Denise Prent v. RJet, L.L.C.

• Court: Court of Appeals of Texas
• Decided: March 5, 2015
• Docket: 01-14-00408-CV
• Status: Published

Opinion

Opinion issued March 5, 2015

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-14-00408-CV ——————————— DENISE PRENT, Appellant

V.

RJET, L.L.C., Appellee

On Appeal from the 234th District Court Harris County, Texas Trial Court Case No. 2013-20652

MEMORANDUM OPINION

Appellant, Denise Prent, challenges the trial court’s rendition of summary

judgment in favor of appellee, rJET, L.L.C., in rJET’s suit against Prent for breach

of contract. In her sole issue, Prent contends that the trial court erred in granting

rJET summary judgment. We reverse and remand.

Background

In its second amended petition, rJET alleged that on January 7, 2013, it

entered into an “Aircraft Dry Lease” (the “lease”) with Prent and Infinitus

Aviation, L.L.C. (“Infinitus”), 1 of which Prent is president. rJET alleged that,

pursuant to the lease, it agreed to lease an aircraft to Prent and Infinitus in

exchange for “payments tied to use of the aircraft.” And from January through

March 2013, Prent and Infinitus used the aircraft and failed to pay rJET. Although

rJet made numerous requests for flight information needed to properly produce

invoices, Prent and Infinitus did not provide sufficient information. And even after

rJET pieced together the necessary information and submitted invoices to Prent

and Infinitis, no payment was made. In April 2013, after rJET had demanded

payment and again received no payment, it filed the instant suit against Prent and

Infinitus, alleging claims for breach of contract, quantum meruit, fraud, and

conspiracy. And it sought actual damages of $88,876.00, punitive damages, and

attorneys’ fees.

rJET further alleged that, prior to execution of the lease, Prent had inspected

the aircraft and “proclaimed that it was airworthy and fit for her use.” Thereafter,

Prent, as both the “Pilot in Command” and the party with “Operational Control,”

1 Infinitus is not a party to this appeal.

2 had the responsibility under the lease to be fully aware of the airworthiness

condition of the aircraft and to schedule maintenance. rJET was obligated under

the lease to pay for maintenance, as determined necessary by Prent, and it did so.

rJET also alleged that Prent and a personal friend, John Leontaritis, had

agreed that Prent would lease the aircraft from rJET, fly it around the country, and

then refuse to pay rJet on the ground that the aircraft was not airworthy. Prent and

Leontaritis then used the aircraft for trips to Las Vegas, Los Angeles, Phoenix,

Boise, Pueblo, and Austin. They also used it to provide trips for their friends to

Stuttgart, Austin, Palm Springs, and Orange County.

Prent and Infinitis answered, generally denying rJET’s allegations and

asserting various affirmative defenses. rJET then moved for summary judgment

on its breach-of-contract claim, asserting that Prent and Infinitus had leased from it

a Citation jet aircraft; used the aircraft on forty trips around the country between

January 7, 2013 and March 10, 2013; collected $186,609.92 from their charter

clients; and breached the lease by refusing to pay $85,888.68 in payments due.

rJET attached to its motion as summary-judgment evidence a copy of the

lease; Prent and Infinitus’s flight plan data and client invoices, which show that,

between January 7, 2013 and March 10, 2013, they flew the aircraft on forty trips,

earning $186,609.92; Prent’s bank records, which show “commingled transactions

of income derived from rJET” between Prent and Infinitus; the aircraft’s

3 maintenance records and its certificate of airworthiness, dated July 5, 2012;

excerpts from Prent’s deposition, in which she testified that although she had flown

the aircraft on numerous occasions and Infinitus had been fully paid by its charter

clients, she made the decision not to pay rJET “[b]ecause of the airworthiness of

the airplane”; and the affidavit of rJET’s owner Jon Kingsley, Sr., who testified

that after Prent had signed the lease, she had “never suggested that there was any

problem with the plane or that it might even need any updated inspections,” and

yet she failed to pay rJET for “any usage of the aircraft.”

Prent then filed an amended answer, including a verified denial, in which

she argued that she was “not liable in the capacity in which she [was] sued”

because she had executed the lease in her individual capacity. In Prent and

Infinitus’s response to rJET’s summary-judgment motion, Prent again asserted that

she, in her individual capacity, was not a party to the lease. She argued, rather, that

“[i]t is clear from the four corners of the Lease that [she] signed [it] in a

representative capacity” because the first paragraph of the lease “unambiguously

indicates the Lessee is Infinitus Aviation, LLC” and she signed the lease as

“President of lnfinitus Aviation, L.L.C.” She asserted that rJET has “no evidence

that any contract even exists between rJet and Denise Prent” and, although

language immediately preceding the signature page indicates that she was

responsible for operational control of the aircraft, this does not constitute evidence

4 that she is personally liable on the lease. To her response, Prent attached her

affidavit, in which she explained that Infinitus does not deny that it contracted with

rJET and it is a proper party. And she stated that Infinitus did not pay rJET for use

of the aircraft because rJET had made representations concerning the airworthiness

of the aircraft that were not true.

In its reply, rJET argued that the lease “places individual liability on Prent”

because it states “I, THE UNDERSIGNED, Denise Prent (LESSEE), AS President

(TITLE), OF Infinitus Aviation, LLC, CERTIFIES THAT I AM RESPONSIBLE

FOR OPERATIONAL CONTROL OF THE AIRCRAFT . . . .” It notes that Prent

drafted the lease, naming herself individually as “the Lessee,” and “deposited half

of the receipts into her personal bank account.” And rJET objected to Prent’s

summary-judgment evidence as “irrelevant” or “inadmissible.”

The trial court granted rJET summary judgment against Prent and Infinitus

on rJET’s breach-of-contract claim, awarding rJET $85,888.68 against Prent and

Infinitus, jointly and severally, plus interest and attorney’s fees. And rJET non-

suited its quantum meruit, fraud, and conspiracy claims against Prent and Infinitus.

Prent, solely in her individual capacity, appeals from the trial court’s judgment.

Standard of Review

To prevail on a summary-judgment motion, a movant has the burden of

establishing that it is entitled to judgment as a matter of law and there is no

5 genuine issue of material fact. TEX. R. CIV. P. 166a(c); Cathey v. Booth, 900

S.W.2d 339, 341 (Tex. 1995). When a plaintiff moves for summary judgment on

its own claim, the plaintiff must conclusively prove all essential elements of its

cause of action. Rhone–Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999).

When deciding whether there is a disputed, material fact issue precluding summary

judgment, evidence favorable to the non-movant will be taken as true. Nixon v.

Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985). Every reasonable

inference must be indulged in favor of the non-movant and any doubts must be

resolved in its favor. Id. at 549.

Summary Judgment

In her sole issue, Prent argues that the trial court erred in granting rJet

summary judgment against her in her individual capacity because she executed the

lease “solely in her corporate capacity as President of Infinitus” and “the pleadings

do not support a summary judgment on fraud or personal benefit by Prent.”

Generally, a member or manager is not individually liable for the obligations

of a limited liability company. See TEX. BUS. ORGS. CODE ANN. § 101.114

(Vernon 2012); McCarthy v. Wani Venture, A.S., 251 S.W.3d 573, 590 (Tex.

App.—Houston [1st Dist.] 2007, pet. denied); see also TEX. BUS. ORGS. CODE

ANN. §§ 21.223, 21.224 (Vernon 2012) (governing corporations), § 101.002

(extending sections 21.223–.226 to limited liability companies). “When it is

6 apparent from the entire agreement that an officer of a corporation signed the

contract on behalf of the corporation as an agent of the corporation, it is the

corporation’s contract.” Wright Grp. Architects-Planners, P.L.L.C. v. Pierce, 343

S.W.3d 196, 201 (Tex. App.—Dallas 2011, no pet.) (extending concept to

professional limited liability company). Agency law is based on the same

premise—an agent is not personally liable on contracts made for a disclosed

principal, in the absence of an express agreement to be bound. Neel v. Tenet

HealthSystem Hosps. Dall., Inc., 378 S.W.3d 597, 604–05 (Tex. App.—Dallas

2012, pet. denied).

In construing a contract, a court must ascertain and give effect to the true

intentions of the parties as expressed in the writing itself. Italian Cowboy

Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011). We

examine and consider the entire writing in an effort to harmonize and give effect to

all the provisions of the contract so that none will be rendered meaningless. Id. We

begin our analysis with the contract’s express language. Id. And we analyze the

provisions of a contract “with reference to the whole agreement.” Frost Nat’l Bank

v. L & F Dists., Ltd., 165 S.W.3d 310, 312 (Tex. 2005); see also Seagull Energy

E&P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006) (“No single

provision taken alone will be given controlling effect; rather, all the provisions

must be considered with reference to the whole instrument.” (citations omitted)).

7 Contract terms will be given their plain, ordinary, and generally accepted meanings

unless the contract itself shows them to be used in a technical or different sense.

Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005). “We

construe contracts ‘from a utilitarian standpoint bearing in mind the particular

business activity sought to be served’ and ‘will avoid when possible and proper a

construction which is unreasonable, inequitable, and oppressive.’” Frost Nat’l

Bank, 165 S.W.3d at 312 (quoting Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527,

530 (Tex. 1987)).

If, after applying the pertinent contract construction rules, the contract can

be given a certain or definite legal meaning or interpretation, then it is not

ambiguous, and we will construe the contract as a matter of law. Id. If a contract

“is subject to two or more reasonable interpretations after applying the pertinent

rules of construction, the contract is ambiguous, creating a fact issue on the parties’

intent.” J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003).

However, a contract is not ambiguous merely because the parties disagree on its

meaning. Seagull Energy E&P, Inc., 207 S.W.3d at 345. Only where a contract is

ambiguous may we consider the parties’ interpretation and consider extraneous

evidence to determine the true meaning of the contract. Italian Cowboy Partners,

Ltd., 341 S.W.3d at 333–34.

8 Here, the first paragraph of the lease identifies the contracting parties as

rJET, as “Lessor,” and Infinitus, as “Lessee,” as follows:

This Lease of Aircraft is made, effective as of the 7 day of January, 2013 by and between rJET, a limited liability corporation [sic] incorporated under the laws of the State of Texas, . . . (hereinafter referred to as “LESSOR”) and Infinitus Aviation, LLC, a Texas Corporation [sic], [(]hereinafter referred to as “LESSEE”) . . . .

In the body of the lease, the parties designated the respective duties of the Lessor

and Lessee. They referred to the Lessee in the singular and as an “it.” Nothing

indicates an intent to bind Prent in her individual capacity. Section sixteen, which

contains the only mention of Prent, provides, in pertinent part, as follows:

THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER [certain regulations] FOR OPERATIONS TO BE CONDUCTED UNDER THIS LEASE. DURING THE DURATION OF THIS LEASE, Infinitus Aviation, LLC, (LESSEE) IS CONSIDERED RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THIS LEASE. AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM [location].

I, THE UNDERSIGNED, Denise Prent, (LESSEE), AS President (TITLE) OF Infinitus Aviation, LLC CERTIFIES THAT I AM RESPONSIBLE FOR THE OPERATIONAL CONTROL OF THE AIRCRAFT AND THAT I UNDERSTAND MY RESPONSIBILITES FOR COMPLIANCE WITH THE APPLICABLE FEDERAL AVIATION REGULATIONS.

IN WITNESS WHEREOF, the PARTIES have executed this Lease:

[Denise Prent] Date 01/07/2013 Signature

9 Denise Prent–Infinitus Aviation, LLC President Title

rJET argues that Prent is individually liable on the lease because the above

language states, “I, THE UNDERSIGNED, Denise Prent, (LESSEE), AS

President (TITLE) OF Infinitus Aviation, LLC CERTIF[Y] THAT I AM

RESPONSIBLE FOR THE OPERATIONAL CONTROL OF THE

AIRCRAFT. . . .” (bold emphasis added). rJET further argues that because Prent,

who drafted the lease, “named both herself and her LLC as lessees,” she is “a joint

lessee and is liable for the payments.”

In harmonizing provisions of a contract, no single provision is given

controlling effect. J.M. Davidson, Inc., 128 S.W.3d at 229. And “terms stated

earlier in an agreement must be favored over subsequent terms.” Coker v. Coker,

650 S.W.2d 391, 393 (Tex. 1983). Here, in the first paragraph of the lease, the

parties to the agreement are expressly identified as rJET and Infinitus. And

nothing in the body of the lease demonstrates that the parties intended for Prent to

be individually or jointly liable on the lease. Although Prent is identified in section

sixteen as “Lessee,” it is only in regard to her responsibility “as President” of

Infinitus to ensure operation of the aircraft within governing regulations. And the

signature block on the same page shows that Prent expressly executed the lease in

her capacity as “President” of Infinitus.

10 In Wright Group, the court noted that the heading of the contract was the

only place it referred to the full legal name of the firm, Wright Group Architects-

Planners, P.L.L.C.; the language in the body of the contract referred only to

“Wright Group”; and the contract was signed by Terrance Wright as “Principal,

Wright Group.” 343 S.W.3d at 201. The court concluded that, construing the

contract as a whole, Wright “clearly signed [it] in a representative capacity.” Id. at

202; see also DiGiammatteo v. Olney, 794 S.W.2d 103, 105 (Tex. App.—Dallas

1990, no writ) (holding contract executed in representative capacity where

defendant signed as corporation’s president and identified corporation as

principal). Here, construing the lease as a whole, we conclude that it is not

ambiguous and Prent executed it in her representative capacity on behalf of

Infinitus.

Further, nothing in the language of the lease suggests that the parties

intended for Prent to act as a guarantor or to otherwise assume individual or joint

liability on the lease. See, e.g., Material P’ships, Inc. v. Ventura, 102 S.W.3d 252,

258–60 (Tex. App.—Houston [14th Dist.] 2003, pet. denied) (holding document

signed in individual capacity, despite use of corporate letterhead and title in

signature, where language “I, personally, guaranty” all liabilities of corporation

unambiguously indicated personal guaranty); Taylor–Made Hose, Inc. v.

Wilkerson, 21 S.W.3d 484, 488–89 (Tex. App.—San Antonio 2000, pet. denied)

11 (holding signature of company vice-president, who “personally agreed” to pay

corporation’s delinquent account, created individual liability as guarantor of

corporate debt).

Although rJET included in its summary-judgment evidence Prent’s bank

statements and a spreadsheet of allegedly “commingled” funds, it did not, in its

motion for summary judgment, allege that Prent had used Infinitus to perpetrate a

fraud for her personal benefit. See TEX. BUS. ORGS. CODE ANN. §§ 21.223,

101.002; Shook v. Walden, 368 S.W.3d 604, 612–22 (Tex. App.—Austin 2012,

pet. denied) (discussing corporate veil-piercing doctrines and limited liability

companies). A motion for summary judgment must itself expressly present the

grounds upon which it is made, and it must stand or fall on these grounds alone.

Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 912 (Tex. 1997); see TEX. R. CIV.

P. 166a(c). “[I]n determining whether grounds are expressly presented, we may

not rely on briefs or summary judgment evidence.” Martinez, 941 S.W.2d at 912.

And rJET non-suited its fraud claim against Prent.

In sum, rJET did not conclusively establish that it is entitled, as a matter of

law, to judgment against Prent in her individual capacity on its breach-of-contract

claim. Accordingly, we hold that the trial court erred in granting rJET summary

judgment against Prent.

We sustain Prent’s sole issue.

12 Conclusion

We reverse the portion of the trial court’s judgment holding Prent

individually liable on rJet’s breach-of-contract claim, and we remand for further

proceedings consistent with this opinion.2

Terry Jennings Justice

Panel consists of Justices Jennings, Massengale, and Lloyd.

2 Prent requests that we render judgment in her favor or, alternatively, remand the case to the trial court for further proceedings. Generally, an appellate court is entitled to render judgment in a summary-judgment context only when both parties have moved for a final summary judgment. See Members Mut. Ins. Co. v. Hermann Hosp., 664 S.W.2d 325, 328 (Tex. 1984); Morales v. Morales, 195 S.W.3d 188, 192 (Tex. App.—San Antonio 2006, pet. denied). Here, although Prent previously moved for summary judgment on rJET’s now non-suited claims, she did not move for summary judgment on rJET’s breach-of-contract claim. Prent’s response to rJET’s motion served only to preclude summary judgment in favor of rJET, and, accordingly, we may not render judgment in her favor on appeal. See Morales, 195 S.W.3d at 192–93.