Continental Casing Corp. v Siderca Corp.

• Decision Date: 01 February 2001
• Docket Number: Nos. 14-98-01153-CV,s. 14-98-01153-CV
• Citation: 38 S.W.3d 782
• Parties: <!--38 S.W.3d 782 (Tex.App.-Houston 2001) CONTINENTAL CASING CORPORATION, Appellant v. SIDERCA CORPORATION AND SIDERCA S.A.I.C., Appellees & 14-99-01423-CV In The Fourteenth Court of Appeals
• Court: Texas Court of Appeals

Page 782

38 S.W.3d 782 (Tex.App.-Houston [14th Dist.] 2001)

CONTINENTAL CASING CORPORATION, Appellant v SIDERCA CORPORATION AND SIDERCA S.A.I.C., Appellees

Nos. 14-98-01153-CV & 14-99-01423-CV

In The Fourteenth Court of Appeals

February 1, 2001.

On Appeal from the 133rd District Court Harris County, Texas Trial Court Cause Nos. 97-38566 & 98-47681

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Panel consists of Chief Justice Murphy and Justices Amidei^* and Hudson.

CORRECTED OPINION

Hudson, Justice.

This is a consolidated appeal from two lawsuits brought by appellant, Continental Casing Corporation ("Continental"), against appellees, Siderca Corporation and Siderca S.A.I.C. (collectively "Siderca"). In the first lawsuit, Continental asserted claims against Siderca for breach of contract, breaches of fiduciary duty and the duty of good faith and fair dealing, tortious interference, and misappropriation. The trial court granted Siderca's motion for summary judgment, and Continental appeals. We affirm the judgment as to all of Continental's claims except for its cause of action for breach of contract based upon certain purchase orders, as to which we reverse and remand to the trial court for further proceedings. In the second lawsuit, Continental asserted claims against Siderca on theories of fraud. Continental later attempted to amend its petition to include additional claims and parties. The trial court struck Continental's amended pleadings as untimely filed and granted summary judgment for Siderca based on the doctrine of res judicata. Continental appeals the trial court's orders striking Continental's amended pleadings and granting summary judgment in the second lawsuit. We affirm.

Factual and Procedural Background

Siderca S.A.I.C. owns and operates a mill in Argentina that manufactures, among other things, mechanical tubing. Siderca Corporation is a wholly owned subsidiary that represents Siderca S.A.I.C. in the United States. Continental is a distributor of pipe and mechanical tubing. In early 1994, Siderca and Continental began having discussions about the possibility that Continental might become a distributor of Siderca's mechanical tubing. During the course of these discussions, Continental prepared a one-page written agreement and forwarded a copy to Siderca. It is undisputed that this document was never signed, nor was there any other signed, written agreement between Continental and Siderca.

In October 1994, Continental's vice president, Dan Benditz, met with Siderca's president, Alfredo Indaco, to address certain concerns Continental had with respect to the parties' business dealings. According to Continental, Indaco confirmed at this meeting that the parties had an agreement encompassing the terms set forth in the document that had been forwarded to Siderca. Contrary to the terms of this oral agreement, Continental alleges that Siderca accepted and negotiated orders and sold mechanical tubing directly to Continental's customers and violated various other duties Siderca owed as a result of the parties' business relationship.

Between October 1994 and July 1996, Continental placed purchase orders for mechanical tubing with Siderca on behalf of one of Continental's customers, ABB Vetco ("Vetco"). According to Continental's petition, it incurred damages when Siderca failed to fulfill these orders in an appropriate or timely manner.

Continental filed suit against Siderca alleging breach of the parties' oral agreement, breach of the purchase orders obtained by Continental for Vetco, breach of fiduciary duty, breach of the duty of good faith and fair dealing, tortious interference with contract, tortious interference with prospective business relations, and misappropriation of proprietary and confidential information. On August 24, 1998, the trial court granted Siderca's motion for summary judgment and ordered that Continental take nothing on its claims. Continental filed its notice of appeal on September 22, 1998.

On October 5, 1998, Continental filed a second lawsuit against Siderca, alleging fraud, fraudulent inducement, fraudulent concealment, and non-disclosure. Continental's claims in the second lawsuit were based on various promises and representations allegedly made by Siderca during the parties' 1994 discussions and the October 1994 meeting between Benditz and Indaco. Siderca moved for summary judgment based on the doctrine of res judicata. At the trial court's suggestion, Siderca filed a special exception to Continental's First Amended Original Petition. The trial court granted Siderca's special exception and on May 3, 1999, ordered Continental, within seven days of the court's order, either to file an amended petition stating causes of action not barred by res judicata or to advise the trial court that it intended to stand on its current petition for purposes of the pending summary judgment motion.

Continental did not amend its petition within seven days of May 3, and Siderca renewed its motion for summary judgment on May 14, 1999, and set the motion for submission on June 7, 1999. On May 19, and then again on June 1, 1999, Continental filed amended petitions purporting to add new defendants and raise additional claims. The trial court granted Siderca's motion to strike these amended petitions. The court also granted Siderca's motion for summary judgment and ordered that Continental take nothing on its claims. Continental filed a motion for new trial which the trial court denied. Continental appeals the orders (1) striking Continental's amended pleadings, (2) granting Siderca's motion for summary judgment, and (3) denying Continental's motion for new trial. This Court granted Siderca's unopposed motion to consolidate the two appeals.

Continental's First Lawsuit

On appeal from the summary judgment in its first lawsuit, Continental raises 18 points of error contending the trial court erred in granting summary judgment to Siderca for various reasons.

The standard for reviewing the granting of a motion for summary judgment is well established. Summary judgment is proper if the defendant, as the movant, disproves at least one element of each of the plaintiff's claims or establishes all elements of an affirmative defense to each claim. See American Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). The movant has the burden of showing there is no genuine issue of material fact and it is entitled to judgment as a matter of law. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). In deciding whether there is a disputed material fact issue precluding summary judgment, proof favorable to the non-movant is taken as true and the court must indulge every reasonable inference and resolve any doubts in favor of the non-movant. See id. at 548-49.

In the order granting summary judgment in favor of Siderca, the court did not state the specific grounds for its ruling. Therefore, we will affirm if any of the theories advanced in Siderca's motion for summary judgment are meritorious. See Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989).

A. Continental's Contract Claims

1. Breach of the alleged oral agreement

In its first six points of error, Continental contends Siderca has failed to meet its summary judgment burden and that genuine issues of material fact surround the existence of an oral agreement between Continental and Siderca, and whether this alleged agreement is enforceable under the statutes of frauds found in the Uniform Commercial Code and the Civil Practice and Remedies Code.

Texas's version of the Uniform Commercial Code's statute of frauds is set forth in Section 2.201 of the Texas Business and Commerce Code. Section 2.201(a) states, in pertinent part:

Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. . . .

Tex. Bus. & Com. Code Ann. § 2.201(a) (Vernon 1994). The record contains no writing signed by Siderca or any authorized agent or broker evidencing the existence of an agreement. Thus, if the alleged agreement is subject to Section 2.201, it is unenforceable as a matter of law.

Whether a contract falls within the statute of frauds is a question of law. Flo Trend Sys., Inc. v. Allwaste, Inc., 948 S.W.2d 4, 9 (Tex. App.--Houston [14th Dist.] 1997, no writ). Where a contract contains a mix of sales and services, the UCC applies if the sale of goods is the "dominant factor" or "essence" of the transaction. See, e.g., WesTech Eng'g, Inc. v. Clearwater Constructors, Inc., 835 S.W.2d 190, 197 (Tex. App.--Austin 1992, no writ). Siderca necessarily concedes that the alleged agreement in this case contains a mix of sales and services. Thus, to determine whether the UCC statute of frauds applies in this case, we must decide whether the dominant factor or essence of this alleged agreement is a "contract for the sale of goods."

The mechanical tubing to be supplied by Siderca is without question a "good" as defined by the UCC. See Tex. Bus. & Com. Code Ann. § 2.105. The UCC states that a "contract for sale" includes both a present sale of goods and a contract to sell goods at a future time. Id. § 2.106. The unsigned written "agreement" prepared by Continental and forwarded to Siderca states that Continental

will engage in aggressive sales activity in all possible markets in the position as a "prime customer" of the works without direct commissions, renumeration or specific consideration; rather, for the materials at a negotiated and agreed price and delivery on a case by case basis.

(Emphasis added). Continental's witnesses testified that this form of agreement constituted the terms on which the oral agreement was subsequently founded.

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