Biosilk Spa, L.P., F.K.A. One Marengo, L.P. v. HG Shopping Centers, L.P.

• Court: Court of Appeals of Texas
• Decided: May 8, 2008
• Docket: 14-06-00986-CV
• Status: Published

Opinion

Affirmed and Memorandum Opinion filed May 8, 2008

Affirmed and Memorandum Opinion filed May 8, 2008.

In The

Fourteenth Court of Appeals

____________

NO. 14-06-00986-CV

BIOSILK SPA, L.P., f.k.a. ONE MARENGO, L.P., Appellant

V.

HG SHOPPING CENTERS, L.P., Appellee

On Appeal from the 234th District Court

Harris County, Texas

Trial Court Cause No. 2006-20479

M E M O R A N D U M   O P I N I O N

Appellant BioSilk Spa, L.P., f.k.a. One Marengo, L.P. appeals from a summary judgment granted in favor of appellee, HG Shopping Centers, L.P., on appellant=s claims of fraud, fraudulent inducement, negligent misrepresentation and promissory estoppel.  Because we conclude that HG conclusively negated the element of reasonable reliance, we affirm the trial court=s judgment.

I.  Factual and Procedural Background

At issue in this dispute is HG=s refusal to allow BioSilk to post on the exterior walls of the Houston Galleria a sign containing the Atag line@ AChi Color Salon.@^[1]  Under a lease agreement (Lease) dated December 31, 2002, BioSilk rented space in the Galleria from HG.  The terms of the Lease limited signage to BioSilk=s trade name and specifically required BioSilk to obtain HG=s approval before posting any signs, either inside the mall or on the exterior walls of the mall.^[2]  The Lease also contained Amerger@ and Adisclaimer of reliance@ language stating that all changes or additions to the agreement between the parties would be in writing and that BioSilk would not rely on any representations, oral or otherwise, not contained in the Lease.^[3]

To attract more customers and increase visibility, BioSilk sought permission from HG in August 2005 to place a sign on the exterior of the building.  Previously, in a letter dated May 2003 (the Letter), HG had advised BioSilk, ALandlord hereby acknowledges its consent to Tenant=s use of the tradename >BioSilk Spa= at the Premises.  Please be advised that Tenant=s new signage must conform to Landlord=s sign criteria and must be approved in writing by Landlord prior to installation.@

BioSilk submitted its first drawing of a proposed sign to HG for approval in August 2005.  The sign read ABioSilk Spa, Chi Color Salon.@  HG replied in a letter directing BioSilk to APLEASE SEE ALL COMMENTS ON DRAWINGS.@  On the accompanying drawing, HG had written comments requesting changes to the letter height and to the overall design of the sign.  HG also wrote, ASIGN LIMITED TO DBA ONLY.  NO TAG LINES.@  Three months later, BioSilk submitted another drawing of a proposed sign.  The second proposal incorporated the changes relating to design and letter height, but the sign still read, ABioSilk Spa, Chi Color Salon.@  HG=s written reply again included a request that BioSilk APLEASE SEE ALL COMMENTS ON DRAWINGS.@  The comment on the drawing, written in large letters stated, ATAG LINES NOT PERMITTED.  RESUBMIT.@

BioSilk filed suit, claiming fraud, fraudulent inducement, negligent misrepresentation, and promissory estoppel.  BioSilk alleged it was losing money because customers could not locate the store.  Biosilk further claimed that it had been induced by HG to remain in the lease by misrepresentations that an exterior sign would be allowed.  HG moved for summary judgment on the grounds that BioSilk could not establish a misrepresentation or misstatement of existing fact and that the merger and disclaimer of reliance language in the Lease precluded BioSilk=s claims.  As summary judgment evidence, HG submitted the Lease, the Letter, and HG=s responses to both sign proposals.

In its response to HG=s summary judgment motion, BioSilk argued that HG=s summary judgment arguments and evidence applied only to pre-Lease misrepresentations.  BioSilk clarified that the alleged misrepresentations occurred subsequent to entering the Lease.  As summary judgment evidence supporting its post-Lease misrepresentation argument, BioSilk attached an affidavit from Chris Marteeny, a BioSilk executive who had participated in the sign negotiations with HG.  The trial court granted summary judgment for HG.

In its first three issues, BioSilk argues the trial court improperly rendered summary judgment because HG did not conclusively negate the elements of misrepresentation or reasonable reliance.  In its fourth issue, BioSilk contends the trial court erred in granting summary judgment on BioSilk=s request for attorney=s fees.

II.  Standard of Review

The standard of review for a traditional motion for summary judgment is whether the successful movant at the trial level carried its burden of showing that there is no genuine issue of material fact and that judgment should be granted as a matter of law.  See Tex. R. Civ. P. 166a(c); KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999).  Conclusively negating at least one of the essential elements of each of the plaintiff=s causes of action or conclusively establishing all elements of an affirmative defense entitles a defendant to summary judgment.  Johnson v. Felts, 140 S.W.3d 702, 706 (Tex. App.CHouston [14th Dist.] 2004, pet. denied).  To conclusively negate at least one of the requisite elements, the motion must identify or address the cause of action or defense and its elements.  Id.  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).  Under this traditional standard, this court must take as true all evidence favorable to the nonmovant and must make all reasonable inferences in the nonmovant=s favor.  See id. at 824.

When, as here, the trial court does not specify the basis for its summary judgment, we will affirm the judgment if any one of the theories advanced in the motion is meritorious.  See Star‑Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995).  In other words, the burden rests on the appealing party to show that each independent ground alleged is insufficient to support the summary judgment granted.  See id.

III.  Analysis

In its second issue, BioSilk contends HG=s summary judgment evidence failed to negate the element of reasonable reliance.  BioSilk claims that the Amerger@ and Adisclaimer of reliance@ language in the Lease do not apply to representations or agreements made subsequent to a contractual agreement.  Because this issue is dispositive of the appeal, we address it first.

Fraud, fraudulent inducement, negligent misrepresentation, and promissory estoppel all require reasonable and justified reliance upon a misrepresentation or promise.  See Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001) (fraud); TMI, Inc. v. Brooks, 225 S.W.3d 783, 792, 795 (Tex. App.CHouston [14th Dist.] 2007, pet. denied) (fraudulent inducement); Ortiz v. Collins, 203 S.W.3d 414, 421 (Tex. App.CHouston [14th Dist.] 2006, no pet.) (fraud, negligent misrepresentation, and promissory estoppel).  When the parties= written agreement addresses the substance of the oral statement and contains language precluding reliance on external representations, Texas courts find reliance on subsequent oral promises unreasonable.  See Simpson v. Woodbridge Props., L.L.C., 153 S.W.3d 682, 684 (Tex. App.CDallas 2004, no pet.) (holding that disclaimer of reliance clause in contract negated reliance on post‑contract oral misrepresentations); Atlantic Lloyds Ins. Co. v. Butler, 137 S.W.3d 199, 226 (Tex. App.CHouston [1st Dist.] 2004, pet. denied) (holding that reliance on misrepresentation that was easily refutable with reasonable diligence was not justified or reasonable where two opposing parties were engaged in litigation and negotiating from equal bargaining positions); DRC Parts & Accessories, L.L.C. v. VM Motori, S.P.A., 112 S.W.3d 854, 856, 858B59 (Tex. App.CHouston [14th Dist.] 2003, pet. denied) (holding that reliance on both pre- and post-contractual oral representations, directly contradicted by express terms of contract, was not justified as matter of law); Airborne Freight Corp. v. C.R. Lee Enters., Inc., 847 S.W.2d 289, 297 (Tex. App.CEl Paso 1992, writ denied) (finding that written contract containing ample cautionary language precluded exclusive reliance by reasonable businessperson on verbal statements contradicting written agreement).

We conclude HG=s summary judgment evidence negated the element of reasonable reliance.  The Lease unambiguously disclaimed reliance on any representations, oral or otherwise, not contained in the Lease.  See DRC Parts & Accessories, 112 S.W.3d at 858B59.  Moreover, by requiring that all changes or amendments be in writing and signed by both parties, the Lease provided additional notice to BioSilk not to rely on oral representations.  See Bluebonnet Sav. Bank, F.S.B. v. Grayridge Apartment Homes, Inc., 907 S.W.2d 904, 908 (Tex. App.CHouston [1st Dist.] 1995, writ denied) (noting that clause requiring that amendments to contract be in writing is additional notice not to rely on oral representations).  Finally, HG communicated to BioSilk in writing and in no uncertain terms that HG would not approve a sign containing the tag line AChi Color Salon.@  We find that the Lease and written correspondence between HG and BioSilk contained ample language precluding a reasonable business person from relying exclusively on any alleged oral representations by HG that contradicted the terms of the Lease and the written communications between the parties.  See Airborne, 847 S.W.2d at 297B98.

BioSilk relies on Marrot Communications v. Spring Branch Medical Center, Mortgage Co. of America v. McCord, and Garcia v. Karam to support its position that courts may give consideration to post‑contract modifications and understandings, despite contractual language to the contrary.  See Garcia v. Karam, 276 S.W.2d 255, 257 (Tex. 1955); Marrot Communications, Inc. v. Spring Branch Med. Ctr., Inc., No. 14-04-00462-CV, 2006 WL 397469, at *3B4 (Tex. App.CHouston [14th Dist.] Feb. 21, 2006, pet. denied) (mem. op.); Mortgage Co. of Am. v. McCord, 466 S.W.2d 868, 871B72 (Tex. Civ. App.CHouston [14th Dist.] 1971, writ ref=d n.r.e.).  We do not find these cases persuasive.  Neither Mortgage Co. nor Garcia involved a merger clause or other language precluding reliance.  In Garcia, enforcement of an oral modification turned on whether the modification fell within the statute of frauds.  See Garcia, 276 S.W.2d at 257.  The statute of frauds does not apply in the instant case.  In Mortgage Co., the court found subsequent oral modifications to contractual writings enforceable on grounds that the plaintiffs had never accepted the terms of the contract in the first place.  See Mortgage Co., 466 S.W.2d at 871B72.  It is undisputed that BioSilk accepted the written terms of the Lease.  Finally, Marrot is distinguishable because while the contract at issue did contain language precluding reliance, unlike the instant case where BioSilk does not allege it was fraudulently induced to enter into the Lease, the Marrot court allowed the party asserting reliance to avoid the contractual provision because the evidence showed they had been fraudulently induced to enter the contract.  See Marrot, 2006 WL 397469, at *3 n.4.

Because HG conclusively negated the element of reasonable reliance, we conclude the trial court properly granted summary judgment for HG.  We overrule BioSilk=s second issue.  Further, in light of our conclusion that the trial court properly granted summary judgment in favor of HG, we need not consider BioSilk=s remaining issues.

We affirm the trial court=s judgment.

/s/      Leslie B. Yates

Justice

Judgment rendered and Memorandum Opinion filed May 8, 2008.

Panel consists of Justices Yates, Guzman, and Price.*

_______________________________

*Senior Justice Frank C. Price, sitting by assignment.

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^[1]  It is undisputed that BioSilk=s Trade Name was ABioSilk Spa@ and the accompanying phrase AChi Color Salon@ constituted a Atag line.@

^[2]  Section 8.9 of the Lease provides:

[O]ther than as permitted under the provisions [in] the Lease, Tenant shall not permit or suffer any advertising medium to be placed on mall walls, on Tenant=s mall or exterior windows, on standards in the mall . . . .  No permission, expressed or implied, is granted to exhibit or display any banner, pennant, sign, and trade . . . decoration of any size, style or material within the Center, outside the Premises . . . .

Paragraph I.B.11 in the Description of Tenant=s Work section provides in part, AStorefront identification signs shall be limited to Tenant=s Trade Name as approved in this Lease or as otherwise approved in writing by Landlord.@

^[3]  Section 24.3 provides:

There are no representations, covenants, warranties, promises, agreements, conditions or undertakings, oral or written, between Landlord and Tenant other than herein set forth.  Except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Lease shall be binding upon Landlord or Tenant unless in writing and signed by them.  Tenant acknowledges that it has independently investigated the potential for the success of its operations in the Center and has not relied upon any inducements or representations on the part of Landlord or Landlord=s representatives, other than those contained in the Lease.