Kelly v. Gaines, No. 10-03-00369-CV (TX 7/13/2005)
| Decision Date | 13 July 2005 |
| Docket Number | No. 10-03-00369-CV.,10-03-00369-CV. |
| Parties | ROGER KELLY, Appellant/Cross-Appellee, v. RUSSELL GAINES AND SOUTHWEST GUARANTY MORTGAGE CORP., Appellees/Cross-Appellants, AND ROBERT THOMPSON AND COMMERCIAL REALTY ADVISORS, INC., Appellees. |
| Court | Texas Supreme Court |
Appeal from the 249th District Court Johnson County, Texas, Trial Court No. 249-13-99.
Affirmed in part, Reversed and remanded in part.
Before Chief Justice GRAY, Justice VANCE, and Justice REYNA.
Roger Kelly filed suit against Appellees after Southwest Guaranty Mortgage Corp. failed to fund a $2,010,000 loan to Kelly for which it had previously issued a loan commitment. The trial court granted several summary judgment motions filed by Appellees and rendered a take-nothing judgment in their favor. Kelly contends that the court erred by denying two continuance motions, by granting the summary judgment motions, by denying his motion to compel Russell Gaines to answer certain deposition questions, by denying his motions to reconsider the summary judgment rulings, and by denying his motion for new trial. Gaines and Southwest Guaranty contend in their cross-appeal that the court erred by denying their motion for sanctions, by granting Kelly's summary judgment motion on their counterclaims, and by denying their motion to release certain documents Kelly filed with the court under seal.
We will affirm in part and reverse and remand in part.
Kelly was involved in litigation regarding a 31-acre tract of land in Burleson used as a softball park and commonly referred to as Cowtown Park. To settle this lawsuit, the parties agreed in December 1997 that Kelly would receive a lease with an option to purchase the property for $1,638,825.
Kelly signed an Advisory Fee Agreement with Commercial Realty Advisors, wherein Kelly stated his desire to obtain "mortgage financing for the purposes of refinancing and developing the Cowtown Park." Commercial Realty agreed "to diligently pursue financing" on Kelly's behalf.
Commercial Realty identified Southwest Guaranty as a possible lender for Kelly. Robert Thompson, Commercial Realty's president, received the necessary loan application documents from Southwest Guaranty and forwarded them to Kelly's attorney Thomas Bullard. Bullard assisted Kelly in completing the documents, then returned them to Thompson who forwarded them to Southwest Guaranty.
Thompson then sent a letter to Kelly advising that he would "no longer be acting as a mortgage broker in [Kelly's] loan application" and that Kelly should thenceforth deal directly with Gaines, Southwest Guaranty's president. According to Gaines, Bullard and Kelly's other attorney, C. W. Stocker, III, advised Gaines in a subsequent conversation that Kelly had an ownership interest in the property, that the loan was for refinancing, and that the softball park had been platted and several lots pre-sold to developers.
Bullard and Stocker pressed Gaines for a loan commitment to show the court in the prior litigation that Kelly had located an interested lender. Southwest Guaranty issued a loan commitment identifying Kelly as the borrower and Kelly's father-in-law Franklin Meeks as a co-borrower. The stated purpose for the contemplated loan was "refinanc[ing]." The commitment had a thirty-day term. The commitment indicated that it must be "fully executed" by the borrower and that the lender's obligations thereunder were subject to the receipt of a satisfactory appraisal, proof of insurance, a title report, and other documentation necessary to ensure the borrower's financial condition.
According to Gaines, when he received the title report indicating that Kelly had no ownership interest in the property, he contacted Bullard and Stocker. Gaines asked them to provide proof of ownership and further information about the platting and pre-sold lots, which they said they would. Gaines had a telephone conversation with Stocker three days before the loan commitment was to expire. Stocker insisted that Southwest Guaranty fund the loan. Gaines replied that the loan would not be funded without the required documentation. Stocker then threatened to sue if the loan was not funded. Gaines responded that he was no longer interested in pursuing the loan.
Shortly after Southwest Guaranty failed to fund the loan in January 1999, Kelly filed suit against Gaines, Southwest Guaranty, Thompson, and Commercial Realty alleging breach of contract, fraud, and negligence. Three months later, Kelly filed an amended petition adding Jeff Thompson and IDC Services, Inc. as defendants1 and alleging additional claims for conspiracy and conversion. The elected judge recused himself in June 1999, and a retired judge was assigned to the case two weeks later.
In January 2001, Kelly hired new attorneys. In March 2002, the court entered a docket control order, setting the case for trial in July 2002 and establishing various discovery and other deadlines. In April, Gaines and Southwest Guaranty filed a countersuit against Kelly (and a third-party action against Stocker, Bullard, and Meeks) alleging fraud, malicious prosecution, conspiracy, and negligent misrepresentation.
Stocker and Meeks filed motions to dismiss the claims against them because they were served less than ninety days before trial, in contravention of the docket control order. The court cancelled the trial setting, and later denied the motions to dismiss. The court instructed the parties to obtain a new trial setting and negotiate an agreed scheduling order. Gaines and Southwest Guaranty offered a proposed scheduling order which the parties never agreed to.
Gaines and Southwest Guaranty filed a no-evidence summary judgment motion on November 4, 2002. The motion was set for hearing three weeks later. On November 7, Kelly filed a motion to substitute a new attorney for the two who first appeared for him in January 2001. On November 15, Kelly's new counsel filed a verified continuance motion contending that there had not yet been adequate time for discovery and noting that counsel needed more time to familiarize himself with the case. Counsel also filed a response to the summary judgment motion, subject to the continuance motion.
The court denied Kelly's continuance motion and conducted the summary judgment hearing as scheduled. In response, Kelly non-suited his fraud and contract claims. The court granted Gaines's and Southwest Guaranty's summary judgment motion as to Kelly's other claims. The court also entered a new docket control order setting the case for jury trial in July 2003 and requiring discovery to be completed by the end of May 2003.
Kelly then filed a new petition against Gaines and Southwest Guaranty alleging the previously non-suited fraud and contract claims. Rather than docketing this petition as a separate lawsuit, the district clerk filed it among the papers of the original suit. Gaines and Southwest Guaranty filed an answer to these allegations in February 2003.
In March, Stocker and Meeks each filed a traditional and no-evidence summary judgment motion on Gaines's and Southwest Guaranty's counterclaims. Gaines and Southwest Guaranty filed a no-evidence summary judgment motion on Kelly's fraud and contract claims. Thompson and Commercial Realty filed their own no-evidence summary judgment motion on Kelly's fraud and contract claims.
In April, Gaines and Southwest Guaranty non-suited their third-party claims against Stocker and Meeks and later agreed to the dismissal of their third-party claims against Bullard. Kelly filed an amended petition adding a claim for breach of fiduciary duty against Thompson and Commercial Realty.
In May, Thompson and Commercial Realty filed an amended no-evidence summary judgment motion addressing the additional claims raised in Kelly's amended petition. Kelly then filed a second amended petition clarifying his allegations to be claims for fraud and breach of contract against Gaines, Southwest Guaranty, Thompson, and Commercial Realty and a claim for breach of fiduciary duty against Thompson and Commercial Realty.
The hearing on Gaines's and Southwest Guaranty's second no-evidence summary judgment motion was set for May 29. Kelly filed a pleading on May 21 requesting that the hearing be continued to allow further discovery and, subject to the requested continuance, responding to the contentions of the summary judgment motion. The court denied the requested continuance and granted Gaines's and Southwest Guaranty's second no-evidence summary judgment motion on Kelly's fraud and contract claims.
In June, Kelly filed a no-evidence summary judgment motion on Gaines's and Southwest Guaranty's counterclaims. Kelly also filed: (1) a motion to reconsider the prior summary judgment rulings, (2) a response to Thompson's and Commercial Realty's amended no-evidence summary judgment motion, and (3) a motion to supplement the motion to reconsider with Meeks's affidavit. Gaines and Southwest Guaranty filed a response to Kelly's no-evidence summary judgment motion on their counterclaims. Kelly filed a supplemental petition alleging a claim of promissory estoppel against Gaines and Southwest Guaranty. At a June 27 hearing, the court granted Thompson's and Commercial Realty's no-evidence summary judgment motion.
In July, Gaines and Southwest Guaranty filed a summary judgment motion contending that Kelly's promissory estoppel claim was barred by limitations and a motion for sanctions. Kelly filed a response to Gaines's and Southwest Guaranty's summary judgment motion and a second motion to reconsider the court's prior summary judgment rulings. Thompson, and Commercial Realty filed a response to Kelly's second motion to reconsider.
In August, Kelly filed a motion for sanctions against Gaines and Southwest Guaranty and a response to Gaines's and Southwest Guaranty's sanctions motion.
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