Hope Therapy v. St. Anthony's Hospital A/K/A LTHM Houston-Operation, LLC D/B/A St. Anthony's Hospital, Individually, as Well as Jointly and Severally And Jason Leday A/K/A Jason Damon Leday, Indiviually as Well as Jointly and Severally And Deric Outley A/K/A Deric Demo ( 2015 )

ACCEPTED
01-14-01011-CV
FIRST COURT OF APPEALS
HOUSTON, TEXAS
5/13/2015 10:15:14 PM
CHRISTOPHER PRINE
CLERK
CASE NO. 01-14-01011-CV
IN THE COURT OF APPEALS FOR THE FILED IN
1st COURT OF APPEALS
FIRST DISTRICT OF TEXAS HOUSTON, TEXAS
AT HOUSTON, TEXAS 5/13/2015 10:15:14 PM
CHRISTOPHER A. PRINE
Clerk
HOPE THERAPY,
Plaintiff-Appellant
vs.
ST. ANTHONY’S HOSPITAL, JASON LEDAY, DERIC OUTLEY, AND
VICTORIA BABINEAUX,
Defendants-Appellees
On appeal from the 269th Judicial District Court of Harris County, Texas
Trial Court Cause No. 2012-74149
APPELLEES’ BRIEF
Troy Tindal
State Bar No. 24066198
17225 El Camino Real, Ste 190
Houston, Texas 77058
Tel: 832-404-2015
Fax: 832-408-7579
troy@tindallawfirm.com
COUNSEL FOR APPELLEES
ORAL ARGUMENT NOT REQUESTED
PARTIES AND COUNSEL
The parties to the trial court’s judgment and the names and addresses of all
trial and appellate counsel are listed below. Tex. R. App. P. 38.1(a).
Counsel for Defendants/Appellees:
Troy Tindal
State Bar No. 24066198
17225 El Camino Real, Ste 190
Houston, Texas 77058
Tel: 832-404-2015
Fax: 832-408-7579
troy@tindallawfirm.com
Counsel for Plaintiff/Appellant Hope Therapy:
Wayman L. Prince
9111 Katy Freeway, Suite 301
Houston, Texas 77024
Telephone: 713-467-1659
Facsimile: 713-467-1686
Email: wayman@wlplaw.com
Appellant Hope Therapy
Wayman L. Prince
9111 Katy Freeway, Suite 301
Houston, Texas 77024
Telephone: 713-467-1659
Facsimile: 713-467-1686
Email: wayman@wlplaw.com
Appellee Jason LeDay
i
c/o Troy Tindal
State Bar No. 24066198
17225 El Camino Real, Ste 190
Houston, Texas 77058
Tel: 832-404-2015
Fax: 832-408-7579
troy@tindallawfirm.com
Appellee Deric Outley
c/o Troy Tindal
State Bar No. 24066198
17225 El Camino Real, Ste 190
Houston, Texas 77058
Tel: 832-404-2015
Fax: 832-408-7579
troy@tindallawfirm.com
Appellee Victoria Babineaux
c/o Troy Tindal
State Bar No. 24066198
17225 El Camino Real, Ste 190
Houston, Texas 77058
Tel: 832-404-2015
Fax: 832-408-7579
troy@tindallawfirm.com
ii
TABLE OF CONTENTS
PARTIES AND COUNSEL ............................................................................................... i
INDEX OF AUTHORITIES...............................................................................................v
STATEMENT REGARDING ORAL ARGUMENT ............................................................ vii
STATEMENT OF THE CASE ........................................................................................ vii
STATEMENT OF JURISDICTION .....................................................................................x
ISSUES PRESENTED ......................................................................................................x
STATEMENT OF THE FACTS ..........................................................................................1
SUMMARY OF THE ARGUMENTS ..................................................................................2
ARGUMENTS AND AUTHORITIES..................................................................................6
I. Standards of Review ...........................................................................................6
a) Traditional Summary Judgment Standard of Review. ...................................6
b. No-Evidence Summary Judgment Standard of Review. ................................7
ISSUE ONE: Whether the trial court committed reversible error in granting
Appellees’ Traditional Motion for Summary Judgment when the summary
judgment record establishes that at the time its suit was filed, Plaintiff Hope
Therapy lacked capacity and/or standing to bring this lawsuit. .............................8
a) Hope Therapy Lacked both Standing and Capacity to Bring Suit ................8
b) Hope Therapy provided no competent summary judgment evidence
of its assumed name status...................................................................................9
c) Hope Therapy was not authorized to sue in the courts of the State of
Texas. .................................................................................................................11
d) Hope Therapy lacked standing and/or capacity to bring this lawsuit
because Hope Therapy was not a party to any of the contracts at issue. ..........13
e) Appellees-Defendants, who were not parties to the contracts and are
not named in the contracts, could not be sued in their individual capacities. ...14
iii
ISSUE TWO: Whether the trial court committed reversible error in granting
Appellees’ Traditional and No-Evidence Motion for Summary Judgment on
Hope Therapy’s breach of contract claims. ..........................................................16
a) The alleged oral promises made by the Defendants are unenforceable
under the suretyship provision of the statute of frauds. .. Error! Bookmark not
defined.
ISSUE THREE: Whether the trial court committed reversible error in granting
Appellees’ Traditional Motion for Summary Judgment on Hope Therapy’s
claim for negligent infliction of emotional distress. .............................................17
a) Plaintiff’s Emotional Distress Claim Is Not Cognizable under Texas
Law. .................................................................. Error! Bookmark not defined.
ISSUE FOUR: Whether the trial court committed reversible error in granting
Appellees’ No-Evidence Motion for Summary Judgment, and denying
Appellant’s Traditional Motion for Summary Judgment, when there was no
evidence of one or more essential elements of Hope Therapy’s claims for breach
of contract, unjust enrichment, quantum meruit, common law fraud, negligent
infliction of emotional distress, and tortious interference with a contract. ..........18
a) The trial judge properly considered Appellant’s summary judgment
evidence. ............................................................................................................19
b) Self-Serving testimony cannot support a motion for summary
judgment. ...........................................................................................................20
CONCLUSION .............................................................................................................22
CERTIFICATE OF SERVICE ..........................................................................................24
iv
INDEX OF AUTHORITIES
Cases
Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845 (Tex. 2005) ..........................21
Benmar Place, L.P. ex rel. Patrick O'Connor & Associates, Inc.
v. Harris Cnty. Appraisal Dist., 997 S.W.2d 284 (Tex. App.—
Houston [14th Dist.] 1999, no pet.)........................................................................18
Boyles v. Kerr, 855 S.W.2d 593 (Tex.1993)..................................................... 16, 30
Brewer v. College of the Mainland, 441 S.W.3d 723 (Tex. App.—
Houston [1st Dist.] 2014, no pet.).................................................................. 18, 19
Brown v. Mesa Distributors, Inc., 414 S.W.3d 279 (Tex. App.—
Houston [1st Dist.] 2013, pet. denied) ..................................................................34
Calvillo v. Gonzalez, 922 S.W.2d 928 (Tex. 1966) .................................................31
Chapa v. Traciers & Assocs., 267 S.W.3d 386 (Tex. App.—Houston
[14th Dist.] 2008, pet. denied). .............................................................................30
Chrissikos v. Chrissikos, 2002 WL 342653 (Tex. App.—Dallas 2002,
pet. denied). ...........................................................................................................29
City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671(Tex. 1979) ............22
Cornelison v. Newberry, 932 S.W.2d 729 (Tex. App.—Waco
1996, no writ) ........................................................................................................33
Dolcefino v. Randolph, 19 S.W.3d 906 (Tex. App.—Houston
[14th Dist.] 2000, pet. denied). .............................................................................33
Dynegy, Inc. v. Yates, 422 S.W.3d 638 (Tex. 2013) ................................................29
El T. Mexican Restaurants, Inc. v. Bacon, 921 S.W.2d 247
(Tex. App.–Houston [1st Dist.] 1995, writ denied) ..............................................24
Ford Motor Co. v. Ridgway, 135 S.W.3d 598 (Tex. 2004) .....................................34
Klentzman v. Brady, 312 S.W.3d 886 (Tex. App. Houston [1st
Dist.] 2009, pet. granted) ......................................................................................22
Laven v. THBN, LLC, 2014 WL 6998098 (Tex. App.—Houston
[14th Dist.] Dec. 11, 2014, no pet. h.) (mem op.) ................................................19
May v. Ticor Title Ins., 422 S.W.3d 93 (Tex. App.–Houston
[14th Dist.] 2014, pet. denied) ....................................................................... 25, 27
v
Melartin v. CR & R, Inc., No. 14–05–00519–CV, 2009 WL
972484 (Tex. App.–Houston [14th Dist.] Mar. 24, 2009,
no pet.) (mem. op.)). .............................................................................................19
Nat’l Family Care Life Ins. Co. v. Fletcher, 57 S.W.3d 662
(Tex. App.—Beaumont 2001, pet. denied). .................................................. 25, 27
Nixon v. Mr. Property Mgt. Co., 690 S.W.2d 546 (Tex. 1985) ...............................31
Nootsie, Ltd. v. Williamson County Appraisal Dist., 925 S.W.2d
659 (Tex. 1996).....................................................................................................21
OAIC Commercial Assets, L.L.C. v. Stonegate Village, L.P., 234
S.W.3d 726 (Tex. App.—Dallas 2007, pet. denied).............................................25
Place, L.P. ex rel. Patrick O'Connor & Associates, Inc. v.
Harris Cnty. Appraisal Dist., 997 S.W.2d 282 (Tex. App.—
Houston [14th Dist.] 1999, no pet.) ......................................................................18
Randall’s Food Mkts., Inc. v. Johnson, 891 S.W2d 640 (Tex. 1995) .....................19
Rizkallah v. Conner, 952 S.W.2d 580 (Tex. App.—Houston
[1st Dist.] 1997, no pet.) .......................................................................................34
Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440 (Tex. 1993) ...............21
Travis v. City of Mesquite, 830 S.W.2d 94 (Tex.1992) ..........................................22
Wornick Co. v. Casas, 856 S.W.2d 732, 733 (Tex. 1993) ................................ 31, 35
Statutes
TEX. BUS. & COM. CODE ANN. § 26.01 ............................................................. 15, 28
TEX. BUS. ORGS. CODE ANN. § 9.051(b) (West) ......................................................23
Rules
TEX. R. CIV. P. 166a(c ................................................................................. 18, 31, 35
TEX. R. CIV. P. 166a(i) ...................................................................................... 20, 29
vi
STATEMENT REGARDING ORAL ARGUMENT
Oral argument is unnecessary as the issues are uncomplicated and purely
legal in character.
STATEMENT OF THE CASE
Nature of the Case:
Appellant sued the Appellees alleging numerous causes of action for breach
of contract, unjust enrichment, quantum meruit, common law fraud, negligent
infliction of emotional distress, and tortious interference with contract arising out
of a transaction between Hope Therapy and St. Anthony’s Hospital, under which
Hope Therapy was allegedly engaged to manage an outpatient program of the
hospital.
Course of Proceedings and Trial Court’s Disposition:
Plaintiff, Hope Therapy, sued St. Anthony’s Hospital, a/k/a LTHM Houston-
Operations LLC d/b/a St. Anthony’s Hospital, Jason LeDay, Deric Outley, and
Victoria Mae Babineaux, alleging breach contract arising out of a partial
hospitalization department management agreement.
On October 13, 2014, Defendants filed a Traditional Motion for Summary
Judgment on the following bases: (1) that Hope Therapy lacked standing to bring
its lawsuit as Hope Therapy was not a validly formed entity authorized to conduct
vii
business in the State of Texas; (2) that Hope Therapy’s breach of contract claim
was barred by the statute of frauds, being a claim in the nature of a suretyship
obligation that was not memorialized in writing; (3) that Hope Therapy’s claim for
negligent infliction of emotional distress was not a cognizable claim under Texas
law.
On October 13, 2014, Defendants also filed a No-Evidence Motion for
Summary Judgment on the basis that Hope Therapy had produced no evidence to
support its claims for claims for breach of contract, unjust enrichment, quantum
meruit, common law fraud, negligent infliction of emotional distress, and tortious
interference with contract.
Defendants’ Partial Traditional and No-Evidence Motions for Summary
Judgment were heard by the trial court on or about November 10, 2014.
On or about November 12, 2014, the trial court signed an order granting
Defendants’ Partial Traditional Motion for Summary Judgment on the basis of lack
of capacity, finding that Hope Therapy was not a validly formed and existing
domestic business entity, nor a foreign entity authorized to conduct business in
Texas, including the right to bring suit in a Texas court. (C.R. 136-37). Also on
November 12, 2014, the court signed an order granting Defendants’ Partial
Traditional and No-Evidence Motions for Summary Judgment, determining that
“fatal defects exist as to one or more essential elements of Plaintiff’s claims for
viii
breach of contract, unjust enrichment, quantum meruit, common law fraud,
negligent infliction of emotional distress, and tortious interference,” and ordering
that Plaintiff Hope Therapy take nothing by its claims for breach of contract, unjust
enrichment, quantum meruit, common law fraud, negligent infliction of emotional
distress, and tortious interference with a contract. (C.R. at 135-35).
On or about October 29, 2014, Hope Therapy filed a motion to refer the case
to mediation. On or about October 30, 2014, Hope Therapy filed a Motion for No-
Evidence Summary Judgment and a Motion for Final Traditional Summary
Judgment. On November 12, 2014, the trial court denied Plaintiff’s motion to refer
the case to mediation, denied Plaintiff’s Motion for No-Evidence Summary
Judgment, and denied Plaintiff’s Motion for Final Traditional Summary Judgment.
(C.R. at 138).
On November 19, 2014, Hope Therapy filed a Motion to Vacate, Modify
Correct or Reform the Interlocutory Summary Judgment Granted to Defendants on
November 12, 2014, which the trial court denied pursuant to its order dated
December 2, 2014. (C.R. 139-153; 160).
On or about November 24, 2014, Hope Therapy filed a “Motion for
Suggestion of Bankruptcy filed by Defendants on July 14, 2014,” seeking to stay
the trial court proceedings in light of the bankruptcy filing by LTHM Houston-
Operations, LLC.
ix
On December 30, 2014, the trial court granted Hope Therapy’s Motion for
Suggestion of Bankruptcy only as to Defendant LTHM Houston-Operations, LLC
d/b/a St. Anthony’s Hospital, and ordered that proceedings against the remaining
Defendants may continue. (Appellant’s Brief, Exh. I).
On or about December 18, 2014, Hope Therapy filed a Notice of Appeal.
STATEMENT OF JURISDICTION
This Court has jurisdiction because this appeal is from a final summary
judgment entered in a civil lawsuit before the 269th Judicial District Court of Harris
County, Texas.
ISSUES PRESENTED
ISSUE ONE: Whether the trial court committed reversible error in granting
Appellees’ Traditional Motion for Summary Judgment when the summary
judgment record establishes that at the time its suit was filed, Plaintiff Hope
Therapy lacked capacity and/or standing to bring this lawsuit because Hope
Therapy had no corporate charter, and was not authorized to conduct business in
the State of Texas.
ISSUE TWO: Whether the trial court committed reversible error in granting
Appellees’ Traditional Motion for Summary Judgment on Hope Therapy’s breach
of contract claims when the alleged oral promises made by the Defendants are
unenforceable under the suretyship provision of the statute of frauds.
ISSUE THREE: Whether the trial court committed reversible error in granting
Appellees’ Traditional Motion for Summary Judgment on Hope Therapy’s claim
for negligent infliction of emotional distress when such a claim is not cognizable
under Texas law.
ISSUE FOUR: Whether the trial court committed reversible error in granting
Appellees’ No-Evidence Motion for Summary Judgment, and denying Appellant’s
x
Traditional Motion for Summary Judgment, when there was no evidence of one or
more essential elements of Hope Therapy’s claims for breach of contract, unjust
enrichment, quantum meruit, common law fraud, negligent infliction of emotional
distress, and tortious interference with a contract.
xi
TO THE HONORABLE COURT OF APPEALS:
Appellees request that this Court affirm the trial court’s order granting the
Appellee-Defendants’ Partial Traditional and No-Evidence Motions for Summary
Judgment on Appellant Hope Therapy’s claims for breach of contract, unjust
enrichment, quantum meruit, common law fraud, negligent infliction of emotional
distress, and tortious interference with contract.
STATEMENT OF FACTS
St. Anthony’s Hospital entered into an agreement with entities known as
Hope, P.C. and Hope Therapy, LLC, whereby Hope would provide partial
hospitalization department management services contingent upon receipt of certain
Medicaid funding. Because of setoffs and chargebacks, largely attributable to
Plaintiff’s management, the Medicaid funding was much less than the parties
anticipated. Plaintiff was paid its share through the time that the management
agreement was cancelled for inadequate performance.
Jason LeDay, Deric Outley, and Victoria Babineaux are individuals who
worked for St. Anthony’s Hospital at the time of the transaction at issue. None of
the three individual Defendants are personally named in any of the contracts made
the basis of Hope Therapy’s lawsuit.
1
At the time its suit was filed, Plaintiff Hope Therapy had no corporate
charter, and was not authorized to conduct business in the State of Texas. (C.R.
(C.R. 136-37). A diligent search of the Texas Secretary of State filing records
shows no filings for any of the entities named in the alleged contracts on which
Plaintiff’s suit is based: “Hope, P.C.” or “Hope Therapy, LLC.” (Id. at Exh. D).
There is no record that Plaintiff has filed a certificate of formation or other
organizational documents as a domestic entity in Texas. Id. There is no record that
Plaintiff has filed a certificate of authority to conduct business as a foreign entity in
the State of Texas.
SUMMARY OF THE ARGUMENT
ISSUE ONE. Whether the trial court committed reversible error in granting
Appellees’ Traditional Motion for Summary Judgment when the summary
judgment record establishes that at the time its suit was filed, Plaintiff Hope
Therapy lacked capacity and/or standing to bring this lawsuit.
a. Hope Therapy provided no competent summary judgment evidence of its
valid corporate existence or assumed name. Hope Therapy has waived this
issue by not presenting it to the trial court for consideration at the summary
judgment stage. Instead, Defendants’ summary judgment evidence showed
that at the time Hope Therapy filed the lawsuit, it had no corporate charter,
and was not authorized to conduct business in the State of Texas. Due to its
2
lack of corporate charter, pursuant to section 9.051(b) of the Texas Business
Organizations Code, Hope Therapy was not authorized to sue in the courts
of the State of Texas.
b. Hope Therapy lacked standing and/or capacity to bring this lawsuit because
the undisputed evidence shows that “Hope Therapy” was not a party to any
of the contracts at issue. The contract was executed by St. Anthony’s
Hospital and by two entities named “Hope, P.C.” and “Hope Therapy,
LLC.” Plaintiff provided no evidence, or insufficient evidence, at the
summary judgment stage to establish that it was a party to any of the
contracts at issue. Thus, there is no evidence of any privity of contract
between Plaintiff Hope Therapy and any of the Defendants, and no evidence
that Hope Therapy may sue to enforce the contracts as a third-party
beneficiary.
c. The individual Defendants, Jason LeDay, Deric Outley, and Victoria
Babineaux, lack the capacity to be sued individually because they were not
parties to any of the contracts made the basis of Plaintiff’s suit. The
individual Defendants are not named anywhere in the contracts, and they
were not intended to be parties to any of the contracts.
ISSUE TWO. Whether the trial court committed reversible error in granting
Appellees’ Traditional Motion for Summary Judgment, and denying Appellant’s
Traditional and No-Evidence Motions for Summary Judgment, on Hope Therapy’s
3
breach of contract claims when the alleged oral promises made by the Defendants
are unenforceable under the suretyship provision of the statute of frauds.
Hope Therapy presented insufficient evidence to show that Defendants
breached any of the contracts at issue. Further, Defendants negated essential
elements of Hope Therapy’s breach of contract claim by conclusively proving a
statute of frauds defense. Alleged oral promises made by the Defendants are
unenforceable under the suretyship provision of the statute of frauds, which
requires that “a promise by one person to answer for the debt, default, or
miscarriage of another person” is “not enforceable unless the promise or
agreement, or a memorandum of it, is in writing and signed by the person to be
charged with the promise or agreement or by someone lawfully authorized to sign
for him.” TEX. BUS. & COM. CODE ANN. § 26.01(a), (b)(2) (Vernon 2012). Hope
Therapy failed to present any evidence to show that the suretyship provision of the
statute of frauds did not apply.
ISSUE THREE: Whether the trial court committed reversible error in granting
Appellees’ Traditional Motion for Summary Judgment on Hope Therapy’s claim
for negligent infliction of emotional distress when such a claim is not cognizable
under Texas law.
Plaintiff’s emotional distress claim fails as a matter of law, as such a claim is
not a cognizable cause of action in Texas. The Texas Supreme Court has expressly
declared that “there is no general duty not to negligently inflict emotional distress.”
4
Boyles v. Kerr, 855 S.W.2d 593, 597 (Tex.1993) (overruling St. Elizabeth Hospital
v. Garrard, 730 S.W.2d 649 (Tex. 1987)).
ISSUE FOUR: Whether the trial court committed reversible error in granting
Appellees’ No-Evidence Motion for Summary Judgment, and denying Appellant’s
Traditional Motion for Summary Judgment, when there was no evidence of one or
more essential elements of Hope Therapy’s claims for breach of contract, unjust
enrichment, quantum meruit, common law fraud, negligent infliction of emotional
distress, and tortious interference with a contract.
The trial court properly granted Appellees’ No-Evidence Motion for
Summary Judgment because Hope Therapy failed to present legally sufficient
probative evidence to support all elements of the Hope Therapy claims. Aside from
Lily Woldu’s affidavit, and conclusory statements made in Appellants’ summary
judgment filings and responsive pleadings, Appellant failed to attach any evidence
or exhibits that would support any of its claims. Lily Woldu’s deposition testimony
cited in Appellant’s brief, purporting to show Defendants’ acts of fraud and breach
of contract, is insufficient for a reversal of the trial court’s judgment, as the
testimony is self-serving, conclusory, and moreover, was not presented by
Appellant at the summary judgment stage. Lily Woldu’s affidavit is insufficient to
support a summary judgment, or to create genuine issues of material fact to defeat
Defendants’ motion for summary judgment, because it is conclusory and does not
provide specific factual information regarding the circumstances surrounding the
alleged breach and the alleged acts of fraud.
5
ARGUMENTS AND AUTHORITIES
I. Standards of Review
a) Traditional Summary Judgment Standard of Review.
Review of a trial court’s summary judgment is de novo. Provident Life &
Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). The standards of
review are established:
1. The movant for summary judgment has the burden of
showing that there is no genuine issue of material fact and
that it is entitled to judgment as a matter of law.
2. In deciding whether there is a disputed material fact issue
precluding summary judgment, evidence favorable to the
non-movant will be taken as true.
3. Every reasonable inference must be indulged in favor of the
non-movant and any doubts resolved in its favor.
Benmar Place, L.P. ex rel. Patrick O'Connor & Associates, Inc. v. Harris Cnty.
Appraisal Dist., 997 S.W.2d 282, 284 (Tex. App.—Houston [14th Dist.] 1999, no
pet.); see TEX. R. CIV. P. 166a(c).
“A defendant moving for traditional summary judgment must conclusively
negate at least one essential element of each of the plaintiff's causes of action or
conclusively establish each element of an affirmative defense.” Brewer v. College
of the Mainland, 441 S.W.3d 723, 729 (Tex. App.—Houston [1st Dist.] 2014, no
pet.); Park Place Hospital v. Estate of Milo, 909 S.W.2d 508, 510 (Tex. 1995).
6
The reviewing court must indulge every reasonable inference in favor of the
nonmovant and resolve any doubts in its favor. Randall’s Food Mkts., Inc. v.
Johnson, 891 S.W2d 640, 644 (Tex. 1995).
“If a trial court grants summary judgment [sought on multiple independent
grounds] without specifying the grounds for granting the motion, [reviewing
courts] must uphold the trial court’s judgment if any of the grounds are
meritorious.” Brewer, 441 S.W.3d at 729. Thus, when “a separate and
independent ground that supports the trial court’s judgment is not challenged on
appeal, [the court] must affirm the judgment.” See Laven v. THBN, LLC, 2014
WL 6998098, at *5 (Tex. App.—Houston [14th Dist.] Dec. 11, 2014, no pet. h.)
(mem op.) (citing Melartin v. CR & R, Inc., No. 14–05–00519–CV, 2009 WL
972484, at *4 (Tex. App.–Houston [14th Dist.] Mar. 24, 2009, no pet.) (mem.
op.)). Similarly, when a party has filed “both a traditional and no-evidence
summary judgment motion, [the appellate court] typically first review[s] the
propriety of the summary judgment under the no-evidence standard.” Brewer, 441
S.W.3d at 729. If summary judgment was properly granted, then the reviewing
court need not reach the traditional summary judgment and must affirm. Id.
b. No-Evidence Summary Judgment Standard of Review.
With respect to a no-evidence motion for summary judgment, an appellate
court reviews “the evidence in the light most favorable to the non-movant,
7
disregarding all contrary evidence and inferences.” TEX. R. CIV. P. 166a(i); King
Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003). “A no evidence point
will be sustained when (a) there is a complete absence of evidence of a vital fact,
(b) the court is barred by rules of law or of evidence from giving weight to the only
evidence offered to prove a vital fact, (c) the evidence offered to prove a vital fact
is no more than a mere scintilla, or (d) the evidence conclusively establishes the
opposite of the vital fact.” Id. “Thus, a no-evidence summary judgment is
improperly granted if the respondent brings forth more than a scintilla of probative
evidence to raise a genuine issue of material fact.” Id. “Less than a scintilla of
evidence exists when the evidence is so weak as to do no more than create a mere
surmise or suspicion of a fact.” Id. “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.” Id.
ISSUE ONE: Whether the trial court committed reversible error in granting
Appellees’ Traditional Motion for Summary Judgment when the summary
judgment record establishes that at the time its suit was filed, Plaintiff Hope
Therapy lacked capacity and/or standing to bring this lawsuit.
a) Hope Therapy Lacked both Standing and Capacity to Bring Suit
To bring suit and recover on a cause of action, plaintiff must have both
standing and capacity; “standing” is a party’s justiciable interest in the suit, and
8
“capacity” is a party’s legal authority to go into court to prosecute or defend the
suit. Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 848 (Tex. 2005).
A party has capacity when it has the legal authority to act, regardless of
whether he has a justiciable interest in the controversy. Nootsie, Ltd. v. Williamson
County Appraisal Dist., 925 S.W.2d 659, 661 (Tex. 1996).
A party has standing when it is personally aggrieved, regardless of whether
the party is acting with legal authority. Nootsie, Ltd., 925 S.W.2d at 661. If a party
lacks standing to bring an action, the trial court lacks subject matter jurisdiction.
Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 444-45 (Tex. 1993).
b) Hope Therapy provided no competent summary judgment evidence of its
entity status.
Hope Therapy contends that the trial court’s summary judgment and/or
findings for Appellees were reversible error because the trial court failed to review
and consider all of the summary judgment evidence presented by Hope Therapy.
Specifically, Hope Therapy contends that the trial court erred in granting summary
judgment for the Appellees on the basis of Hope Therapy’s lack of capacity to do
business in the State of Texas because it failed to consider evidence of Hope
Therapy’s DBA status. In support thereof, Appellant cites deposition testimony
from Lily Woldu (C.R. 141-143) that Hope Therapy was a valid DBA authorized
to do business in Texas.
9
However, this deposition testimony was not presented at the summary
judgment stage. Appellant did not raise the issue of Hope Therapy’s assumed name
or DBA status at the summary judgment stage. Plaintiff did not attach any exhibits,
affidavits, or other evidence reflecting its corporate status or authority to do
business in the State of Texas in any of its summary judgment filings. (See
generally C.R.). The only testimony was Lily Woldu’s affidavit stating that “I was
the prior owner of the business known as Hope Therapy,” which does not identify
any of the contracting parties.
An appellate court may not review an issue unless it was “actually presented
to and considered by the trial court.” Klentzman v. Brady, 312 S.W.3d 886, 900
(Tex. App. Houston [1st Dist.] 2009, pet. granted) (citing Travis v. City of
Mesquite, 830 S.W.2d 94, 100 (Tex.1992)); City of Houston v. Clear Creek Basin
Auth., 589 S.W.2d 671, 677 (Tex.1979) (holding that trial court may not grant
summary judgment on ground not presented by movant in writing).
Instead, the summary judgment record establishes that at the time its suit
was filed, Plaintiff Hope Therapy had no capacity and/or no standing to bring this
lawsuit because Hope Therapy had no corporate charter, and was not authorized to
conduct business in the State of Texas. (C.R. at Exh. D). A diligent search of the
Texas Secretary of State filing records shows no filings for any of the entities
named in the alleged contracts on which Plaintiff’s suit is based: “Hope, P.C.” or
10
“Hope Therapy, LLC.” There is no record that Plaintiff has filed a certificate of
formation or other organizational documents as a domestic entity in Texas. Id.
There is no record that Plaintiff has filed a certificate of authority to conduct
business as a foreign entity in the State of Texas. Id. Regardless of Appellant’s
argument that “the correct business entity was Hope Therapy DBA,” “Hope
Therapy DBA” was not a party to any of the contracts.
Therefore, at the time the lawsuit was filed, Hope Therapy lacked capacity
and/or standing to bring this lawsuit because Hope Therapy had no corporate
charter, and was not authorized to conduct business in the State of Texas.
c) Hope Therapy was not authorized to sue in the courts of the State of
Texas.
Section 9.051(b) of the Texas Business Organizations Code provides as
follows:
“A foreign filing entity or the entity’s legal representative may not maintain
an action, suit, or proceeding in a court of this state, brought either directly
by the entity or in the form of a derivative action in the entity’s name, on a
cause of action that arises out of the transaction of business in this state
unless the foreign filing entity is registered in accordance with this chapter.
This subsection does not affect the rights of an assignee of the foreign filing
entity as:(1) the holder in due course of a negotiable instrument; or(2) the
bona fide purchaser for value of a warehouse receipt, security, or other
instrument made negotiable by law.”
TEX. BUS. ORGS. CODE ANN. § 9.051(b) (West).
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In addition, an entity which has forfeited its charter to conduct business in
the State of Texas has no capacity to sue or defend a lawsuit in the state of Texas.
See generally El T. Mexican Restaurants, Inc. v. Bacon, 921 S.W.2d 247, 251
(Tex. App.–Houston [1st Dist.] 1995, writ denied) (holding that corporation lacked
capacity to sue after forfeiture of corporation’s charter and its privileges to sue).
At the time Plaintiff’s suit was filed, Plaintiff Hope Therapy had no capacity
and/or no standing to bring this lawsuit because Hope Therapy had no corporate
charter, and was not authorized to conduct business in the State of Texas. See
Exhibit D.
As noted above, the Texas Secretary of State filing records showed no
filings for any of the entities named in the alleged contracts on which Plaintiff’s
suit was based and no record that Plaintiff has filed a certificate of formation or
other organizational documents as a domestic entity in Texas, or a certificate of
authority to conduct business as a foreign entity in the State of Texas.
Plaintiff’s claims clearly arise out of the transaction of business in Texas.
Plaintiff’s lawsuit seeks commissions that it alleges are owed under the Partial
Hospitalization Department Management Agreement, whereby Hope Therapy was
allegedly engaged to manage an outpatient program of St. Anthony’s Hospital in
Texas.
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Therefore, Defendants are entitled to traditional summary judgment as a
matter of law as to Plaintiff’s claims on the basis that Plaintiff lacks the standing
and/or capacity to sue.
d) Hope Therapy lacked standing and/or capacity to bring this lawsuit
because Hope Therapy was not a party to any of the contracts at issue.
Hope Therapy presented no competent summary judgment evidence to show
that it was a party to the contract such that it had standing and/or capacity to bring
this lawsuit.
To prevail on a claim for breach of contract, a plaintiff must prove the
following elements: (i) There is a valid contract; (ii) the plaintiff performed or
tendered performance according to the terms of the contract; (iii) the defendant
breached the contract; and (iv) plaintiff sustained damages as a result of the breach.
May v. Ticor Title Ins., 422 S.W.3d 93, 100 (Tex. App.–Houston [14th Dist.] 2014,
pet. denied); Nat’l Family Care Life Ins. Co. v. Fletcher, 57 S.W.3d 662, 669 (Tex.
App.—Beaumont 2001, pet. denied).
In order to establish standing to maintain a breach of contract action, a
plaintiff must show either direct privity or third-party beneficiary status. OAIC
Commercial Assets, L.L.C. v. Stonegate Village, L.P., 234 S.W.3d 726, 738 (Tex.
App.—Dallas 2007, pet. denied). Privity is established by proving the defendant
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was a party to an enforceable contract with either the plaintiff or someone who
assigned its cause of action to the plaintiff. Id.
The contracts at issue were executed between St. Anthony’s Hospital, Hope,
P.C., and Hope Therapy, LLC. (Appellant’s Brief, Exhs. A – C). The Partial
Hospitalization Department Management Agreement (Appellant’s Brief, Exh. A)
and the Business Associate Agreement (Appellant’s Brief, Exh. B), were executed
between St. Anthony’s Hospital and Hope P.C. The Equipment Agreement,
(Appellant’s Brief, Exh. C), was executed between St. Anthony’s Hospital and
Hope Therapy, LLC. Thus, there is no evidence of any privity of contract between
Plaintiff and the Defendants, and Hope Therapy presented no evidence that it is
entitled to enforce the contracts as a third-party beneficiary.
Therefore, the trial court properly granted traditional summary judgment for
Defendants as a matter of law on all of Plaintiff’s claims on the basis that the
Plaintiff has neither standing nor capacity to bring this lawsuit, not having been a
party to any of the contracts at issue.
e) Appellees-Defendants, who were not parties to the contracts and are not
named in the contracts, could not be sued in their individual capacities.
Defendants lack the capacity to be sued individually because they are not
parties to any of the contracts made the basis of Plaintiff’s suit, they are not named
14
anywhere in the contracts, and they were not intended to be parties to any of the
contracts. (Appellant’s Brief, Exh. A – C).
To prevail on a claim for breach of contract, a plaintiff must prove the
following elements: (i) There is a valid contract; (ii) the plaintiff performed or
tendered performance according to the terms of the contract; (iii) the defendant
breached the contract; and (iv) plaintiff sustained damages as a result of the breach.
May v. Ticor Title Ins., 422 S.W.3d 93, 100 (Tex. App.–Houston [14th Dist.] 2014,
pet. denied); Nat’l Family Care Life Ins. Co. v. Fletcher, 57 S.W.3d 662, 669 (Tex.
App.—Beaumont 2001, pet. denied).
Plaintiff failed to show the first element required for a breach of contract
claim, having failed to show that Defendants are parties to a valid contract.
Defendants never signed any of the contracts. (Appellant’s Brief, Exhs. A-C
(containing no signatures of any aligned party with the Hospital). Defendants were
never even named as parties to any of the contracts in the documents. Defendants
are former employees of St. Anthony’s Hospital, but were never intended to be
individual parties to any of the purported contracts between St. Anthony’s Hospital
and the Plaintiff.
Therefore, Defendants cannot be sued in their individual capacities, and the
trial court properly granted traditional summary judgment as a matter of law on
Plaintiff’s breach of contract claim.
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ISSUE TWO: Whether the trial court committed reversible error in granting
Appellees’ Traditional and No-Evidence Motion for Summary Judgment on
Hope Therapy’s breach of contract claims.
Plaintiff alleged that the three Defendants, Ms. Babineaux, Mr. Outley, and
Mr. LeDay, made oral representations to Plaintiff that they would personally and
individually guaranty payment of management fees to Plaintiff under the Partial
Hospitalization Department Management Agreement between Hope P.C. and St.
Anthony’s Hospital. Neither Ms. Babineaux, Mr. Outley, nor Mr. LeDay were
parties to this contract, nor were they named anywhere in it.
These alleged oral promises made by the Defendants are unenforceable
under the suretyship provision of the statute of frauds, which requires that “a
promise by one person to answer for the debt, default, or miscarriage of another
person” is “not enforceable unless the promise or agreement, or a memorandum of
it, is in writing and signed by the person to be charged with the promise or
agreement or by someone lawfully authorized to sign for him.” TEX. BUS. & COM.
CODE ANN. § 26.01(a), (b)(2) (Vernon 2012); Dynegy, Inc. v. Yates, 422 S.W.3d
638, 641-42 (Tex. 2013); Chrissikos v. Chrissikos, 2002 WL 342653, at *6 (Tex.
App.—Dallas 2002, pet. denied).
Therefore, Appellees proved a conclusive statute of frauds defense to
Appellant’s claim for breach of contract. After Appellees met their initial burden
16
to prove the applicability of the statute of frauds defense, Appellant failed to meet
its burden to establish any exception that would take the alleged oral promises out
of the statute of frauds. See, e.g., Dynegy, Inc., 422 S.W.3d at 641-42 (stating that
once the moving party meets its initial burden establishing applicability of the
statute of frauds, the burden then shifts to the opposing party to establish an
exception that would take the verbal contract out of the statute of frauds).
Therefore, the Defendants’ alleged oral promises to personally guaranty
payment of management fees to Plaintiff are unenforceable under the statute of
frauds, and the trial court properly granted Defendants’ Motion for Traditional
Summary Judgment as a matter of law on Plaintiff’s breach of contract claim. The
trial court properly granted Defendants’ Motion for No-Evidence Summary
Judgment, as Hope Therapy failed to come forward with any summary judgment
evidence to raise a genuine issue of material fact on its claim for breach of contract
as required by Rule 166a(i). TEX. R. CIV. P. 166a(i).
ISSUE THREE: Whether the trial court committed reversible error in
granting Appellees’ Traditional Motion for Summary Judgment on Hope
Therapy’s claim for negligent infliction of emotional distress.
The Texas Supreme Court has expressly declared that “there is no general
duty not to negligently inflict emotional distress.” Boyles v. Kerr, 855 S.W.2d 593,
597(Tex.1993) (overruling St. Elizabeth Hospital v. Garrard, 730 S.W.2d 649
(Tex. 1987)). This reasoning has been applied to dismiss claims for negligently
17
inflicted mental anguish and its physical manifestations by our local courts of
appeals. Chapa v. Traciers & Assocs., 267 S.W.3d 386, 398 (Tex. App.—Houston
[14th Dist.] 2008, pet. denied).
As there is no legal precedent for Plaintiff’s claim for “Negligent Infliction of
Emotional Distress” (Section VI of Plf’s First Amd. Pet.), this claim fails as a
matter of law, and the trial court properly granted traditional summary judgment
for the Appellees-Defendants.
ISSUE FOUR: Whether the trial court committed reversible error in granting
Appellees’ No-Evidence Motion for Summary Judgment, and denying
Appellant’s Traditional Motion for Summary Judgment, when there was no
evidence of one or more essential elements of Hope Therapy’s claims for
breach of contract, unjust enrichment, quantum meruit, common law fraud,
negligent infliction of emotional distress, and tortious interference with a
contract.
The trial court properly denied Appellant’s Traditional Motion for Summary
Judgment, and granted Appellees’ No-Evidence Motion for Summary Judgment,
because Appellant failed to meet its summary judgment burden to establish the
elements of its claims for breach of contract, unjust enrichment, quantum meruit,
common law fraud, negligent infliction of emotional distress, and tortious
interference with contract.
According to the standard set forth by Texas law, a party moving for
traditional summary judgment carries the burden of establishing that no genuine
18
issues of material fact issue exists and that it is entitled to judgment as a matter of
law. See TEX. R. CIV. P. 166a(c); Wornick Co. v. Casas, 856 S.W.2d 732, 733
(Tex. 1993); Nixon v. Mr. Property Mgt. Co., 690 S.W.2d 546, 548 (Tex. 1985);
Calvillo v. Gonzalez, 922 S.W.2d 928, 929 (Tex. 1966).
a) The trial judge properly considered Appellant’s summary judgment
evidence.
There is no basis for Appellant’s contention on appeal that the trial court did
not accurately evaluate Appellant’s summary judgment evidence. In response to
Defendants’ No-Evidence Motion for Summary Judgment, and in its own summary
judgment filings, Appellant did not attach any supporting evidence or exhibits for
the trial court to consider, apart from Lily Woldu’s affidavit attached to Hope
Therapy’s Motion for Traditional Summary Judgment. Instead, the evidence
sought to be relied upon by Hope Therapy consists of approximately eight (8)
conclusory statements regarding the circumstances of the transaction, which are
outlined in Hope Therapy’s summary judgment filings and responsive filings, self-
serving deposition testimony from Ms. Woldu, and statements in Ms. Woldu’s
affidavit. In Ms. Woldu’s affidavit, she testified only that she is a licensed
physical therapist, was the owner of the business known as Hope Therapy, that her
agreement to provide PHP services began in April of 2012 and terminated in
November 2012, that she received compensation of over $28,000.00 under the
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agreement between April and November of 2012, that she has received no other
compensation under the agreement since termination of the agreement, and that she
is familiar with the filings in the trial court including Plaintiff’s Motions for
Traditional and No-Evidence Summary Judgment. The Affidavit did not set forth
or describe any circumstantial or direct evidence of acts of fraud or breach of
contract by the Defendants. There was no documentary evidence attached to the
affidavit. Although Appellant’s brief cites deposition testimony from Lily Woldu
in an attempt to support its contention that Defendants breached the contract and
committed acts of fraud, these excerpts from Lily Woldu’s deposition were not
attached to Hope Therapy’s Traditional Motion for Summary Judgment.
b) Self-Serving testimony cannot support a motion for summary judgment.
Further, the deposition excerpts and affidavit of Lily Woldu are conclusory,
self-serving statements from an interested party. See, e.g., Cornelison v. Newberry,
932 S.W.2d 729, 731 (Tex. App.—Waco 1996, no writ) (stating that “[a] statement
of an interested party, testifying as to what he intended, is self-serving, does not
meet the standards for summary judgment proof, and will not support a motion for
summary judgment”). Lily Woldu’s affidavit and deposit testimony are conclusory
and do not provide any specific factual information regarding the circumstances
surrounding the alleged breach or alleged acts of fraud. Lily Woldu’s affidavit
does not explain how the contract was allegedly breached, describe any
20
misrepresentations that were made to her, or even identify how much money Ms.
Woldu claims she is owed.
A conclusory statement is one that does not provide the underlying facts to
support the conclusion and is not competent summary judgment proof. See, e.g.,
Dolcefino v. Randolph, 19 S.W.3d 906, 930 (Tex. App.—Houston [14th Dist.]
2000, pet. denied). “An affidavit that states only legal or factual conclusions
without providing factual support is not proper summary judgment evidence
because it is not credible or susceptible to being readily controverted.” Brown v.
Mesa Distributors, Inc., 414 S.W.3d 279, 287 (Tex. App.—Houston [1st Dist.]
2013, pet. denied) (holding that affidavit did not support summary judgment on a
plaintiff’s breach of contract claim where the affidavit made the conclusory
statement that money was still owed under the lease but did not provide specific
facts regarding the circumstances of the alleged breach); Rizkallah v. Conner, 952
S.W.2d 580, 587 (Tex. App.—Houston [1st Dist.] 1997, no pet.).
Even if the deposition excerpts had been properly presented at the summary
judgment stage, they would be insufficient evidence to support a grant of
traditional summary judgment for Hope Therapy, and would be insufficient to raise
genuine issues of material fact necessary to defeat Defendants’ no-evidence motion
for summary judgment. See, e.g., Brown, 414 S.W.3d at 287; Rizkallah, 952
S.W.2d at 587; see also Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex.
21
2004) (holding that non-movants must produce competent summary judgment
evidence raising a genuine issue of material fact to defeat a no-evidence motion for
summary judgment).
Therefore, the trial court properly decided traditional summary judgment as
a matter of law in favor of the Appellees because Appellant failed to produce more
than a scintilla of evidence sufficient to create a genuine issue of material fact.
CONCLUSION
The trial court properly granted summary judgment for Appellees because
they met their burden to prove that no genuine issues of material fact issue exist,
entitling them to summary judgment as a matter of law. See TEX. R. CIV. P.
166a(c); Wornick, 856 S.W.2d at 733. First, Defendants were able to prove, as a
matter of law, that Plaintiff lacked the capacity to sue because Plaintiff was not
properly organized under the laws of the State of Texas. Second, Defendants’
summary judgment evidence proved, as a matter of law, that Plaintiff lacked both
standing and capacity to sue because Hope Therapy was not a party to any of the
contracts made the basis of Plaintiff’s suit. Third, Defendants conclusively proved
that Plaintiff’s claim for breach of contract was barred by the statute of frauds.
Fourth, Plaintiff’s negligent infliction of emotional distress claim failed as a matter
of law, as Texas law does not recognize a cause of action for negligent infliction of
22
emotional distress. In light of the above, the trial court properly granted traditional
summary judgment for Defendants.
Respectfully submitted
/s/ Troy Tindal on May 13, 2015
___________________________________
Troy Tindal
State Bar No. 24066198
troy@tindallawfirm.com
17225 El Camino Real, Ste 190
Houston, Texas 77058
Tel: 832-404-2015
Fax: 832-408-7579
ATTORNEY FOR APPELLEES
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CERTIFICATE OF SERVICE
This pleading was served upon the following counsel of record
electronically and by regular mail in compliance with Rules 21 and 21a of the
Texas Rules of Civil Procedure and Rule 9.5 of the Texas Rules of Appellate
Procedure on the 13th day of May, 2015.
Wayman L. Prince
9111 Katy Freeway, Suite 301
Houston, Texas 77024
Telephone: 713-467-1659
Facsimile: 713-467-1686
Email: wayman@wlplaw.com
/s/ Troy Tindal on May 13, 2015
___________________________________
Troy Tindal
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