In=20 The
Grace met=20
with three other individuals, Cathleen Johannessen, Stephen Van=20
Loggerenberg, and Marcello Biagioli, in 1998 to discuss formation =
of a=20
business entity to market and deliver mixed metal oxide anodes to =
the=20
cathodic protection market in various parts of the world. Initial =
plans=20
were that Johannessen would begin operations in the United States, =
Biagioli in the United Kingdom, Grace in Singapore, and that Van=20
Loggerenberg would supply the three companies with product, =
credit, and=20
technical support through his company, NMT Electrodes PTY, Ltd., =
located=20
in South Africa. To that=20
end, the four individuals formed an enterprise that Telpro, Inc. =
refers to=20
as "Telpro Global" in 1998. Despite the=20
initial designation of Singapore as Grace's market base, he =
reached an=20
understanding with the three other individuals that he would =
operate in=20
France, on condition that he not compete with Biagioli's Telpro, =
Ltd.,=20
operations in the United Kingdom. Grace then formed Telpro Sarl in =
France=20
in June 2001. Telpro, Inc., the plaintiff in this action, issued =
to Grace=20
25 percent of the stock of Telpro, Inc. on December 7, 2001. Telpro,=20
Inc.'s pleadings state that in July 2003, however, Grace filed an =
action=20
in the United Kingdom against Biagioli, Van Loggerenberg, =
Johannessen, and=20
the Telpro, Inc. entity, that in April 2004, Grace demanded to =
review=20
Telpro, Inc.'s corporate books and records, and that the latter =
demand=20
"prompted this litigation."
Telpro,=20
Inc. filed this declaratory judgment action in June 2004. Telpro, =
Inc.=20
claimed that Grace had no rights as a shareholder to inspect the =
records=20
and sought a declaration that Grace had no status as a shareholder =
in=20
Telpro, Inc. "because he failed to satisfy conditions precedent to =
acquire=20
a shareholder interest in Telpro, Inc. and other Telpro entities =
and had=20
agreed to return his shares if Telpro Sarl ceased to trade." =
Consequently,=20
alleged Telpro, Inc. "Grace enjoys none of the rights, title[,] =
and=20
privilege of a shareholder," including the right to inspect =
Telpro, Inc.'s=20
books pursuant to article 2.44 of the Business Corporation Act. =
See=20
Tex. Bus. Corp. Act Ann. =A7 2.44 (Vernon 2003). Telpro, Inc. =
sought=20
alternatively to determine whether Grace's demand to review Telpro =
Inc.'s=20
records was in bad faith or for an improper purpose, and whether =
the scope=20
of his demand was excessive. Telpro, Inc. also sought attorney's =
fees and=20
costs. Grace answered the lawsuit pro se, by general =
denial. In moving=20
for traditional summary judgment on July 7, 2005, see =
Tex. R.=20
Civ. P. 166a(c), Telpro, Inc. argued that Grace was not a =
shareholder of=20
Telpro, Inc. because he did not perform the "services promised in=20
consideration of the issuance of stock in Telpro, Inc." and =
therefore=20
"failed to satisfy conditions precedent to acquiring shareholder =
status."=20
In telecopier and e-mail correspondence directed to the trial =
court on=20
July 25, 2005, Grace acknowledged that the case was "due to be =
heard" on=20
August 1, 2005. Grace explained that he was in France, did not =
have a=20
machine-readable passport to enter the United States, and asked =
that the=20
summary judgment hearing be deferred for at least one month. The trial=20
court's final summary judgment recites that, "no material fact =
issue=20
exists regarding the facts that [Grace] failed to satisfy =
conditions=20
necessary to be a shareholder" of Telpro, Inc. and declared "null, =
void,=20
and unenforceable" any prior transfer of Telpro, Inc. stock to =
Grace.=20
In his=20
second issue, Grace contends that the trial court erred in =
awarding=20
appellate attorney's fees without having first awarded trial-court =
attorney's fees and that the judgment is not final because the =
trial court=20
did not resolve Telpro, Inc.'s claim for attorney's fees. We =
address the=20
latter portion of Grace's second issue at the outset, because it =
pertains=20
to our jurisdiction to address this appeal. Except for=20
"a few mostly statutory exceptions," this Court's jurisdiction is =
limited=20
to appeals from final judgments. Lehmann v. Har-Con =
Corp., 39=20
S.W.3d 191, 195 (Tex. 2001). We determine whether a decree is a =
final,=20
appealable judgment based on the language in the decree and the =
record of=20
the case. Id. A judgment is final and appealable if it =
disposes=20
of all parties and claims in the case. Id. A judgment is =
not=20
final if it fails to dispose of a party's claim for attorney's =
fees.=20
McNally v. Guevara, 52 S.W.3d 195, 196 (Tex. 2001). In =
reliance=20
on McNally, Grace contends that the judgment in this case =
is not=20
final because the trial court did not "dispose of" Telpro, Inc.'s =
claim=20
for attorney's fees for work done in the trial court, despite =
granting=20
conditional attorney's fees for appeal. The record=20
reflects that the trial court struck through and initialed a =
provision of=20
the judgment, as proposed by Telpro, Inc. that would have awarded =
Telpro,=20
Inc. $20,900.00 as reasonable and necessary attorney's fees. Grace =
contends that, in striking through this granting paragraph, the =
trial=20
court left the claim for trial-court attorney's fees unresolved. =
From that=20
premise, Grace contends that the judgment is not final. We =
disagree.=20
Rule 305=20
authorizes parties to submit a proposed judgment to the court for=20
signature. Tex. R. Civ. P. 305. Pursuant to its inherent judicial =
power,=20
however, a trial court ensures that a proposed judgment correctly =
reflects=20
the trial court's action and the relief granted. See Knox v.=20
Long, 257 S.W.2d 289, 292 (Tex. 1953), rev'd on other=20
grounds, Jackson v. Hernandez, 285 S.W.2d 184, 191 =
(Tex.=20
1956) Coleman v. Zapp, 151 S.W. 1040, 1041 (1912) (both =
decided=20
in context of correction of judgment nunc pro tunc); see also=20
Tex. R. Civ. P. 301 ("The judgment of the court shall conform =
to the=20
pleadings, the nature of the case proved and the verdict, if any, =
and=20
shall be so framed as to give the party all the relief to which he =
may be=20
entitled either in law or in equity.") By striking=20
through the grant of $20,900.00 for trial-court attorney's fees, =
as=20
proposed by Telpro, Inc. and by initialing that change, the trial =
court=20
necessarily denied that relief to Telpro, Inc. See Cox v. =
Upjohn=20
Co., 913 S.W.2d 225, 228 (Tex. App.--Dallas 1995, no writ) =
(according=20
dispositive effect to trial court's striking through language of =
proposed=20
judgment by holding that trial court's action expressly limited =
ruling).=20
By striking through the paragraph of Telpro, Inc.'s proposed =
judgment, the=20
trial court denied, and therefore disposed of, Telpro, Inc.'s =
claim for=20
trial-court attorney's fees. We therefore conclude that the =
judgment is=20
final and appealable. We overrule=20
Grace's second issue.
Grace's=20
first issue presents the broad contention that the trial court =
erred by=20
rendering summary judgment, and three supporting issues that =
challenge the=20
legal and factual bases proposed by Telpro, Inc. for rendition of =
final=20
judgment. A.=20
Standard of Review We review a=20
traditional summary judgment de novo. Joe v. Two Thirty Nine =
Joint=20
Venture, 145 S.W.3d 150, 156 (Tex. 2004). As movant for =
traditional=20
summary judgment on its own claims, Telpro, Inc. had to prove that =
there=20
was no genuine issue of material fact and that Telpro, Inc. was =
entitled=20
to judgment as a matter of law. See Tex. R. Civ. P. =
166a(c);=20
MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986); =
Rizkallah=20
v. Conner, 952 S.W.2d 580, 582 (Tex. App.--Houston [1st =
Dist.] 1997,=20
no pet.). In reviewing the summary judgment, we must indulge every =
reasonable inference in favor of the non-movant and resolve any =
doubts in=20
his favor. Rizkallah, 952 S.W.2d at 582 (citing =
Science=20
Spectrum , Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. =
1997)). We=20
consider all grounds on which the trial court ruled that are =
preserved for=20
review and that are necessary for disposition of the appeal; we =
may=20
consider other preserved grounds in the interest of judicial =
economy.=20
Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 =
(Tex.=20
1996). Because the=20
party moving for traditional summary judgment carries the burden =
to=20
establish that no material fact issue exists and that it is =
entitled to=20
judgment as a matter of law, "the nonmovant has no burden to =
respond to a=20
summary judgment motion unless the movant conclusively establishes =
its=20
cause of action or defense." M.D. Anderson Hosp. & Tumor =
Inst. v.=20
Willrich, 28 S.W.3d 22, 23 (Tex. 2000); see also =
Rh=F4ne-Poulenc,=20
Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999) ("The trial =
court may=20
not grant summary judgment by default" for failure to file a =
response to a=20
motion for summary judgment "when the movant's summary judgment =
proof is=20
legally insufficient."); Rizkallah, 952 S.W.2d at 582-83 =
(holding=20
that lack of response by nonmovant "does not supply by default the =
summary=20
judgment proof necessary to establish the movant's right to =
summary=20
judgment" and that nonmovant "is limited on appeal to arguing the =
legal=20
sufficiency of the grounds presented by movant") (citing =
McConnell v.=20
Southside Sch. Dist., 858 S.W.2d 337, 343 (Tex. 1993)). =
Because a=20
motion for summary judgment must stand on its own merits, the =
nonmovant=20
may argue on appeal that the movant's summary judgment proof is=20
insufficient as a matter of law, even if the nonmovant filed no =
response=20
to the motion. See Willrich, 28 S.W.3d at 23; =
Rizkallah,=20
952 S.W.2d at 582-83. C. Failure=20
of Consideration as Condition Precedent to Issuance of =
Stock Telpro,=20
Inc.'s pleadings allege that Grace lacked shareholder status in =
Telpro,=20
Inc. because he did not satisfy the conditions precedent to =
acquiring a=20
shareholder interest, in both Telpro, Inc. and "other Telpro =
entities"=20
and, in addition, "had agreed to return his shares if Telpro Sarl =
ceased=20
to trade." Given these=20
grounds, as stated in the summary judgment, along with the =
allegations in=20
Telpro, Inc.'s pleadings, which focus on Grace's alleged failure =
to=20
perform conditions precedent, as well as the grounds stated in =
Telpro,=20
Inc.'s motion for summary judgment, which provide the factual=20
substantiation that the condition precedent to Grace's acquiring=20
shareholder status was his performing the services promised as =
consideration, the summary judgment record establishes that =
the trial=20
court necessarily concluded, in rendering summary judgment, that =
Telpro,=20
Inc. established, as a matter of law, that Grace's consideration =
for the=20
shares of Telpro, Inc. failed. The trial=20
court's express conclusion notwithstanding, it is nonetheless =
undisputed=20
that Telpro, Inc. actually issued the stock to Grace on December =
7, 2001.=20
Pursuant to the version of article 2.16A of the Business =
Corporation Act=20
that controls this case, "Shares may not be issued until the full =
amount=20
of the consideration, fixed or provided by law, has been paid =
or=20
delivered as required in connection with the authorization of =
the=20
shares." Tex. Bus. Corp. Ann. art. 2.16A (Vernon 2003) (emphasis =
added). Yet,=20
Telpro, Inc. acknowledged in its petition, motion for summary =
judgment,=20
and affidavit of its principal, Johannessen, that it actually =
issued its=20
shares to Grace. By operation of article 2.16A--and contrary to =
the=20
conclusions of the trial court in rendering summary judgment on =
the=20
grounds asserted by Telpro, Inc.--the record of this case presents =
material issues of fact concerning (1) Grace's having paid or =
delivered=20
consideration for the stock, (2) Grace's status as a shareholder, =
and (3)=20
whether Grace's shares are fully paid and therefore =
non-assessable.=20
See id. The application of the amended statute also calls =
into=20
question the declaration that any issuance of stock to Grace was =
"null,=20
void, and unenforceable." Under article 2.16A, shares may not be =
issued=20
until the full amount of consideration has been paid. Id. =
Telpro,=20
Inc.'s acknowledgment that it issued its shares to Grace, is =
evidence that=20
it received consideration for the stock. On=20
reviewing the legal basis asserted in its motion for summary =
judgment, we=20
conclude that Telpro, Inc. failed to establish its right to =
summary=20
judgment as a matter of law on the grounds asserted in its motion, =
specifically, that Grace was not a shareholder of Telpro, Inc. =
because he=20
did not perform the services promised in consideration for =
issuance of the=20
stock of Telpro, Inc. and, therefore, that Grace failed to satisfy =
conditions precedent to acquiring shareholder status. We sustain=20
Grace's first issue. Because=20
Telpro, Inc. did not meet its burden as movant for summary =
judgment, we=20
need not address the remaining portion of its second issue, which=20
challenged the trial court's granting Telpro, Inc. conditional =
attorney's=20
fees for appeal without allowing attorney's fees for work in the =
trial=20
court. We reverse=20
the judgment of the trial court and remand the cause. =
Panel=20
consists of Chief Justice Radack and Justices Jennings and=20
Bland. 1. The record contains no evidence =
concerning whether=20
the global enterprise was a corporation, partnership, or other =
type of=20
joint venture.=20
2. The record does not reflect whether =
Telpro, Ltd. in=20
the United Kingdom and NMT Electrodes PTY, Ltd. in South Africa =
issued=20
stock to Grace or whether Grace's Telpro Sarl in France issued =
stock to=20
the others.=20
3. Grace does not assert an appellate =
challenge to=20
denial of his request for continuance.=20
4. See Tex. Gov't Code =A7 =
54.1011(a)(11)=20
(Vernon 2005) (delineating cases that may be referred to associate =
judge=20
in Fort Bend County, but limiting associate judge's authority to=20
recommending judgments).=20
5. In support of its first issue, Grace also =
contends=20
that the other three individuals who formed the global company =
were=20
necessary plaintiffs, in addition to Telpro, Inc. Grace's =
contention=20
presents a challenge to Telpro, Inc.'s capacity to sue and, =
therefore, a=20
defect of the parties, which Grace was required to assert in a =
sworn=20
pleading. See Tex. R. Civ. P. 93(4); Allison v. Nat'l =
Union=20
Fire Ins. Co., 703 S.W.2d 637, 638 (Tex. 1986). Having filed =
only a=20
general denial, Grace waived the defect. See Werner v. =
Colwell,=20
909 S.W.2d 866, 870 (Tex. 1995); see also Nine Greenway Ltd. =
v. Heard,=20
Goggan, Blair & Williams, 875 S.W.2d 784, 787 (Tex. =
App.--Houston=20
[1st Dist.] 1994, writ denied) (holding that verified plea not =
required to=20
raise issue of standing, but is necessary to raise issue of =
capacity).=20
6. Telpro, Inc.'s pleadings do not specify =
whether=20
Grace had agreed to return Telpro, Inc. stock or stock of the =
global=20
company.=20
7. Failure of consideration is a matter that =
must be=20
asserted in a verified pleading, see Tex. R. Civ. P. =
93(9), but=20
Grace waived this defect by not directing it to the attention of =
the trial=20
court before the summary judgment was signed. Tex. R. Civ. P. 90.=20
8. See Tex. Bus. Corp. Act Ann. art =
2.16=20
(Vernon 2003), Comment of Bar Committee-1996 (noting that amended =
article=20
2.16A conforms to repeal of Tex. Const. art. XII, =A7 6, which =
previously=20
prohibited issuance of corporate shares except for money paid, =
labor done=20
or property actually received and now permits corporations to =
issue shares=20
"for any form of consideration deemed appropriate by the board of=20
directors of the corporation, which consideration may include a =
promissory=20
note or agreement to provided future services.").=20
9. These same rules apply under the version =
of=20
Business Organization Code that became effective on January 1, =
2006.=20
See Tex. Bus. Org. Code Ann. =A7 21.157 (Vernon 2006).=20
10. We note that this case does not involve =
breach of=20
any alleged shareholder agreement, and no shareholder other than =
Grace was=20
joined as a party.