Plaza City, LLC v. Stephanie L. Sturman A/K/A Stephanie L. Medrano D/B/A E.S. Designs

• Court: Court of Appeals of Texas
• Decided: December 1, 2022
• Docket: 09-21-00089-CV
• Status: Published

Opinion

In The

Court of Appeals

Ninth District of Texas at Beaumont

________________

NO. 09-21-00089-CV ________________

PLAZA CITY, LLC, Appellant

V.

STEPHANIE L. STURMAN A/K/A STEPHANIE L. MEDRANO D/B/A E.S. DESIGNS, Appellee ________________________________________________________________________

On Appeal from the 457th District Court Montgomery County, Texas Trial Cause No. 18-07-09861-CV ________________________________________________________________________

MEMORANDUM OPINION

Appellant Plaza City, LLC (“Plaza”) sued AES Septic, LLC (“AES”) and

Stephanie L. Sturman a/k/a Stephanie L. Medrano d/b/a E.S. Designs (“Sturman”)

for multiple causes of action after one of Plaza’s tenants (“Tenant”) 1 backed out of

a long-term commercial lease, which Plaza alleges AES and Sturman’s conduct

1“Tenant” is Crawford Strategies, LLC and Jennifer Crawford, who are not parties to this appeal. 1 caused. 2 Plaza appeals from the trial court’s ruling granting Sturman’s motion for

summary judgment. Sturman is a licensed sanitarian,3 who argued in her motion for

summary judgment that her official stamp was placed on design drawings for the

septic tank system of an office building without her knowledge or consent. Plaza

contends the trial court erred in granting Sturman’s Traditional Motion for Summary

Judgment. Plaza argues that: (1) the deemed admissions Sturman relied upon were

merit-preclusive and should have been withdrawn; (2) Sturman’s motion should

have been denied because fact issues existed; and (3) knowledge is not required for

a negligence cause of action, and Plaza’s conversations with AES’s employee

created a fact issue regarding Plaza’s conspiracy cause of action. For the following

reasons, we will affirm the trial court’s judgment.

2Prior to granting Sturman’s Motion for Summary Judgment, the trial court granted AES’s Traditional Motion for Summary Judgment and severed AES’s claims from this lawsuit, and Plaza filed a separate appeal as to those claims, which we addressed in a separate memorandum opinion. 3“Sanitarian” is defined as “a specialist in sanitary science and public

health[.]” https://merriam-webster.com/dictionary/sanitarian (last accessed 11/16/2022).

2 I. Background

A. Parties’ Relationship and History

Plaza owns an office building in Montgomery County and entered into an

agreement with Tenant for the buildout of a certain space that required redesign of

the septic system. The lease commenced on May 1, 2018, and Plaza had ninety days

to complete the buildout, or Tenant had the right to terminate the lease. The lease

agreement contained a provision that time was of the essence and required “strict

compliance with the times for performance.” The agreement provided that Plaza

would lease Tenant 10,900 square feet of space. In April 2018, Plaza hired AES to

upgrade the septic system and prepare drawings to submit to the Montgomery

County Permit Department (“MCPD”), which required a licensed sanitarian’s

approval and signature. Sturman was one of the licensed sanitarians AES used for

its projects.

Emails showed that in June 2018, AES submitted redesign drawings to the

MCPD, and due to irregularities, MCPD questioned Sturman about the signature

date. Sturman responded to the MCPD that she had not signed the drawings and

would instruct Luis Cerda, an AES employee, that what happened was

“unacceptable and it needed to stop right now.” In June 2018, Plaza and Tenant met

with the MCPD, who advised the sanitarian’s signature on AES’s septic drawings

had been forged, and MCPD denied the permit.

3 On June 18, 2018, Tenant sent a letter to Plaza indicating they were

terminating their agreement. The letter from Tenant to Plaza advised, “Due to the

recent fraudulent activities surrounding the septic permit involving our potential

business, PlayCation Zone, we must remove ourselves from this situation, in

particular, by terminating the lease at 32507 Tamina Road.” Tenant also demanded

return of their payments.

B. Procedural Posture

Plaza alleged that AES advertised their company as a “septic system

designing, permitting and installation company.” Plaza hired AES to design the

expansion of the septic system, and prior to the installation, AES was required to

obtain a permit from the MCPD. Plaza alleged that AES submitted documents to the

MCPD with a forged sanitarian’s signature, specifically Sturman, and when she

advised the MCPD that AES forged her signature, the MPCD denied the permit

application and the expansion project was halted. Plaza further alleged that due to

the halt of the project, Tenant terminated the long-term lease agreement and

demanded a refund of all payments made toward the lease agreement.

After Tenant terminated the lease, Plaza ultimately sued AES for breach of

contract, breach of fiduciary duty, fraud, negligent misrepresentation, and “civil

conspiracy/joint and several liability.” Plaza amended its Petition and added

Sturman as a defendant. Plaza alleged that Sturman allowed AES to use her seal

4 when she was unavailable. Plaza asserted causes of action for negligence and “civil

conspiracy/joint and several liability” against Sturman. Plaza sought actual damages,

exemplary damages, and attorney’s fees.

C. Motion for Summary Judgment, Response, and Evidence

In February 2021, Sturman filed her Traditional Motion for Summary

Judgment. Sturman argued that AES admitted in its deposition that it “unilaterally

and without Defendant, Sturman’s knowledge submitted documentation bearing

Sturman’s sanitation seal signature.” Sturman contended she was entitled to

summary judgment on Plaza’s negligence and conspiracy/joint and several liability

claims, because she did not cause Plaza’s damages, and Plaza suffered no damages.

In addition to the deposition testimony, Sturman based her motion in part on the

deemed admissions since Plaza failed to answer AES’s Requests for Admissions.

Sturman did not argue that the deemed admissions were the result of flagrant bad

faith or conscious disregard of the rules on Plaza’s part. In support of her Traditional

Motion for Summary Judgment, Sturman included the following evidence: 1)

Deposition Transcript of AES’s corporate representative; 2) AES’s Requests for

Admissions to Plaintiff; and 3) Order Granting AES’s Traditional Motion for

Summary Judgment.

Plaza responded to Sturman’s Traditional Motion for Summary Judgment

contending that the deemed admissions are merit-preclusive and should be set aside

5 since Sturman was required to show that Plaza acted in “flagrant bad faith or callous

disregard,” and she failed to do so. The Response noted Plaza’s counsel was

undergoing a law firm merger and its failure to answer the Requests for Admissions

was the result of an “unfortunate oversight.” Plaza further argued that fact issues

remained pertaining to Sturman’s role in causing Tenant to terminate its lease and

what damages resulted from Sturman’s negligence. Finally, it argues that

conversations between Plaza and AES create a fact issue regarding Sturman’s

knowledge regarding AES’s use of her seal. In support of its Response, Plaza

included the following evidence: 1) Attorney Correspondence; 2) Responses to

Requests for Admission; 3) Architectural Plans for subject property; 4) Lease

Termination Letter; 5) Plaza’s Responses to Requests for Disclosure; and 6)

Business Records Provided by Antonio Plaza with conversation between Plaintiff

and AES.

The record does not show that Plaza included any evidence regarding the

oversight in answering the Requests for Admissions in its Response, and Plaza never

filed a separate motion to strike or a motion to withdraw the deemed admissions.

Instead, in March 2021, after Sturman filed her Motion for Summary Judgment,

Plaza filed Answers to AES’s Requests for Admissions and attached them as

evidence to its Response to Sturman’s Traditional Motion for Summary Judgment.

Sturman moved to strike Plaza’s Answers to AES’s Requests for Admissions and

6 argued that Plaza only responded after she filed her Traditional Motion for Summary

Judgment, waiting almost a year and a half after AES served the Requests for

Admissions. The record does not show that the trial court ever ruled on the Motion

to Strike. The trial court granted Sturman’s Traditional Motion for Summary

Judgment without specifying the basis.

II. Analysis

In its sole issue, Plaza challenges the summary judgment in favor of Sturman

arguing that: 1) the deemed admissions in this case were merit-preclusive and should

have been withdrawn; 2) the motion should have been denied, because “significant

fact issues” existed; and 3) knowledge is not required for a negligence claim, and

Plaza’s conversations with AES’s employee created a fact issue on the conspiracy

cause of action.

We review a trial court’s ruling on a motion for summary judgment de novo.

Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018); Travelers Ins. Co. v.

Joachim, 315 S.W.3d 860, 862 (Tex. 2010). In doing so, we review the evidence in

the light most favorable to the nonmovant, crediting evidence favorable to the

nonmovant and indulging every reasonable inference in its favor. See Lujan, 555

S.W.3d at 84. With a traditional motion for summary judgment, the movant has the

burden to show no genuine issue of material fact exists and it is entitled to judgment

as a matter of law. See id.; see also Tex. R. Civ. P. 166a(b), (c). “An issue is

7 conclusively established ‘if reasonable minds could not differ about the conclusion

to be drawn from the facts in the record.’” Cmty. Health Sys. Prof’l Servs. Corp. v.

Hansen, 525 S.W.3d 671, 681 (Tex. 2017) (quoting Childs v. Haussecker, 974

S.W.3d 31, 44 (Tex. 1998)). If the movant meets its burden, the burden then shifts

to the nonmovant to raise a genuine issue of material fact precluding summary

judgment. Lujan, 555 S.W.3d at 84. When the trial court fails to specify the grounds

on which it granted summary judgment, we must affirm if any of the summary

judgment grounds are meritorious. FM Props. Operating Co. v. City of Austin, 22

S.W.3d 868, 872–73 (Tex. 2000) (citation omitted).

Plaza asserted negligence and civil conspiracy claims against Sturman. The

elements of a negligence cause of action are (1) a legal duty, (2) a breach of that

duty, and (3) damages proximately caused by the breach. See Elephant Ins. Co., LLC

v. Kenyon, 644 S.W.3d 137, 144 (Tex. 2022); Kroger Co. v. Elwood, 197 S.W.3d

793, 794 (Tex. 2006). The elements of a civil conspiracy claim are (1) a combination

of two or more people; (2) to accomplish an unlawful purpose or a lawful purpose

by unlawful means; (3) a meeting of the minds on the object or course of action; (4)

one or more unlawful, overt acts; and (5) the plaintiff suffered injury as a proximate

result of the wrongful act. Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 675 (Tex.

1998); Walker v. Hartman, 516 S.W.3d 71, 81 (Tex. App.—Beaumont 2017, pet.

denied). Both causes of action have proximate cause and damages as elements. See

8 Elephant Ins. Co., 644 S.W.3d at 144 (negligence elements); Walker, 516 S.W.3d at

81 (civil conspiracy elements).

In her Traditional Motion for Summary Judgment, Sturman argued she was

entitled to summary judgment because she did not cause Plaza’s damages and Plaza

suffered no damages. “A traditional summary judgment motion is properly granted

where a defendant conclusively negates at least one essential element of a cause of

action.” Henkel v. Norman, 441 S.W.3d 249, 251 (Tex. 2014) (citation omitted). If

Sturman conclusively negates either causation or damages, as she argued in her

Traditional Motion for Summary Judgment, she is entitled to judgment as a matter

of law. See id.

In support of her argument that she did not cause Plaza’s damages, Sturman

included deposition testimony of AES’s corporate representative and business

manager, Cole Daniels. Daniels testified they worked with Sturman since 2013 and

submitted between 200 and 250 designs to her. Daniels testified that AES employee,

Cerda, used Sturman’s stamp and signature without Sturman’s knowledge in this

instance and admitted that in a phone call with Plaza. Daniels explained that they

subsequently terminated Cerda, and this was a “big reason” for terminating him.

In response to this evidence, Plaza contends a recorded transcript of a

conversation between it and Cerda created a fact issue regarding whether Sturman

knew AES used her stamp and signature. Plaza included a transcript of this recorded

9 conversation in its Response to Sturman’s Traditional Motion for Summary

Judgment.4 In this transcript, despite Cerda claiming that in the past Sturman had

authorized them to place her stamp and signature, Cerda admitted Sturman did not

authorize him to use her stamp in this case and he agreed that he put it there without

her knowledge. This transcript also reveals that Cerda admitted he did not advise

Sturman after the fact that he had used her stamp. Cerda then transferred the call to

his AES supervisor, who spoke with Plaza.

Further, Daniels testified that despite Cerda’s claims that he sent the plans

twenty days before in an earlier phone call with Plaza, Cerda did not send updated

redesigned plans to Sturman to review prior to May 10, 2018. Daniels explained they

checked the company emails to confirm, and Cerda failed to email them to Sturman

when he said he had. Daniels explained that the only time Sturman had ever allowed

them to use her stamp and signature was if she had previously reviewed and

approved the plans, and this did not occur regularly. Daniels testified he was never

under the impression, even with minor changes, that he could use her stamp before

she approved the plans. Daniels discussed two other occasions where AES had used

Sturman’s stamp with her knowledge and approval after she reviewed the plans and

could not think of any other projects where that had happened.

4This same transcript was included as an exhibit to Daniels’s deposition with Sturman’s summary judgment evidence and is discussed at length in Daniels’s deposition testimony. 10 He also explained that when his brother, Nick, spoke to Plaza on the phone

and said that Cerda had emailed the documents to Sturman, Nick was relying on

what Cerda told him, which they later learned was incorrect and it had been based

on a lie Cerda told. Daniels testified that when Nick told Plaza that he understood

why Cerda did it, he was referring to the fact that Cerda knew he would have been

in trouble if he had come to them, because the plans should have been sent before

and already been sealed.

Causation is a requisite element of negligence and civil conspiracy. See

Elephant Ins. Co., 644 S.W.3d at 144; Walker, 516 S.W.3d at 81. The summary

judgment evidence establishes that Sturman had no knowledge and did not

participate in AES using her stamp on Plaza’s redesigned septic plans that were

submitted to the MCPD. The evidence also established that Sturman had only

previously allowed AES to use her stamp and signature if she had already reviewed

and approved the plans, which did not occur here. The summary judgment evidence

conclusively negates that Sturman proximately caused Plaza’s damages, a requisite

element of both a negligence and civil conspiracy claim. See Elephant Ins. Co., 644

S.W.3d at 144; Walker, 516 S.W.3d at 81. Having conclusively negated one element,

the burden shifted to Plaza to present some evidence that showed the existence of a

genuine issue of material fact. See Lujan, 555 S.W.3d at 84 (noting shifting burden).

Sturman negated at least one essential element of each cause of action, and Plaza

11 failed to meet its burden to show the existence of an issue of material fact, and

therefore, the trial court properly granted her Traditional Motion for Summary

Judgment. See Henkel, 441 S.W.3d at 251.

Since we have determined the above-described evidence established

Sturman’s right to judgment as a matter of law, we need not address Plaza’s

argument that the deemed admissions Sturman also relied on were merit-preclusive

and should have been withdrawn. See Tex. R. App. P. 47.1 (requiring the appellate

court to hand down an opinion as short as practicable addressing every issue raised

and necessary to the appeal’s final disposition). Viewing the evidence in the light

most favorable to the nonmovant, we conclude that Sturman met her burden of

showing no genuine issues of material fact remain with respect to causation, and she

is entitled to judgment as a matter of law. See Lujan, 555 S.W.3d at 84; see also Tex.

R. Civ. P. 166a(b), (c). We reject Plaza’s arguments and overrule its sole issue.

III. Conclusion

Having overruled Plaza’s sole issue, we affirm the trial court’s judgment.

AFFIRMED.

________________________________ W. SCOTT GOLEMON Chief Justice

Submitted on August 9, 2022 Opinion Delivered December 1, 2022 Before Golemon, C.J., Horton and Johnson, JJ.