Janai v. Sanford Rose Assocs. Int'l, 05-18-01079-CV
| Decision Date | 13 February 2020 |
| Docket Number | No. 05-18-01079-CV,05-18-01079-CV |
| Parties | ANNE JANAI AND NEBO & FINCH, INC., Appellant v. SANFORD ROSE ASSOCIATES INTERNATIONAL, INC., Appellee |
| Court | Texas Court of Appeals |
On Appeal from the 219th Judicial District Court Collin County, Texas
Before Justices Osborne, Partida-Kipness, and Pedersen, III
Opinion by Justice Partida-Kipness
Anne Janai and Nebo & Finch, Inc. (Nebo) (collectively, Janai-Nebo) appeal the trial court's grant of summary judgment to Sanford Rose Associates International, Inc. (Sanford) on Sanford's claims against Janai-Nebo for breach of a franchise agreement and associated personal guaranty, Janai's counterclaims, and Sanford's claim for actual damages and attorney's fees. In nine issues, Janai-Nebo contend that the trial court erred in granting Sanford's motions for summary judgment, sustaining Sanford's objections to Janai-Nebo's summary judgment evidence, and awarding damages and attorney's fees. We affirm the trial court's judgment in all respects.
This case arises from a franchise agreement between Sanford, a Texas-based executive search firm and franchisor, and Nebo, the franchisee. On August 22, 2016, Janai signed the agreement (Franchise Agreement) to establish a Sanford franchise in New Hampshire. One day later, the parties executed First and Second Amendments to the Franchise Agreement to modify certain terms and assign Janai's interests to Nebo, a New Hampshire corporation Janai established to operate the franchise. Janai is Nebo's sole member. Janai also executed a personal guaranty of Nebo's performance under the Franchise Agreement.
As modified by the First Amendment, the Franchise Agreement required Nebo to pay Sanford a franchise fee of $88,000, with 10% due at signing. The remainder was due on the later of: (1) the first day of Phase I New Franchisee training or (2) the date the franchisee's self-funding process was complete. "Self-funding" is a process in which the franchisee employs a third-party service provider to transfer personal retirement funds into a new investment vehicle from which the franchise fee is paid. Should the self-funding process fail, the franchisee must pay $31,200 within five days of notification of the failure, with the remaining $48,000, plus a $7,500 "payment plan fee," due twenty-four months after the Franchise Agreement effective date. Janai elected the self-funding option.
The Franchise Agreement also required Nebo to pay a periodic royalty to Sanford. Relevant to Sanford's claims, the Franchise Agreement required a minimum royalty of $2,500 per quarter starting ninety days after the franchisee began operations.
Janai paid Sanford $8,800 (10% of the franchise fee) upon signing the Franchise Agreement and attended Sanford's Phase I training in Dallas on or about September 26, 2016. Janai did not pay the remainder of the franchise fee at training, claiming the self-funding process was not complete.
On November 7, 2016, Janai sent an email to Nicholas Turner, Sanford's Co-CEO, in which she stated that she wished to terminate her franchise agreement. Turner responded that he regretted Janai did not wish to move forward with the franchise, but that Janai still owed theremainder of the franchise fee and minimum royalties. Turner asked Janai to "make an offer to exit and buyout of the legal agreement . . . ." Janai replied and confirmed her desire to terminate the relationship. Janai stated, "It is not in my best interest to move forward with [Sanford] at present" and indicated that she would draft a termination letter. Janai confirmed in a later email to Turner that the "termination letter will not include a proposal that I pay a fee."
On November 9, 2016, Janai also informed her self-funding service provider that she had "put this on hold for a while" and asked the service provider to discontinue sending documents for her signature. Janai did not notify Sanford that she had discontinued the self-funding process.
Sanford sent a notice of default to Janai on November 11, 2016, giving Janai-Nebo ten days to cure the default by paying the remainder of the franchise fee. Janai-Nebo did not pay the remainder of the franchise fee, and Sanford sent a letter to Janai on November 28, 2016, terminating the Franchise Agreement.
Sanford filed suit on December 28, 2016, seeking recovery of the unpaid franchise fee and royalties. Sanford brought claims for breach of the Franchise Agreement against both Janai and Nebo, breach of the personal guaranty against Janai, and quantum meruit and promissory estoppel against both Janai and Nebo. Sanford later amended its petition to add a claim of anticipatory breach of contract based on Janai's November 7, 2016 emails.
Janai-Nebo answered Sanford's original and amended petitions and filed counterclaims for violations of the Texas Deceptive Trade Practices Act (DTPA), common law fraud, fraud in the inducement, fraud in the factum, breach of the Franchise Agreement, negligent misrepresentation, per se DTPA violation through non-compliance with the Texas Business Opportunities Act (TBOA), and rescission.
The parties filed a series of motions for partial summary judgment. At issue in this appeal are five motions for partial summary judgment filed by Sanford:
The trial court granted these motions for summary judgment and issued a final judgment on August 21, 2018, awarding $125,308.46 in actual damages, $216,797.81 in attorney's fees, $895 in paralegal fees, $4,951.65 in litigation expenses, and $46,600.00 in appellate attorney's fees should Janai-Nebo unsuccessfully appeal. Janai-Nebo timely filed their notice of appeal on September 18, 2018.
We review a trial court's summary judgment ruling de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could, and disregarding evidence contrary to the nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge every reasonable inference and resolve any doubts in the nonmovant's favor. 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008).
A party without the burden of proof who conclusively negates at least one essential element of a cause of action is entitled to summary judgment on that claim. Frost Nat'l Bank v. Fernandez, 315 S.W.3d 494, 508 (Tex. 2010); see TEX. R. CIV. P. 166a(b), (c). Once the movant produces sufficient evidence to establish the right to summary judgment, the burden shifts to the claimantto come forward with competent controverting evidence that raises a fact issue. Van v. Pena, 990 S.W.2d 751, 753 (Tex. 1999). A plaintiff is entitled to summary judgment on a cause of action if it conclusively proves all essential elements of the claim. See TEX. R. CIV. P. 166a(a), (c); MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986).
After an adequate time for discovery, a party without the burden of proof may, without presenting evidence, move for summary judgment on the ground that there is no evidence to support an essential element of the nonmovant's claim or defense. TEX. R. CIV. P. 166a(i). The motion must specifically state the elements for which there is no evidence. Id.; Timpte Indus., Inc. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009). The trial court must grant the motion unless the nonmovant produces summary judgment evidence that raises a genuine issue of material fact. See TEX. R. CIV. P. 166a(i) & cmt.; Hamilton v. Wilson, 249 S.W.3d 425, 426 (Tex. 2008). If the nonmovant brings forward more than a scintilla of probative evidence that raises a genuine issue of material fact, then a no-evidence summary judgment is not proper. Smith v. O'Donnell, 288 S.W.3d 417, 424 (Tex. 2009); King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003), cert. denied, 541 U.S. 1030 (2004).
When a party moves for summary judgment under both rules 166a(c) and 166a(i), we will first review the trial court's judgment under the standards of rule 166a(i). Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). If the appellant failed to produce more than a scintilla of evidence under that burden, then there is no need to analyze whether the appellee's summary judgment proof satisfied the less stringent rule 166a(c) burden. Id.
Janai-Nebo raise nine issues broadly asserting that the trial court erred in granting Sanford's motions for partial summary judgment.
Sanford contends that Janai-Nebo have waived their first, second, eighth, and ninth issues due to inadequate briefing. Before we consider the merits of the appeal, we address Sanford's contentions.
In their first issue, Janai-Nebo contend that the trial court erred "when it ruled, as a matter of law, that Appellants were not wrongfully terminated." Likewise, Janai-Nebo contend in their second issue that the trial court erred "when it ruled, as a matter of law, that Appellee did not commit a per se violation of the TDTPA." The argument following each of these issues does not direct the court to the trial court's order at issue, cite supporting legal authority, or explain how the cited facts support the argument. Thus, these issues present nothing for our review. See TEX. R. APP. P. 38.1(i) (). However, the arguments presented in these issues are cited in Janai-Nebo's fourth and third issues, respectively. We will consider...
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