Alco Realty v. Coastal Horizons Investment, LLC Sudhoff Properties of Houston, LLC Sudhoff Partnership GP, LLC Sudhoff Partnership, LP and Jacob Sudhoff

• Court: Court of Appeals of Texas
• Decided: December 6, 2018
• Docket: 01-17-00984-CV
• Status: Published

Opinion

Opinion issued December 6, 2018

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-17-00984-CV ——————————— ALCO REALTY, Appellant V. COASTAL HORIZONS INVESTMENT, LLC; SUDHOFF PROPERTIES OF HOUSTON, LLC; SUDHOFF PARTNERSHIP GP, LLC; SUDHOFF PARTNERSHIP, LP; AND JACOB SUDHOFF, Appellees

On Appeal from the 215th District Court Harris County, Texas Trial Court Case No. 2016-72167-A

MEMORANDUM OPINION

In this case, a commercial broker claims that it is owed a real estate

commission. The broker’s client did not buy property within the time frame and the

market area circumscribed by their representation agreement. The broker sued the client and other entities associated with a later real estate

purchase. The trial court granted summary judgment. The broker appeals,

contending that the trial court erred in considering the no-evidence grounds before

an adequate time for discovery had passed and in striking several summary judgment

exhibits. We affirm.

BACKGROUND

Alco Realty, the real estate broker, sued its client, Coastal Horizons

Investment, LLC, and Coastal Horizons’ principal, Jacob Sudhoff. Alco also sued

Commonwealth Commons, LP, Sudhoff Properties of Houston, LLC, Sudhoff

Partnership GP, LLC, and Sudhoff Partnership, LP. Alco alleged that Coastal

Horizons was liable to it for breach of contract, quantum meruit, and fraud. It sued

the remaining defendants as “related entities,” and claimed that they were directly

or vicariously liable to Alco for breach of the representation agreement.

The seeds of the dispute were planted in the fall of 2013, when Coastal

Horizons engaged Alco as its broker. Coastal Horizons and Alco executed a

Commercial Buyer/Tenant Representation Agreement on a form promulgated by the

Texas Association of Realtors. The agreement granted Alco the exclusive right to

act as Coastal Horizons’ real estate agent within the Hyde Park neighborhood of

Montrose. The agreement provided that Coastal Horizons, as the “Client,” would

pay Alco, as the “Broker,” a 4.3% commission on the gross sales price of any

2 property Coastal Horizons acquired during the period between November 13, 2013

and May 13, 2014.

The agreement bound Coastal Horizons, as well as its “heirs, administrators,

executors, successors, and permitted assigns.” A related-party clause further

provided:

If Client does not acquire a property under this agreement, but a related party of Client acquires [within the applicable periods under this agreement] a property that Broker brings to Client’s attention, Broker will be entitled to all compensation under this agreement as if Client had acquired property. “Related party” means any assignee of Client, any family member or relation of Client, any officer, director, or partner of Client, any entity owned or controlled, in whole or part, by Client, and any entity that owns or controls Client, in whole or part.

While the agreement was in force, Alco told Coastal Horizons about a

prospective property in the area. Shortly after the expiration of the Coastal Horizons

agreement, Commonwealth Commons bought the property. It paid a $50,000

broker’s commission to Sudhoff Properties and nothing to Alco.

Alco filed its suit in October 2016. The parties and the trial court signed a

docket control order on January 23, 2017. The order required the parties to complete

discovery by May 30, 2018.

All the defendants except Commonwealth Commons (collectively, the

Sudhoff entities) moved for summary judgment against Alco. The Sudhoff entities

moved for a traditional and a no-evidence summary judgment on October 30, 2017.

3 Alco responded in opposition to the motion on November 27, 2017. On the same

date, the Sudhoff entities objected to the affidavit of Estévan Orozco that

accompanied Alco’s response to the Sudhoff entities’ motion, and they moved to

strike Alco’s summary-judgment exhibits. The trial court sustained the objections

and granted the motion to strike. The trial court then granted the summary-judgment

motion and severed the claims against the Sudhoff, making the summary judgment

final as to these parties and claims.

PROPRIETY OF SUMMARY JUDGMENT

A. Standard of review

We review summary judgments de novo. See City of Richardson v. Oncor

Elec. Delivery Co., 539 S.W.3d 252, 258 (Tex. 2018). When the trial court grants

summary judgment without specifying the grounds for granting the motion, as it did

in this case, we affirm its judgment if any one of the grounds is meritorious. Cmty.

Health Sys. Prof'l Servs. Corp. v. Hansen, 525 S.W.3d 671, 680 (Tex. 2017).

To prove entitlement to summary judgment on traditional grounds, the movant

bears the burden of showing that no genuine issue of material fact exists and that the

trial court should grant judgment as a matter of law. TEX. R. CIV. P. 166a(c); Oncor

Elec., 539 S.W.3d at 258–59. To meet this burden, the movant must conclusively

negate at least one essential element of each of the nonmovant’s causes of action or

conclusively prove all the elements of an affirmative defense. KCM Fin. v.

4 Bradshaw, 457 S.W.3d 70, 79 (Tex. 2015). A matter is conclusively proved if

reasonable people could not differ as to the conclusion to be drawn from the

evidence. See City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005).

If the movant meets its burden, then the burden shifts to the nonmovant to

raise a genuine issue of material fact precluding summary judgment. See Centeq

Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995). Summary-judgment

evidence raises a fact issue if reasonable and fair-minded jurors could differ in their

conclusions in light of the evidence presented. Goodyear Tire & Rubber Co. v.

Mayes, 236 S.W.3d 754, 755 (Tex. 2007) (per curiam). When reviewing the grounds

for summary judgment, we take as true all evidence favorable to the nonmovant and

indulge every reasonable inference and resolve any doubts in the nonmovant’s favor.

Sommers for Ala. & Dunlavy, Ltd. v. Sandcastle Homes, 521 S.W.3d 749, 754 (Tex.

2017).

A party may move for no-evidence summary judgment after an adequate time

for discovery has passed. TEX. R. CIV. P. 166a(i). A trial court must grant a no-

evidence motion for summary judgment if the movant identifies one or more

elements of a claim or defense for which the nonmovant would have the burden of

proof at trial and the nonmovant produces no admissible evidence raising a genuine

issue of material fact as to each challenged element. See id.; Lockett v. HB Zachry

Co., 285 S.W.3d 63, 67 (Tex. App.—Houston [1st Dist.] 2009, no pet.); see also

5 Essex Crane Rental Corp. v. Carter, 371 S.W.3d 366, 383 (Tex. App.—Houston

[1st Dist.] 2012, pet. denied) (explaining that summary-judgment evidence must be

presented in form that would be admissible at trial). To defeat a contention that the

nonmovant has no evidence of a cause of action, the nonmovant must adduce more

than a scintilla of evidence raising a genuine issue of material fact as to each

challenged element. W. Invs., Inc. v. Urena, 162 S.W.3d 547, 550 (2005). “Unless

the respondent produces summary judgment evidence raising a genuine issue of

material fact, the court must grant the motion.” Id.

B. Adequate time for discovery

Alco first contends that the trial court should have allowed additional time for

discovery to disentangle the relationships between the defendant entities. “[T]he

determination of whether there has been adequate time for discovery lies within the

trial court’s discretion. Univ. of Tex. M.D. Anderson Cancer Ctr. v. King, 329

S.W.3d 876, 884 (Tex. App.—Houston [14th Dist.] 2010, pet. denied). We review

that determination on a case-by-case basis to decide whether the trial court acted

within its discretion. McInnis v. Mallia, 261 S.W.3d 197, 201 (Tex. App.—Houston

[14th Dist.] 2008, no pet.).

When a party claims that it lacked an adequate opportunity for discovery

before a no-evidence summary judgment hearing, that party must explain the need

for further discovery in a verified motion for continuance or alert the trial court that

6 it needs additional discovery through an affidavit. TEX. R. CIV. P. 166a(g); Joe v.

Two Thirty Nine Joint Venture, 145 S.W.3d 150, 161 (Tex. 2004). The affidavit

must detail facts explaining why the continuance is necessary. Carter v.

MacFadyen, 93 S.W.3d 307, 310 (Tex. App.—Houston [14th Dist.] 2002, pet.

denied) (citing Nat'l Union Fire Ins. Co. of Pittsburgh, PA v. CBI Indus., 907 S.W.2d

517, 520–22 (Tex. 1995)); see also Duerr v. Brown, 262 S.W.3d 63, 78 (Tex. App.—

Houston [14th Dist.] 2008, no pet.) (movant must state what requested discovery

“would demonstrate or how this information would assist [movant] or the court”).

In the trial court, Alco did not move for a continuance, submit an affidavit that

explained its need for additional discovery, or otherwise object to the timing of the

motion’s submission in its response. See TEX. R. APP. P. 33.1. On appeal, Alco

relies on Castillo v. Mizpah Residential Care, No. 13-12-00719-CV, 2014 WL

2159255 (Tex. App.—Corpus Christi May 22, 2014, pet. denied) (mem. op.), to

contend that the trial court should have continued the motion. In Castillo, the trial

court granted a motion for continuance, extending the discovery period for five more

months. See id. at *1. The trial court nevertheless granted summary judgment four

months before the extended discovery period ended. Id. The Corpus Christi Court

of Appeals observed that the trial court was not required to postpone submission of

the summary-judgment motion to the end of the discovery period. Id. at *9. The

appellate court, however, interpreted the trial court’s extension of the discovery

7 period in the new scheduling order as an implied finding that there had not been

adequate time for discovery. Id. at *7.

Unlike the Castillo plaintiffs, Alco did not move for a continuance of the

summary-judgment motion or otherwise request time to conduct additional

discovery. Because Alco failed to move for a continuance or object to the timing of

the summary-judgment motion’s submission, we hold that Alco failed to preserve

this issue for appellate review. See TEX. R. APP. P. 33.1.

C. Order striking summary-judgment evidence

Alco challenges the trial court’s ruling granting the Sudhoff entities’ motion

to strike several exhibits appended to Alco’s summary-judgment response. Alco did

not file a response to the motion to strike, request a hearing on the Sudhoff entities’

objections to that evidence, or move for a new trial; this complaint thus is not

preserved for our review. See Tex. R. App. P. 33.1. Alco also waived this complaint

by failing to cite to any authority in support of its contention. See TEX. R. APP. P.

38.1.

Alco raises no further issue challenging the propriety of the trial court’s grant

of summary judgment on no-evidence grounds. Accordingly, we hold that the trial

court did not err in granting summary judgment on no-evidence grounds.

8 CONCLUSION

We affirm the judgment of the trial court.

Jane Bland Justice

Panel consists of Chief Justice Radack and Justices Jennings and Bland.