Cricket Communications, Inc. v. Trillium Industries, Inc.

235 S.W.3d 298, 2007 WL 2421485
CourtCourt of Appeals of Texas
DecidedOctober 9, 2007
Docket05-06-00708-CV
StatusPublished
Cited by26 cases

This text of 235 S.W.3d 298 (Cricket Communications, Inc. v. Trillium Industries, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cricket Communications, Inc. v. Trillium Industries, Inc., 235 S.W.3d 298, 2007 WL 2421485 (Tex. Ct. App. 2007).

Opinion

OPINION

Opinion by

Justice FRANCIS.

Cricket Communications, Inc., appeals the trial court’s take-nothing summary judgment against it on its claims against Trillium Industries, Inc., Timothy South-well, Robert Beshirs, Cellular Distributor, Inc., and St. Paul Fire and Marine Insurance Co. In cross appeals, Southwell, CDI, and Trillium challenge the trial court’s denial of them attorney’s fees. Additionally, CDI contends the trial court erred in granting summary judgment against it on its counterclaims against Cricket. For the reasons set out below, we reject all issues and affirm the trial court’s judgment.

Cricket is a wireless communications service provider and wholly-owned subsidiary of Leap Wireless International, Inc. Trillium is in the business of refurbishing used or broken cellular telephones for corporate customers. In 2002, Cricket entered into an agreement with Trillium in which Trillium would provide repairs, maintenance, and support for certain Cricket-owned wireless telephone products. As part of the agreement, the repair services were to be performed at Trillium’s Coppell, Texas, facility. Further, Trillium was required to purchase and maintain various types of insurance policies and to designate Cricket as a payee “on consigned inventory loss.” Trillium purchased initial and renewal insurance policies with St. Paul Fire and Marine Insurance Co.

Beginning in October 2002, Southwell and Beshirs, Trillium’s sales director and human resources manager, respectively, began intercepting shipments of Cricket’s cellular telephones to Trillium. Southwell and Beshirs then sold the cellular telephones to a third party, Cellular Distributors, Inc. (CDI), and received payment through a separate company owned by them. In March 2003, Cricket learned that CDI was offering thousands of its telephones for sale over the internet. Suspicious of the CDI sales, Cricket investigated and learned that the phones should have been in Trillium’s inventory. In May, Cricket notified Trillium of a discrepancy between the number of Cricket phones shipped to Trillium and the number of phones shown received by Trillium. Trillium reported the incident to the Cop-pell Police Department and notified St. *303 Paul of the claimed loss of the Cricket inventory.

In early June, Cricket’s counsel sent Trillium a document retention letter, demanding that Trillium retain and protect any documents related to “the receipt, handling, shipment and record keeping of certain equipment Trillium has handled on behalf of Cricket.” During that same month, Cricket began working with federal law enforcement officials, who were investigating criminal charges against South-well and Beshirs. By late that same month, Cricket expected arrests in the case to be made within weeks.

On August 11, 2003, Cricket sent a demand letter to Trillium in which it asserted that 29,708 of its phones were “either stolen, diverted or otherwise improperly removed” from Trillium’s facility at a loss of $2,984,831. Cricket noted that actual losses may be higher. Cricket demanded Trillium pay the $2.9 million as reimbursement and reserved the right to “take any and all legal action necessary to cover all of its losses” if Trillium failed to pay.

Meanwhile, in April 2003, Cricket, Leap Wireless, and other related entities filed consolidated Chapter 11 bankruptcy cases in California. As part of its petition, Cricket filed schedules of assets but did not list the potential claims against appel-lees nor did it later amend its schedules to include the potential claims. On October 22, 2003, the bankruptcy judge signed an order confirming Cricket’s Fifth Amended Joint Plan of Reorganization without these claims being disclosed. One month later, Cricket sued Trillium for negligence and later amended its petition to add causes of action and the remaining appellees as defendants.

Appellees sought summary judgment on the ground that Cricket was judicially es-topped from bringing this lawsuit by its failure to disclose the claims to the bankruptcy court. Cricket raised several issues in its response, and in addition, filed its own motion for summary judgment arguing that because Southwell and Beshirs had previously pleaded guilty to a felony involving the theft and misappropriation of Cricket’s phones, they were judicially es-topped from denying their liability. In a series of rulings, the trial court granted appellees’ motions for summary judgment but denied the requests of Southwell, Trillium, and CDI for their attorney’s fees. It also granted summary judgment to Cricket on CDI’s counterclaims.

The appeal/cross-appeals involve Cricket’s claims against appellees; CDI’s claims against Cricket; and Southwell, Beshirs, and Trillium’s claim for attorney’s fees. Our review begins with the trial court’s summary judgment in favor of appellees on Cricket’s claims.

We review the trial court’s grant of summary judgment de novo to determine whether the movant’s right to prevail is established as a matter of law. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 156 (Tex.2004); G.C. Bldgs., Inc. v. RGS Contractors, Inc., 188 S.W.3d 739, 741 (Tex.App.-Dallas 2006, no pet.). A defendant who moves for summary judgment based on an affirmative defense must prove each essential element of that defense. Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 121 (Tex.1996). If the defendant’s motion and summary judgment evidence establish its right to judgment as a matter of law, the burden then shifts to the party opposing the motion to raise a genuine issue of material fact or show the defendant’s legal position is unsound. G.C. Bldgs., 188 S.W.3d at 741-42. When reviewing a summary judgment, we accept all evidence favorable to the nonmovant as true, indulge the nonmovant with every favorable reasonable inference, and resolve *304 any doubt in the nonmovant’s favor. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985).

Further, on cross-motions for summary judgment, each party bears the burden of establishing that it is entitled to judgment as a matter of law. See Guynes v. Galveston County, 861 S.W.2d 861, 862 (Tex.1993). When the trial court grants one motion and denies the other, the reviewing court should determine all questions presented. See Comm’rs Court of Titus County v. Agan, 940 S.W.2d 77, 81 (Tex.1997); Jones v. Strauss, 745 S.W.2d 898, 900 (Tex.1988). The reviewing court should render the judgment that the trial court should have rendered. Agan, 940 S.W.2d at 81.

All parties agree that federal law applies to our analysis of the judicial es-toppel issue. Because judicial estoppel was raised in the context of a prior bankruptcy proceeding involving Cricket’s duty under the bankruptcy code, we agree and apply federal law. See In re Coastal Plains Inc., 179 F.3d 197, 205 (5th Cir.1999), ce rt. denied, 528 U.S. 1117, 120 S.Ct. 936, 145 L.Ed.2d 814 (2000); see also Horsley-Layman v. Adventist Health Sys./Sunbelt, Inc.,

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Cite This Page — Counsel Stack

Bluebook (online)
235 S.W.3d 298, 2007 WL 2421485, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cricket-communications-inc-v-trillium-industries-inc-texapp-2007.