Southwest Pipe Services, Inc and Joe Briers v. Sunbelt Rentals, Inc.

• Court: Court of Appeals of Texas
• Decided: March 8, 2016
• Docket: 01-15-00124-CV
• Status: Published

Opinion

Opinion issued March 8, 2016

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-15-00124-CV ——————————— SOUTHWEST PIPE SERVICES, INC. AND JOE BRIERS, Appellants V. SUNBELT RENTALS, INC., Appellee

On Appeal from the County Court at Law No. 2 Fort Bend County, Texas Trial Court Case No. 13-CCV-050901

MEMORANDUM OPINION

In this breach of contract case, Sunbelt Rentals, Inc. (“Sunbelt”) sued

Southwest Pipe Services, Inc. and its president Joe Briers (collectively, “Southwest

Pipe”) after Southwest Pipe rented machinery from Sunbelt and then failed to pay for the rentals. Sunbelt moved for summary judgment on its own claim. The trial

court granted summary judgment and awarded Sunbelt $29,731.63 in damages. In

one issue, Southwest Pipe contends that, because it raised a fact issue by

designating a responsible third party, the trial court erroneously rendered summary

judgment in favor of Sunbelt.

We affirm.

Background

Sunbelt rents equipment and machinery to other companies for use in

various projects. Southwest Pipe removes pipelines, cleans the pipe, and then

resells the pipe. In January 2008, Sunbelt and Southwest Pipe entered into an

agreement whereby Sunbelt would periodically rent equipment to Southwest Pipe

for use in its pipe-removal projects. Briers signed a personal guaranty.

From November 2011 through January 2012, Southwest Pipe rented

equipment from Sunbelt for use in removing a pipeline in Upshur County, Texas.

Sunbelt submitted periodic invoices to Southwest Pipe, totaling $29,731.63, but

Southwest Pipe never paid any of these invoices. Sunbelt filed suit against

Southwest Pipe, alleging suit on a sworn account, breach of contract and breach of

Briers’ personal guaranty, and quantum meruit.

Southwest Pipe filed an amended answer and asserted, as an affirmative

defense, that Sunbelt’s “alleged damages were the result of a responsible third

2 party.” Shortly thereafter, Southwest Pipe filed a motion for leave to designate a

responsible third party. In the motion, Southwest Pipe alleged:

Southwest Pipe Services, Inc. hired Rodney Beshears as a sub- contractor to remove an abandoned pipeline. Beshears, utilizing equipment rented from [Sunbelt], almost immediately [began] removing the pipe and selling it to a local scrap dealer and pocketing the profits. As soon as [Southwest Pipe] discovered that Beshears was misappropriating the pipe, [Southwest Pipe] filed a [temporary restraining order] to stop Beshears. The [temporary restraining order] was granted, but the [temporary injunction] was unsuccessful. Beshears continued to use the rented equipment and continued to remove and sell the pipe that belonged to [Southwest Pipe]. Thus, Beshears is at least partially responsible for the rental bills claimed by [Sunbelt].

Sunbelt did not file an objection to this designation, and the trial court signed an

order designating Beshears as a responsible third party.

Nearly one year later, in July 2014, Sunbelt moved for summary judgment

on its own claims. As summary judgment evidence, Sunbelt attached Southwest

Pipe’s credit application, Briers’ personal guaranty, and invoices relating to the

Upshur County project. Sunbelt argued that Southwest Pipe, and Briers as

guarantor, entered into an agreement with Sunbelt for Sunbelt to supply rental

equipment “to be used for the improvement of real property and various other

works performed by” Southwest Pipe. Sunbelt argued that Southwest Pipe had a

duty to pay Sunbelt for the rental equipment, but Southwest Pipe breached the

agreement by failing to pay for use of the equipment. Sunbelt further argued that it

was entitled to $29,731.63 in damages, plus pre- and post-judgment interest, and

3 attorney’s fees. It attached the affidavit of its counsel to support its request for

$2,500 in attorney’s fees.

In response, Southwest Pipe objected to Sunbelt’s use of the credit

application and the invoices, arguing that the documents were inadmissible hearsay

because Southwest Pipe had not attached a business records affidavit. Southwest

Pipe also argued that a fact issued existed as a result of the designation of Beshears

as a responsible third party. Specifically, Southwest Pipe argued “that Mr.

Beshears should be responsible for any alleged debts owed to [Sunbelt] because he

utilized the equipment for his own benefit.” Southwest Pipe pointed out that under

Texas’s proportionate liability scheme, the trial court shall grant leave to designate

a named person as a responsible third party unless another party files an objection

within fifteen days. Sunbelt did not file a motion objecting to the designation, so

the trial court was required to designate Beshears as a responsible third party, and

because the court did so, “[a] fact issue exists as to who is responsible for

payment” to Sunbelt.

On September 19, 2014, Sunbelt filed an amended motion for summary

judgment. This motion was substantively identical to Sunbelt’s first summary

judgment motion, but its exhibit containing Southwest Pipe’s credit application and

the unpaid invoices from the Upshur County project was accompanied by a

4 business records affidavit. Sunbelt set the motion for a hearing on November 12,

2014.

Southwest Pipe filed a response to the amended summary judgment motion

on November 10, 2014. Southwest Pipe again objected to Sunbelt’s summary

judgment evidence, arguing that the affiant of the business records affidavit failed

to establish that she was a custodian of records and that she was familiar with the

manner in which the records were created and maintained. The remainder of

Southwest Pipe’s response was identical to its response to Sunbelt’s first summary

judgment motion.

The trial court did not rule on Southwest Pipe’s objection to Sunbelt’s

summary judgment evidence. Instead, it granted Sunbelt’s summary judgment

motion and awarded Sunbelt $29,731.63 in damages, pre- and post-judgment

interest, and $2,500 in attorney’s fees. This appeal followed.

Summary Judgment

In its sole issue, Southwest Pipe contends that the trial court erred in

rendering summary judgment in favor of Sunbelt because Southwest Pipe

designated Beshears as a responsible third party, which creates a fact issue as to

who must pay Sunbelt.

5 A. Standard of Review

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

Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). To prevail on a

traditional summary judgment motion, the movant bears the burden of proving that

no genuine issues of material fact exist and that it is entitled to judgment as a

matter of law. TEX. R. CIV. P. 166a(c); Mann Frankfort Stein & Lipp Advisors,

Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). When a plaintiff moves for

summary judgment on its own claim, it must prove that it is entitled to judgment as

a matter of law on each element of its cause of action. See MMP, Ltd. v. Jones,

710 S.W.2d 59, 60 (Tex. 1986) (per curiam); Cleveland v. Taylor, 397 S.W.3d 683,

696–97 (Tex. App.—Houston [1st Dist.] 2012, pet. denied).

A matter is conclusively established if reasonable people could not differ as

to the conclusion to be drawn from the evidence. See City of Keller v. Wilson, 168

S.W.3d 802, 816 (Tex. 2005); Cleveland, 397 S.W.3d at 697. If the movant meets

its burden, the burden then shifts to the nonmovant to raise a genuine issue of

material fact precluding summary judgment. See Centeq Realty, Inc. v. Siegler,

899 S.W.2d 195, 197 (Tex. 1995); Goodyear Tire & Rubber Co. v. Mayes, 236

S.W.3d 754, 755 (Tex. 2007) (per curiam) (stating that summary judgment

evidence raises fact issue if reasonable and fair-minded jurors could differ in their

conclusions in light of all evidence presented). To determine if the nonmovant

6 raised a fact issue, we review the evidence in the light most favorable to the

nonmovant, crediting favorable evidence if reasonable jurors could and

disregarding contrary evidence unless reasonable jurors could not. Fielding, 289

S.W.3d at 848 (citing City of Keller, 168 S.W.3d at 827); Cleveland, 397 S.W.3d at

697. We indulge every reasonable inference and resolve any doubts in the

nonmovant’s favor. Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex.

2002) (citing Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997));

Cleveland, 397 S.W.3d at 697.

We must affirm a summary judgment order if any of the grounds presented

to the trial court are meritorious. Provident Life & Accident Ins. Co. v. Knott, 128

S.W.3d 211, 216 (Tex. 2003); Cleveland, 397 S.W.3d at 697.

B. Sunbelt’s Breach of Contract Claim

To be entitled to summary judgment on its breach of contract claim, Sunbelt

was required to conclusively establish (1) the existence of a valid contract; (2) its

own performance or tendered performance; (3) Southwest Pipe’s breach of the

contract; and (4) damages sustained as a result of the breach. See B & W Supply,

Inc. v. Beckman, 305 S.W.3d 10, 16 (Tex. App.—Houston [1st Dist.] 2009, pet.

denied) (citing Valero Mktg. & Supply Co. v. Kalama Int’l, 51 S.W.3d 345, 351

(Tex. App.—Houston [1st Dist.] 2001, no pet.)). “A breach of contract occurs

when a party fails or refuses to do something he has promised to do.” Id. (quoting

7 Mays v. Pierce, 203 S.W.3d 564, 575 (Tex. App.—Houston [14th Dist.] 2006, pet.

denied)).

As summary judgment evidence, Sunbelt attached copies of Southwest

Pipe’s 2008 application for credit with Sunbelt, as well as Briers’ personal

guaranty and the invoices relating to the rental of equipment for the Upshur County

project.1 The credit application and the invoices were accompanied by a business

records affidavit from Catherine Hargis, Sunbelt’s Corporate Collections Manager.

Hargis averred that Sunbelt “delivered all of the rental equipment in accordance

with the parties’ agreement.” She also averred:

Despite repeated requests on the part of [Sunbelt] that it be paid for such materials and equipment rental pursuant to the parties’ agreement, the [Southwest Pipe has] failed and refused to pay for same. [Southwest Pipe’s] account balance with [Sunbelt] is $29,731.63. [Southwest Pipe’s] account has been kept on a systematic record and all lawful offsets, payments, and credits, if any, have been applied or accounted for.

1 Southwest Pipe objected to Sunbelt’s Exhibit A—the credit application and the invoices—arguing that the business records affidavit failed to establish that the affiant was a custodian of records and that she was “familiar with the manner in which [Sunbelt’s] records are created and maintained by virtue of the affiant’s duties and responsibilities.” The trial court did not rule on this objection, either in the summary judgment order or in a separate order. Defects in the form of summary judgment evidence must be raised before the trial court, and the court must rule on the objection or the objection is waived. See Vasquez v. S. Tire Mart, LLC, 393 S.W.3d 814, 819 (Tex. App.—El Paso 2012, no pet.). “[A] trial court’s ruling on an objection to summary judgment evidence is not implicit in its ruling on the motion for summary judgment . . . .” Delfino v. Perry Homes, 223 S.W.3d 32, 35 (Tex. App.—Houston [1st Dist.] 2006, no pet.). Southwest Pipe points out that it objected to Sunbelt’s Exhibit A, but it does not argue on appeal that the trial court erroneously overruled its objection to this evidence. We hold, therefore, that Southwest Pipe did not preserve this issue.

8 This evidence conclusively establishes that the parties had a valid contract, that

Sunbelt tendered performance, that Southwest Pipe breached the contract by not

paying the agreed-upon rental amounts for the equipment, and that Sunbelt

sustained damages totaling $29,731.63. See id.; see also Triton 88, L.P. v. Star

Elec., L.L.C., 411 S.W.3d 42, 56 (Tex. App.—Houston [1st Dist.] 2013, no pet.)

(concluding that plaintiff conclusively established elements of breach of contract

claim in summary judgment motion by presenting invoices and affidavits

demonstrating amount owed and that invoices were unpaid).

Because Sunbelt conclusively established its right to recover damages from

Southwest Pipe on its breach of contract claim, the burden shifted to Southwest

Pipe to present summary judgment evidence raising a fact issue on an element of

Sunbelt’s claims. Southwest Pipe did not present any evidence in response to

Sunbelt’s summary judgment motion; instead, it argued solely that, because

Beshears had been designated as a responsible third party, this designation created

a fact issue “as to who is responsible for payment” to Sunbelt.

Southwest Pipe relies on Civil Practice and Remedies Code Chapter 33 to

support its argument that the designation of Beshears as a responsible third party

creates a fact issue in this case. Chapter 33 sets out the statutory scheme for the

apportionment of responsibility in tort and deceptive trade practices actions.

Villarreal v. Wells Fargo Brokerage Servs., LLC, 315 S.W.3d 109, 121 (Tex.

9 App.—Houston [1st Dist.] 2010, no pet.); see TEX. CIV. PRAC. & REM. CODE ANN.

§§ 33.001–.017 (Vernon 2015); Galbraith Eng’g Consultants, Inc. v. Pochucha,

290 S.W.3d 863, 868 (Tex. 2009) (“The proportionate responsibility scheme of

chapter 33, on the other hand, is a complex statutory scheme for the comparative

apportionment of responsibility among parties in most tort actions in Texas.”)

(emphasis added). Chapter 33, by its plain language, does not apply to breach of

contract actions. See TEX. CIV. PRAC. & REM. CODE ANN. § 33.002(a) (Vernon

2015) (providing that chapter applies to “any cause of action based on tort” or “any

action brought under the Deceptive Trade Practices-Consumer Protection Act” in

which “a defendant, settling person, or responsible third party is found responsible

for a percentage of the harm for which relief is sought”); Doncaster v. Hernaiz,

161 S.W.3d 594, 604 (Tex. App.—San Antonio 2005, no pet.) (holding that

Chapter 33’s doctrine of proportionate responsibility was not applicable because

“underlying suit lies in contract, not in tort”); see also Dugger v. Arredondo, 408

S.W.3d 825, 832 (Tex. 2013) (“When the Legislature intends an exception to

Chapter 33’s broad scheme, it creates specific exceptions for matters that are

outside the scope of proportionate responsibility.”).

Southwest Pipe argues that Sunbelt has waived any argument about the

applicability of Chapter 33 because Sunbelt did not file an objection in the trial

court to Southwest Pipe’s motion to designate Beshears as a responsible third

10 party. A “responsible third party” is “any person who is alleged to have caused or

contributed to causing in any way the harm for which recovery of damages is

sought . . . .” TEX. CIV. PRAC. & REM. CODE ANN. § 33.011(6) (Vernon 2015).

Section 33.004 provides, in relevant part:

(a) A defendant may seek to designate a person as a responsible third party by filing a motion for leave to designate that person as a responsible third party. The motion must be filed on or before the 60th day before the trial date unless the court finds good cause to allow the motion to be filed at a later date. .... (f) A court shall grant leave to designate the named person as a responsible third party unless another party files an objection to the motion for leave on or before the 15th day after the date the motion is served. .... (h) By granting a motion for leave to designate a person as a responsible third party, the person named in the motion is designated as a responsible third party for purposes of this chapter without further action by the court or any party. .... (l) After adequate time for discovery, a party may move to strike the designation of a responsible third party on the ground that there is no evidence that the designated person is responsible for any portion of the claimant’s alleged injury or damage. The court shall grant the motion to strike unless a defendant produces sufficient evidence to raise a genuine issue of fact regarding the designated person’s responsibility for the claimant’s injury or damage.

Id. § 33.004(a), (f), (h), (l) (Vernon 2015). The granting of leave to designate a

responsible third party does not, absent joinder of the third party as a defendant,

11 impose liability on the responsible third party. Flack v. Hanke, 334 S.W.3d 251,

256 (Tex. App.—San Antonio 2010, pet. denied) (citing TEX. CIV. PRAC. & REM.

CODE ANN. § 33.004(i)).

Southwest Pipe accurately points out that Sunbelt did not file an objection in

the trial court to its motion to designate Beshears as a responsible third party,

which was subsequently granted by the trial court. However, Southwest Pipe

points to no authority holding that a breach-of-contract plaintiff’s failure to object

to a motion to designate a responsible third party renders Chapter 33’s

proportionate responsibility scheme applicable to the breach of contract action,

contrary to an explicit statutory provision stating that Chapter 33 only applies to

tort and deceptive trade practices actions. See TEX. CIV. PRAC. & REM. CODE ANN.

§ 33.002(a) (providing that Chapter 33 only applies to “any cause of action based

on tort” and “any action brought under the Deceptive Trade Practices-Consumer

Protection Act”); see also F.F.P. Operating Partners, L.P. v. Duenez, 237 S.W.3d

680, 687 (Tex. 2007) (“Chapter 33 of the Texas Civil Practice and Remedies Code

governs the apportionment of responsibility in cases within its scope.”); CBI NA-

CON, Inc. v. UOP Inc., 961 S.W.2d 336, 341 (Tex. App.—Houston [1st Dist.]

1997, pet. denied) (“A breach of contract claim is not a basis for contribution under

chapter 33 of the Texas Civil Practice and Remedies Code.”). Under the facts of

this case, Southwest Pipe cannot rely on Sunbelt’s failure to object in the trial court

12 to its motion to designate Beshears as a responsible third party—or the fact that the

trial court granted the motion despite statutory language providing that the

proportionate responsibility scheme does not apply to this breach of contract

action—to create a fact issue precluding summary judgment.

Because Southwest Pipe presented no other evidence controverting any

element of Sunbelt’s breach of contract claim, we hold that Southwest Pipe did not

raise a fact issue on the claim and, thus, the trial court correctly rendered summary

judgment in favor of Sunbelt. See Centeq Realty, 899 S.W.2d at 197 (holding that

when movant conclusively establishes elements of its claim, burden shifts to

nonmovant to raise fact issue to defeat summary judgment).

We overrule Southwest Pipe’s sole issue.

Conclusion

We affirm the judgment of the trial court.

Evelyn V. Keyes Justice

Panel consists of Chief Justice Radack and Justices Keyes and Higley.