Richardson-Eagle v. William M. Mercer, Inc.

• Decision Date: 07 December 2006
• Docket Number: No. 01-04-01000-CV.,01-04-01000-CV.
• Citation: 213 S.W.3d 469
• Parties: RICHARDSON-EAGLE, INC., Appellant, v. WILLIAM M. MERCER, INC., and William M. Mercer of Texas, Inc., Appellees.
• Court: Texas Court of Appeals

213 S.W.3d 469

RICHARDSON-EAGLE, INC., Appellant, v. WILLIAM M. MERCER, INC., and William M. Mercer of Texas, Inc., Appellees.

No. 01-04-01000-CV.

Court of Appeals of Texas, Houston (1st Dist.).

December 7, 2006.

Rehearing Overruled February 28, 2007.

James L. Reed, Jr., Travis Scott Crabtree, Looper, Reed & McGraw, Houston, TX, for Appellant.

Bart Wulff, Jackson Walker L.L.P., W. Michael Byrd Jr., Dallas, TX, Carole Elaine Howard, Jackson Walker LLP, Houston, TX, for Appellee.

Panel consists of Chief Justice RADACK and Justices TAFT and ALCALA.

OPINION

SHERRY RADACK, Chief Justice.

Richardson-Eagle, Inc., appellant, has filed a motion for en banc reconsideration of our opinion issued on August 24, 2006. We withdraw our opinion and judgment of August 24, 2006 and substitute this opinion in their stead. Because we issue a new opinion in connection with the denial of rehearing, appellant's motion for en banc reconsideration of our prior opinion is moot. See Brookshire Bros. v. Smith, 176 S.W.3d 30, 40 n. 2 (Tex.App.-Houston [1st Dist.] 2004, pet. denied) (supp op. on reh'g).

Richardson-Eagle sued appellee, William M. Mercer, Inc., for tortious interference with an existing contract, tortious interference with a prospective business relation, violation of former article 21.21 of the Insurance Code,¹ and violation of the Business and Commerce Code.² The trial court rendered summary judgment in favor of Mercer on all of Richardson-Eagle's claims, denied Mercer's claim of governmental immunity, and denied Richardson-Eagle's motion for partial summary judgment on certain statutory violations by Mercer. Richardson-Eagle appeals, claiming that fact issues remain on all of its claims against Mercer and claiming that it conclusively established the statutory violations by Mercer as a matter of law. We affirm.

Facts

In June 2000, William M. Mercer, Inc. (Mercer) and Houston Independent School District (HISD) entered into a Health and Welfare Benefits Consulting and Administration Agreement (the agreement) whereby Mercer agreed to provide consulting and administrative services in connection with certain benefit plans offered by HISD to its employees. HISD contracted with Mercer in order to improve services and lower costs through a more centralized administration of the benefits program, which had previously been administered piecemeal by HISD staff and individual insurance vendors and agents. Richardson-Eagle was an insurance agency that had been selling voluntary benefits insurance products to HISD since 1996.

In August 2000, Mercer released HISD's Request for Proposal (RFP) to solicit bids for voluntary benefits-insurance proposals for hospital-indemnity, cancer, and disability programs. The RFP stated that "all quoted rates should be net of commissions," that "all proposers must be prepared to enroll participants electronically," and that HISD reserved the right, "at its sole discretion," to reject any and all proposals without penalty. Richardson-Eagle responded to the RFP on behalf of the Standard and American Heritage insurance companies. Richardson-Eagle submitted a disability-insurance proposal on behalf of Standard and cancer and hospital-indemnity proposals on behalf of American Heritage. All proposals included 15-percent commissions to be paid to Richardson-Eagle if either insurance company signed a contract with HISD. The commissions were for administrative services to be provided by Richardson-Eagle, including on-site enrollment services.

HISD determined the commissions had been included to compensate Richardson-Eagle for unwanted administrative services, rejected the proposals, and directed Mercer to negotiate directly with Standard and American Heritage to secure a better value for the district. Standard agreed to negotiate directly with Mercer to modify its disability proposal and ultimately agreed to include a 1.1 percent commission for Richardson-Eagle in the proposal. HISD would not have adopted the terms of the original proposal by Standard, having determined that the proposal was not the best value for the district. Subsequent negotiations led to decreased commissions; the premiums for HISD employees were reduced; and HISD concluded the revised Standard proposal was the best value and accepted it. Because American Heritage refused to negotiate directly with Mercer, HISD rejected its proposals in favor of the incumbent carrier. Richardson-Eagle's approval and participation was not sought on either of these changes.

Standard of Review

We review the trial court's ruling on a summary judgment motion de novo. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.2003). We view the evidence in the light most favorable to the non-movant and, make all reasonable inferences and resolve all doubts in the non-movant's favor. Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex.1999).

The movant for a traditional summary judgment has the burden to show that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. TEX.R. CIV. P. 166a(c); KPMG Peat Marwick v. Harrison County Housing Fin. Corp., 988 S.W.2d 746, 748 (Tex.1999). A defendant who moves for summary judgment must either disprove at least one element of each of the plaintiff's causes of action, or plead and conclusively establish each essential element of any affirmative defense, thereby rebutting the plaintiff's causes of action. Cathey v. Booth, 900 S.W.2d 339, 341 (Tex.1995). If the movant can show that it is entitled to judgment as a matter of law, the burden shifts to the non-movant to present evidence raising a fact issue to defeat the motion for summary judgment. Haight v. Savoy Apartments, 814 S.W.2d 849, 851 (Tex.App.-Houston [1st Dist.] 1991, writ denied).

In a no-evidence summary judgment, the movant represents that no evidence exists as to one or more essential elements of the non-movant's claims, upon which the non-movant would have the burden of proof at trial. TEX.R. CIV. P. 166a(I); See Jackson v. Fiesta Mart, Inc., 979 S.W.2d 68, 70-71 (Tex.App.-Austin 1998, no pet.). On appeal, we ascertain whether the non-movant produced more than a scintilla of probative evidence to raise a genuine issue of material fact. Id. More than a scintilla of evidence exists if the evidence "rises to a level that would enable reasonable and fair-minded people to differ in their conclusions." King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex.2003) (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex.1997)). If the evidence does no more than create a mere surmise or suspicion of fact, less than a scintilla of evidence exists. See Merrell Dow Pharms., Inc., 953 S.W.2d at 711.

Mercer sought both traditional and no-evidence summary judgment, and Richardson-Eagle filed a traditional motion for partial summary judgment. See TEX.R. CIV. P. 166a(c), (I). When, as here, both sides move for summary judgment, and the trial court grants one motion and denies the other, we review the summary judgment evidence presented by both sides to determine all questions presented, and render such judgment as the trial court should have rendered. Comm's Court v. Agan, 940 S.W.2d 77, 81 (Tex.1997). Because the summary judgment order does not specify the ground or grounds on which the trial court relied for its ruling, we will affirm the summary judgment if any of the summary judgment grounds is meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000).

Tortious Interference with an Existing Contract

In its first issue, Richardson-Eagle contends summary judgment was improper on its tortious interference with an existing contract claim because a fact issue remained on each element of the cause of action, and because Mercer failed to prove the affirmative defense of justification as a matter of law. The elements of a cause of action for tortious interference with contractual relations are (1) the existence of a contract subject to interference; (2) a willful and intentional act of interference; (3) that was a proximate cause of the plaintiff's damages; and (4) actual damage or loss. Powell Indus., Inc. v. Allen, 985 S.W.2d 455, 456 (Tex.1998); Abetter Trucking Co. v. Arizpe, 113 S.W.3d 503, 509 (Tex.App.-Houston [1st Dist.] 2003, no pet.). The classic proximate-cause tests for cause-in-fact and foreseeability apply to claims of tortious interference. See Hill v. Heritage Res., Inc., 964 S.W.2d 89, 126 (Tex.App.-El Paso 1997, pet. denied). Establishing causation requires that the plaintiff bring forth sufficient facts so that the evidence, and logical inferences drawn from the evidence, support a reasonable probability that the defendant's acts or omissions were a substantial factor in bringing about injury. Union Pump Co. v. Allbritton, 898 S.W.2d 773, 775 (Tex. 1995); Henry v. Houston Lighting & Power Co., 934 S.W.2d 748, 750 (Tex.App.-Houston [1st Dist.] 1996, writ denied). Though normally an issue of fact, proximate cause may be an issue of law if the facts are conclusive. See Leitch v. Hornsby, 935 S.W.2d 114, 119-20 (Tex.1996).

Richardson-Eagle contends that Mercer interfered with Richardson-Eagle's existing contracts with American Heritage and Standard, and that Mercer's interference caused Richardson-Eagle to lose the commissions it would have received from American Heritage and Standard, had HISD entered into contracts with those entities.³ The RFP, however, explicitly stated that HISD was the only entity with the power to reject the proposals from American Heritage and Standard, and HISD initially rejected both proposals because they did not conform to the requirements of the RFP. At oral submission of this cause, Richardson-Eagle claimed that HISD had not, in fact, rejected its proposals, but rather, that it had rejected every other proposal, and that the Richardson-Eagle proposal was the only one that conformed to the requirements of the RFP. Yet,...