General Elec. Supply Co., a Div. of General Elec. Co. v. Gulf Electroquip, Inc., 01-92-00596-CV

• Decision Date: 25 March 1993
• Docket Number: No. 01-92-00596-CV,01-92-00596-CV
• Citation: 857 S.W.2d 591
• Parties: GENERAL ELECTRIC SUPPLY COMPANY, A DIVISION OF GENERAL ELECTRIC COMPANY, Appellant, v. GULF ELECTROQUIP, INC., Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 591

857 S.W.2d 591

GENERAL ELECTRIC SUPPLY COMPANY, A DIVISION OF GENERAL ELECTRIC COMPANY, Appellant, v. GULF ELECTROQUIP, INC., Appellee.

No. 01-92-00596-CV.

Court of Appeals of Texas Houston (1st Dist.).

March 25, 1993.

Rehearing Denied June 24, 1993.

Ben L. Aderholt, Tina Snelling, Hirsch, Glover, Robinson & Sheinell, P.C., Houston, for appellant.

Raymond A. Krell, P.C., Craig E. Power, P.C., Krell, Torigian & Power, Houston, for appellee.

Before SAM BASS, COHEN and HEDGES, JJ.

SAM BASS, Justice.

General Electric Supply Company (GESCO) appeals from a summary judgment rendered against it in favor of Gulf Electroquip, Inc. (Electroquip) on Electroquip's claims for sworn account, breach of contract, and quantum meruit in connection with a sale of goods to GESCO.

We affirm in part and reverse and remand in part.

In 1985, representatives of GESCO and Electroquip exchanged telephone calls and, later, purchase orders and similar documents. GESCO sought to reach agreement for Electroquip to sell to GESCO a used motor Electroquip had in stock. GESCO was in contact with a Libyan oil company, Jawaby Petroleum, that was interested in purchasing such a motor, and planned to resell the motor to Jawaby immediately.

Electroquip and GESCO agreed that Electroquip would sell the motor to GESCO, for a price of $50,000. As part of the deal, Electroquip was to modify the motor extensively, to adapt it to the specifications transmitted by GESCO. The original motor would be consumed in the process; one deposition witness likened it to carving up a Ferrari to reassemble it into a Chevrolet:

[Y]ou have destroyed something that had value in order to make something else. You've taken a path in which there is no return. You destroyed one thing to build something else. You have to go ahead and continue with it or you don't have anything at all. You don't even have what you started with.

The sale was made subject to approval of Electroquip's engineering drawings for the modifications.

On December 2, Sam Phillips, an outside salesman for GESCO, called Electroquip's sales manager, Mac Colvin, and told him that the drawings had been approved. Colvin then went over to GESCO and picked up a copy of GESCO's purchase order, dated November 21, 1985. Electroquip commenced the modifications to the motor. Phillips testified at deposition that upon commencement of the work, the contract became non-cancellable.

During late 1985, relations between the United States and Libya deteriorated. ¹ On January 7, 1986, President Reagan issued executive order 12543, ² prohibiting trade and certain transactions involving Libya, and on the following day issued executive order 12544, blocking Libyan government property in the United States held by U.S. persons. Exec.Order No. 12,543, 51 Fed.Reg. 875 (1986) and Exec.Order No. 12,544, 51 Fed.Reg. 1235 (1986). On January 8, Phillips called Colvin, informed him of the situation, and inquired whether Electroquip could complete the work and ship the motor by January 16, before all provisions of order 12543 went into effect on February 1. Later that day, Colvin returned a confirming telex to Phillips, stating: "Your request to ship ... motor ... on 1/16/86 is not possible. This is approximately 3 weeks prior to the scheduled delivery. At your request of 1/8/86, we are stopping production on this order. The cancellation charges as of this date are 88 percent of the purchase price."

On January 9, Phillips returned a confirming telex to Colvin, saying: "Confirming receipt of your telex[.] ... Please cancel order[.] ... At this date we do not have a clear understanding from Jawaby on cancellation charges. GESCO cannot guarantee payment of these charges." The following day, Colvin responded, "Confirming receipt of your telex canceling your order[.] ... However, not in agreement that GESCO is not responsible for cancellation charges." A week after that, Colvin telexed Phillips again:

We previously offered to settle for cancellation charges of 88 percent which we understand you have rejected. Given the fact that these are "specially fabricated" goods near completion, please advise whether or not you wish us to complete the manufacturing process so that the goods are 100 percent complete and in a sellable condition, or whether it is your desire to stop production.

The record contains no response from GESCO. GESCO admits that it cancelled the order not later than January 10, 1986. The goods were never completed; no settlement was ever reached; and this suit followed.

The trial court granted interlocutory summary judgment against GESCO in favor of Electroquip, without specific reference to Electroquip's several causes of action. Electroquip later presented evidence of its attorneys' fees, and the trial court entered a final summary judgment. Where, as here, a trial court's order does not specify the grounds relied on for its ruling, the summary judgment will be affirmed on appeal if any of the theories advanced in the motion for summary judgment are meritorious. Insurance Co. of North Amer. v. Security Ins. Co., 790 S.W.2d 407, 410 (Tex.App.--Houston [1st Dist.] 1990, no writ).

In one point of error, GESCO contends that the summary judgment was error because:

(1) Electroquip "failed, as a matter of law, to demonstrate that its performance ... was not a prohibited transfer [under executive orders 12543 and 12544]";

(2) even if the indirect transfer prohibitions of order 12543 did not apply to Electroquip, summary judgment was still improper because

(a) the affidavit attached to support Electroquip's motion for summary judgment merely stated that the allegations in the motion were true, which is insufficient under Law v. Law, 792 S.W.2d 150, 151 (Tex.App.--Houston [1st Dist.] 1990, writ denied);

(b) GESCO's response raised a genuine issue of material fact; and

(c) Electroquip's summary judgment evidence "involves an issue of intent which is inappropriate for summary judgment";

(3) summary judgment on Electroquip's allegation of an agreed restocking charge was improper;

(4) summary judgment was improper on GESCO's "claim of impracticability/impossibility"; and

(5) summary judgment was improperly granted on contested attorneys' fees.

In reviewing a summary judgment, this Court will take all evidence favorable to the nonmovant as true. MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex.1986); Goldberg v. United States Shoe Corp., 775 S.W.2d 751, 752 (Tex.App.--Houston [1st Dist.] 1989, writ denied). Every reasonable inference will be indulged in favor of the nonmovant, and any reasonable doubt will be resolved in its favor. Continental Casing Corp. v. Samedan Oil Corp., 751 S.W.2d 499, 501 (Tex.1988); Goldberg, 775 S.W.2d at 752. The movant has the burden of showing that there are no genuine issues of material fact, and that it is entitled to judgment as a matter of law. MMP, 710 S.W.2d at 60; Goldberg, 775 S.W.2d at 752. When the plaintiff is the movant, the defendant cannot defeat summary judgment merely by pleading an affirmative defense. Kirby Exploration Co. v. Mitchell Energy Corp., 701 S.W.2d 922, 926 (Tex.App.--Houston [1st Dist.] 1985, writ ref'd n.r.e.). Instead, to defeat plaintiff's motion for summary judgment, the nonmovant defendant must respond by producing summary judgment evidence that raises a fact issue on each element of some affirmative defense. Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex.1984); Kirby Exploration, 701 S.W.2d at 926.

GESCO's first argument is that summary judgment for Electroquip was improper because GESCO raised a fact issue on every element of its illegality defense, and Electroquip then failed, as a matter of law, to meet GESCO's showing by demonstrating that its own performance was not, under executive orders 12543 and 12544, a prohibited direct or indirect transfer of goods, technology, or services to Libya.

Executive order 12544 was not expressly presented to the trial court by written motion, answer, or other response to the motion for summary judgment. A summary judgment cannot be reversed on any grounds not presented in the motion for summary judgment. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 676 (Tex.1979); Dickey v. Jansen, 731 S.W.2d 581, 583 (Tex.App.--Houston [1st Dist.] 1987, writ ref'd n.r.e.); TEX.R.CIV.P. 166a(c). For that reason, we will not consider executive order 12544 here. ³ We proceed to consider executive order 12543.

In discovery, Electroquip requested GESCO to admit that "in accordance with the agreement ... Gulf Electroquip, Inc. was to deliver the motor ... FOB, export packer, Houston, Texas on or before January 30, 1986." GESCO responded, "Denied. GESCO's Purchase Order contains all of the terms of the agreement. No mention, inter alia, is made of export packer." Later, GESCO requested Electroquip to admit that "among the terms of the subject sale was: delivery by Gulf Electroquip, Inc. to export packer." Electroquip responded, "The plaintiff objects as the contract between the parties speaks for itself. Denied."

The delivery terms of the Electroquip-GESCO contract are not set out in the November 21, 1985, purchase order, either on the obverse or the reverse. ⁴ In an instance where the contract is silent concerning the place for delivery of goods, TEX.BUS. & COM.CODE ANN. § 2.308 (Vernon 1968) controls. The pertinent portion states:

§ 2.308. Absence of Specified Place for Delivery

Unless otherwise agreed,

(1) the place for delivery of goods is the seller's place of business or if he has none his residence; but

(2) in a contract for sale of identified goods which to the knowledge of the parties at the time of contracting are in some other place, that place is the place for their delivery[.]

Under either of these tests, applied to the foregoing summary judgment evidence, the place for delivery of the motor was Houston, Texas. Regarding the first test, every bit of documentary summary judgment evidence in the...