Haubold v. Med. Carbon Research Inst., LLC
| Decision Date | 14 March 2014 |
| Docket Number | NO. 03-11-00115-CV,03-11-00115-CV |
| Court | Texas Court of Appeals |
| Parties | Axel D. Haubold, Appellant v. Medical Carbon Research Institute, LLC; MCRI, Inc.; and On-X Life Technologies, Appellees |
NO. D-1-GN-08-002054, HONORABLE ORLINDA NARANJO, JUDGE PRESIDING
This appeal arises from a longstanding employment dispute between appellant Axel D. Haubold and his former employer Medical Carbon Research Institute, LLC, (Medical Carbon) and related companies, MCRI, Inc., and On-X Life Technologies (jointly MCRI). Haubold appeals the trial court's order granting partial summary judgment dismissing his claims against MCRI and final judgment awarding MCRI attorney's fees on its counterclaim following a jury trial. For the reasons that follow, we affirm the trial court's judgment except as to the award of attorney's fees. We reverse the trial court's award of attorney's fees and render judgment that MCRI take nothing on its counterclaim.
FACTUAL AND PROCEDURAL BACKGROUND
Haubold's employment with Medical Carbon began in 1994. According to a letter to Haubold from Medical Carbon CEO Jack Bokros dated April 29, 1994, Medical Carbon was to pay Haubold "an annual salary of $10,000 and $25,000[] deferred compensation to be paid when the company is profitable and has the resources to do so." The letter also provided that Haubold was to "become a member" and "receive 400 Incentive Units and 125 Special Incentive Units." Haubold maintains, and MCRI disputes, that in a subsequent oral agreement, Bokros, on behalf of Medical Carbon, also promised Haubold additional amounts of $20,000 and $125,000 per year to be deferred for four years, at which time Haubold would begin to receive an annual salary of $125,000, and that he would retain the 125 special incentive units even after the company was in a position to pay the deferred compensation. Haubold worked for Medical Carbon from 1994 until January 2000. Haubold initially received $10,000 annual compensation in cash, the cash compensation was incrementally increased, and in May 1998, his annual cash compensation was increased to $125,000.
In approximately 2007, Medical Carbon reorganized, converting from a limited liability company to a corporation and becoming a subsidiary of On-X Life Technologies. The parties disagree as to the effect of the reorganization on Haubold's special incentive units. MCRI contends that they were converted to common stock in the new corporation, MCRI, Inc., and are reflected as such in the corporate records. Haubold contends he never received any stock certificates and the reorganization "extinguished" his "repayment priority." In 2008, a dispute arose between Haubold and MCRI, Inc., regarding Haubold's deferred compensation. Through counsel, Haubold asserted a claim for breach of contract and requested payment of $85,987.44 for deferredcompensation. MCRI, Inc., responded by filing a declaratory judgment action seeking a declaration that Haubold was not entitled to the deferred compensation he sought under the terms of the parties' employment agreement. Haubold filed a counterclaim for breach of contract, naming Medical Carbon and On-X Life Technologies as third-party defendants and asserting that MCRI had failed to pay deferred compensation in the amount of $85,987.44 owed under the parties' agreement.
In April 2008, the parties entered into a settlement agreement whereby Medical Carbon/MCRI, Inc., agreed to pay Haubold $85,987.44 and Haubold agreed to release "any and all claims which have been raised or could have been raised by the Parties relating solely to Haubold's present entitlement to the deferred compensation he sought in the above-styled lawsuit." Six weeks later Haubold filed the suit underlying this appeal alleging breach of contract and seeking $500,000 in deferred salary and/or repayment priority based on Medical Carbon's alleged oral agreement to defer $125,000 annual salary for four years and issue Haubold 125 special incentive units. MCRI counterclaimed for breach of the settlement agreement and sought damages in the form of attorney's fees, as well as attorney's fees under Chapter 38 of the Civil Practices and Remedies Code. See Tex. Civ. Prac. & Rem. Code § 38.001-.006. Haubold subsequently added claims for conspiracy, fraud, breach of fiduciary duty, fraudulent transfer, stock fraud, and violations of the Texas Securities Act, see Tex. Rev. Civ. Stat. art. 581-33, and sought equitable relief in connection with these claims.
MCRI filed a motion for summary judgment "as to all claims of . . . Haubold" on the grounds that the claims were barred by the statute of frauds, accord and satisfaction based on the settlement agreement, the applicable statutes of limitations, and the economic loss rule. The trial court granted MCRI's motion, without specifying the grounds on which it relied, and dismissed "allclaims of . . . Haubold . . . in their entirety and with prejudice." MCRI's counterclaim remained pending. Seven days before trial, on the deadline set by the trial court for amending pleadings, MCRI filed its third amended counterclaim, asserting for the first time that the damages it incurred in the form of attorney's fees were "the natural, probable, and foreseeable consequence" of Haubold's breach of the settlement agreement. Haubold filed a motion to strike MCRI's third amended petition on the grounds of untimeliness and surprise and a motion to dismiss MCRI's counterclaim on the ground that MCRI had asserted no statutory or common law basis for recovery of attorney's fees, both of which the trial court denied. The trial court granted MCRI's motion to realign parties, and the case proceeded to a jury trial on MCRI's claim for breach of the settlement agreement. MCRI presented evidence of the attorney's fees it had incurred in defending Haubold's claims and prosecuting its counterclaim. The jury found that Haubold breached the settlement agreement and awarded MCRI damages in the form of attorney's fees in the amounts of $103,000 for preparation and trial, $20,000 for an appeal to the court of appeals, and $10,000 for an appeal to the supreme court. The trial court entered a final judgment in favor of MCRI and awarded attorney's fees in accordance with the jury's verdict. Haubold filed a motion for new trial or alternatively motion to modify judgment, which the trial court denied. This appeal followed.
DISCUSSION
Partial Summary Judgment
In his fifth issue, Haubold contends that the trial court erred in granting summary judgment in favor of MCRI on his various causes of action. Initially, Haubold contends that the trial court's summary judgment exceeded the scope of MCRI's motion because the motion addressed onlyhis claim for deferred salary and not his "shareholder claims" for termination of his special incentive units and their repayment priority as set forth in the operating agreement governing the special incentive units. However, having failed to assert this argument in his response to MCRI's motion as an issue precluding summary judgment, Haubold cannot raise it on appeal as a reason to reverse the summary judgment. See Tex. R. Civ. P. 166a(c) (); Pinnacle Anesthesia Consultants, P.A. v. Fisher, 309 S.W.3d 93, 105-07 (Tex. App.—Dallas 2009, pet. denied) (); see also Tex. R. App. P. 33.1 (). Therefore, we will not disturb the summary judgment on this basis. See Pinnacle Anesthesia, 309 S.W.3d at 105-07; Anderton v. Cawley, No. 05-10-00693-CV, 2012 Tex. App. LEXIS 3621, at *40 (Tex. App.—Dallas May 8, 2012, no pet.) (mem. op.).1
MCRI sought summary judgment on four grounds: that Haubold's claims were barred by (1) the statute of frauds, (2) accord and satisfaction based on the settlement agreement, (3) the applicable statutes of limitations, and (4) the economic loss rule. The trial court granted summary judgment on all of Haubold's claims without specifying the grounds. On appeal, Haubold challenges the summary judgment on grounds (1) and (2), but not on grounds (3) or (4).2 When the trial court does not specify the basis for its summary judgment, the appellant must attack all independent bases or grounds that support the judgment. Worldwide Asset Purchasing, L.L.C. v. Rent-A-Center East, Inc., 290 S.W.3d 554, 559 (Tex. App.—Dallas 2009, no pet.); Jack v. Holiday World of Houston, 262 S.W.3d 42, 49 (Tex. App.—Houston [1st Dist.] 2008, no pet.); Britton v. Texas Dep't of Criminal Justice, 95 S.W.3d 676, 681 (Tex. App.—Houston [1st Dist.] 2002, no pet.); Barefield v. Lone Star Beef Prod., No. 03-12-000329-CV, 2012 Tex. App. LEXIS 7540, at *3 (Tex. App.—Austin Aug. 31, 2012, no pet.) (mem. op.). Wherea judgment may rest upon more than one ground, an appellant who does not challenge each ground waives his right to complain of the ruling to which no error was assigned, and the judgment will be affirmed on the ground as to which no complaint is made. Humphries v. Advanced Print Media, 339 S.W.3d 206, 208 (Tex. App.—Dallas 2011, no pet.); Britton, 95 S.W.3d at 681; Johnson v. Coggeshall, 578 S.W.2d 556, 560 (Tex. Civ. App.—Austin 1979, no writ). This rule is based on the premise that an appellate court normally cannot alter an erroneous judgment for a reason not raised in a point of error on appeal. See Walling v. Metcalfe, 863 S.W.2d 56, 58, (Tex. 1993); Britton, 95 S.W.3d at 681. If the independent ground is of a type that could, if meritorious, fully support the judgment, but the appellant assigns no error to that independent ground, then we must accept the validity of that unchallenged ground,...
To continue reading
Request your trial