s favor. Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex.
2002) (citing Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997));
Cleveland, 397 S.W.3d at 697.
We must affirm a summary judgment order if any of the grounds presented
to the trial court are meritorious. Provident Life & Accident Ins. Co. v. Knott, 128
S.W.3d 211, 216 (Tex. 2003); Cleveland, 397 S.W.3d at 697.
B. Sunbelt’s Breach of Contract Claim
To be entitled to summary judgment on its breach of contract claim, Sunbelt
was required to conclusively establish (1) the existence of a valid contract; (2) its
own performance or tendered performance; (3) Southwest Pipe’s breach of the
contract; and (4) damages sustained as a result of the breach. See B & W Supply,
Inc. v. Beckman, 305 S.W.3d 10, 16 (Tex. App.—Houston [1st Dist.] 2009, pet.
denied) (citing Valero Mktg. & Supply Co. v. Kalama Int’l, 51 S.W.3d 345, 351
(Tex. App.—Houston [1st Dist.] 2001, no pet.)). “A breach of contract occurs
when a party fails or refuses to do something he has promised to do.” Id. (quoting
7
Mays v. Pierce, 203 S.W.3d 564, 575 (Tex. App.—Houston [14th Dist.] 2006, pet.
denied)).
As summary judgment evidence, Sunbelt attached copies of Southwest
Pipe’s 2008 application for credit with Sunbelt, as well as Briers’ personal
guaranty and the invoices relating to the rental of equipment for the Upshur County
project.1 The credit application and the invoices were accompanied by a business
records affidavit from Catherine Hargis, Sunbelt’s Corporate Collections Manager.
Hargis averred that Sunbelt “delivered all of the rental equipment in accordance
with the parties’ agreement.” She also averred:
Despite repeated requests on the part of [Sunbelt] that it be paid for
such materials and equipment rental pursuant to the parties’
agreement, the [Southwest Pipe has] failed and refused to pay for
same. [Southwest Pipe’s] account balance with [Sunbelt] is
$29,731.63. [Southwest Pipe’s] account has been kept on a
systematic record and all lawful offsets, payments, and credits, if any,
have been applied or accounted for.
1
Southwest Pipe objected to Sunbelt’s Exhibit A—the credit application and the
invoices—arguing that the business records affidavit failed to establish that the
affiant was a custodian of records and that she was “familiar with the manner in
which [Sunbelt’s] records are created and maintained by virtue of the affiant’s
duties and responsibilities.” The trial court did not rule on this objection, either in
the summary judgment order or in a separate order. Defects in the form of
summary judgment evidence must be raised before the trial court, and the court
must rule on the objection or the objection is waived. See Vasquez v. S. Tire Mart,
LLC, 393 S.W.3d 814, 819 (Tex. App.—El Paso 2012, no pet.). “[A] trial court’s
ruling on an objection to summary judgment evidence is not implicit in its ruling
on the motion for summary judgment . . . .” Delfino v. Perry Homes, 223 S.W.3d
32, 35 (Tex. App.—Houston [1st Dist.] 2006, no pet.). Southwest Pipe points out
that it objected to Sunbelt’s Exhibit A, but it does not argue on appeal that the trial
court erroneously overruled its objection to this evidence. We hold, therefore, that
Southwest Pipe did not preserve this issue.
8
This evidence conclusively establishes that the parties had a valid contract, that
Sunbelt tendered performance, that Southwest Pipe breached the contract by not
paying the agreed-upon rental amounts for the equipment, and that Sunbelt
sustained damages totaling $29,731.63. See id.; see also Triton 88, L.P. v. Star
Elec., L.L.C., 411 S.W.3d 42, 56 (Tex. App.—Houston [1st Dist.] 2013, no pet.)
(concluding that plaintiff conclusively established elements of breach of contract
claim in summary judgment motion by presenting invoices and affidavits
demonstrating amount owed and that invoices were unpaid).
Because Sunbelt conclusively established its right to recover damages from
Southwest Pipe on its breach of contract claim, the burden shifted to Southwest
Pipe to present summary judgment evidence raising a fact issue on an element of
Sunbelt’s claims. Southwest Pipe did not present any evidence in response to
Sunbelt’s summary judgment motion; instead, it argued solely that, because
Beshears had been designated as a responsible third party, this designation created
a fact issue “as to who is responsible for payment” to Sunbelt.
Southwest Pipe relies on Civil Practice and Remedies Code Chapter 33 to
support its argument that the designation of Beshears as a responsible third party
creates a fact issue in this case. Chapter 33 sets out the statutory scheme for the
apportionment of responsibility in tort and deceptive trade practices actions.
Villarreal v. Wells Fargo Brokerage Servs., LLC, 315 S.W.3d 109, 121 (Tex.
9
App.—Houston [1st Dist.] 2010, no pet.); see TEX. CIV. PRAC. & REM. CODE ANN.
§§ 33.001–.017 (Vernon 2015); Galbraith Eng’g Consultants, Inc. v. Pochucha,
290 S.W.3d 863, 868 (Tex. 2009) (“The proportionate responsibility scheme of
chapter 33, on the other hand, is a complex statutory scheme for the comparative
apportionment of responsibility among parties in most tort actions in Texas.”)
(emphasis added). Chapter 33, by its plain language, does not apply to breach of
contract actions. See TEX. CIV. PRAC. & REM. CODE ANN. § 33.002(a) (Vernon
2015) (providing that chapter applies to “any cause of action based on tort” or “any
action brought under the Deceptive Trade Practices-Consumer Protection Act” in
which “a defendant, settling person, or responsible third party is found responsible
for a percentage of the harm for which relief is sought”); Doncaster v. Hernaiz,
161 S.W.3d 594, 604 (Tex. App.—San Antonio 2005, no pet.) (holding that
Chapter 33’s doctrine of proportionate responsibility was not applicable because
“underlying suit lies in contract, not in tort”); see also Dugger v. Arredondo, 408
S.W.3d 825, 832 (Tex. 2013) (“When the Legislature intends an exception to
Chapter 33’s broad scheme, it creates specific exceptions for matters that are
outside the scope of proportionate responsibility.”).
Southwest Pipe argues that Sunbelt has waived any argument about the
applicability of Chapter 33 because Sunbelt did not file an objection in the trial
court to Southwest Pipe’s motion to designate Beshears as a responsible third
10
party. A “responsible third party” is “any person who is alleged to have caused or
contributed to causing in any way the harm for which recovery of damages is
sought . . . .” TEX. CIV. PRAC. & REM. CODE ANN. § 33.011(6) (Vernon 2015).
Section 33.004 provides, in relevant part:
(a) A defendant may seek to designate a person as a responsible
third party by filing a motion for leave to designate that person
as a responsible third party. The motion must be filed on or
before the 60th day before the trial date unless the court finds
good cause to allow the motion to be filed at a later date.
....
(f) A court shall grant leave to designate the named person as a
responsible third party unless another party files an objection to
the motion for leave on or before the 15th day after the date the
motion is served.
....
(h) By granting a motion for leave to designate a person as a
responsible third party, the person named in the motion is
designated as a responsible third party for purposes of this
chapter without further action by the court or any party.
....
(l) After adequate time for discovery, a party may move to strike
the designation of a responsible third party on the ground that
there is no evidence that the designated person is responsible
for any portion of the claimant’s alleged injury or damage. The
court shall grant the motion to strike unless a defendant
produces sufficient evidence to raise a genuine issue of fact
regarding the designated person’s responsibility for the
claimant’s injury or damage.
Id. § 33.004(a), (f), (h), (l) (Vernon 2015). The granting of leave to designate a
responsible third party does not, absent joinder of the third party as a defendant,
11
impose liability on the responsible third party. Flack v. Hanke, 334 S.W.3d 251,
256 (Tex. App.—San Antonio 2010, pet. denied) (citing TEX. CIV. PRAC. & REM.
CODE ANN. § 33.004(i)).
Southwest Pipe accurately points out that Sunbelt did not file an objection in
the trial court to its motion to designate Beshears as a responsible third party,
which was subsequently granted by the trial court. However, Southwest Pipe
points to no authority holding that a breach-of-contract plaintiff’s failure to object
to a motion to designate a responsible third party renders Chapter 33’s
proportionate responsibility scheme applicable to the breach of contract action,
contrary to an explicit statutory provision stating that Chapter 33 only applies to
tort and deceptive trade practices actions. See TEX. CIV. PRAC. & REM. CODE ANN.
§ 33.002(a) (providing that Chapter 33 only applies to “any cause of action based
on tort” and “any action brought under the Deceptive Trade Practices-Consumer
Protection Act”); see also F.F.P. Operating Partners, L.P. v. Duenez, 237 S.W.3d
680, 687 (Tex. 2007) (“Chapter 33 of the Texas Civil Practice and Remedies Code
governs the apportionment of responsibility in cases within its scope.”); CBI NA-
CON, Inc. v. UOP Inc., 961 S.W.2d 336, 341 (Tex. App.—Houston [1st Dist.]
1997, pet. denied) (“A breach of contract claim is not a basis for contribution under
chapter 33 of the Texas Civil Practice and Remedies Code.”). Under the facts of
this case, Southwest Pipe cannot rely on Sunbelt’s failure to object in the trial court
12
to its motion to designate Beshears as a responsible third party—or the fact that the
trial court granted the motion despite statutory language providing that the
proportionate responsibility scheme does not apply to this breach of contract
action—to create a fact issue precluding summary judgment.
Because Southwest Pipe presented no other evidence controverting any
element of Sunbelt’s breach of contract claim, we hold that Southwest Pipe did not
raise a fact issue on the claim and, thus, the trial court correctly rendered summary
judgment in favor of Sunbelt. See Centeq Realty, 899 S.W.2d at 197 (holding that
when movant conclusively establishes elements of its claim, burden shifts to
nonmovant to raise fact issue to defeat summary judgment).
We overrule Southwest Pipe’s sole issue.
Conclusion
We affirm the judgment of the trial court.
Evelyn V. Keyes
Justice
Panel consists of Chief Justice Radack and Justices Keyes and Higley.
13