Megatel Homes III, LLC v. Woodhull Ventures 2015, L. P.

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-21-00390-CV
Megatel Homes III, LLC, Appellant
v.
Woodhull Ventures 2015, L.P., Appellee
FROM THE 425TH JUDICIAL DISTRICT COURT OF WILLIAMSON COUNTY
NO. 18-0635-C425, THE HONORABLE BETSY F. LAMBETH, JUDGE PRESIDING
MEMORANDUM OPINION
Appellant Megatel Homes III, LLC appeals from the trial court’s granting of
summary judgment in favor of appellee Woodhull Ventures 2015, L.P., and its denial of Megatel’s
request for attorney’s fees under former Texas Rule of Civil Procedure 91a and the Texas Citizens
Participation Act (TCPA). See Tex. R. Civ. P. 91a.7;1 Tex. Civ. Prac. & Rem. Code §§ 27.001–
.011. We affirm the trial court’s granting of summary judgment and that Megatel take nothing on
its claims against Woodhull and the court’s denial of attorney’s fees under the TCPA. However,
1 Rule 91a.7 was amended in 2019, but those amendments do not apply to this case,
which was filed in the trial court before September 1, 2019. See Tex. R. Civ. P. 91a cmt.
2019 (“A civil action commenced before September 1, 2019, is governed by the rule as adopted
in Misc. Docket No. 13-9022.”). We thus cite to the rule as it read before the 2019
amendment. See Misc. Docket No. 13-9022 (Tex. Feb. 12, 2013, order), available at
http://www.txcourts.gov/All_Archived_Documents/SupremeCourt/AdministrativeOrders/miscdo
cket/13/13902200.pdf.
we reverse the court’s final judgment in part and remand for consideration of Megatel’s entitlement
to attorney’s fees under Rule 91a.
FACTUAL AND PROCEDURAL SUMMARY
On February 20, 2017, Megatel paid $350,000 in earnest money and entered into a
contract with Woodhull under which Woodhull would sell Megatel 135 “completed,
fully-buildable residential lots” on which Megatel planned to build houses in a master-planned
community. The lots were to be sold in three “takedown” transactions conveying between twenty
and sixty lots in each closing. The relevant provisions of the contract are:
1.29 “Property” means the Lots together with the Improvements, . . . as well as
lands underlying adjacent streets or roads which belong or in any way pertain to the
Lots. . . .
1.36 “Subdivision” means the master planned community being developed by
Seller on the real property illustrated on [an attached exhibit].
1.37 “Substantially Completed” and “Substantial Completion” means the
applicable Lots have been completed, at Seller’s expense, in accordance with the
Lot Construction Plans and Block Grading Plans [that] have been approved by all
applicable Governmental Authorities, are acceptable to the City, platted, improved,
accepted and approved by the City and, to the extent applicable, all utility districts
or companies having jurisdiction over the development of the Lots, all in buildable
condition subject only to the creation of building pads thereon by Buyer and with
building permits for the erection of single-family detached residences being
available for issuance . . . . In that regard, Seller shall also fulfill all of the following
requirements with respect to the Lots to achieve Substantial Completion (a
summary of which is set forth on Exhibit G attached hereto):[2]
[(a) provide a registered, professional engineer’s certification that the Lots
are outside the 100-year flood plain or flood-prone area;
(b) provide a registered, professional engineer’s certification that all streets,
utilities and other subdivision improvements had been installed
2 For clarity and brevity, we summarize the required substantial-completion items.
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substantially in accordance with the Lot Construction Plans and Block
Grading Plans approved by applicable governmental authorities;
(c) execute any applicable utility contracts;
(d) ensure that all lots are rough graded, benched, and/or sloped in
accordance with the Block Grading Plans, with any compaction done to
HUD-79G certification standards and with Buyer being responsible for
grading final building pads and any needed drainage swales;
(e) install all street signs and street lights or agree to complete those
installations within ninety days of Substantial Completion;
(f) provide print and electronic copies of the recorded Final Plat and
address plat;
(g) provide a letter from a surveyor or the project engineer stating that the
corners of each lot are staked and flagged;
(h) provide the lots’ geotechnical engineer’s HUD-79G certification letter;
(i) provide a stormwater-pollution-prevention plan for the subdivision and
construct and install all erosion-control measures as required;
(j) provide Lot Construction Plans prepared during the course of
development, including plans for streets and other public improvements,
landscaping, and utilities;
(k) pay or agree to pay all developer-related charges, fees and assessments
related to the lots;
(l) ensure the lots are clean and free of debris or detrimental material;
(m) provide a copy of the recorded Restrictive Covenants; and
(n) provide the planned locations of any cluster mailboxes (CBUs) and
agree to install the CBUs within sixty days after closing.]
3.2 Buyer’s Termination Right. At any time prior to the expiration of the [thirty-
day] Inspection Period, Buyer may, in its sole discretion and for any reason or for
no reason, elect to terminate the acquisition of the Property under this Agreement.
If Buyer, by written notice to Seller (the “Notice of Continuation”), waives its right
to terminate this Agreement pursuant to this Section 3.2 prior to the expiration of
the Inspection Period, then this Agreement shall continue in full force and effect.
If Buyer does not give Seller the Notice of Continuation on or before the last day
of the Inspection Period, then this Agreement shall automatically terminate upon
expiration of the Inspection Period. . . . If Buyer delivers its Notice of Continuation
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. . . , this Agreement shall continue to closing upon expiration of the Inspection
Period and Buyer shall be deemed to have elected to continue this Agreement to
the completion of the acquisition of the Property on the terms herein and the Earnest
Money Deposit shall thereafter not be refundable to Buyer except upon the terms
otherwise expressly set forth herein.
3.3 Within seven (7) days after the Effective Date, Seller will (i) deliver to Buyer
copies of the following documents, or (ii) advise Buyer that certain of the following
documents are not available and Buyer shall determine whether to acquire the
Property without such information, in each case to the extent in Seller’s possession
pertaining to the use, development or ownership of the Property (the “Property
Documents”):
(a) any engineering reports and flood studies relating to the Subdivision;
(b) a copy of the Preliminary Plat submitted to the City for the Subdivision;
(c) Seller’s soils report for the Property or Subdivision signed by Seller’s
geotechnical engineer;
(d) Seller’s environmental report(s) for the Property or Subdivision . . . .
3.6(e) Notice of Substantial Completion. Upon Substantial Completion with respect
to the applicable Takedown Tract, Seller shall send written notice (a “Substantial
Completion Notice”) to Buyer. Upon receipt of a Substantial Completion Notice
for the applicable Takedown Tract, Buyer shall have a period of seven days within
which to inspect the applicable Takedown Tract and evaluate the information and
documentation provided by Seller and to notify Seller in writing if any, in Buyer’s
reasonable, good faith judgment it does not believe the Lots are Substantially
Complete. . . . Buyer’s failure to so notify Seller within that 7-day period shall be
deemed Buyer’s agreement to proceed to Closing on the applicable Takedown
Tract. . . . If Seller does not cure Buyer’s objections within said 15-day period,
Buyer may elect, by delivering written notice to Seller within ten days after Seller’s
cure period expires, either (i) to waive such objections and continue this Agreement
in full force and effect or (ii) to cure the matter so objected to, and to deduct the
cost of such cure from the Purchase Price for the applicable Takedown Tract; or
(iii) delay Closing with respect to the applicable Lot or Lots affected by the
objections identified in Buyer’s timely made notice until such Lot or Lots are
Substantially Complete. Buyer’s failure to make a written election within such ten-
day period shall be deemed Buyer’s agreement to waive the objections and continue
to the scheduled Closing on the applicable Takedown Tract. . . .
11.2 Notices. All written notices and demands of any kind which either party may
be required or may desire to serve upon the other party in connection with this
Agreement shall be in writing, signed by the party or its counsel, and shall be (i)
delivered by hand delivery (effective upon actual delivery or refusal at the proper
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address hereunder); or (ii) sent by nationally recognized overnight delivery service
such as Federal Express or UPS . . . . The parties shall each use good faith efforts
to provide a courtesy email copy of any notice delivered under this Agreement . . . .
Courtesy email copies of notices are for informational purposes only, and a failure
to give or receive courtesy email copies of any notice shall not be deemed a failure
to give notice.
Exhibit G: SUMMARY OF SUBSTANTIAL COMPLETION ITEMS
1. Seller’s existing environmental site assessment [pursuant to Section
3.3(a)]
2. Soil Report [pursuant to Section 3.3([c])]
3. HUD-79G Letter [pursuant to Section 1.37(h)]
4. Lot Grading Plans [pursuant to Section 1.2]
5. MUD or PUD Forms (if applicable) [pursuant to Section 3.3(f)]
6. Any impact fee agreements, facilities agreements and development
agreements affecting the Property or the Subdivision for which the Buyer
would be responsible [pursuant to Section 3.3(f)]
7. Restrictive Covenants [pursuant to Section 1.37(m)]
8. HOA Contact [pursuant to Section 3.6(a)]
9. Final Plat [pursuant to Section 1.37(f)]
I0. Address Plat [pursuant to Section 1.37(f)]
11. Lot Construction Plans [pursuant to Section 1.37(j)]
12. Evidence that Lots have been accepted and approved by the City
[pursuant to Section 1.37]
13. Cluster Mailbox location [pursuant to Section 1.37(n)]
14. Surveyor’s letter verifying that Lot corners have been pinned [pursuant
to Section 1.37(g)]
On March 1, 2017, Woodhull gave Megatel a soil report describing the conditions
underneath various streets in the community south of the lots Megatel was to buy. After the
contractual inspection period ended, the parties opted to continue with the sale and development
process. On March 2, 2018, after clearing the lots and preparing them for closing, Woodhull
representative David Nairne emailed Megatel representative JJ Singh that he was providing
Woodhull’s “substantial completion items,” including an updated “Geotechnical Pavement
Report” showing the soil conditions at ten to fifteen test pit locations in the property. On April 25,
Woodhull’s law firm sent Megatel a letter via FedEx and email stating that Substantial Completion
of the lots in the first takedown had occurred on April 12; that in a conversation between the two
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parties earlier in the day, “Seller and Buyer agree that all of the Lots in the First Takedown Tract
are Substantial Complete and both parties are working to prepare for the initial closing”; and that
Woodhull had “agreed to [Megatel’s] request to set the Initial Closing Date for May 25, 2018.”
On May 2, Singh emailed a reply to Nairne’s March 2 email, stating, “I was going
over the documents that you sent and I am missing some of them,” including, “Need final geo-tech
study. What you had sent was HUG-79G and Geo-Technical Investigation Pavement Thickness
Recommendations.” On May 3, Nairne responded, stating in relevant part:
In my last call with Zach [a Megatel representative], he confirmed the Substantial
Completion items per the contract had been received. Thus what you list [in the
email asking for additional documents] are not required completion items for the
Closing, however we can help out as provided below: . . .
Just like at Oak Creek [an earlier similar real-estate transaction between the parties],
we do NOT provide any geo tech study, I think that is a Dallas concept. You can
contract separately for this to be done with a soils engineer (we use MLA for this
project) if desired.
On May 14, Megatel sent Woodhull a letter via FedEx an email stating that
“Megatel denies that Substantial Completion has occurred” in part because “Megatel requires a
Soil Report covering the Property and Lots . . . in order to design the slab structure.” Woodhull
responded that Megatel had not provided such notice within seven days of receiving the Substantial
Completion Notice; that Woodhull had already provided its existing soil reports; and that the
contract did not require Woodhull to obtain additional soil reports. When Megatel failed to appear
at the May 25 closing, Woodhull sent a “Seller’s Default Notice” stating that Megatel had thirty
days to cure its default and close and that a failure to do so would allow Woodhull to exercise its
rights under the contract.
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Megatel filed suit asserting a claim for breach of contract. 3 Megatel sought actual
damages, exemplary damages, and attorney’s fees “under applicable law” and the contract.
Woodhull filed a motion to dismiss under Rule 91a, which the trial court denied,
and then unsuccessfully sought relief through petitions for writ of mandamus filed in this
Court and the Texas Supreme Court. See In re Woodhull Ventures 2015, L.P., No. 18-0835
(Tex. Oct. 12, 2018) (orig. proceeding [mand. denied]); In re Woodhull Ventures 2015, L.P.,
No. 03-18-00503-CV, 2018 WL 4039588 (Tex. App.—Austin Aug. 24, 2018, orig. proceeding
[mand. denied]) (mem. op.). Woodhull also filed a motion to dismiss under the TCPA, which the
trial court denied. We affirmed that denial, holding that Megatel had shown that its claims fell
within an exception to the TCPA. See Woodhull Ventures 2015, L.P. v. Megatel Homes III, LLC,
No. 03-18-00504-CV, 2019 WL 3310509, at *1 (Tex. App.—Austin July 24, 2019, no pet.)
(mem. op.).
Woodhull next filed a counterclaim for breach of contract, seeking to retain
Megatel’s earnest money and to be awarded attorney’s fees under the contract and Chapter 38 of
the Civil Practice and Remedies Code. See Tex. Civ. Prac. & Rem. Code §§ 38.001–.006
(“Attorney’s Fees”). It also filed a traditional and no-evidence motion for summary judgment on
Megatel’s claims. Megatel then filed an amended petition alleging that the contract was
ambiguous, adding a claim for breach of express warranty, and requesting specific performance.
Megatel stated that it sought attorney’s fees under the contract, Chapters 37 and 38 of the Civil
Practice and Remedies Code, see generally id. §§ 37.001–.011 (“Declaratory Judgments”), 8.001–
3 Megatel also asserted a claim for statutory fraud and sought a declaratory judgment but
does not challenge the take-nothing judgment rendered against it on those issues or put forth any
argument relevant to those issues.
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.006, and Chapter 27 of the Business and Commerce Code, Tex. Bus. & Comm. Code §§ 27.01–
.02 (“Fraud”).
The trial court held a hearing on Woodhull’s motion for summary judgment and
signed an order granting Woodhull’s motion, ordering that Megatel:
shall take nothing on all of its claims in its First Amended Petition.
To be clear, Plaintiff shall take nothing on its claims for breach of
contract, breach of express warranty, and statutory fraud, and its
request for declaratory judgment is hereby denied. Plaintiff’s
request for attorneys’ fees in its First Amended Petition also is
hereby denied.
Woodhull then sought summary judgment on its counterclaim for breach of contract
and its request for attorney’s fees. In response, Megatel filed a “Supplement to First Amended
Petition,” alleging ambiguity in the contract’s meaning of “successful party” in the context of the
parties’ requests for attorney’s fees. Megatel argued that it had a right to attorney’s fees—
independent of whether it prevailed on any of its causes of action—because it had prevailed against
Woodhull’s motions to dismiss under Rule 91a and the TCPA. The trial court signed a final
judgment reciting that it had granted Woodhull’s motion for summary judgment on Megatel’s
claims “in [its] entirety, dismissing all of Megatel’s claims against Woodhull.” The court also
stated that it had held a hearing on Woodhull’s “second motion for summary judgment and request
for attorneys’ fees and granted those motions in their entirety.” The court determined that
Woodhull was entitled to retain Megatel’s earnest money deposit and to an award of attorney’s
fees and costs.
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DISCUSSION
On appeal, Megatel raises the following issues: 1) the trial court erred in denying
Megatel’s request for attorney’s fees under Rule 91a and the TCPA; 2) Megatel showed
ambiguities in the contract related to the soil report that Woodhull was required to provide; and
3) the court erred in granting summary judgment on Megatel’s claim for breach of express
warranty. We first address the latter two issues relating to the granting of summary judgment
against Megatel’s claim.
Summary Judgment on Megatel’s Claims for Breach of Contract and Breach of Warranty
We turn first to the trial court’s granting of summary judgment on Megatel’s
claims against Woodhull. We apply well-established standards of review, viewing the
summary-judgment evidence in the light most favorable to the nonmovant, crediting evidence
favorable to that party if reasonable to do so, and disregarding contrary evidence unless
unreasonable to do so. Samson Expl., LLC v. T.S. Reed Props., Inc., 521 S.W.3d 766, 774 (Tex.
2017) (quoting SeaBright Ins. v. Lopez, 465 S.W.3d 637, 641 (Tex. 2015)). A movant seeking a
traditional summary judgment must prove that no material fact issue exists and that it is thus
entitled to judgment as a matter of law. SeaBright Ins., 465 S.W.3d at 641. A party defending
against a no-evidence motion, on the other hand, must produce evidence raising a genuine issue of
material fact as to the elements challenged by the movant. First United Pentecostal Church of
Beaumont v. Parker, 514 S.W.3d 214, 220 (Tex. 2017).
Megatel contends that it raised an issue of fact as to whether Woodhull, by agreeing
to sell “buildable lots,” contractually obligated itself to produce a report analyzing the soil on the
lots. It further asserts that its claim for breach of express warranty was a “separate cause of action
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from breach of contract” and that the trial court erred in rendering judgment against Megatel
on the warranty claim when Woodhull had not filed an amended or supplemental motion for
summary judgment.
Woodhull contracted to sell Megatel “buildable lots,” which Megatel asserts means
lots “that provide Megatel the ‘ability to construct safe, stable housing,’” a definition it takes from
our opinion related to Woodhull’s TCPA motion. See 2019 WL 3310509, at *1. Megatel insists
that because of the assurance that the lots would be “buildable,” the contract can be construed to
require Woodhull to provide a report “encompassing the ‘Property’ or ‘Subdivision’ . . . for
135 ‘buildable Lots.’” It further argues that a soil report for the property “necessarily encompasses
soils information for the ‘Lots’ and also ‘lands underlying adjacent streets or roads,” while a
subdivision soil report “encompasses soils information for the entire master planned community,
not just selected portions.” Because it put forth a reasonable construction, Megatel contends,
it showed ambiguity in the contract language and raised a fact issue sufficient to defeat
summary judgment.
Megatel’s argument, however, elides the fact that the only portion of the contract
that references a soil report is section 3.3(c), which obliged Woodhull to provide reports within
seven days of the contract’s effective date, including a “soils report for the Property or Subdivision
signed by Seller’s geotechnical engineer,” but only to the extent it had such reports in its
possession.4 In the section defining “substantial completion,” the contract does not list a soil report
4 As summary-judgment evidence, Woodhull provided excerpts from the depositions of
Megatel’s president and Singh. Megatel’s president conceded that Woodhull’s initial report,
provided soon after the parties signed the contract in 2017, was sufficient for Megatel to move
forward with the contract, although he insisted that Woodhull “would not have access to the final
soil report till they have [the] subdivision completed and they can deliver the buildable lot.” And
Singh agreed when asked whether “the contract says only that Woodhull has to provide a soils
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as a required item, and although Exhibit G, the summary of substantial-completion items, includes
“soil report,” it specifies that that report is pursuant to section 3.3, thus referencing a report only
“to the extent in [Woodhull’s] possession.” Nowhere in the contract did the parties specify that
Woodhull was required to obtain a soil report that it did not already have in its possession, much
less that it was required to obtain a report describing the soil conditions for each individual lot.
Further, elsewhere in the contract there are indications that Megatel was responsible
for soil testing beyond any reports Woodhull had in its possession at the time of the contract’s
effective date. For instance, section 3.1, “Inspection,” states that Megatel had an inspection period
to “physically inspect the property” and conduct due diligence, including “taking soil and ground
water samples.” Section 3.4, “Restoration,” requires Megatel to return the property to its present
condition “[a]fter any tests of investigation on the Property.” And most importantly, section 10.4,
“Disclaimer,” states that Woodhull disclaimed any “warranties or guaranties of any kind of
character . . . as to, concerning, or with respect to the property, including the nature and condition
of the property and the suitability thereof for any and all activities and uses.” That section goes
on to disclaim any warranties related to geological conditions, including subsurface conditions,
drainage, and “the fitness of the property for any particular purpose (Buyer affirming that Buyer
has not relied on Seller’s skill or judgment to select or furnish the property for any particular
purpose, and that Seller makes no warranty that the property is fit for any particular purpose).”
Megatel agreed that it would “examine and investigate the property”; that it would “rely solely
upon its independent examination, study, inspection and knowledge of the property”; and that its
report during the first seven days if it had it,” answering, “Okay, it does say that.” Singh was also
asked, “And it doesn’t say anywhere else that Woodhull has to provide a second soils report or an
additional soils report,” and he answered, “That’s correct.”
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determination of the “uses to which the property may be put” would be based on its own
inspection, knowledge, and study of the property “and not on any information provided or to be
provided by” Woodhull.
We hold that under the unambiguous language of the contract, Woodhull did not
have an obligation to obtain a soil report in addition to the two it provided to Megatel.
Megatel next argues that it showed contractual ambiguity related to how Megatel
could give notice that it disagreed that the lots were substantially complete—such written notice
was required to be provided to Woodhull within seven days of its Notice of Substantial Completion
or Megatel would be deemed to agree “to proceed to Closing.”
Singh emailed Nairne on May 2, within seven days of Woodhull’s April 25
substantial-completion notice. He stated, “I was going over the documents that you sent and I am
missing some of them,” and provided a list of requested documents, including, “Need final
geo-tech study. What you had sent was HUD-79G and Geo-Technical Investigation Pavement
Thickness Recommendations.” Megatel asserts that Singh’s email should be considered Megatel’s
written notice that it did not believe the lots were substantially complete, contending that the
contract does not “unambiguously eliminate[]” email as a means of providing that notice.
However, the contract states that “written notices . . . which either party may be required or may
desire to serve on the other party in connection with this Agreement,” “shall be” either
hand-delivered or sent by “nationally recognized overnight delivery service.” (Emphasis added.)
Singh’s May 2 email, which was not delivered by hand or an overnight delivery service, cannot be
considered timely written notice disputing Woodhull’s Notice of Substantial Completion. 5 Thus,
5 Further, as Woodhull notes, Singh’s email did not actually assert that the lots were not
substantially complete.
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even if Woodhull was contractually required to provide additional soil reports, by its failure to
provide written notice disputing substantial completion within seven days of Woodhull’s notice,
Megatel agreed to proceed to closing.
We hold that Woodhull did not breach the contract by refusing to produce
additional soil reports beyond those already in its possession. The trial court therefore did not err
in granting summary judgment in Woodhull’s favor on Megatel’s claim for breach of contract.
We overrule Megatel’s second issue.
We next consider Megatel’s argument that the trial court erred in granting summary
judgment on its claim for breach of Woodhull’s express warranty that “[t]o Seller’s knowledge,
the Property Documents delivered to Buyer are not inaccurate, false or misleading in any material
respect.” Megatel amended its petition to add that claim, which it states “is separate” from its
claim for breach of contract, after Woodhull filed its traditional and no-evidence motion for
summary judgment, and Woodhull did not amend or supplement its motion to specifically address
the warranty claim. Megatel insists that its breach-of-warranty claim is not the same as its
breach-of-contract claim, arguing that Woodhull breached its express warranty “by delivering soils
reports that are materially inaccurate, false, or misleading in comparison to what Megatel expected
by the Contract.” However, what Megatel “expected” is not the issue—the issue is what the
contract required. Both Megatel’s breach-of-express-warranty claim and its breach-of-contract
claim hinge on whether Woodhull was contractually obligated to provide a different soil report
than the ones it provided, a question we have already answered in the negative.
Although a movant for summary judgment generally must amend or supplement its
motion to address claims added in a subsequent petition, an amended or supplemental motion is
not required if the amended petition “essentially reiterates previously pleaded causes of action,” if
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a ground asserted in the motion for summary judgment “conclusively negates a common element
of the newly and previously pleaded claims,” or if “the original motion is broad enough to
encompass the newly asserted claims.” Callahan v. Vitesse Aviation Servs., LLC, 397 S.W.3d 342,
350 (Tex. App.—Dallas 2013, no pet.).
Megatel’s claim for breach of express warranty relies on the same allegation as
does its claim for breach of contract—that Woodhull failed to provide a contractually required soil
report. And as discussed earlier, Woodhull established that it was not obliged to obtain a soil
report other than those it had in its possession and provided to Megatel. That fact, in addition to
defeating the breach-of-contract claim, also defeats Megatel’s warranty claim because Woodhull’s
“Property Documents” cannot be viewed as materially inaccurate, false, or misleading under the
contract for failing to include a report that was not required. The trial court did not err in granting
summary judgment on Megatel’s claim for breach of express warranty. We overrule Megatel’s
third issue.
Woodhull established that it was entitled to summary judgment, and we affirm the
trial court’s order as far as it grants Woodhull’s defensive motion for summary judgment that
Megatel take nothing on its claims against Woodhull.
Attorney’s Fees Under Rule 91a and the TCPA
We now turn to Megatel’s remaining issue, arguing that the trial court erred in not
awarding Megatel attorney’s fees incurred in successfully defending against Woodhull’s motions
to dismiss under Rule 91a and the TCPA. As an initial matter, we consider Woodhull’s contention
that Megatel waived its right to attorney’s fees under Rule 91a or the TCPA. Woodhull argues
that Megatel never “separately pleaded that either Rule 91a or Section 27.009 provided any basis
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for an[] award of fees” and instead claimed that its “defense against Woodhull’s Rule 91a and
TCPA motions supported its position that it was a ‘successful party’ under the contract.” Woodhull
also insists that Megatel waived its right to any attorney’s fees because it never asked the trial court
“to adjudicate any request for attorneys’ fees before the court entered a final judgment.”
Contrary to Woodhull’s claim, in its “Supplement to First Amended Petition,”
Megatel did not seek attorney’s fees solely under the contract. Instead, Megatel primarily sought
attorney’s fees under the contract “as a ‘successful party’ regarding numerous judgments in its
favor” but also stated that it was entitled to attorney’s fees “independent of its causes of action: to
offset costs and expenses claimed by Woodhull as a ‘successful party’; by Tex. Civ. Prac. & Rem.
Code § 27.009; and by former Tex. R. Civ. P. 91a.7.” Megatel also included a footnote quoting
the version of Rule 91a in effect at the time it filed its lawsuit, which mandated the award of
attorney’s fees to the party that prevailed on a motion brought under the rule. And in the hearing
on Woodhull’s “offensive” motion for summary judgment related to its counterclaim and request
for attorney’s fees, Megatel noted that Woodhull’s motion did not address its claim for attorney’s
fees under the TCPA or Rule 91a because those requests were not included in Megatel’s first
amended petition. Megatel said, “The supplemental petition filed by Megatel seven days ago
raises those claims and specifically under the former Rule 91a, this Court has a mandatory duty to
award such fees and costs sought by the prevailing party on that motion.” Megatel argued that
Woodhull’s motion for summary judgment did not “specifically address that and so it would be
inappropriate for this Court to rule on that motion and give them a final judgment disposing of our
right to attorney’s fees when this Court has a mandatory duty to award such fees,” requesting an
evidentiary hearing to consider its request for fees under Rule 91a and the TCPA. Thus, although
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its pleadings could have been clearer in seeking attorney’s fees under Rule 91a or the TCPA, we
disagree that it waived those arguments.
As to the merits of Megatel’s argument on appeal, Woodhull argues that Megatel,
as the ultimately unsuccessful party and regardless of any piecemeal success on the earlier motions,
is not entitled to any attorney’s fees because the contract provides that the unsuccessful party shall
pay the successful party’s fees. Woodhull argues that the contract forecloses a “motion-by-motion
approach to fee disputes” and seeks to extend the contract, which bars Megatel from recovering
attorney’s fees due to its loss on the merits of its claims, to also bar Megatel from recovering under
Rule 91a or the TCPA. We decline to do so.
Rule 91a.7, as it read when Megatel filed its lawsuit in May 2018, provided that
a trial court “must award the prevailing party on the [Rule 91a] motion all costs and
reasonable and necessary attorney fees incurred with respect to the challenged cause of action
in the trial court. The court must consider evidence regarding costs and fees in determining
the award.” Misc. Docket No. 13-9022 (Tex. Feb. 12, 2013, order), available at
http://www.txcourts.gov/All_Archived_Documents/SupremeCourt/AdministrativeOrders/miscdo
cket/13/13902200.pdf, amended by Misc. Docket No. 19-9052 (July 11, 2019), available at
https://www.txcourts.gov/media/1444382/199052.pdf. The plain language of the rule as it read at
the time thus allowed for—and indeed mandated—a motion-specific consideration of attorney’s
fees. Megatel prevailed on Woodhull’s motion to dismiss under Rule 91a, was entitled to its
reasonable attorney’s fees incurred in defending against that motion through Woodhull’s petitions
for writ of mandamus in this Court and the Texas Supreme Court, and requested such fees in its
supplemental petition and at the hearing on Woodhull’s second motion for summary judgment.
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The trial court therefore abused its discretion by not awarding Megatel attorney’s fees under the
former Rule 91a.7.
As for the TCPA, if a motion to dismiss is denied and the trial court finds that the
motion was “frivolous or solely intended to delay, the court may award court costs and reasonable
attorney’s fees to the responding party.” Tex. Civ. Prac. & Rem. Code § 27.009(b). Thus, an
award of attorney’s fees to a claimant who successfully defends against a TCPA motion is
discretionary. Megatel has not shown that the trial court abused its discretion in refusing to award
attorney’s fees for successfully defending against Woodhull’s TCPA motion. See, e.g., Stallion
Oilfield Servs. Ltd. v. Gravity Oilfield Servs., LLC, 592 S.W.3d 205, 221 (Tex. App.—Eastland
2019, pet. denied) (concluding that trial court abused its discretion in awarding nonmovant
attorney’s fees under TCPA with finding that motion was “intended to delay”; court was required
to find that motion was filed with “sole intention” of delay); Sloat v. Rathbun, 513 S.W.3d 500,
510 (Tex. App.—Austin 2015, pet. dism’d) (stating that trial court expressly found TCPA motions
were not frivolous, and its comments that “the manner in which the motions were litigated took
time that could have been more productive if used in other ways, . . . cannot be read as a finding
that the motions were filed with the sole intention of delaying the proceedings. In the absence of
such a finding, an award of attorneys’ fees is not authorized by the statute.”). Indeed, Megatel did
not attempt to argue that Woodhull’s motion was frivolous or solely intended to delay. See Tex.
Civ. Prac. & Rem. Code § 27.009(b); Sloat, 513 S.W.3d at 510. We therefore affirm the trial
court’s failure to award Megatel attorney’s fees under the TCPA.
The trial court abused its discretion by not awarding Megatel attorney’s fees under
former Rule 91a.7, but there has been no showing that it abused its discretion by not awarding
attorney’s fees under the TCPA. We sustain Megatel’s first issue in part and overrule it in part.
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CONCLUSION
The trial court properly granted summary judgment on Megatel’s claims for breach
of contract and breach of express warranty and did not abuse its discretion in failing to award
Megatel attorney’s fees incurred in defending against Woodhull’s motion to dismiss under the
TCPA. However, the trial court did abuse its discretion in failing to award Megatel its reasonable
attorney’s fees incurred in defending against Woodhull’s motion to dismiss under Rule 91a. We
therefore reverse the trial court’s final judgment as far as it altogether denies Megatel an award of
attorney’s fees. We remand the case to the trial court to hold a hearing on Megatel’s costs and
reasonable attorney’s fees under Rule 91a. We affirm the remainder of the judgment.
__________________________________________
Edward Smith, Justice
Before Chief Justice Byrne, Justices Smith and Jones*
Affirmed in Part; Reversed and Remanded in Part
Filed: July 7, 2023
* Before J. Woodfin Jones, Chief Justice (Retired), Third Court of Appeals, sitting by assignment.
See Tex. Gov’t Code § 74.003(b).
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