Gensco, Inc. v. Transformaciones Metalurgicias Especiales, S.A.

666 S.W.2d 549, 1984 Tex. App. LEXIS 4909
CourtCourt of Appeals of Texas
DecidedJanuary 12, 1984
DocketB14-83-266CV
StatusPublished
Cited by26 cases

This text of 666 S.W.2d 549 (Gensco, Inc. v. Transformaciones Metalurgicias Especiales, S.A.) 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
Gensco, Inc. v. Transformaciones Metalurgicias Especiales, S.A., 666 S.W.2d 549, 1984 Tex. App. LEXIS 4909 (Tex. Ct. App. 1984).

Opinion

OPINION

ELLIS, Justice.

This appeal is from a summary judgment in a breach of contract action in favor of appellee, Transformaciones Metalurgicias Especiales, S.A. for a total of $1,171,408.25 ($961,500.12 principal due, interest at the rate of 1.5 percent per month as per the parties’ agreement equalling $193,245.88 and $16,662.25 attorney’s fees).

Appellant, Gensco, Inc. brings eleven points of error. Points of error one, two and three assert that the court erred in granting appellee’s motion for summary judgment because the summary judgment proof failed to establish as a matter of law that there was no genuine issue of fact as to appellee’s compliance with and performance of its part of the written agreement and as to appellant’s breach of the written agreement. In point of error four, appellant claims that the summary judgment proof established a genuine issue of material fact on appellant’s affirmative defense of failure of consideration. Point of error five alleges that the summary judgment proof failed to establish as a matter of law that there is no genuine issue of fact as to a principal due and owing in the amount of $961,500.12.

Points of error six, seven and eight complain about the interest the court awarded. In point of error six, appellant asserts that the rate of 1.5 percent per month was not supported by appellee’s pleadings. Point of error seven claims that this recovery was not expressly set forth in Appellee’s Motion for Summary Judgment. Point of error eight alleges that the summary judgment proof failed to establish as a matter of law that there was no genuine issue of fact as to the due dates after which prejudgment interest commenced to accrue.

In points of error nine and ten, appellant claims that the trial court erred in granting summary judgment for attorney’s fees because the summary judgment proof failed to establish as a matter of law that there was no genuine issue of fact as to presentment of appellee’s claim to appellant pursuant to Article 2226 and as to reasonable attorney’s fees. Point of error eleven claims that the trial court erred as a matter of law in granting summary judgment for *552 attorney’s expenses in addition to attorney’s fees.

On or about January 13, 1981, appellee, a Spanish corporation which manufactures oil field tubular goods, began negotiations for the sale of a large quantity of casing to appellant, a Texas corporation which distributes pipe and casing utilized in the drilling of oil and gas wells. Pursuant to the telex provisions, appellant issued Purchase Order Number 10282 which confirmed the parties’ agreement. Appellant commenced the manufacture and shipment of the agreed upon casing.

The original agreement contemplated that appellee would sell the casing to appellant, and that appellant would secure payment of the purchase price by letters of credit. However, the letter of credit posted by appellant to secure payments for the casing expired when appellee had delivered only about two-thirds of the casing. At that time, numerous customers had notified appellant of claims for damage caused by defective casing from the shipment.

On or about November 12, 1981, the parties entered into a written modification of the original agreement. In this agreement Gensco agreed to make timely payment, notwithstanding the third-party claims, in exchange for appellee investigating the claims and negotiating settlement of those it found legitimate and proceeding without letter of credit guaranteeing appellant’s payment. The agreement specifically provided that appellant would look to remedies other than withholding payment to enforce its asserted rights with respect to the third-party claims.

Despite this agreement, appellant refused to pay the amount due. Appellee had not negotiated settlement of any of the third-party claim when it filed a Motion for Summary Judgment seeking $961,500.12, attorney’s fees and prejudgment interest at the statutory rate of six percent per an-num. The trial court rendered summary judgment in favor of appellee. We affirm.

By its points of error one, two, three and five appellant attacks the legal sufficiency of the summary judgment proof to support the trial court’s summary judgment for breach of a written agreement. The following rules should guide an appellate court reviewing summary judgment proof:

1. The movant for summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Rule 166-A(c), Texas Rules of Civil Procedure; Gibbs v. General Motors Cory., 450 S.W.2d 827 (Tex.1970).
2. In deciding whether or not there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true. Cowden v. Bell, 157 Tex. 44, 300 S.W.2d 286 (1957).
3. Every reasonable inference must be indulged in favor of the nonmovants and any doubts resolved in their favor. Hudnall v. Tyler Bank & Trust Co., 458 S.W.2d 183 (Tex.1970); Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929 (1952); Womack v. Allstate Ins. Co., 156 Tex. 467, 296 S.W.2d 233 (1956).

Wilcox v. St. Mary’s University of San Antonio, 531 S.W.2d 589 (Tex.1975).

Appellant argues that appellee has not proven appellant’s breach of the agreement by its failure to pay $961,500.12 of the purchase price of the goods. The invoices in evidence, however, and the admissions by appellant that it owed the money not paid show appellant’s breach. In its answers to appellee’s request for admissions, appellant admitted that it accepted the goods and that the amounts reflected by the invoices were the agreed prices and that it had not paid the full purchase price on any of the invoices. This evidence showed that appellant breached the agreement in the amount of $961,500.10. The trial court, however, awarded $961,500.12 as requested in appellee’s pleadings. In this respect only we modify the judgment of principal of $961,500.12 to judgment of principal in the amount of $961,500.10, *553 making the total amount of the judgment $1,171,408.23. We overrule points of error one, two, three and five.

Appellant’s point of error four claims that the written modification of the original agreement was not binding because there was no consideration by appellee for appellant’s agreement to seek remedies other than withholding the purchase price in order to settle third-party claims. Appellant bases this argument on the fact that appel-lee has not yet settled any of the third-party claims.

A complete failure of consideration constitutes a defense to an action on a written agreement. Rio Grande Nat. Life Ins. Co. v. Faulkner,

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Bluebook (online)
666 S.W.2d 549, 1984 Tex. App. LEXIS 4909, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gensco-inc-v-transformaciones-metalurgicias-especiales-sa-texapp-1984.