Vermont Info. Proc. v. Montana Bev. Corp.

• Decision Date: 07 June 2007
• Docket Number: No. 08-06-00094-CV.,08-06-00094-CV.
• Citation: 227 S.W.3d 846
• Parties: VERMONT INFORMATION PROCESSING, INC., Appellant, v. MONTANA BEVERAGE CORPORATION, Appellee.
• Court: Texas Court of Appeals

227 S.W.3d 846

VERMONT INFORMATION PROCESSING, INC., Appellant, v. MONTANA BEVERAGE CORPORATION, Appellee.

No. 08-06-00094-CV.

Court of Appeals of Texas, El Paso.

June 7, 2007.

Scott E. Hayes, Vincent & Moye PC, Dallas, for Appellant.

Colbert N. Coldwell, Guevara, Rebe, Bauman, Coldwell & Reedmen, L.L.P., El Paso, for Appellee.

Before CHEW, C.J., McCLURE, and CARR, JJ.

OPINION

KENNETH R. CARR, Justice.

Appellant Vermont Information Processing, Inc. ("VIP") appeals the trial court's entry of summary judgment in this breach of contract action in favor of Appellee Montana Beverage Corporation ("MBC"). Because genuine issues of material fact remain, we reverse the trial court's judgment and remand the case to the trial court for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

VIP filed this breach of contract action against MBC on November 12, 2004. VIP's petition alleged that the parties had agreed to a computer equipment and software lease for a term of sixty months commencing in August 1999. VIP further alleged that MBC had breached that agreement by failing to make the final eight monthly payments and failing to pay the termination or "buy-out" fee and accrued interest.

In April of 1999, VIP and MBC negotiated a computer hardware and software upgrade for MBC's warehouse. The parties exchanged faxes discussing finance terms, interest rates, monthly payments, and equipment specifications. On April 22, 1999, the parties signed a "License Agreement" specifying the terms under which MBC would be able to use VIP's computer software in its wholesale beverage distribution business.

On April 26, 1999, the parties signed another document (the "April Document") memorializing the result of the negotiations to that point. The April Document is printed on VIP letterhead and states as follows:

Option 2: New AS/400 Model 170

The following is a description of the hardware and software proposed for the upgrade of your existing IBM AS/400 Model 200 (9402-601DA). Your current AS/400 has a 11.6 CPW rating, 2GB of Disk and 16MB of memory. The new configuration for the Model 170 will have a 2291 Processor with a 25 CPW rating for interactive processing and 115 CPW rating for batch processing, 16GB of disk with mirroring and 128MB of memory.

The April Document then lists all the computer equipment and software for the upgrade, with purchase price, warranty, and maintenance terms for each item. On the second page, several additional upgrade options are listed. For example, VIP could provide "inventory scanning handhelds," at a fixed price, for use in MBC's warehouse.

On page three, VIP provided three payment options. The first payment option called for a one-third software deposit and a 10 percent hardware deposit "Due when the VIP contract is signed," with the other 90 percent of the hardware payment due at installation, and the remaining software payments (one-sixth of the balance each) due each month over the next four months. Under the second and third payment options, VIP would finance the transaction. Under either financing option, a down payment would be due when the contract was signed and the remainder of the balance would be paid in sixty equal monthly payments. Each financing option also provided for a "Buyout upon Termination of Lease."¹

The document continued:

Payment for all equipment is due upon receipt of that equipment. An invoice will be furnished in time for arrival of that equipment at your location. Any invoices that remain unpaid after 30 days from invoice date will be assessed a daily finance charge of 12% per annum that will be due with payment of the invoice.

The cost of the software includes 200 hours for software preparation, conversion of the data, training and on-site cutover. Distributors your size average between 400-450 hours, additional hours beyond the 200 are billed at $100.00 per hour. Based on Montana Beverage's size and configuration, the installation will be 350 hours. Please budget for the additional 150 hours ($15,000). Also included in the cost of the software is airfare, auto rental, lodging and meals for two trips to El Paso for one VIP representative.

You should allocate ($250-500) for shipping charges, ($1,000) to purchase tapes, and ($2,100) to purchase training videos. If you reside in New York, Ohio, New Jersey, California, Massachusetts or Vermont sales taxes will be added to above amount and remitted by VIP. All other applicable taxes are your responsibility and should be paid to the proper authorities.

VIP bases its breach of contract action on both the April Document and a third document, the "Computer Equipment Lease," dated August 1, 1999 (the "August Document"). The August Document is not signed by either party, but is much more detailed regarding the terms of the lease agreement. Under the August Document, the lease was to begin on August 1, 1999, and end on July 31, 2004. Other terms included the conditions under which MBC had a right to use the equipment provided, that MBC had no right to make any alterations to the equipment without VIP's written consent, that MBC was responsible for the equipment's maintenance and repair, that MBC was responsible for any loss or damage to the equipment, that MBC would insure the equipment against loss or damage caused by fire, and the conditions under which the lease would be in default and what remedies were available.²

According to the summary judgment record, VIP delivered equipment to MBC on August 1, 1999. MBC admits in its appellate brief that, beginning in August 1999, it made monthly payments to VIP and that the payments continued for fifty-two months thereafter. At least once during the payment period, MBC changed payment options and monthly payment amounts.³ MBC stopped making monthly payments in December of 2003.

VIP filed suit, alleging that MBC breached the agreement as to the eight remaining payments, the buyout payment due at the termination of the lease, and interest. MBC filed a motion for summary judgment on both "traditional" and "no-evidence" grounds, asserting (1) that there was no evidence of an enforceable contract between the parties and (2) several affirmative defenses. The trial court granted MBC's motion on March 28, 2006, without specifying its grounds for doing so. VIP appeals.

DISCUSSION

In two issues, VIP challenges the trial court's decision to grant MBC's hybrid motion for summary judgment. Because the trial court did not specify the grounds upon which it granted the motion, we will affirm, if any ground asserted has merit. Western Invs., Inc. v. Urena, 162 S.W.3d 547, 550 (Tex.2005). Under Texas Rule of Civil Procedure 166a(b), MBC argued there was no written lease contract, an essential element of VIP's claim. MBC also asserted several affirmative defenses, which it alleged were established as a matter of law. First, MBC argued that, if there was in fact a contract between the parties, the lease was unenforceable as a violation of the statute of frauds, under Texas Business and Commerce Code section 26.01(b)(6), because it was an obligation that was not to be performed within a year. Second, MBC alleged that the contract was for the sale of goods with a value of more than $500, so that it was in violation of the statute of frauds contained in Texas Business and Commerce Code section 2.201. Third, MBC argued that the April Document is ambiguous as to the payment and buyout options. Finally, MBC argued that VIP's cause of action is barred by the statute of limitations. See Tex. Civ. Prac. & Rem.Code Ann. § 16.004. Under Texas Rule of Civil Procedure 166a(i), MBC argued that there was no evidence of a contract between the parties.

The standard of review for a traditional summary judgment asks whether the movant (MBC) carried the burden of showing that there is no genuine issue of material fact, so that judgment should be granted as a matter of law. Diversicare Gen. Partner, Inc. v. Rubio, 185 S.W.3d 842, 846 (Tex.2005); De Santiago v. West Tex. Cmty. Supervision & Corrs. Dep't, 203 S.W.3d 387, 398 (Tex.App.-El Paso 2006, no pet.). Summary judgment is proper, if the defendant disproves at least one element of each of the plaintiff's causes of action, D. Houston Inc. v. Love, 92 S.W.3d 450, 454 (Tex.2002), or if it establishes all elements of an affirmative defense to each claim. Shah v. Moss, 67 S.W.3d 836, 842 (Tex.2001). Once the movant establishes a right to judgment as a matter of law, the burden shifts to the nonmovant to produce evidence raising a genuine issue of material fact. Tex.R. Civ. P. 166a(c); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678-79 (Tex.1979). When reviewing a summary judgment, we take as true all competent evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Southwestern Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex.2002) (citing Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997)).

Rule of Civil Procedure 166a(i) permits a party to move for a no-evidence summary judgment "without presenting summary judgment evidence" and requires the moving party to state that there is no evidence to support one or more specific elements of a claim or defense. Tex.R. Civ. P. 166a(i). A no-evidence motion for summary judgment is essentially a pretrial directed verdict, and we apply the same legal sufficiency standard of review. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex. 2003). The party moving for a no-evidence summary judgment must specifically state the elements as to which there is no evidence. See Tex.R. Civ. P. 166a(i); Aguilar v. Morales, 162 S.W.3d 825, 834 (Tex.App.-El Paso 2005, pet. denied). The burden then shifts to the nonmovant to produce summary judgment evidence raising a genuine issue of material fact regarding each element challenged in the motion. Aguilar, 162 S.W.3d at 834. We view the evidence in the light most...