Hanson, Grant v. Dundas Systems, Inc.

• Court: Court of Appeals of Texas
• Decided: November 21, 2002
• Docket: 01-01-00856-CV
• Status: Published

Opinion

In The

Court of Appeals

For The

First District of Texas

____________

NO. 01-01-00856-CV

GRANT HANSON, Appellant

V.

DUNDAS SYSTEMS, INC., Appellee

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On Appeal from the 113th District Court

Harris County, Texas

Trial Court Cause No. 2000-02157

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O P I N I O N

           Appellant, Grant Hanson, appeals the summary judgment rendered by the trial court in favor of appellee, Dundas Systems, Inc. (Dundas). We affirm.

BACKGROUND

           Dundas is a Florida corporation that sells vending machines and offers some support services to assist the buyers in placing the machines in buildings, stores, and other locations. Hanson received a solicitation letter from the president of Dundas, inviting Hanson to attend a show at which the machines would be demonstrated. Representations in the letter included the following:

           •         I’m sure you’ve noticed the big pile of money at the top of this page. . . . The simple truth is, I wanted to get your attention.

           •         I have discovered a way to make a ton of money, and actually have the time to enjoy it!

           •         [The machines] attract people (and cash) like iron-filings to a magnet!

           •         [Y]ou can join DUNDAS owners all over America who have found the key to their happiness.

           •         Learn, as hundreds of other have, how to make money faster than you can count it!!

           On March 2, 1999, Hanson signed a purchase agreement in which Dundas was to provide eleven snack machines, five drink machines, and seven change machines for the total purchase price of $29,755. Dundas also agreed “to perform only the following acts or services” for Hanson: (a) provide a start-up kit containing a machine operating manual and other information, (b) provide brochures for mailing to prospective locations for the machines, (c) provide a toll-free telephone line for guidance and location support, and, if requested, (d) assist in the selection of suppliers, (e) assist in the selection of refreshments, (f) assist or advise in the sale of the established vending business after at least 12 months in business, and (g) offer options to purchase additional machines in the future.

           Under “Purchaser’s Representations,” the agreement provided, “Purchaser hereby represents as follows:”

He/she is not relying on any representation or statements made by Seller or Seller’s representative which are not included in this Agreement or in disclosure and information documentation which have been received, including, but not limited to, any representations or statements whatsoever concerning profitability of business venture, or the existence of any “buy back,” “protection,” or “security” arrangement concerning the equipment and services being purchased herein.

Hanson signed directly below this representation. The agreement also stated, under “Entire Agreement,” “This Agreement contains all the agreements, understandings, representations, conditions, warranties and covenants made between the parties hereto.”

           In January 2000, Hanson sued Dundas, alleging that Dundas had represented that the direct-mail solicitations would yield a response rate of 3% and the placement rate for vending machines from those responses would be 80% to 85%, but that Hanson’s response rate (13 responses from 978 mailers) was only 1.33% and his placement rate (5 placements) was 38.46%. Hanson asserted causes of action for fraudulent misrepresentation and violation of the Deceptive Trade Practices–Consumer Protection Act (DTPA).

           Dundas answered and filed a motion for summary judgment in which it asserted that (1) Hanson’s fraud and DTPA claims were foreclosed, as a matter of law, by the language of the purchase agreement and (2) there was no evidence of fraud or violations of the DTPA. Dundas attached, as summary judgment evidence, a copy of the purchase agreement. Hanson’s response to the motion recited, briefly, the standard for granting a rule 166a(c) motion for summary judgment and stated the posture of the case and the claims made. Hanson attached to the response an affidavit verifying that all documents attached were true and correct copies of the original documents. Hanson also attached an affidavit asserting the following:

On or about February 1999, Defendant sent me several documents, one of which is attached herein, promising me how much money I would make by joining their vending machine business. Defendant also conducted a seminar here in Houston, Texas, where Defendant further promised that its program was so successful that I would have more customers asking for vending machines than I could purchase. Defendant also promised, according to paragraph 13 of the Purchase Agreement, that if I find that Defendant’s statements and/or promises are not true that I can back out of the agreement and get my money back. I relied on Defendant’s promises and/or statements in signing the purchase agreement. After I signed the agreement and purchased the vending machines, Defendant was not able to place all the vending machines, Defendant was not able to find suitable office locations as promised, Defendant was not able to provide the support service promised, and the placed vending machines were not making the returns promised by Defendant. Upon further conversation with Defendant’s office, I discovered that I was not the first person that has been deceived by the Defendant. I relied on Defendant’s promises in entering into the agreement, and if I had known the truth, I would not have entered into such an agreement. I have notified Defendant through my lawyer in regards to Defendant picking up their machines and refunding my money, but Defendant has refused.

In addition, Hanson attached a copy of the purchase agreement and a copy of the solicitation letter from Gary Verdier, president of Dundas.

           The trial court granted Dundas’s motion for summary judgment without specifying the grounds upon which the motion was granted. Hanson appeals the summary judgment, asserting, in five issues, that the trial court erred in granting Dundas’s motion. We consider only issues four and five, in which Hanson challenges the no-evidence basis for granting the summary judgment and contends that his summary judgment evidence raised genuine issues of material fact regarding his DTPA and fraud claims.

DISCUSSION

Standard of Review

           Under rule 166a(i), a party is entitled to summary judgment if, after adequate time for discovery, there is no evidence of one or more essential elements of a claim or defense on which an adverse party would have the burden of proof at trial. Tex. R. Civ. P. 166a(i). Thus, a no-evidence summary judgment is similar to a directed verdict. Flameout Design & Fabrication, Inc. v. Pennzoil Caspian Corp., 994 S.W.2d 830, 834 (Tex. App.—Houston [1st Dist.] 1999, no pet.). The motion for summary judgment may not be general, but must state the elements on which there is no evidence. Tex. R. Civ. P. 166a(i). The trial court must grant the motion unless the nonmovant produces more than a scintilla of evidence raising a genuine issue of material fact on each of the challenged elements. See Tex. R. Civ. P. 166a(i); Macias v. Fiesta Mart, Inc., 988 S.W.2d 316, 317 (Tex. App.—Houston [1st Dist.] 1999, no pet.). The party with the burden of proof at trial has the same burden of proof in the summary judgment proceeding. Galveston Newspapers, Inc. v. Norris, 981 S.W.2d 797, 799 (Tex. App.—Houston [1st Dist.] 1998, pet. denied). In reviewing a summary judgment, we must indulge every reasonable inference in favor of the nonmovant and resolve any doubts in its favor. Flameout Design, 994 S.W.2d at 834. We will affirm the summary judgment if any of the theories advanced in the motion for summary judgment and preserved on appeal is meritorious. See State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 380 (Tex. 1993).

Hanson’s DTPA Claims

           In his fourth issue, Hanson contends that “the trial court erred in granting appellee’s no-evidence motion for summary judgment on appellant’s DTPA claims when appellant’s affidavits and documentary evidence raised genuine issues of material facts.”

           The elements of a DTPA claim are (1) the plaintiff is a consumer, (2) the defendant engaged in a false, misleading, or deceptive act, and (3) the act constituted a producing cause of the plaintiff’s damages. Doe v. Boys Clubs of Greater Dallas, 907 S.W.2d 472, 478 (Tex. 1995). In its motion for summary judgment, Dundas asserted that there was no evidence of any false, misleading, or deceptive act and there was no evidence of producing cause or damages. These assertions shifted the burden to Hanson to produce some evidence of the challenged elements.

           In his response, Hanson did not address Dundas’s no-evidence motion. On appeal, Hanson asserts that he is a consumer under the DTPA and then argues, “Appellant’s affidavit and documentary evidence clearly shows the several deceptive trade practices of appellee that was [sic] the producing cause of appellee’s damages. Appellant more than produced evidence of probative force on the challenged elements of appellant’s DTPA. Accordingly, the trial court’s summary judgment was in error.” Hanson references, generally, pages in the clerk’s record that include his affidavit, his attorney’s affidavit in support of attorney’s fees, the purchase agreement, and the solicitation letter from Dundas.

           We have reviewed the documents referenced by Hanson and conclude that they do not support Hanson’s DTPA claim. Hanson’s petition complained that Dundas represented that Hanson would realize a 3% response rate from his mailings and an 80% to 85% placement rate from his responses. Hanson’s summary judgment evidence does not contain any evidence of such representations. Rather, the representations, as recited in Hanson’s affidavit, are vague, amount to no more than puffing by Dundas, and are too general to be actionable misrepresentations. See Autohaus, Inc. v. Aguilar, 794 S.W.2d 459, 462 (Tex. App.—Dallas 1990), writ denied, 800 S.W.2d 853 (Tex. 1991). Likewise, the statements made in the solicitation letter are vague and general and are merely puffing. See id. Viewing all the evidence in the light most favorable to Hanson, we hold that there is no evidence to show that Dundas made any material misrepresentation to Hanson.

           We overrule Hanson’s fourth issue.

Hanson’s Fraud Claims

           In his fifth issue, Hanson contends that “the trial court erred in granting appellee’s no-evidence motion for summary judgment on appellant’s fraud and misrepresentation claims when appellant’s affidavits and documentary evidence raised genuine issues of material facts.”

           The elements of fraud are (1) a defendant made a material misrepresentation, (2) the defendant knew that the representation was false when made or the defendant made the representation without knowledge of its truth, (3) the defendant intended the plaintiff to act upon the misrepresentation, (4) the plaintiff relied upon the misrepresentation, and (5) the misrepresentation caused the plaintiff’s injury. See Sears, Roebuck & Co. v. Meadows, 877 S.W.2d 281, 282 (Tex. 1994). Because Dundas made a no-evidence challenge on each of these elements, Hanson was required to show some evidence of each. See Tex. R. Civ. P. 166a(i).

           Hanson argues that the evidence showed that Dundas represented that Hanson would “make a pile of money” and be successful and that Dundas would provide support services. As we noted previously, the statements in Dundas’s solicitation letter were merely puffing and were not actionable misrepresentations. Therefore, Hanson did not produce any evidence that Dundas made any material misrepresentation, as required by rule 166a(i). Furthermore, Hanson did not complain about the lack of support services in his petition and, in his affidavit, did not identify any specific support services promised but not delivered. Moreover, any complaint regarding Dundas’s failure to perform as promised in the purchase agreement should be brought as a claim for breach of contract, not a fraud or DTPA claim. See Southwestern Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991) (stating that, when defendant’s conduct gives rise to liability only because of breach of agreement, the claim sounds in contract).

           We overrule Hanson’s fifth issue.

CONCLUSION

           Because we have overruled Hanson’s fourth and fifth issues challenging the no-evidence summary judgment, we need not reach his first and second issues challenging the rule 166a(c) summary judgment. We also need not reach Hanson’s third issue contending that appellant is not bound by the terms of an agreement, which he argues was procured by fraud, because we have determined that there is no evidence of fraud.

           We affirm the trial court’s judgment.

                                                                             Sam Nuchia

                                                                             Justice

Panel consists of Justices Nuchia, Jennings, and Radack.

Do not publish. Tex. R. App. P. 47.