Nelda Leal D/B/A Rotating Services Industries, Inc. v. Kathleen Weightman ( 2004 )

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Opinion issued October 7, 200

4

  In The

Court of Appeals

For The

First District of Texas

  NO. 01-03-01006-CV

____________

NELDA LEAL D/B/A ROTATING

SERVICES INDUSTRIES, INC., Appellant

V.

KATHLEEN WEIGHTMAN, Appellee

On Appeal from the County Civil Court at Law No. 2

Harris County, Texas

Trial Court Cause No. 789,982

MEMORANDUM OPINION

          Appellant, Nelda Leal d/b/a Rotating Services Industries, Inc. (Leal), challenges the trial court’s rendition of summary judgment in favor of appellee, Kathleen Weightman (Weightman), in Leal’s suit for breach of a loan agreement. In five issues, Leal contends that the trial court erred in granting Weightman’s no-evidence summary judgment motion because (1) Leal produced more than a scintilla of evidence establishing the existence of an express oral contract; (2) Weightman, in her motion, did not state the elements of Leal’s claim as to which there was no evidence; (3) Leal produced more than a scintilla of evidence to establish the existence of an implied contract; (4) Leal produced more than a scintilla of evidence to establish her “unjust enrichment” cause of action; and (5) Weightman, in her motion, did not argue that Leal had no evidence to support her “unjust enrichment” cause of action. We reverse and remand in part and affirm in part.

          Facts

          Up until 1998, Weightman’s husband, now deceased, owned and operated Rotating Services, Inc. (RSI), a business that repaired and sold parts for steam turbines. However, in 1998, the Small Business Administration foreclosed on a loan it had made to RSI, and Leal, who was employed by RSI, purchased the company at a foreclosure sale. Thereafter, Leal renamed the company “Rotating Services Industries, Inc.” and retained Weightman’s husband as an employee at a salary of $3,362 per month.

          Following the foreclosure sale, Weightman and her husband, who were having financial problems, approached Leal for help. Leal agreed to help them, and she began sending checks to Weightman and to her husband. Leal also sent checks, on the Weightmans’ behalf, to their attorney and to the Internal Revenue Service (IRS).

          In 2001, after spending an unspecified amount of time in prison, Weightman’s husband died. Thereafter, Leal contacted Weightman and demanded that she repay the money that Leal had given to Weightman and to her husband. When Weightman refused, Leal filed this lawsuit, alleging that Weightman had breached a loan agreement that she had entered into with Leal and that she owed Leal $66,551.72.

          In response, Weightman filed a no-evidence summary judgment motion, asserting that Leal “[could not] prove the existence of a contract with [Weightman].” In support of her motion, Weightman attached deposition testimony from Leal, who had testified that she and the Weightmans had never executed a written loan agreement or a promissory note. Leal also testified that she and the Weightmans never discussed “how much [of the alleged loan] was to be paid back,” “the payment plan,” or “an interest rate.”

          Leal filed a response to Weightman’s motion, asserting that Leal and Weightman had both an“[i]mplied in law” and an “[i]mplied in fact” contract, that Leal “advanced monies to [Weightman] and/or [on] her behalf,” and that Leal “expected to be paid.” In support of her response, Leal attached her own affidavit, in which she stated that, in 1998, she had agreed to assist the Weightmans financially, “with the understanding that they would pay me back.” Leal also explained that Weightman’s husband had agreed to repay Leal when he was sentenced to “jail” or when he was released. Leal also attached to her response copies of 21 checks that she had written to Weightman, to Weightman’s husband, to their attorney, and to the IRS. The checks, totaling $63,248, were all drawn on the bank account of Rotating Services Industries, Inc.

          On August 22, 2003, following a hearing, the trial court issued an order granting Weightman’s no-evidence summary judgment motion. In its order, the trial court concluded, in pertinent part, as follows:

[T]here is no evidence to support [Leal’s] claim that [Weightman] entered into a contract to borrow money from [Leal], or that [Weightman] entered into a loan contract with [Leal].No-Evidence Summary Judgment

          To prevail on a no-evidence summary judgment motion, a movant must allege that there is no evidence of an essential element of the adverse party’s claim. Tex. R. Civ. P. 166a(i); Southwestern Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002); Flameout Design & Fabrication, Inc. v. Pennzoil Caspian Corp., 994 S.W.2d 830, 834 (Tex. App.—Houston [1st Dist.] 1999, no pet.). Although the non-moving party is not required to marshal its proof, it must present evidence that raises a genuine fact issue on each of the challenged elements. Tex. R. Civ. P. 166a(i). A no-evidence summary judgment motion may not properly be granted if the non-movant brings forth more than a scintilla of evidence to raise a genuine issue of material fact on the challenged elements. Id.; Spradlin v. State, 100 S.W.3d 372, 377 (Tex. App.—Houston [1st Dist.] 2002, no pet.). More than a scintilla of evidence exists when the evidence “rises to a level that would enable reasonable and fair-minded people to differ in their conclusions.” Merrell Dow Pharms. Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). When reviewing a no-evidence summary judgment motion, we assume that all evidence favorable to the non-movant is true, and we indulge every reasonable inference and resolve all doubts in favor of the non-movant. Spradlin, 100 S.W.3d at 377.

Adequacy of Weightman’s Motion

          In her second issue, Leal argues that the trial court erred in granting Weightman’s no-evidence summary judgment motion because the motion did not state the elements of Leal’s claim as to which there was no evidence and that it was “simply a conclusionary [sic] challenge to [Leal’s] case.”

          Rule 166a(i) provides that, to be entitled to no-evidence summary judgment, a movant must specify, in his motion, that there is no evidence of one or more essential elements of a claim or defense on which an adverse party would have the burden of proof at trial. Tex. R. Civ. P. 166a(i).

          Here, Weightman, in her motion, specifically asserted that Leal “[could not] prove the existence of a contract with [Weightman].” The existence of a valid contract is an essential element of a breach of contract cause of action. Hussong v. Schwan’s Sales Enters., Inc., 896 S.W.2d 320, 326 (Tex. App.—Houston [1st Dist.] 1995, no writ). Accordingly, because Weightman’s motion specified that Leal had no evidence of an essential element of her breach of contract cause of action, we hold that the motion complied with the requirements of Rule 166a(i).

          We overrule Leal’s second issue.

Express Oral Contract

          In her first issue, Leal argues that the trial court erred in granting Weightman’s motion because “her affidavit and the checks received by [Weightman] and made payable to [Weightman] and/or for her benefit” provide more than a scintilla of evidence establishing that “[Weightman] entered into [an oral] contract to borrow money from [Leal].”

          In a breach of contract cause of action, a plaintiff must prove that (1) a valid contract existed; (2) the plaintiff performed or tendered performance; (3) the defendant breached the contract; and (4) the plaintiff was damaged as a result of the breach. Valero Mktg. & Supply Co. v. Kalama Int’l, 51 S.W.3d 345, 351 (Tex. App.—Houston [1st Dist.] 2001, no pet.). To be valid and binding, a contract must contain all essential terms and be sufficiently certain so as to define the parties’ legal obligations. See Nickerson v. E.I.L. Instruments, Inc., 874 S.W.2d 936, 939 (Tex. App.—Houston [1st Dist.] 1994, writ denied). Generally, in a contract to loan money, the essential terms include (1) the amount to be loaned, (2) the maturity date of the loan, (3) the interest rate, and (4) the repayment terms. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992).

          Here, Leal notes that, in response to Weightman’s motion, she produced her affidavit, in which she states that, in 1998, she had agreed to assist the Weightmans financially “with the understanding that they would pay [her] back” and that Weightman’s husband had agreed to repay Leal either when he was sentenced to “jail” or when he was released. Leal also produced copies of checks totaling $63,248 that she had written to Weightman, to Weightman’s husband, to their attorney, and to the IRS.

          Leal directs us to no evidence in the record indicating whether Weightman’s husband had agreed to repay the full amount of the loan on a certain maturity date or in installments. Moreover, Leal directs us to no evidence in the record indicating whether the parties had agreed on a specific interest rate or whether they had agreed that no interest would be paid.

          At the time of contracting, the parties reasonably would have regarded a certain maturity date, the repayment terms, and the amount and applicability of an interest rate as essential terms defining the parties’ legal obligations. See id. Because Leal did not produce more than a scintilla of evidence establishing that the parties had agreed on the essential terms of a contract to loan money, we hold that Leal did not produce more than a scintilla of evidence establishing the existence of an express oral contract.

          We overrule Leal’s first issue.

Implied Contract

          In her third issue, Leal argues that the trial court erred in granting Weightman’s motion because Leal produced more than a scintilla of evidence establishing the existence of an implied contract.

          The elements of an implied contract are the same as those of an express contract. Univ. Nat’l Bank v. Ernst & Whinney, 773 S.W.2d 707, 710 (Tex. App.—San Antonio 1989, no writ). The only difference between the two is that, in an express contract, the mutual assent of the parties is expressly stated, whereas in an implied contract, the assent must be inferred from the circumstances of the transaction. Id.

          Here, as noted above, in her response, Leal did not produce more than a scintilla of evidence establishing that the parties had agreed on a certain maturity date, on repayment terms, or on the amount or applicability of an interest rate. There is no evidence in the record to indicate that the parties, through their conduct, had impliedly agreed on any of these essential terms of a contract to loan money. Accordingly, we hold that Leal did not produce more than a scintilla of evidence establishing the existence of an implied contract.

          We overrule Leal’s third issue.

“Unjust Enrichment” Cause of Action

          In her fifth issue, Leal argues that the trial court erred in granting Weightman’s motion in response to her claim for unjust enrichment because Weightman, in her motion, did not argue that Leal had no evidence to support her unjust enrichment cause of action.

          Leal amended her pleadings on August 14, 2003, eight days before the trial court issued its order granting Weightman’s motion. In addition to alleging additional facts and reasserting her breach of contract claim, Leal included the following statement in the “Conditions Precedent” section of her amended petition: “[Weightman] will be unjustly enriched if allowed to retain the monies an[d]/or benefits paid to her and/or for her benefit without repayment.”

          Leal argues that, by including this sentence in the “Conditions Precedent” section of her amended petition, she alleged an “unjust enrichment” cause of action against Weightman. Leal further argues that, because Weightman, in her motion, did not argue that Leal had no evidence to support her “unjust enrichment” cause of action, the trial court erred in granting Weightman’s motion on this claim.

          In response to Leal’s argument, Weightman, citing Barnett v. Coppell North Texas Court, Ltd., 123 S.W.3d 804, 816-17 (Tex. App.—Dallas 2003, no pet.), argues that unjust enrichment “is not an independent cause of action in Texas.” Rather, it is an “element” of a cause of action for restitution. Id. Moreover, Weightman argues that Leal’s “mere mention of unjust enrichment” in her amended petition is not sufficient to allege a cause of action for restitution.

          The Texas Supreme Court, however, has recognized unjust enrichment as a cause of action. See, e.g., Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 683-85 (Tex. 2000). It has even recognized a two-year statute of limitations for unjust enrichment claims. See HECI Exploration Co. v. Neel, 982 S.W.2d 881, 885 (Tex. 1998). A party may recover under an unjust enrichment theory when one person has obtained a benefit from another by fraud, duress, or the taking of undue advantage. Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992). Furthermore, a pleading is sufficient if it gives fair and adequate notice of the facts upon which the pleader bases his claim. Roark v. Allen, 633 S.W.2d 804, 810 (Tex. 1982). The purpose of this rule is to give the opposing party information sufficient to enable him to prepare a defense. Id. The test of fair notice is “whether an opposing attorney of reasonable competence, with the pleadings before him, can ascertain the nature and the basic issues of the controversy and the testimony probably relevant.” State Fid. Mortgage Co. v. Varner, 740 S.W.2d 477, 479 (Tex. App.—Houston [1st Dist.] 1987, writ denied).

          Here, we conclude that a reasonably competent attorney, with Leal’s amended petition before him, would have been able to ascertain that Leal was attempting to allege a cause of action for unjust enrichment. The record indicates that Weightman did not move to strike Leal’s amended petition or challenge it by special exception. See Tex. R. Civ. P. 90.

          We sustain Leal’s fifth issue.

Conclusion

          Having sustained Leal’s fifth issue, we need not address Leal’s fourth issue, in which she argues that the trial court erred in granting Weightman’s no-evidence summary judgment motion because Leal produced more than a scintilla of evidence establishing her unjust enrichment cause of action.

          We reverse that portion of the trial court’s summary judgment ruling that Leal “take nothing” from Weightman in regard to Leal’s unjust enrichment claim, and we remand that claim to the trial court for further proceedings. We affirm the trial court’s judgment in all other respects.



                                                                        Terry Jennings

                                                                        Justice

Panel consists of Justices Taft, Jennings, and Bland.