Jay Cohen v. Tour Partners, LTD., Dennis J. Wilkerson, and Eighteen Investments, Inc. ( 2017 )

Opinion issued April 27, 2017
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-15-00705-CV
———————————
JAY COHEN, Appellant
V.
TOUR PARTNERS, LTD., DENNIS J. WILKERSON, AND EIGHTEEN
INVESTMENTS, INC., Appellees
On Appeal from the 55th District Court
Harris County, Texas
Trial Court Case No. 2013-68181
MEMORANDUM OPINION
Tour Partners, Ltd. asserted third-party claims against Jay Cohen related to a
failed real estate transaction. Cohen asserted counterclaims against Tour Partners
and argued that Tour Partners had participated in a fraudulent transfer of real
property. Tour Partners moved for summary judgment on the counterclaims,
arguing that limitation had run. In the course of the summary-judgment
proceeding, Cohen made a statement that the trial court treated as a judicial
admission. Based on that admission, the trial court entered summary-judgment
against Cohen on limitations grounds.1
We conclude that the trial court erred in granting summary-judgment on
limitations grounds and reverse the summary-judgment order. The trial court has
not ruled on the merits of Cohen’s counterclaims or on various other defensive
arguments raised by Tour Partners. We remand for consideration of those
arguments.
Background
Jay Cohen once held a one-third ownership interest in property located at
2017 Preston Avenue in Houston. That property has had a complicated history of
transferred ownership. The following individuals and entities have asserted an
interest in the property in the order they are listed: (1) Jay Cohen, (2) Preston
Realty Corporation, which is controlled by Matthew Dilick, (3) Tour Partners, and
(4) Ellington F Holdings, LLC.
There has been a great deal of litigation over this property. Cohen has
initiated two suits. The first was filed in 2010 against Dilick in the 234th District
1
At the time the trial court ruled, the summary-judgment order was interlocutory
and not appealable. Other aspects of the case were later resolved, allowing Cohen
to appeal the summary-judgment order.
2
Court of Harris County. We refer to it as Suit Number One. The second was filed
in 2013 against Tour Partners in the 269th District Court of Harris County. We
refer to it as Suit Number Two. While Cohen was asserting claims against Tour
Partners in Suit Number Two, Ellington filed Suit Number Three (this suit) against
Tour Partners in the 55th District Court of Harris County. Tour Partners tried to
consolidate the two suits against it (Suit Number Two and Suit Number Three), but
its motion was denied. Thereafter, Tour Partners asserted third-party claims in this
suit against Cohen, who added his own counterclaims against Tour Partners. At
that point, Cohen had claims against Tour Partners pending in two suits.
Tour Partners moved for summary judgment in Suit Number Two on all
Cohen’s pending claims. The motion was granted, but it did not fully resolve that
case against Tour Partners because Cohen had added a fraudulent-transfer claim
while the summary-judgment motion was pending. Later, Cohen nonsuited the
fraudulent-transfer claim in Suit Number Two and, on the same day, added it as a
counterclaim in Suit Number Three.
Tour Partners moved for summary judgment in Suit Number Three on
Cohen’s counterclaims. One of its arguments was that the limitations period had
expired on those claims. While the summary-judgment motion was pending,
Cohen made a statement regarding the document that purported to transfer
ownership of the property from Dilick’s entity to Tour Partners. The trial court
3
treated Cohen’s statement as a judicial admission and, based on that admission,
held that limitations had expired and granted Tour Partners summary judgment on
that basis.
We discuss below the document Cohen commented on, what Cohen said
about it, and the trial court’s limited ruling based on Cohen’s statement.
A. The “deed” and Tour Partners’s argument that Cohen’s knowledge of
the deed began the limitations period for his claims
In February 2010, a “special warranty deed” was filed in the Harris County
Public Records that lists Preston Realty Corporation, a Dilick-controlled entity, as
a “grantor,” Tour Partners as a “grantee,” and the Preston Avenue property as the
subject property. It contains the following terms and no more:
Date: February 1, 2010
Grantor: Preston Realty Corporation
[address]
Grantee: Tour Partners Limited
[address]
Consideration: Cash and other good and valuable consideration
Property: 2017 Preston, Houston, Texas 77002 consisting of
Lots One [and other described areas of real
property].
The “deed” did not include any statements of conveyance; it described neither the
percentage of ownership interest being transferred nor the type of interest to be
conveyed (e.g., fee simple, life estate, mineral rights).
4
Cohen found out about this filing in April 2010 but stated that he believed
the “deed” was void because it lacked conveyance language.
Tour Partners argued in its summary-judgment motion filed in Suit Number
Three that Cohen had sufficient knowledge to begin the limitations period on his
claims against it no later than April 2010 when he found out about the document.
According to Tour Partners, it was entitled to summary judgment on limitations
grounds because Cohen did not assert claims against it in Suit Number Three until
November 2014, which was more than four years later. Alternatively, Tour
Partners argued that Cohen had no evidence on at least one element of each of his
claims, and Tour Partners, therefore, was entitled to summary judgment on no-
evidence grounds.
Cohen responded by arguing that the 2010 “deed” did not have any language
of conveyance and, therefore, neither the filing of that document nor his
knowledge of it could have begun the limitations period on his fraudulent-transfer
and other claims. He also requested time to conduct discovery to respond to the no-
evidence motion, pointing out that he was added to Suit Number Three after the
discovery period had ended.
B. Cohen’s statement
The trial court held a hearing on the summary-judgment motion. The next
day, Cohen filed a brief to “correct” his “misinterpretation of law regarding the
5
nature of [the] 2010 deed.” The brief recounted his counsel’s earlier statement that
the 2010 “deed” had to be treated as a nullity because it lacked the normal
language of conveyance. The brief modified the nullity statement to assert that, if
the grantor had intended to convey the property through the 2010 “deed,” which
Cohen always disputed was the intent, then the document would not be a nullity
but would instead be, at most, “nothing more than a quitclaim deed”:
The lack of conveyance language does not automatically render the
2010 Deed a nullity (unless that was the intent of the grantor). The
lack of language of conveyance in fact renders the 2010 Deed nothing
more than a quitclaim deed.
Cohen continued to maintain in his brief, as he had before, that the applicable
limitations periods did not begin to accrue until 2013 when a second, “corrected”
deed was filed that did contain the necessary language of conveyance.
C. The trial court’s ruling
In its order granting Tour Partner’s summary-judgment motion, the trial
court denied Cohen’s request to conduct discovery, explaining that the facts “are
fully developed, to the extent necessary to rule on [the affirmative defenses].” The
trial court then explained the significance it gave to Cohen’s post-hearing
statement that the 2010 “deed” is “nothing more than a quitclaim deed.” The order
states in pertinent part as follows:
Preston Realty purported to convey the Property to [Tour Partners] by
way of a “Special Warranty Deed” dated February 4, 2010 (the “2010
Deed.”) Cohen points out that this deed does not contain language of
6
conveyance, but concedes that at a minimum it is a quitclaim deed
(Brief filed by Cohen’s counsel on January 21, 2015.)
***
A fraudulent transfer claim is extinguished four years after the date of
the transfer. Section 24.007(1)(A) states that a transfer of real property
occurs when it is perfected as against a third party. Whether a
quitclaim or something more, the 2010 Deed was filed of record on
February 4, 2010 and thus perfected. It was a “transfer.” Cohen’s
TUFTA claim was filed more than four years later on November 17,
2014. Cohen’s fraudulent transfer claim is extinguished.
Cohen admits that he had actual knowledge of the 2010 Deed in April
of 2010. For purposes of Cohen’s other claims it does not matter
whether the 2010 Deed was a nullity, a quitclaim, or something else.
His April 2010 actual knowledge was an accrual of all other claims.
The Statute of Limitations has run on all such claims.
With this interlocutory order, Cohen’s counterclaims were resolved against him in
Suit Number Three. Tour Partner’s third-party suit against Cohen continued, as did
the claims between Ellington and Tour Partners and its co-defendants, Dennis J.
Wilkerson and Eighteen Investments, Inc. Because these other claims remained
unresolved, the trial court retained jurisdiction and the ability to enter additional
orders.
D. Tour Partners’s second summary-judgment motion
Two months after the interlocutory summary-judgment order, Tour Partners
filed a “supplemental motion for summary judgment,” arguing that Cohen’s
counterclaims are barred by res judicata. Tour Partners argued that the summary-
judgment it obtained in Suit Number Two on all of Cohen’s claims (except the
7
later-filed fraudulent-transfer claim) barred his counterclaims in Suit Number
Three and that the fraudulent-transfer claim is also barred because it “aris[es] from
the same transaction as his other claims.” Tour Partners asked the trial court to
“buttress its prior summary judgment order” by granting its supplemental
summary-judgment motion.
Cohen filed an objection and response to the supplemental summary-
judgment motion, arguing, among other things, that it would be error to grant
summary judgment on claims that were no longer pending.
More than twenty days after the motion was filed, the trial court denied the
motion on non-substantive grounds, stating that Tour Partners’s motion sought an
advisory opinion on claims that had already been dismissed and that the trial court
declined to issue such an advisory opinion. Thus, while the trial court denied the
motion, it did so without ruling on the merits of Tour Partners’s res judicata
argument or Cohen’s defenses to applying res judicata in the context of
overlapping litigation.
One month later, all remaining parties nonsuited their claims, making the
earlier interlocutory summary judgment final and appealable. Before appealing the
judgment against him, Cohen filed a motion for new trial, arguing that he had
uncovered “new evidence” that Preston Realty had continued to act as the property
owner after purporting to sell the property to Tour Partners through the defective
8
2010 “deed.” According to Cohen, this new evidence supported his assertion that
the 2010 “deed” was a sham transaction that involved no intention to transfer
ownership and did not, in the end, affect his interest in the property. His motion
was denied by operation of law, and he appealed the summary judgment against
him. Tour Partners cross-appeals the denial of its supplemental motion for
summary judgment. We reverse.
Summary Judgment for Tour Partners on its
Limitations Affirmative Defenses
The trial court granted Tour Partners summary judgment on its affirmative
defenses. In his first issue, Cohen argues that Tour Partners did not establish its
affirmative defenses as a matter of law. We agree.
A. Standard of review
We review a trial court’s summary judgment de novo. Travelers Ins. Co. v.
Joachim, 315 S.W.3d 860, 862 (Tex. 2010). Under the traditional standard for
summary judgment, the movant has the burden to show that there is no genuine
issue of material fact and that it is entitled to judgment as a matter of law. TEX. R.
CIV. P. 166a(c); KPMG Peat Marwick v. Harrison Cty. Hous. Fin. Corp., 988
S.W.2d 746, 748 (Tex. 1999). 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. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997). The
9
motion must state the specific grounds relied upon for summary judgment. TEX. R.
CIV. P. 166a(c). When reviewing a summary judgment motion, we must (1) take as
true all evidence favorable to the nonmovant, and (2) indulge every reasonable
inference and resolve any doubts in the nonmovant’s favor. Valence Operating Co.
v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident Life & Accident Ins. Co. v.
Knott, 128 S.W.3d 211, 215 (Tex. 2003).
Once a defendant moving for summary judgment establishes all of the
elements of an affirmative defense as a matter of law, the burden of production
shifts to the non-movant to defeat the defendant’s affirmative defense. See EPGT
Tex. Pipeline, L.P. v. Harris Cty. Flood Control Dist., 176 S.W.3d 330, 335 (Tex.
App.—Houston [1st Dist.] 2004, pet. dism’d). The non-movant’s response will
defeat a facially valid affirmative defense if it (1) demonstrates that the motion’s
legal position regarding the affirmative defense is unsound, (2) raises a fact issue
on the elements of the affirmative defense, or (3) sets forth a counter-affirmative
defense to the affirmative defense. See Walters v. Cleveland Reg’l Med. Ctr., 307
S.W.3d 292, 295 (Tex. 2010) (holding that when movant defendant proved statute
of limitations affirmative defense burden shifted to non-movant to raise fact issue
on lack of reasonable opportunity to discover and bring suit within limitations
period); G.C. Bldgs., Inc. v. RGS Contractors, Inc., 188 S.W.3d 739, 742 (Tex.
App.—Dallas 2006, no pet.) (stating that if defendant establishes affirmative
10
defense in a summary judgment motion, “the burden then shifts to the party
opposing the motion to raise a genuine issue of material fact or show the
defendant’s legal position is unsound”); see also TEX. R. CIV. P. 94 (including
statute of limitations as affirmative defense).
If the non-movant asserts a counter-affirmative defense to overcome the
established affirmative defense, the non-movant must provide summary judgment
evidence to raise a fact issue for each element of the counter-affirmative defense.
See Rabe v. Dillard’s Inc., 214 S.W.3d 767, 768 (Tex. App.—Dallas 2007, no
pet.).
Given that the trial court based its summary-judgment ruling on Cohen’s
statement that the 2010 “deed” is “nothing more than a quitclaim deed,” for us to
determine whether Tour Partners established its affirmative defenses as a matter of
law, we must consider the legal effect of Cohen’s statement.
B. Cohen’s statement is not a judicial admission
Cohen’s post-hearing brief filed to clarify his position regarding the nature
of the 2010 “deed” stated that it was “nothing more than a quitclaim deed.” The
trial court treated Cohen’s statement as an admission that the 2010 “deed” was “at
a minimum . . . a quitclaim deed,” and, based on that admission, granted summary
judgment to Tour Partners.
11
We conclude that the trial court erred by treating Cohen’s statement as a
judicial admission to meet Tour Partners’s burden to establish its affirmative
defenses. We do so because a party may not judicially admit issues of law and
whether an unambiguous document is a quitclaim deed or some other form of
transfer is a question of law.
1. Judicial admissions are limited to issues of fact, not law
“A judicial admission results when a party makes a statement of fact which
conclusively disproves a right of recovery or defense he currently asserts.”
Seminole Pipeline Co. v. Broad Leaf Partners, Inc., 979 S.W.2d 730, 740 (Tex.
App.—Houston [14th Dist.] 1998, no pet.); see H.E. Butt Grocery Co. v. Pais, 955
S.W.2d 384, 389 (Tex. App.—San Antonio 1997, no writ); Gevinson v. Manhattan
Constr. Co. of Okl., 449 S.W.2d 458, 466 (Tex. 1969). The elements for
establishing that a statement is a judicial admission are
(1) the statement must be made in the course of a judicial
proceeding;
(2) it must be contrary to an essential fact or defense asserted by
the party;
(3) it must be deliberate, clear, and unequivocal;
(4) it cannot be destructive of the opposing party’s theory of
recovery or defense; and
(5) enforcing the statement as a judicial admission would be
consistent with public policy.
H2O Sols., Ltd. v. PM Realty Grp., LP, 438 S.W.3d 606, 617 (Tex. App.—Houston
[1st Dist.] 2014, pet. denied). Counsel’s statements on behalf of a client will be
12
deemed judicial admissions if they satisfy these five criteria. Seminole Pipeline
Co., 979 S.W.2d at 740. “The principle of binding a party by his judicial admission
should be applied with caution because the effect is that the declarant swears
himself out of court.” Id.
“A party may not judicially admit a question of law.” Pais, 955 S.W.2d at
389; see Jackson v. Tex. S. Univ.-Thurgood Marshall Sch. of Law, 231 S.W.3d
437, 440 (Tex. App.—Houston [14th Dist.] 2007, pet. denied); see also Fort Bend
Cent. Appraisal Dist. v. Hines Wholesale Nurseries, 844 S.W.2d 857, 858–59
(Tex. App.—Texarkana 1992, writ denied) (holding that question of whether error
is clerical error is question of law, not fact, and admission is of no effect).
2. The correct legal classification of the 2010 “deed” is a legal
question
A quitclaim deed is a “deed that conveys a grantor’s complete interest or
claim in certain real property but that neither warrants nor professes that the title is
valid.” Quitclaim Deed, BLACK’S LAW DICTIONARY (10th ed. 2014); see Geodyne
Energy Income Prod. P’ship I-E v. Newton Corp., 161 S.W.3d 482, 486 & n.12
(Tex. 2005) (comparing warranty deed that conveys property to quitclaim deed that
conveys grantor’s rights in that property). Absent an ambiguity, the construction of
a deed, like contracts generally, is a question of law. Gordon v. W. Houston Trees,
Ltd., 352 S.W.3d 32, 43 (Tex. App.—Houston [1st Dist.] 2011, no pet.); see Coker
v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). “In deciding whether an instrument is
13
a quitclaim deed, courts look to whether the language of the instrument, taken as a
whole, conveyed property itself or merely the grantor’s rights.” Newton, 161
S.W.3d at 486; see Roberts v. Corbett, 265 S.W.2d 127, 128 (Tex. Civ. App.—
Galveston 1954, writ ref’d) (describing court’s determination that deed was
quitclaim deed as “conclusion[] of law”). The underlying issue of whether an
instrument is ambiguous also presents a question of law. See Coker, 650 S.W.2d at
394.
There is no ambiguity in the language of the 2010 “deed.” While the
document identifies a grantor and a grantee and describes land, it contains no
provision to transfer any ownership interest or rights from the grantor to the
grantee. There is no conveyance language that could be considered ambiguous
because it is wholly absent from the document. Because the terms of the document
are unambiguous, the issue of whether the 2010 “deed” operates as a quitclaim
deed is a question of law.
3. Cohen cannot judicially admit a question of law
Cohen’s concession that the instrument is “nothing more than a quitclaim
deed”—which the trial court treated as an admission that it is “at a minimum . . . a
quitclaim deed”—addressed a question of law and, therefore, does not have the
legal effect of a judicial admission. Pais, 955 S.W.2d at 389; Fort Bend Cent.
Appraisal Dist., 844 S.W.2d at 859 (admission of question of law “is of no
14
effect”). As such, and contrary to the trial court’s ruling, the statement, standing
alone, cannot satisfy Tour Partners’s burden to prove its affirmative defenses.
To the extent the trial court granted summary judgment because it treated
Cohen’s statement as a judicial admission, the court erred. We turn next to whether
the 2010 instrument is a deed capable of affecting Cohen’s interest in the property,
regardless of Cohen’s characterization of the instrument, so that knowledge of the
instrument in 2010 would have begun the limitations period on Cohen’s claims.
C. The 2010 instrument is not a deed as a matter of law
By statute, a deed “must be in writing and must be subscribed or delivered
by the conveyor or the conveyor’s agent.” TEX. PROP. CODE § 5.021. There are no
formal or technical requirements for an instrument to qualify as a deed, but it must
“contain the essential characteristics of a deed.” Gordon, 352 S.W.3d at 43; see
Green v. Canon, 33 S.W.3d 855, 858 (Tex. App.—Houston [14th Dist.] 2000, pet.
denied). To be a legally effective conveyance, there are four “essential
characteristics of a deed,” the second of which is critical here:
(1) a grantor and grantee can be ascertained from the instrument as a
whole;
(2) there are operative words of grant showing the grantor’s intention to
convey to the grantee title to a real property interest;
(3) the property is sufficiently described; and
(4) the instrument is signed and acknowledged by the grantor.
Gordon, 352 S.W.3d at 43.
15
Under the second essential element, a document can operate as a deed only
if it conveys an interest in property. See id.; see also Deed, BLACK’S LAW
DICTIONARY (10th ed. 2014) (defining “deed” as “written instrument by which land
is conveyed”). Without operative words of grant showing the grantor’s intention to
convey an interest in property to the grantee, an instrument is not a deed. See
Gordon, 352 S.W.3d at 44. Words of grant are necessary because, without them, it
would not be possible to determine what portion of ownership (e.g., 100% versus
something less) or type of ownership interest (e.g., fee simple versus, for example,
a limited mineral interest or an easement) is being conveyed.
Although the 2010 document lists a grantor and grantee, identifies the
Preston Avenue property, and is signed by the grantor, it does not contain any
operative words of grant. While there is no “magic language” or particular terms
that must be used, the 2010 document contains no words of conveyance except for
the words “grantor” and “grantee”—neither of which describes or identifies what
interest is conveyed. Because the document unambiguously fails to convey title
and fails to identify any interest in the described property that is conveyed to Tour
Partners, as a matter of law, it is not a deed. See id. at 43–44; Green, 33 S.W.3d at
858–59.
16
Next, we consider whether Tour Partners established a right to judgment on
limitations grounds on each of Cohen’s counterclaims that was not dependent on
the 2010 instrument qualifying as a deed through judicial admission or otherwise.
D. Tour Partners did not establish a right to judgment on limitations
grounds on Cohen’s counterclaims
The trial court ruled that Cohen’s fraudulent transfer, unjust enrichment, and
fraud counterclaims had extinguished before he raised them.
1. TUFTA claim
Cohen asserted a claim under the Texas Uniform Fraudulent Transfer Act.
See TEX. BUS. & COM. CODE §§ 24.001–.013. The purpose of TUFTA is to prevent
a debtor from fraudulently placing assets beyond its creditor’s reach “with actual
intent to hinder, delay, or defraud” the creditor. Id. § 24.005(a)(1); Corpus v.
Arriaga, 294 S.W.3d 629, 634 (Tex. App.—Houston [1st Dist.] 2009, no pet.). A
creditor may obtain a judgment directly against the debtor or, instead, against a
TUFTA transferee. TEX. BUS. & COM. CODE § 24.009 (allowing TUFTA suit
against transferee).
A TUFTA claim extinguishes four years after a debtor fraudulently transfers
an asset. Id. § 24.010(a)(1). If four years have lapsed, the creditor’s claim can be
extended one year from the date that the transfer “was or could reasonably have
been discovered” by the challenging creditor. Id.
17
The key date for determining whether a TUFTA claim has expired is the
date of “transfer,” which is defined to include “every mode . . . of disposing of or
parting with an asset or an interest in an asset, and includes payment of money,
release, lease, and creation of a lien or other encumbrance.” Id. § 24.002(12). A
“transfer is made . . . when the transfer is so far perfected that a good faith
purchaser of the asset from the debtor against whom applicable law permits the
transfer to be perfected cannot acquire an interest in the asset that is superior to the
interest of the transferee . . . .” Id. § 24.007(1)(A). In other words, Preston Realty
would have made a “transfer” to Tour Partners when the transaction reached the
point that any subsequent, good-faith purchaser attempting to buy the property
from Preston Realty could not obtain an interest superior to that held by Tour
Partners. See Corpus, 294 S.W.3d at 635. A “transfer” is made, for Section 24.007
purposes, “when a deed is recorded.” Id.
Tour Partners argues that the 2010 “deed” qualifies as a “transfer” under
TUFTA because a debtor that conveys his interest in real property to a transferee
through a quitclaim deed fully transfers all interest he may have in the property and
a later-in-time purchaser would be unable to take an interest superior to that of the
transferee. See K.A. Dreschler, Annotation, Rights or Interests Covered by
Quitclaim Deed, 162 A.L.R. 556, 557 (1946) (stating “general rule” that “quitclaim
deed passes all right, title, and interest which the grantor has at the time of making
18
the deed which is capable of being transferred by deed, unless a contrary intent
appears, and it transfers nothing more”).
We have already concluded that the 2010 instrument is not a quitclaim deed
or any other form of valid deed. It transferred nothing. As a result, the 2010 “deed”
cannot be said to have transferred to Tour Partners anything that then became
unavailable to transfer to a later-in-time purchaser. The deed does not qualify as a
TUFTA “transfer” to begin the four-year claim period.2 The trial court erred by
concluding that the TUFTA claim expired four years after this “deed” and by
awarding summary judgment to Tour Partners on that basis.
2
Our dissenting colleague suggests that Tour Partners’s 2013 “Special Warranty
Deed of Correction and Ratification” may relate back to the date that the 2010
“deed” was filed in a manner that would allow Cohen’s TUFTA claim to expire
four years after the 2010 filing even though the 2010 filing was not a valid deed
and transferred nothing, relying on Property Code section 5.030. See Dissent at
17–18; see also TEX. PROP. CODE § 5.030. But Tour Partners has not relied on
Section 5.030 as a basis for arguing that Cohen’s claims expired. Nor has Tour
Partners argued that the changes made through the 2013 “deed of correction and
ratification” qualify under Section 5.028 or 5.029 to invoke Section 5.030’s
relation-back provision or, if they do, that they do not also invoke a statutory
exception to that relation-back provision, which no party has briefed to the trial
court or this Court. See TEX. PROP. CODE §§ 5.027–.030. A relation-back
argument that was never articulated by any party or briefed on appeal cannot
insulate the trial court’s erroneous judgment from reversal. See TEX. R. APP. P.
38.1(i) (requiring appellate brief to contain argument with appropriate citations to
authorities and record); see also TEX. R. CIV. P. 166a(c) (requiring that issues be
“expressly set out” to support summary judgment); G&H Towing Co. v. Magee,
347 S.W.3d 293, 297 (Tex. 2011) (per curiam).
19
2. Unjust enrichment
“A party may recover under the unjust enrichment theory when one person
has obtained a benefit from another by fraud, duress, or the taking of an undue
advantage.” Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41
(Tex. 1992). “A key element of unjust enrichment is that the person sought to be
charged wrongly secured or passively received a benefit.” Ahmed v. Shah, No. 01-
13-00995-CV, 2015 WL 222171, at *5 (Tex. App.—Houston [1st Dist.] Jan. 15,
2015, no pet.) (mem. op.).
“Generally, a cause of action accrues when a wrongful act causes a legal
injury.” Etan Indus., Inc. v. Lehmann, 359 S.W.3d 620, 623 (Tex. 2011) (per
curiam); see Schneider Nat’l Carriers, Inc. v. Bates, 147 S.W.3d 264, 279 (Tex.
2004); Clark v. Dillard’s, Inc., 460 S.W.3d 714, 719 (Tex. App.—Dallas 2015, no
pet.). The date a cause of action accrues is normally a question of law. Etan Indus.,
359 S.W.3d at 623.
Because the 2010 “deed” conveyed nothing to Tour Partners, Tour Partners
did not receive a benefit from the transaction. Accordingly, Cohen’s awareness of
the 2010 “deed” in April 2010 did not begin the two-year statute of limitations on
his unjust-enrichment claim against Tour Partners. See Elledge v. Friberg-Cooper
Water Supply Corp., 240 S.W.3d 869, 870 (Tex. 2007) (per curiam) (citing TEX.
CIV. PRAC. & REM. CODE § 16.003).
20
Tour Partners failed to establish its statute-of-limitations affirmative defense
based on the 2010 “deed.” Tour Partners offered no other rationale for concluding
that Cohen’s unjust-enrichment claim began to accrue more than two years before
he asserted it. Therefore, the trial court erred by granting summary judgment on the
affirmative defense.
3. Fraud
The elements of fraud are (1) a material representation, (2) that is false,
(3) that is known to be false when made or made recklessly without knowledge of
truth, (4) with intent to be acted on, (5) that is relied on, and (6) that proximately
causes injury. See Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341
S.W.3d 323, 337 (Tex. 2011). A fraud claim has a four-year limitations period.
TEX. CIV. PRAC. & REM. CODE § 16.004(a)(4).
As discussed above, the 2010 “deed” transferred nothing, and Cohen
suffered no injury—a necessary fraud element—from Tour Partners’s status as the
“grantee.” We, therefore, conclude that Tour Partners failed to establish its statute-
of-limitations affirmative defense based on the 2010 “deed.” Tour Partners offered
no other rationale for concluding that Cohen’s fraud claim began to accrue more
than four years before he asserted the claim. Therefore, the trial court erred by
granting summary judgment on Tour Partners’s affirmative defense.
21
In sum, Tour Partners’s did not establish its limitations affirmative defenses
as a matter of law, and the trial court erred by granting summary judgment on that
basis to Tour Partners on all of Cohen’s counterclaims. We, therefore, sustain
Cohen’s first issue.
Whether Other Grounds Raised in Summary-Judgment Motion
Provide an Alternative Basis for Affirming
Tour Partners pleaded alternative grounds in its summary-judgment motion,
including that Cohen had no evidence on certain elements of his claims. In his
second and fourth issues, Cohen argues against affirming summary judgment for
Tour Partners on any alternatively pleaded grounds. See Cincinnati Life Ins. Co. v.
Cates, 927 S.W.2d 623, 626 (Tex. 1996) (providing that, when party files
summary-judgment motion that presents alternative grounds for judgment in its
favor, appellate court may affirm on ground different from that relied on by trial
court, in interest of judicial economy, as long as alternative ground was included in
motion).
Tour Partners filed a combined traditional and no-evidence motion for
summary judgment. Cohen responded by alerting the trial court that he was added
as a third-party defendant after significant discovery had taken place in the suit, he
had not been served copies of the previously conducted discovery, and he did not
have time to conduct his own discovery to respond to the no-evidence issues. The
trial court denied Cohen’s request to postpone its ruling on the no-evidence motion
22
to allow additional discovery for the expressly stated reason that all facts that were
necessary to decide the limitations issue—the basis on which the trial court granted
summary judgment—were known or admitted.
Because Cohen requested additional time to conduct discovery in opposition
to the no-evidence motion, the trial court denied his request for the stated reason
that additional discovery was unnecessary for its ruling under another theory, and
we cannot know whether additional discovery would have revealed “some
evidence” in opposition to Tour Partners’s no-evidence motion,3 we conclude that
this is not a situation in which we should exercise discretion to affirm summary
judgment on alternatively pleaded no-evidence grounds. See id. (allowing that
appellate courts “may” consider other grounds for summary judgment on which
trial court did not base its ruling “in the interest of judicial economy”). In our view,
the better course is to remand to allow the trial court to consider whether additional
time for discovery is necessary before it rules on the no-evidence motion.
We sustain Cohen’s second and fourth issues to the extent that we do not
affirm the summary judgment on alternatively pleaded grounds. We offer no
opinion on the merits of Tour Partners’s no-evidence challenge.
3
For example, Cohen’s motion for new trial identifies evidence he asserts that he
did not possess when responding to the no-evidence summary-judgment motion.
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Motions for Additional Discovery and for New Trial
In his third issue, Cohen challenges the trial court’s order denying his
motion for a continuance, thereby preventing him from conducting discovery to
challenge Tour Partners’s no-evidence summary-judgment motion. We have
concluded that the trial court erred by granting Tour Partners summary judgment;
therefore, we are remanding the case to the trial court for additional proceedings.
The dates specified in the most recent docket control order have passed, which
means that new dates will be necessary. This makes the denial of the motion for
additional discovery moot. Likewise, issue five, which challenges the denial of
Cohen’s motion for new trial, is moot.
Cross-Appeal Challenging Denial of
Res Judicata Summary-Judgment Motion
Through a cross-appeal, Tour Partners argues that judgment can be affirmed
in its favor on yet another ground: reversing the denial of Tour Partners’s
“supplemental” summary-judgment motion and rendering judgment that Cohen’s
counterclaims are barred by res judicata.
Tour Partners moved for and was granted summary judgment on its
affirmative defenses. Because other parties and claims remained pending, the
summary-judgment order was interlocutory. While the trial court still had
jurisdiction over the suit, Tour Partners filed a “supplemental” summary-judgment
motion, arguing that the principle of res judicata applied to the dismissed
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counterclaims. Tour Partners explained that it was asking the trial court to
“buttress” its earlier interlocutory order by granting this second motion concerning
the same claims. Cohen objected to a summary-judgment procedure for claims that
were no longer pending. Cohen also presented a factual waiver argument and some
legal arguments against applying res judicata to his counterclaims.
The trial court denied the supplemental motion on non-substantive grounds.
In its order, the trial court noted that it already dismissed Cohen’s counterclaims,
and it declined to advise how it would rule on the res judicata issue, stating: “The
motion invites the Court to issue an advisory opinion, which the Court declines to
do.” Like the summary-judgment order before it, this was an interlocutory order.
Approximately one month later, all other claims and parties were nonsuited,
and Tour Partners’s affirmative-defense summary judgment against Cohen’s
counterclaims became a final judgment, and Cohen initiated this appeal. In
addition to responding to Cohen’s appellate arguments, Tour Partners cross-
appealed the denial of its supplemental summary-judgment motion. Tour Partners
asks us to consider its res judicata argument as an alternative basis for affirming a
judgment that we would, otherwise, be reversing (based on our holding that notice
of a defective “deed” did not begin the limitations period on Cohen’s claims), even
though the trial court never passed on the merits of that argument.
25
Appellate courts must review all summary-judgment grounds on which a
trial court actually ruled, whether by granting or denying the motion, that are
dispositive of the appeal. Id. at 624; see Baker Hughes, Inc. v. Keco R. & D., Inc.,
12 S.W.3d 1, 5–6 (Tex. 1999) (extending Cates rule to require review of grounds
raised in earlier summary-judgment motions ruled on and denied on merits). But
appellate courts are afforded discretion to decline to consider summary-judgment
grounds on which the trial court has not ruled. Cates, 927 S.W.2d at 626 (“We hold
that courts of appeals should consider all summary judgment grounds the trial
court rules on and . . . may consider other grounds that the movant preserved for
review and trial court did not rule on . . . .”) (emphasis added).
Given the complex procedural history of this and its related case as well as
our resolution of the other issues in the appeal, we conclude that this is not a
situation in which we should exercise discretion to consider summary-judgment
grounds on which the trial court has never issued a substantive ruling. See id.
(allowing that appellate courts “may” consider other grounds on which trial court
did not base its ruling); see also Elwess v. Farm Bureau Cty. Mut. Ins. Co. of Tex.,
No. 11-12-00339-CV, 2014 WL 6755662, at *3 (Tex. App.—Eastland Nov. 26,
2014, no pet.) (mem. op.) (holding that appellate court would “decline to address”
summary-judgment grounds not addressed by trial court). In our view, the better
26
course is to remand to allow the trial court to consider these issues in the first
instance.
We overrule Tour Partners’s cross-appeal issue.
Conclusion
We reverse the trial court’s order granting Tour Partners’s motion for
summary judgment. We remand for additional proceedings consistent with this
opinion.
Harvey Brown
Justice
Panel consists of Justices Keyes, Brown, and Huddle.
Justice Keyes, dissenting.
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