Ganske v. Spence

• Decision Date: 28 January 2004
• Docket Number: No. 10-01-315-CV.,10-01-315-CV.
• Citation: 129 S.W.3d 701
• Parties: Jary GANSKE and Shirley Ganske, Appellants, v. Donna SPENCE, as Independent Executor of the Estate of Wayman R. Spence, Deceased, Appellee.
• Court: Texas Court of Appeals

129 S.W.3d 701

Jary GANSKE and Shirley Ganske, Appellants, v. Donna SPENCE, as Independent Executor of the Estate of Wayman R. Spence, Deceased, Appellee.

No. 10-01-315-CV.

Court of Appeals of Texas, Waco.

January 28, 2004.

David G. Tekell, Law Office of David G. Tekell, Waco, James D. Baskin, III, Baskin Law Firm, Austin, for appellants.

Artie G. Giotes, Jim Hering, Pakis, Giotes, Page & Burleson, P.C., Waco, for appellee.

Before Chief Justice GRAY, Justice VANCE, and Justice REYNA.^*

OPINION

TOM GRAY, Chief Justice.

The trial court granted summary judgment for Donna Spence, as independent executor of the estate of Wayman R. Spence. Jary and Shirley Ganske complain that the contract provision at issue is ambiguous. Further, Jary and Shirley argue that summary-judgment evidence was improperly excluded and that their claims are not barred by res judicata. Accordingly, Jary and Shirley assert that the trial court erred in granting the summary judgment. Because we hold the summary-judgment evidence was properly excluded and the indemnity provision is unambiguous, we affirm the trial court's judgment.

BACKGROUND

This case presents a rather complicated procedural background.

The Business Together

Jary and Shirley Ganske were business associates of Dr. Wayman Spence, deceased, whose estate is now a party to this appeal.¹ Jary Ganske was the President and CEO of WRS Group; Shirley Ganske was an employee of WRS Group. Spence was the Chairman and controlling shareholder of WRS Group. Jary and Shirley parted ways from Spence and WRS Group.

The First Dispute

There was a prior dispute. To settle the prior dispute, an "AGREEMENT REGARDING COMPROMISE AND SETTLEMENT OF DISPUTED MATTERS, NON-DISCLOSURE, NON-COMPETITION, AND MUTUAL RELEASES OF ANY AND ALL CLAIMS" was entered into. This agreement was signed by Jary and Shirley. It was also signed by Spence in two capacities: 1) his individual capacity; and 2) for WRS Group. In addition to global mutual releases, the agreement contains an indemnity provision. The meaning of the indemnity provision controls the result of the current dispute. The provision reads:

6.03 No Assignment of Claims and Indemnification. The Ganskes and the WRS Parties represent and warrant that no persons, including shareholders, other than them have any right, title, or interest in and to the claims they have released herein and they hereby indemnify and hold each other, their officers, directors, employees, agents and representatives harmless and agree to defend the foregoing against any and all costs, expenses, or liabilities that may occur as a result of the assertion of the claims against such parties or parties released in this Article by other persons claiming by, through or under or because of the relationship with the parties.

(Emphasis added). After the agreement was signed, Spence passed away, and his son-in-law became WRS's president.

The Second Dispute

Jary and Shirley subsequently intervened in a lawsuit, which was removed to federal court, involving WRS, the Estate, and a former shareholder of WRS. This lawsuit concerned the potential tax liability for money received from WRS by the former shareholder. Jary and Shirley had also received money from WRS in a similar manner and questioned the related tax liability. According to the record before us, Jary and Shirley intervened in the suit and sought a declaratory judgment against WRS regarding the classification of the money as "income."

After Jary and Shirley intervened in the second dispute, WRS asserted counterclaims against them. WRS, on the one side, and Jary and Shirley, on the other, filed cross motions for summary judgment. Meanwhile, the Estate filed a motion to dismiss the claims filed against it by Jary and Shirley. The federal district court ordered that Jary and Shirley's motion for summary judgment be partially granted, specifically as to the counterclaims asserted by WRS. The court's reasoning was that the agreement released any claims that WRS may have against Jary and Shirley "whether known or unknown, suspected or unsuspected." The federal district court further found that Jary and Shirley had not asserted any claims against the Estate, and therefore denied as moot the Estate's motion to dismiss.

The Third Dispute

Jary and Shirley filed the lawsuit underlying this appeal to recover attorney's fees and costs incurred in the second dispute, the federal lawsuit. They sued the Estate alleging that the indemnity provision of the agreement between WRS, Spence, Jary, and Shirley obligates the Estate to reimburse Jary and Shirley for costs incurred because of the claims filed against Jary and Shirley by WRS in the federal lawsuit. The Estate filed a motion for summary judgment asserting two grounds. The trial court granted the Estate's motion for summary judgment without specifying the basis and entered a take nothing judgment against Jary and Shirley.

Jary and Shirley appeal the take nothing judgment, bringing three issues for review. Those issues are: 1) that the trial court erred in concluding as a matter of law that the obligations of the Estate under the indemnity provision did not extend to claims made against Jary and Shirley by WRS; 2) that the trial court erred by refusing to consider summary-judgment evidence regarding the circumstances surrounding the formation of the agreement between the parties; and 3) that Jary's and Shirley's indemnification claims against the Estate are not barred by res judicata because of the federal lawsuit.

We must first decide whether the trial court could consider the evidence, which is the subject of the second issue, in determining whether the indemnity provision was ambiguous. The trial court determined the evidence was not proper summary judgment evidence. If the trial court could consider the deputed summary judgment evidence, but, based on its ruling which excluded the evidence, did not consider it, we must consider the evidence in our determination of the first issue. It would be evidence which the trial court should have considered and, therefore, which this Court must consider in determining whether the summary judgment evidence created a fact issue regarding the meaning of the indemnity provision.

STANDARD OF REVIEW FOR SUMMARY JUDGMENT

The standard of review for a summary judgment is well established: (i) the movant for summary judgment has the burden of showing there is no genuine issue of material fact and is entitled to summary judgment as a matter of law; (ii) in deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true; and (iii) every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in its favor. Nixon v. Mr. Property Mgt. Co., 690 S.W.2d 546, 548-49 (Tex.1985).

For a defendant to prevail on summary judgment, it must show there is no genuine issue of material fact concerning one or more essential elements of the plaintiff's cause of action or establish each element of an affirmative defense as a matter of law. Black v. Victoria Lloyds Ins. Co., 797 S.W.2d 20, 27 (Tex.1990). If the defendant disproves an element of the plaintiff's cause of action as a matter of law, summary judgment is appropriate. Friendswood Dev. Co. v. McDade & Co., 926 S.W.2d 280, 282 (Tex.1996).

When the trial court does not specify the basis for its summary judgment, the appealing party must show it is error to base it on any ground asserted in the motion. Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex.1995).

ISSUE TWO—SURROUNDING CIRCUMSTANCES

In their second issue, Jary and Shirley argue that the trial court erred by refusing to consider summary-judgment evidence. They contend the evidence regarding the circumstances surrounding the formation of the agreement is admissible summary-judgment evidence. We must determine what summary-judgment evidence should have been considered by the trial court before we can review the merits of the summary judgment. Thus we must address issue two regarding objections to the summary-judgment evidence before we reach issue one regarding the interpretation of the indemnity provision.

Applicable Law

In reviewing whether a trial court has erred in the admission or exclusion of summary-judgment evidence, as with any evidence, we use an abuse-of-discretion standard. Ash v. Hack Branch Distributing Co., Inc., 54 S.W.3d 401, 409 (Tex.App.-Waco 2001, pet. denied). A trial court "abuses its discretion when it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law." BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 800 (Tex.2002) (quoting Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex.1985)).

Jary and Shirley complain that the trial court erroneously excluded summary-judgment evidence that goes to the circumstances surrounding the formation of the contract. The Estate argues that the evidence should be excluded based on "best evidence" and "parol evidence" objections. Jary and Shirley contend these are improper objections upon which to exclude the evidence. The best evidence rule "requires that if the contents of a writing are to be proved, it must be by the production, if possible, of the very writing itself." Ortiz v. State, 651 S.W.2d 764, 766 (Tex.Crim.App.1983). Parol evidence cannot be admitted to add to, vary, or contradict a contract's unambiguous provisions. Wilkins v. Bain, 615 S.W.2d 314, 315 (Tex. Civ.App.-Dallas 1981, no writ).

Analysis

Upon examination of the record, we find objections made upon best evidence and parol evidence grounds that were sustained by the trial court to three portions of the summary-judgment evidence. Two were portions of an affidavit sworn to by the lawyer that represented Jary and Shirley during the negotiations culminating in the agreement. And the third is a portion of an affidavit sworn to by Jary. Because...