Jetall Companies, Inc. v. Hoover Slovacek LLP ( 2022 )

Affirmed and Memorandum Opinion filed March 29, 2022.
In The
Fourteenth Court of Appeals
NO. 14-20-00691-CV
JETALL COMPANIES, INC., Appellant
V.
HOOVER SLOVACEK LLP, Appellee
On Appeal from the 164th District Court
Harris County, Texas
Trial Court Cause No. 2020-38738
MEMORANDUM OPINION
Jetall Companies, Inc. sued law firm Hoover Slovacek LLP for breach of
contract, breach of fiduciary duty, and fraud. The trial court dismissed Jetall’s
breach of contract and breach of fiduciary duty claims based on the Texas Citizens
Participation Act (“TCPA”) and dismissed the fraud claim on Hoover Slovacek’s
summary judgment motion. Jetall appeals both rulings.
Regarding the TCPA ruling, Jetall argues in three issues that the act does not
apply and that in any event it produced clear and specific evidence supporting each
element of its contract and fiduciary-duty claims. In a final issue, Jetall contends
that it presented evidence raising a genuine issue of material fact precluding
summary judgment on its fraud claim.
We affirm the trial court’s judgment.
Background
In 2010, Jetall’s president and owner, Ali Choudhri, hired Hoover Slovacek
to represent him as a defendant in a deed restriction lawsuit. After six months,
Hoover Slovacek terminated its representation and eventually withdrew from the
case. According to Hoover Slovacek, it never represented Choudhri again.
In 2016, Jetall wanted to purchase fifty percent of a title company,
Declaration Title Company (“Declaration Title”), which was owned by Renee
Davy and her then-husband, Todd Oakum. When negotiations began, Hoover
Slovacek represented Davy.1 Hoover Slovacek sent Jetall and Davy a waiver of
conflict letter on June 29, 2016, which stated in relevant part:
Presently, this firm represents Renee Davy in various legal matters.
In or around 2010, this firm . . . previously represented Jetall
Companies in a separate and distinct legal matter.[2] This firm’s
representation of Jetall Companies ended in or about late 2011 or
early 2012. Although this could present a potential conflict of interest
situation, it is my understanding that an adversarial relationship
between Jetall Companies and Ms. Davy does not now exist but that,
if one develops through this matter, you understand that we would
1
Around this time, Davy and Oakum were in the midst of divorce proceedings. Hoover
Slovacek represented Davy in the divorce.
2
Although the waiver of conflict letter stated that Hoover Slovacek previously
represented Jetall, we note that the 2010 engagement letter with Hoover Slovacek regarding the
deed restriction suit identifies Choudhri, not Jetall, as the client. Further, the named defendant in
the deed restriction suit was Choudhri. As discussed below, whether Hoover Slovacek’s client in
the 2010 deed restriction suit was Choudhri, Jetall, or both, is immaterial to our analysis.
2
have to withdraw from our representation with respect to this
particular matter.
Both Jetall and Davy signed the waiver, representing that they consented to Hoover
Slovacek’s representation of Davy regarding the Declaration Title negotiations and
waived any conflict of interest based on the circumstances stated in the waiver.
Later, Jetall requested Hoover Slovacek to withdraw as Davy’s counsel.
Michael Ballases, the Hoover Slovacek attorney for Davy’s side of negotiations,
accommodated Jetall’s request and ended Hoover Slovacek’s representation of
Davy in the Declaration Title negotiations. According to Hoover Slovacek, Davy
never sold her interest in Declaration Title to Jetall.
Approximately eight months later, Jetall filed suit against Davy and Oakum,
among others, claiming that Davy and Oakum had in fact separately agreed to sell
their respective ownership interests in Declaration Title to Jetall but breached those
agreements and committed fraud in the process (the “Declaration Title Suit”).
Hoover Slovacek, specifically attorney Ballases, represented Davy in that suit.
While the Declaration Title Suit was pending, Jetall filed a separate lawsuit
against Ballases and Mike Johanson, an attorney with a different law firm, alleging
that Ballases and Johanson conspired to and did tortiously interfere with the
purported contract for the sale of Davy’s and Oakum’s ownership interests in
Declaration Title to Jetall. Ballases and Johanson successfully moved to dismiss
Jetall’s claims against them under the TCPA, which the First Court of Appeals
upheld. See generally Jetall Cos., Inc. v. Johanson, No. 01-19-00305-CV, 2020
WL 6435778, at *1 (Tex. App.—Houston [1st Dist.] Nov. 3, 2020, no pet.) (mem.
op.).
The Declaration Title Suit was tried to a jury, which found that Davy had not
agreed to sell her interest in Declaration Title to Jetall. A week after the judge
3
signed the final judgment in that case, Jetall filed the present suit against Hoover
Slovacek. Jetall asserted claims for breach of contract and breach of fiduciary
duty. Jetall alleged that Jetall and Hoover Slovacek were parties to the conflict
waiver Jetall signed during the negotiations with Davy and that the waiver
contained a provision reserving Jetall’s right to request that Hoover Slovacek
withdraw from representing Davy. Jetall alleged that it invoked that contract right,
and that Hoover Slovacek acknowledged it would withdraw. According to Jetall,
however, Hoover Slovacek breached the contract and violated fiduciary duties by
continuing to represent Davy despite its commitment to withdraw. In an amended
petition, Jetall added a fraud claim, alleging that Hoover Slovacek fraudulently
induced Jetall to sign the conflict waiver.
Hoover Slovacek moved to dismiss Jetall’s contract and fiduciary-duty
claims under the TCPA. Hoover Slovacek argued that the TCPA applied because
Jetall’s claims were based on or in response to the exercise of Hoover Slovacek’s
right to petition; that Jetall could not establish a prima facie case for its claims; and
that, even if Jetall could prove a prima facie case, Jetall’s claims were barred by
the defenses of attorney immunity, waiver, and res judicata.
Jetall responded, arguing that the TCPA did not apply because Jetall’s
claims were not based on any specific communication. Jetall also submitted a
declaration from Choudhri and other evidence in support of a prima facie case.
The trial court granted Hoover Slovacek’s TCPA motion, dismissed Jetall’s
contract and fiduciary-duty claims, awarded Hoover Slovacek its attorney’s fees,
and assessed sanctions against Jetall.
Hoover Slovacek also moved for summary judgment on Jetall’s fraud claim,
which the trial court granted, thus dismissing Jetall’s suit in its entirety.
4
Jetall challenges both rulings on appeal.3
A. TCPA dismissal of Jetall’s contract and fiduciary-duty claims
1. Applicable law and standard of review
The TCPA protects citizens who associate, petition, or speak on matters of
public concern from retaliatory lawsuits that seek to intimidate or silence them.
See In re Lipsky, 460 S.W.3d 579, 584 (Tex. 2015) (orig. proceeding). That
protection comes in the form of a “special motion to dismiss . . . for any suit that
appears to stifle the defendant’s exercise of those rights.” Youngkin v. Hines, 546
S.W.3d 675, 679 (Tex. 2018) (quotation omitted).
Reviewing a TCPA motion to dismiss involves three steps. As a threshold
matter, the movant must demonstrate that the TCPA applies. See Tex. Civ. Prac. &
Rem. Code § 27.005(b). To meet this burden, the movant must show by a
preponderance of the evidence that the legal action is based on or is in response to
movant’s exercise of the rights to associate, speak freely, and petition. Id. If the
movant meets its initial burden, the burden then shifts to the nonmovant to
establish by clear and specific evidence a prima facie case for each essential
element of its claim. Id. § 27.005(c). Finally, if the nonmovant satisfies that
requirement, the burden shifts back to the movant to establish as a matter of law
any valid defense. Id. § 27.005(d). Whether the parties have met these respective
burdens is a question of law that we review de novo. See Dallas Morning News,
Inc. v. Hall, 579 S.W.3d 370, 373 (Tex. 2019).
Regarding the first step, only the right to petition is implicated here. As
defined in the TCPA, the “exercise of the right to petition” means “a
communication in or pertaining to . . . a judicial proceeding.” Tex. Civ. Prac. &
3
Jetall filed a notice of interlocutory appeal from the TCPA dismissal, and later filed an
amended notice of appeal from the summary judgment ruling.
5
Rem. Code § 27.001(4)(A)(i). A “communication” is statutorily defined and
includes “the making or submitting of a statement or document in any form or
medium, including oral, visual, written, audiovisual, or electronic.” Id.
§ 27.001(1); see also Adams v. Starside Custom Builders, LLC, 547 S.W.3d 890,
894 (Tex. 2018) (statutory definition of “communication” covers “[a]lmost every
imaginable form of communication, in any medium”). We construe the phrase
“pertaining to” according to its ordinary meaning as relating directly to or
concerning or having to do with. See Black’s Law Dictionary (11th ed. 2019)
(“pertain” means “to relate directly to; to concern or have to do with”). And courts
have determined that “the ordinary meaning of ‘a judicial proceeding’” is “an
actual, pending judicial proceeding.” Levatino v. Apple Tree Café Touring, Inc.,
486 S.W.3d 724, 728 (Tex. App.—Dallas 2016, pet. denied); see also Black’s Law
Dictionary (11th ed. 2019) (defining “judicial proceeding” as “any court
proceeding; any proceeding initiated to procure an order or decree, whether in law
or in equity”).
2. The TCPA applies to Jetall’s contract and fiduciary-duty claims.
Jetall’s breach of contract claim is premised on Hoover Slovacek’s “failure
to cease representation of Davy” in violation of the conflict waiver. According to
Jetall, once Jetall requested the firm to cease representing Davy “in the matters
involving our mutual business dealings in Declaration Title,” the conflict waiver
required Hoover Slovacek to withdraw from representing Davy regarding the
negotiations and also to decline representation of Davy in the Declaration Title
Suit.
Regarding the breach of fiduciary duty claim, the attorney-client relationship
giving rise to the alleged duty is Hoover Slovacek’s provision of legal services to
Choudhri and/or Jetall in connection with the 2010 deed restriction suit.
6
According to Jetall, Hoover Slovacek received in the course of that proceeding
confidential information relevant to all of Choudhri’s businesses, including Jetall.
Jetall alleged that Hoover Slovacek violated its fiduciary duty when it subsequently
represented Davy against Jetall’s interests in the Declaration Title Suit.
In its motion to dismiss, Hoover Slovacek argued that the TCPA applies to
both claims because Jetall asserted them in response to Hoover Slovacek’s legal
services rendered to Davy during the course and scope of the Declaration Title
Suit. Its representation, according to Hoover Slovacek, constitutes an exercise of
Hoover Slovacek’s right to petition and is therefore protected under the TCPA.
We agree.
Hoover Slovacek attached evidence to its motion that its representation of
Davy included communications pertaining to the Declaration Title Suit. For
example, Ballases averred in an affidavit that Hoover Slovacek, while engaged as
Davy’s counsel in the Declaration Title Suit, had multiple conferences and
discussions with Davy and various witnesses; had multiple communications with
all counsel of record in the case; prepared and filed various pleadings, answers, and
motions; and attended a hearing. Jetall did not dispute that the identified
communications occurred.
By any common understanding, Hoover Slovacek made communications in
or pertaining to a judicial proceeding. Because the communications occurred
during the Declaration Title Suit, which was “an actual, pending judicial
proceeding,” Levatino, 486 S.W.3d at 728, they constitute an exercise of the right
of petition. E.g., Brenner v. Centurion Logistics LLC ex rel. Centurion Pecos
Terminal LLC, No. 05-20-00308-CV, 2020 WL 7332847, at *6 (Tex. App.—
Dallas Dec. 14, 2020, pet. filed) (mem. op.) (“performing legal work on a lawsuit
inherently involves communications”). Further, a plain reading of Jetall’s petition
7
shows that the contract and fiduciary-duty claims are premised on Hoover
Slovacek’s legal representation of Davy in the Declaration Title Suit. See Hersh v.
Tatum, 526 S.W.3d 462, 467 (Tex. 2017) (basis of legal action is determined by
plaintiff’s allegations).
Jetall nevertheless urges that its legal action falls outside the parameters of
the TCPA because Hoover Slovacek’s invocation of the act rests on the exercise of
Davy’s right to petition, not the exercise of Hoover Slovacek’s own right. But the
supreme court and our sister court of appeals have rejected precisely the same
argument. In Jetall Companies, Jetall argued that two attorneys (Ballases and
Johanson) had invoked only their clients’ TCPA rights, not their own, when the
TCPA purportedly protects only the former. But the First Court of Appeals held
that the attorneys’ solicitation, negotiation, and finalization of an acquisition of
Declaration Title by a third party as part of a litigation settlement, as well as the
attorneys’ execution of the written settlement agreement, constituted
communications pertaining to a judicial proceeding. See Jetall Cos., 2020 WL
6435778, at *3-4.
The court in Jetall Companies relied on Youngkin v. Hines. In that case,
attorney Youngkin represented his clients in a property dispute against Hines,
which the parties settled. See Youngkin, 546 S.W.3d at 678. In subsequent
litigation, the allegations against Youngkin included that Youngkin read a Rule 11
agreement into the record at trial and helped his clients avoid compliance with the
terms of the Rule 11 agreement. Id. Youngkin filed a motion to dismiss under the
TCPA, arguing that his recitation of the Rule 11 agreement in open court was an
exercise of the right to petition, as the TCPA defines it, and formed the basis for
Hines’s claims against him. Id. Hines countered that “an attorney speaking for a
client in a courtroom is not exercising any personal First Amendment rights at all.”
8
Id. at 680. The supreme court, adhering to the plain statutory definition, concluded
that Youngkin had exercised the right to petition by making a statement in a
judicial proceeding. Id. The court reasoned that:
[T]he TCPA applies to a legal action against a party that is based on,
related to, or in response to the party’s making or submitting of a
statement or document in or pertaining to a judicial proceeding.
Youngkin’s alleged liability stems from his dictation of the Rule 11
agreement into the court record during trial. By any common
understanding of the words, he made a statement in a judicial
proceeding.
Id.
Similarly, Hoover Slovacek’s alleged liability stems from its legal
representation of Davy during litigation involving Jetall. As referenced above,
Hoover Slovacek filed pleadings in the case, made statements in court, and
necessarily conferred with its client, Davy. These are communications made in or
pertaining to a judicial proceeding. See Jetall Cos., 2020 WL 6435778, at *3;
Brenner, 2020 WL 7332847, at *6 (participation in calls regarding a summary
judgment motion, revising a summary judgment motion, and holding discussions
and meetings with various people about the case were all communications
constituting right of petition).
Jetall also argues that Hoover Slovacek did not meet its TCPA burden
because the firm failed to identify a specific communication that formed the basis
of Jetall’s suit. Jetall relies on White Nile Software, Inc. v. Carrington, Coleman,
Sloman & Blumenthal, LLP, No. 05-19-00780-CV, 2020 WL 5104966 (Tex.
App.—Dallas Aug. 31, 2020, pet. denied), but White Nile is inapposite. In that
case, the court held that silence or a failure to communicate cannot be the basis for
dismissal under the TCPA. Id. at *6. Here, Jetall did not allege that Hoover
Slovacek failed to communicate with Jetall regarding a potential conflict of
9
interest, but rather that Hoover Slovacek’s affirmative conduct, which included
communications pertaining to a judicial proceeding, constituted a breach of
contract and fiduciary duties owed to Jetall. See Brenner, 2020 WL 7332847, at *6
(distinguishing White Nile because evidence showed that evidence of attorney’s
legal work included specific communications pertaining to litigation: “These
allegations of specific communications also distinguish this case from [White Nile]
in which we could not discern any communications from the record.”).
Applying the plain language of the TCPA to the circumstances of this case,
we conclude that Hoover Slovacek proved by a preponderance of the evidence that
Jetall’s legal action is based on or in response to Hoover Slovacek’s exercise of the
right to petition. See Tex. Civ. Prac. & Rem. Code § 27.001(1), (4)(A)(i); see also
Jetall Cos., 2020 WL 6435778, at *3. The trial court did not err in concluding that
the TCPA applies to Jetall’s claims for breach of contract and breach of fiduciary
duty.
3. Jetall failed to establish a prima facie case.
The next question is whether Jetall met its prima facie burden for its contract
and fiduciary-duty claims. “A prima facie case is the ‘minimum quantum of
evidence necessary to support a rational inference that the allegation of fact is
true.’” KBMT Operating Co. v. Toledo, 492 S.W.3d 710, 721 (Tex. 2016) (quoting
Lipsky, 460 S.W.3d at 590).
a. Breach of contract
One of the elements of a breach of contract claim is proof of damages. See
USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479, 501 n.21 (Tex. 2018) (a
breach of contract action requires proof of four elements: (1) formation of a valid
contract; (2) performance by the plaintiff; (3) breach by the defendant; and (4) “the
10
plaintiff sustained damages as a result of the breach”). In Jetall’s response, it
argued that, because Hoover Slovacek represented Davy in the Declaration Title
Suit, “Jetall was required to incur additional attorneys’ fees in attempting to
disqualify one of Defendant’s attorneys as a fact witness.” For proof of this
assertion, Jetall attached the unsworn declaration of Choudhri. Paragraph 7 of
Choudhri’s declaration provided, “As a result of Defendant’s continued
involvement as counsel for Davy, . . . I was forced to incur additional attorneys’
fees and costs to attempt to disqualify [Hoover Slovacek] from participating in the
case.” Paragraph 8 referenced “pleadings” from Jetall’s “motion practice to
disqualify [Hoover Slovacek]” in the Declaration Title Suit. The attached pleading
was a “bench brief,” in which Jetall moved to exclude Ballases from testifying as a
witness in the Declaration Title Suit, which Jetall argued would violate a
disciplinary rule generally prohibiting attorneys from acting as fact witnesses.4
Hoover Slovacek objected to paragraphs 7 and 8, arguing that Jetall’s
assertions were contrary to the written record and violated the best evidence rule.
Hoover Slovacek also pointed out that Jetall never moved to disqualify Hoover
Slovacek from representing Davy in the Declaration Title Suit but instead sought
only to exclude Ballases from testifying. The trial court sustained the objections
and struck paragraphs 7 and 8 from Choudhri’s declaration.
On appeal, Jetall purports to challenge the court’s evidentiary ruling in a
footnote, stating that the trial court abused its discretion in striking paragraphs 7
and 8 “because Choudhri clearly established that he was competent to testify
regarding attorneys’ fees expended in the Davy litigation and had personal
knowledge of the same.” Jetall provides no additional explanation or legal
4
See Tex. Disciplinary Rules Prof’l Conduct R. 3.08.
11
authority to support its argument. We determine that Jetall has waived any
evidentiary challenge under the briefing rules. See Tex. R. App. P. 38.1(i).
Because the trial court struck paragraphs 7 and 8 of Choudhri’s declaration,
there was no evidence supporting the damages element of Jetall’s breach of
contract claim.5 The trial court did not err in dismissing Jetall’s breach of contract
claim under the TCPA.
b. Breach of fiduciary duty
Generally, the elements of a claim for breach of fiduciary duty are (1) the
existence of a fiduciary duty, (2) breach of the duty, (3) causation, and
(4) damages. See, e.g., ERI Consulting Eng’rs, Inc. v. Swinnea, 318 S.W.3d 867,
873 (Tex. 2010).
Jetall alleged that an attorney-client relationship existed between itself and
Hoover Slovacek during the 2010-2011 time frame when the deed restriction
litigation was ongoing. Choudhri asserts that he engaged Hoover Slovacek at that
time for himself and Jetall and that he consulted with the firm on “various matters
related” to Jetall. For purposes of our analysis, we accept as true Choudhri’s
assertion that Hoover Slovacek provided attorney services to Choudhri and Jetall in
2010 and 2011.
An attorney owes a fiduciary duty to a client when an attorney-client
relationship is created. See Willis v. Maverick, 760 S.W.2d 642, 645 (Tex. 1988);
Greene’s Pressure Treating & Rentals, Inc. v. Fulbright & Jaworski, L.L.P., 178
S.W.3d 40, 43 (Tex. App.—Houston [1st Dist.] 2005, no pet.). An attorney-client
5
Jetall claims that the court only struck portions of Choudhri’s declaration, not the
attached exhibits to his declaration, which included the bench memo moving to exclude Ballases
as a witness. We disagree with Jetall’s position. Paragraph 8 expressly referred to, and
incorporated, the bench-memo exhibit. By striking paragraph 8, the court struck any reference to
the exhibit as well.
12
relationship only arises when an attorney agrees to render professional services to a
client. Greene’s Pressure Treating, 178 S.W.3d at 43. This relationship may be
expressly created by contract or impliedly created through the parties’ actions. Id.Generally, in the absence of an agreement to the contrary, the fiduciary duty
created by an attorney-client relationship ends when the relationship ends. See
Lively v. Henderson, No. 14-05-01229-CV, 2007 WL 3342031, at *4 (Tex. App.—
Houston [14th Dist.] Nov. 13, 2007, pet. denied) (mem. op.); Stephenson v.
LeBoeuf, 16 S.W.3d 829, 836 (Tex. App.—Houston [14th Dist.] 2000, pet. denied).
It is undisputed that Hoover Slovacek’s representation of Jetall, if any, ended in
2011.
Certain privileges and duties applicable to an attorney-client relationship,
however, continue after the relationship’s termination. See, e.g., Owens-Corning
Fiberglas Corp. v. Caldwell, 818 S.W.2d 749, 751-52 (Tex. 1991) (orig.
proceeding) (work-product privilege); Md. Am. Gen. Ins. Co. v. Blackmon, 639
S.W.2d 455, 458 (Tex. 1982) (attorney-client privilege to refuse to disclose, and
prevent others from disclosing, confidential communications continues for as long
as client desires to assert it); Tex. R. Evid. 503(b). The general rule is that
confidential information received during a fiduciary relationship may not be used
or disclosed to the detriment of the one from whom the information is obtained,
even after termination of the relationship. See, e.g., Bigham v. Se. Tex. Envtl.,
LLC, 458 S.W.3d 650, 662-63 (Tex. App.—Houston [14th Dist.] 2015, no pet.).
In its TCPA response, Jetall invoked the continuing duty of an attorney to
refrain from disclosing a former client’s confidential information, or using that
information to the former client’s detriment, as the basis for its fiduciary-duty
claim. Jetall argued that Hoover Slovacek breached its fiduciary duty by
representing Davy in the Declaration Title Suit because its representation enabled
13
the firm to utilize Jetall’s confidential information against it. Jetall did not contend
that Hoover Slovacek breached a fiduciary duty in any other respect.
We conclude that Jetall failed in its evidentiary burden on this claim because
Jetall produced no evidence that Hoover Slovacek breached a duty of
confidentiality. Choudhri stated in his declaration that, upon learning that Hoover
Slovacek represented Davy during the Declaration Title Suit, he was “concerned
with [Hoover Slovacek] using confidential information disclosed to [Choudhri]
[sic] against [Choudhri] in litigation strategy and decision making.” This is
nothing more than mere speculation that Hoover Slovacek would use or disclose
confidential information during the Declaration Title Suit and, as such, is not clear
and specific evidence of a breach. See, e.g., Burbage v. Burbage, 447 S.W.3d 249,
259 (Tex. 2014) (“We regard evidence that creates a mere surmise or suspicion of
a vital fact as, in legal effect, no evidence.”); Columbia Med. Ctr. of Las Colinas,
Inc. v. Hogue, 271 S.W.3d 238, 246 (Tex. 2008) (“Proximate cause cannot be
satisfied by mere conjecture, guess, or speculation.”); see also Lakeway Reg’l Med.
Ctr., LLC v. Lake Travis Transitional LTCH, LLC, No. 03-15-00025-CV, 2017
WL 672451, at *14 (Tex. App.—Austin Feb. 17, 2017, pet. denied) (mem. op. on
reh’g) (“Lake Travis’s summary judgment responses, simply speculating that
cross-appellees must have used Lake Travis’s confidential information, did no
more than create a mere surmise or suspicion of use or disclosure of Lake Travis’s
trade secrets.”) (internal quotation omitted). Choudhri offered no evidence
identifying any specific confidential information in Hoover Slovacek’s possession,
why it was relevant to the Declaration Title Suit, or that Hoover Slovacek in fact
used any such information to Jetall’s detriment in the suit.
In the absence of evidence showing a breach, Jetall failed to produce prima
facie evidence in support of each element of its claim for breach of fiduciary duty.
14
The trial court did not err in dismissing this claim under the TCPA. We overrule
Jetall’s first issue.
B. Summary judgment on Jetall’s fraud claim
In its second issue, Jetall challenges the trial court’s summary judgment
ruling on its remaining fraud claim. We review a traditional summary judgment de
novo. See Boerjan v. Rodriguez, 436 S.W.3d 307, 310 (Tex. 2014) (per curiam).
A defendant who moves for traditional summary judgment on the plaintiff’s
claim must conclusively negate at least one element of the plaintiff’s cause of
action or conclusively establish each element of an affirmative defense to the
claim. KCM Fin. LLC v. Bradshaw, 457 S.W.3d 70, 79 (Tex. 2015). To prevail on
a traditional motion for summary judgment, the movant must show that there is no
genuine issue of material fact and that it is entitled to judgment as a matter of law.
See Tex. R. Civ. P. 166a(c); Provident Life & Accident Ins. Co. v. Knott, 128
S.W.3d 211, 215-16 (Tex. 2003). If the movant carries this burden, the burden
shifts to the nonmovant to raise a genuine issue of material fact precluding
summary judgment. Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018). On
review, we construe the evidence in the light most favorable to the nonmovant,
crediting evidence favorable to the nonmovant if a reasonable juror could and
disregarding contrary evidence unless a reasonable juror could not. Mann
Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.
2009).
Jetall alleged that Hoover Slovacek “induced Jetall to execute the Waiver
with no present intention to perform the obligation to perform the cessation of
representation should Jetall request it”; that Jetall reasonably and justifiably relied
on this material representation to Jetall’s detriment; and that, but for the fraud,
Jetall would have never signed the waiver.
15
Fraudulent inducement is a species of common-law fraud that shares the
same basic elements: (1) a material misrepresentation; (2) made with knowledge
of its falsity or asserted without knowledge of its truth; (3) made with the intention
that it should be acted on by the other party; (4) which the other party relied on;
and (5) which caused injury. See Anderson v. Durant, 550 S.W.3d 605, 614 (Tex.
2018). Fraudulent inducement is actionable when the misrepresentation is a false
promise of future performance made with a present intent not to perform. Id.Relying on the conflict waiver, Jetall argues that Hoover Slovacek made a
promise of future performance, without having any intent to actually fulfill that
promise. The conflict waiver provided, in relevant part:
[I]t is my understanding that an adversarial relationship between Jetall
Companies and Ms. Davy does not now exist but that, if one develops
through this matter, you understand that we would have to withdraw
from our representation with respect to this particular matter. . . . [I]f
at any time upon either of you[r] requests or at our request, anyone
feels uncomfortable with respect to our representation of Renee Davy
in this matter, we will withdraw from our representation in this matter
and cease representing Renee Davy with respect to this particular
matter.
Under Jetall’s reading of the conflict waiver, Ballases promised to cease
representation of Davy regarding the Jetall/Davy negotiations if requested and to
withdraw from or decline any future representation if an adversarial relationship
developed between Jetall and Davy. According to Jetall, the Declaration Title Suit
was an adversarial relationship that developed out of the negotiations, thus barring
Hoover Slovacek from representing Davy in that action. Jetall thus contends that
Hoover Slovacek had no intention of fulfilling the promise contained in the
conflict waiver because the firm represented Davy in the Declaration Title Suit.
16
Hoover Slovacek responds that under a plain reading of the conflict wavier it
promised to withdraw upon request from the “particular matter” referenced in the
document, namely, the “potential . . . business transaction” between Jetall and
Davy. Further, it is undisputed that Hoover Slovacek did, in fact, withdraw and
cease its representation in that matter upon Choudhri’s request. Hoover Slovacek
argues that the conflict waiver had no bearing on the firm’s later representation of
Davy in the Declaration Title Suit because that lawsuit did not exist at the time
Jetall signed the waiver. Thus, Hoover Slovacek continues, the conflict waiver
contained no promise of future performance that Hoover Slovacek failed to
perform.
We agree with Hoover Slovacek. The conflict waiver contains Hoover
Slovacek’s unambiguous promise to withdraw from representation of Davy
regarding Jetall’s proposal to purchase Declaration Title and the associated
negotiations. This is evidenced by the repeated references to “this matter” and
“this particular matter,” which refer to the “business transaction” between Jetall
and Davy. Thus, the firm promised to withdraw from representing Davy as to any
further negotiations to acquire Davy’s interest in Declaration Title.
Hoover Slovacek proved that it complied with the conflict waiver. Hoover
Slovacek relied on Ballases’s email to Jetall that Hoover Slovacek immediately
“cease[d] and desist[ed]” from representing Davy during the negotiations, as
requested by Jetall. In response, Jetall offered no evidence that Hoover Slovacek
had no present intention of fulfilling the terms of the conflict waiver at the time of
execution. See, e.g., Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 434 (Tex.
1986) (party’s intent determined at time party made representation); see also
Hearthshire Braeswood Plaza Ltd. P’ship v. Bill Kelly Co., 849 S.W.2d 380, 388-
17
89 (Tex. App.—Houston [14th Dist.] 1993, writ denied) (the fact that one party
interprets provision differently is not evidence of falsity or intent not to perform).
Thus, Jetall did not produce evidence raising a genuine issue of material fact
on one of the elements of its fraud claim, and the trial court did not err in granting
Hoover Slovacek’s motion for summary judgment. See, e.g., Fuller v. Wholesale
Elec. Supply Co. of Houston, Inc., 631 S.W.3d 177, 188 (Tex. App.—Houston
[14th Dist.] 2020, pet. denied). We overrule Jetall’s second issue.
Conclusion
We affirm the trial court’s judgment.
/s/ Kevin Jewell
Justice
Panel consists of Justices Jewell, Bourliot, and Poissant.
18