Rickye Henderson v. David Buttross ( 2018 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-17-00285-CV
Rickye Henderson, Appellant
v.
David Buttross, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 200TH JUDICIAL DISTRICT
NO. D-1-GN-16-003023, HONORABLE TIM SULAK, JUDGE PRESIDING
MEMORANDUM OPINION
Rickye Henderson appeals a final summary judgment dismissing claims he had
asserted against David Buttross regarding real estate transactions and associated foreclosure disputes.
We will affirm the judgment in part and reverse and remand in part.
Although the parties have disputed numerous underlying facts, they concur generally
as to the basic circumstances that gave rise to their litigation. In 2009, appellant Henderson and a
second individual, Irving Lamont Alston, purchased a ten-acre tract in east Austin from David
Anthony, Inc. (DAI), for $640,000. Henderson and Alston financed the purchase through a loan
from DAI evidenced by a promissory note under which the two agreed to pay off the principal
amount and interest through monthly installments. The note was secured by a vendor’s lien and deed
of trust in favor of DAI.
In addition to the land, the transaction conveyed improvements that included a
warehouse-like building in which Henderson thereafter operated a business known as the “Ozone
Events Center.” In 2010, a fire severely damaged the improvements, with concomitant disruption
to the business. Subsequently, citing alleged defaults by Henderson and Alston in performing their
obligations under the note, counsel on DAI’s behalf commenced the first of what would prove to be
several uses or threatened uses of nonjudicial foreclosure remedies against the debtors. In response,
Henderson, pro se, filed a lawsuit in which he disputed that any default had occurred and sought
injunctive relief to bar foreclosure. He named as defendants both DAI and that entity’s president,
David Buttross, appellee here.
These four parties resolved their disputes, at least temporarily, through an April 2012
“Compromise and Settlement Agreement” that included a mutual release of claims and an agreement
to effect modifications to the promissory note that Henderson and Alston had previously made with
DAI. The modifications included a renewal and extension of the outstanding balance of the note,
which the parties agreed was $228,335.11,1 plus an additional $40,000 loan by DAI. The new
$40,000 loan, plus interest, was to be paid off in monthly installments that were to conclude in April
2014. The remaining outstanding balance and accrued interest was to be paid off as a lump-sum or
“balloon” payment due on December 31, 2015.2
1
According to Henderson, the intervening change from the original $640,000 principal loan
balance reflected a payment from insurance proceeds of approximately $320,000 and an agreed-upon
reduction of another $100,000 in light of diminished property value.
2
The deed of trust was correspondingly amended to secure the modified note.
2
There appears to be no dispute that Henderson paid off the $40,000 loan and
associated interest in 2014. But in February 2015—before the remaining lump-sum payment came
due—counsel on DAI’s behalf gave notice of default, asserting that “the loan evidenced by the note
is seriously delinquent.” The “serious” delinquency, according to counsel, was $983.31 in “[p]ast
late charges” and $250 in “attorney’s fees” said to be owed, plus an alleged failure to pay, or to
furnish proof of payment of, property taxes on the property. A March 2015 meeting ensued between
Henderson, Buttross, and (for at least a portion of the meeting) Alston that produced what was
facially a deed of the property in lieu of foreclosure from Henderson and Alston to DAI. This deed
was recorded in the Travis County real property records.
However, DAI through counsel ultimately resumed the foreclosure process after
purportedly discovering that Henderson, contrary to representations he had made in the deed, had
allowed title to become clouded with a child-support lien, a state tax lien, and two abstracted
judgments. A May 2015 substitute trustee’s sale followed in which DAI repurchased the
property for $319,000. Thereafter, in September of that year, DAI resold the property to third parties
for $440,000.
Henderson—pro se, as before—filed another lawsuit, which ultimately gave rise to
this appeal. He named as defendants DAI, “Buttross Properties” (later acknowledged to be a d/b/a
for DAI), and Buttross individually. The gravamen of Henderson’s complaints was that the
defendants had effected sham foreclosures under color of nonexistent claimed defaults, depriving
him wrongfully of the property, of hundreds of thousands of dollars in equity he had built through
previous loan payments, and of additional profits from the sale of the property.
3
Henderson would remain without legal representation through final judgment and into
the appellate stage, when, after filing his brief pro se, he—and this Court—benefitted from oral
argument presented on his behalf by pro bono counsel. But by then, Henderson’s struggles in
representing himself amid the intricacies of Texas summary-judgment practice had already shaped
this case’s procedural posture in a manner adverse to him. And neither the district court nor this
Court has power to overlook such ramifications in allowance for Henderson’s pro se status, as we
are bound to apply the same law and rules equally to him as we do to parties represented by counsel.3
After filing suit, Henderson managed to obtain service of process upon Buttross
individually, but attempts made to serve DAI and “Buttross Properties” through counsel were met
by a successful motion to quash defective service. Thereafter, Buttross through litigation counsel
(a different lawyer than the one who had handled the foreclosure matters for DAI) filed a motion for
summary judgment seeking dismissal of all of Henderson’s claims against Buttross. The motion
included a number of no-evidence challenges going to whether Buttross could be held personally
liable for the complained-of acts. Buttross also attached evidence and included what were
substantively some traditional summary-judgment grounds. Henderson filed a response with his
own evidence.
3
See Mansfield State Bank v. Cohn, 573 S.W.2d 181, 184–85 (Tex. 1978) (“There cannot
be two sets of procedural rules . . . litigants who represent themselves must comply with the
applicable procedural rules, or else they would be given an unfair advantage over litigants
represented by counsel.” (citing Stein v. Lewisville Indep. Sch. Dist., 481 S.W.2d 436 (Tex. Civ.
App.—Fort Worth 1972, writ ref’d n.r.e.))).
4
Following a hearing, the district court granted Buttross’s summary-judgment motion
in full and ordered that Henderson take nothing on his claims.4 This ruling comprised a final
judgment,5 from which Henderson timely perfected this appeal.
4
The order specifically grants Buttross’s “Motion for No-Evidence Summary Judgment,”
but we may also consider any traditional grounds Buttross has preserved. See Cincinnati Life Ins.
Co. v. Cates, 927 S.W.2d 623, 626 (Tex. 1996) (“We hold that courts of appeals should consider all
summary judgment grounds the trial court rules on and the movant preserves for appellate review
that are necessary for final disposition of the appeal . . . [and] further conclude that the appellate
court may consider other grounds that the movant preserved for review and trial court did not rule
on in the interest of judicial economy.” (citing predecessor to Tex. R. App. P. 47.1)).
5
While neither party has disputed these matters, some features of the summary-judgment
order warranted our sua sponte verification of finality as it bears upon our jurisdiction over
Henderson’s appeal. See M.O. Dental Lab v. Rape, 139 S.W.3d 671, 673 (Tex. 2004) (per curiam)
(“Neither party argues to this Court that the summary judgment was not a final, appealable order.
Nevertheless, we are obligated to review sua sponte issues affecting jurisdiction.” (citing New
York Underwriters Ins. Co. v. Sanchez, 799 S.W.2d 677, 678 (Tex. 1990) (per curiam))). The
summary-judgment order, evidently drafted by Buttross’s litigation counsel, grants the motion and
adjudges “that [Henderson] take nothing by his claims as alleged in [Henderson’s] Third Amended
Petition.” The district court struck additional language proposed by counsel that would have
continued, “. . . and that [Henderson’s] suit against [Buttross] be dismissed with prejudice,” and
similarly struck a proposed “Mother Hubbard” clause. The absence of Lehmann-type finality
language in this summary-judgment order necessitated that we examine the record to determine
whether the order had the substantive effect of disposing of all claims and parties in the case. See
Lehmann v. Har-Con Corp., 39 S.W.3d 191, 205–06 (Tex. 2001). That determination, moreover,
controls over any contrary indications that might otherwise be inferred from the deletions made by
the district court. Cf. id. at 204 (“[A]n order can be a final judgment for appeal purposes even
though it does not purport to be if it actually disposes of all claims still pending in the case. Thus,
an order that grants a motion for partial summary judgment is final if it in fact disposes of the only
remaining issue and party in the case, even if the order does not say that it is final, indeed, even if
it says it is not final.”). Upon examination of the record, we conclude that the summary-judgment
order did in fact dispose of all claims and parties in the case, and is thereby final and appealable.
Henderson has acknowledged on appeal that his third amended petition was the operative
pleading when the district court ruled on Buttross’s motion. Although Henderson filed a fourth
amended petition prior to the summary-judgment hearing, he did so only six days prior to the
hearing, past the seven-day deadline for amended pleadings, and without seeking or obtaining leave
from the district court to do so. See Tex. R. Civ. P. 63 (“Parties may amend their pleadings, respond
to pleadings on file of other parties . . . and file such other pleas as they may desire . . . provided, that
5
We review summary judgments de novo.6 Summary judgment is proper when there
are no disputed issues of material fact and the movant is entitled to judgment as a matter of law.7
We take as true any evidence favorable to the non-movant and indulge every reasonable inference
any pleadings, responses or pleas offered for filing within seven days of the date of trial . . . shall be
filed only after leave of the judge is obtained . . . .”); Goswami v. Metropolitan Sav. & Loan Ass’n,
751 S.W.2d 487, 490 (Tex. 1988) (“A summary judgment proceeding is a trial within the meaning
of Rule 63.”). To the extent the summary-judgment order might be read to exclude any new
allegations or claims that had been added by Henderson in his fourth amended petition (which
consisted of a single paragraph making passing reference to an “alter ego” theory), Henderson would
have made the order final nonetheless by subsequently filing a fifth amended petition that omitted
this paragraph and otherwise reverted to the substance of his third amended petition.
Nor did Buttross have any pending affirmative claims for relief that would preclude finality.
Buttross had moved for $250 in sanctions, but this request was merely conditional—he specified that
the request should be considered “moot” if the district court proceeded to grant his summary-
judgment motion.
Finally, while Henderson had continued to name DAI (both under that name and as “Buttross
Properties”) as a defendant in his third amended petition, he has acknowledged that he never served
DAI and points to no indication in the record that he had intended to do so as of the time of the
summary-judgment hearing. Under these circumstances, the summary-judgment ruling had the effect
of a “discontinuance” of his claims against DAI. See M.O. Dental Lab, 139 S.W.3d at 674–75
(reaffirming Youngstown Sheet & Tube Co. v. Penn, 363 S.W.2d 230, 232 (Tex. 1962)).
Consequently, the district court’s order “that [Henderson] take nothing by his claims as alleged in
[Henderson’s] Third Amended Petition” disposed of the only pending claims and parties in the case,
comprising a final and appealable judgment.
6
See Southwestern Bell Tel., L.P. v. Emmett, 459 S.W.3d 578, 583 (Tex. 2015).
7
See Tex. R. Civ. P. 166a(c); BCCA Appeal Grp., Inc. v. City of Houston, 496 S.W.3d 1,
7 (Tex. 2016).
6
from the evidence in the non-movant’s favor.8 The grounds relevant to this analysis are confined
solely to those presented in the summary-judgment motion and response.9
With respect to no-evidence summary-judgment grounds, the burden is on the
non-movant to present evidence raising a genuine issue of material fact as to the elements of claims
or defenses that were challenged in the motion.10 No-evidence motions are essentially pretrial
directed verdicts, and we review them under the same legal-sufficiency standard.11 That is, we will
affirm a grant of a no-evidence motion when the record reveals a complete absence of evidence of
a vital fact, rules of law or evidence prevent the court from giving weight to the only evidence
offered to prove a vital fact, the evidence offered to prove a vital fact is no more than a mere
scintilla, or the evidence conclusively establishes the opposite of a vital fact.12 With “traditional”
summary-judgment grounds, by contrast, the movant must first present evidence that establishes or
negates a claim or defense as a matter of law.13 Only if this burden is met must the non-movant
present evidence to raise a genuine issue of material fact that would defeat summary judgment.14
8
See Lightning Oil Co. v. Anadarko E&P Onshore, LLC, 520 S.W.3d 39, 45 (Tex. 2017).
9
See Henkel v. Norman, 441 S.W.3d 249, 251 n.1 (Tex. 2014) (per curiam) (“[W]e hold that
a summary judgment cannot be affirmed on grounds not expressly set out in the motion or response.”
(quoting Stiles v. Resolution Tr. Corp., 867 S.W.2d 24, 26 (Tex. 1993))).
10
Tex. R. Civ. P. 166a(i); see also Lightning Oil Co., 520 S.W.3d at 45.
11
See Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013).
12
See id.; King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003).
13
KCM Fin. LLC v. Bradshaw, 457 S.W.3d 70, 79 (Tex. 2015).
14
See Amedisys, Inc. v. Kingwood Home Health Care, LLC, 437 S.W.3d 507, 511 (Tex. 2014).
7
The substantive thrust of Henderson’s pro se appellate brief is that the summary-
judgment record presented evidence sufficient to raise genuine issues of material fact as to the
elements and claims Buttross had challenged. Henderson’s pro bono counsel has refined these
arguments further to focus on four theories of recovery Henderson had asserted—(1) breach of
contract, (2) money had and received, (3) DTPA violations, and (4) statutory fraud. Counsel refers
us to record excerpts tending to demonstrate discrepancies between Henderson’s payment records
and those of DAI, discrepancies that in turn tend to raise questions as to whether the asserted defaults
ever truly occurred. (Indeed, when asked by this Court during oral argument, counsel for Buttross
could not explain the precise origins or basis for the $983.31 in “[p]ast late charges” and $250 in
“attorney’s fees” claimed in the February 2015 notice of default.)15 But an equally critical challenge
for Henderson in the posture of this appeal is to demonstrate that his claims as asserted against
Buttross individually, as distinguished from DAI, survive summary judgment.
As pleaded by Henderson, the factual bases for his breach-of-contract claim center
on Buttross’s alleged noncompliance with the 2012 amended note through the foreclosure of the
property and failure to tender “excess proceeds” from the sale. Buttross asserted no-evidence
grounds challenging the existence of any contract, or the breach of any contract, between Henderson
and Buttross individually. As summary-judgment proof to meet his burden, Henderson points to a
copy of the 2012 amended note. However, this document reflects that the sole parties were
15
And Henderson, while still pro se, presented affidavit testimony implicating both himself
and Buttross in a purported forgery of Alston’s name on the March 2016 deed in lieu of foreclosure.
While Buttross terms this allegation “bizarre,” Henderson included a letter from the Court Reporter
Certification Board reflecting that professional disciplinary action had been taken against the notary
who had attested to Alston’s signature.
8
Henderson and Alston on one hand and DAI on the other. Buttross, individually, was not a party.
While Buttross is an officer of DAI and apparently has some sort of ownership
interest, DAI is considered to be a separate legal entity whose corporate form would “normally
insulate[] shareholders, officers, and directors from liability for corporate obligations.”16 Texas law
would impose corporate contract liability on a shareholder only if that shareholder expressly assumes
liability or “cause[s] the corporation to be used for the purpose of perpetuating and did perpetuate
an actual fraud on the obligee primarily for the direct personal benefit of the holder.”17 Henderson
did not present evidence of either circumstance. He comes no closer than to argue, through his
counsel on appeal, that the Compromise and Settlement Agreement had the effect of making Buttross
individually liable for the alleged breaches of the 2012 amended note. Henderson emphasizes that
(1) Buttross, individually, was a party to the Compromise and Settlement Agreement, alongside DAI;
and (2) the parties to the Compromise and Settlement Agreement, including Buttross individually,
agreed that the preexisting note would be modified and set forth the changes to be made. But while
this is evidence that Henderson and Buttross formed a contract through the Compromise and
Settlement Agreement, it remains that the 2012 amended note is the contract whose alleged breach
is the source of Henderson’s claimed injury. Although prescribing other changes to the note, the
Compromise and Settlement Agreement did not purport to make Buttross a party to the note
16
SSP Partners v. Gladstrong Invs. (USA) Corp., 275 S.W.3d 444, 451 n.29 (Tex. 2008);
see also Willis v. Donnelly, 199 S.W.3d 262, 271 (Tex. 2006) (“A bedrock principle of corporate law
is that an individual can incorporate a business and thereby normally shield himself from personal
liability for the corporation’s contractual obligations.”).
17
Tex. Bus. Orgs. Code § 21.223(b); see also id. § 21.225.
9
alongside DAI nor effect an assumption by Buttross of DAI’s liability under it. Summary judgment
was therefore proper on Henderson’s breach-of-contract claim.
Henderson encounters similar problems with his money-had-and-received claim. To
prevail on his claim for money had and received against Buttross individually, Henderson had the
burden of proving that Buttross individually holds money that “in equity and good conscience”
belongs to Henderson.18 As the factual basis of that claim, Henderson alleged that Buttross
wrongfully holds “at least $510,000.00 in payments and proceeds from [Henderson under the
promissory note], $319,000.00 from the subsequent foreclosure sale of the Property, and
$440,000.00 from the illegal sale of the property.” Buttross’s summary-judgment motion included
a no-evidence ground putting Henderson to his proof that Buttross “personally ha[d] or receive[d]
any funds which could be said to rightly belong to Mr. Henderson.” Henderson did not present any
such evidence. To the extent there was evidence concerning these transactions, it tended to show
that the payments or proceeds went to or are held by DAI. The district court did not err in granting
summary judgment as to Henderson’s money-had-and-received theory.
But DAI’s corporate veil is of much less assistance to Buttross in regard to
Henderson’s remaining claims for DTPA violations and statutory fraud. These claims are predicated
18
See Plains Expl. & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296, 302 n.4
(Tex. 2015) (explaining that “[a] claim for ‘money had and received’ is equitable in nature” and,
more precisely, is “a category of general assumpsit to restore money where equity and good
conscience require refund” (quoting MGA Ins. Co. v. Charles R. Chesnutt, P.C., 358 S.W.3d 808,
813 (Tex. App.—Dallas 2012, no pet.), and citing Stonebridge Life Ins. Co. v. Pitts, 236 S.W.3d 201,
203 n.1 (Tex. 2007))).
10
principally on alleged misrepresentations made by Buttross to Henderson concerning the parties’
respective rights under the 2012 modified note.19
Buttross did not assert a no-evidence ground to challenge Henderson’s proof of each
of the DTPA theories Henderson had pleaded. Instead, Buttross challenged whether Henderson had
an evidentiary basis “upon which to impose personal liability upon Mr. Buttross for the actions of
[DAI],”20 thereby accepting for purposes of analysis that the alleged misrepresentations may have
been made by Buttross and were potentially a basis for DTPA liability, but would be attributable to
DAI. This ground overlooks that under the DTPA, a person is personally liable for his or her
violations of that statute even if committed within the scope of an agency relationship.21 This is
consistent with “Texas’[s] longstanding rule that a corporate agent is personally liable for his or her
19
With respect to the DTPA, Henderson asserts that Buttross committed “laundry list”
violations set forth in Texas Business and Commerce Code § 17.46(b)(5) (“representing that goods
or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities
which they do not have”), (7) (“representing that goods or services are of a particular standard,
quality, or grade, or that goods are of a particular style or model, if they are of another”), (12)
(“representing that an agreement confers or involves rights, remedies, or obligations which it does
not have or involve, or which are prohibited by law”), and (24) (“failing to disclose information
concerning goods or services which was known at the time of the transaction if such failure to
disclose such information was intended to induce the consumer into a transaction into which the
consumer would not have entered had the information been disclosed”). Henderson also alleged that
Buttross’s actions were “unconscionable” in taking advantage of his lack of knowledge to a grossly
unfair degree. See Tex. Bus. & Com. Code § 17.50(a)(3).
20
Emphasis added.
21
See, e.g., Miller v. Keyser, 90 S.W.3d 712, 715–18 (Tex. 2002) (citing Leyendecker &
Assocs., Inc. v. Wechter, 683 S.W.2d 369, 375 (Tex. 1984) (op. on reh’g); Light v. Wilson,
663 S.W.2d 813, 815 (Tex. 1983) (Spears, J., concurring); Restatement (Second) of Agency § 348
(1958)).
11
own fraudulent or tortious acts.”22 Consequently, Buttross cannot obtain summary judgment as to
his DTPA liability merely by relying on DAI’s corporate veil.
And here the intricacies of Texas summary-judgment practice ultimately operate in
Henderson’s favor, as Buttross did not present any alternative summary-judgment ground that could
support dismissal of Henderson’s DTPA claims. Buttross attacks the sufficiency of Henderson’s
DTPA pleading, but “[s]ummary judgment based on a pleading deficiency is proper if a party has
had an opportunity by special exception to amend and fails to do so,”23 which was not the case with
respect to Henderson’s DTPA claims.24 And Buttross’s other arguments are either immaterial or
simply undeveloped.25 While we express no opinion as to whether Buttross may have other defenses
or means of defeating Henderson’s DTPA claims, he did not show himself entitled to summary
judgment on this record.
22
Id. at 717; see also Restatement (Third) of Agency § 7.01 (2006) (“An agent is subject to
liability to a third party harmed by the agent’s tortious conduct.”).
23
Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex. 1994).
24
Buttross filed special exceptions to a second amended version of Henderson’s petition but
not to the third, and at no point did Buttross file special exceptions directed to the DTPA claim. Cf.
Tex. R. Civ. P. 91 (“A special exception shall not only point out the particular pleading excepted to,
but it shall also point out intelligibly and with particularity the defect, omission, obscurity, duplicity,
generality, or other insufficiency in the allegations in the pleading excepted to.”).
25
Specifically, Buttross argues that Sections 5.069 through 5.071 of the Property Code
provide no support for DTPA liability, but we do not understand Henderson’s DTPA theories, as
relevant to this appeal, to rely on those statutes. Buttross also makes a passing reference to
limitations, an affirmative defense and traditional summary-judgment ground that must be supported
by evidence, but Buttross did not develop its defense with evidence or argument. See KPMG Peat
Marwick v. Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999) (“A defendant
moving for summary judgment on the affirmative defense of limitations has the burden to
conclusively establish that defense.” (citing Velsicol Chem. Corp. v. Winograd, 956 S.W.2d 529, 530
(Tex.1997) (per curiam))).
12
The same is true of Henderson’s statutory fraud claim. As to this claim, Buttross did
not raise DAI’s corporate veil as a summary-judgment ground. Instead, his arguments consisted
merely of advocating inferences contrary to those that Henderson would have us draw from the
evidence.26 We are instead to indulge every reasonable inference from the evidence in Henderson’s
favor, as the non-movant,27 and the ultimate resolution of competing inferences is reserved
exclusively for the factfinder.28 The district court therefore erred in granting summary judgment on
that claim.
We affirm the district court’s summary judgment dismissing Henderson’s claims
against Buttross for breach of contract and money had and received. But we reverse the judgment
as to Henderson’s DTPA and statutory fraud claims and remand those claims for further proceedings.
_________________________________________
Bob Pemberton, Justice
Before Chief Justice Rose, Justices Pemberton and Goodwin
Affirmed in Part, Reversed and Remanded in Part
Filed: July 5, 2018
26
After referencing the allegedly fraudulent inducements, Buttross advocates summary
judgment on the basis that “it is impossible to conceive of any purpose served by such inducements
or any benefit to Mr. Buttross.”
27
See Lightning Oil Co., 520 S.W.3d at 45.
28
See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (“Credibility determinations,
the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury
functions, not those of a judge, whether he is ruling on a motion for summary judgment or for a
directed verdict.”); see also City of Keller v. Wilson, 168 S.W.3d 802, 819 (Tex. 2005) (“Jurors are
the sole judges of the credibility of the witnesses and the weight to give their testimony.”).
13