Khai Ngoc Tran and Hai Hoang v. Coastal Seafood & Grocery

Opinion

In The

Court of Appeals Ninth District of Texas at Beaumont __________________ NO. 09-11-00668-CV __________________

KHAI NGOC TRAN AND HAI HOANG, Appellants

V.

COASTAL SEAFOOD & GROCERY, Appellee

________________________________________________________________________

On Appeal from the 60th District Court Jefferson County, Texas Trial Cause No. B-185,104 ________________________________________________________________________

MEMORANDUM OPINION

Appellants, Khai Ngoc Tran and Hai Hoang, appeal a summary judgment

granted in favor of appellee, Coastal Seafood & Grocery. 1 We reverse and remand.

Background

Tran and Hoang, Lenders, sold Coastal three lots, with improvements. In the

transaction, Coastal signed a note and gave Lenders a deed of trust securing

Coastal Seafood & Grocery is a partnership between Ted V. Nguyen and 1

Go D. Phan. 1 payment. 2 Approximately two months later, Tran assigned his interest in Coastal’s

note to a bank. Subsequently, the bank filed the assignment for record in the real

property records of Jefferson County.

Seven years later, Coastal became aware of Tran’s assignment when it

learned that Tran’s bank had filed the assignment with the Jefferson County Clerk.

Approximately three months later, Coastal sued Lenders, alleging that Lenders

were liable to it under four theories, (1) breach of the “Sale Agreement,” 3 (2)

conspiracy, (3) fraud, and (4) unjust enrichment.

Subsequently, Coastal filed a traditional motion for summary judgment,

claiming there were “no material facts in dispute regarding the cloud which

[Lenders] placed on the title to [Coastal’s] property.” See Tex. R. Civ. P. 166a(c).

Less than seven days before the hearing, Lenders filed a response. The trial court

entered a judgment resolving Coastal’s claims without specifying the grounds for

its judgment. The judgment states the court, “[a]fter reading the pleadings and

hearing arguments of counsel[,]” found Coastal’s summary judgment motion

“MERITORIOUS[,]” and declared Coastal’s note to be paid in full. The trial court 2 Coastal’s note and the deed of trust are not in the summary judgment record. However, both are referenced by a warranty deed, executed by Tran at the time of the transaction, which is in the summary judgment record. 3 The “Sale Agreement” is not contained in the record, and it was not filed as an exhibit in support of Coastal’s motion for summary judgment. 2 also awarded attorney’s fees to Coastal and ordered that “[a]ll relief not expressly

granted is hereby denied.”

Waiver

As a preliminary matter, Coastal contends that Lenders waived their right to

appellate review of issues one and three. According to Coastal, Lenders limited

their right to appeal by filing a notice of appeal stating that Lenders wish to appeal

“that portion of the judgment rendered against them in said case, specifically, the

award[] of attorney[’]s fees in the sum of $12,000.00.”

Because Coastal’s argument on waiver would, if valid, prevent us from

reaching two of Lenders’ issues that assert the trial court erred in granting

summary judgment on the merits of Coastal’s claims, we choose to address

Coastal’s waiver argument first.

Appellate jurisdiction over an appeal is invoked when a party files a notice

of appeal. Tex. R. App. P. 25.1(b). Rule 25.1 does not limit issues that an appellate

court is required to consider to items, if any, identified in the notice of appeal. See

Tex. R. App. P. 25.1. However, an appellant’s right to raise all issues may be

limited if the appellant asks for a partial reporter’s record. See Tex. R. App. P.

34.6(c)(1). If an appellant asks for a partial reporter’s record, the appellant is

3 required to include in the request “a statement of the points or issues to be

presented on appeal and will then be limited to those points or issues.” Id.

Coastal cites Melton v. Toomey, 350 S.W.3d 235, 237 (Tex. App.—San

Antonio 2011, no pet.), as support for its argument that Lenders’ are not entitled to

our review of issues one and three. Unlike the facts before us now, the appellant in

Toomey requested a partial reporter’s record and filed a notice of appeal entitled

“‘Petitioner’s Notice of Limited Appeal[,]’” which stated that the appellant wished

to assert a right to a limited appeal related to two of the trial court’s specific

rulings. Id. at 236-37. In Toomey, the Court held that although the issues appealed

were stated in the notice of appeal and not in the request for the partial reporter’s

record, as required by Rule 34.6(c)(1), the statement of the issues in the notice of

appeal was sufficient to invoke the presumption of Rule 34.6(c)(4). Id. at 237. As a

result, the appellate court limited the appellant in Toomey to the issues stated in the

notice of appeal. Id.

In this case, Lenders did not request a partial reporter’s record. Additionally,

at the summary judgment hearing, the court reporter was not asked to make a

record. The parties do not contend that any of the proceedings were reported and

thus, it is undisputed that no reporter’s record of the summary judgment hearing

exists. In the absence of a request for a partial reporter’s record or a claim that a

4 reporter’s record of relevant proceedings was taken and could be transcribed, the

notice of appeal vests jurisdiction over the entire case in the court of appeals and

the parties’ briefs provided Coastal with notice of the issues being raised in the

appeal.

Additionally, one of the two issues that Coastal asserts we should not

reach—issue one—argues that Coastal failed to file sufficient summary judgment

evidence to prove that Coastal was entitled to receive a judgment in its favor. In

Bennett v. Cochran, the Texas Supreme Court held that under Rule 34.6(c)(4), “an

appellant need not file a complete reporter’s record to preserve legal or factual

sufficiency points.” 96 S.W.3d 227, 228 (Tex. 2002) (per curiam). The Court held

that the court of appeals erred when it held the appellant waived his legal and

factual sufficiency issues by not filing a complete reporter’s record. Id. Therefore,

Bennett provides additional support for our decision to reach the merits of Lenders’

first issue.

We conclude that Lenders did not invoke the limitations on appeal that are

provided by Rule 34.6(c)(1). See Tex. R. App. P. 34.6(c)(1). We hold that all of the

issues Lenders have raised can be reached in this appeal.

5 Standard of Review

We review a trial court’s ruling to grant a traditional motion for summary

judgment under a de novo standard. Valence Operating Co. v. Dorsett, 164 S.W.3d

656, 661 (Tex. 2005). The party moving for a summary judgment has the burden to

show, with competent summary judgment evidence, that no genuine issue of

material fact exists and that it is entitled to summary judgment as a matter of law.

See Tex. R. Civ. P. 166a(c); see also Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d

546, 548 (Tex. 1985). When a plaintiff moves for a traditional summary judgment,

the plaintiff has the burden to conclusively prove all elements of its claims as a

matter of law. See MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986). In

resolving whether a party met its burden to prove it was entitled to a favorable

ruling on its traditional summary judgment motion, we resolve every reasonable

inference in favor of the non-movant and take all evidence favorable to the non-

movant as true. See Nixon, 690 S.W.2d at 548-49.

Issues

Lenders raise three issues in their appeal. Issue one asserts that Coastal

failed to establish that no genuine issue of fact existed as related to Coastal’s

claims. Issue two asserts that Coastal failed to present evidence to support the trial

court’s award of attorney’s fees. In issue three, Lenders argue the trial court erred

6 in granting summary judgment for several additional reasons, including that the

trial court conducted the summary judgment hearing without requiring Coastal to

provide the number of days’ notice required by the Texas Rules of Civil Procedure.

See Tex. R. Civ. P. 166a(c) (requiring that the motion for summary judgment and

supporting affidavits be filed and served “at least twenty-one days before the time

specified for hearing”).

Analysis

First, we will address Lenders’ complaint that Coastal failed to establish that

there were no genuine issues of material fact. Although the trial court’s order did

not address Coastal’s four theories of liability separately, we will.

Coastal sued Lenders for breaching a contract that Coastal’s motion

references as the “Sale Agreement.” To receive a favorable ruling on its traditional

motion for summary judgment, Coastal was required to “prove all essential

elements of [its] claim.” See Jones, 710 S.W.2d at 60. The essential elements of a

breach of contract claim include: “(1) the existence of a valid contract; (2)

performance or tendered performance by the plaintiff; (3) breach of the contract by

the defendant; (4) damages sustained as a result of the breach.” Winchek v. Am.

Express Travel Related Servs. Co., 232 S.W.3d 197, 202 (Tex. App.—Houston [1st

Dist.] 2007, no pet.).

7 The summary judgment evidence before the trial court did not include a

copy of the sales agreement at issue. Thus, the summary judgment record does not

establish, as a matter of law, that the “Sale Agreement” prohibited Tran from

assigning his interest in Coastal’s note to a third party. Moreover, the evidence

before the trial court failed to establish, as a matter of law, that Tran’s assignment

created a lien on Coastal’s property or that Coastal was damaged by Tran’s

assignment. We conclude that Coastal was not entitled to a summary judgment on

its breach of contract claim.

Coastal also sued Lenders for conspiracy, alleging that Lenders conspired

with the bank to obtain a loan on collateral that they no longer owned. The

elements of an actionable conspiracy include: (1) two or more persons; (2) an

object to be accomplished; (3) a meeting of the minds on the object or course of

action; (4) one or more unlawful, overt acts; and (5) damages as a proximate result.

Tri v. J.T.T., 162 S.W.3d 552, 556 (Tex. 2005). Here, because there is no proof that

the “Sale Agreement” prohibited an assignment of the note to a third party, the

summary judgment evidence fails to conclusively establish that Tran’s assignment

of his interest to a bank violated any of Coastal’s rights. Additionally, no affidavit

or other summary judgment evidence established that Coastal was damaged by a

conspiracy, nor is there any evidence establishing the amount of damages caused

8 by the alleged conspiracy. We conclude that Coastal was not entitled to a summary

judgment on its conspiracy claim.

Coastal’s third theory of liability, fraud, requires proof of: (1) a material

representation; (2) that was false; (3) made by the speaker as a positive assertion,

with knowledge that it was false or made recklessly without any knowledge of the

truth; (4) made by the speaker with the intent that the other party act upon it; (5)

the party acted in reliance on the representation; and (6) the party was injured by it.

In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001). Here, the summary

judgment evidence did not conclusively establish that either Tran or Hoang falsely

represented that they would not assign the note to a third party. Additionally, the

summary judgment evidence did not show that Tran was not the record owner of

the real property included in the transaction at issue. Finally, the summary

judgment evidence failed to establish, as a matter of law, the amount of Coastal’s

damages caused by Lenders’ alleged fraud. We conclude that Coastal was not

entitled to a summary judgment on its fraud claim.

Coastal’s last theory, unjust enrichment, alleges a right to a recovery of

$137,000. There are circumstances under which “overpayments under a valid

contract may give rise to a claim for restitution or unjust enrichment.” Sw. Elec.

Power Co. v. Burlington N. R.R. Co., 966 S.W.2d 467, 469-70 (Tex. 1998) (citing

9 examples allowing restitution to be recovered). Assuming, without deciding, that

Coastal has a claim for unjust enrichment, the summary judgment evidence failed

to establish that Coastal overpaid Lenders on its note; instead, the summary

judgment evidence reflects that as of the date of the summary judgment hearing,

Lenders had not received full payment on Coastal’s note. Nor does the summary

judgment evidence establish as a matter of law that Coastal paid for real property

to which it did not receive clear title. Absent evidence establishing that no material

issues of fact existed, Coastal did not meet its summary judgment burden on its

claim of unjust enrichment.

We conclude that Coastal did not meet its burden to establish that no

material issues exist on any of its theories of recovery. We sustain issue one. As

Lenders’ remaining issues afford them no greater relief, we decline to reach issues

two and three. See Tex. R. App. P. 47.1.

Coastal also filed a cross-point, claiming that Lenders’ appeal is frivolous

and asking for sanctions. Because Lenders’ appeal has merit, we overrule Coastal’s

cross-point. Because Coastal did not meet its burden of proof on its traditional

motion for summary judgment, the trial court erred in granting judgment in

Coastal’s favor. We reverse the trial court’s judgment, and we remand the case to

the trial court for further proceedings consistent with this opinion.

10 REVERSED AND REMANDED.

___________________________ HOLLIS HORTON Justice

Submitted on December 27, 2012 Opinion Delivered February 28, 2013 Before McKeithen, C.J., Gaultney and Horton, JJ.