Plaza City, LLC v. Stephanie L. Sturman A/K/A Stephanie L. Medrano D/B/A E.S. Designs ( 2022 )

In The
Court of Appeals
Ninth District of Texas at Beaumont
________________
NO. 09-21-00089-CV
________________
PLAZA CITY, LLC, Appellant
V.
STEPHANIE L. STURMAN A/K/A STEPHANIE L. MEDRANO
D/B/A E.S. DESIGNS, Appellee
________________________________________________________________________
On Appeal from the 457th District Court
Montgomery County, Texas
Trial Cause No. 18-07-09861-CV
________________________________________________________________________
MEMORANDUM OPINION
Appellant Plaza City, LLC (“Plaza”) sued AES Septic, LLC (“AES”) and
Stephanie L. Sturman a/k/a Stephanie L. Medrano d/b/a E.S. Designs (“Sturman”)
for multiple causes of action after one of Plaza’s tenants (“Tenant”) 1 backed out of
a long-term commercial lease, which Plaza alleges AES and Sturman’s conduct
1“Tenant” is Crawford Strategies, LLC and Jennifer Crawford, who are not
parties to this appeal.
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caused. 2 Plaza appeals from the trial court’s ruling granting Sturman’s motion for
summary judgment. Sturman is a licensed sanitarian,3 who argued in her motion for
summary judgment that her official stamp was placed on design drawings for the
septic tank system of an office building without her knowledge or consent. Plaza
contends the trial court erred in granting Sturman’s Traditional Motion for Summary
Judgment. Plaza argues that: (1) the deemed admissions Sturman relied upon were
merit-preclusive and should have been withdrawn; (2) Sturman’s motion should
have been denied because fact issues existed; and (3) knowledge is not required for
a negligence cause of action, and Plaza’s conversations with AES’s employee
created a fact issue regarding Plaza’s conspiracy cause of action. For the following
reasons, we will affirm the trial court’s judgment.
2Prior to granting Sturman’s Motion for Summary Judgment, the trial court
granted AES’s Traditional Motion for Summary Judgment and severed AES’s
claims from this lawsuit, and Plaza filed a separate appeal as to those claims, which
we addressed in a separate memorandum opinion.
3“Sanitarian” is defined as “a specialist in sanitary science and public
health[.]” https://merriam-webster.com/dictionary/sanitarian (last accessed
11/16/2022).
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I. Background
A. Parties’ Relationship and History
Plaza owns an office building in Montgomery County and entered into an
agreement with Tenant for the buildout of a certain space that required redesign of
the septic system. The lease commenced on May 1, 2018, and Plaza had ninety days
to complete the buildout, or Tenant had the right to terminate the lease. The lease
agreement contained a provision that time was of the essence and required “strict
compliance with the times for performance.” The agreement provided that Plaza
would lease Tenant 10,900 square feet of space. In April 2018, Plaza hired AES to
upgrade the septic system and prepare drawings to submit to the Montgomery
County Permit Department (“MCPD”), which required a licensed sanitarian’s
approval and signature. Sturman was one of the licensed sanitarians AES used for
its projects.
Emails showed that in June 2018, AES submitted redesign drawings to the
MCPD, and due to irregularities, MCPD questioned Sturman about the signature
date. Sturman responded to the MCPD that she had not signed the drawings and
would instruct Luis Cerda, an AES employee, that what happened was
“unacceptable and it needed to stop right now.” In June 2018, Plaza and Tenant met
with the MCPD, who advised the sanitarian’s signature on AES’s septic drawings
had been forged, and MCPD denied the permit.
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On June 18, 2018, Tenant sent a letter to Plaza indicating they were
terminating their agreement. The letter from Tenant to Plaza advised, “Due to the
recent fraudulent activities surrounding the septic permit involving our potential
business, PlayCation Zone, we must remove ourselves from this situation, in
particular, by terminating the lease at 32507 Tamina Road.” Tenant also demanded
return of their payments.
B. Procedural Posture
Plaza alleged that AES advertised their company as a “septic system
designing, permitting and installation company.” Plaza hired AES to design the
expansion of the septic system, and prior to the installation, AES was required to
obtain a permit from the MCPD. Plaza alleged that AES submitted documents to the
MCPD with a forged sanitarian’s signature, specifically Sturman, and when she
advised the MCPD that AES forged her signature, the MPCD denied the permit
application and the expansion project was halted. Plaza further alleged that due to
the halt of the project, Tenant terminated the long-term lease agreement and
demanded a refund of all payments made toward the lease agreement.
After Tenant terminated the lease, Plaza ultimately sued AES for breach of
contract, breach of fiduciary duty, fraud, negligent misrepresentation, and “civil
conspiracy/joint and several liability.” Plaza amended its Petition and added
Sturman as a defendant. Plaza alleged that Sturman allowed AES to use her seal
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when she was unavailable. Plaza asserted causes of action for negligence and “civil
conspiracy/joint and several liability” against Sturman. Plaza sought actual damages,
exemplary damages, and attorney’s fees.
C. Motion for Summary Judgment, Response, and Evidence
In February 2021, Sturman filed her Traditional Motion for Summary
Judgment. Sturman argued that AES admitted in its deposition that it “unilaterally
and without Defendant, Sturman’s knowledge submitted documentation bearing
Sturman’s sanitation seal signature.” Sturman contended she was entitled to
summary judgment on Plaza’s negligence and conspiracy/joint and several liability
claims, because she did not cause Plaza’s damages, and Plaza suffered no damages.
In addition to the deposition testimony, Sturman based her motion in part on the
deemed admissions since Plaza failed to answer AES’s Requests for Admissions.
Sturman did not argue that the deemed admissions were the result of flagrant bad
faith or conscious disregard of the rules on Plaza’s part. In support of her Traditional
Motion for Summary Judgment, Sturman included the following evidence: 1)
Deposition Transcript of AES’s corporate representative; 2) AES’s Requests for
Admissions to Plaintiff; and 3) Order Granting AES’s Traditional Motion for
Summary Judgment.
Plaza responded to Sturman’s Traditional Motion for Summary Judgment
contending that the deemed admissions are merit-preclusive and should be set aside
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since Sturman was required to show that Plaza acted in “flagrant bad faith or callous
disregard,” and she failed to do so. The Response noted Plaza’s counsel was
undergoing a law firm merger and its failure to answer the Requests for Admissions
was the result of an “unfortunate oversight.” Plaza further argued that fact issues
remained pertaining to Sturman’s role in causing Tenant to terminate its lease and
what damages resulted from Sturman’s negligence. Finally, it argues that
conversations between Plaza and AES create a fact issue regarding Sturman’s
knowledge regarding AES’s use of her seal. In support of its Response, Plaza
included the following evidence: 1) Attorney Correspondence; 2) Responses to
Requests for Admission; 3) Architectural Plans for subject property; 4) Lease
Termination Letter; 5) Plaza’s Responses to Requests for Disclosure; and 6)
Business Records Provided by Antonio Plaza with conversation between Plaintiff
and AES.
The record does not show that Plaza included any evidence regarding the
oversight in answering the Requests for Admissions in its Response, and Plaza never
filed a separate motion to strike or a motion to withdraw the deemed admissions.
Instead, in March 2021, after Sturman filed her Motion for Summary Judgment,
Plaza filed Answers to AES’s Requests for Admissions and attached them as
evidence to its Response to Sturman’s Traditional Motion for Summary Judgment.
Sturman moved to strike Plaza’s Answers to AES’s Requests for Admissions and
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argued that Plaza only responded after she filed her Traditional Motion for Summary
Judgment, waiting almost a year and a half after AES served the Requests for
Admissions. The record does not show that the trial court ever ruled on the Motion
to Strike. The trial court granted Sturman’s Traditional Motion for Summary
Judgment without specifying the basis.
II. Analysis
In its sole issue, Plaza challenges the summary judgment in favor of Sturman
arguing that: 1) the deemed admissions in this case were merit-preclusive and should
have been withdrawn; 2) the motion should have been denied, because “significant
fact issues” existed; and 3) knowledge is not required for a negligence claim, and
Plaza’s conversations with AES’s employee created a fact issue on the conspiracy
cause of action.
We review a trial court’s ruling on a motion for summary judgment de novo.
Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018); Travelers Ins. Co. v.
Joachim, 315 S.W.3d 860, 862 (Tex. 2010). In doing so, we review the evidence in
the light most favorable to the nonmovant, crediting evidence favorable to the
nonmovant and indulging every reasonable inference in its favor. See Lujan, 555
S.W.3d at 84. With a traditional motion for summary judgment, the movant has the
burden to show no genuine issue of material fact exists and it is entitled to judgment
as a matter of law. See id.; see also Tex. R. Civ. P. 166a(b), (c). “An issue is
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conclusively established ‘if reasonable minds could not differ about the conclusion
to be drawn from the facts in the record.’” Cmty. Health Sys. Prof’l Servs. Corp. v.
Hansen, 525 S.W.3d 671, 681 (Tex. 2017) (quoting Childs v. Haussecker, 974
S.W.3d 31, 44 (Tex. 1998)). If the movant meets its burden, the burden then shifts
to the nonmovant to raise a genuine issue of material fact precluding summary
judgment. Lujan, 555 S.W.3d at 84. When the trial court fails to specify the grounds
on which it granted summary judgment, we must affirm if any of the summary
judgment grounds are meritorious. FM Props. Operating Co. v. City of Austin, 22
S.W.3d 868, 872–73 (Tex. 2000) (citation omitted).
Plaza asserted negligence and civil conspiracy claims against Sturman. The
elements of a negligence cause of action are (1) a legal duty, (2) a breach of that
duty, and (3) damages proximately caused by the breach. See Elephant Ins. Co., LLC
v. Kenyon, 644 S.W.3d 137, 144 (Tex. 2022); Kroger Co. v. Elwood, 197 S.W.3d
793, 794 (Tex. 2006). The elements of a civil conspiracy claim are (1) a combination
of two or more people; (2) to accomplish an unlawful purpose or a lawful purpose
by unlawful means; (3) a meeting of the minds on the object or course of action; (4)
one or more unlawful, overt acts; and (5) the plaintiff suffered injury as a proximate
result of the wrongful act. Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 675 (Tex.
1998); Walker v. Hartman, 516 S.W.3d 71, 81 (Tex. App.—Beaumont 2017, pet.
denied). Both causes of action have proximate cause and damages as elements. See
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Elephant Ins. Co., 644 S.W.3d at 144 (negligence elements); Walker, 516 S.W.3d at
81 (civil conspiracy elements).
In her Traditional Motion for Summary Judgment, Sturman argued she was
entitled to summary judgment because she did not cause Plaza’s damages and Plaza
suffered no damages. “A traditional summary judgment motion is properly granted
where a defendant conclusively negates at least one essential element of a cause of
action.” Henkel v. Norman, 441 S.W.3d 249, 251 (Tex. 2014) (citation omitted). If
Sturman conclusively negates either causation or damages, as she argued in her
Traditional Motion for Summary Judgment, she is entitled to judgment as a matter
of law. See id.In support of her argument that she did not cause Plaza’s damages, Sturman
included deposition testimony of AES’s corporate representative and business
manager, Cole Daniels. Daniels testified they worked with Sturman since 2013 and
submitted between 200 and 250 designs to her. Daniels testified that AES employee,
Cerda, used Sturman’s stamp and signature without Sturman’s knowledge in this
instance and admitted that in a phone call with Plaza. Daniels explained that they
subsequently terminated Cerda, and this was a “big reason” for terminating him.
In response to this evidence, Plaza contends a recorded transcript of a
conversation between it and Cerda created a fact issue regarding whether Sturman
knew AES used her stamp and signature. Plaza included a transcript of this recorded
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conversation in its Response to Sturman’s Traditional Motion for Summary
Judgment.4 In this transcript, despite Cerda claiming that in the past Sturman had
authorized them to place her stamp and signature, Cerda admitted Sturman did not
authorize him to use her stamp in this case and he agreed that he put it there without
her knowledge. This transcript also reveals that Cerda admitted he did not advise
Sturman after the fact that he had used her stamp. Cerda then transferred the call to
his AES supervisor, who spoke with Plaza.
Further, Daniels testified that despite Cerda’s claims that he sent the plans
twenty days before in an earlier phone call with Plaza, Cerda did not send updated
redesigned plans to Sturman to review prior to May 10, 2018. Daniels explained they
checked the company emails to confirm, and Cerda failed to email them to Sturman
when he said he had. Daniels explained that the only time Sturman had ever allowed
them to use her stamp and signature was if she had previously reviewed and
approved the plans, and this did not occur regularly. Daniels testified he was never
under the impression, even with minor changes, that he could use her stamp before
she approved the plans. Daniels discussed two other occasions where AES had used
Sturman’s stamp with her knowledge and approval after she reviewed the plans and
could not think of any other projects where that had happened.
4This same transcript was included as an exhibit to Daniels’s deposition with
Sturman’s summary judgment evidence and is discussed at length in Daniels’s
deposition testimony.
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He also explained that when his brother, Nick, spoke to Plaza on the phone
and said that Cerda had emailed the documents to Sturman, Nick was relying on
what Cerda told him, which they later learned was incorrect and it had been based
on a lie Cerda told. Daniels testified that when Nick told Plaza that he understood
why Cerda did it, he was referring to the fact that Cerda knew he would have been
in trouble if he had come to them, because the plans should have been sent before
and already been sealed.
Causation is a requisite element of negligence and civil conspiracy. See
Elephant Ins. Co., 644 S.W.3d at 144; Walker, 516 S.W.3d at 81. The summary
judgment evidence establishes that Sturman had no knowledge and did not
participate in AES using her stamp on Plaza’s redesigned septic plans that were
submitted to the MCPD. The evidence also established that Sturman had only
previously allowed AES to use her stamp and signature if she had already reviewed
and approved the plans, which did not occur here. The summary judgment evidence
conclusively negates that Sturman proximately caused Plaza’s damages, a requisite
element of both a negligence and civil conspiracy claim. See Elephant Ins. Co., 644
S.W.3d at 144; Walker, 516 S.W.3d at 81. Having conclusively negated one element,
the burden shifted to Plaza to present some evidence that showed the existence of a
genuine issue of material fact. See Lujan, 555 S.W.3d at 84 (noting shifting burden).
Sturman negated at least one essential element of each cause of action, and Plaza
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failed to meet its burden to show the existence of an issue of material fact, and
therefore, the trial court properly granted her Traditional Motion for Summary
Judgment. See Henkel, 441 S.W.3d at 251.
Since we have determined the above-described evidence established
Sturman’s right to judgment as a matter of law, we need not address Plaza’s
argument that the deemed admissions Sturman also relied on were merit-preclusive
and should have been withdrawn. See Tex. R. App. P. 47.1 (requiring the appellate
court to hand down an opinion as short as practicable addressing every issue raised
and necessary to the appeal’s final disposition). Viewing the evidence in the light
most favorable to the nonmovant, we conclude that Sturman met her burden of
showing no genuine issues of material fact remain with respect to causation, and she
is entitled to judgment as a matter of law. See Lujan, 555 S.W.3d at 84; see also Tex.
R. Civ. P. 166a(b), (c). We reject Plaza’s arguments and overrule its sole issue.
III. Conclusion
Having overruled Plaza’s sole issue, we affirm the trial court’s judgment.
AFFIRMED.
________________________________
W. SCOTT GOLEMON
Chief Justice
Submitted on August 9, 2022
Opinion Delivered December 1, 2022
Before Golemon, C.J., Horton and Johnson, JJ.
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