Dong Sheng Huang v. GTECH Corporation

• Court: Texas Court of Appeals, 3rd District (Austin)
• Decided: June 19, 2026
• Docket: 03-25-00263-CV
• Status: Published

Opinion

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-25-00263-CV

Dong Sheng Huang, Appellant

v.

GTECH Corporation, Appellee

FROM THE 201ST DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GN-14-005114, THE HONORABLE AMY CLARK MEACHUM, JUDGE PRESIDING

MEMORANDUM OPINION

Dong Sheng Huang appeals from the trial court’s grant of summary judgment in

favor of GTECH Corporation. 1 Because we hold that Huang has not proven damages for fraud

or fraud by nondisclosure, we affirm.

BACKGROUND 2

In September 2014, the Texas Lottery launched retail sales of a “scratch-off” or

“instant” ticket known as “Fun 5’s,” which combined five different instant games onto a single

ticket and was sold for a retail price of $5 each. Game 5 on the ticket, a tic-tac-toe game, is the

1 GTECH is now known as IGT Global Solutions Corporation. Because the parties have continued to identify the relevant entity as GTECH, so have we. 2 Much of the background of this case has been detailed by this Court and the supreme court in a related appeal. See GTECH Corp. v. Steele, 549 S.W.3d 768, 770–73 (Tex. App.— Austin 2018), aff’d sub nom. Nettles v. GTECH Corp., 606 S.W.3d 726, 729–30 (Tex. 2020). focus of this dispute and appeared at the bottom right portion of the ticket. This is an example of

how a Texas Fun 5’s ticket that had been scratched off would appear:

To offer this ticket, the Texas Lottery Commission (the Commission), which is

owned and operated the Texas Lottery, purchased the game, which had already been offered in

2 other states, from GTECH. 3 After the Commission selected the game, GTECH submitted

working papers to the Commission with images of the ticket, detailed specifications, and game

parameters. The proposed instructions for the tic-tac-toe game provided: “Reveal three Dollar

Bill ‘[dollar bill icon]’ symbols in any one row, column, or diagonal line, win PRIZE in PRIZE

box. Reveal a ‘5’ symbol in the 5X BOX, win 5 times that PRIZE.” The working papers

specified that a 5 symbol would appear in the 5X box only on eligible winning tickets.

The Commission proposed changes to the tic-tac-toe game, requesting that the

dollar-bill symbol be changed to a 5 symbol and that the multiplier 5 symbol in the 5X box be

changed to a money-bag symbol. The Commission also requested that the money-bag symbol

appear not only on winning tickets but also on some non-winning tickets in order to prevent

microscratching—using a sharp object to reveal a microscopic portion of a ticket to determine

whether it is a winner. GTECH implemented the requested changes, with the result that the

multiplier symbol that had been designed for use only on tickets containing a winning tic-tac-toe

game also appeared on some non-winning tickets. After reviewing the instructions printed on

the ticket, GTECH determined they did not need to be changed, other than to reflect the new

symbols. The instructions on tickets sold in Texas read: “Reveal three ‘5’ symbols in any one

row, column, or diagonal, win PRIZE in PRIZE box. Reveal a Money Bag ‘[money bag icon]’

symbol in the 5X BOX, win 5 times that PRIZE.”

3 Senate Bill 3070 abolished the Texas Lottery Commission in 2025 and transferred its duties to the Texas Department of Licensing and Regulation and Texas Commission of Licensing and Regulation effective September 1, 2025. Act of June 2, 2025, 89th R.S., ch. 1160, § ___, 2025 Tex. Gen. Laws ___, ___ (amending the Government Code, Occupations Code, Penal Code, and Transportation Code to repeal provisions relating to the Texas Lottery Commission and set out provisions transferring the administration of the state lottery and the licensing and regulation of charitable bingo to the Texas Commission of Licensing and Regulation and the Texas Department of Licensing and Regulation). 3 Immediately after the tickets were offered in Texas, Lottery players and retailers

began calling the Commission and GTECH about the game, saying that they thought the money-

bag symbol on a ticket meant an automatic win of five times the amount in the prize box. Callers

complained that the game instructions were misleading, leading players to believe that they had

winning tickets even though they had not also won the tic-tac-toe game. Legislators also

contacted the Commission regarding constituent complaints that the instructions

were misleading. As a result of this confusion, the Commission shut down the game on

October 21, 2014.

More than 1,200 named plaintiffs sued GTECH in Travis County, asserting

claims for fraud, fraud by nondisclosure, aiding and abetting the Commission’s fraud, tortious

interference with the plaintiffs’ contracts with the Texas Lottery, and conspiracy with the

Commission. Some, like Huang, became plaintiffs by intervening in the suit. Huang alleged that

the ticket’s design coupled with the instructions printed on the ticket misled him into believing

that tickets that included a money-bag symbol won five times the prize shown in the prize box,

whether or not the ticket also contained a winning tic-tac-toe combination. He sought only the

benefit of the bargain as the measure of actual damages. GTECH filed a plea to the jurisdiction

against all plaintiffs, arguing that because their claims were premised on conduct controlled by

the Commission, derivative sovereign immunity barred these claims against GTECH. The trial

court denied GTECH’s plea, and this Court affirmed in part and reversed and rendered in part.

GTECH Corp. v. Steele, 549 S.W.3d 768, 802–03 (Tex. App.—Austin 2018), aff’d sub nom.

Nettles v. GTECH Corp., 606 S.W.3d 726, 729–30 (Tex. 2020). We reversed and rendered

judgment dismissing the claims of aiding and abetting fraud, tortious interference, and

conspiracy because they implicated sovereign immunity. Id. at 796. But we affirmed the trial

4 court’s denial of the plea as to the claims for fraud and fraud by nondisclosure, which related to

actions taken by GTECH within its independent discretion. Id. at 802–03. The supreme court

affirmed, Nettles, 606 S.W.3d 726, after which GTECH reached a settlement with some

plaintiffs, then moved for summary judgment against non-settling plaintiffs, including Huang.

GTECH filed a no-evidence motion for summary judgment, arguing that

Huang’s claim for fraud by nondisclosure failed as a matter of law because there was no

evidence that GTECH owed “Huang a duty to disclose the information complained about in

Dong Sheng Huang’s most recent petition.” It also filed a traditional motion for summary

judgment asserting that Huang was not entitled to benefit-of-the-bargain damages. The hearing

was set for December 17, 2024. Huang timely responded to the motions. He then contacted the

trial court, seeking permission to appear virtually at the hearing. Court staff responded that he

could do so with GTECH’s written agreement. GTECH agreed, and correspondence reflecting

the parties’ agreement was forwarded to the trial court. Huang alleges that he called the trial

court the day before the hearing to confirm whether he needed to attend the live hearing, and

court staff advised him that the motions against him had been “taken out,” and that she would

check on the matter with GTECH. Huang also emailed the trial court to confirm that he would

be able to attend the hearing remotely. Court staff replied, “I spoke with counsel, we will set

another court date for you to appear remotely.” Huang therefore did not attend the hearing. At

the hearing, the trial court considered the summary-judgment motions against Huang along with

those pending against approximately fifty other plaintiffs. All were granted.

Huang moved to reconsider, arguing against the substance of the

summary-judgment motions and also urging that the trial court erred in hearing the motions

5 against him after telling him that those motions would be heard at another time. The trial court

denied Huang’s motion.

Huang appeals, asserting that the trial court erred in granting the motions against

him because the trial court’s communications caused him to not attend the hearing on his

motions, the trial court erred in granting traditional summary judgment against him because he

was entitled to recover benefit-of-the-bargain damages from GTECH, and the trial court erred in

granting GTECH’s no-evidence motion because he presented some evidence that GTECH had a

duty to disclose pertinent information that would have clarified the ticket’s winning conditions.

DISCUSSION

Oral hearing on summary judgment

Huang asserts that the trial court erred in granting the summary-judgment motions

against him because “no hearing was held for GTECH’s [summary-judgment] motions related to

Huang,” and he emphasizes that he did not attend the in-person hearing that was held because of

the trial court’s communications stating that his motions would not be considered at the hearing

and that the trial court would “set another court date for [him] to appear remotely.”

“Our rules of civil procedure prescribe guidelines to ensure the parties receive

notice and a meaningful opportunity to be heard.” B. Gregg Price, P.C. v. S Series 1 – Virage

Master LP, 661 S.W.3d 419, 424 (Tex. 2023); see Tex. R. Civ. P. 166a(c) (summary-judgment

motion must be served on opposing party at least twenty-one days before time specified for

hearing). 4 Rule 166a(c) of the Texas Rules of Civil Procedure calls for a hearing on a motion for

4 The Texas Supreme Court recently amended Texas Rule of Civil Procedure 166a, but “[o]ther than the deadline changes, Rule 166a’s rewrite is not intended to substantively change the law.” Tex. R. Civ. P. 166a (cmt. to 2026 change). The amendments renumbered the rule’s 6 summary judgment, but it need not be an oral hearing. Martin v. Martin, Martin & Richards,

Inc., 989 S.W.2d 357, 359 (Tex. 1998) (per curiam); see Long v. Yurrick, 319 S.W.3d 944, 948

(Tex. App.—Austin 2010, no pet.) (“Due process does not require an oral hearing on a motion

for summary judgment . . . .”). Notice of the submission date, however, is required so that

parties have an opportunity to respond to the motion. Martin, 989 S.W.2d at 359; Long,

319 S.W.3d at 948; see Courtney v. Gelber, 905 S.W.2d 33, 34 (Tex. App.—Houston [1st Dist.]

1995, no writ) (trial court erred in deciding summary-judgment motion when parties passed

hearing on motion before response was due, response was not filed, and trial court later granted

motion without notice to any party). Although failing to provide notice of the submission date is

error, the supreme court has concluded that such error is harmless error when the nonmoving

party has had an opportunity to respond and any timely filed response has been considered by the

trial court in reaching its conclusion. See Martin, 989 S.W.2d at 359; Long, 319 S.W.3d at 948

(holding trial court’s grant of no-evidence motion for summary judgment the day before it was

set for hearing was harmless error when nonmovant did not file response, even though

nonmovant’s reason for not responding was that trial was set hours before the

summary-judgment was set for hearing).

Here, court staff misinformed Huang of the submission date for the motions by

telling him his motions would not be heard at the impending hearing and that another hearing

date would be set. Consequently, the trial court erred by nonetheless hearing the motions on the

original hearing date. The error was harmless, however, because Huang filed responses to the

provisions. See Supreme Court of Tex., Final Approval of Amendments to Rule 166a of the Texas Rules of Civil Procedure, Misc. Docket No. 26-9012 (Tex. Feb. 27, 2026). Because the amendments apply only to summary-judgment motions filed on or after March 1, 2026, and the filing of GTECH’s summary-judgment motion preceded the amendments, we refer to the provisions of Rule 166a in effect at the time of filing. See id. 7 motions, and the record shows that the trial court considered those responses. See Martin,

989 S.W.2d at 359. The record of the summary-judgment hearing shows that the trial court was

aware that Huang had responded to the motions, and counsel for GTECH briefly advised the

court of some of Huang’s arguments. Huang does not assert that he would have sought to

present additional arguments or evidence at any reset hearing. The trial court also confirmed its

ruling when it decided Huang’s motion to reconsider. Accordingly, because the record reflects

that the trial court considered Huang’s responses, the trial court’s failure to notify Huang of the

motion’s submission date was harmless error, and we overrule Huang’s issue regarding the

court’s not providing him an oral hearing on the summary-judgment motions.

Traditional summary judgment

We next consider whether the trial court erred by granting GTECH’s traditional

motion for summary judgment. In a traditional summary-judgment motion, the movant has the

burden to show that no genuine issue of material fact exists, and the trial court should grant

judgment as a matter of law. See Tex. R. Civ. P. 166a(c); Gill v. Hill, 688 S.W.3d 863, 868

(Tex. 2024), cert. denied, 145 S. Ct. 274 (2024). The nonmovant must then present

evidence raising a fact issue. First Sabrepoint Capital Mgmt., L.P. v. Farmland Partners Inc.,

712 S.W.3d 75, 84–85 (Tex. 2025). “We review summary judgments de novo, taking as true all

evidence favorable to the nonmovant, and indulging every reasonable inference and resolving

any doubts in the nonmovant’s favor.” Id. at 84 (quoting Weekley Homes, LLC v. Paniagua,

691 S.W.3d 911, 915 (Tex. 2024)).

In its traditional motion, GTECH asserted that Huang was not entitled to

benefit-of-the-bargain damages as a matter of law. Both Huang’s remaining claims—fraud and

8 fraud by nondisclosure—require proof of damages. See Butler v. Collins, 714 S.W.3d 562,

565 n.2 (Tex. 2025) (listing elements of fraud) (citing Formosa Plastics Corp. USA v.

Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 47 (Tex. 1998); Blankinship v. Brown,

399 S.W.3d 303, 308 (Tex. App.—Dallas 2013, pet. denied) (listing elements of fraud by

nondisclosure and citing Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 181 (Tex.

1997) (“Fraud by non-disclosure is simply a subcategory of fraud because, where a party has a

duty to disclose, the non-disclosure may be as misleading as a positive misrepresentation

of facts.”)).

As a measure of actual damages, Huang sought to receive the benefit of the

bargain. See Formosa Plastics Corp. USA, 960 S.W.2d at 49 (“Texas recognizes two measures

of direct damages for common-law fraud: the out-of-pocket measure and the benefit-of-the

bargain measure.”). “Benefit-of-the-bargain damages, which derive from an expectancy theory,

evaluate the difference between the value that was represented and the value actually received.”

Baylor Univ. v. Sonnichsen, 221 S.W.3d 632, 636 (Tex. 2007) (citing Formosa Plastics Corp.

USA, 960 S.W.2d at 49). Benefit-of-the-bargain damages are determined at the time of sale.

Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 817 (Tex. 1997).

Huang contends that the value of the ticket at the time of sale, while not known to

him, was nevertheless established as the five times the amount of PRIZE if this Court agrees that

the instructions fraudulently represented that tickets containing a money-bag symbol were

winning tickets. Assuming that Huang correctly interpreted the instructions, that the ticket’s

value was established though unknown to him, and that a retail purchase is a “bargain” such that

a customer would be entitled to seek benefit-of-the-bargain damages relating to that purchase, we

9 still conclude that Huang was not entitled to recover benefit-of-the-bargain damages for

his purchase.

At the time of purchase, the value of the ticket, from Huang’s perspective,

depended entirely upon chance. See Tex. Gov’t Code § 466.002(5) (“Lottery means the

procedures operated by the state under this chapter through which prizes are awarded or

distributed by chance among persons who have paid, or unconditionally agreed to pay, for a

chance or other opportunity to receive a prize”). In determining the proper measure of damages

in the context of a purchase of land based on a fraudulent misrepresentation that the land had a

valuable feature that, in reality, did not exist on the property, the Texas Supreme Court in

George v. Hesse held that “the extent of [the plaintiff’s] loss is the difference between the value

of that which he has parted with, and the value of that which he has received under the

agreement.” 93 S.W. 107, 107–08 (Tex. 1906). In reaching that conclusion, the Texas Supreme

Court relied on a doctrine explained by the U.S. Supreme Court in Smith v. Bolles, 132 U.S. 125,

129–30 (1889), a case that “involved solely the question of the measure of damages in a case of

fraudulent representations.” George, 93 S.W. at 108. In Smith, the plaintiff purchased shares of

mining stock based on representations that the value of the stock significantly exceeded the

purchase price, then sued when it became evident that the representations were entirely false.

Smith, 132 U.S. at 125. The trial court had charged the jury that the measure of recovery

is generally the difference between the contract price and the reasonable market value, if the property had been as represented to be, or in case the property or stock is entirely worthless, then its value is what it would have been worth if it had been as represented by the defendant, and as may be shown in the evidence before you.

10 Id. at 129. In other words, the Smith trial court concluded the plaintiff could seek the benefit of

the fraudulent bargain. The U.S. Supreme Court reversed, explaining:

The measure of damages was not the difference between the contract price and the reasonable market value if the property had been as represented to be, even if the stock had been worth the price paid for it; nor, if the stock were worthless, could the plaintiff have recovered the value it would have had if the property had been equal to the representations. What the plaintiff might have gained is not the question, but what he had lost by being deceived into the purchase.

Id. Thus, the court held that the plaintiff’s recovery was limited to out-of-pocket damages. The

defendant “was bound to make good the loss sustained, such as the moneys the plaintiff had paid

out and interest, and any other outlay legitimately attributable to defendant’s fraudulent conduct;

but this liability did not include the expected fruits of an unrealized speculation.” Id. at 130.

Huang likewise cannot recover benefit-of-the-bargain damages, particularly when

the benefit was unknown to him at the time he entered the bargain. Absent an award of actual

damages, Huang cannot recover exemplary damages. Nabours v. Longview Sav. & Loan Ass’n,

700 S.W.2d 901, 903 (Tex. 1985). Therefore, we conclude that the trial court did not err in

granting GTECH’s traditional motion for summary judgment, and we overrule Huang’s issue on

this point. Since this issue disposes of both the fraud and fraud by nondisclosure claims, we

need not address Huang’s issue relating to the trial court’s grant of GTECH’s no-evidence

motion relating to fraud by nondisclosure.

CONCLUSION

For the foregoing reasons, we affirm the trial court’s grant of traditional

summary judgment.

11 __________________________________________ Rosa Lopez Theofanis, Justice

Before Justices Triana, Kelly, and Theofanis

Affirmed

Filed: June 19, 2026