Plotkin v. Joekel (Tex.App.- Houston [1st Dist.] Sep. 25, 2009)(Taft)(staffing business dispute)
AFFIRM TC JUDGMENT IN PART, REVERSE TC JUDGMENT IN PART, AND RENDER JUDGMENT:
Opinion by retired Justice Tim Taft, sitting by assignment
Before Justices Taft, Jennings and Bland
01-06-00624-CV Garry L. Plotkin v. Charles Joekel, et al.
Appeal from 133rd District Court of Harris County
Trial Court Judge: Hon. Lamar McCorkle
O P I N I O N
This is a dispute among various people and entities engaged in various employee staffing businesses.
The parties asserted claims, counterclaims, and third-party claims. Each party against whom any claim had
been asserted moved for traditional or no-evidence summary judgment. The trial court granted all
summary-judgment motions and rendered a take-nothing judgment against all claims asserted by any
party. We determine whether the trial court erred in doing so. We affirm the judgment in part, reverse it in
part, and remand the case.
Background
A. The Primary People and Businesses
Garry Plotkin and Charles Joekel were friends who had known each other for many years. Garry's son was
Chad Plotkin, and Charles's son was Kenneth Joekel.
Garry and Charles began doing business together in the 1980s. In 1990, Charles transferred to Garry his
payroll-services business, (1) called Able Ones of Texas, Inc.. Garry took over the business under a new
corporation that he formed, called Texas Personnel Services. Texas Personnel Services eventually
became Westbury Worldwide Services, Inc. d/b/a Worldwide Services ("Worldwide") some time before
1998. The parties dispute whether Worldwide, which began as a staff-leasing business, later began
operating a skilled-labor business, (2) as well.
Charles owned, and was sole officer of, Texas Staffing Services, Inc. ("Texas Staffing") d/b/a Trendsetter
Staffing and d/b/a Trendsetter Skilled. The parties represent that Texas Staffing handled its staff-leasing
business under its Trendsetter Staffing d/b/a, whereas Texas Staffing handled its skilled-labor business
under its Trendsetter Skilled d/b/a.
B. The Sale
On June 8, 1998, Garry, through an attorney's letter, proposed to sell Worldwide's book of business, its
goodwill, and its furniture, fixtures, and equipment. That letter read:
Dear Charles,
Garry has requested that I make the following proposal to you regarding the referenced sale:
1. Charles will purchase the good will of Worldwide for $150,000.00 to be payable at closing.
2. Trendsetter Staffing will purchase all furniture, fixtures and equipment from Worldwide for $50,000.00 to
be payable at closing.
3. Charles will purchase the client list and book of business from Worldwide for a total of 1,500,000.00. . . .
4. If Trendsetter is sold prior to December 31, 1999, Worldwide will receive 25% of the net sale proceeds
less any amounts which have already been paid to Worldwide in a total amount not to exceed
$2,500,000.00.
. . .
(Emphasis added.)
On June 11, 1998, Charles counter-offered by letter. The letter read:
Dear . . . Garry:
Thank you for the proposal regarding the purchase of Worldwide Services' book of business.
Notes:
1. Any purchase of Trendsetter Staffing will be a structured pay-out based upon a client retention;
therefore, any agreement not similarly predicated would be imprudent on my part.
2. The only parties to this Agreement are Charles and Garry, individually, and the terms of this Agreement
are private and confidential between them.
. . .
Having put my footnotes first, let me address your proposal paragraph by paragraph:
Paragraph #1: Okay.
Paragraph #2: Okay.
Paragraph #3: On June 29, 1998, Charles will take control of the Worldwide book of business. Each week
thereafter, Charles will pay Garry an amount equal to one and one-half percent (1½ %) of the gross sales
provided by those accounts formerly serviced by Worldwide per a list of accounts to be agreed upon. This
will continue for 48 months or until $2 Million is paid to Garry, whichever occurs first. Garry may add to the
"Worldwide accounts" at any time and will assist as called upon in the maintenance of said accounts to our
mutual benefit.
Paragraph #4: In the event Charles sells Trendsetter during the term of this Agreement, this Agreement
will be terminated as follows: Charles will pay Garry the lesser of 1) $2,500,000.00 less amounts previously
paid or 2) twenty-five percent (25%) of the gross sales price of Trendsetter less amounts previously paid.
. . .
(Emphasis added.)
On June 16, 1998, Garry and Charles executed two contracts: (1) an "Agreement" and (2) a "Bill of Sale."
The Agreement, which concerned the sale of Worldwide's book of business, provided as follows:
The following represents our agreement regarding the sale by Westbury Worldwide Services, Inc. d/b/a
Worldwide Services ("Worldwide") of its book of business to CHARLES L. JOEKEL upon the following terms
and conditions:
CHARLES JOEKEL agrees to buy and GARRY PLOTKIN agrees to sell the book of business of
WORLDWIDE SERVICES totaling approximately THIRTY MILLION AND NO/100 DOLLARS
($30,000,000.00) per year in annual sales and the sale price to be received for said assets shall be paid
as follows:
1. JOEKEL/Trendsetter will take control of the Worldwide book of business on June 29, 1998. Each week
thereafter, JOEKEL will pay PLOTKIN an amount equal to 1½% of the gross sales of the accounts formerly
serviced by Worldwide per a list of accounts to be agreed upon between the parties. This agreement will
continue for forty-eight (48) months ending in June, 2002 or until a total of TWO MILLION AND NO/100
DOLLARS ($2,000,000.00) is paid to GARRY PLOTKIN, which ever comes first. PLOTKIN may add to the
worldwide accounts at any time during the agreement and will assist JOEKEL/TRENDSETTER as called
upon in the maintenance of said accounts to the mutual benefit of the parties.
2. In the event that JOEKEL sells Trendsetter during the term of this agreement . . . , this agreement will be
terminated. JOEKEL will pay PLOTKIN at that time the lesser of:
(1) TWO MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($2,500,000.00) less any amounts
previously paid or
(2) Twenty-five percent (25%) of the gross sales price received for Trendsetter less any amounts
previously paid to GARRY PLOTKIN.
. . .
BY: /s/ BY: /s/
GARRY L. PLOTKIN CHARLES L. JOEKEL
(Emphasis added.)
The Bill of Sale, which was executed the same day for the sale of Worldwide's goodwill, furniture, fixtures,
and equipment, provided in pertinent part as follows:
KNOW ALL MEN BY THESE PRESENTS that WESTBURY WORLDWIDE SERVICES, INC., D/B/A
WORLDWIDE SERVICES ("Transferor"), in consideration of TWO HUNDRED THOUSAND AND NO/100
DOLLARS ($200,000.00) and other good and valuable consideration to be paid by TEXAS STAFFING
SERVICE, INC. D/B/A TRENDSETTER STAFFING ("Transferee") no later than December 31, 1998, we
hereby sell, transfer, assign and convey unto Transferee . . . all of the right, title and interest of Transferor
in and to the furniture, fixtures, equipment and goodwill of Transferor . . . .
. . .
WESTBURY WORLDWIDE SERVICES, INC., D/B/A WORLDWIDE SERVICES
BY: /s/
GARRY L. PLOTKIN, PRESIDENT
TEXAS STAFFING SERVICE, INC. D/B/A TRENDSETTER STAFFING
BY: /s/
CHARLES L. JOEKEL, PRESIDENT
(Emphasis added.)
It is undisputed that, for the term of the agreement, Charles periodically tendered 1½% commissions to
Garry, but Garry did not take them. The parties dispute why Garry declined to take his commissions. The
parties also dispute whether Worldwide's book of business that was sold contained only staff-leasing
accounts or contained both these accounts and skilled-labor accounts.
C. The Problem
In April 2001, during the term of the Agreement, Charles sold Texas Staffing's staff-leasing business
(operated under the d/b/a Trendsetter Staffing) to Simplified Employment Services ("SES"). SES did not
want to purchase Texas Staffing's skilled-labor accounts. Before the sale of Texas Staffing's staff-leasing
business to SES, Charles sold or transferred all of Texas Staffing's skilled-labor accounts to F.W.
Services, Inc. d/b/a Pacesetter Personnel and d/b/a America's Skilled Personnel ("F.W. Services"), his son
Kenneth's corporation. Garry received no commissions from any of the skilled-labor accounts that were
transferred to F.W. Services, nor did he receive a percentage of the value of these accounts. The parties
dispute the reason for this.
SES purchased Texas Staffing's staff-leasing business for $3,000,000. After having paid only $700,000 of
the total sales price, SES filed for bankruptcy. The remaining $2,300,000 was never paid. Charles paid
Garry $175,000, which was 25% of the $700,000 that SES actually paid. The parties dispute how much
Garry was owed from the sale to SES. The parties also dispute whether Garry was owed pre-sale
commissions.
D. The Involvement of Other Family Members and Employees
Chad Plotkin owned, and was the officer and director of, two corporations that provided factoring (3) to
employee-leasing businesses: CJP Resources, Inc. ("CJP Resources") and CJP Financial Services, Inc.
("CJP Financial"). Chad also owned a third corporation, Your Recruiters, Inc. ("Your Recruiters"). CJP
Financial provided factoring services to a former F.W. Services employee, Terrell Diamond, who left F.W.
Services in the 1990s to start her own staff-leasing business.
Larry Plotkin, Garry Plotkin's twin brother, incorporated LWP Resources d/b/a Huntington Resources, Inc.
("Huntington") to provide factoring services. Huntington provided factoring services to Jeffrey Cash Cary, a
former F.W. Services's employee who left in May 2002 to open a staff-leasing business in San Antonio.
The parties dispute whether (1) Garry enticed Diamond and Cary away from F.W. Services; (2) Garry
enticed a third F.W. Services employee, Todd Murphy, to leave the company in the 1990s to start a
staff-leasing business; (3) Cary breached a non-competition agreement with F.W. Services by opening a
staff-leasing business in San Antonio; and (4) Garry, Chad, CJP Financial, CJP Resources, and Your
Recruiters conspired to lure away these F.W. Services employees in order to profit from providing
factoring services to their new businesses.
E. The Suit
In May 2004, Garry sued Charles, Texas Staffing, Kenneth, and F.W. Services. He sued Charles and
Texas Staffing for, among other things, (1) breach of express contract for failure to pay him 25% of the $3
million sales price to SES and for transferring to Kenneth the skilled-labor accounts that had been
Worldwide's without compensation to Garry and (2) breach of fiduciary duty for converting commissions
that Charles had allegedly held for him under separate verbal agreement. Garry sued Kenneth and F.W.
Services for breach of implied-in-law contract, based on the theory that Kenneth and F.W. Services knew
that the skilled-labor accounts that Charles transferred to them before the SES sale contained Worldwide
skilled-labor accounts, resulting in a fraudulent conveyance that unjustly enriched these defendants. Garry
also sued some or all of these defendants for fraud, Uniform Fraudulent Transfer Act (4) ("UFTA")
violations, money had and received, quantum meruit, and quantum valebant. He sought actual and
punitive damages and disgorgement.
Charles and Texas Staffing counterclaimed against Garry for (1) breach of fiduciary duty; (2) fraud and
misrepresentations, based on Garry's misrepresentations that Worldwide's book of business was worth
$30 million and that Garry would continue to assist with Worldwide accounts after the Agreement's
execution; and (3) breach of contract, based on Garry's promise to continue to assist with maintenance of
Worldwide accounts.
Kenneth and F.W. Services counterclaimed against Garry for (1) breach of fiduciary duty for Garry's luring
F.W. Services's employees away to establish competing businesses for his or his family's profit; (2) tortious
interference with existing and prospective contracts, including interference with (a) existing staff-leasing
contracts in Houston and San Antonio, (b) F.W. Service's non-competition agreement with Cary, and (c) an
agreed temporary injunction between Cary and F.W. Services; (3) fraud, for misrepresentations (a) that
Garry would be loyal and able to maintain confidentiality of information obtained from these defendants,
(b) that he would not do anything to these defendants' business success, and (c) that he did not have a
continuing relationship with Cary, Diamond, or Murphy; and (4) conspiracy to destroy their business by
establishing factoring businesses to finance former F.W. Services employees whom Garry had lured away
for that purpose.
Kenneth and F.W. Services also asserted third-party claims against Chad Plotkin, CJP Financial, CJP
Resources, and Your Recruiters for (1) tortious interference with existing and prospective contracts,
including interference with existing staff-leasing contracts in Houston and San Antonio, with F.W. Service's
non-competition agreement with Cary, and with an agreed temporary injunction between Cary and F.W.
Services, and (2) conspiracy to destroy their business by factoring the new businesses of former F.W.
Services employees whom Garry had lured away for that purpose.
F. The Summary-Judgment Motions and Ruling
Each party against whom any claim, counterclaim, or third-party claim had been asserted moved for
traditional or no-evidence summary judgment. There were five summary-judgment motions filed in all.
The trial court granted all motions for summary judgment without stating its reasons and rendered a
take-nothing judgment on all claims, counterclaims, and third-party claims asserted by any party. The court
denied Garry's motion for new trial.
Summary-Judgment Standards
Traditional summary judgment under Texas Rule of Civil Procedure 166a(c) is proper only when a movant
establishes that there is no genuine issue of material fact and that it is entitled to judgment as a matter of
law. Gary E. Patterson & Assocs., P.C. v. Holub, 264 S.W.3d 180, 190 (Tex. App.--Houston [1st Dist.]
2008, pet. denied) (citing Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995) and
Tex. R. Civ. P. 166a(c)). "A defendant is entitled to summary judgment if the evidence disproves as a
matter of law at least one element of each of the plaintiff's causes of action or if it conclusively establishes
all elements of an affirmative defense." Id.
"A party may move for a no-evidence summary judgment under Texas Rule of Civil Procedure 166a(i) 'if
there is no evidence of one or more essential elements of a claim or defense on which an adverse party
would have the burden of proof at trial.'" Id. (quoting Flameout Design & Fabrication, Inc. v. Pennzoil
Caspian Corp., 994 S.W.2d 830, 834 (Tex. App.--Houston [1st Dist.] 1999, no pet.), and citing Tex. R. Civ.
P. 166a(i)). "The trial court must grant the motion unless the nonmovant produces more than a scintilla of
evidence raising a genuine issue of material fact on the challenged elements." Id. "In determining whether
a respondent to a no-evidence motion for summary judgment has produced sufficient evidence to raise a
genuine issue of material fact, courts are not required to search the record without guidance." Aleman v.
Ben E. Keith Co., 227 S.W.3d 304, 309 (Tex. App.--Houston [1st Dist.] 2007, no pet.). "But 'the respondent
is not required to marshal its proof; its response need only point out evidence that raises a fact issue on
the challenged elements.'" Id. (quoting Tex. R. Civ. P. 166a(i) cmt).
"In reviewing the granting of either type of summary-judgment motion, we indulge every reasonable
inference from the evidence in favor of the nonmovant, resolve any doubts arising from the evidence in its
favor, and take as true all evidence favorable to it." Patterson, 264 S.W.3d at 190. "When an order
granting summary judgment does not specify the grounds upon which the trial court ruled, we must affirm if
any of the summary judgment grounds is meritorious." Id. (citing Star-Telegram, Inc. v. Doe, 915 S.W.2d
471, 473 (Tex. 1995)).
Garry's Appeal
In a single issue, Garry raises several challenges to the summary-judgment rendered on certain of his
claims. He also concedes that he does not challenge other claims and requests for damages or relief on
which summary judgment was rendered.
A. Bases for Judgment Not Challenged on Appeal
Garry does not appeal the summary judgment rendered on his claims for fraud, UFTA violations,
conspiracy, money had and received, quantum meruit, and quantum valebant and on his requests for
punitive damages and disgorgement, conceding that he failed to respond to the no-evidence
summary-judgment motion's grounds attacking the elements of the cited claims, damages, and remedy.
See Tex. R. Civ. P. 166a(i) ("The court must grant the [no-evidence summary-judgment] motion unless the
respondent produces summary judgment evidence raising a genuine issue of material fact."). Accordingly,
we must affirm the summary judgment rendered on these claims and requests for relief or damages. See
Tricon Tool & Supply, Inc. v. Thumann, 226 S.W.3d 494, 500 (Tex. App.--Houston [1st Dist.] 2006, pet.
denied).
B. Breach of Express Contract
Garry first contends that the trial court erred in rendering traditional and no-evidence summary judgment
on his breach-of-express-contract claims against Charles and Texas Staffing.
1. Breach of the Verbal Agreement to Hold Garry's Commissions "in Trust"
A portion of Garry's appellate argument concerns the breach of a post-Agreement verbal contract for
Charles to hold in trust Garry's 1½ % commissions on former Worldwide accounts until Garry requested
them. However, Garry did not plead this as part of his express breach-of-contract claim. Instead, the sole
express contract that Garry's "live" petition alleged was that Charles and Texas Staffing had breached was
the Agreement itself, specifically, by not having paid Garry 25% of the sale price of Texas Staffing
accounts that were sold to SES and by not having compensated him for former-Worldwide accounts that
had been transferred to F.W. Services. The only allegations that the live petition made concerning breach
of a post-Agreement verbal contract to hold Garry's commissions in trust appeared in support of his claims
for breach of fiduciary duty, UFTA violations, quantum valebant, quantum meruit, and money had and
received and his requested remedy of disgorgement.
Texas follows a "fair notice" standard for pleading, in which the question is whether the opposing party can
ascertain from the pleading the nature and basic issues of the controversy. Horizon/CMS Healthcare Corp.
v. Auld, 34 S.W.3d 887, 896 (Tex. 2000). "The purpose of this rule is to give the opposing party
information sufficient to enable him to prepare a defense." Roark v. Allen, 633 S.W.2d 804, 810 (Tex.
1982). The test of fair notice is whether an opposing attorney of reasonable competence, on review of the
pleadings, can ascertain the nature and the basic issues of the controversy and the testimony probably
relevant. Bowen v. Robinson, 227 S.W.3d 86, 91 (Tex. App.--Houston [1st Dist.] 2006, pet. denied).
We hold that under the facts of this case, Garry's breach-of-express-contract allegations against Charles
and Texas Staffing based on the Agreement did not give fair notice of a breach-of-express-contract claim
based on a subsequent, verbal agreement to hold commissions. First, Garry's petition alleged generally
that he had accepted the commissions tendered under the Agreement, but that he had then entered into a
verbal agreement for Charles to hold them in trust. These are allegations of a contract separate from the
Agreement itself. The breach-of-express-contract allegations referenced only the Agreement, not a
separate, verbal contract concerning commissions. Second, paragraph 2 of the Agreement entitled Garry
to the lesser of $2.5 million, less commissions already paid, or 25% of the sales price received. Garry's
petition alleged that the commissions held under this later, verbal agreement amounted to around $1.3
million. Two and a half million dollars less $1.3 million is still greater than the gross sales price received for
the sale of SES. Accordingly, Garry's allegations limited his express-contract claim against Charles and
Texas Staffing for breach of the Agreement to 25% of the sales price received. Given that the Agreement
relegated him to this lesser sum, Garry's allegations did not provide fair notice that he was also claiming
breach of a completely separate verbal agreement to hold commissions in trust.
Garry nonetheless argues that the sufficiency of his pleading was demonstrated by the fact that Charles
and Texas Staffing's summary-judgment motion addressed a verbal agreement to hold commissions. We
disagree. In their summary-judgment motion, Charles and Texas Staffing argued, under rule 166a(c), that
Plaintiff's claim for express contract is based only on (1) amounts allegedly due upon sale of Trendsetter
Staffing and (2) amounts allegedly due as a consequence of an alleged transfer of accounts to Kenneth
Joekel. The claim conspicuously fails to include any allegation with respect to the non-payment of
commissions. Nonetheless, even if the Court were inclined to read Plaintiff's pleadings to allege a claim for
breach of contract based on commissions (and the Trendsetter Defendants object to and oppose such a
reading), such claim fails as a matter of law . . . .
(Emphasis added.) Instead of showing that Charles and Texas Staffing read the petition to allege a
breach-of-express-contract claim for breach of an oral agreement to hold commissions, this text shows that
they did not read the petition that way, that they opposed any reading of the petition to include such an
allegation, and that they addressed the issue only in the event that the court read the petition otherwise.
After being put on notice that his petition did not allege such a theory, Garry declined to amend it to
include such an alternative claim.
We overrule Garry's challenges that are based on this unpleaded express contract claim.
2. Breach of the June 18, 1998 Agreement
Garry also argues that the trial court erred in rendering a take-nothing summary judgment on his claim that
Charles and Texas Staffing breached the Agreement by failing to pay him (1) 25% of the sale price of
Texas Staffing accounts that were sold to SES and (2) compensation for the former-Worldwide accounts
that were transferred to F.W. Services before the sale to SES.
a. Failure to Pay Garry for 25% of the Sale Price of the Texas Staffing Accounts to SES
The Agreement required that, upon sale of "Trendsetter" during the contract term, Charles would pay
Garry the lesser of $2.5 million or "Twenty-five percent (25%) of the gross sales price received for
Trendsetter less any amounts previously paid to GARRY PLOTKIN." Garry contends that a fact issue
exists regarding what the phrase "gross sales price received" means: the price of sale (Garry's
interpretation--$3 million), or the amount of the sale price that the buyer actually paid (Charles's
interpretation--$700,000). Specifically, Garry reads "gross sales price received" to mean "gross sales price
to be received by the seller under the sales contract." Garry appears to argue both that the Agreement is
unambiguous in this regard and that it is ambiguous; under the latter position, he further argues that we
may consider the parties' pre-Agreement correspondence.
In construing a written contract, the primary concern is to ascertain and to give effect to the parties'
intentions as expressed in the document. Frost Nat'l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310, 311-12
(Tex. 2005). We consider the entire writing and attempt to harmonize and to give effect to all of the
contract's provisions. Id. at 312. We construe contracts "'from a utilitarian standpoint bearing in mind the
particular business activity sought to be served'" and "'will avoid when possible and proper a construction
which is unreasonable, inequitable, and oppressive.'" Id. (quoting Reilly v. Rangers Mgmt., Inc., 727
S.W.2d 527, 530 (Tex. 1987)). "The language in a contract is to be given its plain grammatical meaning
unless doing so would defeat the parties' intent." Amtech Elevator Servs. Co. v. CSFB 1998-P1 Buffalo
Speedway Office Ltd. P'ship, 248 S.W.3d 373, 379 (Tex. App.--Houston [1st Dist.] 2007, no pet.).
If, after the pertinent rules of construction are applied, the contract can be given a definite or certain legal
meaning, it is unambiguous, and we construe it as a matter of law. Frost Nat'l Bank, 165 S.W.3d at 312.
However, if after such rules are applied, the meaning of the contract remains uncertain or is susceptible to
more than one reasonable interpretation, it is ambiguous. Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907
S.W.2d 517, 520 (Tex. 1995); Coker v. Coker, 650 S.W.2d 391, 393-94 (Tex. 1983). If a contract is
ambiguous, the contract's interpretation becomes a fact issue to be resolved by deciding the parties' true
intent, for which the fact finder may consider extraneous evidence of intent. See Nat'l Union Fire Ins. Co.,
907 S.W.2d at 520; Coker, 650 S.W.2d at 394-95. Whether a contract is ambiguous is a question of law to
be determined "by looking at the contract as a whole in light of the circumstances present when the
contract was entered." Coker, 650 S.W.2d at 394.
The Agreement does not define the term "gross sales price received." We give the words in this term their
plain, ordinary, and generally accepted meaning because nothing in the Agreement evidences a contrary
intent. See Stahl Petroleum Co. v. Phillips Petroleum Co., 550 S.W.2d 360, 366 (Tex. Civ. App.--Amarillo
1977) (interpreting contractual term "weighted average price received" in same way for same reason,
when term was left undefined in contract), aff'd, 569 S.W.2d 480 (Tex. 1978). "[T]he phrase 'price
received' . . . consists of two terms of ordinary meaning. In the more common sense, . . . the term 'price'
means the amount of money received in exchange for anything, and the transitive verb 'received' means to
take as something paid or to accept payment." Id. Under this definition, the phrase "gross sales price
received" unambiguously means the money that Charles and Texas Staffing actually received for the sale
($700,000), not the full contracted-for price, most of which went unpaid. See Stahl Petroleum Co., 550
S.W.2d at 366; see also Life Ins. Co. v. Verex Assurance, Inc., 810 S.W.2d 416, 418 (Tex. App.--Dallas
1991, no writ) (concluding, in context of mortgage insurance policy, that "sales price" meant cash received
by seller upon transfer of property to buyer). (5) Because the term is unambiguous, we may not resort to
extrinsic evidence--such as the June 11, 1998 pre-Agreement letter on which Garry relies--to alter its
meaning. See Stahl Petroleum Co., 550 S.W.2d at 367-68 (applying plain meaning of contractual term,
despite evidence that parties' course of performance indicated that parties intended different meaning,
when term was unambiguous).
We overrule this challenge under Garry's sole issue.
b. Failure to Pay Garry Compensation for Former-Worldwide Accounts That Were Transferred to F.W.
Services Before the Sale to SES
Garry also sued Charles and Texas Staffing for breach of the Agreement based on the transfer of Texas
Staffing's skilled-labor accounts to F.W. Services before the sale to SES, for which Garry received no
payment. The Agreement provided:
CHARLES JOEKEL agrees to buy and GARRY PLOTKIN agrees to sell the book of business of
WORLDWIDE SERVICES . . .
1. JOEKEL/Trendsetter will take control of the Worldwide book of business on June 29, 1998. Each week
thereafter, JOEKEL will pay PLOTKIN an amount equal to 1½% of the gross sales of the accounts formerly
serviced by Worldwide per a list of accounts to be agreed upon between the parties. . . .
2. In the event that JOEKEL sells Trendsetter during the term of this agreement . . . , this agreement will be
terminated. JOEKEL will pay PLOTKIN at that time the lesser of:
(1) TWO MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($2,500,000.00) less any amounts
previously paid or
(2) Twenty-five percent (25%) of the gross sales price received for Trendsetter less any amounts
previously paid to GARRY PLOTKIN.
(Emphasis added.)
In support of this breach-of-express-contract claim, Garry pleaded that Charles and Texas Staffing
first sold and/or conveyed the book of accounts from Trendsetter's skilled labor division [Trendsetter
Skilled, a d/b/a of Texas Staffing] to [Charles's] son, and thereafter sold the remainder of the business to
SES for $3,000,000. . . . [T]he "skilled" labor accounts were first sold to Kenneth Joekel, with the remaining
"staff" leasing labor accounts being sold to SES. Defendants owe the Plaintiff . . . twenty-five percent of the
value of the assets sold and/or conveyed by Charles Joekel to Kenneth Joekel. Thus far, the only funds
paid to the Plaintiff out of the two sales was $175,000.
Implicit in this allegation is the understanding that (1) Worldwide sold both skilled-labor and staff-leasing
accounts under the Agreement and (2) the Agreement called for Garry to be paid when Texas Staffing
sold any former Worldwide account (staff-leasing or skilled-labor).
Charles and Texas Staffing moved for traditional and no-evidence summary judgment on this claim on the
following grounds:
the Agreement's use of the term "Trendsetter" meant Texas Staffing d/b/a "Trendsetter Staffing," not
Texas Staffing d/b/a "Trendsetter Skilled," as was shown by the contemporaneously executed Bill of Sale's
reference to "Trendsetter Staffing";
accordingly, the Agreement's requirement that Garry be paid 25% of the gross sales price received for
"Trendsetter" meant that he be paid only for the sale of the Texas Staffing d/b/a Trendsetter Staffing,
which held only staff-leasing accounts;
the accounts held by Texas Staffing d/b/a Trendsetter Staffing (the only d/b/a holding former Worldwide
accounts) were sold to SES, and the accounts held by Texas Staffing d/b/a Trendsetter Skilled (with
skilled-labor accounts that were not bought from Worldwide) were sold or transferred to Kenneth;
accordingly, Garry was entitled to 25% of the sales price received from SES, which he was paid.
Because of the above, Garry could show neither breach nor damages. (6)
In support, Charles and Texas Staffing produced and cited Chad Plotkin's deposition testimony, in which
he testified that the accounts bought from Worldwide were recorded separately from other accounts in the
Pay Plus database of "Trendsetter" (without further specification as to Trendsetter Staffing or Trendsetter
Leasing), so as to track commissions owed to Garry. Chad's deposition testimony was also cited in support
of the summary-judgment ground that all of the former Worldwide accounts that Texas Staffing d/b/a
Trendsetter Staffing bought under the Agreement were sold to SES, but that testimony did not support that
contention. Likewise, Charles and Texas Staffing produced the 2001 asset purchase and sales agreement
between SES and "Charles Joekel (the 'Company')," but the copy of that agreement does not list the
assets sold.
Garry argues that a fact issue exists as to whether some of the accounts that Worldwide sold under the
Agreement ended up in F.W. Services without compensation to him. We agree. The crux of the
summary-judgment motion was that (1) all accounts that Worldwide sold under the Agreement ended up in
Texas Staffing d/b/a Trendsetter Staffing; (2) no former Worldwide accounts ended up being transferred to
F.W. Services; and (3) SES bought all accounts held in Texas Staffing d/b/a Trendsetter Staffing, including
all of the former Worldwide accounts. As noted above, the summary-judgment evidence on which Charles
and Texas Staffing relied to show (2) and (3) did not do so. Additionally, in his summary-judgment
response, Garry provided the following evidence:
Worldwide Temporary Services, a corporation that Garry eventually "roll[ed] up . . . into Westbury
[Worldwide Services, Inc.]," got into the skilled personnel business "sometime before [Garry] purchased it,"
which accounts Garry purchased.
Garry's business at the time of the Agreement's execution was "the staff leasing business and skilled
personnel business." (Emphasis added.)
The Worldwide accounts sold under the Agreement were carried in "Trendsetter's" Pay Plus accounting
program.
The skilled-labor accounts were transferred to F.W. Services before the SES sale.
Some of the same client names appeared both in a list of accounts receivable of the d/b/a's of F.W.
Services from 1998 to 2001 and in the lists of accounts that Garry identified by deposition as having been
sold by Worldwide under the Agreement.
Viewed in the required light, this evidence raises a fact issue as to whether (1) Worldwide sold skilled-labor
accounts under the Agreement and (2) some of Worldwide's former accounts sold under the
Agreement--skilled or otherwise--were transferred to F.W. Services, without payment to Garry, before the
sale to SES. This is some evidence, then, of both breach and damages.
Garry also disputes the summary-judgment ground that the Agreement's provisions referring to
"Trendsetter"--e.g., "Joekel/Trendsetter will take control of the Worldwide book of business" and "25% of
the gross sales price received for [the sale of] Trendsetter" (emphasis added)--could have meant only
Texas Staffing d/b/a Trendsetter Staffing. (7) Charles and Texas Staffing respond that the Agreement
must be read with the Bill of Sale, which specified Texas Staffing d/b/a Trendsetter Staffing as the
purchaser.
The Agreement used "Trendsetter" without specifying "Trendsetter Staffing" or "Trendsetter Skilled." Each
of these was a d/b/a of a single corporation, Texas Staffing. A d/b/a ("doing business as") is not a separate
corporate entity: rather, it is a name under which the corporation functions. See Matice Enterps., Inc. v.
Gibson, No. 01-04-00913-CV, 2005 WL 1838018, at *5 (Tex. App.--Houston [1st Dist.] Aug. 4, 2005, no
pet.) (mem. op.). Given this, the actual party to the Agreement was Texas Staffing. Both of Texas Staffing's
d/b/a's used the term "Trendsetter"--meaning that the Agreement's plain language did not show that
"Trendsetter" meant only Texas Staffing d/b/a Trendsetter Staffing. The Bill of Sale identifies Texas
Staffing by its d/b/a Trendsetter Staffing, but again, the real party was Texas Staffing. Moreover, and
importantly, the two contracts sold different things: the Bill of Sale sold physical assets and goodwill (i.e.,
physical or intangible property other than client accounts), whereas the Agreement sold the book of
business (i.e., client accounts that, in theory, could have encompassed skilled-labor or staff-leasing
accounts). Because the contractual term "book of business" could theoretically have included either type
of client account, (8) and because the movants asserted that Texas Staffing d/b/a Trendsetter Staffing
managed only staff-leasing accounts, it is reasonable to view the Agreement's term "Trendsetter" as
meaning more than simply d/b/a Trendsetter Staffing, despite the Bill of Sale's more limited designation.
Accordingly, "Trendsetter" did not have to mean the same thing in the Agreement as it meant in the Bill of
Sale.
We hold that Garry's evidence raised a genuine issue of material fact that precluded summary judgment
on his breach-of-express-contract claim for remuneration for the pre-SES-sale transfer of former
Worldwide accounts to F.W. Services. We sustain this challenge under Garry's sole issue.
C. Garry's Standing to Sue on Any Claim and Charles's and Kenneth's Individual Liability on All Claims
In both the traditional and no-evidence portions of the defendants' summary-judgment motion, Charles and
Kenneth urged that Garry lacked contractual privity, and thus standing, because Garry was not a party to
the Agreement in his individual capacity and all of his claims arose out of the Agreement. In the traditional
portion of the defendants' summary-judgment motion, Charles argued that the corporate veil protected him
from individual liability on any claim because he signed the Agreement in his corporate capacity, not
individually. Also in the traditional portion of the defendants' summary-judgment motion, Kenneth argued
that the corporate veil protected him from all of Garry's claims because those claims related entirely to
F.W. Services's actions. Finally, in the no-evidence portion of the defendants' summary-judgment motion,
both Charles and Kenneth argued that no evidence raised a fact issue that they undertook the
complained-of actions in their individual capacities.
1. Garry's Standing
Worldwide's accounts were corporate assets, not Garry's personal property. Cf. Bilodeau v. Webb, 170
S.W.3d 904, 912 (Tex. App.--Corpus Christi 2005, pet. denied) ("[A] cause of action for injury to the
property of a corporation, or the impairment or destruction of its business, is vested in the corporation, as
distinguished from its stockholders, even though it may result indirectly in the loss of earnings to the
stockholders."). The Agreement implicitly recognizes this by acknowledging that the sale is "by [Worldwide]
of its book of business . . . ." Accordingly, when the Agreement recited that "GARRY PLOTKIN agrees to
sell the book of business" of Worldwide, it was surely referring to him in the capacity of a corporate
representative.
But this was not the only covenant in the Agreement in which Garry's name was used. Rather, there were
two others. First, the Agreement provided that "GARRY PLOTKIN" or "PLOTKIN" would be paid either
weekly commissions or, if "Trendsetter" was later sold during the Agreement's term, the lesser of a
percentage of that sale or a fixed sum, less any commissions already paid. Second, the Agreement
provided that "PLOTKIN" would assist after the sale when called upon in the maintenance of the sold
accounts. The parties used Garry's name in these two covenants, not "Worldwide" or "Garry, on behalf of
Worldwide."
The use of Garry's name in these two additional covenants renders unclear whether he held their rights
and duties as an individual or as a corporate agent. For example, in the post-sale landscape in which
these covenants came into play, Worldwide had already sold all of its assets to Texas Staffing and was no
longer operating. Accordingly, the covenant that "PLOTKIN" would assist post-sale as requested could
reasonably be interpreted to mean that Garry individually would assist. Likewise, it would not be
unreasonable to read the covenant to pay "Garry Plotkin" commissions or a percentage of a later sale to
mean payment to Garry individually: either as the sole director and officer of Worldwide or as its sole
shareholder, (9) Garry could contract to have commissions or a percentage of any later sale paid to
himself individually--regardless of any legal consequences that might result. And it was the 25%-sale-price
covenant upon which Garry based his breach-of-contract claims.
Furthermore, the Agreement's introductory paragraph provided that "[t]he following represents our
agreement regarding the sale by [Worldwide] of its book of sales to CHARLES L. JOEKEL." (Emphasis
added.) The use of "our agreement" for the parties, in juxtaposition with the use of "its book of business"
for the thing being sold, render unclear exactly who constituted "our" and for what covenants: Garry
individually, Garry as corporate representative, Charles individually, or Charles as corporate
representative. Finally, the signature blocks did not indicate if the parties signed individually, as corporate
representatives, or in both capacities.
Charles and Texas Staffing point to the Bill of Sale--which Charles and Garry signed as corporate
representatives and which was clearly between their two corporations--to eliminate any ambiguity in the
Agreement. But the Bill of Sale concerned a one-time sale of totally different assets, with no continuing
covenants. In contrast, the Agreement contained two covenants that the parties intended to extend beyond
the sale date during a time in which Worldwide no longer functioned. Although "all writings that pertain to
the same transaction will be considered together, even if they were executed at different times and do not
expressly refer to one another," the Texas Supreme Court has "cautioned . . . that this rule is simply a
device for ascertaining and giving effect to the intention of the parties and cannot be applied arbitrarily."
DeWitt County Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 102 (Tex. 1999). We thus do not blindly apply the
rule when, as here, the two contracts' provisions differ in material respects. See id.
We hold that the Agreement is ambiguous as to whether the referenced rights and obligations were given
to Garry in his individual or his corporate capacity. (10) Accordingly, the trial court erred in rendering
summary judgment on the ground that Garry lacked standing or privity. See Coker, 650 S.W.2d at 394
("When a contract contains an ambiguity, the granting of a motion for summary judgment is improper
because the interpretation of the instrument becomes a fact issue."). We sustain this challenge under
Garry's sole issue.
2. Charles's Individual Liability
The sole summary-judgment grounds attacking Garry's ability to sue Charles individually were that (1)
Charles was not a party to the Agreement in his individual capacity, but only as representative for Texas
Staffing; (2) Garry could produce "no evidence of at least one element required to pierce the corporate
veil"; and (3) all of Garry's claims arose out of the Agreement.
We hold that the Agreement is ambiguous as to whether Charles signed the Agreement in his individual
capacity, his corporate capacity, or both, depending on the obligation. For example, the Agreement
provided that "CHARLES L. JOEKEL" would buy the book of business; that "JOEKEL" would pay
"PLOTKIN" commissions; and that if "JOEKEL" sold "Trendsetter" during the Agreement's term, "JOEKEL"
would pay either a percentage of the sale or a fixed sum, less previously paid commissions. In contrast, the
Agreement elsewhere provided that "JOEKEL/Trendsetter" would take control of the book of business and
that "PLOTKIN" would assist "JOEKEL/Trendsetter" as they requested with the maintenance of former
Worldwide accounts. Again, the signature blocks did not indicate if the parties signed individually, as
corporate representatives, or in both capacities. And as we discussed above in the context of Garry's
standing, the Bill of Sale's language does not render the meaning of "JOEKEL," "CHARLES L. JOEKEL," or
"JOEKEL/Trendsetter" unambiguous.
For these reasons, we hold that the Agreement is ambiguous as to whether Charles was signing as Texas
Staffing's representative or individually. Because of this, it is irrelevant whether Garry produced some
evidence to pierce Texas Staffing's corporate veil. Accordingly, the trial court erred in rendering summary
judgment on the ground that Charles could not be sued in his individual capacity. See Coker, 650 S.W.2d
at 394. We sustain this challenge under Garry's sole issue.
3. Kenneth's Individual Liability
Kenneth's summary-judgment motion asserted that, because all of Garry's claims related to the acts of his
corporation, F.W. Services, Kenneth could not be held individually liable; the no-evidence portion of his
motion asserted that Garry could produce no evidence entitling him to pierce the corporate veil. The
argument in Garry's relevant appellate briefing concerns only Charles and the capacity in which Garry and
Charles signed the Agreement. Kenneth was not a party to the Agreement. Garry does not discuss
Kenneth's individual liability, and we can discern no attack of Kenneth's summary-judgment ground that he
could not be individually liable. Accordingly, we affirm the summary judgment rendered on all of Garry's
claims alleged against Kenneth in his individual capacity. See Tricon, 226 S.W.3d at 500.
D. Implied-In-Fact and Quasi Contract Claims Against F.W. Services (11)
Garry's pleading did not employ the term "implied-in-fact contract," but he now takes the position that he
pleaded such a claim. Garry expressly pleaded that an "implied contract in law," i.e., a quasi contract,
arose between him and F.W. Services because the latter knew that the accounts that Charles transferred
to it contained former Worldwide accounts, resulting in a fraudulent conveyance that unjustly enriched
F.W. Services.
1. Implied-in-Fact Contract
Garry first argues that the trial court erred in rendering summary judgment on his implied-in-fact
breach-of-contract claim.
"The elements of a contract, express or implied, are identical." Univ. Nat'l Bank v. Ernst & Whinney, 773
S.W.2d 707, 710 (Tex. App.--San Antonio 1989, no writ). Accordingly, the elements of either type of
contract are "(1) an offer, (2) an acceptance, (3) a meeting of the minds, (4) each party's consent to the
terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding." DeClaire
v. G & B Mcintosh Family Ltd. P'Ship, 260 S.W.3d 34, 44 (Tex. App.--Houston [1st Dist.] 2008, no pet.).
"[T]he real difference between express contracts and those implied in fact is in the character and manner
of proof required to establish them." Haws & Garrett Gen. Contractors., Inc. v. Gorbett Bros. Welding Co.,
480 S.W.2d 607, 609 (Tex. 1972). "In each instance there must be shown the element of mutual
agreement which, in the case of an implied contract, is inferred from the circumstances." Id.
Garry's pleading expressly referred only to a "contract implied in law" (i.e., a quasi contract), not an
implied-in-fact one. The supporting allegations were not entirely clear as to which type of implied contract
Garry meant. Rather than specially excepting for clarification, F.W. Services construed Garry's allegations
to include breach of an implied-in-fact contract and moved for no-evidence summary judgment on that
claim, raising these grounds:
1. No evidence demonstrated that F.W. Services and Garry had a meeting of the minds.
2. No evidence existed that F.W. Services consented to be bound.
3. No evidence existed that Garry tendered performance or provided goods and services.
4. No evidence of privity existed between Garry and F.W. Services for various reasons.
Garry's summary-judgment response addressed the fourth summary-judgment ground--privity--by urging
that he was in privity with F.W. Services because it had "received accounts conveyed by Garry . . . to
Charles . . . and did not pay [Garry] either commissions owed . . . , or the value of the business which was
conveyed . . . ," so that Garry "was clearly in privity with [F.W. Services] with respect to funds due and
owing [Garry] under the terms of [the Agreement]." He did not address any of the first three grounds,
however, and his response did not point to evidence raising a fact issue on the challenged elements. (12)
A trial court must grant a no-evidence summary-judgment motion if the non-movant does not produce
evidence raising a fact issue on a challenged element. See Tex. R. Civ. P. 166a(i). Accordingly, we hold
that the trial court did not err in rendering summary judgment on any implied-in-fact breach-of-contract
claim that Garry might have alleged. We overrule this challenge under Garry's sole issue.
2. Quasi Contract
In support of his quasi contract claim against Kenneth and F.W. Services, Garry alleged that these
defendants were "beneficiaries of the monies and accounts conveyed by [Garry] to [Charles and Texas
Staffing]"; that they "used those assets for their own benefit sans any compensation" to Garry; that the
claim was also based on Kenneth's "position in privity with [Charles's] business, as well as [Kenneth's and
F.W. Services's] knowledge of the terms reflected in the [Agreement] prior to the fraudulent transfer of
[Garry's] accounts from Charles . . . to Kenneth"; and that Garry sought "damages he sustained" (13) from
the "fraudulent conveyance" of "funds and accounts had and received" by Kenneth and F.W. Services.
"'Contracts implied in law, or . . . more properly quasi or constructive contracts, are a class of obligations
which are imposed or created by law without regard to the assent of the party bound, on the ground that
they are dictated by reason and justice . . . ." Ferrous Prod. Co. v. Gulf States Trading Co., 160 Tex. 399,
402-03, 332 S.W.2d 310, 312 (1960) (quoting Arthur L. Corbin, Corbin on Contracts and C.J.S.,
Contracts). "'Such contracts rest on the equitable principle that a person shall not be allowed to enrich
himself unjustly at the expense of another, and on the principle that whatsoever it is certain that a man
ought to do, that the law supposes him to have promised to do. . . .'" Id. F.W. Services's no-evidence
summary-judgment motion asserted that Garry "failed to present any admissible evidence that a contract
implied in law [i.e., a quasi contract] was created."
Garry's petition alleged that the equity to be served by restitution damages was remedying the fraudulent
conveyance of former Worldwide accounts to Kenneth with Kenneth's knowledge. That is, Garry alleged
that Kenneth's and F.W. Services's wrongful conduct underlay this claim. However, in seeking to
substantiate this allegations, Garry pointed only to the Agreement and the list of accounts receivable of
the d/b/a's of F.W. Services, which contained some of the accounts that Garry identified as former
Worldwide accounts. Garry did not identify any evidence in support of this quasi contract claim that
anything akin to a fraudulent transfer to Kenneth had occurred with Kenneth's knowledge or that Kenneth
had otherwise intentionally taken advantage of him--which was the basis that Garry had alleged justified
the imposition of a quasi contract. (14)
Given the state of Garry's allegations and evidence tendered in support, we hold that the trial court did not
err in rendering summary judgment on that claim. We overrule this challenge under Garry's sole issue.
E. Breach of Fiduciary Duty
Garry pleaded a breach-of-fiduciary-duty claim against Charles and Texas Staffing, referencing Garry and
Charles's verbal agreement to hold Garry's commissions "in trust," which "Charles Joekel converted . . . for
his own use and benefit without [Garry's] knowledge and consent."
The elements of a breach-of-fiduciary-duty claim are (1) the existence of a fiduciary relationship between
the plaintiff and defendant; (2) the defendant's breach of the fiduciary duties arising from that relationship;
and (3) injury to the plaintiff, or benefit to the defendant, resulting from that breach. Jones v. Blume, 196
S.W.3d 440, 447 (Tex. App.--Dallas 2006, pet. denied). The no-evidence portion of Charles and Texas
Staffing's summary-judgment motion attacked all elements of the claim.
Garry's claim rested not on a formal fiduciary relationship, but on an informal one. "An informal fiduciary
duty may arise from a moral, social, domestic or purely personal relationship of trust and confidence,
generally called a confidential relationship." Assoc. Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d
276, 287 (Tex. 1998). This duty is not lightly created, however. Id. at 288. "To impose an informal fiduciary
duty in a business transaction, the special relationship of trust and confidence must exist prior to, and
apart from, the agreement made the basis of the suit." Id. "[M]ere subjective trust does not . . . transform
arm's-length dealing into fiduciary relationship." Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171,
177 (Tex. 1997). "Although . . . the existence of a confidential relationship is ordinarily a question of fact,
when the issue is one of no evidence, it becomes a question of law." Crim Truck & Tractor Co. v. Navistar
Int'l Transp. Corp., 823 S.W.2d 591, 594 (Tex. 1992).
The only basis that Garry asserted for a fiduciary duty was the oral agreement to hold his commissions in
trust. (15) The commissions were part of an arms-length, express contract between Garry and Charles or
Texas Staffing. This agreement is simply not the type that will give rise to a fiduciary duty. Garry relied
below on no evidence of a fiduciary relationship that existed prior to or apart from the verbal agreement to
hold commissions. See id. The trial court thus did not err in rendering summary judgment on Garry's
breach-of-fiduciary-duty claim.
We overrule this challenge under Garry's sole issue.
Charles and Texas Staffing's and Kenneth and F.W. Services's Appeals
A. Bases for Judgment Not Challenged on Appeal
Charles and Texas Staffing counterclaimed against Garry for breach of the Agreement's requirement that
he assist after the sale in the maintenance of the former Worldwide accounts upon request. Garry moved
for no-evidence summary judgment on this claim. Charles and Texas Staffing do not challenge the
summary-judgment rendered on this claim. Accordingly, we must affirm that portion of the judgment. See
Tricon Tool & Supply, Inc., 226 S.W.3d at 500.
Garry, Chad, and Chad's three corporations also moved for no-evidence summary judgment on the claim
for attorney's fees of Kenneth and F.W. Services. Kenneth and F.W. Services did not respond to that
ground below, and they do not challenge on appeal the rendition of judgment on their fee request.
Accordingly, we must affirm this portion of the summary judgment, as well. See id.
Finally, Kenneth and F.W. Services do not complain on appeal of the rendition of summary judgment on
their claims that Garry, Chad, and Chad's three corporations tortiously interfered with (1) an agreed
temporary injunction between Cary and F.W. Services and (2) unspecified "existing labor staffing contracts
in the San Antonio and Houston markets" other than their non-competition agreement with Cary.
Accordingly, we must also affirm the judgment rendered on these tortious interference claims. See id.
B. Charles and Texas Staffings's Fraud Counterclaims Against Garry
In issue five, Charles and Texas Staffing contend that the trial court erred in rendering summary judgment
on their fraud counterclaims against Garry. See Sears, Roebuck & Co. v. Meadows, 877 S.W.2d 281, 282
(Tex. 1994) ("'The elements of fraud are a material misrepresentation, which was false, and which was
either known to be false when made or was asserted without knowledge of its truth, which was intended to
be acted upon, which was relied upon, and which caused injury.'" ) (quoting DeSantis v. Wackenhut Corp.,
793 S.W.2d 670, 688 (Tex. 1990)).
In their counter-petition, Charles and Texas Staffing alleged that Garry had committed fraud by (1)
misrepresenting that Worldwide's book of business was worth $30 million per year and (2) misrepresenting
that he would continue to assist in the maintenance of the former Worldwide accounts upon request. Garry
moved for no-evidence summary judgment on each element of these fraud claims. In their
summary-judgment response, Charles and Texas Staffing did not identify any evidence to show the falsity
of Garry's representations concerning the value of Worldwide's accounts or of his agreement to assist with
these accounts' maintenance in future--the sole factual bases for their claims. Rather, their response
focused solely on Garry's alleged forgery, following the Agreement's execution, of an "Exhibit A" to the
Agreement, in which Garry listed former Worldwide accounts on which the parties had purportedly agreed
that he would receive commissions. Charles and Texas Staffing's appellate challenges also focus on
Exhibit A.
Charles and Texas Staffing's summary-judgment evidence was not relevant to the fraud allegations set
forth in their pleadings and on which Garry moved for summary judgment. Accordingly, the trial court did
not err in rendering summary judgment on Charles and Texas Staffing's fraud claims against Garry.
When Charles and Texas Staffing raised a new basis for their fraud claim in their summary-judgment
response, Garry did not object, but neither did he join the issue by reply. Even if the new fraud allegation
could be viewed as having been tried by consent, (16) Charles and Texas Staffing did not point out
evidence concerning the fraud elements of reliance and damages arising from the alleged fabrication of
Exhibit A. See Meadows, 877 S.W.2d at 282. A trial court must grant a no-evidence summary judgment on
a claim if the non-movant does not produce any evidence of the challenged elements of that claim. See
Tex. R. Civ. P. 166a(i).
We overrule issue five.
C. Kenneth and F.W. Services's Fraud Counterclaim Against Garry
In issue four, Kenneth and F.W. Services contend that the trial court erred in granting Garry's no-evidence
summary-judgment motion on their fraud counterclaim against Garry.
Kenneth and F.W. Services alleged that Garry
made false, material representations to [them] regarding his loyalty and ability to maintain the
confidentiality of all records, plans and information he acquired through his relationship with [them]. [Garry]
falsely represented to [them] that as confidant and close business associate, he would not do anything
detrimental to the business success of [them]. [Garry] further falsely represented that he did not have any
continuing relationship with Diamond, Cary or Murphy after they left their employment with F.W. Services,
Inc.
Garry's no-evidence summary-judgment motion challenged all elements of this fraud counterclaim.
Although Kenneth and F.W. Services' summary-judgment response alleged that Garry had made
representations that he was reliable and would not use F.W. Service's confidential financial information,
they pointed to no summary-judgment evidence to support this allegation. For example, their response to
the motion's attack on the fraud counterclaim pointed to only two pieces of evidence: (1) some of CJP
Financial's corporate records from the Texas Secretary of State and (2) Diamond's deposition, which
contained no testimony about the alleged representations. Because Kenneth and F.W. Services failed to
carry their burden of producing some evidence to support this element of their fraud counterclaim against
Garry, we hold that the trial court did not err in rendering summary judgment on it. See Tex. R. Civ. P.
166a(i); Meadows, 877 S.W.2d at 282.
We overrule issue four.
D. Charles and Texas Staffing's and Kenneth and F.W. Services's Counterclaims Against Garry for Breach
of Fiduciary Duty
In issue six, Charles and Texas Staffing argue that the trial court erred in granting Garry's no-evidence
summary-judgment motion on their counterclaim for breach of fiduciary duty against Garry. In issue three,
Kenneth and F.W. Services argue that the trial court erred in granting Garry's no-evidence
summary-judgment motion on their counterclaim for breach of fiduciary duty against Garry.
1. The Allegations
Kenneth and F.W. Services alleged that Garry had a "special relationship of trust and confidence" with
them, which he had breached by "conspiring to establish competing businesses," and which had damaged
them in unspecified ways. Charles and Texas Staffing alleged that Garry's breach of his fiduciary
relationship to them had resulted in damages, which included his owing them for 10 years of rent, utilities,
and other operating expenses. Charles and Texas Staffing further alleged that Charles "conveyed and
required [what became Worldwide's] business with the express and implied understanding that [Garry]
would continue to honor his commitments to [Charles] of good faith and fair dealing." The relevant
underlying facts that both petitions alleged were that (1) Garry ran Worldwide from their offices without
paying overhead or expenses; (2) Garry had unlimited access to their business plans, trade secrets, files,
business records, contracts, and computers; (3) he worked in close proximity to their employees; and (4)
they trusted him.
2. The Law
Again, the elements of a breach-of-fiduciary-duty claim are (1) the existence of a fiduciary relationship
between the plaintiff and defendant; (2) the defendant's breach of the fiduciary duties arising from that
relationship; and (3) injury to the plaintiff, or benefit to the defendant, resulting from that breach. Jones,
196 S.W.3d at 447. "To impose an informal fiduciary duty in a business transaction, the special
relationship of trust and confidence must exist prior to, and apart from, the agreement made the basis of
the suit," and mere subjective trust is not enough. Assoc. Indem. Corp., 964 S.W.2d at 288; Swanson, 959
S.W.2d at 177.
3. The Motions and Responsive Evidence
Garry's no-evidence summary-judgment motion challenged each element of Charles and Texas Staffings's
and Kenneth and F.W. Services's breach-of-fiduciary-duty counterclaims against him. We need to
consider only the element of the existence of a fiduciary relationship.
It was undisputed that Garry was not F.W. Services's employee or representative and that he had his own
staffing business during the time that he shared offices with F.W. Services. In their respective responses,
Charles, Texas Staffing, Kenneth, and F.W. Services argued that a fiduciary relationship arose from
Charles' long-term friendship with Garry, Charles' and Kenneth's having allowed Garry to share F.W.
Services's office for eight years, their having given Garry complete access to F.W. Services's business
records, and their trust and reliance on him. By reply brief, however, they expressly disavow reliance on
the parties' long-time friendship and their sharing of office space, arguing instead that the fiduciary
relationship arose by virtue of their having "entrusted Garry with confidential information." Looking only to
this basis, we consider the evidence that Charles, Texas Staffing, Kenneth, and F.W. Services tendered
below in support:
While Garry shared offices with them, he had "complete access to [Kenneth's] entire business," including
"staff, records, everything."
"We trusted [Garry] 100 percent," believing that he "was essentially a family member . . . ."
"When F.W. Services was preparing to relocate [to a new location], Garry . . . offered to personally take
responsibility for transporting F.W. Services's corporate records," an offer that Charles and Kenneth
accepted because they "trusted him as though he were part of the family."
An informal fiduciary duty is not lightly recognized. See Assoc. Indem. Corp., 964 S.W.2d at 288. The
record shows that Garry, Charles, and Kenneth were experienced business people, that each had his own
business, and that none was a co-employee or representative of any common business. Their mere
access to each others' business records and information while office-sharing does not convert their
standard business relationship into one of the highest fiduciary stature, in which each party would have to
place the other's interests before his own. This is especially true here, where each party independently
operated a separate staff-leasing or payrolling business during the period of office-sharing. We have
found no authority recognizing an informal fiduciary relationship on evidence like this, and Charles,
Kenneth, and their businesses point us to none. Finally, the above evidence, which appellants concede is
the sole basis for the relationship underlying this claim, shows Garry's access to F.W. Services's business
records; it does not show that Garry had access to Texas Staffing's business records, and it is no
evidence of a fiduciary relationship between Garry, on the one hand, and Charles and Kenneth
individually, on the other.
On appeal, Charles, Texas Staffing, Kenneth, and F.W. Services also argue that they raised a fact issue
on an alternative breach-of-fiduciary-duty theory: that Garry was liable for inducing Cary to breach Cary's
fiduciary duty to F.W. Services. This theory was not pleaded as a basis for any defendant's
breach-of-fiduciary-duty claim against Garry, however. Kenneth and F.W. Services did raise this theory in
one sentence of their summary-judgment response. But even if their doing so could somehow render the
theory tried by consent, when Garry did not join the issue by reply, (17) we would overrule the challenge.
Kenneth and F.W. Services pointed to no evidence in support of that theory below, including anything
showing that any fiduciary duty that Cary owed to F.W. Services during his employment with it extended
beyond his employment term, which is the point at which he allegedly began competing in violation of his
non-competition agreement. See Tex. R. Civ. P. 166a(i).
We hold that the trial court properly rendered summary judgment on the breach-of-fiduciary-duty claims of
Charles, Texas Staffing, Kenneth, and F.W. Services against Garry. We overrule issues three and six.
F. Kenneth and F.W. Services's Counterclaims Against Garry, and Their Third-Party Claims Against Chad
and Chad's Three Corporations, for Conspiracy and Tortious Interference With an Existing Contract and
With Prospective Business Relations
Third-party plaintiffs and counter-defendants Kenneth and F.W. Services alleged that counter-defendant
Garry and third-party defendants Chad, CJP Financial, CJP Resources, and Your Recruiters had tortiously
interfered with F.W. Services's existing non-competition agreement with Cary and that, through promoting
Cary's competition, they had also tortiously interfered with F.W. Services's prospective business relations.
Kenneth and F.W. Services also alleged that Garry, Chad, and Chad's three corporations had conspired
"to destroy [their] business . . . by setting up a factoring business, in order to aid, assist, and financially
support competing businesses"; to induce F.W. Service's employees to use its confidential information to
compete with it; and to induce Cary to violate his non-competition agreement with F.W. Services.
Garry moved for no-evidence summary judgment on these counterclaims. Chad and his three corporations
moved for traditional and no-evidence summary judgment on these third-party claims.
1. The No-Evidence Summary-Judgment Motions of Garry and of Chad and His Three
Corporations
a. Tortious interference with existing contract
In part of issue one, Kenneth and F.W. Services assert that the trial court erred in granting the
no-evidence summary-judgment motions of Garry, Chad, and Chad's three corporations on their
counterclaim and third-party claim for tortious interference with an existing contract.
The elements of tortious interference with an existing contract are that (1) the plaintiff had a contract
subject to interference, (2) the defendant willfully and intentionally interfered with that contract, (3) the
interference proximately caused the plaintiff's damage, and (4) the plaintiff incurred actual damage or loss.
C.M. Asfahl Agency v. Tensor, Inc., 135 S.W.3d 768, 790 (Tex. App.--Houston [1st Dist.] 2004, no pet.).
The no-evidence summary-judgment motions of Garry and of Chad and his three corporations challenged
each element of this claim.
In response, Kenneth and F.W. Services produced the following evidence:
that after Cary left F.W. Services, Huntington--a company owned by Garry's brother--serviced 80% to 85%
of the factoring needs for Cary's new staffing business, Opcion Uno, L.L.C., which operated in San Antonio;
that Huntington was in place as a funding source before Cary left F.W. Services;
that Garry had referred Cary to Huntington for financing and had assured Cary prior to Cary's leaving
F.W. Services that Huntington could provide him funding;
that Cary mainly talked to and dealt with Garry about matters related to Huntington, even though Garry's
brother owned the company;
that it was important for Cary to have adequate financing to start his business;
that before he left F.W. Services in May 2002, Cary spoke with Garry at least once about the ins and outs
of starting his own business;
that Cary had a non-competition agreement with F.W. Services, which precluded his competing with F.W.
Services within a 50-mile radius of any city in which the company conducted its business;
that Cary told Garry that he had this non-competition agreement with F.W. Services, that he told Garry
about his idea to open a business in San Antonio so as not to violate that agreement, and that Cary
believed that Garry "thought that [Cary's] thought process was sound";
that "Pacesetter Personnel" operated in San Antonio; (18)
that Cary had been a key employee of F.W. Services; and
that F.W. Services spent eight months locating and training a replacement for Cary, who until he had left
had been the only employee trained to train new sales people.
We first hold that Kenneth and F.W. Services produced some evidence of each element of this claim
against Garry, including evidence showing Garry's knowledge of the non-competition agreement's
existence; his assistance in obtaining, and in continuing to be a contact for, Huntington's factoring of
Cary's San Antonio business, which was necessary to the running of that business; F.W. Services d/b/a
Pacesetter Personnel's operating in San Antonio to some extent; and F.W. Services's having had to locate
and to train Cary's replacement over an eight-month period, when Garry had been the only employee
trained to train new sales people.
We also hold, however, that Kenneth and F.W. Services did not carry their burden of producing some
evidence of each element of this claim against Chad or his three corporations. Kenneth and F.W. Services'
brief asserts that "Chad . . . solicited his father's and Huntington's help in tortiously interfering with the
Cary/Pacesetter employment contact"; that "Chad . . . permitted this arrangement [for Huntington's
factoring of Cary's business] to take place"; and that "even though Chad was aware of the non-compete
provision, he intentionally encouraged Cary to violate his agreement and assisted him in his endeavor by
facilitating discussions between his father and Cary." But the summary-judgment evidence, even when
viewed in the light most favorable to Kenneth and F.W. Services, shows none of these things. (19) Rather,
the cited evidence shows only that Chad and Cary had been close friends since college, that Cary had
mentioned to Chad that he was thinking about starting a business in San Antonio, and that Cary told Chad
at some unspecified point that he was receiving factoring from Huntington, although Chad did not recall
Cary's mentioning that fact to him at the time that Cary was first going into business. No cited evidence
indicates that Chad knew of the non-competition agreement, that Chad facilitated any discussions between
Garry or Huntington and Cary, or that Chad or his companies encouraged or assisted Cary in violating his
non-competition agreement. Kenneth and F.W. Services ask us to infer from Chad and Cary's close
friendship and Garry's knowledge of the non-competition agreement that Chad also knew of the
agreement, but that would require crediting speculation as evidence and stacking inference upon
inference, neither of which we may do. See Marathon Corp. v. Pitzner, 106 S.W.3d 724, 727-28 (Tex.
2003).
We address one final matter raised by Garry, Chad, and Chad's three corporations on appeal. They
contend that the non-competition agreement was not part of the summary-judgment evidence because it,
along with other evidence, was struck upon their objections. However, the order granting their objections
and striking the non-competition agreement was signed more than two months after the trial court had
already rendered summary judgment, at the time of the denial of Garry's simultaneously filed motion for
new trial. Although the belated order recited that the exhibits were struck from Kenneth and F.W.
Services's summary-judgment response, nothing in the final summary judgment itself indicates that the trial
court considered the objections when it ruled on the summary-judgment motion. For example, the
judgment recited that the court had considered "the evidence," without restriction, and did not mention the
evidentiary objections. Additionally, Garry's motion for new trial, in which he asked for a ruling on his prior
objections, noted that "the Court did not rule upon [Garry's] objections to Defendants' summary judgment
exhibits" and thus requested a "specific written ruling on each objection" for "purposes of preserving the
appellate record" because "failure to get written rulings waives the objections on appeal . . . , a waiver
which Plaintiff declines." (Emphasis added.)
Given this record and these circumstances, it is not entirely clear that the trial court's signing the order
striking this evidence two and a half months after its summary-judgment ruling, in conjunction with its
consideration of a motion for new trial, demonstrated that the court did not consider the disputed evidence
at the time of its summary-judgment ruling. The ambiguity in this case distinguishes it from those in which
the record more clearly demonstrated that a belated written ruling on evidentiary objections memorialized
an unwritten ruling made at the time of summary judgment. (20) As with any ruling, a summary-judgment
order's review generally extends to the evidence that was before the court when it ruled, absent an
indication that the court did not consider certain evidence for purposes of that ruling. See Methodist
Hosps. of Dallas v. Tall, 972 S.W.2d 894, 898 (Tex. App.--Corpus Christi 1998, no pet.) ("It is axiomatic
that an appellate court reviews actions of a trial court based on the materials before the trial court at the
time it acted.") Accordingly, we cannot say with certainty that the trial court did not consider the
non-competition agreement when it rendered summary judgment.
We sustain the portion of issue one that complains of the judgment rendered on the claim against Garry
for tortious interference with Cary's non-competition agreement with F.W. Services. We overrule the
portion of issue one that complains of the judgment rendered on the claim against Chad and his three
corporations for tortious interference with Cary's non-competition agreement with F.W. Services.
b. Tortious interference with prospective business relationships
In the remainder of issue one, Kenneth and F.W. Services assert that the trial court erred in granting the
no-evidence summary-judgment motions of Garry, Chad, and Chad's three corporations on their
counterclaim and third-party claim for tortious interference with prospective business relationships. As they
did with their claim for tortious interference with an existing contract, Kenneth and F.W. Services clarify on
appeal that the focus of this claim is on the alleged recruitment of and assistance to Cary in his starting a
competing business in San Antonio.
"To establish a cause of action for tortious interference with prospective business relationships, a plaintiff
must show that (1) there was a reasonable probability that the parties would have entered into a business
relationship; (2) the defendant committed an independently tortious or unlawful act that prevented the
relationship from occurring; (3) the defendant either acted with a conscious desire to prevent the
relationship from occurring or knew the interference was certain or substantially certain to occur as a result
of the conduct; and (4) the plaintiff suffered actual harm or damages as a result of the defendant's
interference." Richardson-Eagle, Inc. v. William M. Mercer, Inc., 213 S.W.3d 469, 475 (Tex. App.--Houston
[1st Dist.] 2006, pet. denied). The motions of Garry and Chad and his three corporations challenged each
element of this claim.
The sole evidence that Kenneth and F.W. Services's response pointed out to show elements (1) and (4)
was Kenneth's affidavit, in which he averred that "F.W. Services suffered further lost profits" from Cary's
competing against it because "it is reasonably likely that some of the unskilled work Cary obtained for his
own business would have been obtained for F.W. Services had Cary remained." This assertion is
conclusory and cannot raise a fact issue on summary judgment. See Ryland Group, Inc. v. Hood, 924
S.W.2d 120, 122 (Tex. 1996) ("Conclusory affidavits are not enough to raise fact issues" in that "[t]hey are
not credible, nor [are they] susceptible to being readily controverted"). The conclusory nature of this
evidence distinguishes it from the evidence in Bradford v. Vento, on which Kenneth and F.W. Services
rely: here, there is no evidence as to the type of clients (skilled or not) F.W. Services serviced in San
Antonio, the number of its San Antonio customers, or like matters that would have shown a reasonable
probability that the clients that Cary serviced there would have contracted with F.W. Services if Cary had
not operated there. Compare id., 997 S.W.2d 713, 732 (Tex. App.--Corpus Christi 1999) (holding that
legally and factually sufficient evidence of first element of
tortious-interference-with-prospective-business-relations claim existed when plaintiff, who alleged that he
had lost customers due to defendant's interference, produced evidence that plaintiff had considerable
experience in selling product, a large collection of merchandise, an established and expanding customer
base, and a certain volume of customer sales), rev'd in part on other grounds, 48 S.W.3d 749 (Tex. 2001).
Additionally, as discussed with respect to the third-party claim against Chad and his corporations for
tortious interference with an existing contract, there is no evidence that Chad or his corporations, which did
not provide factoring services to Cary, tortiously interfered with anything.
We overrule the remainder of issue one that complains of the judgment rendered on the claim against
Garry, Chad, and Chad's three corporations for tortious interference with prospective business relations.
c. Civil conspiracy
In issue two, Kenneth and F.W. Services argue that the trial court erred in granting the no-evidence
summary-judgment motions of Garry, Chad, and Chad's three corporations on their counterclaim and
third-party claim for civil conspiracy.
Kenneth and F.W. Services's petition alleged that Garry, Chad, and Chad's three corporations had
conspired "to destroy [their] business . . . by setting up a factoring business, in order to aid, assist, and
financially support competing businesses"; to induce F.W. Service's employees to use its confidential
information to compete with it; and to induce Cary to breach his non-competition agreement with F.W.
Services. As they did with their tortious interference claims, Kenneth and F.W. Services clarify on appeal
that their conspiracy claim arises from "the enticement of . . . Cary to breach his employment agreement
and set up a competitive business."
The elements of civil conspiracy are (1) two or more people; (2) an object to be accomplished; (3) a
meeting of the minds on the object or course of action; (4) one or more unlawful, overt acts; and (5)
damages as a proximate result. Tri v. J.T.T., 162 S.W.3d 552, 556 (Tex. 2005). The movants challenged
all elements of this claim.
First, for the same reasons as discussed above with regard to the tortious interference claims, Kenneth
and F.W. Services did not raise a fact issue on element (2) of their conspiracy claim against Chad and his
three corporations. In fact, the only appellate argument concerning the allegations against Chad and his
corporations is a conclusory statement that "Chad and Garry Plotkin entered into a conspiracy to destroy
[Kenneth and F.W. Services] and steal away Pacesetter's top employees" and an assertion that "Chad, as
sole officer and director or CJP Financial, allowed his father to use his company to perpetuate this
conspiracy." The evidence, however, showed that Huntington, not Chad or his corporations, financed
Cary's San Antonio business, not that Chad "allowed" Garry to do anything related to Cary or that Garry
had used Chad's corporations to service Cary's business. Accordingly, we hold that the trial court did not
err in granting the no-evidence summary-judgment motion on Kenneth and F.W. Services's conspiracy
claim against Chad and his corporations.
Kenneth and F.W. Services's counter-petition alleged that Garry, Chad, and Chad's three corporations
were the coconspirators. We have already held that Kenneth and F.W. Services produced no evidence
that Chad or his corporations were part of a conspiracy concerning Cary and his San Antonio business.
There cannot be a conspiracy of one. See Tri, 162 S.W.3d at 556 (providing that civil conspiracy requires
two or more people). Accordingly, we hold that the trial court also properly rendered summary judgment on
Kenneth and F.W. Services's claim of conspiracy against Garry.
We overrule issue two.
2. The Motion for Traditional Summary Judgment of Chad and His Three Corporations
Third-party defendants Chad and his three corporations moved for traditional summary judgment on both
of the tortious interference claims and on the civil conspiracy claim alleged against them on the sole basis
that the statute of limitations barred those claims. In issue seven, Kenneth and F.W. Services contend that
the trial court erred in granting the traditional summary-judgment motion of Chad and his three
corporations on this basis.
Because we have already held that the trial court properly rendered no-evidence summary judgment on
Kenneth and F.W. Services's claims against Chad and his three corporations for tortious interference with
an existing contract, tortious interference with prospective business relations, and civil conspiracy, we
need not consider whether the trial court erred in granting traditional summary judgment on these same
claims. See Aleman, 227 S.W.3d at 309 (holding that when summary-judgment order does not specify
grounds, we affirm if any is meritorious). Accordingly, we do not reach issue seven.
Conclusion
We reverse the summary judgment to the extent that it rendered judgment on the following claims:
Garry's claim against Charles and Texas Staffing for breach of the Agreement based on the transfer of
certain accounts to Kenneth or F.W. Services;
Kenneth's and F.W. Services's counterclaim against Garry for tortious interference with an existing
contract between Cary and F.W. Services.
The judgment is affirmed in all other respects. The cause is remanded for proceedings consistent with this
opinion.
Tim Taft (21)
Justice
Panel consists of Justices Jennings, Bland, and Taft.
1. The record indicates that a payroll-services business--also called an employee-leasing or staff-leasing business--is a
business that assumes a client's employees in order, for a fee, to administer the client's business payroll,
employment-related taxes, worker's compensation insurance, and other employee benefits. For simplicity's sake, we will
use the term "staff-leasing" business throughout the remainder of the opinion.
2. The record indicates that a skilled-labor business is one providing temporary skilled labor.
3. The record indicates that factoring is a form of financing, often used in the staff-leasing business, in which a company's
accounts receivable serve as collateral for loans. The factoring company holds the accounts receivable, collects the money
owed on them, and then sends the money to the client company when requested.
4. See Tex. Bus. & Com. Code Ann. §§ 24.001-.013 (Vernon 2009).
5. Garry contends that the term is ambiguous because (1) he reads it to mean "gross sales price to be received by the
seller under the sales contract" (emphasis added) and (2) the parties' differing interpretations of the same term mean that it
is ambiguous. First, Garry's interpretation depends on the insertion of words into the phrase, not on the phrase's actual
wording. Second, an ambiguity does not arise merely because the parties to the agreement have different interpretations of
a term. DeWitt County Elec. Co-op., Inc. v. Parks, 1 S.W.3d 96, 100 (Tex. 1999).
6. Charles and Texas Staffing also argued that Garry could produce no evidence of privity between himself and them. We
discuss this summary-judgment basis further below.
7. Garry did not raise this argument in his summary-judgment response, but he may raise it now because it concerns
whether Charles and Texas Staffing's summary-judgment motion satisfied its burden on this ground. See City of Houston v.
Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979).
8. This possibility is borne out by the parties' competing summary-judgment evidence: Garry's evidence showed that
Worldwide's book of business included both staff-leasing and skilled-labor accounts; other evidence indicated that
Worldwide had only staff-leasing accounts to sell. For the reasons discussed earlier, we of course must take as true
Garry's evidence that Worldwide transferred both kinds of accounts under the Agreement. For purposes of the current
discussion, however, we note merely that the term "book of business" was not limited to a particular type of account.
9. See Speedy Stop Food Stores, Ltd. v. Reid Rd. Mun. Util. Dist. No. 2, 282 S.W.3d 652, 656 n.2 (Tex. App.--Houston [14th
Dist.] 2009, pet. filed). ("It is well-established that corporations can act only through human agents and that, when an officer
or corporate representative acts on behalf of a corporate entity, that act is the act of the corporation itself."); see also Martin v.
Martin, Martin & Richards, Inc., 12 S.W.3d 120, 124 (Tex. App.--Fort Worth 1999, no pet.) ("A sole shareholder or all
shareholders acting in agreement, being all the beneficial owners of corporate property, may themselves deal with the
[corporate] property [that they dispose of by contract], so long as the rights of creditors are not prejudiced. In such a case,
only the corporation's creditors are in a position to complain of the lack of proper action by the board of directors.") (citing
Newman v. Toy, 926 S.W.2d 629, 631 (Tex. App.--Austin 1996, writ denied)); cf. Tex. Bus. Corp. Act Ann. art. 2.30-1(A)(6)
(Vernon 2003) (shareholder agreements concerning corporate property); Tex. Bus. Org. Code Ann. § 21.101(a)(8) (Vernon
2008) (same).
10. Charles and Texas Staffing argue that Garry cannot assert now that the Agreement is ambiguous because he never
pleaded ambiguity below. However, even when both parties agree that their contract is unambiguous and merely disagree
as to its unambiguous meaning, a court may independently conclude that the contract is ambiguous. See White v. Moore,
760 S.W.2d 242, 243 (Tex. 1988); Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983). Thus, in an appeal from a
summary-judgment ruling, "[a] court may conclude that a contract is ambiguous even in the absence of such a pleading by
either party." Sage St. Assocs. v. Northdale Constr. Co., 863 S.W.2d 438, 445 (Tex. 1993).
11. Garry pleaded this claim against Kenneth, too, but, as explained above, the summary judgment disposing of his
individual liability must be affirmed.
12. On appeal, Garry cites evidence from his summary-judgment response that he argues raised a fact issue on the
challenged implied-in-fact contract element of mutual consent. Specifically, he argues that evidence that he produced
showing that Charles was the Chairman of the Board of F.W. Services indicates that he "had the authority to bind F.W.
Services to a contract" and that his knowledge thus "is imputable to F.W. Services." However, Garry's summary-judgment
response did not bring to the trial court's attention either this evidence or this argument, as was his burden. See Aleman v.
Ben E. Keith Co., 227 S.W.3d 304, 309 (Tex. App.--Houston [1st Dist.] 2007, no pet.) (indicating that non-movant's burden is
to point out evidence raising a fact issue); Springer v. Am. Zurich Ins. Co., 115 S.W.3d 582, 585 (Tex. App.--Waco 2003, pet.
denied) ("If it is [the non-movant's] assertion that the Commission decision constitutes evidence that would defeat the
no-evidence motion for summary judgment, it was her responsibility to present such an assertion to the trial court through
her response."). The only place in his response that Garry relied on this particular evidence was in response to an
unrelated summary-judgment ground that did not concern Charles's authority to bind F.W. Services. Accordingly, we may
not consider Garry's argument on appeal. See Holloway v. Tex. Elec. Util. Constr., Ltd., 282 S.W.3d 207, 212 (Tex.
App.--Tyler 2009, no pet.) (holding that no-evidence summary-judgment response was inadequate to raise fact issue when
party failed to discuss challenged element anywhere in response). Compare Johnson v. Brewer & Pritchard, P.C., 73
S.W.3d 193, 207-08 (Tex. 2002) (concluding that non-movant's response was adequate despite not expressly discussing
challenged claim because, under other portions of response, party referred briefly to it and discussed pertinent evidence).
13. He also sought disgorgement of profits and other remedies that he has abandoned on appeal.
14. In fact, Garry did not respond to the summary-judgment motion's challenge to his claims for common-law and statutory
fraud arising out of the intentional transfer of former Worldwide assets to Kenneth and F.W. Services, and he has
abandoned these claims on appeal.
15. On appeal, Garry also asserts that a fiduciary duty arose due to his and Charles's being "long standing family friends,"
their having "repeated business contacts," and their "often work[ing] together." However, we do not read Garry's petition as
alleging these bases for a fiduciary duty. And even if it did, Charles and Texas Staffing moved for no-evidence summary
judgment on the basis that no fiduciary relationship existed; Garry neither argued that their friendship or past business
relationship created a duty nor pointed out evidence in support; and Garry's response instead referenced the oral
agreement for Charles to hold Garry's commissions. Accordingly, Garry cannot now rely on the parties' friendship and
lengthy business contacts as bases for reversal. See Tex. R. Civ. P. 166a(i) & cmt.
16. See Via Net v. TIG Ins. Co., 211 S.W.3d 310, 313 (Tex. 2006) ("When [the plaintiff-nonmovant] asserted the discovery rule
for the first time in its summary judgment response, [the defendant-movant] had two choices: it could object that the
discovery rule had not been pleaded, or it could respond on the merits and try the issue by consent.").
17. See Via Net, 211 S.W.3d at 313 ("When [the plaintiff-nonmovant] asserted the discovery rule for the first time in its
summary judgment response, [the defendant-movant] had two choices: it could object that the discovery rule had not been
pleaded, or it could respond on the merits and try the issue by consent.") (emphasis added). We note that even if this theory
could be considered tried by consent for Kenneth and F.W. Services, it could not for Charles and Texas Staffing, who did not
assert it in their summary-judgment response.
18. Cary testified that he had done "some work on behalf of [Kenneth] for the benefit of his San Antonio entity," San Antonio
Staffing, before he had left F.W. Services, but that San Antonio Staffing "fell under a different corporate umbrella than what
[he] was competing against." Kenneth's summary-judgment affidavit did not explain the relationship, if any, between San
Antonio Staffing and F.W. Services. However, Kenneth and F.W. Services also produced Diamond's deposition testimony, in
which she testified that in 1987 she had been "transferred by Charles Joekel" to San Antonio, where she worked for both
"Pacesetter Personnel" and for San Antonio Staffing. In that same testimony, she also responded affirmatively to a question
asking whether Garry had suggested to her, before she left F.W. Services in 1996, that she "should leave and set up a
competing business with Pacesetter in San Antonio." (Emphasis added.) This is some evidence, when viewed in the light
most favorable to Kenneth and F.W. Services, that F.W. Services d/b/a Pacesetter Personnel conducted business, through
San Antonio Staffing or otherwise, in San Antonio.
19. Kenneth and F.W. Services argue that Chad and his three corporations can be held liable for the actions of Huntington
under the single-business-enterprise theory. They did not allege this liability basis in their counter-petition, but did raise
it--without objection, but also without joinder by the movants--in their summary-judgment response. Assuming without
deciding that this liability theory could be viewed as having been tried by consent, see Via Net, 211 S.W.3d at 313, the Texas
Supreme Court has since rejected its validity. See SSP Partners v. Gladstrong Investments (USA) Corp., 275 S.W.3d 444,
456 (Tex. 2008). Accordingly, the evidence that Kenneth and F.W. Services produced in support of this responsive theory did
not constitute any evidence of Chad's or his corporations' acts.
20. See Esty v. Beal Bank S.S.B., No. 05-08-00038-CV, 2009 WL 2506338, at *8 (Tex. App.--Dallas Aug. 18, 2009, no pet. h.)
(holding that challenge to trial court's having signed orders striking summary-judgment evidence after denial of motion for
new trial was waived because both parties had agreed that trial court could wait to rule on objections until after
summary-judgment ruling and because trial court had earlier signed another post-judgment order expressly stating that it
had considered, at time that it had ruled on summary-judgment motion, only competent and admissible evidence); Crocker
v. Paulyne's Nursing Home, Inc., 95 S.W.3d 416, 420 (Tex. App.--Dallas 2002, no pet.) (holding that order sustaining
evidentiary objections signed 89 days after summary-judgment ruling was effective to memorialize evidentiary ruling made
before summary-judgment order's signing, that court had considered "evidence admitted for consideration" and parties'
objections).
21. The Honorable Tim Taft, who retired from the First Court of Appeals effective June 1, 2009, continues to sit by
assignment for the disposition of this case, which was submitted on June 24, 2008.