Leonard v. Knight

• Decision Date: 31 May 2018
• Docket Number: NO. 14-16-00932-CV,14-16-00932-CV
• Citation: 551 S.W.3d 905
• Parties: John LEONARD, Appellant v. Spencer Tracy KNIGHT, Appellee
• Court: Texas Court of Appeals

551 S.W.3d 905

John LEONARD, Appellant

v.Spencer Tracy KNIGHT, Appellee

NO. 14-16-00932-CV

Court of Appeals of Texas, Houston (14th Dist.).

Opinion filed May 31, 2018

Suzan R. Sanders, Wichita Falls, TX, for Appellant.

Mark Alan Junell, Houston, TX, for Appellee.

Panel consists of Justices Jamison, Busby, and Donovan.

J. Brett Busby, JusticeAppellee Spencer Tracy Knight sued appellant John Leonard for breach of contract when Leonard failed to pay the full amount owed under an agreement. Knight filed a traditional motion for summary judgment, which the trial court granted. Leonard challenges the trial court’s final summary judgment in three issues.

Leonard contends that the trial court erred when it granted Knight’s motion for summary judgment on breach of contract because Leonard’s evidence created a fact issue on each element of his affirmative defense of prior material breach. We overrule this issue because Leonard’s evidence did not create a genuine issue of material fact on whether Knight’s breach was material, thus excusing Leonard from future performance.

Leonard also advances two issues challenging the trial court’s award of attorney’s fees to Knight. First, Leonard argues that the trial court erred in granting summary judgment on fees because his evidence created a genuine issue of material fact on the reasonableness of Knight’s fees. We overrule this issue because the affidavit Leonard filed in response to Knight’s motion is conclusory and therefore no evidence. Second, Leonard asserts that Knight’s evidence should not have been considered, as he did not timely designate his expert nor supplement discovery. We overrule this issue because Leonard failed to preserve it for appellate review. We therefore affirm the trial court’s summary judgment.

BACKGROUND

The relevant facts in this case are undisputed. Knight and Leonard settled a prior lawsuit by signing a settlement agreement in July 2010.¹ Leonard promised in that settlement agreement that he would sign a promissory note obligating him to (1) pay Knight a total of $86,500 plus interest for a term of four years; (2) make minimum monthly payments of at least $250 during the four-year term; and (3) at the end of the four-year term, pay the unpaid principal and interest in a single balloon payment. Knight, on the other hand, agreed that he would dismiss the prior lawsuit with prejudice. Both Knight and Leonard agreed that they would release all claims each had against the other. Leonard signed the promissory note one month later.

Leonard began making payments soon after signing the promissory note, and he made the minimum monthly payment each month for four years. Knight never filed a motion to dismiss the prior lawsuit with prejudice. Instead, the trial court dismissed the prior lawsuit for want of prosecution in September 2010. Knight made no effort to refile the prior lawsuit against Leonard. For four years, Leonard never complained to Knight that the dismissal of the prior lawsuit was without prejudice.

Leonard did not make the final balloon payment, which was due in August 2014. Instead, Leonard sent Knight a letter in December 2014 pointing out that Knight had not filed a motion to dismiss the prior lawsuit with prejudice. Contending this failure was a breach of the settlement agreement, Leonard notified Knight that he was revoking the settlement agreement. Knight responded by suing Leonard for breach of contract. Leonard filed an answer asserting the affirmative defense that his performance under the settlement agreement was excused as a result of Knight’s prior material breach of the agreement.

Knight eventually filed a traditional motion for summary judgment. The trial court granted Knight’s motion and signed a final summary judgment awarding Knight $105,135.82 as the amount owed under the promissory note,² $21,659.44 for attorney’s fees and costs through trial, and additional fees if the case was appealed and Knight prevailed. This appeal followed.

ANALYSIS

I. The trial court did not err in granting Knight summary judgment on his claim for breach of contract.

We address appellant’s third issue first because success on this issue would afford him the greatest relief. See CMH Homes, Inc. v. Daenen , 15 S.W.3d 97, 99 (Tex. 2000) ; Caballero v. Caballero , No. 14-16-00513-CV, 2017 WL 6374724, at *3 (Tex. App.—Houston [14th Dist.] Dec. 14, 2017, no pet.) (mem. op.) (addressing appellate issue providing greatest possible relief first). In that issue, Leonard argues summary judgment was improper on Knight’s claim for breach of contract because a question of fact existed regarding Leonard’s affirmative defense of prior material breach.

A. Standard of review

We review a trial court’s order granting a traditional summary judgment de novo. Mid–Century Ins. Co. v. Ademaj , 243 S.W.3d 618, 621 (Tex. 2007). In reviewing a grant of summary judgment, we consider all of the evidence in the light most favorable to the nonmovant. Ron v. AirTran Airways, Inc. , 397 S.W.3d 785, 788 (Tex. App.—Houston [14th Dist.] 2013, no pet.). When a plaintiff moves for summary judgment on its cause of action, it must conclusively prove all essential elements of its claim as a matter of law. Cullins v. Foster , 171 S.W.3d 521, 530 (Tex. App.—Houston [14th Dist.] 2005, pet. denied). Evidence is considered conclusive if reasonable people could not differ in their conclusions. Dias v. Goodman Mfg. Co., L.P. , 214 S.W.3d 672, 676 (Tex. App.—Houston [14th Dist.] 2007, pet. denied). The nonmovant has no burden to respond to a motion for summary judgment unless the movant conclusively establishes each element of its cause of action as a matter of law. Rhone–Poulenc, Inc. v. Steel , 997 S.W.2d 217, 222–23 (Tex. 1999). If the movant establishes its entitlement to judgment, then the burden shifts to the nonmovant to come forward with competent controverting evidence sufficient to raise a genuine issue of material fact. Muller v. Stewart Title Guar. Co. , 525 S.W.3d 859, 868 (Tex. App.—Houston [14th Dist.] 2017, no pet.).

Once Knight proved his entitlement to summary judgment as a matter of law, it became Leonard’s burden as the non-movant to present grounds for avoiding summary judgment. Home Loan Corp. v. JPMorgan Chase Bank, N.A. , 312 S.W.3d 199, 205 (Tex. App.—Houston [14th Dist.] 2010, no pet.). To avoid summary judgment by raising an affirmative defense, the non-movant must do more than merely plead the affirmative defense. Lujan v. Navistar Fin. Corp. , 433 S.W.3d 699, 704 (Tex. App.—Houston [1st Dist.] 2014, no pet.)

. In addition, the non-movant must produce sufficient evidence to conclusively prove or at least raise a material issue of fact as to each element of the affirmative defense. See Wiggins v. Overstreet , 962 S.W.2d 198, 200 (Tex. App.—Houston [14th Dist.] 1998, pet. denied).

B. Leonard did not raise a genuine issue of material fact on his affirmative defense of prior material breach.

When one party to a contract commits a material breach of that contract, the other party is discharged or excused from further performance. PAJ, Inc. v. Hanover Ins. Co. , 243 S.W.3d 630, 633 (Tex. 2008). The contention that a party is excused from its contract performance by the other party’s prior material breach is an affirmative defense. Henry v. Masson , 333 S.W.3d 825, 834 (Tex. App.—Houston [1st Dist.] 2010, no pet.). Non-material breaches do not excuse future performance by the non-breaching party. Bartush–Schnitzius Foods Co. v. Cimco Refrigeration, Inc. , 518 S.W.3d 432, 436 (Tex. 2017). Materiality is normally a question of fact, but it "may be decided as a matter of law ... if reasonable jurors could reach only one verdict." Id. In determining the materiality of a breach, courts consider, among other things, the extent to which the non-breaching party will be deprived of the benefit that it reasonably could have anticipated from full performance. Hernandez v. Gulf Group Lloyds , 875 S.W.2d 691, 693 (Tex. 1994). The less the non-breaching party is deprived of the expected benefit of the contract, the less material the breach. Id.

Knight admits he did not file a motion to dismiss the prior lawsuit with prejudice. Instead, the trial court dismissed the prior lawsuit without prejudice for want of prosecution. Leonard argues Knight’s failure to do as he promised in the settlement agreement is a material breach of the agreement because a dismissal "without prejudice is not a determination on the merits of the case," while a dismissal with prejudice "would mean that [Leonard] did not commit [the] allegations and claims in the underlying suit." Leonard cites no authority for the latter proposition, and our own research reveals none. Although a dismissal with prejudice does operate as a determination on the merits of the claim, it does so for the purpose of barring future litigation of the same claim. See Mossler v. Shields , 818 S.W.2d 752, 754 (Tex. 1991) ; In re Guardianship of Patlan , 350 S.W.3d 189, 196 (Tex. App.—San Antonio 2011, no pet.).

Knight and Leonard entered into the settlement agreement "for the purpose of finally resolving and terminating any and all controversies between [them] and to buy peace." As a result of the settlement agreement, Knight took no further action in the trial court where the prior lawsuit was pending, and the lawsuit was eventually dismissed for want of prosecution on September 23, 2010. Knight took no action to revive the prior lawsuit after it was dismissed by the trial court. Leonard confirmed this when he stated that he was unaware that the prior lawsuit had been dismissed without prejudice until December 4, 2015. Although there is evidence that Knight breached the settlement agreement by failing to dismiss the prior lawsuit with prejudice, Leonard did not carry his burden to present evidence that this breach was material—e.g, that he was deprived of the benefit he reasonably expected to receive from the settlement. See FedGess Shopping Ctrs., Ltd. v. MNC...