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N & A PROPERTIES, INC. and Mustafa Nadaf, Appellants, v. PH STEEL, INC., Appellee.
This case presents competing ownership claims as to certain parts and pieces of equipment related to a shredder used in a metal recycling facility. Appellee, PH Steel, Inc. (PH Steel), sued Appellants 1 N & A Properties, Inc., and its owner and president, Mustafa Nadaf, for breach of contract, conversion, and declaratory judgment, seeking a determination of the ownership of the disputed equipment, unfettered access to same, damages, and attorney's fees. Along with a general denial, the answer to the suit included counterclaims for a similar declaratory judgment and for violations of the Texas Theft Liability Act (TTLA).2 The trial court granted PH Steel's motion for partial summary judgment against the counterclaims. Following a bench trial, the trial court determined that PH Steel owned the property at issue; and, based on a breach of contract, Appellants owed damages and attorney's fees. In seven issues, Appellants contend the trial court erred in granting a partial summary judgment on the counterclaims; and further erred in rendering a bench trial judgment declaring PH Steel owner of the equipment at issue, and in awarding damages and attorney's fees based on its contract claim. We affirm in part and reverse and remand in part.3
I. FACTUAL AND PROCEDURAL BACKGROUND
A. Factual background
Erath Iron and Metal, Inc. (Erath Iron) owned a metal recycling facility in Stephenville, Texas (the facility). This entity was also the sole member of EIM Operations, LLC. In 2011 and 2016, Erath Iron obtained loans from Coleman County State Bank (CCSB). Those loans were secured, respectively, by liens on the metal facility's land and other assets such as its scales, Geiger counters, and scrap metal. During that same period, EIM Operations purchased equipment for the facility including a metal shredder and its attachments. EIM Operations owned this equipment subject to a separate lien by First Financial Bank (FFB).
In 2016 or 2017, Erath Iron and EIM Operations went out of business, resulting in the two banks foreclosing on their respective security interests. CCSB acquired title to the metal facility's land and premises in July 2017. On December 7, 2018, FFB sold equipment to PH Steel for $375,000, after foreclosing on its lien.4 Relevant to this dispute, the Equipment Purchase and Sale Agreement between FFB and PH Steel referenced a Bill of Sale and a “Schedule 1” listing the tangible machinery and equipment included in the transaction. Both were attached to the agreement. The schedule provided as follows:
The following personal property located at [the facility's address], Stephenville, Texas, 76401:
• One (1) 60” Fines Line (use -60” DSRP, 60” VIS, Controllers, 60” Shaker Table (Serial No. 071029-1); and
• One (1) Shredder 60104 SXS, Serial No. 811 (hereinafter collectively referred to as the “Equipment”).
The Equipment also includes all accessions, attachments, accessories, tools, parts, supplies, replacements of and additions to any of the Equipment.
The following week, on December 14, 2018, PH Steel entered into an Equipment Storage and Access Agreement with CCSB, who was then the landowner of the former Erath Iron premises. By the access agreement, CCSB agreed to allow PH Steel to continue to keep and store on the premises, “the Newell Shredder, serial number 811 along with any other related equipment/component parts conveyed as part of the same transaction (the “Equipment”), upon written confirmation of purchase received from [PH Steel] claiming ownership of the Equipment.” In turn, PH Steel promised to pay CCSB $4,500 per month for the first and second thirty-day period the equipment remained stored on the premises, $6,000 per month for the third and fourth thirty-day period of storage, and $7,500 for the fifth and sixth month of storage. PH Steel was also granted “reasonable and unfettered access to the Equipment during normal business hours,” so it could “arrange for and accomplish the removal of the Equipment from Landowner's premises and the relocation of the Equipment to another property.”
N & A Properties later purchased from CCSB the former Erath Iron facility along with certain equipment related thereto. The commercial contract between CCSB and N & A Properties, effective January 23, 2019, described the property sold as “the parcel of land,” together with improvements to the property, and “the personal property owned by [CCSB] currently located on the Property.” Additionally, the agreement's property description also included the following statement: “[t]he Property is subject to an existing Equipment Storage and Access Agreement addressed in the attached Exhibit A.” The attached exhibit provided as follows:
Description of the Property and Personal Property
Approximately 11.698 Acres out of Henry Pearson Survey Abstract 613. Erath County Texas as described on the following pages.
All personal property associated with the Property and Improvements, including two truck scales, inventory, fluff and other personal property owned by Seller physically located on the Property as of the Effective Date. Buyer shall purchase and accept title to all personal property owned by Seller at the Property.
The Property and this sale shall be subject to the Equipment Storage and Access Agreement (the “Access Agreement”) by and between PH Steel, Inc. ․ and [CCSB] ․ with respect to that Newell Shredder, serial number 811 along with any other related equipment/component parts conveyed as part of the same transaction, and which are owned or claimed by PH Steel, Inc. The Equipment Storage and Access Agreement shall remain in force and effect․ [N & A Properties] shall allow access to the Property to PH Steel, Inc. ․ and [CCSB] shall be entitled to enforce against [N & A Properties] any legal or equitable rights under the Access Agreement for any breach caused by [N & A Properties], or damage to the property described in the Access Agreement․
To effectuate the sale, CCSB conveyed the premises to N & A Properties on January 29, 2019. That same date, CCSB also sold personal property, assets, and equipment to N & A Properties as described in the Bill of Sale, Exhibit A, which provided:
All personal property owned by Seller currently located on the Property commonly known as approximately 11.698 acres out of Henry Pearson Survey Abstract 613 and all of that certain lot, tract or parcel of land out of Block 49 of the city of Dublin, Erath County, Texas, being all of Lots 5, 7, and 7-A. Such property specifically includes but is not limited to the following:
Rice Lake 70’ Survivor Scale Serial #4HRN
Ludlem Geiger Counter
Unibridge 70’ Scale
Ludlem Geiger Counter
All inventory to be described as scrap iron and “fluff’ ”
Personal property specifically EXCLUDED includes assets previously include[d] in that Rosen Systems, Inc. auction conducted on January 22nd, 2019, and/or sold at that auction.
Meanwhile, to manage the relocation of equipment from the Erath Iron facility to one of its lay down yards, PH Steel hired industrial consultant Benjamin Lehmann. On March 11, 2019, Lehmann and Tanner Ballew, a contractor hired by PH Steel to disassemble the shredder and equipment, met with Nadaf and his assistant. At the meeting, Lehmann explained the relocation project from start to finish. Nadaf, however, raised objections about the plan to disassemble and remove the shredder from the facility.
B. Procedural background
Thereafter, PH Steel filed suit against N & A Properties and Nadaf for breach of contract, conversion, and declaratory judgment. PH Steel alleged that Appellants deprived it of unfettered access to its equipment. PH Steel asserted Appellants’ agents and employees repeatedly interfered with its agents and third parties while they worked on equipment removal. It further asserted N & A Properties claimed to own numerous items related to the shredder and related systems. Along with filing suit, PH Steel obtained a temporary restraining order. The order prohibited N & A Properties and Nadaf from using specifically identified equipment and ordered the defendants to grant PH Steel unfettered access to the listed items for purposes of removing the property from the premises. A temporary injunction hearing was set for April 4, 2019. Before that date, N & A Properties and Nadaf filed an answer, generally denying the allegations in plaintiff's suit. This pleading also included a counterclaim for declaratory judgment, wherein “Defendant/Counter Plaintiff” sought a determination of “the rights and status concerning personal property claimed by [PH Steel] and the real property belonging to [N & A Properties].” Defendant/Counter Plaintiff also asserted a counterclaim for damages and attorney's fees under the Texas Theft Liability Act, alleging PH Steel “intentionally with malice a forethought stole[ ], and misappropriated Defendant/Counter Plaintiff's personal property.”
On the date set, the trial court held a temporary injunction hearing. PH Steel presented three witnesses including Lehmann, Ballew, and a representative from FFB. After PH Steel rested, Appellants announced it would enter an agreed temporary injunction. Days later, the parties and the trial court signed an agreed temporary order, whereby Appellants granted PH Steel unfettered access to the facility in order for PH Steel to “remove property PH Steel reasonably believes was purchased ․”
Months later, PH Steel moved for partial summary judgment on both traditional and no-evidence grounds on the counterclaims brought against it. PH Steel attached evidence with its motion. Appellants timely responded, attaching its own evidence in support. The trial court held a motions hearing where it heard argument from the parties. At the end of the hearing, the trial court granted partial summary judgment in favor of PH Steel and sustained objections to some of Appellants’ summary judgment evidence. The trial court entered a general order granting PH Steel's motion and ordered Defendant/Counterplaintiff take nothing on the counterclaims. Also, the court entered a separate order on PH Steel's objections to Appellants’ summary judgment evidence.
As to the remaining claims, the trial court held a bench trial over two days. At the conclusion of the hearing, the trial court told the parties to prepare proposed judgments to include any findings that would support the relief requested. On January 10, 2020, the trial court entered a final judgment finding PH Steel had the superior right to certain equipment removed from the facility including “among other things, the shredder, shaker table, fines line, and all attachments and accessories to those items.” The trial court also found N & A Properties breached the Equipment Access and Storage Agreement and PH Steel suffered actual damages. On conversion, the trial court found PH Steel failed to sustain its burden of proof.
The trial court ordered PH Steel to recover from N & A Properties and Nadaf actual damages in the amount of $50,000. PH Steel was also awarded reasonable and necessary attorney's fees in defending against N & A Properties’ theft claim in the amount of $20,000, and reasonable and necessary attorney's fees in prosecuting its breach of contract claim in the amount of $30,000. Additionally, the trial court ordered that PH Steel recover from Appellants, conditional attorney's fees in the event of an appeal. Appellants filed a motion for new trial which was overruled by operation of law.
This appeal followed.
II. ISSUES ON APPEAL
In seven issues on appeal, Appellants contend the trial court erred (1) in granting summary judgment on Appellants’ counterclaims, and (2) in rendering final judgment in favor of PH Steel on its ownership claim, and its related claim of breach of contract. After grouping the issues by their procedural posture, we consider each in turn.
III. THE BENCH TRIAL JUDGMENT
In issues one through four, and six, Appellants challenge the final judgment rendered in favor of PH Steel.
A. Individual liability
In the first issue, Appellants contend Nadaf, the president and owner of N & A Properties, Inc., cannot be held liable for a breach of contract claim when he was not a party to the contract on which the claim was based.
The record shows that PH Steel sued both N & A Properties and Nadaf for breach of the Equipment Storage and Access Agreement entered between PH Steel and CCSB. PH Steel alleged that N & A Properties purchased from CCSB the former premises of Erath Iron subject to the access agreement. Also, it contended that N & A Properties ratified the agreement by accepting storage payments that PH Steel made to CCSB under the agreement. PH Steel's live petition contended, among other claims, that “Appellants’ agents and employees have repeatedly interfered with PH Steel's agents and third parties, such as electrical contractors hired to unhook the shredder and related equipment from power systems, working on the removal process.”
Following a bench trial on the alleged breach of contract, the trial court rendered judgment in favor of PH Steel and against both N & A Properties and Nadaf. The trial court awarded to PH Steel the sum of $50,000 in actual damages, $30,000 for reasonable and necessary attorney's fees prosecuting the breach of contract claim, and costs and post-judgment interest.
In its briefing on appeal, PH Steel concedes the judgment for breach of contract against Nadaf, individually, cannot stand. And it further concedes, to the extent that no individual liability may lie, the damages awarded on the claim against Nadaf, and attorney's fees, as well, were rendered in error.
Accordingly, we sustain Appellants’ first issue.
B. The recoverability of damages
Two of Appellants’ issues challenge the recoverability of contract damages. In the second issue, Appellants assert the trial court erred in rendering judgment for breach of contract damages because the court had specifically enforced the contract by means of equitable relief. Related to that argument, Appellants’ third issue contends that because damages were not recoverable on the breach of contract claim, that attorney's fees were similarly not recoverable. Specifically, Appellants assert the trial court entered a temporary injunction on April 9, 2019, granting PH Steel unfettered access to the premises of the former facility of Erath Iron during prescribed hours. And the injunction further provided the purpose of the access included:
․ to remove property PH Steel reasonably believes was purchased, from FFB, including but not limited to the SXS Shredder Serial Number 811, any downstream equipment associated with or attached to the shredder, any equipment associated with or formerly attached to the Fines Line system, and all accessions, attachments, accessories, tools, parts, supplies, replacements of any additions to any of the equipment (collectively “the Equipment”).
Appellants assert this agreed injunction enforced the access agreement from the date of its entry until the equipment removal was completed in June 2019. It further claims that PH Steel has never claimed that Appellants violated the terms of the temporary injunction. Appellants argue a suit requesting injunctive relief to enforce a contract equates to a suit for specific performance of the contract, and in that case, principles of specific performance should apply. Appellants thus contend that recovery of damages and specific performance are mutually exclusive such that one remedy precludes the other. For multiple reasons, we disagree.
First, as PH Steel points out, a temporary injunction and specific performance are not the same concept such that law applicable to one applies to the other. As a result, none of Appellants’ cited authorities support their broad contention. See Karagounis v. Bexar Cty. Hosp. Dist., 70 S.W.3d 145, 147 (Tex. App.—San Antonio 2001, pet. denied) (holding that the mandatory venue statute pursuant to Tex. Civ. Prac. & Rem. Code Ann. § 65.023 was not invoked because, when the true nature of the lawsuit was determined by looking at the facts in the petition, the plaintiff actually sought specific performance of a contract and not a permanent injunction); In re Daniel, No. 12-06-00232-CV, 2006 WL 2361350, at *3 (Tex. App.—Tyler Aug. 16, 2006, no pet.) (mem. op.) (finding the plaintiff was primarily seeking a permanent injunction rather than specific performance, invoking the mandatory venue statute under Tex. Civ. Prac. & Rem. Code Ann. § 65.023).
Second, interchanging an injunction with specific performance, Appellants argue that courts have held that specific performance was not appropriate or available when an adequate remedy in damages existed. See, e.g., Canteen Corp. v. Republic of Texas Props., Inc., 773 S.W.2d 398, 401 (Tex. App.—Dallas 1989, no writ) (“A court will generally not decree a party to perform a continuous series of acts which extend through a long period of time and require constant supervision by the court.”); United Coin Meter Co., Inc. v. Johnson-Campbell Lumber Co., 493 S.W.2d 882, 888 (Tex. App.—Fort Worth 1973, no writ) (“The evidence showed that plaintiffs did have an adequate legal remedy at law by way of an action for damages.”). Appellants thus contend the opposite is also true. In other words, Appellants argue that courts have held that damages and specific performance are alternatives to one another as both are remedies for a breach of contract. See Hays St. Bridge Restoration Grp. v. City of San Antonio, 570 S.W.3d 697, 707 (Tex. 2019) (describing that an award of damages is a legal remedy; while specific performance is an equitable remedy that lies within the court's discretion whenever damages would be inadequate or not possible to establish). When an adequate remedy at law exists, Appellants argue the availability of an injunction or specific performance is foreclosed. See Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d 407, 423 (Tex. 2011).
We conclude, however, that Appellants’ contention that a temporary injunction is equivalent to specific performance of a contract is unsupported by law. Here, the trial court entered an agreed temporary injunction granting PH Steel “unfettered access” to described equipment including equipment PH Steel reasonably believed it had purchased from FFB. A temporary injunction is temporary in nature and preserves the status quo of the litigation's subject matter pending a trial on the merits. Pharaoh Oil & Gas, Inc. v. Ranchero Esperanza, Ltd., 343 S.W.3d 875, 880 (Tex. App.—El Paso 2011, no pet.). Then, after a contested trial, the trial court found that Appellants’ breach of the access agreement, before entry of the agreed injunction, caused PH Steel to suffer actual damages. The trial court's final judgment also noted the temporary injunction was no longer in effect, “as the equipment at issue has been removed from the property.” Courts are permitted to grant injunctive relief, whether temporary or permanent, while also awarding damages following a resolution on the merits. See, e.g., Glattly v. Air Starter Components, Inc., 332 S.W.3d 620, 638 (Tex. App.—Houston [1st Dist.] 2010, pet. denied) (to receive a temporary injunction, a party need not prove it will prevail on the merits; it must only show a probable right to recovery).
Appellants have failed to demonstrate that PH Steel could not recover damages as a matter of law for breach of the access agreement. Without more, we overrule Appellants’ second and third issue.
C. Sufficiency of the evidence supporting the damages award
In their fourth issue, Appellants assert the evidence in support of the trial court's award of damages on the breach of contract claim was legally and factually insufficient.
In briefing, Appellants only challenge the testimony of Lehmann, who managed the project of removing and relocating equipment from the former Erath Iron facility for PH Steel. Lehmann testified that, after his first visit to the site, he prepared a removal plan and calculated a reasonable budget using standard methods. The trial court admitted into evidence a spreadsheet titled, “PH STEEL DAMAGES,” which Lehmann described as a summary of expenses incurred on behalf of PH Steel. When admitting the exhibit, the trial court indicated it would consider it a trial aid connected to Lehmann's testimony. Lehmann testified he sought quotes from a variety of contractors for different aspects of the removal project. He explained that all quotes were obtained before any disputes with Appellants had arisen. Lehmann clarified how certain occurrences with Appellants resulted in deviations from estimates and increased costs.
1. Legal sufficiency of the evidence
Appellants argue the testimony of Lehmann was unreliable, speculative, flawed, and irrelevant. Based on this argument, Appellants contend there was no evidence to support the damages award. PH Steel responds with two arguments. First, it asserts Appellants have failed to adequately brief its argument on appeal. Second, it contends that Appellants are actually complaining of the reliability of opinion testimony, which required objection at the time the testimony was offered to preserve the error for appellate review. As to these arguments, Appellants reply that they did not need to “waste pages of text and this Court's time restating the general rules for legal insufficiency challenges,” and specific standards for opinion testimony were a proper standard of review. Examining the substance of Appellants’ argument, we conclude the legal sufficiency briefing is not so inadequate such that it results in briefing waiver. But we agree with PH Steel that Appellants’ complaint on reliability was not preserved for our review.
The Texas Rules of Appellate Procedure control the required content and organization for an appellate brief. Valadez v. Avitia, 238 S.W.3d 843, 845 (Tex. App.—El Paso 2007, no pet.). To comply with Rule 38.1, an appellant's brief must contain clear and concise arguments including appropriate citations to legal authority and to the record. Tex. R. App. P. 38.1(i); Collins v. Walker, 341 S.W.3d 570, 575 (Tex. App.—Houston [14th Dist.] 2011, no pet.). Mere uttering of brief, conclusory statements unsupported by citation to legal authorities does not satisfy briefing requirements. Collins, 341 S.W.3d at 575. The Supreme Court of Texas has continuously recognized that an issue may be waived when appellant fails to provide citations, argument, or analysis. Ross v. St. Luke's Episcopal Hosp., 462 S.W.3d 496, 500 (Tex. 2015). Yet, we are also instructed by our highest court “to construe the Rules of Appellate Procedure reasonably, yet liberally, so that the right to appeal is not lost by imposing requirements not absolutely necessary to effect the purpose of a rule.” Republic Underwriters Ins. Co. v. Mex-Tex, Inc., 150 S.W.3d 423, 427 (Tex. 2004) (quoting Verburgt v. Dorner, 959 S.W.2d 615, 616-17 (Tex. 1997)). Even still, “[a]n appellate court has no duty-or even right-to perform an independent review of the record and applicable law to determine whether there was error.” Valadez, 238 S.W.3d at 845.
We interpret Appellants’ argument as asserting the evidence was insufficient to support the trial court's judgment of damages because Lehmann's testimony was speculative and unreliable. Based on our review of the record, Appellants did not object to Lehmann's testimony, either before or during trial, on the basis it lacked reliability. See Pike v. Texas EMC Mgmt., LLC, 610 S.W.3d 763, 786 (Tex. 2020) (“When a party wishes to complain that expert testimony is legally insufficient to support the judgment because the basis offered for it is unreliable, it should challenge the admission of the testimony before trial or object when it is offered.”). Further, we note that Appellants’ arguments and cited authority on the admissibility of expert opinions are irrelevant. PH Steel never tendered Lehmann as an expert witness nor did the trial court so designate him in that capacity. Unlike reliability, however, an objection at trial is not required for complaints of evidence being conclusory or speculative. Such complaints are properly preserved for a legal sufficiency review. Id. Accordingly, we examine Appellants’ challenge to the extent they assert Lehmann's testimony was conclusory or too speculative to support the trial court's judgment.
In a legal sufficiency challenge, we consider whether the evidence at trial would enable a reasonable and fair-minded fact finder to reach the finding under review. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). Evidence is considered legally insufficient to support a finding when “(1) the record discloses a complete absence of evidence of a vital fact; (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence establishes conclusively the opposite of a vital fact.” Gunn v. McCoy, 554 S.W.3d 645, 658 (Tex. 2018). More than a mere scintilla of evidence is shown “when the evidence rises to a level that would enable reasonable and fair-minded people to differ in their conclusions.” Id. On the contrary, the record contains less than a scintilla “when the evidence offered to prove a vital fact's existence is so weak as to do no more than create a mere surmise or suspicion.” Id. (quoting King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003) (internal quotation marks omitted)). All the record evidence must be considered “in the light most favorable to the party in whose favor the verdict has been rendered,” and “every reasonable inference deducible from the evidence is to be indulged in that party's favor.” Id. (quoting Bustamante v. Ponte, 529 S.W.3d 447, 456 (Tex. 2017)). Legal sufficiency review must credit favorable evidence if a reasonable fact finder could, and disregard contrary evidence unless a reasonable fact finder could not. City of Keller, 168 S.W.3d at 827; Matter of Estate of Masters, No. 08-20-00156-CV, 2022 WL 2827022, at *3 (Tex. App.—El Paso July 20, 2022, no pet.).
First, Appellants assert that Lehmann's testimony was “fatally flawed” in that he assumed the various parts of the project would have been completed for the amounts estimated in advance, and he assumed the project would have been completed at or before the times estimated in advance. Appellants assert these factual assumptions were “contrary to the accumulated experience of all mankind.” Appellants further assert other factors were not considered that could have likewise affected his estimates such as weather conditions, the possibility of breakdowns and flat tires on the trucks used for the project, equipment breakdowns, and labor shortages. Appellants cite no authority demonstrating that estimates based on quotes for work to be completed is insufficient or lacking in probative weight. Appellants’ hypothetical occurrences wrongly ask us to make inferences that do not support the trial court's judgment, which we are prohibited from doing in a sufficiency review. City of Keller, 168 S.W.3d at 808 (“[W]e are to consider only the evidence and inferences that tend to support the finding and disregard all evidence and inferences to the contrary.”). Furthermore, there was no evidence presented to the trial court of these hypothetical scenarios.
Next, Appellants assert there was other evidence presented to the trial court indicating the delays in the project were not caused by any obstruction by Appellants. Specifically, Appellants asserted that delays were caused due to the need to find a new contractor after the original contractor quit the job. Appellants assert testimony established that contractor Ballew quit when it appeared that he would not earn the amount of money he had counted on. Appellants point out they brought a bill of exception of the testimony of Susan Martinez, a representative of N & A Properties. Her testimony was excluded on the basis of hearsay. Appellants argued the statement was not hearsay because it was “conversations with a party” and it showed “what [ ] a party to the lawsuit [said] to her about subjects related to the lawsuit ․” On appeal, Appellants argue the statement was not offered to prove the truth of the matter asserted but to show a statement at the time the contractor quit the project. We conclude Appellants’ evidentiary complaint was not preserved for our review. To preserve error, a party must make a timely request, objection, or motion in the trial court with sufficient specificity to make the court aware of the complaint. Tex. R. App. P. 33.1(a). Accordingly, a party's argument on appeal must comport with that made in the trial court. Id. Appellants failed to show the trial court abused its discretion in excluding the testimony and we do not consider it here. Furthermore, there was testimony that Appellants’ interference contributed to Ballew quitting the job. Specifically, Ballew testified he removed his equipment because he was scared Nadaf was going to lock his equipment in the facility and, he explained, “that's my livelihood, so I got my stuff out[.]”
Lastly, Appellants assert there was evidence showing the true reason for delay was “Lehmann's decision to order trucks as-needed instead of scheduling them in advance.” Also, Appellants assert Lehmann had unjustified fears that delayed the project: items might disappear if left onsite overnight and fear he would not be able to access the site each day. Again, Appellants wrongly ask us to look at evidence that does not support the judgment, which we cannot do, when performing a legal sufficiency review. City of Keller, 168 S.W.3d at 808.
The trial court found Appellants “breached the Equipment Access and Storage Agreement by depriving PH Steel of ‘unfettered access’ to access and remove equipment” and “[a]s a result of [Appellants’] breach of the agreement, [PH Steel] has suffered actual damages in the amount of $50,000.” The record contains sufficient testimony on Appellants’ efforts to interfere with the project and PH Steel's need to change logistics with the project, in effect changing the schedule and estimated costs. Accordingly, we conclude Appellants failed to show the trial court's judgment was not supported by legally sufficient evidence.
2. Factual sufficiency of the evidence
Appellants’ fourth issue further contends the evidence was factually insufficient. As to this argument, PH Steel responds that Appellants waived any challenge to the factual sufficiency of the damages award due to inadequate briefing. We agree. Appellants present a single sentence challenge to factual sufficiency: “In the alternative, the evidence is factually insufficient to support the damages award, and the cause should be reversed and remanded for a new trial.” On top of failing to address the proper standard of review and applicable law, we conclude Appellants’ single sentence preserved nothing for our review. See Tex. R. App. P. 38.1(i); Ski River Dev., Inc. v. McCalla, 167 S.W.3d 121, 141 (Tex. App.—Waco 2005, pet. denied) (holding factual sufficiency argument waived when the argument was one sentence in their 50-page brief).
We overrule Appellants’ fourth issue.
D. Sufficiency of the evidence supporting an assignment of the contract
In their sixth issue, Appellants assert the finding that the Equipment Storage and Access Agreement had been assigned to N & A Properties was supported by legally insufficient evidence. In briefing on appeal, Appellants deny that any assignment occurred, arguing “no written evidence exists in the Record to support this claim.” Other than this one line, no other argument is developed nor are cases cited as authority. Yet, conclusory statements unsupported by citation to legal authorities do not satisfy briefing requirements. See Tex. R. App. P. 38.1(i); Collins, 341 S.W.3d at 575.
We overrule Appellants's sixth issue.
IV. THE PARTIAL SUMMARY JUDGMENT
In the fifth issue, and seventh issue, which includes four sub-issues, Appellants complain of the trial court's grant of partial summary judgment in favor of PH Steel on Appellants's two counterclaims, which included a claim for declaratory relief as to the ownership of the disputed property, and a claim for damages brought under the Texas Theft Liability Act. See Tex. Civ. Prac. & Rem. Code Ann. §§ 134.001-.005. Appellants assert that genuine issues of material fact precluded both a traditional and no-evidence summary judgment on ownership of pieces of equipment which are the basis of their two counterclaims. They further assert that if summary judgment is reversed on appeal, that attorney's fees awarded to PH Steel must also be reversed; and, in any event, attorney's fees assessed against Nadaf, individually, under the counterclaims, are unsupportable as a matter of law. We address each argument in turn.
A. Standard of review
Both a no-evidence and a traditional motion for summary judgment are reviewed de novo. See Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). We review no-evidence motions for summary judgment under the same legal sufficiency standard used to review a directed verdict. Painter v. Amerimex Drilling I, Ltd., 561 S.W.3d 125, 130 (Tex. 2018). A party without the burden of proof at trial, after adequate time for discovery, may move for summary judgment on the ground that there is no evidence of one or more essential elements of a claim or defense. Tex. R. Civ. P. 166a(i). The nonmovant must then produce evidence regarding each challenged element which “would enable reasonable and fair-minded people to differ in their conclusions.” Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004) (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). “[A] no-evidence summary judgment is improperly granted if the respondent brings forth more than a scintilla of probative evidence to raise a genuine issue of material fact.” See King Ranch, 118 S.W.3d at 751.
A traditional motion for summary judgment requires the moving party to show that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Nassar v. Liberty Mut. Fire Ins. Co., 508 S.W.3d 254, 257 (Tex. 2017). To prevail, the movant must either negate at least one essential element of the nonmovant's cause of action or prove all essential elements of an affirmative defense. See Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995). Once a movant initially establishes a right to summary judgment on the issues expressly presented in the motion, the burden shifts to the nonmovant to present issues or evidence precluding summary judgment. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678-79 (Tex. 1979).
In reviewing either type of summary judgment motion, we view the evidence in the light most favorable to the nonmovant, crediting favorable evidence if reasonable jurors could do so, and disregarding contrary evidence unless reasonable jurors could not. Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013); Valence Operating Co., 164 S.W.3d at 661. In a hybrid motion, or when a party combines both a traditional motion with a no-evidence motion, we typically address the no-evidence grounds first before turning, if necessary, to the traditional grounds. Merriman, 407 S.W.3d at 248.
B. The no-evidence basis
By counterclaim, N & A Properties sought a declaratory judgment “concerning personal property claimed by [PH Steel] and the real property belonging to [Defendant/Counterplaintiff].” It also asserted a cause of action for theft against PH Steel pursuant to the Texas Theft Liability Act. In PH Steel's no-evidence motion for summary judgment, it asserted Appellants had no evidence of an essential element on which their counterclaims were both based. Specifically, PH Steel argued there was no evidence that Appellants had any ownership interest in the shredder system equipment, which is a required element of each claim.
Under a no-evidence summary judgment standard, the non-movant carries the entire burden of proof as to each element contested in the motion. See Tex. R. Civ. P. 166a(i); JLB Builders, L.L.C. v. Hernandez, 622 S.W.3d 860, 864 (Tex. 2021). The trial court must resolve all reasonable doubts about the facts in favor of the nonmovant. Painter, 561 S.W.3d at 130. Conclusory evidence is insufficient to meet the non-movant's burden under the no-evidence standard. Draughon v. Johnson, 631 S.W.3d 81, 88 (Tex. 2021) (citing Tex. R. Civ. P. 166a(i)). “[A] no-evidence summary judgment is improperly granted if the respondent brings forth more than a scintilla of probative evidence to raise a genuine issue of material fact.” JLB Builders, 622 S.W.3d at 864 (alteration in original). If the non-movant fails to produce more than a scintilla of evidence under the no-evidence burden, there is no need to analyze whether its proof satisfied the Rule 166a(c) burden.
PH Steel argues that a declaratory judgment action requires a justiciable controversy (i.e., a dispute over ownership). Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. 1995). And it further asserts there is no evidence that PH Steel committed theft of property or that Appellants sustained any damages from theft (civil theft claim). Tex. Civ. Prac. & Rem. Code Ann. § 134.002-.003 (defining theft as “unlawfully appropriating property or unlawfully obtaining services” and stating a person who commits theft is civilly liable under the Act “for damages resulting from the theft”); see also Tex. Penal Code Ann. § 31.03(a), (b)(1) (defining theft as appropriating property without the owner's effective consent and with the intent to deprive the owner of the property). As relevant here, an owner is defined as a person who has title to the property, possession of the property, whether lawful or not, or a greater right to possession of the property than the actor. Tex. Penal Code Ann. § 1.07(a)(35)(A). Regarding either counterclaim, PH Steel asserts that N & A Properties and Nadaf, individually, were required, under the no-evidence standard, to present evidence creating a fact issue as to their ownership of the contested equipment related to the shredder, which they failed to do. We agree.
Appellants responded to PH Steel's no-evidence motion with multiple arguments. First, Appellants argued that PH Steel “failed to meet its burden of establishing that [Appellants] [have] no evidence to support their claims.” In other words, Appellants challenged the evidence PH Steel attached to its traditional motion, asserting a genuine issue of material fact existed as to which party owned the disputed property. Although either party can rely on attached evidence comprising the summary judgment record—that is, the movant can rely on evidence filed by the nonmovant and vice versa—nonetheless, the burden of proof remains intact. See Wilson v. Burford, 904 S.W.2d 628, 629 (Tex. 1995); JLB Builders, 622 S.W.3d at 864. As to the challenged element of ownership, Appellants may rely on the evidence provided by PH Steel to support its claims, but they cannot shift the burden of proof to PH Steel to establish a genuine issue of material fact on the challenged element. They could only shift such burden of proof by filing their own motion for summary judgment, which they did not do.
Second, Appellants referred to a “brochure” they attached to their summary judgment response, asserting the exhibit showed the difference between the shredder and the other pieces of equipment. They assert the brochure shows “that the purchase of such a machine as a shredder does not mean that one has purchased the building it goes in, the concrete it sits on or the conveyors it deposits scrap onto, any more than the purchase of a car entitle[d] one to possession of a garage it is parked in, the concrete that it drives on, or the trailer it might need to haul dirt.” The trial court, however, sustained objections based on hearsay and lack of foundation against the admissibility of the brochure. On appeal, Appellants assert the trial court abused its discretion in sustaining PH Steel's objections and excluding the brochure as evidence. Specifically, Appellants assert the evidence was used demonstratively to assist the fact finder in understanding what is and is not considered part of a “shredder system.” Assuming, without deciding, the trial court abused its discretion in excluding the evidence, we conclude the brochure constitutes no evidence that Appellants are the owner of any of the contested parts of the shredder system. The brochure contains information on the Newell recycling equipment business, but not necessarily the equipment at issue here. Nor does it address in any way the ownership of any item depicted either in whole or in part. Accordingly, it fails to create a genuine issue of material fact that N & A Properties is the owner of any piece of equipment depicted.
In their briefing here, Appellants combine their argument regarding the grounds asserted in PH Steel's traditional and no-evidence motions for summary judgment. Appellants assert that “[g]enuine issues of material fact existed on the ownership of the fines line shaker table,” again attacking the evidence produced by PH Steel in support of its traditional motion for summary judgment. Appellants also assert that “the ownership of the fines line shaker table” was seriously disputed by the parties.
For purposes of the no-evidence motion for summary judgment, however, the critical inquiry is not whether a genuine issue of material fact existed on who owned the fines line shaker table. Rather, the critical inquiry is whether Appellants raised a genuine issue of material fact regarding their ownership of pieces of equipment such as the fines line shaker table when responding to PH Steel's no-evidence motion. Here, they did not. Appellants’ response failed to produce summary judgment evidence raising a genuine issue of material fact on the challenged element of equipment ownership. To succeed on its counterclaims, N & A Properties would need to prove ownership of the items to which it sought declaratory relief and on which it asserted PH Steel committed civil theft against it. In responding to PH Steel's no-evidence motion, N & A Properties failed to produce any evidence raising a genuine issue of material fact on its ownership or superior right to possess either the fines line shaker table or other related pieces of equipment.
Appellants also assert that Ballew, the contractor hired by PH Steel, admitted he had bought a 480-pound container of scrapped copper off the property from PH Steel. Appellants point to Ballew's deposition, attached to their response to PH Steel's motion for summary judgment. PH Steel responds that the deposition only establishes “[Ballew] bought unidentified copper scrap from PH Steel at an unknown time from an unknown site.” From our review of the record, the deposition of Ballew took place on May 30, 2019. Ballew testified that he bought a bin of copper from PH Steel at some time before “the court date.” Neither Ballew's deposition nor other evidence establishes that Appellants were the owners of that specific bin of copper sold or that PH Steel committed theft against Appellants on such. Furthermore, Appellants failed to raise any issue of material fact on any damages sustained from the alleged civil theft and they do not otherwise address the element on appeal.
For these reasons, we conclude the trial court did not err in granting PH Steel's no-evidence motion for partial summary judgment on N & A Properties’ counterclaims. Because we affirm this part of the trial court's judgment, we need not address the merits of PH Steel's traditional motion for summary judgment. Moreover, we do not reach issue seven, sub-issue c., in which Appellants argue the award of attorney's fees must be reversed contingent on our reversal of the summary judgment granted on N & A Properties’ TTLA claim.
We overrule Appellants’ fifth issue and seventh issue, including sub-issues 7a., 7b., and 7c.
C. Attorney's fees awarded against Nadaf
In the seventh issue, sub-issue d., Appellants assert that no attorney's fees may be awarded against Nadaf under the Texas Theft Liability Act (TTLA), even if such award is affirmed against N & A Properties. They contend the TTLA claim against PH Steel was brought solely by N & A Properties, not Nadaf. Factually, he never asserted any ownership of the disputed equipment. Rather, the bill of sale and other documents that were put forward to show ownership were only signed by Nadaf in his capacity as president of N & A Properties. Countering, PH Steel responds with two arguments. First, it asserts that Nadaf waived his right to assert this complaint by bringing it for the first time on appeal. Second, it argues the record supports the fact that both Nadaf and N & A Properties asserted a counterclaim under the TTLA. We disagree with both contentions of PH Steel.
1. No waiver
Parties are restricted on appeal to the theory on which the case was tried. Wells Fargo Bank, N.A. v. Murphy, 458 S.W.3d 912, 916 (Tex. 2015). If no objection was made to the trial court that matches the complaint on appeal, then the issue has not been preserved for appellate review. See Tex. R. App. P. 33.1; Ridge Nat. Res., L.L.C. v. Double Eagle Royalty, L.P., 564 S.W.3d 105, 121 (Tex. App.—El Paso 2018, no pet.) (providing that argument on appeal must correspond with the complaint made at the trial court level).
The availability of attorney's fees under a particular statute is a question of law for the court. See Johnson v. City of Fort Worth, 774 S.W.2d 653, 656 (Tex. 1989) (per curiam) (observing that statutory construction is a question of law). We construe Nadaf's motion for new trial as asserting non-recoverability of attorney's fees against him individually. In this post-trial motion, he asserted the trial court erred in entering judgment against him as there was no evidence he had acted outside of his capacity as president of N & A Properties. Bringing this complaint to the trial court's attention, Nadaf gave it an opportunity to rule not only on the erroneous award of damages, but also on the availability of attorney's fees. We conclude Nadaf sufficiently preserved this issue for appellate review.
2. Recoverability of attorney's fees against Nadaf individually
On appeal, Nadaf argues the trial court erred by granting attorney's fees because such fees were not recoverable against him individually. Generally, each party must pay its own attorney's fees unless a statute or contract authorizes fee-shifting. Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 483-84 (Tex. 2019). The Texas Theft Liability Act is one such statute. It provides, “[e]ach person who prevails in a suit under this chapter shall be awarded court costs and reasonable and necessary attorney's fees.” Tex. Civ. Prac. & Rem. Code Ann. § 134.005(b). Courts have held that the phrase “prevailing party” in section 134.005(b) of the TTLA includes both a plaintiff successfully prosecuting a theft suit and a defendant successfully defending against one. Arrow Marble, LLC v. Estate of Killion, 441 S.W.3d 702, 706 (Tex. App.—Houston [1st Dist.] 2014, no pet.); Peoples v. Genco Fed. Credit Union, No. 10-09-00032-CV, 2010 WL 1797266, at *7 (Tex. App.—Waco May 5, 2010, no pet.) (mem. op.). Moreover, a prevailing defendant is entitled to attorney's fees “without any prerequisite that the claim is found to be groundless, frivolous, or brought in bad faith.” Air Routing Int'l Corp. (Canada) v. Britannia Airways, Ltd., 150 S.W.3d 682, 686 (Tex. App.—Houston [14th Dist.] 2004, no pet.). Thus, PH Steel's status as a prevailing counter-defendant does not prevent recovery of attorney's fees.
But the question raised by this issue is whether Nadaf may be held liable in this instance for such fees. Again, the relevant provision states that “[e]ach person who prevails in a suit under this chapter shall be awarded court costs and reasonable and necessary attorney's fees.” Tex. Civ. Prac. & Rem. Code Ann. § 134.005(b). Because Chapter 134 does not define or clearly indicate a different result for the meaning of the term “suit,” it must be given its common, ordinary meaning. See Jaster v. Comet II Const., Inc., 438 S.W.3d 556, 562 (Tex. 2014) (instructing courts to apply the plain meaning of a statute's words “unless a different meaning is apparent from the context or the plain meaning leads to absurd or nonsensical results” (quoting Molinet v. Kimbrell, 356 S.W.3d 407, 411 (Tex. 2011))). The Supreme Court of Texas found the term “action” is generally synonymous with “suit,” which is “a demand of one's rights in court.” Id. at 564. Thus, the common meaning of the term “suit” refers to “any proceeding in a court of justice by which an individual pursues [the] remedy ․ which the law affords him.” Id. (quoting H.H. Watson Co. v. Cobb Grain Co., 292 S.W. 174, 176 (Tex. 1927)). Although “suit” can be “more general in its comprehension than the word ‘action,’ both terms refer to a judicial proceeding in which parties assert claims for relief.” Id. (quoting H.H. Watson Co., 292 S.W. at 176). For there to be a “suit” or “action,” it is “essential that it rest in a court, with the power to hear it.” Id. (quoting United Prod. Corp. v. Hughes, 152 S.W.2d 327, 330 (Tex. 1941)).
Here, the counterclaim provides that “Defendant/Counter Plaintiff [brings] this cause of action for the theft of Defendant/Counter Plaintiff's personal property.” Although this particular line of the pleading may be ambiguous as to whether the claim is asserted by N & A Properties or by Nadaf, it nonetheless identifies that the theft claim is brought for “Defendant/Counter Plaintiff's personal property.” In context, the background facts of the pleading more specifically described that N & A Properties purchased certain property from CCSB. And no allegation whatsoever is made that Nadaf himself owned or claimed to own any of the equipment on which the TTLA counterclaim was based. We thus conclude that Nadaf himself did not bring a TTLA claim upon which attorney's fees were awarded to the prevailing party. Accordingly, we reverse that part of the trial court's judgment awarding PH Steel attorney's fees against Nadaf individually, and we render judgment that PH Steel take nothing on its claim for attorney's fees against Nadaf.
We sustain Appellants’ sub-issue d. of the seventh issue.
Having sustained issues one and seven, sub-issue d., we reverse those portions of the trial court's judgment providing that PH Steel shall have and recover damages, attorney's fees, taxable costs, and post-judgment interest from Mustafa Nadaf, individually. We remand the case to the trial court to modify the judgment in accordance with this opinion. We affirm the remainder of the judgment as modified. Tex. R. App. P. 43.2(d).
1. Collectively, we refer to N & A Properties and Nadaf as “Appellants.” Occasionally, however, when we reference these parties individually, we use “N & A Properties” for the corporate entity, and “Nadaf” for Mustafa Nadaf individually.
2. See Tex. Civ. Prac. & Rem. Code Ann. §§ 134.001–.005 (providing civil action to recover damages, fees, and costs due to a theft).
3. This case was transferred from our sister court in Eastland, and we decide it in accordance with the precedent of that court to the extent required by Tex. R. App. P. 41.3.
4. The Bill of Sale indicates it was made by and between FFB, as Seller, and DCJ Equipment Dealers, LLC, as Buyer. At trial, evidence was introduced that DCJ was an affiliate of PH Steel and owned by the same group of individuals. DCJ leased the shredder system back to PH Steel. Our record also includes an “Equipment Purchase and Sale Agreement” listing FFB as seller and PH Steel as buyer. DCJ's presence is not discussed in detail or made an issue by either party.
GINA M. PALAFOX, Justice
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Docket No: No. 08-20-00106-CV
Decided: October 31, 2022
Court: Court of Appeals of Texas, El Paso.
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