Armendariz v. Hudgens
| Decision Date | 27 July 2020 |
| Docket Number | No. 08-17-00231-CV,08-17-00231-CV |
| Citation | 618 S.W.3d 750 |
| Parties | Martin ARMENDARIZ, Appellant, v. James HUDGENS, d/b/a El Paso Cattle, GP, and John Hudgens, d/b/a El Paso Cattle, GP, Appellees. |
| Court | Texas Court of Appeals |
ATTORNEY FOR APPELLEES: Jamie T. Wall, James & Haugland, P. C., P.O. Drawer 1770, El Paso, TX 79902.
ATTORNEY FOR APPELLANT: John P. Mobbs, Attorney at Law, 6350 Escondido Drive, Suite A-14, El Paso, TX 79912.
Before Alley, C.J., Rodriguez, and Palafox, JJ.
This is an appeal from an order granting summary judgment against Appellant Martin Armendariz, dismissing his claims for breach of contract and quantum meruit against Appellees, James Hudgens, d/b/a El Paso Cattle, GP, and John Hudgens, d/b/a El Paso Cattle, GP (hereinafter "EP Cattle"). Armendariz filed suit after he sold a herd of cattle but was not fully paid under the sales contract. Under the traditional summary judgment standard, EP Cattle carried the burden to disprove as a matter of law either the existence of, or breach of the claimed contract. To do so, it needed to prevail on two issues. First, it needed to disprove that certain statements and actions of a third-party, Simon Chavez, could be imputed to EP Cattle under one or more agency theories. Second, EP Cattle needed to prove as a matter of law that its claimed role as a "consignee" in the transaction absolved it of any liability for breach of contract where the contract documents themselves state that EP Cattle was the purchaser of the cattle. We conclude that EP Cattle succeeded, but only in part on the first question, and not at all on the second. Accordingly, we reverse in part, and affirm in part the summary judgment on the contract claim. We affirm the summary judgment's dismissal of a quantum meruit claim.
In November of 2012, Armendariz and Jose Bremer, who jointly owned a herd of cattle located in Chihuahua, Mexico, looked for a cattle buyer in the United States. Bremer gave Armendariz authority to negotiate a deal with Simon Chavez, who was in the business of purchasing cattle in the El Paso area and whom Armendariz believed was "paying the best price" for cattle at that time. Armendariz initially contacted Chavez by phone in November of 2012 to begin negotiations. According to Armendariz, Chavez represented that he was the "buyer" for EP Cattle, and that he was negotiating the purchase on behalf of EP Cattle, who Chavez claimed was the actual purchaser in the transaction.1 Based on Chavez's representations, Armendariz believed that he and Bremer were selling the cattle to EP Cattle, rather than to Chavez. Armendariz and Chavez agreed upon a total net purchase price of $654,115.67, with $280,202.71 to go to Bremer, and the remainder, approximately $348,837.00, to go to Armendariz.
Chavez indeed was a cattle buyer for EP Cattle, but as it turns out, only for a specific volume of cattle of a certain weight that EP Cattle would then turn and sell to its customer, Swift & Henry. The cattle that Armendariz and Bremer were selling, however, were not in the quantity or weight class for Swift & Henry's specifications, and none of the cattle that Armendariz and Bremer sold wound up going to Swift & Henry.2
In order for the cattle to be legally crossed into the United States from Mexico, two things needed to happen. First, it was necessary to retain the services of a Mexican broker to file the proper paperwork to initiate the transfer, and second, the Mexican broker was required to consign the cattle to an entity that was bonded and authorized by the United States Department of Agriculture to accept the cattle at the border crossing. It is undisputed that Chavez did not have the necessary bonding or authority to accept the cattle for the border crossing, but that EP Cattle did. And this is where the dispute begins.
According to the deposition testimony of John Hudgens, (a partner in EP Cattle), as well as Ismael Lopez, (EP Cattle's accountant and bookkeeper), Chavez approached EP Cattle to serve as the consignee for the sale of the cattle in order to effectuate the border crossing. Hudgens testified that EP Cattle agreed to serve as the consignee and that Chavez in turn agreed to pay EP Cattle a commission for its services. EP Cattle thereafter retained the services of Miranda Brokerage to serve as the Mexican broker to authorize the shipment to the United States. Miranda Brokerage thereafter prepared two invoices, both dated December 3, 2012, for its services. The first invoice listed Bremer as the client and shipper, and EP Cattle as the consignee, specifying a total of 124 head of steers, and 890 head of heifers. A second invoice listed Armendariz as the shipper, and EP Cattle as the consignee, specifying a total of 136 steers. As noted, both invoices state that EP Cattle is the consignee, but they also both state that the cattle are "Cobrar A" EP Cattle (translated on the document as "For the account of"). Neither invoice defined the term "consignee."
It is undisputed that the entire herd of cattle crossed into the United States on that same day. The USDA border crossing documents state that the herd was sold by Bremer and Armendariz to Miranda Brokerage, who was serving as the shipper. After the cattle crossed the border, they were placed in designated and numbered pens in a cattle yard in Santa Teresa, commonly used for this purpose.
After the cattle crossed the border, Armendariz, Bremer, and Chavez met with Lopez in EP Cattle's offices in El Paso. During this meeting, Chavez, with Armendariz's authorization, gave Lopez instructions regarding the amounts owed to Armendariz and Bremer for the sale, less the commissions owed to Miranda Brokerage, and instructed Lopez on how to wire transfer the money to them. In addition, Armendariz and Bremer gave Lopez their bank account numbers, and were told they were "going to get a transfer." Although Armendariz recalled that Chavez gave instructions to Lopez on how to prepare the invoices for the sale, he admittedly did not hear what those instructions were.
During the meeting, Lopez prepared two invoices, both of which were on EP Cattle's letterhead. The first invoice had the following information:
This invoice listed a total of 890 heifers of various weights, for a total purchase price of $568,167.56, minus Miranda Brokerage's fee of $22,443.54, for a total due of $545,724.02. A comments sections appeared to have wiring instructions for the funds payable to Armendariz. The second invoice had the following information:
This invoice listed a total of 124 steers of various weights, for a total purchase price of $85,948.11, minus Miranda Brokerage's fee of $2,632.42, for a total due of $83,315.69. It had under the comments section what appear to be wiring instructions to Jose Bremer, which on our copy is struck through.
The cattle were thereafter shipped to various buyers in the United States, all of whom were Chavez's customers, with the proceeds initially going to EP Cattle and with EP Cattle later dispersing those payments to Bremer and Chavez. In particular, EP Cattle paid Bremer $280,202.71 by wire transfer on December 10, 2012, and Bremer thereafter considered that he had been paid in full for his share of the sale.3 On December 14, 2012, Armendariz received and accepted a payment of $48,837 from Chavez by wire transfer to his account. Armendariz therefore calculated that he was still owed $300,000 for the sale of the cattle.
According to Lopez, Chavez thereafter came to his office and said he had paid all the parties involved the remaining amounts they were owed, and that he was entitled to be reimbursed by EP Cattle. Based on Chavez's representation, and his calculation of the amounts remaining to be paid, Lopez generated a check for Hudgens's signature. It is undisputed that on December 19, 2012, Hudgens signed a check on EP Cattle's behalf, in the amount of $460,338.32, made out to 24 Trading Company, LLC, a d/b/a/ that Chavez had started using in April of that year. The check referenced the two invoice numbers that Lopez had prepared on the day of the cattle crossing. Hudgens testified that in signing the check, he relied on Lopez's calculations and his belief that Chavez had paid all of the parties what they were owed. And of course, had that been the case, there would be no dispute. But as the parties would later learn, Chavez failed to pay Armendariz the balance owed for the cattle.
Armendariz subsequently filed a lawsuit against EP Cattle and 24 Trading Company, LLC, raising claims for breach of contract against both entities, as well as a claim for quantum meruit. Armendariz later nonsuited its claim against 24 Trading Company, LLC after learning that it had declared bankruptcy.
For its part, EP Cattle denied that it had a contract with Armendariz, alleging that Chavez was acting as an "independent operator" in the transaction, and that he was responsible for any payment owed to Armendariz. Armendariz then filed a second amended petition, as well as a supplemental petition, alleging that Chavez had actual or apparent authority to act on EP Cattle's behalf in entering into the contract to purchase the cattle, or that EP Cattle had later ratified Chavez's actions. In addition, Armendariz asserted a claim against EP Cattle for quantum meruit, contending that EP Cattle had accepted the benefits of the transaction. In response, EP Cattle denied all of the allegations, contending that it never agreed to purchase the cattle, that its role in the transaction was limited to that of a consignee, and that it had paid all of the amounts it owed in that role without accepting or retaining any benefits in its purported role as a purchaser.
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