John Leonard v. Spencer Tracy Knight

Affirmed and Opinion filed May 31, 2018.
In The
Fourteenth Court of Appeals
NO. 14-16-00932-CV
JOHN LEONARD, Appellant
V.
SPENCER TRACY KNIGHT, Appellee
On Appeal from the 189th District Court
Harris County, Texas
Trial Court Cause No. 2015-23987
OPINION
Appellee Spencer Tracy Knight sued appellant John Leonard for breach of
contract when Leonard failed to pay the full amount owed under an agreement. Knight
filed a traditional motion for summary judgment, which the trial court granted.
Leonard challenges the trial court’s final summary judgment in three issues.
Leonard contends that the trial court erred when it granted Knight’s motion for
summary judgment on breach of contract because Leonard’s evidence created a fact
issue on each element of his affirmative defense of prior material breach. We overrule
this issue because Leonard’s evidence did not create a genuine issue of material fact on
whether Knight’s breach was material, thus excusing Leonard from future
performance.
Leonard also advances two issues challenging the trial court’s award of
attorney’s fees to Knight. First, Leonard argues that the trial court erred in granting
summary judgment on fees because his evidence created a genuine issue of material
fact on the reasonableness of Knight’s fees. We overrule this issue because the
affidavit Leonard filed in response to Knight’s motion is conclusory and therefore no
evidence. Second, Leonard asserts that Knight’s evidence should not have been
considered, as he did not timely designate his expert nor supplement discovery. We
overrule this issue because Leonard failed to preserve it for appellate review. We
therefore affirm the trial court’s summary judgment.
BACKGROUND
The relevant facts in this case are undisputed. Knight and Leonard settled a
prior lawsuit by signing a settlement agreement in July 2010.1 Leonard promised in
that settlement agreement that he would sign a promissory note obligating him to (1)
pay Knight a total of $86,500 plus interest for a term of four years; (2) make minimum
monthly payments of at least $250 during the four-year term; and (3) at the end of the
four-year term, pay the unpaid principal and interest in a single balloon payment.
Knight, on the other hand, agreed that he would dismiss the prior lawsuit with
prejudice. Both Knight and Leonard agreed that they would release all claims each had
against the other. Leonard signed the promissory note one month later.
Leonard began making payments soon after signing the promissory note, and he
1
The parties do not discuss the exact nature of the prior lawsuit. The settlement agreement
reveals only that there was a “business relationship and legal representation that took place prior to
this lawsuit.”
2
made the minimum monthly payment each month for four years. Knight never filed a
motion to dismiss the prior lawsuit with prejudice. Instead, the trial court dismissed
the prior lawsuit for want of prosecution in September 2010. Knight made no effort to
refile the prior lawsuit against Leonard. For four years, Leonard never complained to
Knight that the dismissal of the prior lawsuit was without prejudice.
Leonard did not make the final balloon payment, which was due in August 2014.
Instead, Leonard sent Knight a letter in December 2014 pointing out that Knight had
not filed a motion to dismiss the prior lawsuit with prejudice. Contending this failure
was a breach of the settlement agreement, Leonard notified Knight that he was revoking
the settlement agreement. Knight responded by suing Leonard for breach of contract.
Leonard filed an answer asserting the affirmative defense that his performance under
the settlement agreement was excused as a result of Knight’s prior material breach of
the agreement.
Knight eventually filed a traditional motion for summary judgment. The trial
court granted Knight’s motion and signed a final summary judgment awarding Knight
$105,135.82 as the amount owed under the promissory note,2 $21,659.44 for attorney’s
fees and costs through trial, and additional fees if the case was appealed and Knight
prevailed. This appeal followed.
ANALYSIS
I. The trial court did not err in granting Knight summary judgment on his
claim for breach of contract.
We address appellant’s third issue first because success on this issue would
afford him the greatest relief. See CMH Homes, Inc. v. Daenen, 15 S.W.3d 97, 99
(Tex. 2000); Caballero v. Caballero, No. 14-16-00513-CV, 2017 WL 6374724, at *3
2
Because the $250 monthly payment did not cover the interest accruing on the $86,500
principal, the amount Leonard owed Knight increased during the four-year term of the note.
3
(Tex. App.—Houston [14th Dist.] Dec. 14, 2017, no pet.) (mem. op.) (addressing
appellate issue providing greatest possible relief first). In that issue, Leonard argues
summary judgment was improper on Knight’s claim for breach of contract because a
question of fact existed regarding Leonard’s affirmative defense of prior material
breach.
A. Standard of review
We review a trial court’s order granting a traditional summary judgment de novo.
Mid-Century Ins. Co. v. Ademaj, 243 S.W.3d 618, 621 (Tex. 2007). In reviewing a
grant of summary judgment, we consider all of the evidence in the light most favorable
to the nonmovant. Ron v. AirTran Airways, Inc., 397 S.W.3d 785, 788 (Tex. App.—
Houston [14th Dist.] 2013, no pet.). When a plaintiff moves for summary judgment on
its cause of action, it must conclusively prove all essential elements of its claim as a
matter of law. Cullins v. Foster, 171 S.W.3d 521, 530 (Tex. App.—Houston [14th
Dist.] 2005, pet. denied). Evidence is considered conclusive if reasonable people could
not differ in their conclusions. Dias v. Goodman Mfg. Co., L.P., 214 S.W.3d 672, 676
(Tex. App.—Houston [14th Dist.] 2007, pet. denied). The nonmovant has no burden
to respond to a motion for summary judgment unless the movant conclusively
establishes each element of its cause of action as a matter of law. Rhone-Poulenc, Inc.
v. Steel, 997 S.W.2d 217, 222–23 (Tex. 1999). If the movant establishes its entitlement
to judgment, then the burden shifts to the nonmovant to come forward with competent
controverting evidence sufficient to raise a genuine issue of material fact. Muller v.
Stewart Title Guar. Co., 525 S.W.3d 859, 868 (Tex. App.—Houston [14th Dist.] 2017,
no pet.).
Once Knight proved his entitlement to summary judgment as a matter of law, it
became Leonard’s burden as the non-movant to present grounds for avoiding summary
judgment. Home Loan Corp. v. JPMorgan Chase Bank, N.A., 312 S.W.3d 199, 205
4
(Tex. App.—Houston [14th Dist.] 2010, no pet.). To avoid summary judgment by
raising an affirmative defense, the non-movant must do more than merely plead the
affirmative defense. Lujan v. Navistar Fin. Corp., 433 S.W.3d 699, 704 (Tex. App.—
Houston [1st Dist.] 2014, no pet.). In addition, the non-movant must produce sufficient
evidence to conclusively prove or at least raise a material issue of fact as to each
element of the affirmative defense. See Wiggins v. Overstreet, 962 S.W.2d 198, 200
(Tex. App.—Houston [14th Dist.] 1998, pet. denied).
B. Leonard did not raise a genuine issue of material fact on his
affirmative defense of prior material breach.
When one party to a contract commits a material breach of that contract, the
other party is discharged or excused from further performance. PAJ, Inc. v. Hanover
Ins. Co., 243 S.W.3d 630, 633 (Tex. 2008). The contention that a party is excused from
its contract performance by the other party’s prior material breach is an affirmative
defense. Henry v. Masson, 333 S.W.3d 825, 834 (Tex. App.—Houston [1st Dist.]
2010, no pet.). Non-material breaches do not excuse future performance by the non-
breaching party. Bartush-Schnitzius Foods Co. v. Cimco Refrigeration, Inc., 518
S.W.3d 432, 436 (Tex. 2017). Materiality is normally a question of fact, but it “may
be decided as a matter of law . . . if reasonable jurors could reach only one verdict.”
Id. In determining the materiality of a breach, courts consider, among other things, the
extent to which the non-breaching party will be deprived of the benefit that it
reasonably could have anticipated from full performance. Hernandez v. Gulf Group
Lloyds, 875 S.W.2d 691, 693 (Tex. 1994). The less the non-breaching party is deprived
of the expected benefit of the contract, the less material the breach. Id.
Knight admits he did not file a motion to dismiss the prior lawsuit with prejudice.
Instead, the trial court dismissed the prior lawsuit without prejudice for want of
prosecution. Leonard argues Knight’s failure to do as he promised in the settlement
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agreement is a material breach of the agreement because a dismissal “without prejudice
is not a determination on the merits of the case,” while a dismissal with prejudice
“would mean that [Leonard] did not commit [the] allegations and claims in the
underlying suit.” Leonard cites no authority for the latter proposition, and our own
research reveals none. Although a dismissal with prejudice does operate as a
determination on the merits of the claim, it does so for the purpose of barring future
litigation of the same claim. See Mossler v. Shields, 818 S.W.2d 752, 754 (Tex. 1991);
In re Guardianship of Patlan, 350 S.W.3d 189, 196 (Tex. App.—Austin 2011, no pet.).
Knight and Leonard entered into the settlement agreement “for the purpose of
finally resolving and terminating any and all controversies between [them] and to buy
peace.” As a result of the settlement agreement, Knight took no further action in the
trial court where the prior lawsuit was pending, and the lawsuit was eventually
dismissed for want of prosecution on September 23, 2010. Knight took no action to
revive the prior lawsuit after it was dismissed by the trial court. Leonard confirmed
this when he stated that he was unaware that the prior lawsuit had been dismissed
without prejudice until December 4, 2015. Although there is evidence that Knight
breached the settlement agreement by failing to dismiss the prior lawsuit with
prejudice, Leonard did not carry his burden to present evidence that this breach was
material—e.g, that he was deprived of the benefit he reasonably expected to receive
from the settlement. See FedGess Shopping Ctrs., Ltd. v. MNC SSP, Inc., No. 14-07-
00211-CV, 2007 WL 4387337, at *3 (Tex. App.—Houston [14th Dist.] Dec. 18, 2007,
no pet.) (mem. op.) (holding summary judgment proper against defense of prior
material breach where defendant failed to produce evidence implicating materiality).
Instead, the summary judgment evidence indicates that Leonard received the expected
benefit: the prior lawsuit was terminated and not revived. See Hernandez, 875 S.W.2d
at 693. There is no indication in the record that, at the time Leonard failed to make his
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final payment, Knight could have refiled the claims dismissed in the prior lawsuit. We
therefore hold that Leonard did not raise a genuine issue of material fact on his
affirmative defense of prior material breach, and the trial court did not err when it
granted Knight’s motion for summary judgment. We overrule Leonard’s third issue.
II. The trial court did not err in granting Knight summary judgment on the
amount of his attorney’s fees.
We address Leonard’s first two issues together because both challenge the trial
court’s grant of Knight’s motion for summary judgment on his attorney’s fees.
A. Leonard did not raise a genuine issue of material fact because his
affidavit regarding fees is conclusory.
In his motion for summary judgment, Knight asked the trial court to award him
the attorney’s fees he incurred in pursuing his claim for breach of contract against
Leonard. In support of that request, Knight attached an affidavit prepared by his
attorney, Mark Junell. Junell ultimately stated that the attorney’s fees and costs
incurred in the suit were $21,659.44. Junell then opined that this amount was
reasonable and necessary.
Leonard argues in his first issue that the trial court erred when it granted Knight
summary judgment on his request for attorney’s fees because the affidavit of his own
attorney, Suzan Sanders, was sufficient to raise a genuine issue of material fact on the
reasonableness of Knight’s attorney’s fees.3 Leonard attached the affidavit to his
response to Knight’s motion for summary judgment. Sanders states in her affidavit
that “the amount of fees claimed by Knight’s attorney are not reasonable or necessary.”
Sanders offered no facts explaining her conclusion.4 Knight, who did not object to
3
Leonard does not separately contend that the substance of Junell’s affidavit, standing alone,
is insufficient to support summary judgment for Knight’s attorney’s fees. We therefore do not address
that issue.
4
Sanders addressed the fees she had incurred on behalf of her client. She did not, however,
7
Sanders’s affidavit in the trial court, responds that the affidavit did not raise a fact issue
on the reasonableness of his fees and costs because it is conclusory and therefore no
evidence. We agree.
A conclusory statement is one that expresses a factual inference without
providing underlying facts to support that conclusion. See, e.g., Arkoma Basin Expl.
Co. v. FMF Assocs. 1990-A, Ltd., 249 S.W.3d 380, 389 n.32 (Tex. 2008); Dolcefino v.
Randolph, 19 S.W.3d 906, 930 & n.21 (Tex. App.—Houston [14th Dist.] 2000, pet.
denied) (holding statement in affidavit that “this was false and defamatory and has
injured me in my profession” was conclusory). Affidavits that state conclusions
without providing underlying facts to support those conclusions are not proper
summary judgment evidence. See Padilla v. Metro. Transit Auth. of Harris County,
497 S.W.3d 78, 86 (Tex. App.—Houston [14th Dist.] 2016, no pet.). To avoid being
excluded as conclusory, an affidavit must contain specific factual bases, admissible in
evidence, from which any conclusions are drawn. See id. An objection that statements
in an affidavit are conclusory asserts a defect of substance, which may be raised for the
first time on appeal. Pipkin v. Kroger Tex., L.P., 383 S.W.3d 655, 670 (Tex. App.—
Houston [14th Dist.] 2012, pet. denied).
Because Sanders did not include any facts to support her conclusion that
Knight’s fees and costs were not reasonable and necessary, we hold her affidavit is
conclusory and therefore not competent summary judgment evidence. Hovorka v.
Cmty. Health Sys., Inc., 262 S.W.3d 503, 512 (Tex. App.—El Paso 2008, no pet.).
Leonard cites our opinion in Engel v. Pettit, 713 S.W.2d 770, 773 (Tex. App.—
Houston [14th Dist.] 1986, no writ), but it does not address when a fee affidavit is
make any attempt to compare the amount of fees she incurred to those claimed by Knight. Nor did
she suggest that Junell’s fees were not reasonable because they were significantly higher than her
own.
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conclusory. In Engel, the plaintiff sued the defendant to collect on a promissory note.
Id. at 771. The plaintiff moved for summary judgment on the amount owed under the
note as well as his attorney’s fees. Id. The trial court granted the motion and the
defendant appealed. Id. On appeal, a panel of this Court held that the defendant’s fee
affidavit raised a fact issue on the amount of the plaintiff’s attorney’s fees. Id. at 772–
73. The affidavit read as follows, in pertinent part: “I have reviewed the file in the
above case. I have handled many debt collection cases. The fee of $2,000.00 in the
above case for services rendered by Plaintiff’s attorney is excessive and unreasonable.”
Id. at 771–72.
In a civil case, we are limited to addressing the issues raised by the parties. See
Tex. R. App. P. 38.1(f) (“The brief must state concisely all issues or points presented
for review.”); Ward v. Lamar Univ., 484 S.W.3d 440, 453 (Tex. App.—Houston [14th
Dist.] 2016, no pet.) (explaining that our “adversary system of justice . . . depends on
the parties to frame the issues for decision and assigns to courts the role of neutral
arbiter of the matters that the parties present.”); Dallas Cnty. v. Crestview Corners Car
Wash, 370 S.W.3d 25, 57 (Tex. App.—Dallas 2012, pet. denied) (“We look to the
issues and the arguments and authorities in appellant’s brief to determine the grounds
presented for appellate review and will consider all issues fairly raised.”); Bankhead v.
Maddox, 135 S.W.3d 162, 163–64 (Tex. App.—Tyler 2004, no pet.) (stating that “an
appellate court has no discretion to fabricate an issue not raised in the appellant’s
brief.”). In Engel, the plaintiff did not argue on appeal that the affidavit of the
defendant’s attorney was conclusory. Engel, 713 S.W.2d at 773. Because Engel did
not address that argument, it does not require a different result here. We overrule
Leonard’s first issue.
B. Leonard did not preserve his second issue for appellate review.
Leonard contends in his second issue that the trial court erred when it considered
9
Junell’s fee affidavit because (1) Knight allegedly failed timely to designate his
attorney as an expert; and (2) Knight did not supplement his discovery responses with
the items required by Rule 194.2(f)(4)(A) of the Texas Rules of Civil Procedure,
including Junell’s billing records. We address each contention in turn.
With respect to his contention that Knight did not timely designate his attorney
as an expert, Leonard asserts that under the trial court’s docket control order of May
27, 2015, expert designations were due by February 4, 2016. Leonard does not,
however, provide a citation to where in the appellate record that docket control order
can be found, and our own investigation has not located it. Leonard therefore has not
shown any error by the trial court related to Knight’s expert designation. See Aldous
v. Bruss, 405 S.W.3d 847, 859 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (“A
party asserting error on appeal bears the burden of showing that the record supports the
contention raised and of specifying the place in the record where the matters upon
which he relies or of which he complains are shown.”).5
We turn next to Leonard’s complaint that Knight’s alleged failure to supplement
his discovery responses with Junell’s billing records (among other things) rendered
Junell’s fee affidavit inadmissible. Leonard included an objection to the admissibility
of Junell’s affidavit in his summary judgment response, but he did not obtain an express
ruling on that objection. On appeal, Leonard argues that he preserved this complaint
because the trial court’s action in granting Knight’s motion for summary judgment
implicitly overruled his objection to Junell’s affidavit. We disagree. See Parkway
Dental Assocs., P.A. v. Ho & Huang Props., L.P., 391 S.W.3d 596, 603–04 (Tex.
5
Even if the record included a docket control order setting the deadline to designate experts
on February 4, 2016 as asserted by appellant, the record reveals that Knight filed his expert
designation on April 15, 2016, almost exactly four months before the trial court granted Knight’s
motion for summary judgment. Leonard has not demonstrated how he was harmed by the late
designation. See Tex. R. App. P. 44.1.
10
App.—Houston [14th Dist.] 2012, no pet.) (stating that this Court has refused to
recognize the granting of a summary judgment motion as an implied overruling of the
nonmovant’s evidentiary objections). Obtaining an express ruling on an objection to
summary judgment evidence is necessary to preserve error for appellate review. Id.
Because Leonard did not obtain a ruling on his objection to Junell’s affidavit, he has
not preserved any complaint he may have had for appellate review. We overrule
Leonard’s second issue.
CONCLUSION
Having overruled each of Leonard’s issues raised in this appeal, we affirm the
trial court’s judgment.
/s/ J. Brett Busby
Justice
Panel consists of Justices Jamison, Busby, and Donovan.
11