Fred Loya Ins. Agency, Inc. v. Cohen

• Decision Date: 31 October 2014
• Docket Number: No. 08–12–00281–CV.,08–12–00281–CV.
• Citation: 446 S.W.3d 913
• Parties: FRED LOYA INSURANCE AGENCY, INC., and Loya Insurance Company, Appellants/Cross–Appellees, v. Martin W. COHEN, Martin W. Cohen & Co., and Nehoc Advisors, Inc., Appellees/Cross–Appellants.
• Court: Texas Court of Appeals

446 S.W.3d 913

FRED LOYA INSURANCE AGENCY, INC., and Loya Insurance Company, Appellants/Cross–Appellees

v.Martin W. COHEN, Martin W. Cohen & Co., and Nehoc Advisors, Inc., Appellees/Cross–Appellants.

No. 08–12–00281–CV.

Court of Appeals of Texas, El Paso.

Oct. 31, 2014.

S. Anthony Safi, Mounce, Green, Myers, Safi & Galatzen, El Paso, TX, Grant Cook, Greenberg Traurig, LLP, Houston, TX, for Appellants.

Jeremy C. Martin, Malouf & Nockels, Dallas, TX, for Appellees.

Before McCLURE, C.J., RIVERA, not participating, and RODRIGUEZ, JJ.

OPINION

ANN CRAWFORD McCLURE, Chief Justice.

This is a double appeal arising from the trial court's rulings on competing motions for summary judgment. Fred Loya Insurance Agency, Inc. (the Agency), and Loya Insurance Company (the Company)(collectively Loya) challenge the summary judgment granted in favor of Martin W. Cohen (Martin), Martin W. Cohen & Company (Cohen & Company), and Nehoc Advisors, Inc. (Nehoc), (collectively, “Cohen”) on Loya's breach of fiduciary duty claim and the award of attorney's fees. In its cross-appeal, Cohen complains of orders striking its summary judgment affidavit, granting Loya's traditional and no-evidence summary judgment motions, and denying Cohen's motion to reconsider the traditional summary judgment motion, and final judgment.¹ For the reasons that follow, we affirm.

FACTUAL SUMMARY

In July 2001, Loya executed a written contract engaging the professional accounting services of Cohen to assist in acquiring financing that would permit Loya to operate its business without need of obtaining reinsurance for the insurance policies it was selling and to represent Loya in matters before the Texas Department of Insurance as they related to alterations in Loya's method of conducting its business. Cohen also registered as a lobbyist for Loya. Loya agreed to compensate Cohen on an hourly-rate basis.

On August 7, 2002, the parties entered into a verbal agreement whereby Loya would compensate Cohen 1% of the written premium revenue reinsured, (the 1% Agreement), payable monthly. According to Loya, Cohen was to assist in obtaining financing sufficient to allow Loya to reinsure insurance premiums on policies produced by the Agency, and to continue to provide accounting services. Cohen would submit monthly invoices amounting to 1% of the written premium revenues of the preceding month, and all other accounting services through Cohen's CPA firm would be billed on varying hourly rates.

By letter dated February 20, 2009, Loya provided written notice to Cohen that it was terminating their agreement and relationship effective December 31, 2008. Loya filed suit seeking a declaratory judgment that because the 1% Agreement had an indefinite term, Loya was entitled to terminate the agreement at any time upon notice to Cohen, and that the agreement was effectively terminated on February 20, 2009. Loya alternatively sought a declaratory judgment that a reasonable period of time had elapsed “for the duration of the 1% Agreement” prior to December 31, 2008, and Loya was entitled to terminate that agreement effective February 20, 2009. Loya's amended petition alleged a breach of fiduciary duty cause of action alleging that Martin, in his capacity as a certified public accountant and agent of Loya, breached his duties to Loya. Cohen counter-claimed for breach of contract and fraud, and alternatively presented a claim for quantum meruit, which it later declined to pursue.

On March 18, 2011, Loya filed its motion for partial summary judgment on its declaratory action. Loya also sought a defensive partial summary judgment dismissing Cohen's alternative quantum meruit claim. In its order on Loya's motions for partial summary judgment, the trial court recalled that Cohen had stipulated that it was withdrawing with prejudice its claim for relief on the theory of quantum meruit. It granted summary judgment in favor of Loya, declaring that the oral 1% Agreement was terminable by either party upon notice to the other without any further obligations, Loya properly terminated the 1% agreement by letter dated February 20, 2009, termination of the 1% Agreement was effective on that date, and Loya had no further liability to Cohen after that date. The trial court dismissed Cohen's counterclaim alleging breach of contract for the period following February 20, 2009, but did not dismiss that claim for the period through February 20, 2009.

On June 10, 2011, Cohen filed its motion for partial summary judgment asserting that no evidence supported Loya's breach of fiduciary duty cause of action and that Loya, having obtained summary judgment that the 1% Agreement was terminable at will, should not be permitted to seek recovery based upon that agreement not being terminable at will. The trial court granted Cohen's motion and ordered that Loya take nothing on its breach of fiduciary duty claim.

On September 6, 2011, Loya filed its no-evidence motion for summary judgment with regard to Cohen's claim of fraudulent inducement. The trial court granted Loya's motion.

On December 15, 2011, Cohen filed its motion for partial summary judgment asserting that there was no genuine issue of any material fact concerning the elements of its breach of contract claim. On January 24, 2012, the trial court entered an agreed order granting the motion in part and denying it in part. The court awarded Cohen $537,779.20 as compensation under the 1% Agreement for the period of January 1, 2009, through February 20, 2009, with pre-judgment interest from June 5, 2009, through entry of final judgment, subject to its final determination by separate order of the merits of Loya's claims that Cohen breached its fiduciary duties. The trial court also ordered that Cohen recover post-judgment interest after entry of final judgment and reasonable attorneys' fees necessary to recover and collect the full amount of Cohen's contract claims, leaving for further resolution Loya's costs, including reasonable and necessary attorneys' fees, under the declaratory judgment statute.

In its final judgment, pursuant to its prior summary judgment rulings, the trial court declared that Loya properly terminated its oral agreement with Cohen on February 20, 2009, and had no further liability to Cohen under the 1% Agreement after that date. It ordered that (1) Cohen take nothing on its breach of contract claims against the Agency for any fees under the 1% Agreement allegedly owed after February 20, 2009; (2) the Agency and Company take nothing on their breach of fiduciary duty claims and defenses; (3) Cohen take nothing by reason of its fraudulent inducement counterclaims; (4) Cohen recover from the Agency the principal sum of $537,779.20 as compensation pursuant to the 1% Agreement for the period of January 1, 2009, through February 20, 2009; and (5) Cohen recover from the Agency pre-judgment and post-judgment interest and its reasonable and necessary attorney's fees.

The trial court awarded Loya attorneys' fees in the amounts of $211,030 for the work performed by The Cook Law Firm, and $37,185 for the work performed by Mounce, Green, Myers, Safi, Paxson & Galatzen P.C. in the successful declaratory judgment claim. It awarded Cohen attorneys' fees in the sums of $300,696 for services performed by Beck & Hall and $15,000 for services performed by David Evans. The court denied recovery for attorneys' fees incurred by Richard Forrest and Enrique Moreno. The trial court also awarded attorneys' fees to the parties in the event of appeal.

STANDARD OF REVIEW

We review a trial court's summary judgment de novo . Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.2009). Our review is limited to consideration of the summary judgment evidence presented to the trial court. See Tex.R. Civ. P. 166a(c) (no oral testimony may be considered in support of a motion for summary judgment); Chappell v. Allen, 414 S.W.3d 316, 321 (Tex.App.-El Paso 2013, no pet.) (scope of review limited to summary judgment record upon which trial court's ruling was based); Garcia v. BNSF Ry. Co., 387 S.W.3d 763, 766 (Tex.App.-El Paso 2012, no pet.) ; Mathis v. Restoration Builders, Inc., 231 S.W.3d 47, 52 (Tex.App.-Houston [14th Dist.] 2007, no pet.). When the trial court does not specify the grounds for its ruling, a summary judgment must be affirmed if any of the grounds on which judgment is sought are meritorious. Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex.2013) ; State v. Ninety Thousand Two Hundred Thirty–Five Dollars & No Cents in U.S. Currency, 390 S.W.3d 289, 292 (Tex.2013).

When a party moves for summary judgment on both no-evidence and traditional grounds, we first review the trial court's judgment under the no-evidence standard of review. Merriman, 407 S.W.3d at 248 ; Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex.2004). “That is because if the non-movant fails to produce legally sufficient evidence to meet his burden as to the no-evidence motion, there is no need to analyze whether the movant satisfied its burden under the traditional motion.” Merriman, 407 S.W.3d at 248.

We review no-evidence summary judgments under the same legal sufficiency standard as directed verdicts. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750–51 (Tex.2003). Under that standard, we consider evidence in the light most favorable to the non-movant, crediting evidence a reasonable jury could credit and disregarding contrary evidence and inferences unless a reasonable jury could not. See Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 756 (Tex.2007) ; City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex.2005). The non-movant has the burden to produce summary judgment evidence raising a genuine issue of material fact as to each challenged element of its cause of action. Tex.R. Civ. P. 166a(i). A no-evidence challenge will be sustained when: (1) there is a complete absence of evidence of a vital fact; (2) the court is barred by rules of law or of evidence from giving weight to...