Double Diamond, Inc. v. Hilco Elec. Co-Op.
| Decision Date | 17 December 2003 |
| Docket Number | No. 10-02-228-CV.,10-02-228-CV. |
| Citation | 127 S.W.3d 260 |
| Parties | DOUBLE DIAMOND, INC., Appellant, v. HILCO ELECTRIC COOPERATIVE, INC., Appellee. |
| Court | Texas Court of Appeals |
R. Soltero and Karen L. Watkins, McGinnis, Lochridge & Kilgore, L.L.P., Austin, for Appellee/Respondent.
Before Chief Justice GRAY, and Justice VANCE.
This is a summary judgment case. Double Diamond, Inc. is the owner and developer of a subdivision called White Bluff, to which Hilco Electric Cooperative, Inc., a non-profit electric-cooperative corporation, provides electricity. Tex. Util.Code Ann. § 161.001-.054 (Vernon 1998 & Supp.2004). A dispute arose when Double Diamond objected to Hilco's charges for extensions of distribution lines and other facilities required to provide electricity to White Bluff. The trial court granted Hilco's motion for summary judgment in the amount of $439,456.28. We will sustain Double Diamond's challenge, reverse the judgment, and remand the cause.
In the early 1990s, Double Diamond began the development of White Bluff, a primarily residential subdivision, on land it owned in Hill County. Hilco, the sole provider of electricity to White Bluff, constructs underground and overhead electric distribution lines and other facilities and charges for this construction. For many years, Double Diamond and Hilco dealt with each other under an oral agreement concerning what charges Hilco would make for construction work to extend its distribution system. Randy Gracy, an officer of Double Diamond, worked out the arrangements with successive general managers of Hilco-first Sam Houston and later Joe Forman.
In August 1996, while Forman was still general manager, the parties signed a written agreement. The agreement provided for a substantial discount on charges Double Diamond would pay for construction to extend Hilco's distribution system in relation to the standard charges listed in Hilco's Tariff.1 The monthly revenue Hilco derived from electricity use in White Bluff was so substantial that Hilco was willing to forego some of its usual charges for construction. The written agreement states that "upon termination [of the agreement], [Hilco's] approved tariffs will be in effect." The agreement expired by its express terms in August 1997, but in November 1997, the parties extended it by written agreement. The extension agreement states that the parties "agree to extend the terms of the [agreement] on the same terms and conditions ... until August 2, 1998." When the extension expired in August 1998, Double Diamond inquired about extending it again but received no answer from Hilco. Summary judgment evidence shows, however, that from August 2, 1998, until August 23, 2000, the parties continued to deal with each other just as they had under the 1996 written agreement.
On August 23, 2000, Hilco's general manager since June 1999, Gerald Lemons, sent Double Diamond a letter which stated: "effective immediately, new construction or member requested upgrades ... will be accomplished utilizing a Contribution-In-Aide to Construction (CIAC) method," which is the procedure in the Tariff for extending Hilco's distribution system.2 In November 2000, Lemons sent another letter, this time demanding payment of $484,229.24 for work that had been performed to extend the distribution system since August 1998. Hilco later claimed that the charges were due under the terms of its Tariff for extensions of the distribution system made during the two years in dispute and that it had failed to adequately bill Double Diamond. Hilco demanded payment before it would construct any new electrical lines or facilities, but Double Diamond refused to pay. Thus, this dispute is about whether Hilco was entitled to be paid for construction work done between August 2, 1998, and August 23, 2000, according to the rates in the Tariff or whether some other agreement governed the amounts Double Diamond was obligated to pay.3
Double Diamond continued to refuse Hilco's demands and lodged a complaint with the Texas Public Utilities Commission, which took no corrective action against Hilco. In May 2001, Double Diamond sued Hilco in Travis County for injunctive relief to require Hilco to resume construction of additional electrical lines and facilities, for tortious interference, and for a declaratory judgment that it owed Hilco nothing in damages.4 Hilco filed a counterclaim for $381,610.21.5 In amended pleadings, which included sworn denials under Rules of Civil Procedure 93(10) and 185, Double Diamond asserted that: (a) by implication after August 1998, the terms of the 1996 written agreement had been extended or a new agreement entered into incorporating the same terms, and those terms controlled rather than those in the Tariff; (b) some of the back-charges Hilco was demanding were for services not rendered for or to Double Diamond; and (c) some of the back-charges were barred by limitations.
Hilco filed a motion for summary judgment based on theories of breach of contract, suit on a sworn account, and quantum meruit. It also requested that Double Diamond's suit for declaratory relief be denied. Double Diamond filed a motion for partial summary judgment claiming that any charges for services performed more than six months prior to September 1, 1999,6 were barred by limitations. In May 2002, the trial court granted Hilco's motion for summary judgment in the amount of $439,456.28, which apparently included $75,000 in attorney's fees. The court denied Double Diamond's motion for partial summary judgment.7
"Rule 166a provides a method of summarily terminating a case when it clearly appears that only a question of law is involved and that there is no genuine fact issue." Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222 (Tex.1999). The movant has the burden to prove by summary-judgment evidence that "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." Id.; Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548 (Tex.1985); Tex.R. Civ. P. 166a(c).
We review a summary judgment de novo. Rucker v. Bank One Texas, N.A., 36 S.W.3d 649, 653 (Tex.App.-Waco 2000, pet. denied). In conducting our review, we must accept as true all evidence that is favorable to Double Diamond and resolve all doubts and indulge every reasonable inference regarding the existence of a genuine issue of fact in favor of Double Diamond. Rhone-Poulenc, Inc., 997 S.W.2d at 223; Nixon, 690 S.W.2d at 548-49.
Hilco's motion for summary judgment asserted there was no fact dispute on its claims of breach of contract, suit on a sworn account, and quantum meruit. The order granting summary judgment does not state under which theory it was granted. When the trial court does not specify the basis for the summary judgment, we will affirm it if any of the movant's grounds has merit. FM Properties Operating v. City of Austin, 22 S.W.3d 868, 872-73 (Tex.2000); Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex.1995). Thus we will address all three grounds.
Double Diamond asserts: (1) after August 1998, the parties' agreement for extensions of Hilco's distribution system was an implied agreement, the terms of which were identical to the August 1996 written agreement, and therefore the rates and charges which had applied the previous two years controlled, rather than those of the Tariff; and (2) if the Tariff controlled, the amounts demanded by Hilco are inaccurate, because not all the charges billed were for services to or for the benefit of Double Diamond. Finding it dispositive, we will address the first of these two contentions.
The Tariff:
Under the terms of the Tariff, a person desiring to purchase electricity from Hilco must (1) file an "application for membership," (2) apply for service by signing Hilco's "Electric Service Agreement," and (3) provide Hilco with any easement necessary. The Electric Service Agreement incorporates the terms of the Tariff. The grant of the application operates as Hilco's acceptance of the Member's offer to purchase electric service. The Electric Service Agreement, which includes the terms of the Tariff, and the easement specify the terms of the "contract" between Hilco and the Member regarding electric service to the Member's residence or to a commercial or industrial installation.8 The tariff also provides for payment of the cost to extend distribution lines, which varies according to the status of the facility to be served: permanent single family residence, non-permanent residence, commercial or industrial installation, or subdivision development or mobile-home park. White Bluff is a subdivision development.
The Tariff provides: The Tariff provides that the developer will pay the actual cost of construction, less $1,200, prior to the commencement of construction. Under the Tariff, Double Diamond is a "developer."
To establish that the Tariff controls, Hilco says that the Tariff itself is the contract. Alternatively, it points to the express language in the 1996 written agreement, affirmed in the extension agreement, that says "upon termination [of the agreement], [Hilco's] approved tariffs will be in effect." Third, Hilco refers us to section 304.4 of the Tariff which says the "contract for electric service may be modified or terminated by the...
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