Javier Gomez, D/B/A Del Norte Petroleum v. R. W. Armstrong ( 2004 )

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                                     NUMBER 13-03-658-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

JAVIER GOMEZ D/B/A

DEL NORTE PETROLEUM,                                                  Appellant,

v.

R. W. ARMSTRONG,                                                          Appellee.

    On appeal from the 197th District Court

of Cameron County, Texas.

    MEMORANDUM OPINION

Before Chief Justice Valdez and Justices Hinojosa and Castillo

Memorandum Opinion by Justice Castillo

         Appellant Javier Gomez, d/b/a Del Norte Petroleum, appeals from a final summary judgment in favor of appellee R. W. Armstrong on Gomez's claims for breach of contract and fiduciary duty. We affirm.

I. BACKGROUND FACTS

         Armstrong is a lawyer. One of Armstrong's clients, Intercontinental Oil Company, and Gomez were parties to an oil purchase contract. Armstrong was not a party to the contract. Pursuant to the contract, Gomez delivered $75,000 to Armstrong for the benefit of Intercontinental. Armstrong deposited the funds in a trust account, to be disbursed according to his client's instructions. A dispute arose. Intercontinental sued Gomez. The parties settled their lawsuit. On Intercontinental's instructions, Armstrong tendered $12,500 to Gomez on Intercontinental's behalf. Gomez then sued Armstrong to recover the $75,000 he had initially deposited.

         Gomez alleged he entered into an oral agreement with Armstrong for Armstrong's services as a broker and agent to purchase oil. Armstrong breached that agreement, Gomez contended. Further, Armstrong did not inform Gomez that Armstrong represented Intercontinental, an omission Gomez claimed was a breach of fiduciary duty. Armstrong denied he entered into a contract with Gomez and denied he owed any fiduciary duty to him. He moved for summary judgment.

II. DISPOSITION

A. The Standard of Review

         The function of summary judgment is to eliminate patently unmeritorious claims and defenses, not to deprive litigants of the right to a jury trial. Alaniz v. Hoyt, 105 S.W.3d 330, 344 (Tex. App.–Corpus Christi 2003, no pet.). The standard of review is determined by whether the summary-judgment motion was brought on traditional or no-evidence grounds. See Tex. R. Civ. P. 166a(c), (i); see also Ortega v. City Nat'l Bank, 97 S.W.3d 765, 771 (Tex. App.–Corpus Christi 2003, no pet.) (op. on reh'g). In traditional summary-judgment motions, the movant bears the burden of showing both no genuine issue of material fact and entitlement to judgment as a matter of law. See Tex. R. Civ. P. 166a(c); see also Ortega, 97 S.W.3d at 771-72. In deciding whether there is a genuine issue of material fact, we take evidence favorable to the non-movant as true. Ortega, 97 S.W.3d at 772. We make all reasonable inferences and resolve all doubts in favor of the non-movant. Id. A non-movant plaintiff bears the burden to respond to a traditional summary-judgment motion if the movant defendant conclusively: (1) establishes each element of its defense; or (2) negates at least one element of the non-movant's cause of action. Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex. 1991); Hoyt, 105 S.W.3d at 345.  We review a summary judgment de novo to determine whether a party established its right to prevail as a matter of law. Ortega, 97 S.W.3d at 771.

B. Gomez's Causes of Action

1. Breach of Contract

         The elements of a breach-of-contract claim are: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages to the plaintiff resulting from that breach. Adams v. H & H Meat Prods., Inc., 41 S.W.3d 762, 771 (Tex. App.–Corpus Christi 2001, no pet.). The requisites for a valid contract are: (1) an offer; (2) an acceptance in strict compliance with the terms of the offer; (3) a meeting of the minds; (4) each party's consent to the terms; and (5) execution and delivery of the contract with the intent that it be mutual and binding. Id. The existence of an oral contract may be proved by circumstantial as well as direct evidence. Harris v. Balderas, 27 S.W.3d 71, 77 (Tex. App.–San Antonio 2000, pet. denied). We look to the communications between the parties and to the acts and circumstances surrounding those communications. See id.

2. Breach of Fiduciary Duty

         Courts impose fiduciary duties on some relationships because of their special nature. The "term 'fiduciary' is derived from the civil law." Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 199 (Tex. 2002) (quoting Kinzbach Tool Co. v. Corbett-Wallace Corp.,160 S.W.2d 509, 512 (Tex. 1942)). "'Generally speaking, it applies to any person who occupies a position of peculiar confidence towards another. It refers to integrity and fidelity. It contemplates fair dealing and good faith, rather than legal obligation, as the basis of the transaction.'" Brewer & Pritchard, P.C., 73 S.W.3d at 199 (quoting Kinzbach Tool Co.,160 S.W.2d at 512). "The agreement to act on behalf of the principal causes the agent to be a fiduciary, that is, a person having a duty, created by his undertaking, to act primarily for the benefit of another in matters connected with his undertaking." Brewer & Pritchard, P.C., 73 S.W.3d at 200.

C. Armstrong's Summary-Judgment Grounds

         In his motion for summary judgment, Armstrong asserted, among other arguments, that: (1) he was not a party to any contract with Gomez; and (2) he did not agree to be Gomez's agent, broker, or attorney. We conclude that Armstrong moved for summary judgment on the necessary element of the existence of a contract with regard to Gomez's breach-of-contract claim. See Lear Siegler, Inc., 819 S.W.2d at 471; see also Hoyt, 105 S.W.3d at 345. Similarly, we conclude that Armstrong moved for summary judgment on the necessary element of existence of a fiduciary agreement with regard to Gomez's breach-of-fiduciary-duty claim. See Lear Siegler, Inc., 819 S.W.2d at 471; see also Hoyt, 105 S.W.3d at 345.

D. The Summary-Judgment Evidence

1. Armstrong's Evidence

         Armstrong supported his summary-judgment grounds with his affidavit and an affidavit by Joseph L. Parkhurst, president of Intercontinental. Armstrong's affidavit recited that: (1) he was not a party to any contract with Gomez; (2) Gomez's contract was with Intercontinental; (3) Armstrong acted as Intercontinental's attorney in the transaction and not as Gomez's agent or broker; (4) Armstrong did not agree with Gomez to be his agent, broker, or attorney; (5) Gomez deposited the $75,000 with Armstrong for the benefit of Intercontinental; and (6) Armstrong disbursed the funds according to Intercontinental's instructions.

         Parkhurst's affidavit established the following facts: (1) on July 25, 2001, Intercontinental entered into an oil purchase agreement with an entity controlled by Gomez; (2) Intercontinental engaged Armstrong on or about August 10, 2001 to represent it in the purchase and sale agreement; (3) the entity controlled by Gomez was unable to secure satisfactory financing; (4) Intercontinental permitted Gomez to transfer the purchase and sale agreement to Del Norte Petroleum; (5) Intercontinental required a $75,000 deposit from Gomez; (6) Gomez deposited the $75,000 with Armstrong; (7) on Intercontinental's instructions, Armstrong disbursed $50,000 of the funds and retained $25,000 for future expenses; (8) Gomez was unable to secure satisfactory financing; (9) Intercontinental sued Gomez for breach of contract; and (10) that lawsuit settled.

         This Court addressed a summary-judgment motion that attempted to establish the non-existence of an attorney-client relationship in Yaklin v. Glusing, Sharpe & Krueger, 875 S.W.2d 380, 384 (Tex. App.–Corpus Christi 1994, no writ). We noted:

In this summary judgment proceeding, the burden is on Sharpe, the movant [attorney], to negate the existence of the attorney-client relationship. Sharpe attempted to do so through the affidavits of Hoffman and Dobbs. The Hoffman and Dobbs affidavits describe a transaction which usually involves Sharpe handling the paperwork for the bank, solely on the bank's behalf. They establish that Sharpe had an attorney-client relationship with the bank. As such, however, they do not necessarily negate the possibility of Sharpe representing Yaklin as well in the transaction. Given the inferences allowed a non-movant's evidence in a summary judgment proceeding, we cannot say that Sharpe was not representing Yaklin as a matter of law.

Id. Here, however, Armstrong's summary-judgment evidence left no ambiguity as to whether Armstrong acted as Gomez's agent as well as Intercontinental's attorney. We hold that Armstrong conclusively negated at least one element of both of Gomez's causes of action. See Lear Siegler, Inc., 819 S.W.2d at 471; Hoyt, 105 S.W.3d at 345. The burden shifted to Gomez to raise a fact issue as to the existence of a contract with Armstrong and the existence of a fiduciary agreement between Armstrong and Gomez. See Hoyt, 105 S.W.3d at 345.

2. Gomez's Response

         Gomez supported his response to Armstrong's motion for summary judgment by two affidavits. Gomez's affidavit recited in its entirety as follows:

I entered into an agreement with R.W. ARMSTRONG for the purchase of Oil. MR. ARMSTRONG was hired by me to be my Agent and Broker for the purchase of Oil. I paid R.W. ARMSTRONG $75,000.00 by check. The check was made out to R.W. ARMSTRONG Trustee. Mr. Armstrong endorsed the check and deposited [sic] in his account.

MR. R.W. ARMSTRONG represented to me that he would handle my account and would find a Seller of the Oil. I hired him as an Agent-Broker. Never did MR. R.W. ARMSTRONG represent to me that he represented INTERCONTINENTIAL [sic] OIL CO. as their attorney.

MR. R.W. ARMSTRONG as my agent has failed to deliver the oil as contracted for. He refuses to release my money, which was a total of $78,500.00

I was willing and able to perform the purchase with a line of credit obtained from Texas State Bank. MR. R.W. ARMSTRONG has breached the contract, and fiduciary duty by not returning my money and by releasing funds to a 3rd party without my consent.

MR. R.W. ARMSTRONG, as an agent knew he as [sic] obtaining a contract for oil for my benefit.

MR. R.W. ARMSTRONG has misled me, he has breached his fiduciary duties owed to me as an Agent, has created a conflict of Interest problem, as he claims he represented INTERCONTINENTIAL [sic] OIL CO.

         Gomez also attached the affidavit of Joe Martinez to his summary-judgment response. Martinez's affidavit recited in its entirety:

MR. JAVIER GOMEZ and R.W. ARMSTRONG entered into a Agent-Broker Agreement which R.W. ARMSTRONG would represent JAVIER GOMEZ in obtaining Oil. I delivered a check to R.W. ARMSTRONG for $75,000.00 as part of the down payment.

MR. R.W. ARMSTRONG never told JAVIER GOMEZ or me that he represented INTERCONTINENTIAL [sic] OIL CO. MR. R.W. ARMSTRONG represented himself to JAVIER GOMEZ, as his agent-broker and agreed to represent MR. JAVIER GOMEZ. The Product was never delivered and R.W. ARMSTRONG never provided the services to JAVIER GOMEZ.

The funds were requested from R. W. ARMSTRONG. But he refuses to return the funds to MR. JAVIER GOMEZ.

MR. R.W. ARMSTRONG was representing JAVIER GOMEZ to obtain Oil from an Oil Co. He was the Broker-Agent for JAVIER GOMEZ. MR. R. W. ARMSTRONG has breached his agreement by not performing and delivering the product as contracted for.

         In his summary-judgment response but not in his affidavit, Gomez alleged that he contracted with Armstrong "as Broker-Agent to purchase oil" on or about September 21, 2001. He contended that he was "a third party beneficiary on any arranged purchase of oil" between Armstrong and Intercontinental. He also claimed entitlement to $78,500 from Armstrong.

3. Armstrong's Objections

         Armstrong objected to both Gomez's and Martinez's affidavits as being conclusory. He also objected to Martinez's affidavit as not showing the basis for his personal knowledge.

4. The Trial Court's Ruling

         Armstrong presented his objections to the trial court at the summary-judgment hearing. After considering the motion, response, and affidavits, the trial court ruled:

I read the affidavit of Mr. Gomez who claims that he entered into a contract with Mr. Armstrong. But in his affidavit, which is Exhibit No. 7 to Plaintiff's Responses to Defendant's Motion for Summary Judgment, I find that it's very vague and that it doesn't set out the terms of what the contract was or what was expected of Mr. Armstrong, if there was a contract, other than just to purchase oil, but never as to how much oil, by when, and if it could be performed within a year or not. There is really nothing that tells me that, that he could have performed it within a year. He does allege that it is an oral contract.

Then I have the affidavit of Mr. Joe Martinez. In his affidavit he says he delivered a check to Mr. Armstrong for 75,000 as part of the down payment. So we don't even know if there was a contract and how much the contract was for. He makes conclusions and he doesn't tell me how he arrives at those conclusions.

So I will find that he has not met his burden and I will grant your motion for summary judgment.

         Accordingly, the record indicates the trial court ruled on Armstrong's objections, either expressly or implicitly. See Tex. R. App. P. 33.1(a)(2)(A); see also Columbia Rio Grande Regional Hosp. v. Stover, 17 S.W.3d 387, 395-96 (Tex. App.–Corpus Christi 2000, no pet.). Gomez did not seek leave to amend his summary-judgment proof. On appeal, Gomez does not challenge the trial court's rulings on Armstrong's objections.                                                   E. Analysis

1. Waiver on Appeal

         A party who does not object to the trial court's ruling excluding summary-judgment evidence or seek to amend any deficient affidavit waives the right to complain about the ruling on appeal. Rayl v. Borger Econ. Dev. Corp., 963 S.W.2d 109, 113 (Tex. App.–Amarillo 1998, no pet.) (holding that appellant's failure to object to trial court's ruling excluding summary judgment waived issue); Inglish v. Prudential Ins. Co. of Am., 928 S.W.2d 702, 705 (Tex. App.–Houston [1st Dist.] 1996, writ denied) (holding that appellants who did not request opportunity to amend summary-judgment responses waived any complaint on appeal of trial court's ruling sustaining objections and special exceptions to affidavit). Similarly, a party who does not direct an issue on appeal challenging a trial court's ruling waives that issue. Samples Exterminators v. Samples, 640 S.W.2d 873, 875 (Tex. 1982) (per curiam).

2. Incompetent Summary-Judgment Evidence

         Even assuming that Gomez had not waived any complaint about exclusion of his summary-judgment evidence at trial and that his issue on appeal fairly includes a challenge the trial court's rulings on Armstrong's objections, we agree with the trial court's assessment of the conclusory nature of Gomez and Martinez's affidavits. The affidavit of an interested party is acceptable summary-judgment proof where it is clear, positive and direct, otherwise credible, free from inconsistencies and contradictions, and could have been readily controverted. Tex. R. Civ. P. 166a(c); James v. Hitchcock Indep. Sch. Dist., 742 S.W.2d 701, 706 (Tex. App.–Houston [1st Dist.] 1987, writ denied). To be competent summary-judgment proof, an affidavit must affirmatively show that it is based on personal knowledge and state facts in a form that would be admissible at trial. Draper v. Garcia, 793 S.W.2d 296, 300 (Tex. App.–Houston [14th Dist.] 1990, no writ); Marek v. Tomoco Equip. Co., 738 S.W.2d 710, 714 (Tex. App.–Houston [14th Dist.] 1987, no writ). Summary-judgment affidavits may not be based on hearsay. Einhorn v. LaChance, 823 S.W.2d 405, 410 (Tex. App.–Houston [1st Dist.] 1992, writ dism'd w.o.j.).

         Self-serving statements in affidavits of interested witnesses concerning their state of mind are incontrovertible because "the mental workings of an individual's mind are matters about which adversaries have no knowledge or ready means of confirming or controverting." Lukasik v. San Antonio Blue Haven Pools, 21 S.W.3d 394, 399 (Tex. App.–San Antonio 2000, no pet.) (quoting Hayes v. E.T.S. Enters., Inc., 809 S.W.2d 652, 657 (Tex. App.–Amarillo 1991, writ denied)). The phrase "could have been readily controverted" means "the testimony at issue is of a nature which can be effectively countered by opposing evidence." Casso v. Brand, 776 S.W.2d 551, 558 (Tex. 1989). Statements of opinion and conclusions of the affiant cannot be countered and are incompetent summary-judgment proof. Aldridge v. De Los Santos, 878 S.W.2d 288, 296 (Tex. App.–Corpus Christi 1994, writ dism'd w.o.j.) (citing Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984)); Harley-Davidson Motor Co. v. Young, 720 S.W.2d 211, 213 (Tex. App.–Houston [14th Dist.] 1986, no writ). Conclusions of the affiant, unsupported by fact, have no probative value and do not raise a fact issue. Draper, 793 S.W.2d at 300; Manges v. Astra Bar, Inc., 596 S.W.2d 605, 610 (Tex. Civ. App.–Corpus Christi 1980, writ ref'd n.r.e.).

         We agree with the trial court that the Gomez and Martinez affidavits contain conclusory statements that have no probative value. See Draper, 793 S.W.2d at 300. Recitations in the affidavits must be so direct and unequivocal that perjury can be assigned against the affiant if the statement is false. See id. The statements in the Gomez and Martinez affidavits are not "direct and unequivocal." Martinez's statements are hearsay as well as conclusory. See Einhorn, 823 S.W.2d at 410.         Moreover, certain statements in Gomez's affidavit are inconsistent with and contradict the allegations in his petition and summary-judgment response. Gomez pleaded in his petition and his summary-judgment response that Armstrong agreed to be his agent and broker on September 21, 2001. That date was after the date Gomez deposited the $75,000 with Armstrong. Further, Gomez did not dispute that an entity he controlled contracted directly with Intercontinental on July 25, 2001 to purchase oil, long before he claimed to have contracted with Armstrong for the same purpose. Also, Gomez variously claims he is entitled to $78,500, yet he does not dispute that he deposited only $75,000 with Armstrong. He did not account for his receipt of $12,500 from Armstrong in connection with the settlement with Intercontinental. He made no attempt to address these discrepancies and inconsistencies in his summary-judgment evidence. Finally, Gomez claimed both to have contracted with Armstrong "for the purchase of Oil" and that Armstrong "would handle [his] account and would find a Seller of the Oil" as Gomez's agent and broker. We find that Gomez's affidavit is not free of contradictions and inconsistencies and cannot be readily controverted. See Tex. R. Civ. P. 166a(c).

         The Gomez and Martinez affidavits are in contrast to the affidavits supporting Armstrong's motion. See Draper, 793 S.W.2d at 300. Armstrong unequivocally denied being a party to any contract or agreement with Gomez. He set forth facts establishing that Gomez had contracted with Intercontinental, not with him. He attested he acted as Intercontinental's lawyer in the transaction, not as Gomez's agent. Armstrong expressly denied he agreed to be Gomez's agent, broker, or attorney. He established he accepted the funds deposited with him by Gomez as Intercontinental's attorney for its benefit. Finally, Armstrong stated unequivocally he disbursed the funds according to Intercontinental's instructions.

         Parkhurst's affidavit confirms Armstrong's statements. See id. Further, Parkhurst established that the attorney-client relationship between Intercontinental and Armstrong began about September 10, 2001, before Gomez deposited the funds with Armstrong on September 17, 2001. Parkhurst also attested that Gomez deposited the $75,000 with Armstrong on Intercontinental's instruction.

         Neither Gomez's nor Martinez's affidavit sets out the elements of any purported contract or agreement between Gomez and Armstrong. Gomez did not establish any inception date for his purported agency agreement with Armstrong, nor did he provide any facts from which the details of its terms, conditions, or duration may be inferred. See H & H Meat Prods., Inc., 41 S.W.3d at 771 (finding that "requisites for a valid contract" include offer, acceptance, meeting of the minds, consent to terms, and intent that agreement be mutual and binding); see also Brewer & Pritchard, P.C., 73 S.W.3d at 200 (finding that existence of fiduciary duty requires agent's agreement to act primarily on behalf of principal). Gomez did not dispute that an attorney-client relationship existed between Armstrong and Intercontinental and in fact recognized that fact in his summary-judgment response. Except under circumstances not relevant here, absent privity of contract, an attorney representing a party in a transaction owes no duty to a third party to the transaction. See Draper, 793 S.W.2d at 301 (citing First Mun. Leasing Corp. v. Blankenship, Potts, Aikman, Hagin & Stewart, 648 S.W.2d 410, 413 (Tex. App.–Dallas 1983, writ ref'd n.r.e.)); cf. McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests, 991 S.W.2d 787, 793-94, (Tex. 1999) (third party may bring negligent-misrepresentation claim); McKnight v. Riddle & Brown, 877 S.W.2d 59, 61 (Tex. App.–Tyler 1994, writ denied) (fraud claim); Burnap v. Linnartz, 914 S.W.2d 142, 148 (Tex. App.–San Antonio 1995, writ denied) (negligent failure to advise of non-representation).

         In any event, Gomez did not assert any claims against Armstrong as an attorney. Rather, his claims focused on Armstrong as his agent and broker. Armstrong's uncontroverted summary-judgment evidence established that Armstrong was acting as Intercontinental's attorney when he received the disputed funds from Gomez. Gomez's inconsistent and conclusory summary-judgment evidence does not create any fact issue that Armstrong was acting as Gomez's agent and broker when he received the disputed funds from Gomez. Finally, Gomez's summary-judgment evidence did not controvert the evidence in Parkhurst's affidavit that Gomez deposited the $75,000 with Armstrong on Intercontinental's instruction, not Armstrong's. We hold that Gomez did not raise a question of fact that precludes summary judgment on either of his two causes of action. See Draper, 793 S.W.2d at 301. We overrule Gomez's sole issue.

III. CONCLUSION

         We affirm the judgment of the trial court.

                                                      ERRLINDA CASTILLO

                                                      Justice

Memorandum Opinion delivered and filed

this 31st day of August, 2004.