Martinez v. Dkta Enters. Ltd.

• Decision Date: 29 May 2020
• Docket Number: No. 07-19-00116-CV,07-19-00116-CV
• Parties: JULIO MARTINEZ, APPELLANT v. DKTA ENTERPRISES LTD., SUNSET WELL SERVICES, INC., AND POLICARPIO "POLY" ABALOS, APPELLEES
• Court: Court of Appeals of Texas

JULIO MARTINEZ, APPELLANT v. DKTA ENTERPRISES LTD., SUNSET WELL SERVICES, INC.,AND POLICARPIO "POLY" ABALOS, APPELLEES

No. 07-19-00116-CV

Court of Appeals Seventh District of Texas at Amarillo

May 29, 2020

On Appeal from the 70th District Court Ector County, Texas

Trial Court No. A-137,862, Honorable Denn Whalen, Presiding

MEMORANDUM OPINION

Before QUINN, C.J., and PARKER and, DOSS, JJ.

Julio Martinez (Martinez) appeals from a final summary judgment denying him recovery against DKTA Enterprises Ltd., Sunset Well Services, Inc., and Policarpio "Poly" Abalos (collectively referred to as Sunset). The underlying dispute arose from alleged promises by Sunset to Martinez concerning an agreement to sell him a house and pay him a $100,000 employment bonus after seven years of work. Apparently, Martinez worked for Sunset and DKTA under the direction of Abalos. The promises in question supposedly went unfulfilled, resulting in Martinez suing Sunset, DKTA, and Abalos for 1) breached contract, 2) fraud, 3) conversion, 4) intentional infliction of emotional distress, 5) negligence, 6) gross negligence, 7) misrepresentation, and 8) alter ego. The traditional and no-evidence motions for summary judgment filed by his three opponents addressed each cause of action. Furthermore, the trial court granted them without specifying the grounds upon which it relied. Martinez timely appealed and presented us with multiple issues.¹ We affirm.²

Objections to Summary Judgment Evidence

In his first issue, Martinez contends that the trial court erred by overruling his objections to an affidavit filed in support of Sunset's motions for summary judgment. We overrule the issue for the following reason.

The admission or exclusion of evidence lies within the trial court's discretion. Mira Mar Dev. Corp. v. City of Coppell, 364 S.W.3d 366, 376 (Tex. App.—Dallas 2012, pet. denied). Assuming arguendo that the trial court erred in overruling Martinez's objections to the affidavits, it remained incumbent upon him to show harm due to the purported ruling. Id. That obligation required him to explain how the error probably caused the rendition of an improper judgment. Id. Merely concluding that it did, does not suffice. Martinez neglected to do that here. He simply concluded the alleged error was reversible.Having failed to address harm, he likewise failed to show the alleged error entitled him to reversal.

Fraud

Martinez next contends that the trial court erred in granting summary judgment on his claim of fraud. Sunset contended in its summary judgment motion that he had no evidence of either a falsehood or a promise made with the intent not to perform it. Martinez allegedly did and presented it to the trial court thereby precluding it from granting that aspect of the no-evidence motion. We overrule the issue.

Again, underlying all his claims are the supposed promises of Sunset. They consist of its agreement to 1) sell him a house and 2) pay him a $100,000 bonus after seven years of employment. The failure to perform those agreements constituted fraud, according to Martinez, because Sunset had no intent to perform when the promises were made.

There are situations where a claim of fraud may arise from a breached contract. They involve the breaching party having no intention to perform its contractual obligations when entering the agreement. See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 305 (Tex. 2006) (stating that a contractual promise made without the intention of performing may give rise to an action for fraudulent inducement). Yet, a subsequent breach of the agreement (i.e., failing to perform the promise) alone is not evidence of the requisite intent. Id. Nor is denying that an alleged promise was made legally sufficient evidence of fraud. Id. On the other hand, a breach coupled with "'slight circumstantial evidence' of fraud" may support a claim of fraudulent inducement. Id. Martinez suggeststhat he presented the accompanying "slight circumstantial evidence of fraud" to elevate the breach of contract to fraud, here. We assess that by applying the standard of review applicable to reviewing summary judgments. It is explained in Community Health Sys. Prof'l Servs. Corp. v. Hansen, 525 S.W.3d 671 (Tex. 2017).

Regarding the bonus, Martinez cited us to evidence depicting that 1) Abalos represented "he was going to give him [Martinez] a loyalty bonus of $100,000.00 if [Martinez] stayed for seven years," 2) his "seven years ended in June of 2012," 3) "he went to [Abalos] and asked for the bonus," 4) Abalos said the bonus would be forthcoming "next December," and 5) "[a]fter one year . . . [he] did not get his bonus as promised . . . ." Upon our putting aside surmise or speculation, we conclude that this illustrates nothing more than a promise to pay coupled with nonpayment when it came time to perform. That evinces nothing other than a breach of contract, and evidence of a breached contract alone fails to illustrate an intent not to perform a promise when it was made. And, Martinez did not explain otherwise.

He merely concluded that it was "solid testimony from which Appellees' fraudulent intent could be easily inferred." If it were possible to "easily infer[]" the existence of deceit at the inception of the arrangement from this bit of evidence, it is equally easy to infer from it nothing more than the mere failure to abide by an earlier promise. And, because either inference is not more probable than the other, the evidence proves neither inference. See Hancock v. Variyam, 400 S.W.3d 59, 70-71 (Tex. 2013) (stating that a fact-finder "may not reasonably infer an ultimate fact from 'meager circumstantialevidence which could give rise to any number of inferences, none more probable than another'").

Simply put, what Martinez relies on is not the "slight circumstantial evidence of fraud" needed to overcome the rule mentioned in Tony Gullo. It is merely evidence of a breached agreement.

As for the agreement about the home, it was manifested in a document signed by a Sunset representative and Martinez in June of 2011. The agreement provided that " between Julio Martinez ("Buyer") and Sunset Well Service, Inc. ("Seller"), . . . seller will sale [sic] 517 E. 93rd Street, Odessa, Texas 79765 . . . for a total sale price of $348,180.75 in the form of 348 payments of $1,000.00" which payments would be made twice a month "to the Seller." Martinez further agreed to "pay all property taxes and pay insurance coverage . . . while [the] agreement [was] in effect." Finally, the parties agreed that "[t]he property will be deeded to Buyer, Julio Martinez, after payoff."³ (Emphasis added). Allegedly, Sunset failed to perform its end of the bargain and convey the house to him. As evidence that it intended not to perform from the inception of the agreement, Martinez alludes to the failure to convey coupled with evidence of his "buying the house, [and] paying for it, [while Abalos] was not letting [Martinez] . . . claim the mortgage interest orthe homestead exemption." This too falls short of circumstantial evidence of fraud under Tony Gullo.

Reference to the alleged interference with claiming "mortgage interest or the homestead exemption" appeared in a deposition of Martinez. Its sum total consisted of his statement that "[i]f I was buying the house and I was paying him [Abalos], you know, why was he not letting me claim the mortgage interest or the homestead exemption, you know?" Nothing else was said about how or when Martinez attempted to "claim the mortgage interest or the homestead exemption." How and why Abalos purportedly interfered went unexplained, as did the extent of the interference, its duration, and its inception. In other words, the comment is bereft of factual support and development. Without that, it is conclusory. See Massey Operating, LLC v. Frac Tech Servs., LLC, No. 11-11-00118-CV, 2013 Tex. App. LEXIS 2278, at *8-9 (Tex. App.—Eastland Mar. 7, 2013, no pet.) (mem. op.) (stating that a conclusory statement is one that does not provide the underlying facts to support it). Being conclusory, it is not competent summary judgment evidence, especially when we are left to guess at when or why the interference purportedly occurred. See Tony Gullo Motors, 212 S.W.3d at 306 (noting that the destruction of the contract was circumstantial evidence of fraud in the contracting process because it "was part of the original contracting process").

Even if the utterances were not conclusory, we are at a loss understanding how they indicate fraud. Referring to the contract signed by the parties, we note it says nothing of a mortgage or interest. Rather, he apparently obligated himself under the instrument to 1) pay a specific price for the house and 2) pay that price in a specific number ofpayments with each being for a specific amount. Furthermore, we were cited to nothing of record illustrating that he paid a particular amount of interest or that a portion of the monthly payments were attributable to interest. See Cottledge v. Roberson, No. 05-12-00720-CV, 2013 Tex. App. LEXIS 4540, at *2-3 (Tex. App.—Dallas Apr. 9, 2013, no pet.) (mem. op.) (imposing upon the appellant the burden of directing the reviewing court to the evidence in the record supporting her contentions and stating that the reviewing court is not responsible for searching the summary judgment record for such evidence). Unless Martinez paid or obligated himself to pay interest it is rather nonsensical to begin to suggest that interfering with his ability to deduct interest is an indicia of fraud. The same is no less true with the purported homestead designation.

Elsewhere in his appellate brief Martinez clarifies that he needed some type of "house documents" from Sunset illustrating he owned the house to secure the homestead designation. Yet, given the nature of the contract he signed, he did not own the house. We explain why later in our opinion. If he did not own the house, then Sunset had no...