Villanueva v. Gonzalez

• Decision Date: 01 October 2003
• Docket Number: No. 04-02-00723-CV.,04-02-00723-CV.
• Citation: 123 S.W.3d 461
• Parties: Edward VILLANUEVA, Appellant, v. Hector GONZALEZ, Appellee.
• Court: Texas Court of Appeals

123 S.W.3d 461

Edward VILLANUEVA, Appellant, v. Hector GONZALEZ, Appellee.

No. 04-02-00723-CV.

Court of Appeals of Texas, San Antonio.

October 1, 2003.

From the County Court at Law No. 3, Bexar County, Texas, Trial Court No. 267956; Irene A. Rios, Judge Presiding.¹

S. Tyler Rutherford, San Antonio, for Appellant.

Ted H. Roberts, San Antonio, for Appellee.

Sitting: ALMA L. LóPEZ, Chief Justice, SANDEE BRYAN MARION, Justice, PHYLIS J. SPEEDLIN, Justice.

OPINION

Opinion by: PHYLIS J. SPEEDLIN, Justice.

Edward Villanueva ("Villanueva") appeals the trial court's order granting partial summary judgment in favor of Hector Gonzalez ("Gonzalez") on Villanueva's claims for breach of contract, breach of fiduciary duty, and breach of a partnership agreement. Villanueva also appeals the trial court's order granting Gonzalez's motion for judgment notwithstanding the verdict on his fraud claim. We overrule Villanueva's two issues and affirm the judgment of the trial court.

Background

In June 1999, Villanueva, an accountant, and Gonzalez, an attorney, entered into an agreement regarding the use of Villanueva's real property as collateral for Gonzalez to write bail bonds. The terms of this agreement are disputed by the parties. Villanueva contends that he never received his portion of the fees generated on the bail bonds written by Gonzalez. He sued Gonzalez asserting claims for breach of contract, breach of a partnership agreement, breach of fiduciary duty, and fraud. Gonzalez moved for summary judgment on traditional and no evidence grounds. In support of the traditional summary judgment motion, Gonzalez argued that all of Villanueva's claims were based upon his allegation that the parties entered into an agreement to split profits from a bail bond business. According to Gonzalez, this agreement violates the Texas Occupations Code, thereby making the contract illegal and unenforceable as a matter of law. Because all of Villanueva's claims were based on an unenforceable contract, all his claims are invalid. The trial court granted a partial summary judgment without stating its grounds and dismissed all of Villanueva's claims with the exception of his fraud claim.

SUMMARY JUDGMENT

Standard of Review

In a traditional motion for summary judgment, the movant must conclusively establish that no genuine issue of material fact exists and that he is entitled to judgment as a matter of law. Tex.R. Civ. P. 166a(c). Where a party moves for summary judgment on the grounds of an affirmative defense, such as the illegality of a contract, the movant must expressly present and conclusively prove each essential element of the affirmative defense. Havlen v. McDougall, 22 S.W.3d 343, 345 (Tex. 2000). We review de novo the granting of a summary judgment. Am. Broad. Cos. v. Gill, 6 S.W.3d 19, 27 (Tex.App.-San Antonio 1999, pet. denied). In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true and every reasonable inference must be indulged in favor of the nonmovant and doubts resolved in his favor. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985).

When a movant asserts multiple grounds for summary judgment, and the order does not state the theory upon which the trial court based its decision, the nonmovant on appeal must negate any grounds on which the trial court could have granted the order. See Malooly Bros., Inc. v. Napier, 461 S.W.2d 119, 121 (Tex.1970). Otherwise, we will affirm the summary judgment if any one of the theories advanced is meritorious. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex.1989). We first address whether the contract is illegal as a matter of law.

Illegality of Contract

A contract to do a thing which cannot be performed without violation of the law violates public policy and is void. See Lewis v. Davis, 145 Tex. 468, 199 S.W.2d 146, 148-49 (1947); Jack v. State, 694 S.W.2d 391, 397 (Tex.App.-San Antonio 1985, writ ref'd n.r.e.). The purpose behind this rule is not to protect or punish either party to the contract, but to benefit and protect the public. Lewis, 199 S.W.2d at 151; In re Kasschau, 11 S.W.3d 305, 312 (Tex.App.-Houston [14th Dist.] 1999, orig. proceeding). In Texas, parties to a contract are presumed to be knowledgeable of the law. Kasschau, 11 S.W.3d at 312. Accordingly, courts will generally leave the parties as they find them. Id.; See Plumlee v. Paddock, 832 S.W.2d 757, 759 (Tex.App.-Fort Worth 1992, writ denied). Therefore, where the illegality of the contract does not appear on the face of the contract, the contract will not be held void unless facts showing its illegality are before the court. Lewis, 199 S.W.2d at 149; Kasschau, 11 S.W.3d at 312.

In his original petition, Villanueva alleged that he and Gonzalez "entered into an agreement whereby [Gonzalez] was to write surety bonds and the proceeds of this surety bond business would be split in equal half shares to both [Villanueva] and [Gonzalez]." Villanueva's affidavit offered at summary judgment supported these allegations.

Gonzalez agreed to write surety bonds and the proceeds of this surety bond business would be split in equal half shares to both myself and Gonzalez. Based upon this arrangement, I then deeded Gonzalez real property ... with which Gonzalez used as collateral to secure criminal bail bonds to generate profits for our partnership.

* * *

I fully complied with my obligations by deeding the property to Gonzalez. Gonzalez did indeed write over $196,000.00 in bonds and has financially benefitted from same. Gonzalez has received profits in an amount of at least $19,600.00. However, Gonzalez, upon my demand, has refused to relinquish my agreed upon share of these funds or real property.

* * *

I have been damaged by all of Gonzalez's misconduct because I have failed to receive my share of the profits.

Accepting Villanueva's allegations as true, we must then examine whether the contract is illegal as a matter of law.

Chapter 1704 of the Texas Occupations Code regulates bail bond sureties. Tex. Occ.Code Ann. §§ 1704.001-.306 (Vernon 2003). The statute is intended to protect the public interest by governing the business of bail bonds, including the licensing and regulation of persons who engage in that business. See Smith v. Tarrant County Bail Bond Bd., 997 S.W.2d 870, 871 (Tex.App.-Fort Worth 1999, pet. denied); see also Act of May 18, 1973, 63rd Leg., R.S., ch. 550, § 1, 1973 Tex. Gen. Laws 1520, 1520. For this purpose, the statute creates a bail bond board in each county with a population of 110,000 or more to administer and enforce the statute. Tex. Occ.Code Ann. §§ 1704.051,.101-.109 (Vernon 2003). A person may not act as a bail bond surety without being licensed. Id. at § 1704.151. The one exception to this requirement is an attorney who executes a bail bond or acts as a surety for a person he or she represents in a criminal case for which bond is given. Id. at § 1704.163(a); Akridge v. State, 13 S.W.3d 808, 810 (Tex.App.-Beaumont 2000, no pet.).

Assuming Villanueva's allegations are true, Gonzalez contends that the contract violates section 1704.252(9) of the Occupations Code, and thus, is unenforceable.

After notice and hearing, a board may revoke or suspend a license if the license holder:

(9) pays commissions or fees to or divides commissions or fees with, or offers to pay commissions or fees to or divide commissions or fees with, a person or business entity not licensed under this chapter.

Tex. Occ.Code Ann. § 1704.252(9) (Vernon 2003). Villanueva disagrees that the contract is rendered illegal by Chapter 1704 of the Occupations Code.

We construe statutes as written and, if possible, ascertain the legislative intent from the statute's language. See Marcus Cable Assocs., L.P. v. Krohn, 90 S.W.3d 697, 706 (Tex.2002); Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 493 (Tex.2001). We begin with the plain language of the statute because we assume that the Legislature tries to say what it means. See Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 866 (Tex.1999). Even where a statute is not ambiguous, however, we consider other factors to determine the Legislature's intent such as the object sought to be attained, the legislative history, and the consequences of a particular construction. Tex. Gov't Code Ann. § 311.023 (Vernon 1998); Helena Chem. Co., 47 S.W.3d at 493.

The plain language of the statute provides that a bail bond surety's license can be revoked or suspended if they divide commissions or fees with a person not licensed under Chapter 1704. See Tex. Occ.Code Ann. § 1704.252(9) (Vernon 2003). The language regarding the prohibited conduct is clear and broad. See Op. Tex. Att'y Gen. No. JC-0528 at 3-4 (2002). The prohibition against dividing fees has been a basis for revoking a license since the law's inception, and is consistent with the statute's purpose of regulating bail bond sureties. See Act of May 18, 1973, 63rd Leg., R.S., ch. 550, § 9(7), 1973 Tex. Gen. Laws 1520, 1525. This prohibition extends to attorneys who are statutorily authorized to write bail bonds. Tex. Occ.Code Ann. § 1704.163(b) (Vernon 2003); see Minton v. Frank, 545 S.W.2d 442, 445 (Tex.1976). The Occupations Code makes clear that a person, who is not an attorney, may not act as a bail bond surety in a county unless the person holds a license. See Tex. Occ.Code Ann. § 1704.151 (Vernon 2003); see also id. at § 1704.001(5) (defining "person" as an individual or corporation). If individuals who are qualified to act as bail bond sureties could split commissions or fees with those who do not meet the statute's requirements or exceptions, a bail bond board could not regulate them. See Tex. Occ.Code Ann. §§ 1704.101-.109 (Vernon 2003) (explaining a bail bond board's powers and duties).

Given the plain language of sections 1704.252(9) and 1704.151, we conclude an agreement to split fees between an attorney and a...