KWSO Television Co., Inc. v. KFDA Operating Company, LLC

442 S.W.3d 695, 2014 WL 3845216, 2014 Tex. App. LEXIS 8563
CourtCourt of Appeals of Texas
DecidedAugust 6, 2014
Docket05-12-00386-CV
StatusPublished
Cited by7 cases

This text of 442 S.W.3d 695 (KWSO Television Co., Inc. v. KFDA Operating Company, LLC) 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
KWSO Television Co., Inc. v. KFDA Operating Company, LLC, 442 S.W.3d 695, 2014 WL 3845216, 2014 Tex. App. LEXIS 8563 (Tex. Ct. App. 2014).

Opinion

OPINION

Opinion by

Justice MOSELEY.

Appellants 1 are the Sellers under an asset purchase agreement and appellees 2 are the Buyers. The question presented is, under the terms of the asset purchase agreement and Delaware law, 3 who is entitled to the escrow money when the sale failed to close? The Sellers contend the Buyers manufactured a reason to terminate the agreement after Sellers refused to reduce the price. Buyers contend Sellers breached the agreement, giving them the right to terminate the agreement. In addition, Buyers assert the mere pendency of their lawsuit against Sellers caused a condition to closing to fail; that condition was that no action for damages or other relief in connection with the agreement be pending at the time of closing. Sellers counter that Buyers improperly caused the condition to fail by filing this lawsuit.

The trial court granted summary judgment for Buyers and Sellers appeal. For the following reasons, we reverse and remand.

Background

Buyers and Sellers entered into an asset purchase agreement (APA) in June 2008 to transfer ownership of several television and radio stations for a price of approximately $115,000,000. Under the terms of the APA, Buyers deposited $5,750,000 in escrow. The APA provided that if the closing did not occur and Sellers terminated the APA for an uncured breach by Buyers, Sellers would receive the escrow funds as liquidated damages. On the other hand, if the closing did not occur and the APA was terminated for any other reason, the Buyers would receive the escrow funds. The APA provided that neither party could terminate the agreement if that party was in material breach of the agreement.

The deadline to close the sale was December 31, 2008. Several weeks before the deadline, Buyers demanded a price reduction because changes in the financial markets had significantly increased their financing costs. Sellers refused to reduce the price.

On December 12, 2008, Buyers gave notice of termination of the APA for Sellers’ breach of certain representations regard *698 ing the stations. A week later, Buyers filed this lawsuit seeking damages and specific performance of the provision to release the escrow funds to Buyers.

The sale did not close by the deadline. On January 14, 2009, Sellers gave notice of termination of the APA because of the Buyers’ material breach of the APA. Sellers later filed a counterclaim contending that Buyers’ termination was ineffective and sought to recover the escrow funds.

Buyers moved for partial summary judgment on the grounds that (1) Sellers materially breached the APA in several ways and (2) there was no duty to close the transaction because this lawsuit was a pending action under the APA condition that no action be pending at the time of closing. The trial court denied the motion for partial summary judgment. Buyers then filed a limited motion to reconsider, in which they argued the trial court should reconsider the motion for partial summary judgment and grant it because it was undisputed this lawsuit was pending on December 31, 2008, causing the failure of the no-pending action condition to the obligation to close.

After additional briefing and arguments, the trial court signed an order granting the limited motion to reconsider and the motion for partial summary judgment. The order did not specify the grounds the trial court ruled upon. The parties filed an agreed motion for severance, which the trial court granted. The trial court then rendered a final judgment vacating its pri- or order denying the motion for partial summary judgment, incorporating the order granting Buyers’ limited motion to reconsider and motion for partial summary judgment, and rendering judgment for Buyers.

Standard op Review

We review the trial court’s summary judgment de novo. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.2003). The standards for reviewing summary judgments are well established and we follow them in reviewing this appeal. See Tex.R. Civ. P. 166a(c); Nixon v. Mr. Property Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985) (traditional summary judgment standards of review). In a traditional motion for summary judgment, the party moving for summary judgment has the burden of showing no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. See Tex:R. Civ. P. 166a(c); Nixon, 690 S.W.2d at 548; In deciding whether a disputed material fact issue exists, we review the record “in the light most favorable to the nonmovant, indulging every reasonable inference and resolving any doubts against the motion.” Buck v. Palmer, 381 S.W.3d 525, 527 (Tex.2012) (per curiam) (quoting City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex.2005)).

An appellate court must review all of the summary judgment grounds on which the trial court actually ruled, whether granted or denied, and which are dis-positive of the appeal, and may consider any grounds on which the trial court did not rule. Baker Hughes, Inc. v. Keco R. & D., Inc., 12 S.W.3d 1, 5-6 (Tex.1999).

Analysis

Sellers raise two issues on appeal, contending the trial court erred by granting summary judgment for Buyers and by rendering summary judgment on grounds that were not before it. We analyze this case in three parts: (1) what summary judgment grounds could the trial court consider; (2) whether Buyers proved their material breach claims as a matter of law; and (3) whether the alleged failure of the no-pending action condition is an independent *699 ground for affirming the summary judgment.

A. Summary Judgment Grounds

Sellers argue we should consider only the alleged failure of the “no-pending action” condition because, by filing the limited motion for reconsideration, Buyers abandoned all other grounds raised in their earlier motion for partial summary judgment.

The trial court has plenary power over its interlocutory rulings. See Fruehauf Corp. v. Carrillo, 848 S.W.2d 83, 84 (Tex.1993) (per curiam). “A trial court may, in the exercise of discretion, properly grant summary judgment after having previously denied summary judgment without a motion by or prior notice to the parties, as long as the court retains jurisdiction over the case.” Stroop v. N. County Mut. Ins. Co., 133 S.W.3d 844, 852 (Tex.App.Dallas 2004, pet. denied) (quoting H.S.M. Acquisitions, Inc. v. West,

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442 S.W.3d 695, 2014 WL 3845216, 2014 Tex. App. LEXIS 8563, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kwso-television-co-inc-v-kfda-operating-company-llc-texapp-2014.