Mensa-Wilmot v. Smith International, Inc. (Tex.App.- Houston [1st Dist.] Nov. 19,
2009)(Alcala) (breach of contract, option contract, untimely amendment of pleadings prior to SJ hearing,
AFFIRM TRIAL COURT JUDGMENT: Opinion by Justice Alcala
Before Justices Keyes, Alcala and Hanks
01-08-00481-CV Graham Mensa-Wilmot v. Smith International, Inc.
Appeal from 165th District Court of Harris County
Trial Court Judge: Hon. Elizabeth Ray
O P I N I O N
Appellant, Graham Mensa-Wilmot ("Mensa-Wilmot") appeals from a take-nothing summary judgment
rendered in favor of appellee, Smith International, Inc. ("Smith"). In five issues, Mensa-Wilmot contends we
lack jurisdiction because his amended petition added causes of action that were not addressed in the
motions for summary judgment; the trial court erred by rendering summary judgment on causes of action
not addressed in the motions for summary judgment; and the summary judgment evidence on the breach
of contract claim raised a fact issue concerning whether Mensa-Wilmot properly exercised his stock
options before he resigned. We conclude that we have jurisdiction over this appeal, that the trial court did
not err by rendering summary judgment in favor of Smith on the claims pleaded in Mensa-Wilmot's
late-filed amended petition, and that the trial court did not err by granting summary judgment in favor of
Smith on Mensa-Wilmot's breach of contract claim. We affirm.
Smith is a worldwide supplier of products and services for the oil and gas industry. Mensa-Wilmot was an
employee of Smith from 1994 until his resignation in 2005. During his employment, Mensa-Wilmot entered
into three Nonqualified Stock Option Agreements ("NQSOA") under Smith's 1989 Long Term Incentive
Compensation Plan ("Plan"). Mensa-Wilmot was informed of the appropriate procedures to exercise his
stock options when he entered into the stock option agreements.
The Plan stipulated Mensa-Wilmot must be a Smith employee at the time when the option is exercised.
Specifically, the 1997 and 1999 NQSOAs described the time during which the option could be exercised
and then stated, "Anything to the contrary herein notwithstanding, the option granted hereunder shall
terminate immediately upon the voluntary resignation by Employee . . . ." In the 2001 NQSOA, the
language is: "Notwithstanding anything to the contrary in Sections 1(c), 1(d), 1(e) or in any other
provisions of this Agreement, the option granted hereunder shall terminate immediately upon the voluntary
resignation by Employee . . . ." In addition, the Plan provided,
Unless otherwise expressly provided in the Grantee's Incentive agreement, with respect to a Grantee who
is an Employee, in the event of termination of the Grantee's Employment except resulting from his
Disability or Retirement . . . any vested Incentive Award shall expire on the earlier of (A) the expiration date
set forth in the Incentive Agreement for such Incentive Award, or (B) the expiration of ninety (90) days after
the date of his termination of Employment.
To exercise stock options, the Plan required Mensa-Wilmot to sign and deliver written notice to Smith's
secretary specifying the number of shares he desired and how he wanted the stock to be issued. In
pertinent part, the first NQSOA, dated December 3, 1997, provides,
[T]his option may be exercised by written notice signed by Employee and delivered to the Corporate
Secretary of the Company or sent by certified mail addressed to the Company (for the attention of the
Corporate Secretary) at its corporate office in Houston, Texas. Such notice shall state the number of
shares of Common Stock as to which the option is exercised and shall be accompanied by the full amount
of the purchase price of such shares.
The December 7, 1999 and December 4, 2001 NQSOAs both provide,
[T]his option may be exercised by written notice signed by Employee, or any trust, person or entity to
whom Employee has transferred his rights under this option in accordance with Section 7(g) of the Plan,
and delivered to the Corporate Secretary of the Company or sent by certified mail addressed to the
Company (for the attention of the Corporate Secretary) at its corporate offices in Houston, Texas. Such
notice shall state the number of shares of Common Stock as to which the option is exercised and shall be
accompanied by the full amount of the purchase price of such shares.
In addition to the stock options, the Plan identified several different types of incentive awards, including
"Restricted Stock Units." Section 2 of the Plan covered stock options and Section 5 of the plan covered
restricted stock units. Mensa-Wilmot received 140 unvested restricted stock units under the Plan.
On November 10, 2005, Mensa-Wilmot sent an e-mail informing his supervisor Paul Cox of his resignation,
effective one month later on December 10. Mensa-Wilmot states that, at about the same time he sent the
notice of his resignation, he sent a handwritten letter to Smith informing Smith of his intention to exercise
his stock options.
On November 22, 2005, Merrill Lynch sent an e-mail to Smith's employees informing them that their
restricted stock units would vest on December 7, 2005. The email instructed the employees to open an
account with Merrill Lynch so that, upon vesting, the restricted stock units would be deposited into the
On December 7, Merrill Lynch contacted Cay Price ("Price"), the Plan administrator, informing her that
Mensa-Wilmot did not open an account. After Price unsuccessfully attempted to contact Mensa-Wilmot,
she next contacted Jane Aynn Prestenbach to determine Mensa-Wilmot's employment status with Smith.
Prestenbach sent an e-mail to Mensa-Wilmot, forwarding the November 22 email from Merrill Lynch.
Prestenbach contacted Stuart Oliver, informing him that she was unable to contact Mensa-Wilmot. Oliver
sent Mensa-Wilmot an e-mail notifying him that his restricted stock units vested and he needed to contact
Prestenbach. The Merrill Lynch e-mail was attached to Oliver's e-mail to Mensa-Wilmot. Upon receiving the
e-mail, Mensa-Wilmot spoke with Prestenbach. After that conversation, Mensa-Wilmot contends he filled
out the appropriate forms for opening an account and returned it to Merrill Lynch.
Mensa-Wilmot contacted Price during the last week of December 2005 to inquire about his stock options.
Price informed Mensa-Wilmot he would need to send a check to pay for the stock. Mensa-Wilmot sent the
check. On December 30, Price contacted Prestenbach to confirm Mensa-Wilmot's reason for termination
from Smith so she would know how to handle Mensa-Wilmot's stock options because the stock options
were treated differently depending whether the employee voluntarily resigned or was terminated. After it
was confirmed that Mensa-Wilmot resigned, Price determined that Mensa-Wilmot did not follow the
appropriate procedures to exercise his stock options.
Mensa-Wilmot received a deposit into his Merrill Lynch account, but it was for $2,700, which was much less
than he expected. He contacted Price and she informed him that the size of the deposit was due to his
failure to exercise his stock options in accordance with the time line described in the agreement.
Specifically, Mensa-Wilmot did not comply with the agreement because he did not declare an intent to
exercise his options before December 10, 2005.
After filing this suit, Mensa-Wilmot moved for summary judgment on his breach of contract claims. In his
motion, Mensa-Wilmot said, "Smith has not put forth any evidence demonstrating why there is not an
enforceable and binding contract in the form of the Agreements that should be honored." Mensa-Wilmot
also asserted he was entitled to summary judgment because the evidence conclusively established he had
exercised his options. Specifically, Mensa-Wilmot stated,
Wilmot tendered his resignation to Smith on November 10, 2005. From this point forward, there are
numerous internal emails that are exchanged at Smith evidencing as a matter of law that Wilmot's Stock
Options have vested and owing. [sic] As a matter of law, and upon reviewing these emails it is evident that
Wilmot has met his burden in proving the elements of a breach of contract claim. In particular, these
internal Smith e-mails demonstrate an acknowledgement [sic] on Smith's part that Wilmot's stock options
are vested and owing, contrary to their position in this litigation.
(Citations to summary judgment exhibits omitted).
Smith filed a cross motion for summary judgment. In it, Smith asserted Mensa-Wilmot produced no
evidence he timely exercised his stock options in the manner specified in the NQSOAs, which was a
condition precedent to Smith's contractual obligations under the NQSOAs. Smith also asserted that
because Mensa-Wilmot had not fulfilled the condition precedent, Mensa-Wilmot had no evidence that
Smith breached the contract. Smith also asserted the evidence conclusively negated the same two
elements of Mensa-Wilmot's claim.
After the submission of the summary judgment motions, and one week before the trial court granted
Smith's motion and denied Mensa-Wilmot's motion, Mensa-Wilmot filed an amended original petition to
include claims for statutory fraud, common-law fraud, and unjust enrichment. Mensa-Wilmot did not seek or
obtain the trial court's permission before filing his amended petition. The trial court granted Smith's cross
motion for summary judgment, rendered a final judgment that Mensa-Wilmot take nothing, and dismissed
the lawsuit with prejudice.
In his third and fourth issues, Mensa-Wilmot asserts this Court does not have jurisdiction because the trial
court's judgment is not a final judgment. Specifically, Mensa-Wilmot contends his amended petition added
theories of recovery that were not addressed by Smith's motion for summary judgment.
A. Law Concerning Final and Appealable Judgments
An appeal may generally be taken only from a final judgment that disposes of all pending parties and
claims. Fresh Coat, Inc. v. Life Forms, Inc., 125 S.W.3d 765, 767 (Tex. App.--Houston [1st Dist.] 2003, no
pet.). "[A] judgment issued without a conventional trial is final for purposes of appeal if and only if either it
actually disposes of all claims and parties then before the court, regardless of its language, or it states with
unmistakable clarity that it is a final judgment as to all claims and all parties." Lehmann v. Har-Con Corp.,
39 S.W.3d 191, 192-93 (Tex. 2001). Language that a plaintiff take nothing by his claims, or that the case
is dismissed, shows finality if there are no other claims by other parties. Lehmann, 39 S.W.3d at 205.
Here, three months after the submission of the summary judgment motions, Mensa-Wilmot filed an
amended original petition adding claims for statutory and common law fraud and unjust enrichment.
Mensa-Wilmot did not obtain the trial court's permission before filing his amended petition.
Smith did not amend its summary judgment to address Mensa-Wilmot's new claims. Approximately one
week after Mensa-Wilmot filed his amended petition, the trial court signed an order stating,
On this date, came for consideration Plaintiff's Motion for Summary Judgment and Defendant's
Cross-Motion for summary Judgment in the above-referenced matter. Upon consideration and review, the
Court determines that Plaintiff's Motion for summary Judgment is DENIED and DEFENDANT'S
Cross-Motion for Summary Judgment is GRANTED. Plaintiff shall take nothing in this lawsuit. This case is
dismissed with prejudice. This is a final judgment.
The judgment expressly states it is final. It also expressly orders that Mensa-Wilmot take nothing by his
lawsuit and expressly dismisses the case. We conclude that this judgment states with unmistakable clarity
that it is a final order. See Lehmann, 39 S.W.3d at 205 (stating order with language that plaintiff take
nothing by his claims, or that case is dismissed, shows finality if there are no other claims by other parties).
Although the amended petition added claims not addressed by Smith's motion for summary judgment, that
fact does not make the trial court's judgment interlocutory because the final judgment plainly resolved the
entire case. As the Supreme Court of Texas explains,
[A]n order can be final and appealable when it should not be. For example, an order granting a motion for
summary judgment that addressed all of the plaintiff's claims when it was filed but did not address claims
timely added by amendment after the motion was filed may state unequivocally that final judgment is
rendered that the plaintiff take nothing by his suit. Granting more relief than the movant is entitled to
makes the order reversible, but not interlocutory.
Lehmann, 39 S.W.3d at 204.
To support his contention that the judgment in this case is not final, Mensa-Wilmot cites Coastal Terminal
Operators v. Essex Crane Rental Corp., 133 S.W.3d 335 (Tex. App.--Houston [14th Dist.] 2004, order). In
Coastal Terminal Operators, the trial court held a hearing on a motion for summary judgment. 133 S.W.3d
at 336. After the hearing and without seeking the trial court's permission, the nonmovant filed a pleading
asserting additional claims for the first time. Id. Approximately one week after the additional claims were
filed, the trial court granted the summary judgment. Id. The court of appeals, citing the Texas Supreme
Court in Guajardo v. Conwell, 46 S.W.3d 862, 864 (Tex. 2001), held that a summary judgment is not final
unless it disposes of pleadings that were filed after the hearing, but before judgment. Coastal Terminal
Operators, 133 S.W.3d at 338.
Coastal Terminal Operators and Guajardo are distinguishable from this case because the language of
those orders did not indicate finality, as compared to this order that dismisses the lawsuit with a
take-nothing judgment. See Guajardo, 46 S.W.3d at 864 ("There is no other language in th[e] judgment
that indicates finality . . . ."); Coastal Terminal Operators, 133 S.W.3d at 338 (judgment did not dispose of
all claims with "unmistakable clarity"). Here, the order incorporates the unmistakably clear language that
Lehmann identifies as manifesting an intent that the judgment be final, specifically, that Mensa-Wilmot take
nothing and that his case is dismissed with prejudice. See Lehmann, 39 S.W.3d at 205.
We overrule Mensa-Wilmot's third and fourth issues.
Summary Judgment on Fraud and Unjust Enrichment Claims
In his fifth issue, Mensa-Wilmot contends the trial court erred by "granting a final summary judgment when
there were other theories of recovery asserted that had not been challenged in [Smith's] cross-motion for
summary judgment." Mensa-Wilmot asserts the trial court erred by granting summary judgment in favor of
Smith because Smith did not amend its cross-motion for summary judgment to address the claims for
statutory fraud, common-law fraud, and unjust enrichment pleaded in Mensa-Wilmot's amended petition.
Smith responds that the trial court did not err by failing to consider Mensa-Wilmot's amended pleadings
filed three months after the submission of the summary judgment and without permission of the trial court.
A. Amended Pleadings and Summary Judgments
Rule 63 of the Texas Rules of Civil Procedure provides,
Parties may amend their pleadings . . . by filing such pleas with the clerk at such time as not to operate as
a surprise to the opposite party; provided, that any pleadings, responses or pleas offered for filing within
seven days of the date of trial or thereafter, or after such time as may be ordered by the judge under Rule
166, shall be filed only after leave of the judge is obtained, which leave shall be granted by the judge
unless there is a showing that such filing will operate as a surprise to the opposite party.
Tex. R. Civ. P. 63. A summary judgment hearing is a trial for purposes of rule 63. Wheeler v. Yettie
Kersting Mem'l Hosp., 761 S.W.2d 785, 787 (Tex. App.--Houston [1st Dist.] 1988, writ denied); see Sosa v.
Cent. Power & Light, 909 S.W.2d 893, 895 (Tex. 1995) (applying rule 63 to amendment filed before
summary judgment hearing). In addition to the time period for filing an amended petition in rule 63, rule
166a provides that a trial court shall render summary judgment if the pleadings and summary judgment
evidence "on file at the time of the hearing, or filed thereafter and before judgment with permission of the
court" show the movant is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c) (emphasis
Although subject to the first requirement of rule 63 that an amendment must be made "at such time as not
to operate as a surprise to the opposite party," a party may file an amended pleading outside seven days
of the trial date freely, without leave of court. Tex. R. Civ. P. 63; Sosa, 909 S.W.2d at 895; see also Judge
David Hittner & Lynne Liberato, Summary Judgments in Texas, 47 S. Tex. L. Rev. 409, 418 (2006). If an
amended pleading is filed within seven days but before the hearing, leave of court is required. See Houtex
Ready Mix Concrete & Materials v. Eagle Constr. & Envtl. Servs., L.P., 226 S.W.3d 514, 520 (Tex.
App.--Houston [1st Dist.] 2006, no pet.). An appellate court, however, will presume leave was granted
"when a summary judgment states that all pleadings were considered, and when, as here, the record does
not indicate that an amended pleading was not considered, and the opposing party does not show
surprise." Cont'l Airlines, Inc. v. Kiefer, 920 S.W.2d 274, 276 (Tex. 1996); see also Hittner, supra at 418-19
(citing Kiefer, 920 S.W.3d at 276 and 9029 Gateway S. Joint Venture v. Eller Media Co., 159 S.W.3d 183,
187 (Tex. App.--El Paso 2004, no pet.)).
Unlike amended pleadings filed within seven days before the summary judgment hearing, there is no
presumption that leave was granted when amended pleadings are filed after the summary judgment
hearing. After the summary judgment hearing but before the trial court renders judgment, a party must
obtain the leave of the court to amend a pleading. Hittner, supra, at 419 (citing Tex. R. Civ. P. 166a(c) and
Hussong v. Schwan's Sales Enters., Inc., 896 S.W.2d 320, 323 (Tex. App.--Houston [1st Dist.] 1995, no
writ)); see also Austin v. Countrywide Homes Loans, 261 S.W.3d 68, 75 (Tex. App.--Houston [1st Dist.]
2008, pet. denied) ("Once the hearing date for a motion for summary judgment has passed, the movant
must secure a written order granting leave in order to file an amended pleading."); C/S Solutions, Inc. v.
Energy Maintenance Services Group LLC, 274 S.W.3d 299, 307 (Tex. App.--Houston [1st Dist.] 2008, no
pet.) (stating party that attempted to amend pleadings "needed leave of court under Rule 63 because the
summary-judgment hearing had already been held"); see also Automaker, Inc. v. C.C.R.T. Co., 976
S.W.2d 744, 745 (Tex. App.--Houston [1st Dist.] 1998, no pet.) ("A nonmovant must secure the court's
permission if it files the amended pleading after the summary judgment hearing.") (Emphasis in original). In
contrast to the presumption we apply to an amended pleading filed within seven days of the hearing,
"[u]nless the record shows that the trial court granted leave to file the pleading, the appellate court will
assume leave was denied." Austin, 261 S.W.3d at 76.
Amended pleadings in the different categories described above are treated differently. A proper amended
pleading supersedes and replaces prior pleadings. FKM P'ship, Ltd. v. Bd. of Regents of the Univ. of
Houston Sys., 255 S.W.3d 619, 633 (Tex. 2008) (citing Tex. R. Civ. P. 65). Thus, generally, (1) once a
plaintiff has timely amended his petition, or has done so with leave of court, to plead additional claims, a
defendant is not entitled to a summary judgment on the plaintiff's entire case, unless the defendant
amends or supplement its motion for summary judgment to address the claims asserted in the amended
pleading. Rotating Servs. Indus., Inc. v. Harris, 245 S.W.3d 476, 487 (Tex. App.--Houston [1st Dist.] 2007,
pet. denied) (citing Blancett v. Lagniappe Ventures, Inc., 177 S.W.3d 584, 592 (Tex. App.--Houston [1st
Dist.] 2005, no pet.); Smith v. Atl. Richfield Co., 927 S.W.2d 85, 88 (Tex. App.--Houston [1st Dist.] 1996,
However, if a plaintiff seeks to amend in the seven-day period before the summary judgment hearing and
leave to amend was denied, or the presumption that leave was granted does not apply, the amended
petition is not timely and should not be considered by the trial court. McIntyre v. Wilson, 50 S.W.3d 674,
684 (Tex. App.--Dallas 2001, pet. denied); Domizio v. Progressive County Mut. Ins. Co., 54 S.W.3d 867,
875-76 (Tex. App.--Austin 2001, pet. denied). The same is true of a pleading filed after the summary
judgment hearing without leave of court; we do not consider an amended pleading filed without the trial
court's permission after the summary judgment hearing. See Taylor v. Sunbelt Mgmt., Inc., 905 S.W.2d
743, 745 (Tex. App.--Houston [14th Dist.] 1995, no writ) (stating "we cannot consider appellants' pleadings
which were admittedly filed after the motion for summary judgment hearing"); W. Tex. Gas, Inc. v. 297 Gas
Co., 864 S.W.2d 681, 685 (Tex. App.--Amarillo 1993, no writ) (holding trial court did not err by failing to
consider amended petition filed after hearing without leave of court). Because an amendment that is not
timely and not allowed by the trial court does not supersede the prior petition, the summary judgment
movant need not amend or supplement his motion to address those claims. See Taylor, 905 S.W.2d at 745
(citing Tex. R. Civ. P. 166a(c) and holding trial court did not err by granting summary judgment when new,
unaddressed claims were added by amended petition filed after hearing without leave of court); W. Tex.
Gas, Inc., 864 S.W.2d at 685 (same); see also Hittner, supra, at 419-20 (stating movant need not amend
motion for summary judgment to address amended pleadings if summary judgment filed after
court-ordered deadline to amend pleadings).
Here, Mensa-Wilmot filed his amended petition three months after the summary judgment hearing. We
presume that leave to amend was not granted unless the record shows that the trial court granted leave.
See Austin, 261 S.W.3d at 76. Nothing in the record indicates the trial court granted leave, or that
Mensa-Wilmot sought leave. We, therefore, cannot consider the claims added by Mensa-Wilmot's
amended petition. See Taylor, 905 S.W.2d at 745; W. Tex. Gas, Inc., 864 S.W.2d at 685.
We hold the trial court did not err by rendering summary judgment in favor of Smith because
Mensa-Wilmot's additional claims were contained in an amended petition that was filed without the trial
court's permission after the summary judgment hearing had been held. See Taylor, 905 S.W.2d at 745; W.
Tex. Gas, Inc., 864 S.W.2d at 685.
We overrule Mensa-Wilmot's fifth issue.
Summary Judgment on Breach of Contract Claim
In his second issue, Mensa-Wilmot contends the trial court erred by granting Smith's cross-motion for
summary judgment because the summary judgment evidence raised a fact issue concerning whether he
properly exercised his options under the stock option agreement.
In the motion for summary judgment that the trial court granted, Smith contends that Mensa-Wilmot has no
evidence of the elements of "breach of contract" or "conditions precedent to performance" of his breach of
contract claim, and that he conclusively negated the same two elements. Specifically, Smith asserts
"Mensa-Wilmot must prove that before the effective date of his resignation from [Smith] on December 10,
2005, he sent [Smith's] Corporate Secretary a signed written notice of his intention to exercise the stock
options under the NQSOAs." Smith states, "Mensa-Wilmot failed to exercise his options in writing under the
NQSOAs plain terms" and Mensa-Wilmot "failed to comply with the procedures in [the] NQSOAs."
Mensa-Wilmot responds to the motion for summary judgment by asserting that a fact issue exists
concerning whether he timely exercised his stock options and summary judgment for Smith was therefore
A. Applicable Law
We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.
2005). Summary judgment is proper only when the movant establishes there is no genuine issue of
material fact and that the movant is entitled to judgment as a matter of law. Tex R. App. P. 166a(c). The
motion must state the specific grounds relied upon for summary judgment. Id. In reviewing a motion for
summary judgment, we must indulge every reasonable inference in favor of the nonmovant, take all
evidence favorable to the nonmovant as true, and resolve any doubts in favor of the nonmovant. Valence,
164 S.W.3d at 661.
We review a no-evidence summary judgment by construing the record in the light most favorable to the
nonmovant and disregarding all contrary evidence and inferences. Patriacca v. Frost, 98 S.W.3d 303, 306
(Tex.App.--Houston [1st Dist.] 2003, no pet.). A trial court improperly renders a no-evidence summary
judgment if the nonmovant presents more than a scintilla of probative evidence to raise a genuine issue of
material fact. Greathouse v. Alvin Indep. Sch. Dist., 17 S.W.3d 419, 423 (Tex. App.--Houston [1st Dist.]
2000, no pet.).
The essential elements in a suit for breach of contract are: (1) the existence of a valid contract; (2) the
plaintiff performed or tendered performance; (3) the defendant breached the contract; and (4) the plaintiff
was damaged as a result of the breach. Bank of Tex. v. VR Elec., Inc., 276 S.W.3d 671, 677 (Tex.
App.--Houston [1st Dist.] 2008, pet. denied). Furthermore, a party seeking to recover under a contract
bears the burden of proving that all conditions precedent have been satisfied. CDI Eng'g Group, Inc. v.
Admin. Exch., Inc., 222 S.W.3d 544, 548 (Tex. App.--Houston [14th Dist.] 2007, pet. denied) (citing
Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 283 (Tex. 1998)). In an option
contract, strict compliance with the provisions of the option contract is required. Besteman v. Pitcock, 272
S.W.3d 777, 784 (Tex. App.--Texarkana 2008, no pet.); Tex. State Optical, Inc. v. Wiggins, 882 S.W.2d 8,
10-11 (Tex. App.--Houston [1st Dist.] 1994, no writ).
Mensa-Wilmot contends his affidavit suffices to raise a fact issue concerning whether he timely exercised
his stock options. Specifically, Mensa-Wilmot relies on the following statement in his affidavit: "During the
second week of November 2005, I sent a letter to Smith International, Inc. (Smith) from Dubai (UAE)
informing Smith of my intention to exercise my stock options."
In reviewing the evidence to determine whether summary judgment in favor of Smith was proper, we must
accept all Mensa-Wilmot's evidence as true and disregard contrary evidence and inferences. See Valence,
164 S.W.3d at 661; Patriacca, 98 S.W.3d at 306. However, even accepting Mensa-Wilmot's affidavit as
true, it does not address whether he exercised the options in the manner specified by the NQSOAs. The
NQSOAs required "written notice signed by Employee" to be "delivered to the Corporate Secretary of the
Company or sent by certified mail addressed to the Company (for the attention of the Corporate
Secretary) at its corporate office in Houston, Texas." Furthermore, to exercise the options, Mensa-Wilmot
was required to "state the number of shares of Common Stock as to which the option is exercised and shall
be accompanied by the full amount of the purchase price of such shares." Mensa-Wilmot's affidavit does
not address whether he (1) delivered the notice or sent it via certified mail, (2) stated the number of shares
he wished to purchase under the option, or (3) tendered the full amount of the purchase price. Because
Mensa-Wilmot did not present summary judgment evidence that he exercised his stock option as required
by the NQSOAs, we hold there is no fact issue and the trial court did not err by rendering summary
judgment in favor of Smith. See Besteman, 272 S.W.3d at 784 (requiring strict compliance with provisions
of option contract); Tex. State Optical, Inc., 882 S.W.2d at 10-11 (same).
Mensa-Wilmot asserted at oral argument that there is an ambiguity concerning the proper manner to
exercise stock options and, therefore, his affidavit raises a fact issue concerning whether he properly
exercised his stock options. In support, Mensa-Wilmot identifies two documents introduced as summary
judgment evidence. The first, a prospectus covering the NQSOAs contained a section entitled "Manner of
Exercise." This section provides, in pertinent part,
All options and stock appreciation rights are exercisable by written notice to us specifying the number of
shares being purchased, accompanied in the case of the exercise of an option by payment in full in cash
or its equivalent acceptable to us.
In addition, Mensa-Wilmot identifies a document from Smith entitled "Exercising Your Nonqualified Stock
Options." This document provides, in pertinent part, that the options may be exercised by "[c]omplet[ing]
and sign[ing] a Notice of Exercise letter (each time you exercise) specifying the number of shares you wish
to purchase, and how you would like the stock to be issued (i.e. to you or your account with a broker)."
Mensa-Wilmot does not assert that either of these documents are part of the NQSOAs. The cover page of
the prospectus expressly states it is not an offer to sell common stock of Smith. Furthermore, the second
document from Smith expressly provides,
This document is a summary only and is not meant to replace or amend the terms of the Smith
International, Inc. Long-Term Incentive Plan, as amended, or executed Stock Option Agreements. Please
refer to those documents if there are any questions.
Because these documents are not part of the NQSOAs, they do not alter the way in which Mensa-Wilmot
was required to exercise his stock options under the NQSOAs. Assuming these two documents were part
of the NQSOAs, Mensa-Wilmot's affidavit, in which he asserts he sent a letter exercising the options, fails
to show he complied with the two documents because the documents required that he specify the number
of shares and include payment for the shares.
In addition, Mensa-Wilmot contends the e-mails introduced as summary judgment evidence raise a fact
issue on his claims. Specifically, Mensa-Wilmot contends, "Multiple e-mail exchanges were made between
[Mensa-Wilmot] and [Smith's] employees regarding the stock options before December 10, 2005."
Mensa-Wilmot also asserts,
[Mensa-Wilmot] opened an account with Merrill Lynch specifically for the stock options that he had elected
to exercise after speaking with Jean Aynn Prestenbach so that his stock options proceeds could be
deposited there. The reasonable inference is that the exercise of option letter had been received by
[Smith] in a timely manner.
Mensa-Wilmot is mistaken. The email from Merrill Lynch to Smith on November 22--and later forwarded to
Mensa-Wilmot by Prestenbach and Oliver-- specifically referred to "restricted stock," not "stock options" as
Mensa-Wilmot contends. Specifically, the Merril Lynch email stated, "IMPORTANT NOTICE REGARDING
YOUR RESTRICTED STOCK GRANT[.] Merrill Lynch has been selected as the broker to assist you in
establishing an account to facilitate the settlement process on the Restricted Stock vesting event on
December 7, 2005." (Emphasis added). Oliver's e-mail referred to a "stock grant," not a "stock option."
Because the emails do not refer to the stock options as Mensa-Wilmot contends, but to the separate
restricted stock units awarded under the Plan, the evidence does not raise an issue concerning
Mensa-Wilmot's exercise of his options.
We hold the evidence does not raise a fact issue concerning whether Mensa-Wilmot exercised his stock
options as required by the terms of the NQSOAs.
We overrule Mensa-Wilmot's second issue.
In his first issue, Mensa-Wilmot asks, "Did the trial court err in granting the appellee's cross-motion for
summary judgment?" Within this issue, Mensa-Wilmot presents no independent ground for reversal.
Rather, Mensa-Wilmot expressly states "the first issue--whether the trial court erred in granting summary
judgment--is common to all other issues raised. The more narrow issues behind this broad issue are
discussed individually throughout this brief." (Citation omitted). Because it presents no independent
ground or argument for reversal, we overrule Mensa-Wilmot's first issue.
We affirm the trial court's judgment.
Panel consists of Justices Keyes, Alcala, and Hanks.
1. There are exceptions to the general rule that are not applicable to this case. For example, if the
amended petition essentially reiterates previously pleaded causes of action and a ground asserted in a
motion for summary judgment conclusively negates a common element of both the newly and previously
pleaded claims, or the original motion is broad enough to encompass the newly asserted claims, an
amended or supplemental motion for summary judgment is not necessarily needed. Rotating Servs. Indus.,
Inc. v. Harris, 245 S.W.3d 476, 487 (Tex. App.--Houston [1st Dist.] 2007, pet. denied) (citing Blancett v.
Lagniappe Ventures, Inc., 177 S.W.3d 584, 592 (Tex. App.--Houston [1st Dist] 2005, no pet.); Fraud-Tech,
Inc. v. Choicepoint, Inc., 102 S.W.3d 366, 387 (Tex. App.--Fort Worth 2003, pet. denied); Farah v. Mafrige
& Kormanik, P.C., 927 S.W.2d 663, 671-72 (Tex. App.--Houston [1st Dist.] 1996, no writ); Judwin Props.,
Inc. v. Griggs & Harrison, 911 S.W.2d 498, 502 (Tex. App.--Houston [1st Dist.] 1995, no writ)).