Beesley v. Hydrocarbon Separation, Inc.

• Citation: 358 S.W.3d 415
• Decision Date: 03 January 2012
• Docket Number: No. 05–10–00252–CV.,05–10–00252–CV.
• Parties: Charles Robert BEESLEY, Appellant, v. HYDROCARBON SEPARATION, INC. and Wilfred Gary McPeak, Appellees.
• Court: Court of Appeals of Texas

358 S.W.3d 415

Charles Robert BEESLEY, Appellant,

v.HYDROCARBON SEPARATION, INC. and Wilfred Gary McPeak, Appellees.

No. 05–10–00252–CV.

Court of Appeals of Texas, Dallas.

Jan. 3, 2012.

David Jefrie Mizgala and Richard M. Hunt, Munsch Hardt Kopf & Harr, P.C., Dallas, TX, for Appellant.

Cody L. Towns, Rodriguez Ghrayeb & Gerscg, LLP, Jeffrey S. Tolley, Rodriguez Davis Ghorayeb Gersch & Towns, P.C., Chad M. Ruback, The Ruback Law Firm, Dallas, TX, for Appellees.

Before Justices BRIDGES, MARTIN RICHTER, and MURPHY.

OPINION

Opinion By Justice MURPHY.

Appellant Charles Robert Beesley sued appellees Hydrocarbon Separation, Inc. (HSI) and Wilfred Gary McPeak for breach of contract and fraud. The trial court granted appellees' motions for summary judgment. We affirm the trial court's judgment in part, reverse in part, and remand the cause.

Background

In 1992, HSI purchased all of the shares of Dell Chemical and Marketing Limited (Dell Chemical), a Canadian corporation owned by Beesley. Dell Chemical owned the formula for a product called Value 100 used in cleaning hydrocarbons from oil field equipment. In connection with the purchase, Beesley and HSI entered into two agreements, the Agreement for Sale of Shares, and the Contract for Provision of Services (referred to by Beesley as the Employment Contract), both dated November 20, 1992. Both agreements included provisions by which Beesley would be employed by HSI as a consultant. The Agreement for Sale of Shares provided:

6. By way of a consultancy contract agreement, the Buyer [HSI] agrees to employ the Seller [Beesley] as a consultant for a period of ten years at an annual fee of FIFTY THOUSAND DOLLARS ($50, 000.00) Canadian per year commencing January 1, 1994.

The Employment Contract provided:

2. PAYMENT

(1) As full consideration for performance hereof, [HSI] will pay Consultant on the basis specified in Schedule “B”, “Payment,” attached hereto.

Schedule B in its entirety provided: “Consultant shall be paid $50,000 (Fifty Thousand) Canadian in arrears per annum for services rendered.” Beesley's services were to commence on January 1, 1994, and “be completed by December 31, 2003.” The agreement would terminate on December 31, 2003, unless the parties elected to renew it, but even if renewed, the agreement would terminate on December 31, 2005.

HSI, a Texas corporation, was incorporated after the agreements were signed. The summary judgment evidence shows HSI was incorporated in February 1993. On December 1, 1993, Beesley entered into an agreement entitled “Contract for Provision of Services Addition” (Addition) with a corporation identified as “Hydrocarbon Separation Inc. (HCI) ... a Cyprus, Nicosia corporation” (HCI Cyprus). This Addition permitted HCI Cyprus to pay Beesley $100,000 for the formulas and blending procedures for Value 100. The Addition also provided, “[t]his agreement when exercised by HCI will render null and void any other financial commitments which HCI may have to [Beesley].” Neither party performed under the Addition, and HCI Cyprus is not a party to this lawsuit. ¹ In interrogatory responses, HCI stated that “sometime in 1993 or 1994,” it transferred its ownership interest in Dell Chemical to an entity called Texas Industries, Ltd. On February 2, 1996, the corporate charter of HSI was forfeited for failure to file a franchise tax report.

Although HSI paid the consideration under the Agreement for Sale of Shares, it is undisputed that HSI never made any payments under the agreements to Beesley for consulting services. On December 17, 2003, McPeak sent Beesley a letter terminating the Contract for Provision of Services. On January 13, 2004, Beesley sent an invoice to McPeak and HSI for $500,000 Canadian for his service. Neither HSI nor McPeak paid the invoice, and on December 3, 2007, Beesley sued HSI and McPeak for breach of contract and fraud. The trial court granted summary judgment for HSI and McPeak on all of Beesley's claims. Beesley appeals only the portion of the judgment regarding his claims for breach of contract.

Standards of Review

We review summary judgments under well-established standards. See Tex.R. Civ. P. 166a; Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex.1985) (traditional motions under Rule 166a(c)); Gen. Mills Rests., Inc. v. Texas Wings, Inc., 12 S.W.3d 827, 832–33 (Tex.App.-Dallas 2000, no pet.) (no-evidence motions under Rule 166a(i)). A defendant who moves for summary judgment pursuant to rule 166a(c) must show the plaintiff has no cause of action. A defendant may meet this burden by disproving at least one essential element of each theory of recovery or by conclusively proving all elements of an affirmative defense. See Gen. Mills Rests., 12 S.W.3d at 832. A matter is conclusively established if ordinary minds cannot differ as to the conclusion to be drawn from the evidence. AN Collision Ctr. of Addison, Inc. v. Town of Addison, 310 S.W.3d 191, 193 (Tex.App.-Dallas 2010, no pet.). The movant has the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Sysco Food Servs., Inc. v. Trapnell, 890 S.W.2d 796, 800 (Tex.1994). In deciding whether a disputed material fact issue exists precluding summary judgment, evidence favorable to the non-movant will be taken as true. Id. Every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in its favor. Id. We review a summary judgment de novo to determine whether a party's right to prevail is established as a matter of law. Dickey v. Club Corp. of Am., 12 S.W.3d 172, 175 (Tex.App.-Dallas 2000, pet. denied).

We review a no-evidence summary-judgment motion under the same legal sufficiency standard used to review a directed verdict. See Tex.R. Civ. P. 166a(i); Gen. Mills Rests., 12 S.W.3d at 832–33. We must determine whether the non-movant produced more than a scintilla of probative evidence to raise a fact issue on the material questions presented. See Gen. Mills, 12 S.W.3d at 833. 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. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex.2003) (quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.1983)). As with traditional motions, we consider the evidence in the light most favorable to the non-movant. Id.

Issues

In a single issue, Beesley contends the trial court erred by granting appellees' motions for summary judgment on his claim for breach of contract. Beesley contends the summary judgment evidence demonstrated the existence of genuine issues of material fact on every challenged element of his contract claim and on at least one element of each affirmative defense asserted by appellees.

Discussion

The trial court first granted partial summary judgment for McPeak and HSI on their affirmative defense of limitations. In its order, the trial court concluded:

Plaintiff [Beesley] has brought a breach of contract claim against Defendants [McPeak and HSI], alleging that Defendants breached their contract with Plaintiff by failing to make ten annual payments of $50,000 per year in exchange for Plaintiff providing certain consulting services during the period 1994 to 2003. Based on the summary judgment evidence before it, the Court finds that the written contracts between the parties unambiguously require that payment for each calendar year period of service be made during the following calendar year, the first payment thus becoming due in 1995 (for services rendered in 1994) and the final payment becoming due in 2004 (for services rendered in 2003). As Plaintiff did not bring suit until December 3, 2007, claims for all but the final two annual payments (for services allegedly provided in 2002 and 2003) are barred by the statute of limitations.

McPeak then filed a motion for summary judgment contending he was not individually liable on the contracts, and HSI moved for summary judgment based on its dissolution. The trial court granted these motions, and judgment was entered that Beesley take nothing on his claims. Because these latter motions address Beesley's entire claim, we address them first.

1. Dissolution of HSI

HSI moved for summary judgment alleging that Beesley's claims were barred because they were asserted more than three years after HSI was dissolved. Citing article 7.12 of the Texas Business Corporations Act, HSI contended Beesley was required to assert his claims “before the expiration of the three year period following the date of dissolution.” See Tex. Bus. Corp. Act Ann. art. 7.12 (expired January 1, 2010).² With its motion for summary judgment, HSI submitted a certified copy of a notice of tax forfeiture from the Texas Secretary of State dated February 13, 1996. Former article 7.12(F)(1)(e) provided that a corporation whose charter was forfeited pursuant to the Texas Tax Code was “dissolved” for purposes of article 7.12.

In response, Beesley raised two issues. First, he argued that HSI's judicial admissions precluded summary judgment because they at least raised a fact issue as to HSI's continued corporate existence. Second, he argued that HSI had failed to file a verified denial as required by Rule 93, Texas Rules of Civil Procedure.³ With respect to the judicial admissions, Beesley pointed to allegations in HSI's “Amended Original Answer and Counterclaim” filed on April 24, 2009. This answer included an allegation by HSI that “HSI is the proper party to sue for breach of contract.” HSI also pleaded that it was entitled to recover its costs and attorney's fees. Beesley also pointed to HSI's “Original Counterclaim and Third Party Petition” filed on November 21, 2008. In this pleading, HSI alleged it was a corporation organized under the laws of the State of Texas with its principal place of business in Texas. Beesley argued this was an admission against interest that “may be used as evidence against the...