Patricia Garcia v. Bernardo Lucero ( 2012 )

COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
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PATRICIA GARCIA, No. 08-10-00329-CV
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Appellant, Appeal from the
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v. County Court at Law No. 6
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BERNARDO LUCERO, of El Paso County, Texas
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Appellee. (TC# 2009-235)
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OPINION
Patricia Garcia sued Bernardo Lucero, seeking a declaration that they are equal partners in
a general partnership, or alternatively seeking to recover for breach of contract, promissory
estoppel, and detrimental reliance. The trial court granted summary judgment in favor of Lucero
on all of Garcia’s claims. Garcia appeals raising nineteen issues.1 We affirm in part and reverse
and remand in part.
BACKGROUND
Garcia alleges that she and Lucero started an extramarital affair in 1994, while she was
employed at his architectural firm. Lucero moved out of the home he shared with his family and
moved into an apartment with her. In 2001, Lucero filed for divorce from his wife. In 2006, the
personal relationship between Lucero and Garcia ended. Shortly thereafter, Lucero finalized his
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Issues One through Seven concern the partnership claim, Issues Eighteen and Eight through Fourteen concern the
breach of contract claim, Issues Fifteen through Seventeen concern the promissory estoppel claim, and Issue Nineteen
concerns the detrimental reliance claim. For the reasons explained below, we find it unnecessary to address every
issue.
divorce and “begged [Garcia] to resume the relationship.” Garcia declined.
Garcia and Lucero acquired property while their personal relationship was ongoing. The
petition alleges that Garcia and Lucero are partners in a general partnership that was formed for the
purpose of purchasing and operating businesses. The parties considered the property acquired
during their relationship to be owned “50/50,” they agreed to share losses and profits, and they
each had the right to control and manage the property.
The original petition specifically refers to two pieces of property. First, in 2000, the
partnership purchased AV Electronics Service Center for $60,000, with each partner paying
$30,000 of the purchase price. Second, in 2002, the partnership purchased an apartment complex.
The petition claims that although the apartment complex was deeded to Lucero, it was purchased
for the benefit of the partnership. Neither partner made a down payment on the property. Lucero
financed the purchase by making the mortgage payments from the rental income, and Garcia
managed the apartment complex. Lucero and Garcia “considered the property their ‘retirement.’”
The original petition seeks a declaration that Garcia and Lucero are equal partners in a
partnership and that the two businesses are partnership property, which is owned equally by them.
The petition also seeks the winding-up of the partnership.
Lucero filed a motion for no-evidence summary judgment. Before the court ruled on this
motion, Garcia filed a supplemental petition, adding claims for breach of contract, promissory
estoppel, and detrimental reliance. Thereafter, the trial court granted Lucero’s motion for
summary judgment. Garcia filed a motion for new trial because the summary judgment motion
did not address the supplemental claims. The court granted the motion for new trial as to the
breach of contract, promissory estoppel, and detrimental reliance claims. Lucero then filed a
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motion for no-evidence summary judgment on these claims, which the trial court granted. This
appeal followed.
THE FIRST SUMMARY JUDGMENT--PARTNERSHIP CLAIMS
“[A] party . . . may move for summary judgment on the ground that there is no evidence of
one or more essential elements of a claim . . . on which an adverse party would have the burden of
proof at trial.” TEX.R.CIV.P. 166a(i). Such a motion “must state the elements as to which there
is no evidence.” Id. This rule “does not authorize conclusory motions or general no-evidence
challenges to an opponent’s case.” Id. 1997 cmt. Instead, “[t]he motion must be specific in
challenging the evidentiary support for an element of a claim . . . .” Id. A complaint that a
summary judgment motion does not comply with these provisions may be raised for the first time
on appeal. In re Estate of Swanson, 130 S.W.3d 144, 147 (Tex.App.--El Paso 2003, no pet.).
Garcia’s original petition seeks a “declaration of a general partnership [and a] declaration
of the rights and responsibilities of the partners in relation to the partnership property.” The
petition describes the parties’ relationship under the heading “Partnership Agreement” and
describes the two specific properties acquired by the parties under the heading “Partnership
Property.” The first motion for summary judgment states that Garcia cannot present sufficient
evidence “to raise a genuine issue of material fact with respect to the following questions, which
are fundamental elements of her alleged cause of action: . . . That any partnership agreement
exists between the parties with respect to any of the alleged ‘partnership property’ [and] [t]hat
Plaintiff has any ownership interest in any of the alleged ‘partnership property.’”
There are five evidentiary factors that must be considered in determining whether a
partnership has been created. See TEX.BUS.ORGS. CODE ANN. ' 152.052(a)(West Supp.
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2011); see also Ingram v. Deere, 288 S.W.3d 886, 898 (Tex. 2009)(stating that “an absence of any
evidence of the factors will preclude the recognition of a partnership,” while “conclusive evidence
of all of the . . . factors will establish the existence of a partnership as a matter of law”). The
factors are: (1) receipt or right to receive a share of profits; (2) expression of an intent to be
partners; (3) participation or right to participate in control; (4) agreement to share or sharing of
losses or liability; and (5) agreement to contribute or contribution of money or property to the
business. TEX.BUS.ORGS. CODE ANN. ' 152.052(a); Ingram, 288 S.W.3d at 895. In Issues
Three and Four, Garcia asserts that Lucero’s motion amounts to a global, conclusory no-evidence
challenge because it does not specify as to which of these factors there is no evidence.
Lucero does not dispute that the five-factor test applies. He asserts, however, that the
summary judgment motion challenges a specific element by stating that there is no evidence of a
partnership agreement. The existence of a formal partnership agreement is not one of the five
factors. Relying on Section 152.002(a) of the Business Organizations Code, Lucero nevertheless
contends that the trial court could not make any declaration concerning the rights and
responsibilities of the parties in relation to the partnership property without evidence of a
partnership agreement. Section 152.002(a) states that “a partnership agreement governs the
relations of the partners and between the partners and the partnership.” TEX.BUS.ORGS. CODE
ANN. ' 152.002(a). This is the statutory language that Lucero cites. Lucero ignores the
following language from the same statute: “To the extent that the partnership agreement does not
otherwise provide, this chapter and the other partnership provisions govern the relationship of the
partners and between the partners and the partnership.” TEX.BUS.ORGS. CODE ANN.
' 152.002(a). Moreover, another statute provides that an association of two or more persons to
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carry on a business for profit creates a partnership, regardless of whether they intended to create a
partnership or whether the association is called a “partnership.” Id. at ' 152.051(b). Thus, the
existence of a formal partnership agreement is not an element that must be proven to establish a
partnership.
Lucero also asserts that the motion challenges a specific element of Garcia’s claims, as
pleaded, by stating that there is no evidence that Garcia had any ownership interest in any of the
alleged partnership property. Lucero points out that the original petition alleges that Garcia is
“entitled to an ownership interest in the apartment complex.” But, as Garcia notes in Issue Five,
“[p]artnership property is not property of the partners.” Id. at ' 152.101. Accordingly, direct
ownership of partnership property is not an element that must be proven to establish a partnership.
Any allegations in the petition suggesting direct ownership of property are mere surplusage.
The relief requested in Garcia’s original petition requires her to establish that she and
Lucero are equal partners in a general partnership. The first summary judgment motion does not
specifically challenge the essential elements of a partnership. We therefore sustain Issues Three,
Four, and Five. This means that the first summary judgment must be reversed. Because of this
disposition, it is not necessary to address Garcia’s other issues concerning the first summary
judgment.
THE SECOND SUMMARY JUDGMENT--SUPPLEMENTAL CLAIMS
Breach of Contract
A no-evidence summary judgment is essentially a pretrial directed verdict. Godfrey v.
Sec. Serv. Fed. Credit Union, 356 S.W.3d 720, 725 (Tex.App.--El Paso 2011, no pet.). When the
movant specifically states that there is no evidence on an essential element of a plaintiff’s claim,
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the non-movant must produce more than a scintilla of evidence raising a fact issue on the
challenged element. 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. Id. The evidence must be viewed in the
light most favorable to the non-movant. Id.
The supplemental petition alleges that Lucero breached a contract to provide Garcia with
legal title to the apartment complex. The second motion for summary judgment asserts several
grounds to support a no-evidence summary judgment on this claim. One of those grounds is that
there is no evidence that Garcia suffered damages. This is an essential element of the breach of
contract claim. See id. at 726. In Issue Thirteen, Garcia asserts that she presented sufficient
summary judgment evidence to raise a fact issue on damages.
In response to the second summary judgment motion, Garcia submitted her own affidavit.
Therein, she states that Lucero bought the apartment complex in 2000 “with two promissory notes
totaling approximately one million dollars.” At that time, Lucero said, “These apartments will be
our retirement.” She accepted his offer to manage the apartments and she devoted her time and
labor to the task for seven years without pay. The rental money was used for payments on the
promissory notes and for maintenance. If she had not believed that she was an owner, she would
not have worked without pay. As time went by and Lucero had little involvement with the
apartments, he “changed from saying that they were for our retirement to saying that the
apartments were mine.” Attached to the affidavit is an e-mail to Garcia with the subject line “RE:
I will always Love you,” in which Lucero states, “You had 100% of the apartments, now I will talk
to an attorney and you and I will agree on a percentage.”
On appeal, Garcia contends that the general measure of damages for breach of contract is
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the benefit of the bargain, which represents the difference between the value expected and the
value received. Citing her affidavit, Garcia asserts that she was promised an ownership interest in
the apartment complex, that she managed the complex for seven years without pay, and that the
apartment complex was supposed to fund her retirement. Garcia argues that these statements
from her affidavit constitute evidence that there was a difference between the value she expected
and the value she received. She also asserts that she believed she had “an ownership interest in an
asset which would one day have a net worth of several hundreds of thousands, if not millions of
dollars, and produce a steady income stream . . . .” Thus, according to Garcia, there is more than
a scintilla of evidence to support a damage award. We disagree.
There is nothing in the record to support Garcia’s assertion that the apartment complex will
be worth hundreds of thousands or millions of dollars some day. The record contains no evidence
regarding the current market value of the apartment complex, the current mortgage indebtedness,
or the equity that Lucero or the putative partnership has in the complex. Nor does the record
contain any evidence regarding the income stream that Garcia expected for her retirement.
Likewise, there is no evidence of the value of Garcia’s services. Garcia made no attempt to
quantify her damages in the trial court. Therefore, she failed to raise a fact issue on this element.
Cf. Tex. Instruments, Inc. v. Teletron Energy Mgmt., Inc., 877 S.W.2d 276, 279 (Tex.
1994)(holding that damages for lost profits must be proven with reasonable certainty); Hoss v.
Alardin, 338 S.W.3d 635, 654 (Tex.App.--Dallas 2011, no pet.)(upholding summary judgment on
breach of contract claim where there was no evidence of the amount of net profits). Issue
Thirteen is overruled. Because evidence of damages is essential to recover for breach of contract,
the trial court did not err by granting a no-evidence summary judgment on this claim, and we need
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not consider Garcia’s remaining appellate issues concerning this claim.
Promissory Estoppel
The supplemental petition raises a claim for promissory estoppel. The second motion for
summary judgment asserts that Garcia cannot recover for promissory estoppel because there is no
evidence of a legally enforceable promise, that Garcia substantially and detrimentally relied on a
promise, or that any reliance was foreseeable. The elements of promissory estoppel are: (1) a
promise; (2) foreseeability of reliance thereon by the promisor; and (3) substantial reliance by the
promisee to her detriment. See Kelly v. Rio Grande Computerland Group, 128 S.W.3d 759, 769
(Tex.App.--El Paso 2004, no pet.).
Garcia argues that the second summary judgment motion does not address the promissory
estoppel theory asserted in her supplemental petition. Therefore, she contends in Issue Fifteen
that the second summary judgment did not dispose of her promissory estoppel claim, meaning that
there is no final judgment. Alternatively, she contends in Issue Sixteen that if the second
summary judgment disposed of her promissory estoppel claim, the judgment is erroneous because
the motion mischaracterized her claim.
Garcia points to the following language in her supplemental petition: “The acts and
omissions of the defendant form the basis [of] promissory estoppel in favor of the plaintiff,
because the defendant promised that the apartments were the property of both plaintiff and
defendant.” The second summary judgment motion states that Garcia has no evidence “[t]hat a
legally enforceable promise had been made. Relying on a vague, indefinite promise of future
income is unreasonable as a matter of law.” Garcia argues that it was wrong for Lucero to
characterize the promise upon which she relies as a vague, indefinite promise of future income
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because her supplemental petition alleges that Lucero actually promised that she would
immediately become a co-owner of the apartment complex if she agreed to manage it.
The second summary judgment motion unambiguously identifies Garcia’s three
supplemental claims, including the promissory estoppel claim, and seeks summary judgment on
all of them. The prayer for relief specifically requests the court to “[g]rant summary judgment
against Plaintiff on all her causes of action.” The second summary judgment order granted this
motion. Therefore, the second summary judgment disposed of all the claims that remained
pending, and constitutes a final judgment. See Lehmann v. Har–Con Corp., 39 S.W.3d 191, 195
(Tex. 2001).
Moreover, the second summary judgment motion asserts that there is no evidence of a
legally enforceable promise. Because a promise is the first element of a promissory estoppel
claim, the motion clearly challenges an element that Garcia must prove. It is irrelevant that the
motion goes on to describe Garcia’s claim as a “vague, indefinite promise of future income.” We
also note that the supplemental petition is not the model of clarity that Garcia suggests it to be. It
alleges that the parties agreed to use the apartment complex as “an investment . . . to generate
income in the future when the parties chose to retire” and that Garcia dedicated herself to
managing the apartment complex “without payment . . . other than the deferred and future
expectation of benefit.” Given these allegations, Lucero can be excused for misunderstanding the
exact nature of the promissory estoppel claim.
Issues Fifteen and Sixteen are overruled.
In Issue Seventeen, Garcia argues that she presented more than a scintilla of evidence on
the promissory estoppel elements that are challenged in the second summary judgment motion:
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(1) a promise; (2) substantial and detrimental reliance; and (3) that reliance was reasonably
foreseeable by Lucero. Viewing the evidence in the light most favorable to Garcia, we agree.
Garcia’s affidavit indicates that she and Lucero had a romantic relationship. According to
the affidavit, Lucero asked Garcia to manage the apartment complex after telling her that they
were co-owners and that the complex would be used to fund their retirement. Given the nature of
the offer and their relationship, Lucero could reasonably foresee that Garcia would rely on his
promise. She did rely on it, to her detriment, by managing the complex without pay and without
help from Lucero for seven years. Lucero even acknowledged in his e-mail that Garcia had
“100% of the apartments” and that she deserves some recompense.
Issue Seventeen is sustained.
Detrimental Reliance
The supplemental petition asserts: “The acts and omissions of the defendant form the
basis of a cause of action in detrimental reliance in favor of the plaintiff, because the defendant
stated that the apartments belonged to both parties and plaintiff reasonably and substantially relied
on Lucero’s statements to her detriment.” The second summary judgment motion asserts that
detrimental reliance is merely an element of promissory estoppel, not a separate cause of action in
itself. Garcia’s response to the summary judgment motion relies on the same evidence to
establish promissory estoppel and detrimental reliance.
In Issue Nineteen, Garcia argues that promissory estoppel and detrimental reliance are
distinct causes of action, but she makes no effort to explain how they differ. She cites one case to
support her position. See Roberts v. Geosource Drilling Servs., Inc., 757 S.W.2d 48
(Tex.App.--Houston [1st Dist.] 1988, no writ). There, the court referred to detrimental reliance as
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the “doctrinal sibling” of promissory estoppel. Id. at 50. The plaintiff had sued for, among other
things, “detrimental reliance.” Id. In apparent reliance on the nomenclature chosen by the
plaintiff, the appellate court stated:
For the doctrine of ‘detrimental reliance’ to be available, Roberts must
show the existence of a promise ‘designedly made to influence the conduct of the
promisee, tacitly encouraging the conduct, which conduct, although not necessarily
constituting any actual performance of the contract itself, is something that must be
done by the promisee before he could begin to perform, and was a fact known to the
promisor. Wheeler v. White, 398 S.W.2d 93, 96 (Tex.1965) [remaining citations
omitted].
Id. The cited case, Wheeler, is a promissory estoppel case. See 398 S.W.2d at 96 (expressly
using the term “promissory estoppel”). Furthermore, the Roberts court evaluated the plaintiff’s
claim under the criteria that apply to promissory estoppel. See 757 S.W.2d at 50.
Like the court in Roberts, we would not penalize a plaintiff for referring to promissory
estoppel as “detrimental reliance,” but, also like the Roberts court, we would evaluate a
detrimental reliance claim under the same criteria as a promissory estoppel claim. It is not a
distinct cause of action. See Univ. of Tex. Sys. v. Courtney, 946 S.W.2d 464, 468 (Tex.App.--Fort
Worth 1997, writ denied)(holding that detrimental reliance is not a separate tort cause of action
and suggesting that it is “equivalent to contractual promissory estoppel”).
Garcia argues that Lucero used the wrong procedural vehicle to assert that detrimental
reliance is not a distinct cause of action. She believes that this issue should have been raised in a
traditional motion for summary judgment rather than a no-evidence motion. Courts are split as to
whether a purely legal issue can ever be raised in a no-evidence motion. See Brookshire Katy
Drainage Dist. v. Lily Gardens, LLC, 357 S.W.3d 661, 675-76 (Tex.App.--Houston [1st Dist.]
2011, no pet.)(Keyes, J., dissenting from denial of en banc rehearing)(discussing the conflicting
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cases); see also Bailey v. Gulf States Util. Co., 27 S.W.3d 713, 715-16 (Tex.App.--Beaumont
2000, pet. denied)(affirming no-evidence summary judgment on ground that “oppressive conduct”
is not a separate cause of action, without addressing whether no-evidence motion was appropriate
vehicle). Under the circumstances of this case, we see no point in reversing the summary
judgment merely to remand for further proceedings on a non-existent claim.2
Issue Nineteen is overruled.
CONCLUSION
The first summary judgment order is reversed. The second summary judgment order is
reversed with respect to the promissory estoppel claim, but affirmed with respect to the breach of
contract and detrimental reliance claims. The cause is remanded to the trial court for further
proceedings.
March 28, 2012
CHRISTOPHER ANTCLIFF, Justice
Before McClure, C.J., Rivera, and Antcliff, JJ.
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There may be circumstances in which it would not be appropriate to raise a legal issue in a no-evidence motion. We
confine our holding here to the facts before us.
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