Ortega v. City Nat. Bank
| Decision Date | 23 January 2003 |
| Docket Number | No. 13-00-064-CV.,13-00-064-CV. |
| Parties | Jose A. ORTEGA and Rene Ortega as individuals and d/b/a Ortega Farms, A Partnership, Appellants, v. CITY NATIONAL BANK, Appellee. |
| Court | Texas Court of Appeals |
Fabian Guerrero, Edinburg, for Appellants.
Lance Alan Kirby, Robert L. Galligan, Jones, Galligan, Key & Lozano, for Appellee.
Before Justices HINOJOSA, CASTILLO, and AMIDEI1.
Opinion by Justice. CASTILLO.
We grant appellee's motion for rehearing, withdraw our opinion issued August 31, 2001, and substitute the following in its place.
Jose and Rene Ortega ("the Ortegas")2 sought financing for their farming operations from City National Bank ("the Bank"). When the bank refused to extend a line of credit over and above that already extended, the Ortegas sued. The summary judgment from which this appeal arises granted a take-nothing judgment against appellants and judgment in favor of the Bank on its counterclaim for judicial foreclosure of its security interest on each of three notes. The summary judgment awarded the Bank liquidated damages in the amount of $302,637.78. Appellants assert the trial court erred in granting summary judgment against their claims of breach of contract, negligence, and fraud. We affirm.
In May of 1995, the Bank loaned the Ortegas $93,800 for the 1996 crop year. A guarantee of the loan was provided by the Farm Service Agency (the "FSA").3 The Ortegas made no payment on the loan. Despite the' nonpayment of the 1995 loan, in January of 1996, the Bank made another loan to the Ortegas for $115,000.00. This loan was also guaranteed by the FSA and provided that "this promissory note will be used for three consecutive crop years, with [the] second and third years being advanced only after [sic] preceding crop year[']s advance has been paid in full." That same month, the Bank restructured the 1995 loan as a five-year amortization with a three-year balloon. The Ortegas failed to repay the entire amounts due for the 1995 and 1996 loans, although they did receive some crop insurance proceeds which were turned over to the Bank. In August of 1996, a vice president of the Bank applied part of a $49,000 insurance check to the 1995 debt and part to the 1996 line-of-credit debt.4 Another insurance check was applied to the 1996 line-of-credit debt. Needing money to secure a lease agreement on 300 acres of land used for their farming operations, the Ortegas requested financing from the Bank for the 1997 crop year. In September of 1996, the Bank notified the Ortegas by letter that, at that time, it was denying a request for a non-FSA guaranteed direct line of credit from the bank, due to drought conditions in the Rio Grande Valley and the uncertainty of the availability of sufficient water. In December of 1996, FSA informed the Ortegas that the 1997 advance on the FSA-guaranteed line of credit could not be extended because the Ortegas did not meet the necessary debt-credit ratio required to secure an FSA guarantee. The Bank then reversed the application of the August insurance proceeds to the 1995 loan, applied those funds to the 1996 line of credit, and pushed back the due date on the 1995 loan. These actions altered the Ortegas' debt-credit ratios sufficiently to allow them to qualify for a FSA guarantee of a 1997 line of credit.
In May of 1997, the Ortegas sued the Bank, claiming that the Bank's initial application of a portion of the insurance funds toward the 1995 debt, rather than the 1996 line of credit, directly caused the FSA's rejection of the loan renewal package in late 1996 and Ortega's subsequent loss of the ability to lease the 300 acres that they had been unable to secure. The Ortegas alleged breach of contract, breach of the duty of good faith, negligence, and fraud under the Deceptive Trade Practices Act.5 The Bank filed a counterclaim for judicial foreclosure on all outstanding notes which the Ortegas owed the Bank.
On March 26, 1999, the Bank filed a traditional motion for summary judgment against claims alleged in the Ortegas' first amended petition. The Ortegas subsequently amended their petition, filing "Plaintiff's Third Amended Petition for Breach of Express Contract and Fraud" which replaced its breach of contract claim with a third-party beneficiary action for breach of contract and dropped the DTPA claims, replacing them with common-law fraud claims.6 The Bank then filed a "Motion for Summary Judgment Reply" on May 3, 1999, noting that new causes of action had been filed but suggesting that the trial court grant a partial summary judgment on the issues previously raised in the Ortegas' prior petition. The Ortegas filed a response alleging that the existing motion for summary judgment was inapplicable to the pleadings before the court because of the amended petition and therefore should be denied in whole. In response, on July 29, 1999, the Bank filed a supplemental motion for summary judgment, seeking a summary judgment on traditional grounds against all the claims alleged in the Ortegas' third amended original petition, in which the Ortegas pled for recovery as a third-party beneficiary of the contract between the Bank and the Farm Service Agency, negligence, breach of the duty of good faith and fair dealing, and fraud. The Bank also alleged a "no-evidence" ground in the alternative as to the Ortegas' fraud claim.
On August 6, 1999, prior to the submission date for the supplemental motion for summary judgment, the Ortegas once again amended their petition and added an additional cause of action for civil conspiracy. In their August 16, 1999 response to the Bank's pending motion, the Ortegas provided notice that they had filed an amended petition and specially excepted to the supplemental motion for summary judgment on the grounds that "therefore the Defendant's motion is inapplicable with regard to those theories which are insufficiently described by the defendant." In the subsequent paragraph of the response, the Ortegas provided notice of the newly alleged civil conspiracy cause of action. The Bank filed a reply to the Ortegas' response but did not address the issue of the new cause of action or file any additional supplemental motions for summary judgment.
In the summary judgment order, the trial court acknowledged the filing of the fourth amended original petition, finding that it "included essentially the same allegations as in their third amended petition." The trial court further found that the Bank's supplemental summary judgment motion "addressed all of the Ortegas' affirmative claims for relief appearing in their fourth amended petition." The trial court granted summary judgment against all of the plaintiffs' claims raised in the fourth amended petition.
Before we reach the merits of this case, we must first determine whether we have jurisdiction over this appeal. Texas Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex.1993). Because the question of jurisdiction is a legal question, we follow the de novo standard of review. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex.1998). Jurisdiction of a court is never presumed and, if the record does not affirmatively demonstrate the appellate court's jurisdiction, the appeal must be dismissed. El-Kareh v. Tex. Alcoholic Beverage Comm'n, 874 S.W.2d 192, 194 (Tex.App.-Houston [14th Dist.] 1994, no writ). As appeals are only allowed from final orders or judgments, we must first consider whether an order purporting to grant a summary judgment can be final and appealable when one of the plaintiff's causes of actions was not addressed by the defendant in the motion for summary judgment. Lehmann v. HarCon Corp., 39 S.W.3d 191, 195 (Tex.2001); Liu v. Yang, 69 S.W.3d 225, 227 (Tex.App.-Corpus Christi 2001, no pet.). We have recently decided this question in the negative. Liu, 69 S.W.3d at 228-29.
However, the judgment in the present case, unlike that in Liu, did purport to address all of plaintiffs' claims, even those not specifically pled in the motion for summary judgment, and, in accordance with the same, ordered that the plaintiffs' take nothing on their suit. As the trial court purported to rule on all claims in the plaintiff's fourth amended petition, we find that the summary judgment order was final. Ritzell v. Espeche, 87 S.W.3d 536, 538 (Tex.2002); see also Lehmann, 39 S.W.3d at 200. We therefore have jurisdiction to determine this cause.
The trial court granted summary judgment against all five of the Ortegas' claims in their fourth amended petition: breach of contract, breach of duty of good faith and fair dealing, negligence, fraud, and civil conspiracy. On appeal, the Ortegas complain only of the trial court's rulings on their breach of contract, negligence, and fraud claims. Accordingly, we will now consider whether the trial court erred in granting summary judgment against the appellants on their breach of contract, negligence, and fraud claims.
The function of summary judgment is not to deprive litigants of the right to a trial by jury, but to eliminate patently unmeritorious claims and defenses. City of Houston v. Clear Creek Basin Autlz., 589 S.W.2d 671, 678 n. 5 (Tex.1979); Swilley v. Hughes, 488 S.W.2d 64, 68 (Tex. 1972). On appeal, the proper standard of review for the grant of a motion for summary judgment is determined by whether the motion was granted on traditional or "no-evidence" grounds. The determination of the nature of the motion for summary judgment is critical, as the difference in relative burdens between the parties in the two types of summary judgments is significant. See Michael v. Dyke, 41 S.W.3d 746, 750-52 (Tex.App.-Corpus Christi 2001, no pet.)
We review the grant of a traditional summary judgment de novo. Alejandro v. Bell, 84 S.W.3d 383, 390 (Tex. App.-Corpus Christi 20...
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