HK Partners, Inc. v. Power Computing Corporation
HK Partners, Inc. v. Power Computing Corporation
Opinion
The following facts are not disputed. In November 1996, Power announced plans to build a manufacturing facility in Georgetown, Texas, and issued a "Request for Proposals" ("RFP") seeking a developer to assist with the project. In response, HK joined with several other businesses to form a development "team" that submitted a development proposal to Power. HK's proposal explicitly stated that neither its submission nor acceptance would create a contract. Power notified HK in late November that it had been selected for the project, but the parties did not execute a formal contract detailing the terms of the development project. On December 2, 1996, representatives of Power and HK met, at which time Power instructed HK to begin preliminary work immediately. At this meeting, HK representatives requested that Power sign a "pre-development agreement" confirming that Power would accept responsibility for all initial expenses until more permanent financial and contractual arrangements could be made. The parties exchanged several drafts of a proposed pre-development agreement, but none was ever formally executed. On December 20, 1998, less than three weeks after HK began working on the project, Power informed HK that it had decided to change the entire approach to the project. Power instructed HK to discontinue its efforts, to submit an invoice for the work completed to date, and to submit a new proposal conforming with Power's new approach, which had HK playing a more limited role than was contemplated in the original RFP. HK declined to submit a new proposal, instead submitting an invoice for $250,000. Power refused to pay this amount, claiming it was excessive compensation for the services actually performed by HK.
The parties' main disagreement concerns the existence and scope of a pre-development agreement. Power states that its sole purpose was to confirm that HK was to proceed immediately with pre-development work and that Power would, for the time being, compensate HK on a "pay-as-you-go" basis. HK counters that the pre-development agreement also memorializes the "broader agreement" between the parties that HK had been selected as the owner/developer/landlord of the entire project.
Power filed suit seeking a judgment declaring that the parties never entered into a contract for the development of the entire project and that Power is obligated only to pay HK the fair value of the pre-development work HK actually performed. HK counterclaimed, complaining of breach of contract, fraud, and negligent misrepresentation, all relating to its allegation that Power had committed to the "broader agreement." Power filed a motion for summary judgment on HK's counterclaims. The trial court granted the motion as to the breach of contract and fraud causes of action, ordering that HK take nothing by those claims, but denied summary judgment as to the negligent misrepresentation cause of action. The fraud and breach of contract claims were severed so HK could appeal the summary judgment order.
HK presents eleven issues for appeal; however, they may be consolidated into two basic issues: (1) whether the trial court erred in granting summary judgment on HK's breach of contract claim because there are questions of fact as to the existence of a contract and a breach by Power; and (2) whether the trial court erred in granting summary judgment on HK's fraud claim because there is a question of fact as to whether Power committed fraud.
Competent Summary Judgment Evidence
Before addressing the merits of this appeal, we turn our attention to the voluminous summary judgment evidence HK presented to the trial court in its response and supplemental response to Power's motion for summary judgment. Power urges this Court to disregard all evidence that was attached to HK's responses but not specifically referenced in its responses.
When presenting summary judgment evidence, "[a] party must expressly and specifically identify the supporting evidence on file which it seeks to have considered by the trial court." Boeker v. Syptak, 916 S.W.2d 59, 61 (Tex. App.--Houston [1st Dist.] 1996, no writ). General references to a voluminous record that do not direct the trial court or the parties to the evidence relied on are insufficient. See Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 81 (Tex. 1989) (summary judgment motion referred trial court to all material "on file"). Attaching entire depositions to a motion for summary judgment or a response thereto, and referencing them only generally, "does not relieve the party's burden of pointing out to the trial court where in the evidence the issues set forth in the motion or response are raised." Guthrie v. Suiter, 934 S.W.2d 820, 826 (Tex. App.--Houston [1st Dist.] 1996, no writ). It is not the duty of the trial court to sift through voluminous attachments to discover potential fact issues. See id. Similarly, it is not the duty of this Court to sift through a massive record in search of a fact issue in order to overturn a summary judgment. See Paull v. Capital Resource Mgmt., Inc., 987 S.W.2d 214, 220-21 (Tex. App.--Austin 1999, no pet. h.).
Although HK attached more than 900 pages of material to its responses, including large portions of deposition transcripts, HK made specific reference to only a small portion of this evidence in the body of its responses. HK rarely directed the trial court to where fact issues were raised within the attached materials. Instead, HK routinely directed the trial court to the deposition of a particular witness without providing any page or line number references. We believe such general references are insufficient to create competent summary judgment evidence. See Rogers, 772 S.W.2d at 81; Guthrie, 934 S.W.2d at 826. The trial court was therefore not required to search each page of the unreferenced attachments to HK's responses in search of a fact issue, and we decline to do so as well.
Further, in its brief in this appeal, HK directs this Court to particular portions of its summary-judgment evidence not pointed out to the trial court. We believe we are required to consider only the evidence the trial court was required to consider, and that we should ignore evidentiary references made to this Court that were not made to the trial court. See Nicholson, 747 S.W.2d at 4 n.1. Nonetheless, in reviewing the judgment here, we have considered both the summary-judgment evidence specifically cited to the trial court and that cited exclusively to this Court; we do not, however, consider the massive amount of material specifically referenced neither to the trial court nor to this Court.
Alternative Summary Judgment Standards
In its motion for summary judgment, Power argued that it was entitled to prevail under Texas Rule of Civil Procedure 166a(c) or, alternatively, that it was entitled to a "no-evidence" summary judgment under Texas Rule of Civil Procedure 166a(i). See Tex. R. Civ. P. 166a(c), (i). The trial court's order did not specify whether it was based on Rule 166a(c) or Rule 166a(i). (1) We believe this situation is analogous to a summary judgment order that does not specify the ground relied on for its ruling although the motion asserted multiple grounds. "When a trial court's order granting summary judgment does not specify the ground or grounds relied on for its ruling, summary judgment will be affirmed on appeal if any of the theories advanced are meritorious." Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989). Applying the logic of Carr, we believe this Court may uphold the summary judgment in the instant appeal if Power prevails under either Rule 166a(c) or Rule 166a(i).
"No-evidence" Summary Judgment
Pursuant to Texas Rule of Civil Procedure 166a(i), a party may move for summary judgment asserting that, after adequate time for discovery, there is no evidence of one or more of the essential elements of a claim on which the adverse party would have the burden of proof at trial. Power asserted in its motion for summary judgment that, after an adequate time for discovery, HK was unable to present any evidence on various essential elements of its claims for breach of contract and fraud. (2) A no-evidence summary judgment is essentially a pretrial directed verdict, so we must determine whether HK produced enough evidence of probative force to raise a fact issue on each material question presented. See Jackson v. Fiesta Mart, Inc., 979 S.W.2d 68, 70 (Tex. App.--Austin 1998, no pet.). In deciding whether summary-judgment evidence raises a genuine issue of material fact, we view as true all evidence favorable to the non-movant and indulge every reasonable inference, and resolve all doubts, in its favor. Nixon v. Mr. Property Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985).
1. Breach of Contract
It is undisputed that the parties never executed a final written contract encompassing the development of the entire project. HK urges this Court to find, however, that there is at least a fact issue as to whether the parties intended to enter into an enforceable oral contract whereby HK would be the owner/developer/landlord of the project. As evidence of this oral contract, HK directs us to the deposition testimony of various persons and to the final draft of the unexecuted pre-development agreement. First, HK cites this Court to deposition testimony of an HK representative that a Power representative affirmatively agreed to sign a pre-development agreement acknowledging that HK would be the owner/developer/landlord of the project. The remainder of the deposition testimony cited by HK relates to Power's promises to sign the pre-development agreement actually drafted by HK, which included the following language:
Power agrees that should HK be successful in obtaining permanent financing for Phase I, Power shall grant to HK and the Development Team, the exclusive right to develop and construct all future phases of the Campus, subject only to the ability of the parties to agree on the terms, cost and schedule of such development and construction.
This paragraph was altered by Power to read: "Power agrees it will provide HK and the Development Team the opportunity to develop and construct all future phases of the Campus." HK argues that this evidence--Power's promises to sign a pre-development agreement acknowledging HK's expansive role in the project, coupled with the promises to sign the pre-development agreement actually drafted by HK and modified by Power--at least raises a fact issue as to whether the parties had a "meeting of the minds" as to a "broader agreement" that HK would be the owner/developer/landlord of the entire project.
Whether parties intended to enter into a binding contract is generally a question of fact. See Farah v. Mafrige & Kormanik, P.C., 927 S.W.2d 663, 678 (Tex. App.--Houston [1st Dist.] 1996, no writ). Whether a particular agreement is an enforceable contract, however, is a question of law. See id. A contract is not enforceable unless the parties' legal obligations and liabilities can be determined. See T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). The material terms must be agreed upon before the contract is enforceable. See id. The agreement must "be sufficiently definite in its terms so that a court can understand what the promisor undertook." Id. While parties may agree on terms sufficient to create a contract and leave other provisions for later negotiation, see Scott v. Ingle Bros. Pac., Inc., 489 S.W.2d 554, 555 (Tex. 1972), there is no binding contract if an essential term is left unresolved, see T.O. Stanley Boot, 847 S.W.2d at 221. A contract will fail for indefiniteness if evidence is not presented on all essential terms. See id. at 221-22 (contract to loan money failed for indefiniteness where interest rate and repayment terms not specified).
Viewing the evidence in the light most favorable to HK, we conclude that the alleged "broader agreement" was too indefinite to be enforced because it did not specify any of the material terms inherent in contracts to develop commercial real estate. (3) The evidence cited by HK relates to Power's promise to sign a pre-development agreement either (1) affirmatively stating HK would be the owner/developer/landlord, or (2) referencing a "continuing relationship" between the parties on this project. This evidence does not provide even the most basic terms necessary to create a contract for the development of an entire manufacturing plant. For example, the record is devoid of agreements on the scope of the project, the budget, the design, or the duration or terms of any necessary leases. While it is true that in an appropriate case a court may imply certain terms to a contract, see, e.g., Bendalin v. Delgado, 406 S.W.2d 897, 900 (Tex. 1966) (court inferred that "reasonable price" was intended), HK offered no evidence from which any terms can reasonably be inferred here. There is simply nothing to indicate what the promisor undertook. We hold that any oral contract between the parties that HK would be the owner/developer/landlord of the entire project fails for indefiniteness and is thus unenforceable as a matter of law.
HK next argues that if no oral contract was created, the actions of the parties created an "implied-in-fact" contract because the dealings between the parties indicate a meeting of the minds regarding the terms of the contract. See Ishin Speed Sport, Inc. v. Rutherford, 933 S.W.2d 343, 348 (Tex. App.--Fort Worth 1996, no writ); Smith v. Renz, 840 S.W.2d 702, 704 (Tex. App.--Corpus Christi 1992, writ denied). We disagree.
Both express contracts and implied-in-fact contracts require a showing of a mutual agreement, the latter by inference from the circumstances. See Haws & Garrett Gen. Contractors, Inc. v. Gorbett Bros. Welding Co., 480 S.W.2d 607, 609 (Tex. 1972) (emphasis added). With an implied-in-fact contract, "[t]he conception is that of a meeting of the minds of the parties as implied from and evidenced by their conduct and course of dealing . . . ." Id. (emphasis added). The conduct must convey an objective assent to the terms of an agreement. See Ishin Speed Sport, 933 S.W.2d at 348; E-Z Mart Stores, Inc. v. Hale, 883 S.W.2d 695, 699 (Tex. App.--Texarkana 1994, writ denied).
None of the evidence relied on by HK shows that the parties' conduct and course of dealing implied they had reached a meeting of the minds as to the terms of a contract allowing HK to develop the entire project. As noted previously, HK does not direct this Court to evidence of any terms it believes the "broader agreement" included; thus, it is unable to produce evidence to show the parties manifested their agreement to these unknown terms through their actions. (4)
We hold that Power was entitled to a "no-evidence" summary judgment on HK's counterclaim for breach of contract. HK produced no evidence that the parties agreed to the material terms of a contract giving HK the right to be the owner/developer/landlord of the entire project; therefore, the oral contract fails for indefiniteness. Similarly, there is no evidence of any actions by the parties that could imply they agreed to be bound to a sufficient number of essential terms.
2. Fraud
Before addressing whether HK has presented any evidence as to the elements of fraud, we first turn to the issue of whether fraud is the proper cause of action to redress HK's alleged injury. Generally, if conduct gives rise to liability independent of the fact that an agreement exists between two parties, a cause of action may sound in tort; but if conduct gives rise to liability only because it breaches the parties' agreement, the claim sounds only in contract. See Southwestern Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991).
In the present case, Power's liability, if any, arises from a failure to comply with the "broader agreement" HK alleges exists. (5) HK has alleged fraud and breach of contract based on essentially the same facts: Power's failure to allow HK to be the owner/developer/landlord of the project. While HK couched its cause of action as common-law fraud, it arguably seeks to recover merely the benefit of its alleged bargain with Power. See DeLanney, 809 S.W.2d at 495. Because HK's real objective seems to be to enforce a promised exchange, it might not be able to use fraud to circumvent the unenforceability of the contract. See Barbouti v. Munden, 866 S.W.2d 288, 293 (Tex. App.--Houston [14th Dist.] 1993, writ denied).
Nonetheless, assuming arguendo that a fraud action is appropriate in this case, it still fails. Under a no-evidence summary-judgment standard, the non-movant must produce evidence on each of the essential elements of a claim on which it would have the burden of proof at trial. Tex. R. Civ. P. 166a(i). Power asserted in its motion for summary judgment and to this Court that HK is unable to present any evidence on at least one of the essential elements of fraud. We agree.
The elements of common-law fraud are: (1) a material representation; (2) that is false; (3) which was either known to be false when made or was made recklessly without knowledge of its truth; (4) with the intent that the representation be relied upon; (5) that it was relied upon; and (6) which caused injury. See Johnson & Johnson Med., Inc. v. Sanchez, 924 S.W.2d 925, 931 (Tex. 1996); Stone v. Lawyers Title Ins. Corp., 554 S.W.2d 183, 185 (Tex. 1977).
HK claims that Power made the following fraudulent misrepresentations to HK: (1) that HK had been awarded the Power Project as outlined in the RFP and in conformity with HK's development proposal (that HK would be the owner/developer/landlord of the project); and (2) that Power would sign the pre-development agreement. Assuming, as we must, that Power made these representations to HK, we find no evidence in the record that Power had the necessary intent to commit fraud.
Each of the misrepresentations allegedly made by Power involves a promise of future action. A promise of future performance constitutes actionable fraud only if the promise was made with no intention of performing it at the time it was made. See Formosa Plastics Corp. v. Presidio Eng'rs, 960 S.W.2d 41, 48 (Tex. 1998); see also Texas Oil Co. v. Tenneco Inc., 917 S.W.2d 826, 834 (Tex. App.--Houston [14th Dist.] 1994), rev'd on other grounds, 958 S.W.2d 178 (Tex. 1997) (citing T.O. Stanley Boot, 847 S.W.2d at 222). Thus, in order to prove its fraud claim, HK must show that at the time Power promised HK it would be awarded the project, and at the time Power promised to sign the pre-development agreement, Power had the intent to deceive and no intention of performing as promised. See Formosa, 960 S.W.2d at 48.
HK argues that the intent of a party not to perform as promised may be inferred by the party's subsequent actions. HK directs our attention to Power's ultimate failure to perform, coupled with Power's denial that it ever made the promises, to create an inference that at the time Power made the promises it had no intention of fulfilling them. We agree that a party's denial that a promise was ever made is a factor that may be considered in determining whether, when the promise was made, there was a lack of intent to perform. See Tenneco, 917 S.W.2d at 834. However, Power has never denied that its original intent was for HK to assume a large role in the project pursuant to the RFP. Power has also never denied that it promised to sign a pre-development agreement. We also agree that failure to perform as promised is one factor that may be considered to establish deceitful intent of a party at the time the promise was made. See Tenneco, 917 S.W.2d at 834. Standing alone, however, failure to perform amounts to no evidence of fraud. See Formosa, 960 S.W.2d at 48; Tenneco, 917 S.W.2d at 834. Because the only evidence HK presents regarding fraudulent intent is Power's failure to perform as promised, (6) HK has failed to produce any legally competent evidence to raise a fact issue that Power had the requisite intent at the time the promises were made. See Formosa, 960 S.W.2d at 48.
Having concluded that HK failed to produce any evidence as to the required element of intent, we need not address the remaining elements of fraud. We hold that the trial court correctly granted summary judgment on HK's fraud claim pursuant to Power's request for a "no-evidence" summary judgment.
Because we uphold the judgment of the trial court pursuant to Rule 166a(i), we need not address whether the judgment may be upheld under Rule 166a(c) as well. See Tex. R. Civ. P. 166a(c), (i).
Having found no error, we affirm the trial court's granting of Power's motion for summary judgment as to HK's causes of action for breach of contract and fraud.
J. Woodfin Jones, Justice
Before Justices Jones, B. A. Smith and Yeakel
Affirmed
Filed: May 27, 1999
Do Not Publish
1. During oral argument, the parties suggested the judgment was based on Rule 166a(i); however, both Power's and HK's briefs on appeal structure the arguments as if judgment was based on Rule 166a(c).
2. Power also made this argument as to HK's negligent-misrepresentation claim, but that issue was not a part of the trial court's judgment and thus is not part of this appeal.
3. We emphasize that our holding today is limited to finding that the parties had no enforceable oral contract as to the "broader agreement" that HK claims existed. We make no determination on the issue of whether an oral contract was created as to pre-development services as memorialized in the unexecuted pre-development agreement.
4. HK also urges this Court to find that the doctrine of promissory estoppel precludes Power from denying an agreement existed between the parties. It is well settled, however, that promissory estoppel does not create a contract where none existed before. See, e.g., "Moore" Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 936 (Tex. 1973). HK also argues that promissory estoppel precludes Powers from asserting the defense of statute of frauds. See Nagle v. Nagle, 633 S.W.2d 796, 799 (Tex. 1982). In light of our holding that any alleged contract between the parties that HK would be the owner/developer/landlord of the project fails for indefiniteness, we need not address Power's defense of statute of frauds or the promissory estoppel exception to that defense.
5. We emphasize that we are not addressing liability for the pre-development services already performed by HK. Liability for these services is the subject of the underlying declaratory- judgment action still pending before the trial court below.
6. HK urges this Court to find that "other circumstantial evidence" creates a fact issue of fraudulent intent, but fails to direct us to any such circumstantial evidence in the record.
M>See Tenneco, 917 S.W.2d at 834. However, Power has never denied that its original intent was for HK to assume a large role in the project pursuant to the RFP. Power has also never denied that it promised to sign a pre-development agreement. We also agree that failure to perform as promised is one factor that may be considered to establish deceitful intent of a party at the time the promise was made. See Tenneco, 917 S.W.2d at 834. Standing alone, however, failure to perform amounts to no evidence of fraud. See Formosa, 960 S.W.2d at 48; Tenneco, 917 S.W.2d at 834. Because the only evid
Case-law data current through December 31, 2025. Source: CourtListener bulk data.