Academy of Skills v. Charter Schools

• Decision Date: 25 June 2008
• Docket Number: No. 12-07-00027-CV.,12-07-00027-CV.
• Citation: 260 S.W.3d 529
• Parties: ACADEMY OF SKILLS & KNOWLEDGE, INC., Appellant/Cross-Appellee v. CHARTER SCHOOLS, USA, INC., Appellee/Cross-Appellant.
• Court: Texas Court of Appeals

260 S.W.3d 529

ACADEMY OF SKILLS & KNOWLEDGE, INC., Appellant/Cross-Appellee v. CHARTER SCHOOLS, USA, INC., Appellee/Cross-Appellant.

No. 12-07-00027-CV.

Court of Appeals of Texas, Tyler.

June 25, 2008.

Rehearing Overruled August 28, 2008.

J. Bennett White, for Appellant.

Richard M. Grimes, W. Todd Parker, Houston, TX, for Appellee.

Panel consisted of WORTHEN, C.J., GRIFFITH, J., and HOYLE, J.

OPINION

SAM GRIFFITH, Justice.

Academy of Skills & Knowledge, Inc. ("ASK") appeals following summary judgment proceedings and a jury trial in a civil lawsuit between ASK and Charter Schools, USA, Inc. ("CSUSA"). ASK raises twelve issues on appeal. CSUSA raises three cross issues. We affirm in part, and reverse and render in part.

BACKGROUND

ASK is a Texas nonprofit corporation formed in 1996 for the purpose of providing alternative educational opportunities to children. ASK initially operated a private school, the Academy of Skills & Knowledge. In 1998, ASK converted the private school to an open enrollment charter school, retaining the name Academy of Skills & Knowledge.¹

The school experienced substantial enrollment growth as a charter school because parents were no longer required to pay private school tuition in order to enroll their children. In 2000, ASK's board of directors began to explore the possibility of employing a management company to manage its school. The directors believed that a specialized management company would possess expertise that would enhance and improve the operations and educational quality of the school.

Eventually, ASK entered into a contract for management of the school with Charter Schools USA at Academy of Skills & Knowledge, L.C. ("LC"), a wholly owned subsidiary of CSUSA. The management contract would become effective before the school's 2001-2002 school year and would continue for five years. Despite the fact that CSUSA was not explicitly granted any rights or obligated to perform any functions under the management contract, CSUSA's president, Jonathan Hage, also signed the management contract on behalf of CSUSA.

During contract negotiations, the ASK board of directors decided to relocate the school in order to accommodate a larger student population. A new, larger facility was located and a lease was entered into between ASK and the facility's owner. On September 1, 2001, ASK's school began its 2001-2002 school year at this new facility and under the new management contract.

Relations between ASK and the management companies gradually became strained. After the school year ended, the management contract was terminated. Eventually, civil litigation resulted between ASK and CSUSA, with each party asserting multiple causes of action against the other. Following summary judgment proceedings, the parties tried their remaining causes before a jury.² At the close of evidence, the trial court granted a directed verdict against ASK regarding its sole remaining cause of action, a breach of contract claim against CSUSA. Following a jury verdict, the trial court subsequently entered a judgment against ASK for $250,889.59 plus $50,000.00 for attorney's fees. This appeal followed.

SUMMARY JUDGMENT

ASK, in its first seven issues, and CSUSA, in its third cross issue, challenge various trial court orders granting partial summary judgment.

Standard of Review

We review a trial court's grant of summary judgment de novo. Mid-Century Ins. Co. of Tex. v. Ademaj, 243 S.W.3d 618, 621 (Tex.2007). When performing a de novo review, we exercise our own judgment and redetermine each legal issue. Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1999). When, as here, a party moves for both a traditional and a no evidence summary judgment, we first review the trial court's summary judgment under the no evidence standard. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex.2004). If the no evidence summary judgment was properly granted, we do not reach arguments under the traditional motion for summary judgment. See id. at 602.

In an appeal of a summary judgment proceeding, our review is a limited one. "Issues not expressly presented to the trial court by written motion, answer or other response shall not be considered on appeal as grounds for reversal." TEX.R. CIV. P. 166a(c) (emphasis added). When reviewing a summary judgment, courts of appeals should consider all summary judgment grounds ruled on by the trial court and preserved for appellate review that are necessary for final disposition of the appeal. Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex.1996). Further, an appellate court may, in the interest of judicial economy, consider other grounds that the movant preserved for review, despite the fact that the trial court did not rule on them. Id.

No Evidence Summary Judgment

Rule 166a(i) of the Texas Rules of Civil Procedure provides as follows:

No-Evidence Motion. After adequate time for discovery, a party without presenting summary judgment evidence may move for summary judgment on the ground that there is no evidence of one or more essential elements of a claim or defense on which an adverse party would have the burden of proof at trial. The motion must state the elements as to which there is no evidence. The [trial] court must grant the motion unless the respondent produces summary judgment evidence raising a genuine issue of material fact.

TEX.R. CIV. P. 166a(i). A summary judgment motion pursuant to Rule 166a(i) is essentially a motion for a pretrial directed verdict. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581-82 (Tex.2006) (citing Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex.1997)). Once such a motion is filed, the burden shifts to the nonmoving party to present evidence raising a genuine issue of material fact as to the elements specified in the motion. Mack Trucks, 206 S.W.3d at 582 (citing Havner, 953 S.W.2d at 711). A no evidence motion for summary judgment must be granted if (1) the moving party asserts that there is no evidence of one or more specified elements of a claim or defense on which the adverse party would have the burden of proof at trial; and (2) the respondent produces no summary judgment evidence raising a genuine issue of material fact on those elements. Sudan v. Sudan, 199 S.W.3d 291, 292 (Tex.2006) (per curiam) (citing TEX.R. CIV. P. 166a(i)). A fact is "material" if it affects the ultimate outcome of the lawsuit under the governing law. Pierce v. Wash. Mut. Bank, 226 S.W.3d 711, 714 (Tex.App.-Tyler 2007, pet. denied). A material fact issue is "genuine" if the evidence is such that a reasonable jury could find the fact in favor of the nonmoving party. Pierce, 226 S.W.3d at 714; see Hamilton v. Wilson, 249 S.W.3d 425, 426 (Tex.2008) (per curiam) ("We review a no-evidence summary judgment for evidence that would enable reasonable and fair-minded jurors to differ in their conclusions.").

In reviewing a ruling on a no evidence summary judgment motion, we review the evidence presented by the motion and response in the light most favorable to the nonmovant, crediting evidence favorable to that party if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. Mack Trucks, 206 S.W.3d at 582 (citing City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.2005)). A no evidence motion is properly granted if the nonmovant fails to bring forth more than a scintilla of probative evidence as to the essential element in question. Redmon v. Griffith, 202 S.W.3d 225, 232 (Tex. App.-Tyler 2006, pet. denied) (citing Havner, 953 S.W.2d at 711). If the evidence supporting a finding rises to a level that would enable reasonable, fair minded persons to differ in their conclusions, then more than a scintilla of evidence exists. Id. Less than a scintilla of evidence exists when the evidence is so weak as to do no more than create a mere surmise or suspicion of a fact, and the legal effect is that there is no evidence. Id. at 232-33 (citing Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.1983)).

Traditional Summary Judgment

Rule 166a(c) governs traditional motions for summary judgment and provides as follows:

Motion and Proceedings Thereon. The motion for summary judgment shall state the specific grounds therefor. . . . The judgment sought shall be rendered forthwith if (i) the deposition transcripts, interrogatory answers, and other discovery responses referenced or set forth in the motion or response, and (ii) the pleadings, admissions, affidavits, stipulations of the parties, and authenticated or certified public records, if any, on file at the time of the hearing, or filed thereafter and before judgment with permission of the court, show that, except as to the amount of damages, there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law on the issues expressly set out in the motion or in an answer or any other response.

TEX.R. CIV. P. 166a(c).

When reviewing a ruling on a traditional motion for summary judgment, we must examine the entire summary judgment record in the light most favorable to the nonmovant, indulging every reasonable inference and resolving any doubts against the motion. Yancy v. United Surgical Partners Int'l, Inc., 236 S.W.3d 778, 782 (Tex.2007) (citing City of Keller, 168 S.W.3d at 824-25). For a party to prevail on a traditional motion for summary judgment, it must conclusively establish the absence of any genuine issue of material fact and that it is entitled to judgment as a matter of law. TEX.R. CIV. P. 166a(c). As stated above, a fact is "material" if it affects the ultimate outcome of the lawsuit under the governing law. Pierce, 226 S.W.3d at 714. A material fact issue is "genuine" if the evidence is such that a reasonable jury could find the fact in favor of the nonmoving party. Pierce, 226 S.W.3d at 714; see Wal-Mart Stores, Inc. v. Spates, 186 S.W.3d 566, 568 (Tex.2006) (per curiam) (appellate court reviewing a summary...