Chapman v. Mitsui Engineering and Shipbuilding Co., Ltd.

• Decision Date: 10 August 1989
• Docket Number: No. 01-88-01202-CV,01-88-01202-CV
• Citation: 781 S.W.2d 312
• Parties: Pat CHAPMAN, Appellant, v. MITSUI ENGINEERING AND SHIPBUILDING CO., LTD., Harlan Stein, and Gordon Bing, Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 312

781 S.W.2d 312

Pat CHAPMAN, Appellant, v. MITSUI ENGINEERING AND SHIPBUILDING CO., LTD., Harlan Stein and Gordon Bing, Appellees.

No. 01-88-01202-CV.

Court of Appeals of Texas Houston (1st Dist.).

Aug. 10, 1989.

Rehearing Denied Oct. 26, 1989.

Tom Alexander, David J. Sacks, Alexander & McEvily, Houston, for appellant.

Leymon L. Solomon, Charles S. Wuest, Chamberlin, Hrdlicka, White, Johnson & Williams, Philip P. Sudan, Jr., Jeffery T. Nobles, Ryan, Shoss, Sudan & Rothfelder, Houston, for appellees.

Before EVANS, C.J., and DUNN and MIRABAL, JJ.

OPINION

EVANS, Chief Justice.

Pat Chapman appeals from a take-nothing summary judgment in his suit against the appellees, Mitsui Engineering & Shipbuilding Co., Ltd. (Mitsui), Harlan Stein, and Gordon Bing. Chapman filed this suit in January 1987, alleging that the appellees conspired to defraud him and tortiously interfered with his business relationship with a third party, Glitsch Field Services, Inc. (Glitsch), a wholly-owned subsidiary of Foster Wheeler, Inc.

In his petition, Chapman alleged that he owned 100% of the stock in a Canadian holding company known as Paje Rosha Holdings, Ltd., which in turn owned 100% of another Canadian corporation known as Western Stress Relieving Services, Inc. (WSRSI). He alleged that WSRSI owned 100% of the stock in a Texas corporation known as Western Stress, Inc. (WSI), and that he, individually, owned 100% of the stock in a second Texas corporation known as Universal Stress Relieving, Inc. (USRI).

Chapman alleged that, in 1985, he started negotiating the sale of his stock in the latter three corporations, and that he hired the appellee, Bing, as his head negotiator. He said that Bing searched for purchasers and eventually began discussions with Mitsui, who designated the appellee, Stein, as its head negotiator. On April 16, 1986 Mitsui sent Chapman a letter indicating its intention to begin discussions concerning the acquisitions of WSI, and on April 25, 1986, Mitsui sent a proposed Letter of Understanding to Chapman regarding such negotiations. According to Chapman's petition, the terms of the April 25 letter were unacceptable as proposed, and he modified the letter and forwarded his counter-proposal to Mitsui in early May 1986. He alleged that Mitsui never responded to his counter-proposal.

Chapman alleged that he thereafter began negotiations to sell his stock in WSI and USRI to Glitsch. As a result of such negotiations, he alleged, Chapman and Glitsch entered into a letter agreement on June 18, 1986, for Glitsch's purchase of the WSI and USRI stock for $2,350,000.

One day later, June 19, 1986, Chapman alleged, he told Bing of his agreement with Glitsch, and Bing informed Stein of the Chapman/Glitsch agreement. Chapman alleged that either Stein or another Mitsui representative immediately contacted Foster Wheeler, and told it that Chapman had an exclusive agreement with Mitsui, and that Glitsch must stop all negotiations with Chapman. According to Chapman's petition, Glitsch, on receiving that advice, immediately advised Chapman that it was cancelling any contracts or negotiations between them.

Chapman alleged that Stein and Bing would have received a "hefty commission" from the sale of the stock purchase by Mitsui, but would not have received a commission on a sale of the stock to Glitsch. After the appellees allegedly interfered with his business relationship with Glitsch, causing Glitsch to terminate that deal, Chapman said Bing and Stein convinced him that further discussions with Glitsch would be meaningless. He then entered into an agreement with a wholly-owned subsidiary of Mitsui, which had been created to purchase his WSI and USRI stock. This "substitute" sale, Chapman asserts, was significantly less valuable than his deal with Glitsch, and he sold to Mitsui only to reduce his loss.

In addition to his allegations regarding tortious interference, Chapman alleged that both Stein, acting on his own behalf and on behalf of Mitsui, and Bing had defrauded him, and that "some" of the false representations made to him by Stein and Bing were: (1) Bing would represent Chapman's best interests in negotiating the stock purchase, and (2) Glitsch would no longer deal with Chapman under any circumstances.

In addition to such allegations of common law fraud, Chapman alleged that Bing and Stein had committed statutory fraud under Tex.Bus. & Com.Code Ann. sec. 27.01 (Vernon 1987), and that Mitsui, Stein, and Bing entered into a fraudulent conspiracy and took concerted action to prevent his making the sale to Glitsch and to induce him to enter into the stock purchase agreement with Mitsui.

Chapman claimed actual damages in excess of $850,000, and he also sought punitive damages and attorney's fees.

The appellees, Mitsui, Stein, and Bing, asserted affirmative defenses of privilege, estoppel, waiver, election of remedies, and laches.

Mitsui and Stein filed a joint motion for summary judgment in which they asserted that Chapman could not recover on any of his claims, because at the time he was negotiating to sell his corporations to Glitsch, he was a party to a binding agreement (the "Letter of Understanding") with Mitsui, which precluded him from negotiating a sale to anyone except Mitsui. In support of the summary judgment motion, Mitsui and Stein attached a copy of the Letter of Understanding, with Chapman's modifications, and Chapman's admissions regarding its execution. Appellee Bing filed a separate motion for summary judgment that adopted the arguments contained in the motion of Mitsui and Stein.

The trial court's docket sheet indicates that on April 26, 1988, the court granted a summary judgment for Mitsui, Stein, and Bing, and that on July 30, 1988, the court granted Chapman's "motion for rehearing." On September 1, 1988, the trial court signed the judgment, which is the subject of this appeal, that recites the court conducted a "rehearing" in the matter and that it then "reexamined the pleadings and the Summary Judgment evidence" before it.

Mitsui, Stein, and Bing argue respectively, that the additional summary judgment proof, submitted with Chapman's motion for rehearing, was not properly considered by the trial court because such materials were filed after the first hearing held in March or April 1988.

When a motion for new trial has been filed after the entry of the summary judgment, a court may usually consider only the record as it existed prior to the granting of the summary judgment. Parchman v. United Liberty Life Ins. Co., 640 S.W.2d 694, 696 (Tex.App.--Houston [14th Dist.] 1982, writ ref'd n.r.e.). Therefore, a trial court does not abuse its discretion in refusing to consider summary judgment materials filed after the summary judgment hearing. Hill v. Milani, 678 S.W.2d 203, 205 (Tex.App.--Austin 1984), aff'd, 686 S.W.2d 610 (Tex.1985); Jones v. Hubbard, 302 S.W.2d 493, 496 (Tex.Civ.App.--Waco 1957, writ ref'd n.r.e.). A trial court may, however, decide to grant a new trial and if it does so, it may proceed to consider further summary judgment motions and proof.

Here, when the trial court granted Chapman's "motion for rehearing," that ruling vacated any prior judgment in the case. A "motion for rehearing" is the equivalent of a motion for a new trial. Hill v. Bellville Gen. Hosp., 735 S.W.2d 675, 677 (Tex.App.--Houston [1st Dist.] 1987, no writ). When a court grants a new trial, the effect of its ruling is to set aside all proceedings and to reinstate the cause on the docket as though it had not been tried. Wichita Falls Traction Co. v. Cook, 122 Tex. 446, 455, 60 S.W.2d 764, 768 (Tex.Comm'n.App.1933, opinion adopted). In this case, when the court vacated its prior ruling, it did not abuse its discretion in considering summary judgment proof filed after the time of the earlier hearing.

We further note that the transcript does not contain any summary judgment other than the final judgment dated September 1, 1988, which is the subject of this appeal. Although the trial court's docket sheet indicates the court made a ruling on the motion for summary judgment in April 1988, that docket entry does not, in itself, constitute a judgment. Formby's KOA v. BHP Water Supply Corp., 730 S.W.2d 428, 430 (Tex.App.--Dallas 1987, no writ). It is possible the court simply made a preliminary ruling in April 1988, and withheld making a final decision at that time. In this respect, we note that while Chapman's motion is termed a "motion for rehearing," the name by which a motion is designated does not necessarily determine its true character. See Bryce v. Corpus Christi Area Convention and Tourist Bureau, 569 S.W.2d 496, 498 (Tex.Civ.App.--Corpus Christi 1978, writ ref'd n.r.e.).

The trial court's summary judgment does not specify the ground or grounds on which its ruling is based. Therefore, we must affirm the judgment if any theory asserted in the motion is meritorious. See Carr v. Brasher, 776 S.W.2d 567, 569 (Tex.1989).

In a single point of error, Chapman asserts that the summary judgment is erroneous because Mitsui, Stein, and Bing failed to prove, as a matter of law, that they were privileged to interfere with Chapman's contractual relations with Glitsch, or that Chapman's claims were barred, as a matter of law, by the doctrines of estoppel, waiver, laches, or election of remedies.

A claim of tortious business interference may be defeated if a defendant establishes that such interference occurred with legal justification or excuse. Sakowitz v. Steck, 669 S.W.2d 105, 107 (Tex.1984); Capital Title Co. v. Donaldson, 739 S.W.2d 384, 390 (Tex.App.--Houston [1st Dist.] 1987, no writ). The issue of privilege is an affirmative defense upon which the defendant has the burden of proof. Sterner v. Marathon Oil Co., 767 S.W.2d 686 (Tex.1989).

If a valid contract existed between Chapman and Mitsui that provided that WSI would not negotiate a sale of its assets of stock with another company until...