AFFIRM; and Opinion Filed August 21, 2014.
S In The Court of Appeals Fifth District of Texas at Dallas No. 05-13-00589-CV
JORDAN & JENNIFER DONTOS, Appellant V. BANCO POPULAR NORTH AMERICA, Appellee
On Appeal from the 68th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-07-14576-C
MEMORANDUM OPINION Before Justices Moseley, O'Neill, and FitzGerald Opinion by Justice O'Neill Appellants Jordan and Jennifer Dontos appeal a summary judgment in favor of appellee
Banco Popular North America. In a single point of error, appellants contend the trial court erred
in granting summary judgment because material fact issues exist. For the following reasons, we
affirm the trial court’s judgment.
Crave, LLC, as franchisee, entered into a vending machine franchise agreement with
24Seven Vending (USA), as franchisor. Appellants are the owners of Crave and guaranteed its
performance of the franchise agreement. To finance the franchise fee and other business
expenses, Crave obtained a small business loan from Banco Popular and executed a promissory
note. Appellants guaranteed the note. After Banco Popular released the funds for the franchise
fee, appellants discovered that 24Seven had just gone into receivership and its successor Bacon Whitney was not financially stable. Crave subsequently defaulted on the note and appellants
defaulted on their guaranty.
Crave and appellants sued several defendants, including 24Seven, Bacon Whitney
Corporation, and Banco Popular in connection with fraud related to the franchise agreement.
Banco Popular answered and filed counterclaims against Crave on the note and appellants on
their personal guaranty. Appellants subsequently obtained a default judgment against 24Seven
and Bacon Whitney for $1.5 million in actual damages and $4.5 million in punitive damages.
Banco Popular filed motions for summary judgment on its affirmative claims and on
appellants’ claims against it. The trial court granted Banco Popular’s motions and rendered a
take-nothing judgment against appellants on their claims and in favor of Banco Popular on the
note and the guaranty.
On appeal, in a single issue, appellants contend the trial court erred in granting the
summary judgments. To prevail on a traditional motion for summary judgment, a movant must
show that there is no genuine issue as to any material fact and that the movant is entitled to
judgment as a matter of law. TEX. R. CIV. P. 166a(c); Little v. Tex. Dep’t of Criminal Justice,
148 S.W.3d 374, 381 (Tex. 2004). The burden is on the party appealing from a trial court
judgment to show the judgment is erroneous. Englander Co. v. Kennedy, 428 S.W.2d 806, 806
(Tex. 1968). A party appealing a summary judgment must challenge all possible grounds on
which the judgment could have been based. Jarvis v. Rocanville Corp., 298 S.W.3d 305, 314
(Tex. App.—Dallas 2009, pet. denied).
In their petition, appellants alleged claims against all of the defendants generally. They
asserted claims for violations of certain state and federal franchise laws, DTPA violations, fraud,
breach of contract, tortious interference, civil conspiracy, aiding and abetting, and negligent
–2– misrepresentation. Appellants claims all arose from misrepresentations concerning the franchise
agreement transaction.
With respect to Banco Popular, they alleged it, “[a]s a party to the loan transaction, a part
of the franchise transaction . . . knew, or with the exercise of reasonable care, should have known
. . . that there was a material change in financial circumstances and identity of the
franchisor/recipient of the loan proceeds.” It asserted Banco Popular had a duty to, but did not,
disclose this “information” to them.
On appeal, appellants first assert the trial court erred in granting summary judgment on
their claims arising from violations of the Texas Business Opportunity Act and the Federal
Franchise Rules which were “in turn violations of the DTPA and the Washington Franchise
Act.” Banco Popular moved for summary judgment asserting that both the Texas Business
Opportunity Act and the Federal Franchise rules applied only to claims against a defendant that
had entered into a franchise agreement. Appellants have not challenged this ground for summary
judgment. Instead, they assert summary judgment on their DTPA claim was improper because
the DTPA does not require “privity.” However, appellants have not identified any DTPA
violation other than violations of the Texas Business Opportunity Act and the Federal Franchise
Rules. Absent a showing Banco Popular violated those provisions, appellants have likewise
failed to show summary judgment on their DTPA claim was error.
Appellants next complain the trial court erred in granting Banco Popular’s motion for
summary judgment on their fraud claim. Banco Popular moved for summary judgment on
appellants’ fraud claim asserting it did not make any representations to appellants regarding the
franchise agreement. On appeal, appellants assert summary judgment was improper because
they presented summary judgment evidence that Banco Popular failed to disclosure material
information to appellants that it knew or “should have known.”
–3– Fraud by nondisclosure is considered a subcategory of fraud. Schlumberger Tech. Corp.
v. Swanson, 959 S.W.2d 171, 181 (Tex. 1997); Blackinship v. Brown, 399 S.W.3d 303, 308 (Tex.
App.—Dallas 2013, pet. denied). To establish fraud by nondisclosure, appellants must prove (1)
the defendant failed to disclose facts to the plaintiff, (2) the defendant had a duty to disclose
those facts, (3) the facts were material, (4) the defendant knew the plaintiff was ignorant of the
facts and the plaintiff did not have an equal opportunity to discover the facts, (5) the defendant
was deliberately silent when it had a duty to speak, (6) by failing to disclose the facts, the
defendant intended to induce the plaintiff to take some action or refrain from acting, (7) the
plaintiff relied on the defendant’s nondisclosure, and (8) the plaintiff was injured as a result of
acting without that knowledge. Blackinship, 399 S.W.3d at 308; Horizon Shipbuilding, Inc. v.
Blyn II Holding, LLC, 324 S.W.3d 840, 850 (Tex. App.—Houston [14th Dist.] 2010, no pet.).
Here, appellants have presented no evidence of any “fact” Banco Popular was aware of and
failed to disclose. They nevertheless assert Banco Popular should have investigated and, had
they done so, they would have discovered the change in financial condition of the franchisor and
would then have had a duty to disclose that fact to appellants.
To be actionable, a failure to disclose material information necessarily requires the
defendant have known the information and have failed to bring it to the plaintiff’s attention. See
Doe v.
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AFFIRM; and Opinion Filed August 21, 2014.
S In The Court of Appeals Fifth District of Texas at Dallas No. 05-13-00589-CV
JORDAN & JENNIFER DONTOS, Appellant V. BANCO POPULAR NORTH AMERICA, Appellee
On Appeal from the 68th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-07-14576-C
MEMORANDUM OPINION Before Justices Moseley, O'Neill, and FitzGerald Opinion by Justice O'Neill Appellants Jordan and Jennifer Dontos appeal a summary judgment in favor of appellee
Banco Popular North America. In a single point of error, appellants contend the trial court erred
in granting summary judgment because material fact issues exist. For the following reasons, we
affirm the trial court’s judgment.
Crave, LLC, as franchisee, entered into a vending machine franchise agreement with
24Seven Vending (USA), as franchisor. Appellants are the owners of Crave and guaranteed its
performance of the franchise agreement. To finance the franchise fee and other business
expenses, Crave obtained a small business loan from Banco Popular and executed a promissory
note. Appellants guaranteed the note. After Banco Popular released the funds for the franchise
fee, appellants discovered that 24Seven had just gone into receivership and its successor Bacon Whitney was not financially stable. Crave subsequently defaulted on the note and appellants
defaulted on their guaranty.
Crave and appellants sued several defendants, including 24Seven, Bacon Whitney
Corporation, and Banco Popular in connection with fraud related to the franchise agreement.
Banco Popular answered and filed counterclaims against Crave on the note and appellants on
their personal guaranty. Appellants subsequently obtained a default judgment against 24Seven
and Bacon Whitney for $1.5 million in actual damages and $4.5 million in punitive damages.
Banco Popular filed motions for summary judgment on its affirmative claims and on
appellants’ claims against it. The trial court granted Banco Popular’s motions and rendered a
take-nothing judgment against appellants on their claims and in favor of Banco Popular on the
note and the guaranty.
On appeal, in a single issue, appellants contend the trial court erred in granting the
summary judgments. To prevail on a traditional motion for summary judgment, a movant must
show that there is no genuine issue as to any material fact and that the movant is entitled to
judgment as a matter of law. TEX. R. CIV. P. 166a(c); Little v. Tex. Dep’t of Criminal Justice,
148 S.W.3d 374, 381 (Tex. 2004). The burden is on the party appealing from a trial court
judgment to show the judgment is erroneous. Englander Co. v. Kennedy, 428 S.W.2d 806, 806
(Tex. 1968). A party appealing a summary judgment must challenge all possible grounds on
which the judgment could have been based. Jarvis v. Rocanville Corp., 298 S.W.3d 305, 314
(Tex. App.—Dallas 2009, pet. denied).
In their petition, appellants alleged claims against all of the defendants generally. They
asserted claims for violations of certain state and federal franchise laws, DTPA violations, fraud,
breach of contract, tortious interference, civil conspiracy, aiding and abetting, and negligent
–2– misrepresentation. Appellants claims all arose from misrepresentations concerning the franchise
agreement transaction.
With respect to Banco Popular, they alleged it, “[a]s a party to the loan transaction, a part
of the franchise transaction . . . knew, or with the exercise of reasonable care, should have known
. . . that there was a material change in financial circumstances and identity of the
franchisor/recipient of the loan proceeds.” It asserted Banco Popular had a duty to, but did not,
disclose this “information” to them.
On appeal, appellants first assert the trial court erred in granting summary judgment on
their claims arising from violations of the Texas Business Opportunity Act and the Federal
Franchise Rules which were “in turn violations of the DTPA and the Washington Franchise
Act.” Banco Popular moved for summary judgment asserting that both the Texas Business
Opportunity Act and the Federal Franchise rules applied only to claims against a defendant that
had entered into a franchise agreement. Appellants have not challenged this ground for summary
judgment. Instead, they assert summary judgment on their DTPA claim was improper because
the DTPA does not require “privity.” However, appellants have not identified any DTPA
violation other than violations of the Texas Business Opportunity Act and the Federal Franchise
Rules. Absent a showing Banco Popular violated those provisions, appellants have likewise
failed to show summary judgment on their DTPA claim was error.
Appellants next complain the trial court erred in granting Banco Popular’s motion for
summary judgment on their fraud claim. Banco Popular moved for summary judgment on
appellants’ fraud claim asserting it did not make any representations to appellants regarding the
franchise agreement. On appeal, appellants assert summary judgment was improper because
they presented summary judgment evidence that Banco Popular failed to disclosure material
information to appellants that it knew or “should have known.”
–3– Fraud by nondisclosure is considered a subcategory of fraud. Schlumberger Tech. Corp.
v. Swanson, 959 S.W.2d 171, 181 (Tex. 1997); Blackinship v. Brown, 399 S.W.3d 303, 308 (Tex.
App.—Dallas 2013, pet. denied). To establish fraud by nondisclosure, appellants must prove (1)
the defendant failed to disclose facts to the plaintiff, (2) the defendant had a duty to disclose
those facts, (3) the facts were material, (4) the defendant knew the plaintiff was ignorant of the
facts and the plaintiff did not have an equal opportunity to discover the facts, (5) the defendant
was deliberately silent when it had a duty to speak, (6) by failing to disclose the facts, the
defendant intended to induce the plaintiff to take some action or refrain from acting, (7) the
plaintiff relied on the defendant’s nondisclosure, and (8) the plaintiff was injured as a result of
acting without that knowledge. Blackinship, 399 S.W.3d at 308; Horizon Shipbuilding, Inc. v.
Blyn II Holding, LLC, 324 S.W.3d 840, 850 (Tex. App.—Houston [14th Dist.] 2010, no pet.).
Here, appellants have presented no evidence of any “fact” Banco Popular was aware of and
failed to disclose. They nevertheless assert Banco Popular should have investigated and, had
they done so, they would have discovered the change in financial condition of the franchisor and
would then have had a duty to disclose that fact to appellants.
To be actionable, a failure to disclose material information necessarily requires the
defendant have known the information and have failed to bring it to the plaintiff’s attention. See
Doe v. Boys Club of Greater Dallas, Inc., 907 S.W.2d 472, 479 (Tex. 1995) (failure to disclose
under DTPA). There is also no duty if a defendant fails to disclose material facts it “should have
known.” Id. (citing Prudential Ins. Co. of Am. v. Jefferson Assoc., Inc., 896 S.W.2d 156, 162
(Tex. 1995)). We conclude appellants have failed to show the trial court erred in granting Banco
Popular’s motion for summary judgment on their fraud claim.
Appellants also contend summary judgment was improper on their claims for civil
conspiracy. To support this contention, appellants merely recite the elements of conspiracy and
–4– assert “[t]hese elements are all provided by [a]ppellants’ summary judgment proof.” The
appellate rules require an appellant’s brief to contain a clear and concise argument for the
contentions made. TEX. R. APP. P. 38.1(i). A point of error not adequately supported by either
argument or authorities is waived. Huey v. Huey, 200 S.W.3d 851, 854 (Tex. App.—Dallas
2006, no pet.). We conclude this issue is inadequately briefed and presenting nothing to review.
See Kupchynsky v. Nardiello, 230 S.W.3d 685, 692 (Tex .App.—Dallas 2007, pet. denied).
Finally, appellants contend summary judgment was improper on their claim for negligent
misrepresentation. The elements of a cause of action for negligent misrepresentation are: (1) a
representation is made by a defendant in the course of his business, or in a transaction in which
he has a pecuniary interest; (2) the defendant supplies ‘false information’ for the guidance of
others in their business; (3) the defendant did not exercise reasonable care or competence in
obtaining or communicating the information; and (4) the plaintiff suffers pecuniary loss by
justifiably relying on the representation. Federal Land Bank Ass’n v. Sloane, 825 S.W.2d 439,
442 (Tex. 1991). Under this argument, appellants recite these elements and assert they raised a
fact issue because Banco Popular “knew or should have known that there was or may have been
a material change in the conditions surrounding the loan.” Appellants cite no authority that a
nondisclosure can support a negligent misrepresentation claim and the only authority they do cite
does not support their contention. We conclude they have failed to show the trial court erred in
granting summary judgment on their negligent misrepresentation claim.
We affirm the trial court’s judgment.
/Michael J. O'Neill/ MICHAEL J. O'NEILL 130589F.P05 JUSTICE
–5– S Court of Appeals Fifth District of Texas at Dallas JUDGMENT
JORDAN & JENNIFER DONTOS, On Appeal from the 68th Judicial District Appellants Court, Dallas County, Texas Trial Court Cause No. DC-07-14576-C. No. 05-13-00589-CV V. Opinion delivered by Justice O'Neill. Justices Moseley and FitzGerald Banco Popular North America, Appellee participating.
In accordance with this Court’s opinion of this date, the judgment of the trial court is AFFIRMED.
It is ORDERED that appellee Banco Popular North America recover its costs of this appeal from appellants JORDAN & JENNIFER DONTOS.
Judgment entered this 21st day of August, 2014.
–6–