REVERSE and REMAND and Opinion Filed May 29, 2024
S In The Court of Appeals Fifth District of Texas at Dallas No. 05-22-01211-CV
PACK PROPERTIES XIV, LLC AND T&T REALTY CORP., Appellants V. REMINGTON PROSPER, LLC, Appellee
On Appeal from the 471st Judicial District Court Collin County, Texas Trial Court Cause No. 471-04301-2021
MEMORANDUM OPINION Before Justices Partida-Kipness, Pedersen, III, and Garcia Opinion by Justice Pedersen, III Appellants Pack Properties XIV, LLC (Pack Properties) and T&T Realty
Corp. (T&T) appeal the trial court’s February 20, 2023 Final Judgment, which
granted the summary judgment motions of appellee Remington Prosper, LLC
(Remington) and denied the partial summary judgment motion of appellants. The
case involves a contract for the sale of real property (the Contract) and allegations—
by both the seller and the purchaser—of breach of that Contract. Appellants argue
the trial court’s summary judgment rulings in favor of Remington were erroneous,
identifying five subsidiary issues for our review: whether appellants are affiliates of each other; whether—if T&T breached the parties’ agreement by assigning it to a
non-affiliate without Remington’s consent—that breach was immaterial and
whether that breach was cured by appellants’ offer to rescind the assignment;
whether Remington is barred from enforcing the consent-to-assignment requirement
by doctrines of waiver or estoppel; and whether Remington is entitled to attorney’s
fees. We conclude that no party established that it was entitled to judgment as a
matter of law, so we reverse the trial court’s Final Judgment and remand this case
for further proceedings.
Background
Lou Lebowitz wished to own and operate a Subaru car dealership in Prosper,
Texas, and in 2019 he was successful in obtaining a Letter of Intent (LOI) from
Subaru of America, Inc. The LOI identified the “dealership entity” as SLJ/SOP, Ltd.
(SOP), an entity owned 100% by Lebowitz, and it identified the conditions that
Lebowitz or SOP would need to fulfill to open such a dealership. For our purposes,
those conditions included (1) purchasing an acceptable site for the dealership, and
(2) associating with a partner who was an experienced car dealer, who would own a
significant percentage of the dealership, and who would provide experienced
management for the dealership.
To fulfill the first condition, Lebowitz identified property on State Highway
380 in Prosper (the Property) that was owned by Remington. Subaru approved the
Property for the site of the dealership, and T&T (another entity owned 100% by
–2– Lebowitz) signed the Contract with Remington to purchase the Property for
approximately $7.3 million.
As to the second relevant condition in the LOI, Lebowitz developed a
relationship with Sam Pack, who owned multiple dealerships himself and who had
decades of experience in car dealerships. The two men agreed to work together to
open the Subaru dealership. Together they created a complicated web of business
entities and relationships to participate in what they call their “Enterprise.” Through
two of those entities, the men entered into a Mutual Acquisition and Development
Agreement (the MADA). One party to the MADA was Lebowitz’s SOP; the other
was a Pack-owned entity, Pack Automotive Group, Ltd. (PAG). The MADA
included the following agreements:
T&T would assign its interest in the Contract to Pack Prosper1;
PAG would take over payments under the Contract, including reimbursing T&T for its initial deposit;
Pack Properties and SOP would enter into a lease, in which Pack Properties agrees to construct the Subaru dealership on the Property pursuant to the requirements of the LOI;
PAG would enter into an Operating Agreement with SOP; and
PAG would pay $1,750,000.00 in cash in exchange for the assignment to it of 49% of the general and limited partnership interests in SOP.
1 In April 2021, Pack Prosper changed its name to Pack Properties XIV, LLC; the name change has not affected any party’s position in this litigation. After this initial reference to Pack Prosper, we will continue referring to the appellant assignee entity as Pack Properties. –3– Following execution of the MADA, T&T assigned its interest in the Contract to Pack
Properties. Approximately one month later, Lebowitz informed Stanley Graff, owner
of Remington, about the assignment to Pack Properties; appellants’ lead
transactional lawyer, Roy True, likewise gave the assignment information to
Remington’s transactional lawyer, Robert Allen.
The assignment to Pack Properties implicated a provision of the Contract that
stated:
Purchaser may assign this Contract to an affiliate or entity under common control with Purchaser with notice to, but without the consent of Seller. Any other assignment shall require Seller’s prior written consent.
Initially, the parties proceeded as they had before the assignment. Closing was
scheduled for May 25, 2021. The title company re-issued its title-insurance
commitment in Pack Properties’ name and revised all closing documents to name
Pack Properties as the purchaser, and Allen revised the warranty deed to show Pack
Properties as the purchaser. Pack Properties executed all the closing documents and
placed them in escrow with the title company and initiated a wire transfer for the
purchase price of the Property.
The day before the closing date, Remington asked to postpone closing for one
month, until June 25. Through Allen, Remington promised to execute the closing
documents and to put them in escrow, so Pack Properties, through True, agreed to
the postponement and pulled back its wire transfer.
–4– Three days later, on May 27, Allen sent a letter to Lebowitz and True
requesting for the first time “appropriate written evidence” that the assignment had
been made according to the Contract, i.e., to an affiliate of T&T or an entity
otherwise under the common control of T&T. The letter also referred to a second
agreement Remington had with another entity to purchase land adjacent to the
Property and said that:
Under that [second] agreement the purchaser named therein has certain rights to acquire the Property if the Purchaser fails to close the purchase of the Property as required pursuant to the Contract. The Seller believes that it may have some liability to the purchaser in that agreement if it were to sell the Property to Pack in violation of the terms of the Contract.
Lebowitz had learned of the existence of this second contract between Remington
and Shottenkirk Highway 380 Properties, LLC (Shottenkirk) during negotiations for
the Contract. He testified in his summary judgment affidavit that Allen told him that
Shottenkirk had a right to purchase the Property if the Contract did not close or was
terminated, but appellants learned only later that the Shottenkirk right to purchase
the Property could be triggered by delay in closing appellants’ Contract.
In response to Allen’s request for evidence of affiliation, True drew up and
sent Allen a draft of the organizational chart for the Pack-Lebowitz Enterprise. True
testified that Allen then called him and relayed Graff’s “reluctance to close” the sale,
expressing Graff’s “primary concern” that he would be sued by Shottenkirk if he
closed. True stated that, according to Allen, “Graff would have Remington close
[the] Contract, if [appellants] would indemnify Remington and Graff should –5– Shottenkirk file a lawsuit.” After reporting the phone call to his client, True offered
instead to have Pack Properties rescind the assignment and to have T&T close as the
Purchaser under the Contract. Remington did not respond to this offer.
When the extended closing date arrived, Pack Properties had executed the
closing documents and funded the purchase by a new wire transfer, but Remington
refused to close the sale.
The Lawsuit Below
Pack Properties filed suit for breach of the Contract, alleging that Remington
breached by failing to comply with its contractual closing obligations; it sought
specific performance of the Contract or substantial damages. It also made a claim
for declaratory judgment, seeking declarations: that T&T and Pack Properties are
affiliates of each other; that Remington and its attorney, Allen, consented to the
assignment; and that Remington is estopped to assert the assignment was in breach
of the Contract. It also pleaded that waiver and estoppel operate to prevent
Remington’s objecting to the assignment. And—in a separate estoppel pleading—it
contended that Remington cannot object to the assignment because Pack Properties
and T&T offered to cure any assignment-provision breach.
Remington answered and pleaded counterclaims for breach of contract and
declaratory relief against Pack Properties as well as a third party claim for the same
–6– declaratory relief against T&T.2 T&T answered and pleaded counterclaims against
Remington for breach of contract and declaratory relief.
The Summary Judgment Motions
Pack Properties and T&T filed their Partial Motion for Summary Judgment
Against Remington, urging that “the single issue for this Court to decide in
connection with this Motion for Summary Judgment is whether T &T and Pack XIV
are ‘affiliates’ of each other in the context of their activities on behalf of the Lou/Sam
Enterprise.” Factually, the motion relied on affidavits from Lebowitz, Pack, and
True, on excerpts from Graff’s deposition, and on the Enterprise’s organizational
chart.
Legally, the motion cited and addressed nine cases that discussed the meaning
of “affiliate,” beginning with Eckland Consultants, Inc. v. Ryder Stillwell, Inc., 176
S.W.3d 80 (Tex. App.—Houston [1st] 2004, no pet.), which appellants
acknowledged to be the “most cited case” on the issue. After reporting that the
contract at issue did not define affiliate, the Eckland Consultants court stated that
the word:
is generally defined as a “corporation that is related to another corporation by shareholdings or other means of control,” BLACK’S LAW DICTIONARY 59 (7th ed.1999), and as a “company effectively controlled by another or associated with others under common ownership or control.” WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 35 (1971).
2 Remington also made third party claims against Shottenkirk; those claims were later dismissed and play no part in this appeal. T&T also pleaded its own third party claim against Shottenkirk. –7– Id. at 88. Appellants argued that the organizational chart showed that they met this
definition because T&T and Pack Properties were “related to” one another.
Appellants argued further that Lebowitz and Pack “controlled” one another in
furtherance of the Enterprise because: (a) T&T was related to the other Lebowitz
entities, and Pack Properties was related to the other Pack entities; (b) pursuant to
the MADA, Lebowitz and Pack had shared control of the Enterprise; and (c) the
Lebowitz and Pack affidavits stated that the two men “would each have shared
control in the decision-making and [they] would each have veto power to stop any
of the enterprise’s potential decisions that either of [them] opposed.”3
Remington filed two summary judgment motions against T&T and Pack
Properties. It filed a no-evidence motion that essentially identified every element in
appellants’ breach of contract claims, their request for specific performance, and
their declaratory judgment claims, as well as their affirmative defense. It also filed
a joint traditional partial summary judgment motion against appellants. The
traditional motion agreed that the “pivotal issue in this litigation” was whether Pack
Properties was an affiliate or entity controlled by T&T. Remington’s summary
judgment evidence was drawn from the depositions of Pack, Lebowitz, and Graff,
and the Declaration of Robert Allen.
3 Appellants went on to cite and address cases with a number of different understandings of the word affiliate; given our threshold resolution below of the meaning of the term, we need not discuss those cases further. –8– Legally, Remington focused on this Court’s opinion in Vision Capital Real
Estate, LLC v. Wurzak Hotel Group, No. 05-15-00917-CV, 2016 WL 6093977 (Tex.
App.—Dallas Oct. 19, 2016, no pet.) (mem. op.), in which we essentially adopted
the Eckland Consultants definition of affiliate quoted above. Remington contended
that at all times relevant to this litigation, Lebowitz had the sole right to control T&T
and Pack had the sole right to control Pack Properties. Remington also contended
that the organizational chart provided by appellants showed no affiliation between
the two entities. The summary judgment evidence established that T&T did not seek
or obtain Remington’s written consent before assigning its Contract rights to Pack
Properties. Therefore, Remington argued, it was entitled to judgment as a matter of
law that T&T failed to comply with the Contract by assigning the agreement to Pack
Properties (a) which was not an affiliate of T&T, (b) without obtaining Remington’s
prior written consent. Remington asserted that this failure to comply with the
assignment provision of the Contract “constituted a prior material breach excusing
Remington’s future performance under the [Contract], including but not limited to,
its obligations regarding closing of the [Contract].” As a result, it argued that it was
entitled to Contractual remedies, including termination and liquidated damages.
The trial court denied appellants’ motion; it granted both of appellee’s
motions. The court’s Final Judgment concluded that appellants should take nothing
on their claims against Remington and that Remington should recover the $200,000
–9– deposit held in escrow, its costs, and attorney’s fees for trial and, conditionally,
appellate attorney services.
This appeal followed.
Discussion
Appellants contend that the trial court erred in granting Remington’s motions
and in denying appellants’ motion. We apply well-known standards in our review of
traditional and no-evidence summary judgment motions. See Timpte Indus., Inc. v.
Gish, 286 S.W.3d 306, 310 (Tex. 2009); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d
546, 548 (Tex. 1985). With respect to a traditional motion for summary judgment,
the movant has the burden to demonstrate that no genuine issue of material fact exists
and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Nixon,
690 S.W.2d at 548–49. We review a no-evidence summary judgment under the same
legal sufficiency standard used to review a directed verdict. TEX. R. CIV. P. 166a(i);
Gish, 286 S.W.3d at 310. To defeat a no-evidence summary judgment, the
nonmovant is required to produce evidence that raises a genuine issue of material
fact on each challenged element of its claim. Gish, 286 S.W.3d at 310; see also TEX.
R. CIV. P. 166a(i). In reviewing both a traditional and no-evidence summary
judgment, we consider the evidence in the light most favorable to the nonmovant.
Smith v. O’Donnell, 288 S.W.3d 417, 424 (Tex. 2009); 20801, Inc. v. Parker, 249
S.W.3d 392, 399 (Tex. 2008). We credit evidence favorable to the nonmovant if
reasonable jurors could, and we disregard evidence contrary to the nonmovant unless
–10– reasonable jurors could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,
289 S.W.3d 844, 848 (Tex. 2009). When both parties move for summary judgment
and the trial court grants one motion and denies the other, we consider both motions,
their evidence, and their issues, and we render the judgment that the trial court should
have rendered. Id.
Together, these motions present intertwined issues that could allow either—
or neither—side to prevail on summary judgment. Appellants’ motion attempted to
prove: appellants’ own compliance with the Contract, specifically with the
assignment clause; Remington’s breach by its failure to close the sale; and
appellants’ resulting entitlement to specific performance.4 Remington’s traditional
motion attempted to prove: appellants’ breach of the assignment provision;
Remington’s excuse for failing to close based on that prior material breach by
appellants; and its entitlement to attorney’s fees. In its no-evidence motion,
Remington essentially challenged the existence of evidence on each element of
appellants’ claims for breach of contract as well as their entitlement to specific
performance.5
4 Appellants’ motion was only partial because it did not address their claim for attorney’s fees. 5 The no-evidence motion could not urge Remington’s defense of prior material breach because it was Remington’s burden to prove the elements of that defense. See Pollard v. Hanschen, 315 S.W.3d 636, 639 (Tex. App.—Dallas 2010, no pet.) (“A party may not file a no-evidence summary judgment motion on an affirmative defense he has the burden to prove at trial.”) Remington’s motions also addressed appellants’ declaratory judgment claims and their affirmative defenses of waiver and estoppel. Given our resolution of appellants’ first two subsidiary issues, we conclude that any rulings concerning these additional issues would be inappropriate dicta. –11– Affiliate Status
In appellants’ first subsidiary issue on appeal, they contend that, as a matter
of law, they are affiliates of each other so that they did not need Remington’s consent
for T&T to assign the Contract to Pack Properties. Alternatively, they contend that
there is a fact issue as to appellants’ affiliate status. The parties and their motions
agree that the threshold issue for summary judgment is whether Pack Properties is
an affiliate of T&T. If Pack Properties is an affiliate of T&T, then appellants
complied with the assignment clause of the Contract; if not, then T&T’s assignment
to Pack Properties without Remington’s consent was a breach of the Contract.
We repeat the critical assignment provision, section 14.11 of the Contract:
Purchaser may assign this Contract to an affiliate or entity under common control with Purchaser with notice to, but without the consent of Seller. Any other assignment shall require Seller’s prior written consent.
The Contract defines the “Purchaser” as T&T, but it does not define “affiliate.” The
parties disagree about the definition or legal standard one entity must meet to qualify
as an affiliate of another.
In this Court, appellants urge us to apply the word’s “broad, ordinary
meaning” in this case, and they offer numerous dictionary definitions and quotes
from case law, which lead them to contend that our affiliate inquiry should be
whether the entities (or individuals) are “associated with” each other and “connected
with” each other. Appellants argue that T&T and Pack Properties are indeed
associated with and connected with each other by virtue of the Enterprise that was –12– (a) created by Pack and Lebowitz and (b) illustrated by the organizational chart
submitted as evidence in the summary judgment proceeding.
Remington argues that this Court has already determined the meaning of
affiliate in a contract that does not define the word, citing Vision Capital, in which
we stated:
The contract does not define “affiliate,” so we apply its plain, ordinary, and generally accepted meaning. See Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 158 (Tex. 2003); Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). “Affiliate” is generally defined as a “corporation that is related to another corporation by shareholdings or other means of control” and as a “company effectively controlled by another or associated with others under common ownership or control.” Eckland Consultants, Inc. v. Ryder, Stillwell Inc., 176 S.W.3d 80, 88 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (internal citations omitted).
2016 WL 6093977 at *4.
Appellants posit that Vision Capital is “noncontrolling and distinguishable”
for several reasons. First they assert that the Vision Capital court was proffered only
one dictionary definition in that case, and they contend that the court might have
reached a different conclusion “had it been confronted with a full-throated
argument” about the term’s broad meaning. But Vision Capital, as we have quoted
it above, did not rely on just a single dictionary definition. Instead it cited to Eckland
Consultants, which in turn cites specifically to two significant dictionaries.6
Moreover, while the issues on appeal are determined by the appellant, we note that
6 The Eckland Consultants definition, quoted earlier herein, includes citations to Black’s Law Dictionary and Webster’s Third New International Dictionary. 176 S.W.3d at 88. –13– appellate courts routinely undertake the legal research necessary to determine how
those issues should be resolved. A reviewing court is not limited to the legal
authority cited by either party.
Remington’s remaining points here—that the Vision Capital appellant offered
no evidence of control to meet the Eckland Consultants standard, and that Vision
Control’s disposition turned on a different issue and dispositive fact—do not speak
to that opinion’s determination of the “plain, ordinary, and generally accepted”
meaning of affiliate when it is not defined in the parties’ contract.
We agree with Remington on this threshold point. “[W]e follow our own
precedent and may not overrule a prior panel decision of this Court, absent an
intervening change in the law by the legislature, a higher court, or this Court sitting
en banc. Interest of P.M.B., No. 05-20-00559-CV, 2022 WL 16569600, at *4 (Tex.
App.—Dallas Nov. 1, 2022, no pet.) (mem. op.) (citing Mitschke v. Borromeo, 645
S.W.3d 251, 256 n.8 (Tex. 2022)). None of those conditions exists here; we are
bound by Vision Capital. Id.
Remington’s Contract was with T&T. Appellants’ organizational chart
indicates that T&T is an entity owned 100% by Lebowitz. The affiliate question,
thus, becomes whether T&T—or Lebowitz, its owner—exercises sufficient control
over Pack Properties to bring it within Vision Capital’s definition of affiliate.7
7 Appellants contend that the Contract permitted three categories of assignees: (1) affiliates, (2) entities under common control with Purchaser, and (3) other assignees with Remington’s consent. They argue that
–14– Remington points to appellants’ organizational chart and finds no indicia of
the control that Vision Capital clearly requires for an affiliate relationship. It argues
that the chart fails to demonstrate that Pack Properties is owned or controlled by
Lebowitz or T&T. Indeed, it argues that the organizational structure shows no direct
relationship or affiliation between T&T/Lebowitz and Pack Properties.
Appellants argue that the organizational chart illustrates the network of
entities created by Lebowitz and Pack to conduct their Enterprise. The two men
jointly own the entity that will directly own the Subaru dealership (Lebowitz at 51%
and Pack at 49%), pursuant to their MADA. And pursuant to their affidavits, the two
men agreed in 2021,
that in order to consummate the formation of our partnership and/or joint enterprise for the Dealership, we needed to have certain entities owned and/or controlled by each of us enter into written agreements, whereby [they] and our respective entities agreed to join together into a single enterprise that would purchase the Property, and then build and operate the prospective Dealership in Prosper, Texas, (“‘the Lou/Sam Enterprise”). [We] would each have shared control in the decision- making and we would each have veto power to stop any of the enterprise’s potential decisions that either of us opposed.
“[t]here would be no need for section 14.11 to separate the concepts of ‘affiliates’ and an ‘entity under common control with Purchaser’ if the word ‘affiliate’ required control.” But the Texas Supreme Court has “repeatedly recognized, when faced with legal language that appears repetitive or otherwise unnecessary, that drafters often include redundant language to illustrate or emphasize their intent.” Whole Woman’s Health v. Jackson, 642 S.W.3d 569, 582 (Tex. 2022). Although Jackson involved statutory interpretation, it relied on that court’s precedent involving contract interpretation. See id. (citing Phila. Indem. Ins. Co. v. White, 490 S.W.3d 468, 477 (Tex. 2016) (interpreting damage-to-premises language of lease) and Chesapeake Expl., L.L.C. v. Hyder, 483 S.W.3d 870, 873 (Tex. 2016) (interpreting royalty provision of gas-lease)).
–15– We conclude that a fact issue exists concerning whether T&T or Lebowitz
exercises sufficient control over Pack Properties to conclude that Pack Properties is
an affiliate of T&T. Therefore, neither party established its position concerning the
validity of the assignment of the Contract as a matter of law. We sustain appellants’
first issue to the extent it urged alternatively that a fact issue exists on affiliate status.
This conclusion, while necessary, is not conclusive of this appeal. It leads to
different results for appellants and Remington:
(1) Remington’s Motions must be denied. Appellants defeated the no-
evidence motion as to their purported breach by producing sufficient evidence
of control to raise a fact issue on their compliance with the assignment
provision. Because Remington failed to prove the prior breach by appellants
as a matter of law, it has not established an excuse for its failure to close, and
the traditional motion fails as well.
(2) Appellants failed to prove conclusively that they did not breach the
assignment provision of the Contract. However, appellants could still prevail
on their summary judgment claim based on Remington’s failure to close if
they established as a matter of law that any breach of the assignment provision
was immaterial and, therefore, could not excuse Remington’s failure to close.
Given the latter result, we proceed to consider the issue of the materiality of a breach
of the Contract’s assignment clause within the context of the parties’ motions for
summary judgment.
–16– Materiality
Appellants’ second subissue contends that if their failure to obtain
Remington’s consent to the assignment was a breach of the Contract, then as a matter
of law it was an immaterial breach so that Remington was still required to close the
sale. Alternatively, they contend there is a fact issue on the materiality of such a
breach.
Remington’s defense below and its traditional summary judgment motion
were rooted in its affirmative defense of a prior material breach by appellants. “It is
a fundamental principle of contract law that when one party to a contract commits a
material breach of that contract, the other party is discharged or excused from further
performance.” Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196
(Tex. 2004). If Pack Properties is not an affiliate of T&T, then Remington’s consent
was necessary for the assignment to be valid. If appellants’ failure to obtain that
consent was a material breach of the Contract, then Remington was excused from its
obligation to close the sale of the property. See id.
At the outset, we note that the parties make conflicting assertions concerning
the nature of the materiality question. Remington asserts that what constitutes a
material term is a question of law; appellants argue that materiality is ordinarily a
fact question. Both cite Texas opinions for their position. The confusion appears to
stem from two different contexts in which an inquiry may arise concerning the
materiality of a contract term.
–17– One such context occurs when a court must determine if the parties’
agreement is sufficiently certain to be an enforceable contract. The question
generally arises when the agreement lacks a particular term or contains a term that
is unclear. The ultimate issue in this kind of case is the existence of a valid contract,
which is a legal question. See, e.g., Barrow-Shaver Res. Co. v. Carrizo Oil & Gas,
Inc., 590 S.W.3d 471, 481 (Tex. 2019); In re D. Wilson Const. Co., 196 S.W.3d 774,
781 (Tex. 2006). Accordingly, we evaluate de novo whether the missing or unclear
term is material, i.e., whether it is necessary to understanding the parties’ obligations
in performing the contract.
The second group of cases that analyze materiality are those like our own,
where the question is whether a breach by one party was sufficiently important to
excuse the other party’s continuing performance, i.e., the affirmative defense of prior
material breach. These cases do not address a missing term and its effect on the
validity of a contract; instead, these cases look to the significance of a particular term
within the total agreement. Courts performing this analysis address the materiality
issue as a fact question. See, e.g., Bartush-Schnitzius Foods Co. v. Cimco
Refrigeration, Inc., 518 S.W.3d 432, 436 (Tex. 2017) (per curiam) (“Generally,
materiality is an issue ‘to be determined by the trier of facts.’” (quoting Hudson v.
Wakefield, 645 S.W.2d 427, 430 (Tex. 1983))). When evaluating the materiality of
a prior breach, we may decide the issue as a matter of law only if reasonable jurors
could reach only one verdict. Id.; see City of Keller v. Wilson, 168 S.W.3d 802, 822
–18– (Tex. 2005) (“If the evidence at trial would enable reasonable and fair-minded
people to differ in their conclusions, then jurors must be allowed to do so.”).
The Texas Supreme Court has identified five factors that can be significant in
determining whether a failure to perform is material:
(a) the extent to which the injured party will be deprived of the benefit which he reasonably expected;
(b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;
(c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture;
(d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of the circumstances including any reasonable assurances;
(e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.
Mustang Pipeline Co., Inc. v. Driver Pipeline Co., Inc., 134 S.W.3d 195, 199 (Tex.
2004) (citing RESTATEMENT (SECOND) OF CONTRACTS § 241 (1981)). As to the first
factor, some courts have concluded in essence that the less the non-breaching party
is deprived of its expected benefit, the less material the breach is. See, e.g.,
Hernandez v. Gulf Grp. Lloyds, 875 S.W.2d 691, 693 n.2 (Tex. 1994); Sky Cap.
Grp., Ltd. v. Bombardier, Inc., No. 05-13-00133-CV, 2014 WL 6807710, at *4 (Tex.
App.—Dallas Dec. 3, 2014, no pet.). Indeed, we have stated when discussing the
defense of prior material breach that “[a] material breach is conduct that deprives
the injured party of the benefit that it reasonably could have anticipated from the
breaching party’s full performance.” Hollingsworth v. Parklane Corp., No. 05-19- –19– 01576-CV, 2021 WL 1290735, at *2 (Tex. App.—Dallas Apr. 7, 2021, no pet.)
(citing Hernandez, 875 S.W.2d at 693).
Remington bore the burden to prove its affirmative defense of a prior material
breach. See Compass Bank v. MFP Fin. Servs., Inc., 152 S.W.3d 844, 851–52 (Tex.
App.—Dallas 2005, pet. denied). However, neither party offered summary judgment
evidence speaking specifically to the materiality of the purported breach by
appellants. On appeal, therefore, both sides essentially argue the issue as a matter of
law. Remington argues that the identity of the parties is a “first order term” of any
contract, and complains that if the assignment were enforced, it would be
“contractually bound to sell its real property to a stranger.” It does not explain what
benefit it would lose in that case. Appellants opine—in reliance on the first Mustang
Pipeline factor—that Remington lost no expected Contract benefit as a result of the
assignment to Pack Properties. They contend that “Remington would have timely
received the full sales price from a ready, willing, and able substitute buyer that
Remington has never objected to.” They add that even if there were some prejudice
to Remington, the offer to rescind the assignment would have cured it by restoring
T&T as the purchaser of the Property. But neither party speaks to any of the
remaining Mustang Pipeline factors.
We conclude that neither Remington nor appellants have established their
position on the materiality of a breach of the assignment provision as a matter of
law. Reasonable jurors could reach different conclusions on materiality, and so fact
–20– issues remain on the issue. See Bartush-Schnitzius Foods Co., 518 S.W.3d at 436.
Neither party is entitled to summary judgment on the issue.
We sustain appellants’ second subissue to the extent that it argued
alternatively that a fact issue exists on the issue of the materiality of any breach of
the assignment provision of the Contract.
Conclusion
We conclude that a fact issue exists concerning whether appellant Pack
Properties is sufficiently within the control of appellant T&T to be T&T’s affiliate.
We conclude further that a fact issue exists concerning whether a breach of that
provision by appellants, if it occurred, would have been material. Accordingly:
Remington’s traditional motion for summary judgment did not establish as a
matter of law that it was entitled to summary judgment on its defense of a
prior material breach of the Contract;
Appellants came forward with sufficient evidence on the issue of a breach of
the assignment provision to raise a fact issue and to defeat Remington’s no-
evidence motion; and
Appellants’ traditional motion did not establish as a matter of law that they
did not materially breach the Contract by assigning it to Pack Properties;
therefore, the motion failed to establish that appellants were entitled to
specific performance of the Contract based on an unexcused breach by
Remington.
–21– In sum, the trial court erred by granting summary judgment in favor of Remington,
but appellants have not proved that they were entitled to judgment as a matter of law.
For these reasons, we reverse the trial court’s Final Judgment and remand this case
/Bill Pedersen, III/ BILL PEDERSEN, III 221211F.P05 JUSTICE
–22– S Court of Appeals Fifth District of Texas at Dallas JUDGMENT
PACK PROPERTIES XIV, LLC On Appeal from the 471st Judicial AND T&T REALTY CORP., District Court, Collin County, Texas Appellants Trial Court Cause No. 471-04301- 2021. No. 05-22-01211-CV V. Opinion delivered by Justice Pedersen, III. Justices Partida- REMINGTON PROSPER, LLC, Kipness and Garcia participating. Appellee
In accordance with this Court’s opinion of this date, the judgment of the trial court is REVERSED and this cause is REMANDED to the trial court for further proceedings.
It is ORDERED that appellants Pack Properties XIV, LLC and T&T Realty Corp. recover their costs of this appeal from appellee Remington Prosper, LLC.
Judgment entered May 29, 2024
–23–