Randy L. Yeske v. Piazza Del Arte, Inc., Swiss International, Inc., D/B/A Swiss Builders, Tino Bekardi, David E. Kassab and Paul Garnney ( 2016 )

Affirmed in Part and Reversed and Remanded in Part and Memorandum
Opinion filed December 22, 2016.
In The
Fourteenth Court of Appeals
NO. 14-15-00633-CV
RANDY L. YESKE, Appellant
V.
PIAZZA DEL ARTE, INC., SWISS INTERNATIONAL, INC. D/B/A SWISS
BUILDERS, TINO BEKARDI, DAVID E. KASSAB AND PAUL GARNEY,
Appellees
On Appeal from the 164th District Court
Harris County, Texas
Trial Court Cause No. 2013-46578
MEMORANDUM OPINION
To stop a non-judicial foreclosure on his condominium unit, appellant Randy
L. Yeske filed a lawsuit against three individuals who served on the board of
directors of the condominium’s homeowners association and two corporations.
Yeske alleged, among other things, that the homeowners association was never
properly incorporated and therefore lacked authority to collect assessments or
foreclose on his unit. Yeske sought declaratory relief and also asserted numerous
claims for damages against the defendants. In a series of interlocutory orders, the
trial court ruled in favor of the defendants on all of Yeske’s claims. The trial court
then severed the homeowners association’s counterclaims, making the
interlocutory orders disposing of Yeske’s claims final. On appeal, Yeske raises
seven issues challenging the trial court’s rulings and the severance of the
association’s counterclaims. We affirm in part and reverse and remand in part.
FACTUAL AND PROCEDURAL BACKGROUND
In 2001, Tino Bekardi incorporated a for-profit company called Piazza Del
Arte, Inc. to develop the Piazza Del Arte Condominiums, a twelve-unit
condominium project located at 5801 Winsome Lane in Houston. Bekardi’s
company, Swiss International, Inc. d/b/a Swiss Builders (“Swiss Builders”),
completed construction on the condominiums in 2006. Piazza Del Arte, Inc.
forfeited its corporate charter several years later.
On February 14, 2006, a non-profit corporation named PDA HOA 5801
Winsome was formed to operate the Piazza Del Arte Homeowners Association (the
Association). Later that same year, Bekardi filed in Harris County a condominium
declaration (the “Declaration”) for the Piazza Del Arte Condominiums.1
Through foreclosure, Randy L. Yeske purchased a unit in the Piazza Del
Arte Condominiums in October 2009. After purchasing the unit, Yeske “began
noticing some inconsistencies in the assessments taxed against each of the unit
owners.” Yeske requested various documents from the Association, including the
Association’s “bylaws, declarations, proof of insurance, operating statements,
1
Piazza Del Arte, Inc. was identified as the “Declarant” in the Declaration, and the
Association was defined as “the PIAZZA DEL ARTE HOMEOWNERS ASSOCIATION, a
corporation organized under the Texas Non-Profit Corporation Act for the management of the
[condominium project], the membership of which consists of all of the Owners in the Project.”
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calculations of assessments charged to the owners, [and] detailed accounting and
other pertinent documentation relevant to ownership within and operation of the
alleged homeowners association.” The parties dispute whether the requested
documents were ever made available to Yeske.
According to Yeske, he discovered that the Association was never properly
incorporated and therefore never legally existed. The parties dispute whether
Yeske subsequently failed to pay his condominium assessments for 2012 and 2013.
After giving Yeske notices that his assessments had not been paid, the
Association’s Board of Directors (the “Board”) voted to proceed with a non-
judicial foreclosure on Yeske’s unit. At that time, Bekardi was the president of the
Association, Paul Garney was the vice-president, and David E. Kassab was the
treasurer. Bekardi resigned in January 2013, and Garney became president. Walter
Ebarb, another unit owner, became vice-president, and Kassab remained as
treasurer.
In response to the threat of foreclosure, Yeske filed this lawsuit and placed
$3,100.00—representing one year’s dues—in the registry of the court. In his first
amended petition, Yeske sought a declaratory judgment that “Piazza Del Arte
Homeowners Association, Inc. has not been organized pursuant to the statutes,
codes and laws of the State of Texas, and as such is not a viable homeowners
association and lacks authority to act according[ly].” Yeske also asserted numerous
claims for damages against the defendants, including defamation, misappropriation
of funds, wrongful foreclosure, breach of fiduciary duty, negligence, and gross
negligence. Yeske also sued Bekardi for civil assault and battery and intentional
infliction of emotional distress.
Kassab moved to dismiss Yeske’s breach of fiduciary duty claim on the
grounds that it had no basis in law. See Tex. R. Civ. P. 91a. On September 27,
3
2013, the trial court granted Kassab’s motion after an oral hearing and awarded
Kassab $700.00 in attorney’s fees. After that, Yeske non-suited without prejudice
his breach of fiduciary duty claims against Bekardi and Garney. Kassab then filed
special exceptions to Yeske’s first amended petition. The trial court granted
Kassab’s special exceptions on December 17, 2013, and ordered Yeske to amend
his pleadings to remove any reference to “breach of fiduciary duty” and to
specifically identify each allegedly defamatory statement made by Kassab.
Yeske filed a second amended petition on December 20, 2013. Ten days
later, on December 30, an assumed name certificate was filed by PDA HOA 5801
Winsome notifying the Texas Secretary of State that the company was conducting
business under the assumed name “Piazza Del Arte Homeowners Association.”
In April 2014, the defendants filed a document titled, “Joint Traditional and
No-Evidence Motions for Summary Judgment, Request for Attorney’s Fees and
Motion for Sanctions” and attached evidence in support of the motions. The
defendants prefaced their motions with the statement that Yeske had mistakenly
sued Piazza Del Arte, Inc., an entity that was “no longer valid,” rather than the
correct entity, PDA HOA 5801 Winsome, the “entity that is in good standing and
managing the subject Homeowners Association.”
In their joint summary judgment motions, the defendants sought no-evidence
summary judgment on Yeske’s claims for declaratory judgment, negligence and
gross negligence, defamation, misappropriation of funds, wrongful foreclosure,
and “other wrongdoing,” as well as Yeske’s claims against Bekardi for civil assault
and battery and intentional infliction of emotional distress. The defendants sought
traditional summary judgment on Yeske’s negligence and gross negligence claims
on the grounds that the defendants did not owe Yeske any duties as a matter of law
and therefore Yeske lacked standing to bring these claims against them. The
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defendants further asserted that they were entitled to traditional summary judgment
on Yeske’s defamation claims because: (1) Yeske could not identify one
slanderous comment made by Kassab; (2) the claims were barred by the statute of
limitations; (3) the allegedly defamatory statements were either not defamatory as
a matter of law or were true or substantially true; and (4) a qualified privilege
existed as to Kassab’s statements in carrying out his duties on the Board and Yeske
had no evidence that Kassab acted with malice. Finally, the defendants sought
traditional summary judgment on Yeske’s declaratory judgment action on the
grounds that PDA HOA 5801 Winsome d/b/a Piazza Del Arte Homeowners
Association is the entity operating the Association and was organized lawfully and
remains “in good status” with the Texas Secretary of State. Only Kassab sought
sanctions against Yeske.
Yeske moved for a continuance of the hearing on the defendants’ motions,
which the trial court granted. Shortly after that, the motions were set for
submission on July 14. On July 7, Yeske filed a response to the motions with
supporting evidence. The hearing on the defendants’ motions was later reset for
September 19.
On September 12, Yeske filed a supplemental response and additional
evidence. Yeske asserts that he also filed a third amended petition that same day,
but the file-stamped copy in the record shows that the third amended petition was
filed on September 15. In the third amended petition, Yeske added allegations that
the defendants’ failure to properly incorporate the Association and take other
actions constituted a violation of the Texas Uniform Condominium Act (the “Act”
or “TUCA”). On September 16, the defendants moved to strike Yeske’s
supplemental response and third amended petitions.
On September 30, the trial court signed an interlocutory order granting only
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the defendants’ no-evidence motion for summary judgment on Yeske’s defamation
claims. The trial court also recessed the hearing on the summary judgment motions
and ordered the parties to participate in a mediation regarding the remaining claims
“before the Court rules on the remaining claims and rest of Defendants[’] Motions
heard on September 19, 2014.”
On October 24, counterclaims were filed against Yeske by “PDA HOA 5801
Winsome d/b/a Piazza Del Arte Homeowners Association (improperly named in
this lawsuit as Piazza Del Arte, Inc.)” and Garney. The counter-plaintiffs asserted
claims for breach of contract, quantum meruit, and slander of title, and also sought
temporary and permanent injunctive relief against Yeske.
Yeske filed objections and a response to the counterclaims, as well as an
answer. Among other things, Yeske asserted that PDA HOA 5801 Winsome was a
third-party intervenor, and not a counter-plaintiff as represented.2
In November, the defendants’ remaining summary judgment claims were set
for submission on December 1, 2014, along with the defendants’ motion to strike
Yeske’s third amended petition.
On December 1, 2014, the trial court signed an “Order Granting Final
Summary Judgment” in which the court granted the defendants’ traditional and no-
evidence motions for summary judgment “in their entirety.” In the order, the trial
court did not identify the specific grounds on which each claim was disposed, but
ruled that Yeske take nothing against the defendants “by reason of his various
causes of action” asserted against them. The court also ordered Yeske to pay the
2
In the counter-claim, plaintiff/counter-defendant PDA HOA 5801 Winsome d/b/a/
Piazza Del Arte Homeowners Association stated that it was “a Texas Non-Profit Condominium
Association which operates Piazza Del Arte condominiums located in Harris County, Texas and,
although being sued under a misnomer as Piazza Del Arte, Inc., has made an appearance in this
case.”
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defendants $7,500.00 in reasonable and necessary attorney’s fees and expenses
incurred in defending against Yeske’s declaratory judgment claim, to be paid
within thirty days from the date of the order. Additionally, the court ordered that
the $3,100.00 Yeske had placed in the registry of the court was to be remitted to
“PDA HOA 5801 Winsome d/b/a Piazza Del Arte Homeowners Association, the
entity operating the homeowners association.” The trial court denied Kassab’s
motion for sanctions against Yeske, and did not rule on the defendants’ motion to
strike Yeske’s supplemental response and third amended petition.
The Association, now simply identifying itself as “Piazza Del Arte
Homeowners Association,” moved for traditional summary judgment on its breach
of contract claim against Yeske. The Association sought $6,355.00 allegedly owed
by Yeske for unpaid association dues, penalties, and expenses, and attorney’s fees.
In late December 2014, Kassab, Garney, Bekardi, and Swiss Builders
nonsuited their claims against Yeske. At this point, all of Yeske’s claims had been
disposed and the only remaining claims were those of the Association against
Yeske.
On February 18, 2015, the Association filed a motion to sever its claims
against Yeske, which the trial court granted on April 17, 2015. The severance
made the trial court’s December 1, 2014 order on the defendants’ summary
judgment motions final and appealable. Yeske filed a motion for new trial on May
15, 2015, which was overruled by operation of law. This appeal followed.
ISSUES AND ANALYSIS
On appeal, Yeske raises seven issues, contending that the trial court erred
by: (1) granting Kassab’s Rule 91a motion to dismiss Yeske’s breach of fiduciary
duty claim against Kassab; (2) granting a no-evidence summary judgment as to
7
Yeske’s defamation claim when there was more than a scintilla of evidence
supporting it; (3) granting a traditional and no-evidence summary judgment on
“various causes of action” when there was a genuine issue of material fact on the
claims; (4) granting a traditional and no-evidence summary judgment on the
negligence and gross negligence causes of action based on lack of standing; (5)
granting a traditional and no-evidence summary judgment on causes of action not
presented in the motion; (6) granting the appellees attorney’s fees with summary
judgment; and (7) severing the Association’s claims against Yeske when they were
inextricably interwoven with Yeske’s claims against the Association.
I. Kassab’s Rule 91a Motion to Dismiss
In his first issue, Yeske contends that the trial court erred in granting
Kassab’s Rule 91a motion to dismiss Yeske’s breach of fiduciary duty claim
because there was a basis in law and fact for Yeske’s claim. Yeske also argues that
his first amended petition gave fair notice that he was alleging that Kassab owed
him a fiduciary duty under section 82.103(a) of the Act.
Rule 91a allows a party, with exceptions not applicable here, to “move to
dismiss a cause of action on the grounds that it has no basis in law or fact.” Tex. R.
Civ. P. 91a.1. We review the merits of a Rule 91a motion de novo, because the
availability of a remedy under the facts alleged is a question of law. City of Dallas
v. Sanchez, 494 S.W.3d 722, 724–25 (Tex. 2016) (per curiam) (citing Wooley v.
Schaffer, 447 S.W.3d 71, 75–76 (Tex. App.—Houston [14th Dist.] 2014, pet.
denied)). We apply the fair-notice pleading standard to determine whether the
allegations of the petition are sufficient to allege a cause of action. Wooley, 447
S.W.3d at 76. Whether the dismissal standard is satisfied depends solely on the
pleading of the cause of action. Sanchez, 494 S.W.3d at 724 (citing Tex. R. Civ. P.
91.a.6).
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The elements of a common-law breach of fiduciary duty claim are: (1) a
fiduciary relationship existed between the plaintiff and defendant; (2) a breach by
the defendant of his fiduciary duty to the plaintiff; and (3) an injury to the plaintiff
or benefit to the defendant as a result of the defendant’s breach. See Lundy v.
Masson, 260 S.W.3d 482, 501 (Tex. App.—Houston [14th Dist.] 2008, pet.
denied). Under the Act, “each officer or member of the board of the condominium
association “is liable as a fiduciary of the unit owners for the officer’s or member’s
acts or omissions.” See Tex. Prop. Code § 82.103(a). The Act specifically provides
that an officer or director of the association is not liable to the association or any
unit owner for monetary damages for an act or omission occurring in the person’s
capacity as an officer or director unless: (1) the officer or director breached a
fiduciary duty to the association or a unit owner; (2) the officer or director received
an improper benefit; or (3) the act or omission was in bad faith, involved
intentional misconduct, or was one for which liability is expressly provided by
statute. Id. § 82.103(f). A “unit owner” is a person who owns a condominium unit.
See id. § 82.003(a)(24).
The gravamen of Yeske’s first amended petition was that Kassab and the
other individual defendants were members of an invalid homeowners association
that was never properly incorporated as required under the Texas Property Code or
as represented in the Association’s Declaration and other documents. In the section
of the petition titled “Breach of Fiduciary Duty,” however, Yeske alleged in the
alternative that he owned a condominium unit; Kassab was a director of the alleged
Association; and Kassab violated his fiduciary duties as a director of the alleged
Association under its corporate documents and the Texas Property Code. Yeske
further alleged that Kassab engaged in “numerous acts of misconduct, negligence,
gross negligence, and wronging,” including: (1) receiving financial benefit by
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allocating the Association’s funds to be expended on his own condominium unit;
(2) approving the payment of invoices for work done to his own property; (3)
allowing an improvident expenditure of corporate funds; and (4) failing to protect
the residents’ Association bank accounts and allowing the misappropriation of
funds. Yeske claimed that this alleged wrongdoing resulted in losses to himself and
other residents.
In Kassab’s Rule 91a motion to dismiss, he argued that Yeske’s claims for
breach of fiduciary duty have no basis in law because Kassab does not owe Yeske
a fiduciary duty as a matter of law and therefore, even if the allegations in Yeske’s
petition were taken as true, Yeske was not entitled to relief. “A cause of action has
no basis in law if the allegations, taken as true, together with inferences reasonably
drawn from them, do not entitle the claimant to the relief sought.” Tex. R. Civ. P.
91a.1.
In support of his motion, Kassab primarily relied on Myer v. Cuevas, in
which the court applied general principles of corporation law to conclude that
individual board members of a condominium association owed fiduciary duties
only to the association, and thus did not owe a formal fiduciary duty to an
individual member of the association unless a contract or other special relationship
existed between them. See 119 S.W.3d 830, 836 (Tex. App.—San Antonio 2003,
no pet.). Because the unit owner failed to allege that an informal or confidential
relationship existed between himself and the board members, the court held that
the unit owner lacked standing to sue the board members individually for breach of
fiduciary duty. See id. (citing Wingate v. Hajdik, 795 S.W.2d 717, 719 (Tex. 1990)
(explaining that a corporate stockholder “cannot recover damages personally for a
wrong done solely to the corporation, even though he may be injured by that
wrong” unless the wrongdoer violates a duty arising from a contract or
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otherwise.”)). Kassab did not argue, and Myer did not address, section 82.103 of
the Act.
On appeal, Yeske does not claim that a common-law formal or informal
fiduciary relationship exists between him and Kassab; instead, he argues that
Kassab owes him fiduciary duties under section 82.103 of the Act and that the
allegations in his petition gave Kassab fair notice that he was invoking the Act.
Kassab responds that Yeske did not plead a violation section 82.103 as a basis for
his breach of fiduciary duty claim in his first amended petition, nor did he plead
some other fact or agreement between the parties that could create a fiduciary
duty.3
Courts have held that a party is not required to specifically plead a violation
of a statute so long as the factual allegations are sufficient to give the opposing
party fair notice of the basis of the claim. See, e.g., Discovery Operating, Inc. v. BP
Am. Prod. Co., 211 S.W.3d 140, 162 (Tex. App.—Eastland 2010, pet. denied);
Broom v. Brookshire Bros., Inc., 923 S.W.2d 57, 60 (Tex. App.—Tyler 1995, writ
denied); Ransopher v. Deer Trails, Ltd., 647 S.W.2d 106, 110 (Tex. App.—
Houston [1st Dist.] 1983, no writ). Here, Yeske alleged in his first amended
petition that: (1) Kassab, a director of the Association, owed a fiduciary duty to
Yeske, a unit owner; (2) while acting as a director, Kassab allegedly engaged in
acts and omissions constituting a breach of fiduciary duty; and (3) Yeske was
injured by the breach or Kassab benefitted as a result of the breach. Yeske’s
petition and the attached Declaration also refer to the Texas Uniform
3
Kassab also argues that in Yeske’s response and at the hearing on the motion, Yeske did
not claim that he was asserting a claim under section 82.103. Instead, Yeske argued that Kassab
and the other defendants owed a fiduciary duty concerning the money collected from property
owners and held by them in a constructive trust while they were acting without authority.
However, Rule 91a and Sanchez instruct that the court is to consider only the pleading together
with any permitted exhibits. See Tex. R. Civ. P. 91a.6; Sanchez, 494 S.W.3d at 724.
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Condominium Act, found in Chapter 82 of the Property Code. We conclude that,
although Yeske did not specifically refer to section 82.103 in his petition, Yeske’s
allegations that Kassab violated fiduciary duties owed to Kassab as a director of a
condominium association organized pursuant to the Property Code gave Kassab
sufficient notice of a fiduciary duty claim under the Act.
Nevertheless, the appellees also argue that section 82.103 of the Act does
not confer a fiduciary duty to the individual unit owners, citing Harris v. Spires
Counsel of Co-Owners, 981 S.W.2d 892 (Tex. App.—Houston [1st Dist.] 1998, no
pet.), and Petty v. Portofino Council of Coowners, Inc., 702 F. Supp. 2d 721 (S.D.
Tex. 2010) (applying Texas law). Neither case stands for the broad proposition the
appellees assert. Harris involved claims against the condominium association
rather than its individual board members, and although the court mentions section
82.103 of the Act, it does not construe or rely on section 82.103 in concluding that
no informal or confidential relationship existed between the association and the
unit owner. See Harris, 981 S.W.2d at 897–98. In Petty, which also involved
claims by unit owners against their condominium association, the court relied on
Harris to hold that in order to impose a fiduciary duty on an association, there
needed to be “some other fact or agreement between the parties that could create
the fiduciary duty.” See 702 F. Supp. 2d. at 735 (citing Harris, 981 S.W.2d at 898).
Because the plaintiffs failed to plead any facts to support the creation of a fiduciary
duty between them and the association, the court held that the plaintiffs had failed
to state a claim for breach of fiduciary duty. Id.
In contrast, Yeske’s allegations against Kassab, if taken as true, would
entitle Yeske to relief under the Act. See Tex. Prop. Code § 82.103(a), (f). We
conclude that Yeske has pleaded a claim for breach of fiduciary duty against
Kassab that has a basis in law, and therefore the trial court erred in granting
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Kassab’s Rule 91a motion to dismiss. We sustain Yeske’s first issue.
II. No-Evidence Summary Judgment on Yeske’s Defamation Claim
In his second issue, Yeske contends that the trial court erred in granting a
no-evidence summary judgment as to his defamation claim against Kassab when
there was more than a scintilla of evidence to support it. Within this issue, Yeske
also argues that an adequate time for discovery had not passed and the appellants
failed to accurately list the challenged elements of their defamation claims.
A. The Summary Judgment Standards of Review
We review the trial court’s grant of summary judgment de novo. Joe v. Two
Thirty Nine Joint Venture, 145 S.W.3d 150, 156 (Tex. 2004). In reviewing either a
no-evidence or traditional summary judgment motion, we must take as true all
evidence favorable to the non-movant and draw every reasonable inference and
resolve all doubts in favor of the non-movant. Id. at 157; Mendoza v. Fiesta Mart,
Inc., 276 S.W.3d 653, 655 (Tex. App.—Houston [14th Dist.] 2008, pet. denied).
A no-evidence motion for summary judgment is essentially a motion for a
pretrial directed verdict. Tex. R. Civ. P. 166a(i); Timpte Indus., Inc. v. Gish, 286
S.W.3d 306, 310 (Tex. 2009). After an adequate time for discovery, a party
without the burden of proof may, without presenting evidence, seek summary
judgment on the ground that there is no evidence to support one or more essential
elements of the non-movant’s claim or defense. Tex. R. Civ. P. 166a(i). The non-
movant is required to present evidence raising a genuine issue of material fact
supporting each element contested in the motion. Id.; Timpte, 286 S.W.3d at 310.
We review the evidence presented in the light most favorable to the party against
whom the summary judgment was rendered, crediting evidence favorable to that
party if reasonable jurors could, and disregarding contrary evidence unless
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reasonable jurors could not. Timpte, 286 S.W.3d at 310.
The party moving for a traditional summary judgment has the burden to
show that no material fact issue exists and that it is entitled to summary judgment
as a matter of law. Tex. R. Civ. P. 166a(c); Willrich, 28 S.W.3d at 23. To be
entitled to traditional summary judgment, a defendant 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. Am. Tobacco Co.,
Inc. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). Evidence is conclusive only if
reasonable people could not differ in their conclusions. City of Keller v. Wilson,
168 S.W.3d 802, 816 (Tex. 2005). Once the defendant produces sufficient
evidence to establish the right to summary judgment, the burden shifts to the
plaintiff to come forward with competent controverting evidence raising a genuine
issue of material fact. Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex.
1995).
B. The Applicable Law on Defamation
To maintain a defamation claim, a plaintiff must prove that each defendant:
(1) published a statement; (2) that was defamatory; and (3) while acting with
negligence regarding the truth of the statement. WFAA v. McLemore, 978 S.W.2d
568, 571 (Tex. 1988). A written statement is defamatory when a person of ordinary
intelligence would interpret it in a way that tends to injure the subject’s reputation
and thereby expose the subject to public hatred, contempt, or ridicule, or financial
injury, or to impeach the subject’s honesty, integrity, virtue, or reputation. See
Neely v. Wilson, 418 S.W.3d 52, 60 (Tex. 2013). The common law and statutes
provide certain defenses and privileges to defamation claims. Id. at 62. For
example, it is a complete defense to defamation if a statement is true or
substantially true. Id.; Randall’s Food Mkts. v. Johnson, 891 S.W.2d 640, 646
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(Tex. 1995). In a suit brought by a private individual, truth is an affirmative
defense. Randall’s Food Mkts., 891 S.W.2d at 646.
The common law also recognizes a qualified privilege that protects
communications made in good faith on a subject in which the author has an interest
or a duty to another person having a corresponding interest or duty. See Free v.
Am. Home Assurance Co., 902 S.W.2d 51, 55 (Tex. App.—Houston [1st Dist.]
1995, no writ); Pioneer Concrete of Tex., Inc. v. Allen, 858 S.W.2d 47, 49 (Tex.
App.—Houston [14th Dist.] 1993, writ denied). If a conditionally privileged
statement is motivated by malice, however, the privilege is lost. Pioneer, 858
S.W.2d at 49. Whether a qualified privilege exists is a question of law for the
court. Houston v. Grocers Supply Co., 625 S.W.2d 798, 800 (Tex. App.—Houston
[1st Dist.] 1981, no writ).
When the defendant moves for summary judgment, the defendant has the
burden to conclusively prove his affirmative defense of qualified privilege,
including proving the lack of malice. See Randalls Food Mkts., 891 S.W.2d at 646;
Saudi v. Brieven, 176 S.W.3d 108, 118–19 (Tex. App.—Houston [1st Dist.] 2004,
pet. denied). In the absence of controverting proof, a defendant’s affidavit is
sufficient to negate actual malice. See Saudi, 176 S.W.3d at 119; Gonzales v. Levi
Strauss & Co., 70 S.W.3d 278, 283 (Tex. App.—San Antonio 2002, no pet.).
C. Application of the Law to Yeske’s Defamation Claim
On appeal, Yeske complains that Kassab made defamatory statements to the
other condominium owners concerning Yeske’s alleged failure to pay his 2013
condominium dues and filed a non-judicial foreclosure action based on untrue
publications in Harris County. Yeske argues that the trial court erred in granting
the no-evidence summary judgment on his defamation claims against Kassab
because an adequate time for discovery had not passed, the appellees failed to
15
identify the specific elements of the claim they challenged, and Yeske presented
more than a scintilla of evidence that Kassab defamed him. We need not address
these complaints, however, because summary judgment on Yeske’s defamation
claim against Kassab may be affirmed on another ground.
The trial court’s final summary judgment order granted both the appellees’
no-evidence and traditional motions for summary judgment “in their entirety”
without specifying the grounds. In their traditional summary judgment motion, the
appellees asserted that Yeske could not identify one slanderous comment made by
Kassab; the defamation claims against Kassab were barred by limitations; the
subject statements were either not defamatory as a matter of law or are true or
substantially true; and a qualified privilege exists as to any statements made by
Kassab in carrying out his duties on the Board of the Association and Yeske could
not show that Kassab acted with actual malice. Although Yeske points to some
evidence that Kassab made certain statements which Yeske maintains are
defamatory and untrue in response to the appellees’ no-evidence summary
judgment motion, Yeske wholly fails to address each of the traditional summary
judgment grounds raised in the motion, including Kassab’s defenses.
When, as here, a summary judgment fails to specify the grounds upon which
the trial court relied for its ruling, we must affirm the judgment if any of the
grounds advanced is meritorious. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex.
1989). Further, because Yeske does not challenge on appeal the grounds raised in
the appellees’ traditional summary judgment motion to defeat Yeske’s defamation
claims, we may affirm the summary judgment on Yeske’s defamation claim
against Kassab on this basis. See Wilkinson v. USAA Fed. Sav. Bank Trust Servs.,
No. 14-13-00111-CV, 2014 WL 3002400, at *5 (Tex. App.—Houston [14th Dist.]
July 1, 2014, pet. denied) (mem. op.) (“[W]hen a particular summary judgment
16
ground goes unchallenged, we affirm the judgment as to that ground.”) (citing
PAS, Inc. v. Engel, 350 S.W.3d 602, 608 (Tex. App.—Houston [14th Dist.] 2011,
no pet.); Wortham v. Dow Chem. Co., 179 S.W.3d 189, 202–03 (Tex. App.—
Houston [14th Dist.] 2005, no pet.) (holding that when trial court issued amended
order granting summary judgment in favor of defendant on all of appellants’
claims without specifying any grounds and, on appeal, appellants failed to
challenge a ground, summary judgment on that ground would be affirmed). We
overrule Yeske’s second issue.
III. The Trial Court’s Grant of Traditional and No-Evidence Summary
Judgment on “Various Causes of Action”
In his third issue, Yeske challenges the trial court’s grant of traditional and
no-evidence summary judgment on his “various causes of action,” including
accounting, defamation, assault, misappropriation of funds, negligence and gross
negligence, on the grounds that fact issues exist as to these claims. Within this
issue, Yeske presents two overarching complaints: (1) the trial court erred in
granting summary judgment on Yeske’s request for a declaratory judgment; and
(2) the appellees owed Yeske statutory duties that they breached and therefore
summary judgment was improper because he was entitled to bring such an action
and sue for attorney’s fees.
A. Declaratory Judgment Actions
Under the Uniform Declaratory Judgments Act, “a person interested under a
deed, will, written contract, or other writings constituting a contract or whose
rights, status, or other legal relations are affected by a statute, municipal ordinance,
contract, or franchise may have determined any question of construction or validity
arising under the instrument, statute, ordinance, contract, or franchise and obtain a
declaration of rights, status, or other legal relations hereunder.” Tex. Civ. Prac. &
17
Rem. Code § 37.004(a). A declaration may be either affirmative or negative in
form and effect, and the declaration has the force and effect of a final judgment or
decree. Id. § 37.003(b). Declaratory judgments are reviewed under the same
standards as other judgments. Id. § 37.010. Because the appellees moved for
summary judgment on Yeske’s request for declaratory relief, we review the
declaratory judgment by summary judgment standards. See City of Galveston v.
Tex. Gen. Land Office, 196 S.W.3d 218, 221 (Tex. App.—Houston [1st Dist.]
2006, pet. denied).
1. Yeske did not present a genuine issue of material fact on whether
the Association ever existed.
As explained above, Yeske sought a declaratory judgment that the
Association was “not organized pursuant to the statutes, codes and laws of the
State of Texas, and as such is not a viable homeowners association and lacks
authority to act according[ly].” In response, the appellees moved for traditional
summary judgment on Yeske’s declaratory judgment action, arguing that the
evidence established as a matter of law that PDA HOA Winsome d/b/a/ Piazza Del
Arte Homeowners Association was the entity operating the Association and was
organized lawfully and remains in “good status” with the Texas Secretary of State.
The appellees also moved for no-evidence summary judgment on Yeske’s request
for declaratory relief, asserting that Yeske had no evidence that (1) the Association
was not organized pursuant to the codes, statutes, and laws of the State of Texas, or
(2) that the Association is not a viable homeowners association and lacks authority
to act accordingly.
The Texas Uniform Condominium Act provides that “a condominium may
be created . . . only by recording a declaration executed in the same manner as a
deed by all persons who have an interest in the real property” that contains certain
18
information, including the name of the unit owners’ association. See Tex. Prop.
Code §§ 82.051(a), 82.055. The unit owners’ association must be organized as a
profit or nonprofit corporation. See Tex. Prop. Code § 82.101. Further, a
condominium unit may not be conveyed until the Secretary of State has issued a
certificate of incorporation for the association. Id.
Yeske contends that the appellees failed to comply with the Act because
there was not a corporation named “Piazza Del Arte Homeowners Association,
Inc.” when the Association was purportedly created, and therefore the Association
never legally existed. Because the Association failed to properly follow the legal
requirements for forming a condominium homeowners association, Yeske argues,
the Association “pretended that a homeowners association existed and collected
monies from owners without legal authority.” Consequently, Yeske argues, he was
entitled to bring a declaratory judgment action against the appellees to enforce the
Act. See Tex. Prop. Code § 82.161 (providing that if a declarant or any other
person subject to the Act violates the Act, the declaration, or the bylaws, a person
or class of persons adversely affected by the violation has a claim for appropriate
relief and the prevailing party is entitled to reasonable attorney’s fees and costs of
litigation).
In their traditional summary judgment motion, the appellees presented
evidence that the Association is operated by the nonprofit corporation “PDA HOA
5801 Winsome,” which has been registered with the Secretary of State since 2006,
and the corporation remains in good standing with the Texas Secretary of State.
Yeske points to no contrary evidence. The appellees contend that Yeske confuses
PDA HOA 5801 Winsome, the nonprofit entity that has always operated the
Association, with Piazza Del Arte, Inc., the now-defunct for-profit entity that was
initially set up to construct the condominiums. According to the appellees, this
19
confusion caused Yeske to sue Piazza Del Arte, Inc., believing it was the
Association. Further, after Bekardi resigned as the Association’s president, Kassab,
Garney, and Ebarb filed the assumed name certificate in 2013 to prevent any
potential confusion.
The appellees’ evidence conclusively demonstrates that the Association has
been legally incorporated as PDA HOA 5801 Winsome since 2006 and is the
nonprofit entity that operates the Association in accordance with the Act. The
burden thus shifted to Yeske to raise a genuine issue of material fact issue
precluding summary judgment.
Yeske first asserts that no entity named “Piazza Del Arte Homeowners
Association, Inc.” was ever incorporated and empowered to collect dues or fees
from Yeske, and the appellees’ filing of the 2013 assumed name certificate with
that name does not cure the defect. Yeske relies on section 82.101 of the Act to
argue that no homeowners association for a condominium exists until a certificate
of incorporation is issued by the State of Texas. See Tex. Prop. Code § 82.101 (“A
unit owners’ association must be organized as a profit or nonprofit corporation.”).
However, a similar argument was rejected in Plano Parkway Office Condos. v.
Bever Props., LLC, 246 S.W.3d 188, 195 (Tex. App.—Dallas 2007, pet. denied).
In Plano Parkway, a condominium unit owner and lessee sought a
declaration that the condominium association failed to comply with section 82.101
because it sold the unit before the association was incorporated and, therefore, the
association did not legally exist and the unit was not subject to the association’s
bylaws or the condominium declarations. See id. at 190–01. After a detailed
analysis of the Act, the Plano Parkway court concluded that “the defining event in
the creation of a condominium regime is the filing of a declaration under sections
82.051(a) and 82.055 of the Texas Property Code, not the incorporation of the unit
20
owners’ association.” Id. at 195. The court further held that the unit owner was not
excused from the condominium regime because the association’s certificate of
incorporation was not issued before the units were conveyed. Id.4
Assuming that the Association failed to comply with the Act in some way by
representing itself by the name “Piazza Del Arte Homeowners Association, Inc.”
or some other variation which differed from its corporate name, Plano Parkway
suggests that such a technical violation would not relieve Yeske of his obligation to
pay the condominium assessments. See id. at 195–96. In Plano Parkway, the unit
owner and lessee also argued that that they were excused from the condominium
regime because the association’s articles of incorporation provided that it “will
have no members,” in violation of section 82.101’s requirement that all unit
owners be members of the association. See id. The court rejected that argument as
well, and determined that the legislative intent of the Act was “that the
consequence of a defect in the articles of incorporation is to allow the owner to
pursue ‘appropriate relief’ under section 82.161 . . ., not to defeat the entire
condominium regime.” See id. at 196; see also Bever Props., LLC v. Jerry
Huffman Custom Builder, L.L.C., No. 05-13-01519-CV, 2015 WL 4600347, at *14
(Tex. App.—Dallas July 31, 2015, no pet.) (mem. op.) (stating that section 82.161
4
Yeske dismisses the Plano Parkway decision, arguing that it has been superseded by a
2012 amendment to the Texas Property Code. Specifically, Yeske points to Property Code
section 202.006(b), which provides that “a dedicatory instrument has no effect until the
instrument is filed in accordance with this section.” According to Yeske, when analyzed in
combination with sections 82.051(a) and 82.101, “it leads to the conclusion that effective 2012,
dedicatory instruments have no effect unless the condominium association is first incorporated.”
However, section 202.006 is located in a separate chapter of the Property Code concerning
restrictive covenants, and Yeske points to nothing suggesting that the legislature intended this
provision to override the plain language of the statutes applicable to condominium declarations
in the Act. See TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 439 (Tex. 2011)
(stating that the primary objective in construing a statute is to give effect to the Legislature’s
intent as expressed in the statute’s plain language and that courts must avoid adopting an
interpretation that renders any part of the statute meaningless).
21
of the Act “creates a general cause of action for a person who is adversely affected
when a person subject to the [Act] violates the [Act] or the declaration or the
bylaws of a condominium regime”). Accordingly, even if the Association has
failed to comply with some provision of the Act, any noncompliance would not, as
Yeske argues, necessarily invalidate the condominium regime entirely. See Plano
Parkway, 246 S.W.3d at 195–96.
Yeske acknowledges the appellees’ claim that PDA HOA 5801 Winsome is
the homeowners association for the Piazza Del Arte Condominiums. But, Yeske
argues, only after Yeske filed his lawsuit in 2013—and just three months before
filing summary judgment motions—did the appellees file an assumed name
certificate “attempting to legalize the use of the name ‘Piazza Del Arte
Homeowners Association’ as an assumed name of PDA HOA 5801 Winsome,
Inc.” Yeske also argues that filing an assumed name certificate cannot “shoehorn”
the Piazza Del Arte Homeowners Association into an existing corporation, but
even if it did, such an entity would not have been created until 2013. Years before
this, Yeske asserts, the appellees attempted to collect dues as if the homeowners
association was already incorporated when it was not, pointing to collection letters
sent to Yeske demanding $2,700.00 and $3,100.00 for dues that included the
letterhead, “Piazza Del Arte Homeowners Association, Inc.”
While we agree with Yeske that filing an assumed name certificate is not
equivalent to forming a new corporation, Yeske cites no authority for the
proposition that the failure to file an assumed name certificate invalidates an
existing corporate entity. Rather, Yeske cites to Texas Business and Commerce
Code section 71.201 to argue that a company which fails to file an assumed name
certificate “may not maintain in a court of this state an action or proceeding arising
out of a contract or act in which an assumed named was used until an original,
22
new, or renewed certificate has been filed.” See Tex. Bus. & Com. Code
§ 71.201(a). However, the statute also provides that the failure to comply “does not
impair the validity of any contract or act by the [company] or prevent the
[company] from defending any action or proceeding in any court of this state.” Id.
Therefore, the 2013 assumed name certificate filed by PDA HOA 5801 Winsome
is not, as Yeske maintains, evidence that the Association never legally existed, or
that it only legally existed after it initiated the non-judicial foreclosure on his unit.
Yeske also contends that PDA HOA 5801 Winsome is not legally
incorporated because it does not comply with section 82.055 of the Act. According
to Yeske, this section expressly prohibits the use of abbreviations in the formation
of a condominium homeowners association such as “PDA HOA” because the Act
provides that the word “condominium” must be included in the homeowners
association. Section 82.055 of the Act provides, in relevant part:
The declaration of a condominium must contain
(1) the name of the condominium, which must include the word
“condominium” or be followed by the words “a condominium” or
a phrase that includes the word “condominium,” and the name of
the association.
See id. § 82.055(1) (emphasis added). By its plain language, this provision applies
to the condominium declaration, not the legal name of the corporation operating
the condominium homeowners association. The Declaration for the Piazza Del
Arte Condominiums complies with this requirement, providing on its first page as
follows: “The formal name of the Project is ‘PIAZZA DEL ARTE
CONDOMINIUMS’ and will be known as ‘PIAZZA DEL ARTE
CONDOMINIUMS.’” Yeske’s argument that PDA HOA 5801 is not properly
incorporated because it uses abbreviations and its name does not include the word
“condominium” is not supported by the statutory language on which he relies.
23
Finally, although his argument is not entirely clear, Yeske appears to
contend that his request for declaratory relief could not be disposed of on summary
judgment in the appellees’ favor. Yeske argues that because a declaratory
judgment action “is an additional and cumulative remedy” that does not supplant
any existing remedy, “treating Yeske’s declaratory judgment as if it were an
independent cause of action is error.” Yeske maintains that he was authorized to
bring a declaratory judgment action to enforce the Act and, if the prevailing party,
he may recover attorneys’ fees for doing so, a proposition with which we agree. As
we have explained, however, Yeske is not entitled to the declaratory relief he
seeks.
In summary, the thrust of Yeske’s complaint is that “Piazza Del Arte
Homeowners Association, Inc.” purported to be a valid condominium homeowners
association that was collecting and using unit owners’ assessments, when no
corporation by that name ever legally existed. However, the appellees have
presented uncontroverted evidence that the Association has been operated by the
nonprofit corporation PDA HOA 5801 Winsome since 2006, and the company
remains in good standing. Yeske has presented no evidence that raises a fact issue
to the contrary. Thus, the trial court’s rejection of Yeske’s requested declaratory
relief and its judgment that PDA HOA 5801 Winsome d/b/a/ Piazza Del Arte
Homeowners Association was “the entity operating the homeowners association”
was not error.
2. Yeske failed to raise a fact issue precluding summary judgment
on “various causes of action.”
Yeske next argues that fact issues preclude summary judgment against him
on his “various causes of action” because he presented evidence that creates a
genuine issue of material fact precluding summary judgment on all of the claims
24
on which the appellees moved for summary judgment.
In his summary judgment response, Yeske did not address each of the
appellees’ grounds for summary judgment; instead, Yeske organized his arguments
into three sections: (1) “Under Texas law, Condominium Association never
existed”; (2) “Assumed Name Certificate fails as a matter of law”; and (3)
“Defendants liable to unit owners by statute.” In the third section, Yeske asserted
that all of the appellees were subject to liability for violations of specific provisions
of the Act and, further, that the individual board members were liable for breaches
of fiduciary duty under section 82.103. Yeske’s allegations were primarily
supported by statements in his own affidavit. Yeske also averred that he suffered
$19,657.00 in damages, and $21,750.00 in attorney’s fees. Yeske concluded by
asserting that he “has suffered damages for Defendants’ negligence, gross
negligence, defamation, misappropriation of funds, wrongful foreclosure, and
attorney’s fees.”
On appeal, Yeske reproduces the same section of his response to assert that
his evidence “unequivocally created the necessary fact issues” to preclude
summary judgment on his various causes of action. In this section of his brief,
Yeske does not address the evidence that he contends raises a genuine issue of
material fact on each challenged element of the appellees’ no-evidence summary
judgment on Yeske’s claims for negligence, gross negligence, defamation,
misappropriation of funds, wrongful foreclosure, other wrongdoing, assault and
battery, or intentional infliction of emotional distress. Indeed, Yeske does not
discuss these claims at all.
Because Yeske failed to point out the evidence that raises a fact issue on
each of the elements of the claims challenged in the appellees’ no-evidence
summary judgment motion and does not address the claims on appeal, we overrule
25
Yeske’s third issue and affirm the trial court’s grant of the appellees’ no-evidence
summary judgment motion on Yeske’s claims of negligence, gross negligence,
defamation, misappropriation of funds, wrongful foreclosure, other wrongdoing,
assault and battery, and intentional infliction of emotional distress. See Haven
Chapel United Methodist Church v. Leebron, 496 S.W.3d 893, 903 (Tex. App.—
Houston [14th Dist.] 2016, no pet.) (affirming grant of no-evidence summary
judgment when appellant did not address the claims on which appellee moved for
no-evidence summary judgment or direct the court to any evidence to overcome
the appellee’s challenges to the elements of each of the appellant’s claims); Leffler
v. JP Morgan Chase Bank, N.A., 290 S.W.3d 384, 386–87 (Tex. App.—El Paso
2009, no pet.) (“When a ground upon which summary judgment may have been
rendered, whether properly or improperly, is not challenged, the judgment must be
affirmed.”).
Moreover, as Yeske has failed to address the no-evidence summary
judgment granted against him on his negligence and gross negligence claims, we
need not consider Yeske’s fourth issue in which Yeske argues that the trial court
erred in granting the appellees’ traditional motion for summary judgment on his
negligence and gross negligence claims based on lack of standing. See, e.g., Ford
Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004) (noting that if appellant
fails to point to a scintilla of evidence under the no-evidence standard, “then there
is no need to analyze whether [appellant’s] proof satisfied the Rule 166a(c)
burden).
IV. Summary Judgment Granted on Claims Not Presented in the
Appellees’ Motion
In his fifth issue, Yeske contends that the trial court erred in granting a
traditional and no-evidence summary judgment on claims not presented in the
26
appellees’ motion. Yeske argues that the appellees wholly failed to move for
summary judgment on the following claims alleged in his third amended petition:
(1) defamation by Bekardi and Garney; (2) demand for accounting; (3) violation of
TUCA; (4) attorney’s fees for bringing TUCA claims; and (5) declaratory
judgment on Yeske’s TUCA claims. In response, the appellees contend that the
third amended petition alleging TUCA claims was not before the trial court, but
even if it were, they were entitled to summary judgment on all claims.
A. The Timeliness of the Third Amended Petition
Yeske contends that he timely filed his third amended petition with his
supplemental response to the appellees’ motions on September 12, seven days
before the September 19, 2014 hearing date. In support of this contention, Yeske
points to the petition’s certificate of service indicating that it was served on
September 12, and he notes that the petition was filed before the January 2, 2015
deadline for amended pleadings contained in the court’s docket control order.
Yeske also argues that the trial court must have considered his third amended
petition before signing the September 24, 2014 order granting a no-evidence
summary judgment on Yeske’s defamation claim against Kassab because the
appellees moved to strike the petition as untimely, but the trial court did not rule on
their motion.
A party may amend its pleadings after a motion for summary judgment is
filed until seven days before trial. Tex. R. Civ. P. 63. A summary judgment
proceeding is a trial within the meaning of Rule 63. Goswami v. Metro. Sav. &
Loan Ass’n, 751 S.W.2d 487, 490 (Tex. 1988). However, if a party files amended
pleadings within seven days before a summary judgment hearing, an appellate
court will presume that the trial court granted leave to amend when the summary
judgment states that all pleadings were considered, the record does not indicate that
27
an amended pleading was not considered, and the opposing party does not show
surprise. Cont’l Airlines, Inc. v. Kiefer, 920 S.W.2d 274, 276 (Tex. 1996). Texas
appellate courts apply a liberal interpretation in determining whether a trial court
granted leave to late-file an amended pleading. Wilson v. Korthauer, 21 S.W.3d
573, 577 (Tex. App.—Houston [14th Dist.] 2000, pet. denied).
The appellees assert that Yeske’s third amended petition was not timely filed
because even though the certificate of service indicates that the petition was served
on September 12, the electronic file stamp from the clerk’s office shows that it was
actually filed on September 15, less than seven days before the September 19
hearing.5 The appellees argue that leave to file the untimely pleading cannot be
presumed because (1) the trial court’s order indicates that the trial court did not
consider the amended petition, and (2) the appellees demonstrated surprise.
1. The trial court’s order
The appellees contend that the language in the final summary judgment
order shows that the trial court did not consider Yeske’s petition because it reflects
that the trial court considered only the “pleadings . . . properly before the
Court . . . .” See John C. Flood of DC, Inc. v. SuperMedia, L.L.C., 408 S.W.3d 645,
654 (Tex. App.—Dallas 2013, pet. denied) (“By reciting that it considered the
5
In his reply brief, Yeske argues for the first time that documents attached to appellate
brief show that Yeske electronically filed his supplemental response and third amended petition
on the same day, but the petition was file-stamped at a later date because the district clerk
rejected the original submission. In support of this claim, Yeske points to documents attached to
his appellate brief. Yeske also argues that under Rule 21(5) of the Texas Rules of Civil
Procedure, his third amended petition was deemed filed on September 12. However, Yeske may
not raise a new issue in his reply brief that was not discussed in his original brief, even if the new
issue is raised in response to a matter in the appellee’s brief but not raised in the appellant’s
original brief. See, e.g., Marsh v. Livingston, No. 14-09-00011-CV, 2010 WL 1609215, at *4
(Tex. App.—Houston [14th Dist.] Apr. 22, 2010, pet. denied) (mem. op.). Further, this court
cannot consider documents attached to an appellate brief that are not contained in the appellate
record. See WorldPeace v. Comm’n for Lawyer Discipline, 183 S.W.3d 451, 465 n.23 (Tex.
App.—Houston [14th Dist.] 2005, pet. denied). We therefore do not address this issue.
28
“timely filed” pleadings, not “all of the pleadings,” the trial court indicated it did
not consider appellants’ amended answer in the course of deciding appellee's
summary judgment motions.”); Hussong v. Schwan’s Sales Enters., Inc., 896
S.W.2d 320, 323 (Tex. App.—Houston [1st Dist.] 1995, no writ) (trial court did
not grant leave to file pleadings late where summary judgment order stated that
court considered “prior pleadings referenced in the motion for summary
judgment”).
The trial court’s order recites: “The Court, having considered the aforesaid
motions, as well as the pleadings, affidavit(s), discovery responses, if any, exhibits
and other summary judgment evidence properly before the Court” grants the
appellees’ summary judgment motions (emphasis added). The phrase “properly
before the court” immediately follows “other summary judgment evidence,” rather
than the list of items that includes the pleadings. “It is a general rule of grammar
that modifying words or phrases are presumed to apply to the words or phrases that
immediately precede them and not to those more remote.” See Note Inv. Grp., Inc.
v. Assocs. First Capital Corp., 478 S.W.3d 463, 479–80 (Tex. App.—Beaumont
2015, no pet.) (collecting authorities). Applying this rule, the phrase “properly
before the court” modifies only “other summary judgment evidence,” not the more
remote “pleadings.” Therefore, the order reflects that the trial court considered “the
pleadings” on file, and it is undisputed that the third amended petition was on file
prior to the hearing.
Even if “properly before the court” were read to modify “pleadings,” the
trial court could have determined that the petition was properly filed, given that it
did not grant the appellees’ motion to strike the petition. Further, the language in
the order that Yeske shall take nothing “by reason of his various causes of action”
suggests that the trial court intended to grant summary judgment on all of Yeske’s
29
claims, including those asserted in his third amended petition. Thus, nothing in the
record indicates that Yeske’s third amended pleading was not considered. See
Kiefer, 920 S.W.2d at 276.
2. Prejudice and surprise
The appellees next contend that they were “clearly prejudiced and surprised”
by the third amended petition because “a pleading is facially prejudicial if it asserts
new claims not previously pleaded.” According to the appellees, because they
objected to the amendment as prejudicial, “prejudice has been demonstrated.” As
support for this contention, the appellees cite G.R.A.V.I.T.Y. Enterprises, Inc. v.
Reece Supply Company, 177 S.W.3d 537, 544 (Tex. App.—Dallas 2005, no pet.),
and Stephenson v. Leboeuf, 16 S.W.3d 829, 839 (Tex. App.—Houston [14th Dist.]
2000, pet. denied). But neither case holds that a pleading is automatically
prejudicial on its face as a matter of law merely because it asserts a new cause of
action. See G.R.A.V.I.T.Y., 177 S.W.3d at 543 (holding that trial court had
discretion to grant motion to strike appellant’s second amended petition when
appellant did not dispute that it was prejudicial on its face, the petition was
untimely under the scheduling order, and it was objected to by appellee);
Stephenson, 16 S.W.3d at 839 (“Merely because an amended pleading asserts a
new cause of action, however, does not make it prejudicial to the opposing party as
a matter of law.”). Further, although Yeske did not allege that the appellees’
conduct constituted statutory violations of TUCA until the third amended petition,
his pleadings and summary judgment responses reflect that his claims were based
on the appellees’ alleged failure to comply with various TUCA provisions.
Therefore, the appellees have not demonstrated surprise as a matter of law.
Because the summary judgment order reflects that all pleadings were
considered, the record does not indicate that Yeske’s third amended petition was
30
not considered, and the appellees have not shown surprise, we presume that the
trial court granted Yeske leave to amend his pleadings and considered the third
amended petition.
B. Summary Judgment on All of Yeske’s Claims was Error
Yeske next contends that the appellees did not move for summary judgment
on the following claims: (1) defamation by Bekardi and Garney; (2) demand for
accounting; and (3) statutory claims, declaratory judgment, and attorney’s fees
under TUCA. Therefore, Yeske asserts, the appellees were not entitled to summary
judgment on those claims. In response, the appellees assert that even if the trial
court considered Yeske’s third amended petition alleging TUCA violations,
summary judgment as to these claims was proper.
As a general rule, a party may not be granted judgment on a cause of action
not addressed in a Rule 166a(c) summary judgment proceeding. See Nall v.
Plunkett, 404 S.W.3d 552, 555 (Tex. 2013) (per curiam); Similarly, the no-
evidence summary judgment rule “requires that the moving party identify the
grounds for the motion.” Timpte, 286 S.W.3d at 310. The portion of a final
summary judgment rendered on the plaintiff’s entire case under these
circumstances must generally be reversed because the judgment grants more relief
than requested. See Lehmann v. Har-Con Corp., 39 S.W.3d 191, 200 (Tex. 2001);
Dubose v. Worker’s Med., P.A., 117 S.W.3d 916, 922 (Tex. App.—Houston [14th
Dist.] 2003, no pet.).
This court has recognized limited exceptions to the general rule when (1) the
movant has conclusively proved or disproved a matter that would also preclude the
unaddressed claim as a matter of law, or (2) when the unaddressed claim is
derivative of the addressed claim and the movant proved its entitlement to
summary judgment on the addressed claim. See Engel, 350 S.W.3d at 609–10;
31
Dubose, 117 S.W.3d at 922. The application of an exception requires “a very tight
fit” between what was proved or disproved in the motion and what elements must
be proved or disproved for the unaddressed claim. Engel, 350 S.W.3d at 610
(citing Wilson v. Davis, 305 S.W.3d 57, 73 (Tex. App.—Houston [1st Dist.] 2009,
no pet.)).
1. Defamation against Bekardi and Garney
Yeske asserts that the appellees moved for no-evidence summary judgment
only as to Yeske’s claims of defamation against Kassab, and therefore are not
entitled to summary judgment on his defamation claims against Bekardi and
Garney. The appellees’ no-evidence motion challenged the following elements of
Yeske’s defamation claims:
[A]fter an adequate period of discovery, Plaintiff has been unable to
produce, and will not be able to produce, evidence sufficient to raise a
genuine issue of material fact as to these challenged elements: (1) that
any of the Defendants actually published a statement; (2) that any
alleged statements which were published were defamatory concerning
the Plaintiff; and/or (3) that Defendants acted with negligence
regarding the truth of the statement. Moreover, as to Defendant David
Eric Kassab, Plaintiff cannot put forth evidence sufficient to raise a
genuine issue of material fact that David Eric Kassab published any
allegedly defamatory statements with actual malice.
The appellees properly identified each challenged element of Yeske’s defamation
claims against all of the “Defendants”—which would include Bekardi and
Garney—and asserted an additional defense specific to Kassab. See Timpte, 286
S.W.3d at 310; Lampasas v. Spring Ctr., Inc., 988 S.W.2d 428, 436 (Tex. App.—
Houston [14th Dist.] 1999, no pet.). Because Yeske offered no evidence to support
his defamation claims against Bekardi and Garney, the trial court did not err by
granting summary judgment on those claims. See Wilkinson, 2014 WL 3002400, at
*5; Wortham, 179 S.W.3d at 202–03.
32
2. Demand for Accounting
Yeske claims that he alleged a demand for an accounting in both his second
and third amended petitions, in which he requested that “the Association provide
access to all of its financial books and financial records and to provide a full and
accurate accounting of all funds deposited and expended allegedly on behalf of the
owners of property located at 5801 Winsome Lane, Houston, Texas, from January
2006 to present.” Additionally, in Yeske’s third amended petition, he alleges that
“the Defendants have wholly failed to abide by the provisions of TUCA, including
but not limited to obtaining annual audits, keeping true books, and fail[ing] to
make financial records, other records or annual audits available” to Yeske, causing
him to incur attorney’s fees and expenses for which he is entitled to recover under
section 82.161 of the Act.
An accounting may be a particular remedy sought in conjunction with
another cause of action or it may be a suit in equity. Lewis v. Xium Corp., No. 07-
08-0219-CV, 2009 WL 1953419, at *5 (Tex. App.—Amarillo July 8, 2009, pet.
denied) (mem. op.). In a suit for an accounting, the general rule requires that the
right to an accounting must first be determined and, if found, reference for an
account should be ordered. Advert. & Policy Comm. of the Avis Rent A Car Sys. v.
Avis Rent A Car Sys., 780 S.W.2d 391, 400 (Tex. App.—Houston [14th Dist.]
1989), vacated and remanded due to settlement, 796 S.W.2d 707 (Tex. 1990). To
be entitled to an accounting, a plaintiff usually must have a contractual or fiduciary
relationship with the party from which the plaintiff seeks the accounting. T.F.W.
Mgmt., Inc. v. Westwood Shores Prop. Owners Ass’n, 79 S.W.3d 712, 717 (Tex.
App.—Houston [14th Dist.] 2002, pet. denied).
The appellees contend that Yeske’s request for an accounting is “not a
separate cause of action but rather a remedy sought.” See Shields v. Ameriquest
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Mortg. Co., No. 05-06-01647, 2007 WL 3317533, at *2 (Tex. App.—Dallas Nov.
9, 2007, no pet.) (mem. op.). Because the claims underlying Yeske’s request for an
accounting were appropriately dismissed, the appellees assert, Yeske is not entitled
to this relief. The appellees’ argument overlooks Yeske’s separate allegations
under the section of his third amended petition on “Violations of Texas Uniform
Condominium Act” in which he alleged that he is entitled to statutory relief as
provided in the Act. See Plano Parkway, 246 S.W.3d at 196. The appellees’
summary judgment motion did not address the accounting-related TUCA claims
alleged in Yeske’s third amended petition; therefore, summary judgment was
improper on those claims. Moreover, to the extent that Yeske requests an
accounting as a remedy for Yeske’s alleged TUCA violations, the determination of
whether an accounting would be an appropriate remedy must await the
determination of the liability issues. See Shields, 2007 WL 3317533, at *2.
3. Other TUCA Claims
In addition to the accounting-related TUCA claims in Yeske’s third
amended petition, Yeske alleged that the Association never existed and therefore
collected monies from owners without legal authority in violation of TUCA.
Moreover, as the appellees acknowledge, Yeske argued in his summary judgment
response that: each of the appellees owed him statutory duties under the Act;
appellees Kassab, Bekardi, and Garney owed him fiduciary duties under section
82.103 of the Act; and the appellees violated several specific sections of the Act. It
is undisputed that the appellees did not move for summary judgment on Yeske’s
TUCA claims, but they contend that any TUCA claim alleged in Yeske’s third
amended petition is derivative of or otherwise encompassed by the summary
judgment on Yeske’s declaratory judgment and negligence claims.
Concerning Yeske’s TUCA claim that the Association was never legally
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incorporated and never existed, we agree with the appellees that this claim was
disposed of by the summary judgment on Yeske’s declaratory judgment action. As
discussed above, the appellees moved for summary judgment on Yeske’s request
for declaratory relief and conclusively demonstrated that the Association was
properly incorporated and in existence. Because the crux of Yeske’s TUCA claim
and request for declaratory relief was that the Association never legally existed,
summary judgment was properly granted on this alleged violation of TUCA. See
Dubose, 117 S.W.3d at 922.
Concerning Yeske’s claims relating to the appellees’ failure to properly keep
the Association’s records and make the records available to Yeske, the appellees
contend that they addressed this claim by moving for summary judgment on
Yeske’s negligence claim, which was based, at least in part, on allegations that the
appellees failed “to render an accounting or to allow plaintiff access to its financial
records” and “to protect the residents’ Association bank accounts.” Therefore, the
appellees assert, this portion of Yeske’s TUCA claim was “necessarily
encompassed under the previously asserted and addressed negligence claim,”
citing Wortham v. Dow Chemical Company. See 179 S.W.3d at 202. In Wortham,
this court held that because Dow’s first summary judgment motion challenged the
Worthams’ ability to bring forth any evidence of a duty owed or breached in
support of their negligence claims, the trial court’s judgment was sufficiently broad
enough to encompass the Worthams’ later-pleaded negligence claims. Id.
Unlike Wortham, the appellees do not argue that Yeske failed to present
evidence on an element common to both his negligence claims and his TUCA
claims; instead, the appellees argue that because Yeske’s negligence claim was
based on the same allegations on which the TUCA claim is based, summary
judgment on the negligence claim also disposes of the TUCA claim. In PAS, Inc. v.
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Engel, this court rejected a similar argument that summary judgment on a fraud
claim also encompassed an unaddressed breach of fiduciary duty claim merely
because summary judgment was proper on the negligence claim and both claims
arose from the “same set of facts.” See 350 S.W.3d at 610. The court instead
looked to the elements of each claim and concluded that, because the fiduciary
duty claim did not require evidence of the same element on which the negligence
claim was disposed, summary judgment on the fraud claim did not preclude the
fiduciary duty claim. See id. (stating that a claim for breach of fiduciary duty,
unlike a fraud claim, does not require a plaintiff to establish reliance and holding
that “the fact that at-will employment precludes PAS from establishing justifiable
reliance for purposes of its fraud claim on alleged statements by Engel regarding
future employment with PAS, . . . does not bar its breach of fiduciary duty claim”).
The appellees’ no-evidence summary judgment motion challenged the
elements of a common-law negligence claim, namely, the existence of a duty,
breach of that duty, and damages proximately caused by the breach. See W. Invs.,
Inc. v. Urena, 162 S.W.3d 547, 550 (Tex. 2005). In contrast, TUCA provides that
“[if] a declarant or any other person subject to this chapter violates this chapter, the
declaration, or the bylaws, any person or class of persons adversely affected by the
violation has a claim for appropriate relief.” Tex. Prop. Code § 82.161(a). A
“declarant” is “a person, or group of persons acting in concert, who: (A) as part of
a common promotional plan, offers to dispose of the person’s interest in a unit not
previously disposed of; or (B) reserves or succeeds to any special declarant right.”
Id. § 82.003(10). Additionally, each officer or member of the board of a
condominium association “is liable as a fiduciary of the unit owners for the
officer’s or member’s acts or omissions” and may be liable to a unit owner for
money damages for an act or omission occurring in the person’s capacity as an
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officer or director in certain enumerated circumstances. See id. § 82.103(a), (f).
The prevailing party in an action to enforcement the declaration, bylaws, or rules is
entitled to reasonable attorney’s fees and costs of litigation from the nonprevailing
party. Id. at § 82.161(b).
Yeske’s TUCA claims implicate statutory obligations that differ from the
duties imposed under the common law. See Plano Parkway, 246 S.W.3d at 195–
96. However, with the exception of Yeske’s claim that the Association never
legally existed, nothing in the appellees’ summary judgment motion addresses
Yeske’s allegations that the appellees violated various provisions of the Act. See
Engel, 350 S.W.3d at 610; see also Smith v. Heard, 980 S.W.2d 693, 697–98 (Tex.
App.—San Antonio 1998, pet. denied) (holding that summary judgment on
attorney malpractice claims did not encompass Texas Debt Collection Practices
Act claim in amended petition).
Further, to the extent that the appellees argue, as they did in their reply brief
in the trial court, that Yeske’s statutory claims fail—including Yeske’s fiduciary
duty claim under section 82.103—a summary judgment movant may not use its
reply to amend its motion or to raise new and independent summary judgment
grounds. Engel, 350 S.W.3d at 609. In this circumstance, we conclude that the
appellees’ summary judgment motion was not broad enough to encompass Yeske’s
TUCA claims other than those related to Yeske’s claim that the Association never
existed. We therefore sustain Yeske’s fifth issue in part, and reverse and remand
the case for further proceedings consistent with this opinion.
V. Severance of the Association’s Claims against Yeske
In his seventh issue, Yeske contends that the trial court erred in severing the
Association’s claims against him when they were inextricably interwoven with his
claims against the Association. The Association responds that severance was
37
proper because all of Yeske’s claims had been disposed by summary judgment and
the only claims remaining were those of the Association.
A trial court has broad discretion in the matter of severance and
consolidation of causes, and the trial court’s decision to grant a severance will not
be reversed unless it has abused its discretion. Guaranty Fed. Sav. Bank v.
Horseshoe Operating Co., 793 S.W.2d 652, 658 (Tex. 1990). The controlling
reasons for allowing a severance are avoiding prejudice, doing justice, and
increasing convenience. Id. A claim is properly severable if (1) the controversy
involves more than one cause of action, (2) the severed claim is one that would be
the proper subject of a lawsuit if independently asserted, and (3) the severed claim
is not so interwoven with the remaining action that they involve the same facts and
issues. In re State, 355 S.W.3d 611, 614 (Tex. 2011). If any one of these three
criteria are not met, then the trial court has abused its discretion and reversal is
warranted. Owens v. Owens, 228 S.W.3d 721, 726 (Tex. App.—Houston [14th
Dist.] 2006, pet. dism’d).
According to Yeske, the Association’s claims against him involve the exact
same facts and issues presented by his claims, the claims are mirror opposites that
are inextricably interwoven, and no judicial economy is preserved by severing the
Association’s claims against him. Although we have concluded that Yeske failed
to raise a genuine issue of material fact on his claim that the Association was not
properly incorporated and therefore never legally existed, we agree that Yeske’s
statutory claims under the Texas Uniform Condominium Act are so interwoven
with the Association’s claims against Yeske for unpaid condominium dues and
fees that they involve the same facts and issues and should be tried together. See
Owens, 228 S.W.3d at 727 (holding trial court’s severance did not avoid prejudice
or further convenience but instead separated interwoven claims sharing facts and
38
issues that should be tried together). We sustain Yeske’s seventh issue and hold
that the trial court abused its discretion by severing the Association’s claims. We
therefore reverse the trial court’s April 17, 2015 severance order and remand for
further proceedings.
VI. Attorney’s Fees
In his sixth issue, Yeske argues that the trial court erred in granting the
appellees attorney’s fees and expenses on summary judgment. Within this issue,
Yeske raises several sub-issues: (1) the appellees are not entitled to fees for
defending themselves; (2) David Kassab is not entitled to hybrid representation and
recovery of his own fees and must segregate them; and (3) the award of attorney’s
fees payable in 30 days is an improper sanction.
The trial court’s judgment reflects that the appellees were awarded
attorney’s fees based on the Declaratory Judgments Act. In any declaratory
judgment proceeding, the court “may award costs and reasonable and necessary
attorneys' fees as are equitable and just.” Tex. Civ. Prac. & Rem. Code § 37.009.
The Declaratory Judgments Act “entrusts attorney fee awards to the trial court’s
sound discretion, subject to the requirements that any fees awarded be reasonable
and necessary, which are matters of fact, and to the additional requirements that
fees be equitable and just, which are matters of law.” Bocquet v. Herring, 972
S.W.2d 19, 21 (Tex. 1998). Under the Declaratory Judgments Act, a party
defending a suit brought may be awarded its reasonable and necessary attorney’s
fees. Bradt v. State Bar of Tex., 905 S.W.2d 756, 760 (Tex. App.—Houston [14th
Dist.] 1995, no pet.).
As discussed above, the trial court did not err in granting summary judgment
on Yeske’s request for declaratory judgment that the Association never legally
existed and therefore collected monies from unit owners without legal authority.
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As we have also explained, however, Yeske’s third amended petition included
claims that the appellees violated various provisions of TUCA, which were not
addressed in the appellees’ summary judgment motion. Because we reverse and
remand the case for further proceedings, we also reverse the award of attorney’s
fees for reconsideration on remand. See Tex. Civ. Prac. & Rem. Code § 37.009.
CONCLUSION
The trial court properly granted summary judgment on Yeske’s request for
declaratory judgment and claims for negligence, gross negligence, defamation,
misappropriation of funds, wrongful foreclosure, other wrongdoing, assault and
battery, and intentional infliction of emotional distress. However, the trial court
erred in granting summary judgment on Yeske’s claims based on violations of the
Texas Uniform Condominium Act (other than Yeske’s claim that the Association
was never legally incorporated and collected monies from unit owners without
legal authority) and in awarding attorney’s fees and expenses to the appellees. The
trial court also erred in granting Kassab’s Rule 91a motion to dismiss and the
Association’s motion to sever. We therefore reverse the trial court’s order granting
Kassab’s Rule 91a motion to dismiss, affirm in part and reverse in part the trial
court’s summary judgment, reverse the trial court’s order granting the
Association’s motion to sever, and remand the case for further proceedings
consistent with this opinion.
/s/ Ken Wise
Justice
Panel consists of Justices Jamison, McCally, and Wise.
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