Aslam Virani v. Pat Cunningham

Affirmed and Memorandum Opinion filed February 2, 2012.
In The
Fourteenth Court of Appeals
___________________
NO. 14-11-00331-CV
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ASLAM VIRANI, Appellant
V.
PAT CUNNINGHAM, Appellee
On Appeal from the 56th District Court
Galveston County, Texas
Trial Court Cause No. 07-CV-1407
MEMORANDUM OPINION
This is the second appeal involving an alleged agreement by Pat Cunningham to sell
Aslam Virani a plot of land in the Marina Del Sol Subdivision. In Virani‘s earlier
interlocutory appeal, we affirmed the trial court‘s denial of Virani‘s motion to compel
Cunningham to arbitrate under a settlement agreement between the Marina Del Sol
Subdivision Homeowners‘ Association (―the Association‖) and Virani. Our decision was
based on the trial court‘s implied finding that Pat Cunningham, the president of the
Association, signed the settlement agreement in his representative rather than individual
capacity. After our decision, the trial court granted Cunningham‘s motion for summary
judgment, and Virani appeals. We affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
We discussed the factual background of this case in Virani‘s earlier appeal. See
Virani v. Cunningham, No. 14-08-01166-CV, 2009 WL 2568349, at *1 (Tex.
App.—Houston [14th Dist.] Aug. 20, 2009, pet. denied) (mem. op.) (―Virani I‖). Briefly,
the Association sued Virani in 2003 for alleged deed-restriction violations. At that time,
Cunningham was the Association‘s president and a member of its board. Following
mediation, the Association and Virani entered into a settlement agreement. Under the
terms of the agreement, Virani agreed to reduce the size of his existing pier within six
months or petition for amendment of the Association‘s restrictions. The agreement
provided that Cunningham would sell to Virani an adjacent subdivision lot for $290,000,
with the closing to occur within sixty days of execution of the agreement. The agreement
was signed by Cunningham, two other Association board members, the Association‘s
attorney, Virani, and Virani‘s attorney. Cunningham signed his name, and underneath his
signature appear the typewritten words ―Pat Cunningham, President and Board Member
Marina Del Sol Subdivision Homeowners[‘] Association.‖ The agreement contains a
clause requiring arbitration of ―any future disputes by and between [the parties] . . . .‖
On December 6, 2007, Virani sued Cunningham individually, alleging that
Cunningham breached the settlement agreement by failing to convey title to the adjacent
lot to Virani. Virani sought damages or, alternatively, specific performance of the
agreement. On July 30, 2008, Virani filed a Plea in Abatement and Motion to Compel
Arbitration. The trial court held a hearing, at which Cunningham testified that he had
signed the settlement agreement on behalf of the homeowners‘ association. The trial
court denied Virani‘s plea and motion, and we affirmed the rulings. See id., 2009 WL
2568349, at *5. We held that ―[i]n denying Virani‘s plea and motion, the [trial] court
made an implied finding that Cunningham signed the agreement in his representative
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capacity . . .‖ and could not be compelled to arbitrate. Id., 2009 WL 2568349, at *4.
Applying a no-evidence standard of review, we concluded that there was some evidence
that Cunningham intended to sign the agreement only in his capacity as association
president and board member and the trial court therefore did not err in denying Virani‘s
plea and motion. Id., 2009 WL 2568349, at *5.
On remand, Virani amended his petition to add equitable estoppel and promissory
estoppel as bases for relief. Cunningham moved for traditional and no-evidence summary
judgment. Cunningham argued that, based on our decision in Virani I, he could not be
held individually liable under the settlement agreement. He also argued that the
settlement agreement was unenforceable against him under the statute of frauds because he
had not signed it in his individual capacity. Finally, Cunningham contended that there
was no evidence to support several elements of Virani‘s estoppel arguments. Specifically,
he argued, Virani had failed to show that Virani had paid consideration for, taken
possession of, or made improvements to the property. In response, Virani presented an
affidavit in which he attested that Cunningham ―clearly took action and made
representations that we were indeed moving forward toward closing and that a contract
existed between the parties . . . .‖ Virani further stated that he ―always believed that [he]
was in a contract with Mr. Cunningham.‖ Virani also produced transcripts of a deposition
in which Cunningham testified that he understood when he signed the settlement
agreement that he was to sell his lot to Virani. However, in the same deposition,
Cunningham testified that he had signed the agreement in his capacity as president of the
Association. Finally, Virani produced two letters from his attorney to Cunningham‘s
counsel, complaining that Cunningham had not responded to Virani‘s request to close on
the lot. At the bottom of one of these letters, by his own admission, Cunningham wrote by
hand that he ―would be happy to close on the lot on Monday[, January] 26th[, 2004].‖ He
added that he would not close if the closing statement failed to reflect certain taxes and fees
The original copy of this note apparently contained Cunningham‘s signature, and
Cunningham testified at his deposition that he wrote and signed the note. However, the
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copy of this note in evidence does not contain a signature. The trial court granted
Cunningham‘s motion for summary judgment on March 4, 2011 without specifying the
grounds for its ruling.
II. ISSUES PRESENTED
Virani first argues that the trial court erred in granting summary judgment on
Cunningham‘s statute of frauds defense because the settlement agreement, on its own or
combined with Virani‘s attorney‘s letter and Cunningham‘s handwritten note, satisfies the
requirement of an agreement in writing. Virani also contends that the trial court should
not have granted summary judgment because Virani raised a genuine issue of material fact
in support of his estoppel arguments. In his second issue, Virani argues that the trial court
erred in granting summary judgment because our decision in Virani I did not foreclose
recovery under the settlement agreement itself or under his estoppel theories. In his final
three issues, Virani contends that summary judgment was inappropriate to the extent it was
based on the law of the case doctrine. He contends that (a) our decision in Virani I did not
become the law of the case because, as an intermediate appellate court, we are not a ―court
of last resort,‖ and the Texas Supreme Court did not affirm our decision; (b) our holding in
Virani I as to capacity was one of fact rather than law; and (c) the facts substantially
changed between the time we rendered our decision in Virani I and the time the trial court
granted summary judgment, precluding application of the law of the case doctrine.
III. STANDARD OF REVIEW
We review the trial court‘s grant of a summary judgment de novo. Provident Life
& Accident Ins. Co. v. Knott, 198 S.W.3d 211, 215 (Tex. 2003). We consider all the
evidence in the light most favorable to the nonmovant, crediting evidence favorable to the
nonmovant if a reasonable factfinder could, and disregarding contrary evidence unless a
reasonable factfinder could not. See Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582
(Tex. 2006). We must affirm the summary judgment if any of the movant‘s theories
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presented to the trial court and preserved for appellate review are meritorious. Provident
Life, 128 S.W.3d at 216.
The movant for traditional summary judgment has the burden of showing that there
is no genuine issue of material fact and that it is entitled to judgment as a matter of law.
TEX. R. CIV. P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289
S.W.3d 844, 848 (Tex. 2009). A defendant who moves for traditional summary judgment
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. Frost Nat’l Bank
v. Fernandez, 315 S.W.3d 494, 508 (Tex. 2010). 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 establishes its right to summary
judgment as a matter of law, the burden shifts to the plaintiff to present evidence raising a
genuine issue of material fact. Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex.
1995). The nonmovant has no burden to respond to a traditional summary-judgment
motion 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).
In a no-evidence motion for summary judgment, the movant represents that there is
no evidence of one or more essential elements of the claims for which the nonmovant bears
the burden of proof at trial. TEX. R. CIV. P. 166a(i); Timpte Indus., Inc. v. Gish, 286
S.W.3d 306, 310 (Tex. 2009). The burden then shifts to the nonmovant to present
evidence raising a genuine issue of material fact as to the elements specified in the motion.
Mack Trucks, 206 S.W.3d at 582. We review the evidence presented by the motion and
response in the light most favorable to the nonmovant, crediting evidence favorable to that
party if a reasonable juror could, and disregarding contrary evidence unless a reasonable
juror could not. Id. (citing City of Keller, 168 S.W.3d at 827 and Johnson v. Brewer &
Pritchard, P.C., 73 S.W.3d 193, 208 (Tex. 2002)). We sustain a no-evidence summary
judgment when (a) there is a complete absence of evidence of a vital fact, (b) the court is
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barred by rules of law or of evidence from giving weight to the only evidence offered to
prove a vital fact, (c) the evidence offered to prove a vital fact is no more than a mere
scintilla, or (d) the evidence conclusively establishes the opposite of the vital fact. City of
Keller, 168 S.W.3d at 810. The evidence is insufficient if ―it is ‗so weak as to do no more
than create a mere surmise or suspicion‘‖ that the challenged fact exists. Akin, Gump,
Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. & Research Corp., 299 S.W.3d 106, 115 (Tex.
2009) (quoting Kroger Tex. L.P. v. Suberu, 216 S.W.3d 788, 793 (Tex. 2006)).
When, as here, the movant asserts multiple grounds for summary judgment and the
trial court grants summary judgment without specifying the grounds for its ruling, we must
affirm the judgment if any of the grounds is meritorious. Carr v. Brasher, 775 S.W.2d
567, 570 (Tex. 1989); Chrimson v. Brown, 246 S.W.3d 102, 106 (Tex. App.—Houston
[14th Dist.] 2007, no pet.).
IV. ANALYSIS
A. Statute of Frauds
Virani first argues that the trial court erred in granting summary judgment on
Cunningham‘s statute of frauds defense. Under the statute of frauds, a contract for the
sale of real estate is not enforceable unless the promise or agreement, or a memorandum of
it, is in writing and signed by the person to be charged with the promise or agreement or by
someone lawfully authorized to sign for him. TEX. BUS. & COM. CODE ANN. § 26.01
(West 2009). An agreement is not ―signed by the person to be charged‖ if the defendant
signed the agreement in one capacity and is charged with it in another capacity. See FCLT
Loans, L.P. v. Estate of Bracher, 93 S.W.3d 469, 476–77 (Tex. App.—Houston [14th
Dist.] 2002, no pet.) (where note was signed by decedent, defendants who were sued
individually and as co-executors of the estate were entitled to summary judgment as to
individual liability).
Virani argues that the settlement agreement satisfies the statute of frauds because
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Cunningham signed it. But in Virani I, we affirmed the trial court‘s implied finding that
Cunningham did not sign the settlement agreement in his individual capacity. On remand,
Virani produced no evidence that the facts relevant to that determination had changed. As
a matter of law, therefore, Cunningham showed that the settlement agreement was not
―signed by the person to be charged with the promise‖ as required under the statute of
frauds. See FCLT Loans, 93 S.W.3d at 476–77.
Although the settlement agreement alone does not satisfy the statute of frauds,
Virani argues that a combination of the settlement agreement, Virani‘s attorney‘s letters to
Cunningham, and Cunningham‘s handwritten note on one of them does. To satisfy the
statute of frauds, there must be a written memorandum that is complete within itself in
every material detail and contains all of the essential elements of the agreement. Cohen v.
McCutchin, 565 S.W.2d 230, 232 (Tex. 1978). If the written memorandum consists of
multiple documents, the later documents must refer to the earlier ones. Alattar v. Ganim,
14-08-00756-CV, 2010 WL 547032, at *5 (Tex. App.—Houston [14th Dist.] Feb. 18,
2010), rev’d on other grounds, 54 Tex. Sup. Ct. J. 1260 (June 24, 2011) (per curiam).
Oral evidence can only bring together the different writings; it cannot connect them. Id.
(citing Douglass v. Tex.–Canadian Oil Corp., 141 Tex. 506, 509, 174 S.W.2d 730, 731
(1943). The documents must show their connection by their own contents. Id.; see
Gruss v. Cummins, 329 S.W.2d 496, 500 (Tex. Civ. App.—El Paso 1959, writ ref‘d n.r.e.)
(―Parol evidence is not admissible to show that even signed writings relate to the same
transaction.‖). For an unsigned document to be part of a written memorandum, it must be
referred to or adopted by a signed document. See id., 2010 WL 547032, at *6 (―This
document cannot properly be considered as part of the ‗written memorandum‘ because no
other document signed by Alattar or Alattar‘s authorized representative refers to it or
adopts it.‖).
Cunningham admitted that he wrote and signed a note on the bottom of one of the
letters in which he stated that he would be happy to close on the lot, but that he would not
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do so if the closing document did not reflect certain changes. This statement, however,
never refers to the settlement agreement, nor does it necessarily acknowledge any existing
obligation. See id., 2010 WL 547032, at *6 n.7 (―‗Writings that contain ―futuristic‖
language are insufficient to confirm that a contract or promise is already in existence.‘‖)
(quoting Hartford Fire Ins. Co. v. C. Springs 300, Ltd., 287 S.W.3d 771, 778 (Tex.
App.—Houston [1st Dist.] 2009, pet. denied)). Further, in the letter itself, Virani‘s
attorney stated that ―the settlement agreement is hereby declared breached.‖ It would be
illogical to read Cunningham‘s note as an acknowledgement that he was individually
bound under an agreement Virani‘s attorney had just declared breached. Finally, there is
no evidence that the changes Cunningham requested were ever made, or even that a closing
statement was prepared. Because Cunningham did not sign any agreement binding him
individually, the trial court correctly granted summary judgment on statute of frauds
grounds. We therefore overrule Virani‘s first issue as it pertains to Cunningham‘s statute
of frauds defense.
B. Equitable Estoppel
Virani next argues that the trial court erred in granting summary judgment because
Virani raised a genuine issue of material fact in support of equitable estoppel. In his
summary-judgment response, Virani cited Cunningham‘s admissions that Cunningham
signed the settlement agreement, that Cunningham knew Virani was prepared to purchase
the lot, and that Cunningham intended to sell the lot to Virani. Virani also contends, in his
second issue, that our decision in Virani I did not bar recovery under an equitable estoppel
theory because we did not address such a theory on his first appeal.
Equitable estoppel is a defensive plea raised to prevent a party from insisting upon
its strict legal rights under the statute of frauds, when enforcing an oral agreement would be
necessary to avoid an injustice. See Nat’l Resort Comtys., Inc. v. Cain, 479 S.W.2d 341
(Tex. Civ. App.—Austin 1972, writ ref‘d n.r.e.) (―By whatever name the equitable plea of
the vendee may be called, whether promissory estoppel, equitable estoppel, or estoppel In
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pais, it is a plea raised to estop the vendor from interposing the Statute of Frauds in an
effort to avoid passage of the fee.‖). When a defendant establishes the elements of his
statute of frauds defense as a matter of law, the burden shifts to the plaintiff to adduce
evidence in support of an estoppel defense. See Moore Burger, Inc. v. Phillips Petroleum
Co., 492 S.W.2d 934, 936–37 (Tex. 1973) (so holding as to promissory estoppel). To
enforce an oral contract for the purchase of real property on the basis of equitable estoppel,
a purchaser must show that he paid consideration and took possession of the property.
Boyert v. Tauber, 834 S.W.2d 60, 63 (Tex. 1992). In addition, the purchaser must show
either that he made permanent and valuable improvements on the property with the seller‘s
consent, or that the transaction would be a fraud on the purchaser if the oral contract was
not enforced. Id. (citing Hooks v. Bridgewater, 111 Tex. 122, 126–27, 229 S.W.2d 1114,
1116–117 (1921)). See also Nagle v. Nagle, 633 S.W.2d 796, 799, 800 (Tex. 1982) (―The
exception to the Statute of Frauds announced in Hooks v. Bridgewater was to prevent
actual [common-law] fraud.‖). In his summary-judgment response, Virani conceded that
he had failed to pay consideration or take possession of the property. His equitable
estoppel argument therefore fails as a matter of law. This determination rests not on our
decision in Virani I but on Virani‘s failure to create a fact issue about the elements of
equitable estoppel. We therefore overrule Virani‘s first and second issues as they pertain
to equitable estoppel.
C. Promissory Estoppel
Virani next argues that the trial court erred in granting summary judgment because
he raised a genuine issue of material fact in support of his promissory estoppel theory. In
support of his promissory estoppel theory, Virani relies on the evidence he presented that
Cunningham knew about the agreement and intended to sell Virani the land, and that
Virani thought they had formed a contract. As with his equitable estoppel argument,
Virani also contends that our decision in Virani I did not bar recovery under a promissory
estoppel theory because we did not address the issue in that case.
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Under the doctrine of promissory estoppel, courts will enforce an oral promise to
sign an instrument complying with the statute of frauds if: (1) the promisor should have
expected that his promise would lead the promisee to some definite and substantial injury,
(2) such an injury occurred, and (3) the court must enforce the promise to avoid injustice.
Nagle, 633 S.W.2d at 800 (citing Moore Burger, 492 S.W.2d at 934. In his
summary-judgment response, Virani failed to show that he suffered injury because of
Cunningham‘s promise. Virani‘s promissory estoppel theory therefore fails as a matter of
law, regardless of our decision in Virani I. We overrule Virani‘s first and second issues as
they pertain to promissory estoppel.
D. Law of the Case Arguments
In his final four issues, Virani argues that the trial court erred in granting summary
judgment because the law of the case doctrine did not bar his claims. Under the law of the
case doctrine, questions of law decided on appeal to a court of last resort govern the case
throughout its subsequent stages. Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex.
1986). A reviewing court may apply the law of the case doctrine in a subsequent
proceeding if the facts in the later proceeding are ―so nearly the same that they do not
materially alter the legal issues involved in the later proceeding.‖ Lawrence v. City of
Wichita Falls, 122 S.W.3d 322, 326 (Tex. App.—Fort Worth 2003, pet. denied). By
narrowing the issues in successive stages of the litigation, the law of the case doctrine is
intended to achieve uniformity of decision as well as judicial economy and efficiency.
Hudson, 711 S.W.2d at 630. The doctrine is based on public policy and is aimed at
putting an end to litigation. Id. (citing Barrows v. Ezer, 624 S.W.2d 613, 617 (Tex.
App.—Houston [14th Dist.] 1981, no writ). It applies only to questions of law, and it does
not necessarily apply when either the issues or the facts presented at successive appeals are
not substantially the same as those involved in the first trial. Id. (citing Barrows, 624
S.W.2d at 617 and Ralph Williams Gulfgate Chrysler Plymouth, Inc. v. State, 466 S.W.2d
639, 640–41 (Tex. Civ. App.—Houston [14th Dist.] 1971, writ ref‘d n.r.e.)). Thus, when
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parties have amended pleadings on remand, the issues or facts may change so that the law
of the case no longer applies. Id. (citing Rose v. Parker, 143 Tex. 202, 210, 183 S.W.2d
438, 442 (1944)). The decision to revisit a previous holding is left to the discretion of the
court under the particular circumstances of each case. City of Houston v. Jackson, 192
S.W.3d 764, 769 (Tex. 2006).
Virani first argues that in Virani I, we addressed only the settlement agreement‘s
arbitration clause and not whether Cunningham is bound as a signatory to the settlement
agreement as a whole. But while the issue in Virani I was the arbitration clause, our
decision was based on the trial court‘s implied finding that Cunningham did not sign the
settlement agreement individually. See Virani I, 2009 WL 2568349, at *5. If
Cunningham did not sign the settlement agreement individually, then he is not individually
bound as a signatory. See Willis v. Donnelly, 199 S.W.3d 262, 271 (Tex. 2006) (a party
cannot be held not individually liable under a contract the party signed in representative
capacity). Virani presented no new facts that would alter our previous holding or make
the law of the case inapplicable. We therefore overrule Virani‘s second issue as it pertains
to Cunningham‘s individual liability under the settlement agreement.
In his third issue, Virani contends that the trial court erred in granting summary
judgment because, as an intermediate appellate court, we are not a ―court of last resort‖ for
the purpose of the law of the case doctrine. However, intermediate appellate courts have
consistently treated their own prior decisions, and those of their sister courts, as binding
under the law of the case doctrine. See, e.g., Barrows, 624 S.W.2d at 617 (treating prior
decision of own court as law of the case); Ralph Williams, 466 S.W.2d at 640 (treating
prior decision of sister court as law of the case. We overrule Virani‘s third issue.
Virani next contends that the trial court erred in granting summary judgment based
on our holding in Virani I because the facts substantially changed between the time we
rendered that decision and the time that the trial court granted summary judgment. Virani
cites his own affidavit and Cunningham‘s deposition testimony, both of which he
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presented after our decision in Virani I. But Virani himself notes that ―[t]hese additional
facts relate to promissory and equitable estoppel‖ and have no effect on the issues that were
dispositive in Virani I. We overrule Virani‘s fourth issue.
Finally, Virani argues that the trial court erred in rendering summary judgment
based on our capacity determination in Virani I because the capacity in which Cunningham
signed the settlement agreement is a question of fact, to which the law of the case doctrine
does not apply. But as long as the facts remain so nearly the same that they do not
materially alter the legal issues involved, our earlier determination remains the law of the
case.1 See Hudson, 711 S.W.2d at 630; Lawrence, 122 S.W.3d at 326. We overrule
Virani‘s fifth issue.
V. CONCLUSION
We hold that Cunningham established each element of his statute of frauds defense
1
Virani notes that ―[o]n review of an order denying [a] Motion to Compel Arbitration, the
appellate court would have been limited in [its] consideration of issues and facts.‖ It is true that a motion
to compel or stay arbitration may be granted without an evidentiary hearing, so the evidence may not
always be fully developed when a court of appeals affirms or denies an order on such a motion on
interlocutory appeal. See In re Jim Walter Homes, Inc., 207 S.W.3d 888, 896 (Tex. App.—Houston [14th
Dist.] 2006, orig. proceeding) (trial court is not required to hold evidentiary hearing on motion to compel
arbitration). There may be cases in which, after a trial on the merits, the appellate court‘s prior holding
may no longer apply as the law of the case. See Marin Real Estate Partners, L.P. v. Vogt, No.
04-10-00602-CV, 2011 WL 5869520, at *8 (Tex. App.—San Antonio Nov. 23, 2011, no pet. h.) (affirming
a permanent injunction three years after reversing a temporary injunction on interlocutory appeal because
―circumstances could have changed or the Vogts could have presented different or more compelling
evidence in 2009 than they did in 2006.‖); In re B.G.D., 351 S.W.3d 131, 142 (Tex. App.—San Antonio
2011, no pet.) (―To determine if we should apply the law of the case doctrine, we must compare the
evidence from the 2005 temporary orders hearing . . . and the evidence from the 2009 trial on the merits.‖);
Med. Ctr. Bank v. Fleetwood, 854 S.W.2d 278 (Tex. App.—Austin 1993, writ denied) (―‗Where there has
been a reversal of a summary judgment in favor of a Defendant and then a trial on the merits with an appeal,
the law as stated in the summary judgment [appeal] does not necessarily control the case on the appeal from
the trial on the merits.‘‖) (quoting Allstate Ins. Co. v. Smith, 471 S.W.2d 620, 623 (Tex. Civ. App.—El Paso
1971, no writ)). Federal courts have expressly recognized an exception to the law of the case doctrine
when a subsequent trial produces substantially different evidence. See, e.g., EEOC v. Int’l
Longshoremen’s Ass’n, 623 F.2d 1054, 1058 (5th Cir. 1980). In this case, however, the trial court held a
full evidentiary hearing on Virani‘s motion. It viewed the signature block of the settlement agreement and
heard Cunningham testify that he signed the settlement agreement in his representative capacity, and Virani
has presented no new evidence relevant to this issue.
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as a matter of law, that Virani failed to raise a genuine issue of material fact in support of
his estoppel arguments, and that our decision in Virani I operates as the law of the case.
Accordingly, we affirm the trial court‘s judgment.
/s/ Tracy Christopher
Justice
Panel consists of Chief Justice Hedges and Justices Brown and Christopher.
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