Methodist Hospitals of Dallas v. Corporate Communicators, Inc.

• Decision Date: 06 March 1991
• Docket Number: No. 05-90-00388-CV,05-90-00388-CV
• Citation: 806 S.W.2d 879
• Parties: METHODIST HOSPITALS OF DALLAS, Appellant, v. CORPORATE COMMUNICATORS, INC., Appellee.
• Court: Texas Court of Appeals

Page 879

806 S.W.2d 879

METHODIST HOSPITALS OF DALLAS, Appellant, v. CORPORATE COMMUNICATORS, INC., Appellee.

No. 05-90-00388-CV.

Court of Appeals of Texas Dallas.

March 6, 1991.

Rehearing Denied April 24, 1991.

B. Scott Tilley, Wade L. McClure, Dallas, for appellant.

Anthony A. Petrocchi, Christopher M. Weil, Dallas, for appellee.

Before WHITHAM, LAGARDE and KINKEADE, JJ.

OPINION

KINKEADE, Justice.

Methodist Hospitals of Dallas appeals a judgment in favor of Corporate Communicators, Inc. (CCI) in this breach of contract action. In eleven points of error, Methodist asserts various alleged errors. We consider only the assertions that the trial court erred when it (1) granted CCI's motion for partial summary judgment and failed to grant Methodist's motion for reconsideration, (2) granted CCI's motions in limine, and (3) modified the court's charge during its closing argument. Because the trial court erred in modifying the court's charge during CCI's closing argument, we reverse the trial court's judgment and remand the cause for further proceedings.

PROCEDURAL HISTORY

On November 7, 1983, Methodist executed two contracts to purchase magazines produced by CCI. Methodist's president, William E. Parisi, and its vice-presidents, Ralph E. Cross and Ed Osofski, signed the contracts on behalf of Methodist. Leslie B. Blaser signed the contracts on behalf of CCI. The contracts renewed previous agreements between the parties. After Methodist ordered and purchased several issues of the magazines under these renewed contracts, it refused to order any more magazines and instructed CCI not to produce or deliver any more magazines. On June 16, 1986, CCI filed suit to recover damages for Methodist's alleged breach of the two contracts. One month later, Methodist filed a general denial and a counterclaim for the payment of services allegedly rendered to CCI by Methodist.

On May 12, 1987, CCI filed a motion for partial summary judgment on the issue of Methodist's breach of contract. CCI attached the sworn and notarized affidavits of Parisi, Cross, Osofski, and Blaser. On July 6, 1987, Methodist filed its response to CCI's motion, and the court held a hearing. In its response, Methodist raised lack of authority to execute the contract by its officers and attached the unsigned, unsworn affidavits of Paul R. Seegers, its chairman of the board, and Michael J. Schaefer, its senior vice-president and chief financial officer. On July 21, 1987, the trial court granted CCI's motion for partial summary judgment on the issue of Methodist's breach of the contracts. The court reserved for jury trial the issue of damages caused by the breach and Methodist's right, if any, to offset those damages. On October 21, 1987, CCI moved for summary judgment on the issues of damages. On November 9, 1987, Methodist filed (1) its first amended answer raising lack of authority as an affirmative defense, (2) a response to CCI's motion for summary judgment concerning damages asserting that a decision as to damages was premature because the court should first reconsider the issue of liability, and (3) a motion to reconsider the court's grant of summary judgment to CCI on the issue of Methodist's breach of contract. Methodist attached to its motion for reconsideration the signed, sworn affidavits of Seegers and Schaefer, which showed a file date of July 2, 1987. On December 29, 1987, the trial court denied CCI's motion for summary judgment as to damages and denied Methodist's motion to reconsider the previously granted partial summary judgment. After a jury trial, the court entered a final judgment in favor of CCI awarding actual damages, attorneys' fees, interest, and court costs.

SUMMARY JUDGMENT

In its first point of error, Methodist contends that the trial court erred when it (1) granted CCI's motion for partial summary judgment as to Methodist's breach of the two contracts and (2) failed to grant Methodist's motion for reconsideration. Methodist argues that CCI failed to produce sufficient evidence to show either actual or apparent authority of Methodist's officers to bind the hospital to the contracts.

CCI's Partial Motion for Summary Judgment

Summary judgment is proper only if the pleadings, depositions, admissions, and affidavits show that (1) there is no genuine issue as to any material fact, and (2) the moving party is entitled to judgment as a matter of law. TEX.R.CIV.P. 166a. On appeal, this Court resolves all doubts against the movant, CCI. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678-679 (Tex.1979).

A breach of contract occurs when a party fails or refuses to perform an act that it expressly promised to do. Fidelity & Deposit Co. v. Stool, 607 S.W.2d 17, 24 (Tex.Civ.App.--Tyler 1980, no writ). A party that denies the execution, by itself or by its authority, of a contract upon which a pleading is founded, must do so by a sworn denial. TEX.R.CIV.P. 93(7). In the absence of a verified plea of denial, the court receives the instrument into evidence as fully proved. Zodiac Corp. v. General Elec. Corp., 566 S.W.2d 341, 346 (Tex.Civ.App.--Tyler 1978, no writ). Further, ratification of a contract occurs if the principal retains the benefits of the transaction after acquiring full knowledge of its agent's unauthorized acts. Land Title Co. of Dallas, Inc. v. F.M. Stigler, Inc., 609 S.W.2d 754, 756 (Tex.1980).

To support its motion for partial summary judgment, CCI attached signed copies of both contracts and the sworn affidavits of Parisi, Osofski, and Cross. Each of these affidavits stated that these officers represented and executed the agreements with the belief that they possessed the authority to bind Methodist to the terms of the contracts. CCI also attached Blaser's sworn affidavit, which stated that (1) he believed the Methodist officers executing the contracts possessed the authority to do so, (2) CCI performed its obligations under the contract, and (3) Methodist refused to perform its obligations under the contract.

In its original answer Methodist failed to file a sworn denial of the execution of the contracts by persons with authority. In its response to CCI's motion, Methodist raised for the first time lack of authority by its officers to sign the contracts on Methodist's behalf. To support its arguments, Methodist attached the unsigned, unsworn affidavits of Seegers and Schaefer. More than three months after the summary judgment hearing, Methodist attached to its motion to reconsider signed and sworn copies of these affidavits, which showed that they were filed with the clerk on July 2, 1987. Even if we ignore Methodist's failure to file a sworn denial, there is no indication from the record that Methodist drew the court's attention to the signed and sworn copies of the affidavits at the summary judgment hearing on July 6, 1987. Further, the record fails to show that Methodist's response or the affidavits were on file seven days prior to the day of the hearing or that Methodist obtained leave of court to file its response or the affidavits late. See Tex.R.Civ.P. 166a(c).

Viewing the summary judgment evidence in a light most favorable to Methodist, no genuine issue of material fact exists regarding lack of authority or Methodist's breach of the contracts. Absent a verified plea that Methodist's officers lacked authority to execute the contracts, the court received the contracts as fully proved. Further, Methodist ratified its officers' actions when it ordered magazines and accepted their delivery pursuant to the renewed contracts. These facts coupled with the sworn statements by Methodist's officers that they believed they had authority and Blaser's statements that CCI performed all of its obligations and Methodist refused to further perform its obligations established CCI's breach of contract claim as a matter of law. Because CCI established as a matter of law that Methodist breached the two contracts, the trial court properly granted CCI's partial motion for summary judgment as to liability on July 21, 1987.

Methodist's Motion to Reconsider

On November 9, 1987, over three months after the granting of CCI's partial summary judgment, Methodist amended its answer, raising lack of authority as an affirmative defense, and filed a motion asking the court to reconsider its ruling on CCI's partial summary judgment as to liability. The trial court granted CCI its motion for partial summary judgment on July 21, 1987. In an apparent attempt to get a second bite at the apple, Methodist amended its answer and filed a motion to reconsider the court's earlier ruling. Once the trial court granted CCI summary judgment as to liability, no obligation existed for it to consider further motions on that issue from either party. See Martin v. First Republic Bank, 799 S.W.2d 482, 488-89 (Tex.App.--Fort Worth 1990, writ denied).

In its motion to reconsider, Methodist asserted that (1) due to scheduling conflicts, Methodist was unable to depose CCI's affiants until just prior to the summary judgment hearing, (2) the deposition transcripts were unavailable at the time Methodist filed its response or at the time of the hearing, and (3) these depositions raised the lack of authority issue. Methodist, however, failed to request a continuance or leave of court to file a late response. See TEX.R.CIV.P. 166a(c) & (f). As discussed above, the trial court properly granted CCI's motion and, therefore, was under no obligation to allow Methodist to further litigate the breach of contract issue. Because the trial court properly granted CCI summary judgment, it did not abuse its discretion when it denied Methodist's motion to reconsider. We overrule Methodist's first point of error.

MOTIONS IN LIMINE

In its second and third points of error, Methodist contends that the trial court erred when it granted CCI's motions in limine. Methodist argues that the trial court's ruling precluded it from presenting evidence concerning the lack of...