Mission Grove LP v. Darren Hall

Affirmed in part and Reversed and Remanded in part Opinion filed October
4, 2016.
In The
Fourteenth Court of Appeals
NO. 14-15-00120-CV
MISSION GROVE, L.P., Appellant
V.
DARREN HALL, Appellee
On Appeal from the 268th District Court
Fort Bend County, Texas
Trial Court Cause No. 10-DCV-179490
OPINION
Appellant Mission Grove, L.P. appeals the trial court’s orders granting
summary judgment in favor of appellee Darren Hall on Mission Grove’s claims for
breach of contract, fraud, and promissory estoppel. As to the breach of contract
claim, we affirm the trial court’s order granting summary judgment in favor of
Hall. As to the fraud and promissory estoppel claims, we reverse the trial court’s
order granting summary judgment in favor of Hall and we remand to the trial court
for further proceedings in accordance with this opinion.
BACKGROUND AND PROCEDURAL HISTORY
Mission Grove, as owner and developer of the Lakes of Mission Grove
subdivision, entered into a contract with Texas Classic Homes, L.P., 1 (Texas
Classic) for Texas Classic to be the approved builder for the subdivision. Hall
signed the contract on behalf of Texas Classic. The signature page of the contract
was executed as follows:
Paragraph 11 of the contract at issue in this case provides in its
entirety:
Builder will provide to Developer complete and accurate information
related to the contract amount and draw status in order to verify the
amounts due under this agreement including, but not limited to the
Contract with Customer, the HUD-1 and change order invoices. The
obligations under this agreement are also a personal obligation of the
builder representative signing below.
1
Texas Classic Homes LP is erroneously identified in the contract as “Texas Classic
Homes Inc.” The error is not material to the issues raised in this appeal.
2
Texas Classic failed to perform under the agreement and filed for
bankruptcy. Thereafter, Mission Grove filed a breach of contract claim against
Hall, personally, for failure to pay or perform as agreed. Mission Grove alleged
that such failure to perform occurred beginning in September of 2006. Hall filed
his first motion for summary judgment, asserting that he was not a party to the
contract because he had not signed the contract in his individual capacity.
More than four years after filing its original petition, Mission Grove filed an
amended original petition to include claims against Hall for promissory estoppel,
fraud and negligent misrepresentation. Hall then filed a second motion for
summary judgment on Mission Grove’s remaining claims, asserting that the four-
year statute of limitations had expired. Mission Grove responded, contending that
the claims were timely under the relation-back doctrine. The trial court granted
both motions for summary judgment. Mission Grove timely filed this appeal.
ISSUES PRESENTED
Mission Grove challenges the trial court’s summary judgment ruling in favor
of Hall on both the breach of contract claim and the fraud and promissory estoppel
claims.2 In its first issue, Mission Grove asserts that both the contract between the
parties and the parties’ pre-contract negotiations unambiguously make Hall
personally liable for his company’s obligations under the agreement and, therefore,
summary judgment for Hall on the breach of contract claim is error. In its second
issue, Mission Grove asserts that although the fraud and promissory estoppel
2
Mission Grove originally brought a claim for negligent misrepresentation along with its
fraud and promissory estoppel claims. The negligent misrepresentation claim was included in the
claims for which Hall moved for summary judgment in the trial court. Mission Grove does not
challenge the trial court’s ruling on the negligent misrepresentation claim and it is not before this
court.
3
claims were filed well beyond the limitations period, those claims are not time-
barred because of the relation-back doctrine.
STANDARD OF REVIEW
We review a trial court’s grant of summary judgment de novo. Valence
Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). When a trial court’s
order granting summary judgment does not specify the ground or grounds relied on
for its ruling, summary judgment will be affirmed on appeal if any theories
advanced are meritorious. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989).
In a traditional motion for summary judgment, the movant bears the burden
of showing that no genuine issue of material fact exists and that it is entitled to
judgment as a matter of law. Tex. R. Civ. P. 166a(c). A movant who conclusively
negates at least one of the essential elements of a cause of action or conclusively
establishes an affirmative defense is entitled to summary judgment. Frost Nat’l
Bank v. Fernandez, 315 S.W.3d 494, 508 (Tex. 2010). Once a movant establishes a
right to summary judgment as a matter of law, the burden shifts to the non-movant
to present evidence raising a genuine issue of material fact. See Walker v. Harris,
924 S.W.2d 375, 377 (Tex. 1996); Williams v. Bell, 402 S.W.3d 28, 35 (Tex.
App.—Houston [14th Dist.] 2013 no pet.).
Summary judgment evidence raises a genuine issue of fact, if in light of the
evidence, reasonable and fair-minded jurors could differ in their conclusions.
Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007) (per
curiam). However, for summary judgment evidence to be considered, it must
contain facts and be presented in a form that would be admissible at trial. See
United Blood Servs. v. Longoria, 938 S.W.2d 29, 30 (Tex. 1997) (per curiam); In
re Estate of Guerrero, 465 S.W.3d 693, 706 (Tex. App.—Houston [14th Dist.]
2015, pet. filed); see also Tex. R. Civ. P. 166a(f) (requiring that supporting and
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opposing affidavits in summary judgment proceedings “shall set forth such facts as
would be admissible in evidence, and shall show affirmatively that the affiant is
competent to testify to the matters stated therein”).
APPLICABLE LAW AND ANALYSIS
I. Breach of Contract
Mission Grove first argues that the trial court erred in granting summary
judgment in favor of Hall. Specifically, Mission Grove asserts that the
unambiguous language of the contract makes it clear that Hall was personally
liable for the obligations of Texas Classic. Additionally, Mission Grove asserts that
the summary judgment evidence reflects that the parties discussed Hall’s personal
responsibility prior to the execution of the contract and thus raised a genuine issue
of material fact regarding the parties’ intentions.
Hall moved for summary judgment on the ground that he was not a party to
the contract because he signed the contract only in a representative capacity. The
trial court granted Hall’s motion.
To prevail on his traditional motion for summary judgment, Hall was
required to conclusively negate an element of Mission Grove’s breach of contract
claim or prove all elements of an affirmative defense. See Frost Nat’l Bank, 315
S.W.3d at 508. The elements of a breach of contract claim are: (1) a valid contract
existed between the plaintiff and the defendant; (2) the plaintiff tendered
performance or was excused from doing so; (3) the defendant breached the terms
of the contract; and (4) the plaintiff sustained damages as a result of the
defendant’s breach. West v. Triple B Servs., LLP, 264 S.W.3d 440, 446 (Tex.
App.—Houston [14th Dist.] 2008, no pet.). At issue here is element one, a contract
between Mission Grove and Hall.
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A. Hall is not primarily liable as a party to the contract.
In the first paragraph of the contract, the parties are expressly identified as
Mission Grove L.P. (“Developer”) and Texas Classic Homes, Inc. (“Builder”).
Thereafter, Texas Classic is referred to as “Builder.” Hall’s name does not appear
in the recitation of the parties. As set forth above, Texas Classic Homes is written
in the space identified as “Name of Builder.” On the signature line, Hall’s
signature includes the word “President.” Then, Hall’s printed name appears in the
next line and the word “President” again appears on the line for “title.”
Hall acknowledges that he signed the contract, but argues that he did so only
in a representative capacity as the president of Texas Classic and that he did not
become a party to the contract. “As a general rule, a suit for breach of contract may
not be maintained against a person who is not a party to the contract, particularly a
non-party who is assigned duties by the terms of the contract.” Bernard Johnson,
Inc. v. Cont’l Constructors, Inc., 630 S.W.2d 365, 369 (Tex. App.—Austin 1982,
writ ref’d n.r.e.) (citing Jones v. George, 61 Tex. 345, 364 (1884); Carruth v.
Valley Ready-Mix Concrete Co., 221 S.W.2d 584 (Tex. App.—Eastland 1949, writ
ref’d)). It is “axiomatic ... that a contract between other parties cannot create an
obligation or duty on a non-contracting party, which non-contracting party was a
stranger to the basic, underlying construction contract.” City of Beaumont v.
Excavators & Constructors, Inc., 870 S.W.2d 123, 129 (Tex. App.—Beaumont
1993, writ denied) (citing Bernard Johnson, Inc., 630 S.W.2d at 369). In addition,
Texas Classic is unambiguously identified within the contract as the principal. See
A to Z Rental Ctr. v. Burris, 714 S.W.2d 433, 435 (Tex. App.—Austin 1986, writ
ref’d n.r.e.) (holding that a person making or purporting to make a contract with
another as an agent for a disclosed principal does not become a party to the
contract, unless the parties have otherwise agreed) (citing Anderson v. Smith, 398
6
S.W.2d 635 (Tex. App.—Dallas 1965, no writ); Restatement (Second) of Agency §
320 (1957)).
Mission Grove urges, in response, that this contract falls into the exception
for signatures in a representative capacity. More specifically, Mission Grove urges
that paragraph 11 signals the intent of the parties that Hall, too, would become a
party to the contract. Paragraph 11 of the contract provides:
Builder will provide to Developer complete and accurate information
related to the contract amount and draw status in order to verify the
amounts due under this agreement, including, but not limited to the
Contract with the Customer, the HUD-1 and change order invoices.
The obligations under this agreement are also the personal
obligations of the builder representative signing below.
(emphasis added)
Despite the general rule that an agent does not become a party to a contract
executed in a representative capacity for a disclosed principal, an agent may
nonetheless expressly agree to be bound. See Neel v. Tenet HealthSystem Hosps.
Dallas, Inc., 378 S.W.3d 597, 604–05 (Tex. App.—Dallas 2012, pet. denied). We
must therefore determine whether Hall expressly agreed to be bound to the subject
contract.
In construing the contract, our primary concern is to ascertain and give effect
to the intentions of the parties as expressed in the written instrument. See Kelley–
Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex. 1998). To
ascertain the parties’ true intentions, we examine the entire agreement in an effort
to harmonize and give effect to all of its provisions so that none will be rendered
meaningless. MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 652
(Tex. 1999). We presume that the contracting parties intend every clause to have
some effect. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996).
A contract should be construed by determining how the reasonable person “would
7
have used and understood such language, considering the circumstances
surrounding its negotiation and keeping in mind the purposes intended to be
accomplished by the parties when entering into the contract.” Manzo v. Ford, 731
S.W.2d 673, 676 (Tex. App.—Houston [14th Dist.] 1987, no writ). As such, “[n]o
single provision taken alone will be given controlling effect.” Seagull Energy E &
P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006).
We first note that the sentence upon which Mission Grove relies for Hall’s
“express agreement to be bound” does not contain Hall’s name at all: “The
obligations under this agreement are also the personal obligations of the builder
representative signing below.” Thus, the sentence reflects no agreement between
Mission Grove and Hall. In other words, under Mission Grove’s argument, the
“express agreement to be bound” would apply to whoever signed the agreement on
behalf of Texas Classic, not just Hall. In fact, the sentence belies Mission Grove’s
argument because it refers solely to one signing “on behalf of” or in a
representative capacity for the company. The sentence can be harmonized with a
signature in a representative capacity because corporations must necessarily act
through individuals; the individual signing a contract in a representative capacity
always “represents that the corporation intends to perform the contract.” JJJJ
Walker, LLC v. Yollick, 447 S.W.3d 453, 460 (Tex. App.—Houston [14th Dist.]
2014, pet. denied).
Had Hall’s name been referenced in the personal-obligation sentence, the
question presented would be much closer, but even one analogous decision from
our sister court places such signatory liability in doubt. See, e.g., Prent v. rJET,
L.L.C., No. 01-14-00408-CV, 2015 WL 1020207, at *2–4 (Tex. App.—Houston
[1st Dist.] Mar. 5, 2015, no pet.) (mem. op.). In Prent, for example, the contract
identified the parties as rJET and Infinitus Aviation. Id. at *3. Denise Prent
8
executed the agreement as president of Infinitus. Id. However, within the body of
the contract, Prent was once identified as a Lessee, along with the statement
certifying, “I am responsible for the operational contract of the aircraft.” Id. The
First Court of Appeals determined that “construing the lease as a whole, . . . it is
not ambiguous and Prent executed it in her representative capacity on behalf of
Infinitus.” Id. at *4. Unlike the Texas Classic contract before us, the Infinitus
contract actually contained some language suggesting a promise by Prent. Hall
made no promises within this contract.
Mission Grove also contends that the summary judgment evidence
submitted—the affidavit of Showalter—raises a genuine issue of material fact as to
the parties’ intentions about whether Hall was a party to the contract. In his
affidavit, Showalter states that the parties discussed Hall’s personal obligation
before executing the agreement, and Hall expressed understanding and acceptance
of that obligation and promised to fulfill personally the obligations of Texas
Classic under the agreement. Showalter also states that Mission Grove relied on
these promises when entering into the agreement. Thus, Mission Grove contends
that we should ascertain the parties’ intentions from this parol agreement, rather
than from the express terms of the contract.
For this evidence to be considered, however, it must contain facts and be
presented in a form that would be admissible at trial. See Longoria, 938 S.W.2d at
30. When a written instrument is worded so that it can be given a certain or definite
legal meaning or interpretation, then it is not ambiguous and the construction and
meaning thereof is question of law for the court to determine. See R & P Enters. v.
LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 519 (Tex. 1980); Universal C. I.
T. Credit Corp. v. Daniel, 243 S.W.2d 154, 157 (Tex. 1951); Calpine Producer
Servs., L.P. v. Wiser Oil Co., 169 S.W.3d 783, 787 (Tex. App.—Dallas 2005, no
9
pet.) (citing Dedier v. Grossman, 454 S.W.2d 231, 234 (Tex. Civ. App.—Dallas
1970, writ ref’d n.r.e.)). A contract, however, is ambiguous when its meaning is
uncertain and doubtful or it is reasonably susceptible to more than one meaning.
Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). In construing a contract, the
court seeks to “ascertain the true intentions of the parties as expressed in the
instrument.” Id. (emphasis added). In other words, the “intent of the parties must
be taken from the agreement itself, not from the parties’ present interpretation, and
the agreement must be enforced as it is written.” Calpine Producer Servs., 169
S.W.3d at 787 (quoting Parts Indus. Corp. v. A.V.A. Servs., Inc., 104 S.W.3d 671,
678 (Tex. App.—Corpus Christi 2003, no pet.)). Additionally, the parties’ intent is
to be ascertained from the instrument as a whole, not from isolated parts thereof;
the court will not inquire into the subjective intent of the contracting parties. See
id.; Stine v. Stewart, 80 S.W.3d 586, 589 (Tex. 2002) (per curiam); Burrus Mills,
Inc. v. Hein, 378 S.W.2d 85, 88 (Tex. Civ. App.—Dallas 1964, writ dism’d);
Ervay, Inc. v. Wood, 373 S.W.2d 380, 384 (Tex. Civ. App.—Dallas 1963, writ
ref’d n.r.e.).
We have concluded above that the agreement unambiguously expresses the
parties’ intent that Mission Grove and Texas Class are the parties to the contract
and that Hall executed the agreement in his representative capacity. Therefore,
Mission Grove’s extraneous evidence may not be admitted to ascertain the parties’
intent. See Fimberg v. F.D.I.C., 880 S.W.2d 83, 86 (Tex. App.—Texarkana 1994,
writ denied) (holding that appellant’s affidavit contradicting plain language of
unambiguous promissory note constituted impermissible parol evidence);
Rosemont Enters., Inc. v. Lummis, 596 S.W.2d 916, 923–24 (Tex. App.—Houston
[14th Dist.] 1980, no writ) (holding that affidavit contradicting express provisions
of note was not competent summary judgment evidence). Consequently, Mission
10
Grove’s extraneous summary judgment evidence did not serve to raise a genuine
issue of material fact as would preclude summary judgment. See Fimberg, 880
S.W.2d at 86; Lummis, 596 S.W.2d at 924; see also Dean A. Smith Sales, Inc. v.
Metal Sys., Inc., 397 S.W.3d 305, 308 (Tex. App.—Dallas 2013, pet. denied)
(holding impermissible parol evidence is not competent summary judgment
evidence).
B. Hall is not liable secondarily as a guarantor of Texas Classic’s
contract.
In the alternative, Mission Grove argues that Hall personally guaranteed his
company’s performance and that without this personal guarantee from Hall,
Mission Grove would not have entered into the contract. “A guaranty agreement
creates a secondary obligation whereby the guarantor promises to be responsible
for the debt of another and may be called upon to perform if the primary obligor
fails to perform.” Wasserberg v. Flooring Servs. of Tex., LLC, 376 S.W.3d 202,
205 (Tex. App.—Houston [14th Dist.] 2012, no pet.). For a guaranty to be
enforceable, it must evidence, with reasonable clearness, “an intent on the part of a
party to become liable on an obligation in case of default by the primary
obligator.” Block v. Aube, 718 S.W.2d 914, 915 (Tex. App.—Beaumont 1986, no
writ) (citing Taylor v. First State Bank, 178 S.W. 35 (Tex. Civ. App.—Fort Worth
1915, no writ)).
To show that Hall personally guaranteed the performance of Texas Classic,
the agreement must clearly evidence Hall’s intent to become personally liable for
the obligations of Texas Classic under the agreement if Texas Classic defaulted.
Mission Grove asserts that Texas courts have had little difficulty holding an owner
or officer of a company personally liable for a company obligation and cites
several cases in which the court found the owner or officer had personally
11
guaranteed the obligations of the company. We conclude that Mission Grove’s
authority for such a broad statement is distinguishable. Most of the cases cited by
Mission Grove involve contracts containing specific first-person guarantor
language such as “I guarantee.” See, e.g., 84 Lumber Co., L.P. v. Powers, 393
S.W.3d 299, 305 (Tex. App.—Houston [1st Dist.] 2012, pet. denied) (holding that
language in credit application that “I do unconditionally and irrevocably personally
guarantee” the credit account was a personal guarantee by signatory that created
both corporate and individual liability); Taylor-Made Hose, Inc. v. Wilkerson, 21
S.W.3d 484, 488 (Tex. App.—San Antonio 2000, pet. denied) (determining that
the language “[w]e agree to pay,” and “I, personally agree to pay” used in the
“terms and conditions” section immediately preceding the signature evidenced the
signatory’s agreement to be personally liable for delinquent amounts on the
account).
The contract at issue has no such first-person language. The signature line
and agreement in this case use only entity-specific terms and do not evidence an
intent that Hall’s signature was made in an individual capacity. See First ATM, Inc.
v. Onedoz, Inc., No. 03-08-00286-CV, 2009 WL 349164, at *4 (Tex. App.—
Austin Feb. 13, 2009, no pet.) (mem. op.) (holding that the use of entity-specific
terms in conjunction with a lack of first person statements in the agreement
evidenced that any assent by the company’s owner and president through his
signature to the statement the “individual executing the contract is personally
liable” was made only in a representative capacity). Thus, these cases are
distinguishable from the case before this court.
Mission Grove’s other authority is similarly distinguishable for its
construction of explicit language that unambiguously evidenced the signatory’s
specific intent to be the personal guarantor for the debts or obligations of the
12
company under the agreement in an individual capacity. See Neel, 378 S.W.3d at
604 (holding that when individuals signed a lease as “Tenants,” the additional
language that “[e]ach and every person, . . . comprising Tenant . . . shall be jointly
and severally liable” sufficiently established personal liability for the lease); see
also Austin Hardwoods, Inc. v. Vanden Berghe, 917 S.W.2d 320, 323 (Tex. App.—
El Paso 1995, writ denied) (finding the following language in credit application
creates a guarantee: “We fully understand your credit terms and agree to the proper
payment in consideration of extended credit. If a corporation, the undersigned
personally guarantees the payment of this account in his individual capacity.”)
The contract at issue contains no such explicit guarantee. The word
“guaranty” does not appear in the contract. Other than the signature line, Hall’s
name does not appear in the contract. Even if, for the sake of argument, we
substituted Hall’s name into the sentence upon which Mission Grove relies and
eliminated the reference to Hall’s representative capacity, it would suggest primary
liability on the contractual obligations, not secondary liability. But, because we
must accept the contract as written by the parties, and construe it as a whole to give
effect to the parties’ objective intentions, we can find nothing to support a
construction for secondary (guarantee) liability. See Block, 718 S.W.2d at 915.
Therefore, Hall is not secondarily liable on the contract for Texas Classic’s
obligations.
Having determined that Hall is neither primarily liable on Texas Classic’s
contract as a party nor secondarily liable on such contract as a guarantor, we
conclude the trial court did not err in granting Hall’s motion for summary
judgment on Mission Grove’s breach of contract claim. We overrule Mission
Grove’s first issue.
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II. Fraud and Promissory Estoppel Claims
Mission Grove’s second issue challenges the trial court’s summary judgment
ruling in favor of Hall on Mission Grove’s fraud and promissory estoppel claims
based on the statute of limitations. Mission Grove concedes that it filed the fraud
and promissory estoppel claims by amended pleading beyond the four-year
limitations period for such claims. However, Mission Grove argues that the claims
are not barred by limitations because of Texas Civil Practice and Remedies Code
section 16.068, the relation-back doctrine. See Tex. Civ. Prac. & Rem. Code §
16.068.
Section 16.068 provides: If a filed pleading relates to a cause of action, cross
action, counterclaim, or defense that is not subject to a plea of limitation when the
pleading is filed, a subsequent amendment or supplement to the pleading that
changes the facts or grounds of liability or defense is not subject to a plea of
limitation unless the amendment or supplement is wholly based on a new, distinct,
or different transaction or occurrence.” Tex. Civ. Prac. & Rem. Code § 16.068. As
a remedial statute, section 16.068 should be construed liberally; it is designed to
protect litigants from loss of their claims by a plea of limitations. Milestone Props.,
Inc. v. Federated Metals Corp., 867 S.W.2d 113, 116 (Tex. App.—Austin 1993, no
writ).
Tracking the language of the statute, Mission Grove asserts that the relation-
back doctrine applies because (a) the breach of contract cause of action was not
time barred when it was originally filed and (b) that the new causes of action for
fraud and promissory estoppel are based on the same transaction or occurrence
upon which the breach of contract claim is based. Hall does not disagree on these
points. Instead, Hall argues that regardless of whether Mission Grove’s fraud and
promissory estoppel claims arise from the same transaction or occurrence as the
14
breach of contract claim, to revive the time-barred causes of action using the
relation-back doctrine, the breach of contract claim must have been “a valid cause
of action.” Hall then reasons that because the trial court granted summary
judgment on Mission Grove’s breach of contract action, that claim was not a valid
cause of action.
Hall’s one-paragraph argument on the relation-back doctrine and its valid-
cause-of-action element relies upon two cases. See Almazan v. United Servs. Auto.
Ass’n, 840 S.W.2d 776, 778 (Tex. App.—San Antonio 1992, writ denied) (“a cause
of action barred by limitation cannot be revived by filing a pleading stating an
invalid cause of action and thereafter amending to include the barred cause of
action,”); Church v. Ortho Diagnostic Sys., Inc., 694 S.W.2d 552, 556 (Tex.
App.—Corpus Christi 1985, writ ref’d n.r.e.)3 (holding that for a “statement of a
new cause of action in an amended pleading to come within the provisions of this
statute, the nature of the original claim must have had some validity”)).
Neither case supports Hall’s argument; nor do we find a case holding that
the relation-back doctrine only applies if the original cause of action is ultimately
meritorious. Instead, in Almazan, the referenced “invalid cause of action” was a
new cause of action that was already time-barred at the time the original claim was
filed. See Almazan, 840 S.W.2d at 778 (noting that “the legislature did not intend
to allow an amended pleading to revive causes of action that were barred when the
original pleading was filed”). Hall has not made an Almazan argument here. In
other words, Hall has never argued that Mission Grove’s fraud and promissory
estoppel claims were already time-barred at the time Mission Grove filed the
breach of contract action. And, in Church, when the Court required the initial
3
The Church opinion is based upon Tex. Rev. Civ. Stat. Ann. art. 5526 (Vernon Supp.
1985), the predecessor to Tex. Civ. Prac. and Rem. Code § 16.068.
15
claim to have “some validity,” it was looking for a pleading that “state[s] a cause
of action.” See Church, 694 S.W.2d at 556. Hall has not argued that Mission
Grove’s breach of contract action failed to state a claim.
Consistently, our court has applied “a two-pronged test to determine whether
an amended pleading relates back to an earlier pleading for purposes of
limitations.” Cooke v. Maxam Tool & Supply, Inc., 854 S.W.2d 136, 141 (Tex.
App.—Houston [14th Dist.] 1993, writ denied) (noting that the test is (1) the first
pleading must not be time-barred when filed, and (2) the amended pleading must
not be wholly based on a new, distinct or different transaction or occurrence). We
have never considered the substantive merit of claims originally plead to determine
the application of the relation-back doctrine. We have never held that the original
claim must withstand a summary judgment motion or be persuasive to the fact
finder in order to be “valid” for purposes of the relation-back doctrine. We decline
to do so here. Under the test Hall suggests, a court could never determine whether
the relation-back doctrine applies without necessarily concluding that the initial
claims were meritorious, whether challenged by summary judgment or directed
verdict or not challenged at all. It is unworkable.
Because Hall did not and does not allege that Mission Grove’s breach of
contract claim was time-barred at the time of filing or that Mission Grove’s new
claims are wholly based on a new, distinct or different transaction or occurrence,
the relation-back doctrine applies. We therefore reverse the trial court’s order
granting Hall summary judgment on Mission Grove’s fraud and promissory
estoppel claims and remand to the trial court for further proceedings.
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CONCLUSION
We affirm the trial court’s order granting summary judgment on Mission
Grove’s breach of contract claim. We reverse the trial court’s order granting
summary judgment on Mission Grove’s fraud and promissory estoppel claims and
remand to the trial court for further proceedings.
/s/ Ken Wise
Justice
Panel consists of Justices Jamison, McCally, and Wise.
17