Hand v. Dean Witter Reynolds Inc.

• Decision Date: 06 October 1994
• Docket Number: No. A14-93-01024-CV,A14-93-01024-CV
• Citation: 889 S.W.2d 483
• Parties: Carolyn Maxey HAND, Appellant, v. DEAN WITTER REYNOLDS INC. and W. Michael Robertson, Appellees. (14th Dist.)
• Court: Texas Court of Appeals

Page 483

889 S.W.2d 483

Carolyn Maxey HAND, Appellant, v. DEAN WITTER REYNOLDS INC. and W. Michael Robertson, Appellees.

No. A14-93-01024-CV.

Court of Appeals of Texas,

Houston (14th Dist.).

Oct. 6, 1994.

Rehearing Overruled Nov. 17, 1994.

Joseph R. Joy, III, Lafayette, LA, Larry Trimble, Houston, for appellant.

J. Steven Stewart, Houston, Rodney Acker, Dallas, W. James Kronzer, Leslie C. Taylor, Houston, for appellees.

Before MURPHY, ELLIS and BARRON, JJ.

OPINION

MURPHY, Justice.

Carolyn Maxey Hand (Hand), appellant, sued Dean Witter Reynolds Inc. (Dean Witter) and W. Michael Robertson (Robertson), appellees, for negligence and violations of the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA) for failing to purchase oil option contracts as allegedly requested by Hand through her father, Bryan Maxey (Maxey). The trial court granted summary judgment in favor of Dean Witter and Robertson. We affirm.

Dean Witter is a securities brokerage firm with offices in Houston. Robertson is a licensed stock broker employed by Dean Witter in Houston since 1981. Hand's father, Bryan Maxey, gave Hand securities in the late 1950s. The securities were originally placed in an account set up with Merrill Lynch in Dallas, where appellant resides. Because Maxey traditionally made most of the decisions regarding investments or trades, Hand decided to move the account to Dean Witter's office in Houston so Maxey could more conveniently access the account and make trades. Of course, all trades had to be authorized by Hand because the account belonged to her. The account was supervised by Robertson.

On or about June 20, 1990, Maxey called Hand and his other daughter, Mary Maxey. Hand alleged that her father called them because he had learned that oil was at an eighteen month low and OPEC was going to meet soon with the intention of driving prices higher. Hand alleged that Maxey apprised them of his findings and advised them to authorize $30,000.00 from each of their accounts to purchase uncovered oil commodity option contracts. A commodity option contract ¹ vests a person with the right, for a specified period of time, to either buy or sell the subject of the option at a predetermined price. 1 PHILIP MCBRIDE JOHNSON & THOMAS LEE HAZEN, COMMODITIES REGULATION § 1.07, 22-23 (1989). Hand and her sister gave Maxey authorization to make the purchase.

Maxey called Robertson and inquired about placing an order for Hand to buy oil options. At this point, the parties' rendition of events differs dramatically. Maxey allegedly told Robertson that timing was critical and that he wanted the purchase completed before any price increase adversely affected profits. Hand alleged that Robertson advised Maxey that it would take seven to ten days to complete the transaction. He further advised Maxey that the paperwork necessary to complete the transaction would have to be sent from Chicago. Hand claims both of these representations were false.

According to Hand, Robertson did not send the necessary papers to her until ten days after the original request. She also alleges that the paperwork did not have to be sent from Chicago, but was in fact sent from Dean Witter's Houston office. By the time it reached her, oil prices had already increased.

Appellees' rendition of the facts disagrees with that given by appellant. First, appellees contend that neither Hand nor Maxey ever sought or received any investment advice from Robertson. Next, appellees claim that when Maxey phoned Robertson inquiring about the options, Robertson told Maxey: (1) he did not trade option contracts; (2) Hand's account was not approved for such trades, i.e., she did not have a commodities account with Dean Witter; (3) Hand would have to fill out the application papers required by federal law and qualify to do the requested trades; and (4) it would take a week to ten days to open and approve an account that would allow such trades. During the same conversation, Robertson also allegedly informed Maxey that he would not make the requested trade, but he would send the forms to Hand and Maxey. Appellees allege that after Maxey received this information, he knew that a trade or option purchase could not be completed that day because the requisite forms had to be returned and the new account approved. Appellees sent the forms to Hand but she never returned them. Appellees claim that Hand did not return the forms because she was told by Maxey that the trade would be too late if not accomplished on the same day that Maxey had talked with Robertson. Neither Hand nor Maxey ever tried to get another broker to complete the transaction.

Hand claims that the trade could not have been completed in any event because the transaction requested by her father was absolutely prohibited. She claims that the existing office policy was that the few brokers that were allowed to do this type of transaction on a limited basis were not allowed to open any new accounts at the time of her request. Hand alleges that Robertson knew of the office policy and that he failed to advise Hand or her father that the purchase was an impossibility and that they should seek the services of another brokerage firm if they wished to complete the transaction in a timely manner.

Hand never made any purchases of oil options and ultimately brought suit against the appellees. In her Original Petition, Hand claimed that Robertson, an employee of Dean Witter, acting in the course and scope of his employment, failed to purchase oil options as requested and directed and that as a result, she lost $4,125,000.00, the profit she would have realized had the purchase been made when requested. Hand alleged that this failure to act constituted negligence that proximately caused her damages. She further alleged that she was a consumer under the DTPA and that appellees conduct was false, misleading, or deceptive and thus, prohibited by the DTPA. Hand also requested attorney's fees and pre- and post-judgment interest.

Appellees filed a motion for summary judgment claiming they were entitled to judgment as a matter of law on Hand's negligence claim because:

(1) neither Dean Witter nor Robertson owed Hand a legal duty; and

(2) Hand's refusal to execute and return the necessary paperwork was the sole proximate cause of her alleged damages.

They also claimed they were entitled to summary judgment as to Hand's DTPA claim because:

(1) federal law preempts state law on any cause of action connected with the sale of commodities option contracts; and

(2) the sale of commodities option contracts is not a sale of goods or services under the DTPA.

Alternatively, they argued that even if Hand's claims are valid, her damages must be measured by the difference between the price of an oil option contract on June 19, 1990, and the highest value such contract may have obtained between June 19, 1990, and a reasonable time thereafter in which to allow her to purchase another option contract through another broker. They alleged that she is not entitled to the difference between the June 19th price and the highest price of the option contract before its expiration.

On July 20, 1993, the trial court signed an order granting summary judgment in favor of appellees. The court did not specify the reasons for its ruling in the order. Appellant appeals from that judgment. She brings five points of error contending that the trial court erred in granting summary judgment on each and every ground raised by appellees in their motion.

A summary judgment is not entitled to the same deference given to a judgment following a trial on the merits of the case. See Montgomery v. Kennedy, 669 S.W.2d 309, 310-11 (Tex.1984). When it reviews a trial court's order granting summary judgment, the appellate court does not view the proof in the light most favorable to the judgment; rather, it must indulge every reasonable inference in favor of the non-movant. E.g., Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). The issue on appeal is whether the movant has proved it is entitled to judgment as a matter of law, not whether the non-movant raised a material fact issue precluding the summary judgment. E.g., Gibbs v. General Motors Corp., 450 S.W.2d 827, 828-29 (Tex.1970); see TEX.R.CIV.P. 166a(c). If the movant fails to meet its burden, the appellate court must reverse and remand the action for further proceedings. Gibbs, 450 S.W.2d at 828-29.

The Texas Supreme Court has clearly instructed appellate courts on the appropriate standards to be used when reviewing summary judgments:

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

2. In determining whether there is a material issue of fact precluding summary judgment, evidence favorable to the non-movant must be taken as true.

3. Every reasonable inference must be indulged in favor of the non-movant and any doubt resolved in its favor.

Nixon, 690 S.W.2d at 548-49; Montgomery, 669 S.W.2d at 310-11.

Because the trial court's order does not state the grounds on which the court sustained appellees' motion, the summary judgment will be affirmed if any of the theories advanced are meritorious. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex.1989); see Maley v. 7111 Southwest Freeway, Inc., 843 S.W.2d 229, 234 (Tex.App.--Houston [14th Dist.] 1992, writ denied). In her first point of error, Hand contends that the trial court erred in granting summary judgment in favor of appellees as to her negligence claim based on appellees' argument that they did not owe her a legal duty.

We must first discuss a procedural difficulty with some of the arguments contained in Hand's appellate brief under point of error number one. In her brief, she raises a new negligence theory concerning appellees' duty, or lack thereof, as it relates to her negligence claim. This theory was not pled in her original petition, but...