Equisource Realty Corp. v. Crown Life Ins. Co.

• Decision Date: 19 April 1993
• Docket Number: No. 05-92-01144-CV,05-92-01144-CV
• Citation: 854 S.W.2d 691
• Parties: EQUISOURCE REALTY CORPORATION, Appellant, v. CROWN LIFE INSURANCE COMPANY, Appellee.
• Court: Texas Court of Appeals

Page 691

854 S.W.2d 691

EQUISOURCE REALTY CORPORATION, Appellant, v. CROWN LIFE INSURANCE COMPANY, Appellee.

No. 05-92-01144-CV.

Court of Appeals of Texas,

Dallas.

April 19, 1993.

John H. Carney, Dallas, for appellant.

David Hicks, Dallas, for appellee.

Before LAGARDE, MALONEY and MORRIS, JJ.

OPINION

LAGARDE, Justice.

Equisource Realty Corporation appeals the summary judgment entered for Crown Life Insurance Company in the amount of $45,000 plus attorney's fees. Equisource brings three points of error contending that (a) the trial court erred in entering summary judgment for Crown because there are genuine issues of material fact and because Crown failed to establish its entitlement to summary judgment as a matter of law; and (b) the trial court erred in entering declaratory judgment for Crown because this cause of action is not appropriate for declaratory judgment. We sustain Equisource's first point in part and overrule the other points. We reverse the trial court's judgment insofar as it relates to Crown's claim for "wrongful notice of lis pendens/slander of title" and remand that cause of action to the trial court. We affirm the trial court's judgment in all other respects.

FACTUAL BACKGROUND

In June 1990, Equisource, as purchaser, and Crown, as seller, entered into a purchase and sale contract for an apartment complex. The contract designated Stewart Title Company as the "Title Company" in the contract and stated that Stewart Title was to hold the earnest money deposited by Equisource. The contract did not contain a separate escrow agreement. Pursuant to the contract, Equisource deposited "initial earnest money" of $25,000 with Stewart Title.

The contract provided that Equisource would have an inspection period expiring on July 20, at the end of which if Equisource wanted to continue under the contract, it had to deposit $25,000 "additional earnest money" with Stewart Title. If Equisource chose to terminate the contract, then it had to send notice of termination to Crown, and Stewart would refund the initial earnest money to it. If the inspection period expired before Equisource deposited the additional earnest money with Stewart Title or sent notice of termination to Crown, then the contract would be terminated, and Equisource would forfeit the initial earnest money to Crown.

On July 19, Equisource notified Crown by certified letter that it was terminating the contract. On July 20, Equisource and Crown agreed to an extension of the inspection period to August 10. The extension required Equisource to deposit an additional $20,000 as initial earnest money, bringing the total initial earnest money to $45,000. Equisource deposited the extra initial earnest money, and the parties treated the contract as still continuing. On August 10, Equisource, through its attorney in fact, notified Stewart Title, not Crown, of its intention to terminate the contract. Stewart Title then tried to send notice of the termination to Crown by telecopier but was unable to successfully send the notice. Neither Stewart Title nor Equisource mailed a copy of the notice to Crown or sent the notice by any other means set out in the contract for sending notice. On August 13, Crown's attorneys sent a letter to Equisource stating that Equisource had failed to either timely notify Crown of its election to terminate the contract or to deposit the additional earnest money and had thus forfeited the initial earnest money to Crown as liquidated damages.

THE PLEADINGS

The record shows that Equisource sued Crown and Stewart Title for breach of contract. Equisource also sued Stewart Title for breach of fiduciary duty, negligence and violations of the Texas Deceptive Trade Practices-Consumer Protection Act and alleged that Crown was liable under the doctrine of respondeat superior as Stewart Title's principal. Stewart Title interpleaded the $45,000 initial earnest money, counterclaimed against Equisource, and crossclaimed against Crown. ¹ Crown counterclaimed against Equisource for declaratory judgment, breach of contract, and "wrongful notice of lis pendens/slander of title." ² The record does not contain an answer or the pleading of any affirmative defenses by Equisource to Crown's counterclaim. Crown moved for summary judgment on its counterclaim, and the trial court granted Crown's motion, dismissed Equisource's claims against Crown, and awarded Crown the $45,000 initial earnest money, plus attorney's fees. The trial court then severed Crown's judgment from Equisource's claims against Stewart Title.

STANDARD OF REVIEW

The function of a summary judgment is not to deprive a litigant of its right to a full hearing on the merits of any real issue of fact but is to eliminate patently unmeritorious claims and untenable defenses. Gulbenkian v. Penn, 151 Tex. 412, 416, 252 S.W.2d 929, 931 (1952). The standards for reviewing a motion for summary judgment are:

1. The movant for summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law.

2. In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true.

3. Every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor.

Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985); Montgomery v. Kennedy, 669 S.W.2d 309, 310-11 (Tex.1984); Wilcox v. St. Mary's Univ., 531 S.W.2d 589, 592-93 (Tex.1975). The purpose of the summary judgment rule is not to provide either a trial by deposition or a trial by affidavit but to provide a method of summarily terminating a case when it clearly appears that only a question of law is involved and that no genuine issue of material fact remains. Gaines v. Hamman, 163 Tex. 618, 626, 358 S.W.2d 557, 563 (1962).

A movant must show its entitlement to summary judgment on the issues expressly presented to the trial court by conclusively proving all essential elements of its cause of action or defense as a matter of law. See Swilley v. Hughes, 488 S.W.2d 64, 67 (Tex.1972). The trial court may not grant summary judgment by default against the nonmovant for failing to respond to the motion when the movant's summary judgment proof is legally insufficient. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979).

A nonmovant need not answer or respond to a motion for summary judgment to contend on appeal that the grounds expressly presented by the movant's motion are insufficient as a matter of law to support summary judgment. However, the nonmovant may not raise any other issues as grounds for reversal. City of Houston, 589 S.W.2d at 678. Where the nonmovant has a crossaction pending against the movant, the nonmovant can defeat the summary judgment by presenting evidence raising a genuine issue of material fact on its crossaction. Maddox v. Oldham Little Church Found., 411 S.W.2d 375, 378 (Tex.Civ.App.--Tyler 1967, writ ref'd n.r.e.).

Except to attack the legal sufficiency of the movant's grounds for summary judgment, the nonmovant must expressly present to the trial court any reason for avoiding the movant's entitlement to summary judgment. The nonmovant must present summary judgment proof when necessary to show a fact issue. The nonmovant must expressly present to the trial court in a written answer or response to the motion those issues that would defeat the movant's right to summary judgment and failing to do so, may not assign them on appeal as error. TEX.R.CIV.P. 166a(c); City of Houston, 589 S.W.2d at 678-79.

CROWN'S ENTITLEMENT TO JUDGMENT AS A MATTER OF LAW

In its first point of error, Equisource contends that the trial court erred in entering summary judgment because Crown failed to establish that it was entitled to judgment as a matter of law. Equisource argues that (a) the affidavit of Ted Freed does not establish how he acquired personal knowledge of the facts alleged in the affidavit; (b) Freed's affidavit is insufficient to establish Crown's counterclaims or to defeat Equisource's claims; and (c) Crown's motion for summary judgment fails to address its claim for wrongful notice of lis pendens/slander of title.

A. Freed's Personal Knowledge

Equisource argues that the affidavit of Ted Freed was improper summary judgment evidence by Crown because the affidavit failed to establish how Freed acquired personal knowledge of the facts in the affidavit. In the affidavit, Freed stated:

1. "My name is Ted Freed. I am over the age of twenty-one years, of sound mind, and competent to testify. All of the matters stated herein are within my personal knowledge, and are true and correct.

2. "I am the Director of Property Dispositions for Crown Life Insurance Company, and have held that position since April, 1990."

This Court faced a similar situation in Jackson T. Fulgham Co. v. Stewart Title Guaranty Co., 649 S.W.2d 128 (Tex.App.--Dallas 1983, writ ref'd n.r.e.). In Jackson T. Fulgham Co., we held that although an affidavit must state more than that the affiant "has personal knowledge," the affidavit met the personal knowledge requirement by the affiant's stating that he was the vice president of the movant. Jackson T. Fulgham Co., 649 S.W.2d at 130; see also City of Dallas v. Continental Airlines, Inc., 735 S.W.2d 496, 501 (Tex.App.--Dallas 1987, writ denied) (relying on Jackson T. Fulgham ). Likewise, Freed's position as Director of Property Dispositions for Crown is sufficient to show the origin of his personal knowledge of the facts surrounding this attempted real estate venture.

B. Sufficiency of Summary Judgment Evidence

Equisource argues that Freed's affidavit is insufficient to establish Crown's entitlement to judgment as a matter of law on its counterclaims. To prove its entitlement to summary judgment on its claims for declaratory judgment and breach of contract, Crown had to prove conclusively that (...