K.W. Ministries, Inc. v. Auction Credit Enterprises, LLC ( 2015 )

ACCEPTED
05-14-01392-CV
FIFTH COURT OF APPEALS
DALLAS, TEXAS
4/8/2015 6:56:26 PM
LISA MATZ
CLERK
No. 05-14-01392-CV
FILED IN
5th COURT OF APPEALS
In the Court of Appeals for the Fifth Judicial District of Texas at Dallas
DALLAS, TEXAS
4/8/2015 6:56:26 PM
LISA MATZ
Clerk
K.W. MINISTRIES, INC.,
Plaintiff-Appellant,
v.
AUCTION CREDIT ENTERPRISES, LLC,
Defendant-Appellee
__________________________________________________________________
On appeal from the 116th Judicial District Court for Dallas County, Texas
Hon. Tonya Parker presiding
__________________________________________________________________
BRIEF OF APPELLEE
AUCTION CREDIT ENTERPRISES, LLC
__________________________________________________________________
Robert K. Wise
State Bar No. 21812700
bwise@lwsattorneys.com
LILLARD WISE SZYGENDA PLLC
5949 Sherry Lane, Suite 1255
Dallas, Texas 75225
214 • 739 • 2000 Telephone
214 • 739 • 2010 Fax
TABLE OF CONTENTS
TABLE OF CONTENTS ........................................................................................... 1
INDEX OF AUTHORITIES...................................................................................... 3
STATEMENT OF THE CASE .................................................................................. 7
STATEMENT REGARDING ORAL ARGUMENT ............................................... 8
STATEMENT OF FACTS ........................................................................................ 9
A. The Parties. .................................................................................................... 10
B. KWM And ACE Enter Into A Floor-Plan Financing Agreement. ................ 13
C. KWM Defaults Under The Agreement. ........................................................ 16
D. ACE Reports KWM’s Default To Auction Insurance Agency (AIA). .......... 17
E. KWM Sues ACE. ........................................................................................... 19
F. KWM Sues ACE Again. ................................................................................ 19
SUMMARY OF ARGUMENT ............................................................................... 30
ARGUMENT ........................................................................................................... 32
A. The Trial Court Did Not Abuse Its Discretion In Failing To
Consider The Amended Response................................................................. 32
1. The standard of review. ....................................................................... 32
2. The trial court did not abuse its discretion by not considering
the Amended Response. ...................................................................... 32
a. Texas Rule of Civil Procedure 166a(c) expressly
requires leave of court to file a summary-judgment
response or summary-judgment evidence late. ......................... 33
b. The relation-back doctrine is inapplicable to a
summary-judgment response. ................................................... 38
B. The Summary Judgment Must Be Affirmed For Multiple Reasons. ............ 40
1. The summary-judgment standard. ....................................................... 40
2. Both the no-evidence and traditional summary judgment
must be affirmed. ................................................................................. 42
PRAYER .................................................................................................................. 47
CERTIFICATE OF COMPLIANCE WITH RULE 9.4 .......................................... 49
CERTIFICATE OF SERVICE ................................................................................ 49
2
INDEX OF AUTHORITIES
CASES
Allison v. Post-Newsweek Stations Houston LP, Nos. 01-10-00775-CV,
01-11-00767-CV, 2011 Tex. App. LEXIS 10158 (Tex. App.—
Houston [1st Dist.] Dec. 22, 2011, no pet.) (mem. op.) ................................36
Arellano v. Magana, 315 S.W.3d 576 (Tex. App.—El Paso 2010) ........................47
Baylor Health Care System v. Maxtech Hldgs., Inc., 111 S.W.3d 654
(Tex. App.—Dallas 2003, no pet.) ................................................................47
Benchmark Bank v. Crowder, 919 S.W.2d 657 (Tex. 1996) ............................ 28, 34
Brown v. Melissa 121/5 Partners, Ltd., No. 05-13-01189-CV,
2014 Tex. App. LEXIS 8467 (Tex. App.—Dallas Aug. 4,
2014, no pet.) (mem. op.) ................................................................. 32, 34, 37
Brown v. Tex. Bd. of Nurse Exam’rs, 194 S.W.3d 721 (Tex. App.—
Dallas 2006, no pet.) ......................................................................................47
Burbage v. Burbage, 447 S.W.3d 249 (Tex. 2014) .................................................43
Carpenter v. Cimarron Hydrocarbons Corp., 98 S.W.3d 682
(Tex. 2002) ................................................................................. 32, 33, 34, 37
Centeq Realty, Inc. v. Siegler, 899 S.W.3d 195 (Tex. 1995) ...................................41
Elliot-Williams Co. v. Diaz, 9 S.W.3d 801 (Tex. 1999) ..........................................40
Forbes, Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167 (Tex. 2003)...............40
Godfrey v. Sec. Serv. Fed. Credit Union, 356 S.W.3d 720 (Tex. App
El Paso 2011, no pet.) ....................................................................................37
Helitrans Co. v. Rotorcraft Leasing Co. 2015 Tex. App. LEXIS 1410
(Tex. App.—Houston [1st Dist.] Feb. 12, 2015, no pet. h.) ..........................46
Johnson & Johnson Med., Inc. v. Sanchez, 924 S.W.2d 925 (Tex. 1996) ..............41
Karcher v. Classic Foods, L.P., 2005 Tex. App. LEXIS 3062
(Tex. App.—Fort Worth Apr. 21, 2005, no pet.) ................................... 40, 41
3
Ketter v. ESC Med. Sys., Inc., 169 S.W.3d 791 (Tex. App.—Dallas 2005,
no pet.) ...........................................................................................................41
In re K.W. Ministries, Inc. d/b/a CRUSH Auto Sales, No. 05-13-0085-CV,
Memorandum Op. (Jan. 28, 2013) .................................................................19
Laidlaw Waste System, Inc. v. City of Wilmer, 904 S.W.2d 656 (Tex. 1995) ...........9
Lone Star Partners v. NationsBank Corp., 893 S.W.2d 593 (Tex. App.—
Texarkana 1994, no writ)...............................................................................39
Mackey v. Great Lakes Investments, Inc., 255 S.W.3d 243 (Tex.
App.—San Antonio 2008, pet. denied) ...........................................................9
Malcomson Road Utility Dist. v. Newsom, 171 S.W.3d 257 (Tex. App.—
Houston [1st Dist.] 2005, pet. denied) ...........................................................40
Miller v. Argumaniz, 2015 Tex. App. LEXIS 1274 (Tex. App.—El Paso
Feb. 11, 2015, no pet. h.) (mem. op.) ............................................................39
PNS Stores, Inc. v. Rivera, 335 S.W.3d 265 (Tex. App.—San Antonio
2010), rev’d on other grounds, 379 S.W.3d 267 (Tex. 2012) ................ 35, 36
Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217 (Tex. 1999) ...................................41
Santillan v. Nat’l Union Fire Ins. Co., 166 S.W.3d 823 (Tex. App.—
El Paso 2005, no pet.) ....................................................................................47
In re S.A.P., 156 S.W.3d 574 (Tex. 2005) ...............................................................39
Star-Telegram, Inc. v. Doe, 915 S.W.2d 471 (Tex. 1995).......................................41
Sterling v. Alexander, 99 S.W.3d 793 (Tex. App.—Houston [14th Dist.]
2003, pet. denied) ..........................................................................................47
Swett v. At Sign, Inc., No. 2-08-315-CV, 2009 Tex. App. LEXIS 3579
(Tex. App.—Fort Worth May 21, 2009, no pet.) (mem. op.) .......................37
Tarrant Restoration v. Tex Arlington Oaks Apts., Ltd., 225 S.W.3d 721
(Tex. App.—Dallas 2007, no pet.) ......................................................... 40, 41
Tenneco, Inc. v. Enter. Prods. Co., 925 S.W.2d 640 (Tex. 1996),
rev’d on other grounds, 379 S.W.3d 267 (Tex. 2012) ..................................35
4
Univ. of Tex. Health Science Ctr. v. Bailey, 332 S.W.3d 395 (Tex. 2011) .............39
Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex. 2005)..................... 40, 41
Wawarosky v. Fast Grp. Houston Inc., No. 01-13-00466-CV, 2015 Tex.
App. LEXIS 1522 (Tex. App.—Houston [1st Dist.] Feb. 17, 2015,
no pet. h.) (mem. op.) ................................................................................9, 37
STATUTES AND RULES
Texas Business & Commerce Code § 17.45(5) .........................................................7
Texas Business & Commerce Code § 17.46(b) .........................................................7
Texas Business & Commerce Code § 17.46(b)(8), .................................................20
Texas Business & Commerce Code §17.46(b)(12) .................................................20
Texas Business & Commerce Code §17.46(b)(24) .................................................20
Texas Business & Commerce Code § 17.49(f)................................................. 21, 23
Texas Business & Commerce Code § 17.50(a) .......................................................23
Texas Business & Commerce Code § 17.50(a)(1) ....................................................7
Texas Business & Commerce Code § 17.50(a)(1)(A) .............................................23
Texas Business & Commerce Code § 17.50(a)(3) ....................................................7
Texas Business & Commerce Code § 17.565................................................... 21, 23
Texas Civil Practice & Remedies Code § 16.068................................. 31, 33, 37, 39
Texas Rule of Appellate Procedure 38.1(d)...............................................................9
Texas Rule of Appellate Procedure 38.1(i) .............................................................32
Texas Rule of Appellate Procedure 44.1(a) (1) .......................................................37
Texas Rule of Civil Procedure 45(a) .......................................................................39
Texas Rule of Civil Procedure 166a(c)................................................. 25, 31, 33, 34
Texas Rule of Civil Procedure 166a(i) ....................................................................42
5
OTHER AUTHORITIES
Judge David Hitner & Lynne Liberato, Summary Judgments in Texas:
State and Federal Practice, 46 Houston L. Rev. 1379 (2010)...................... 34
6
STATEMENT OF THE CASE1
This action arises out of a “Demand Promissory Note and Security
Agreement” (the Agreement) pursuant to which Appellant K.W. Ministries, Inc.
(KWM) obtained floor-plan financing from Appellee Auction Credit Enterprises,
LLC (ACE) for the purchase of vehicles by KWM’s former used-car business.2
KWM’s “Original Petition” (the Petition) alleged five causes of action:
(1) defamation, (2) false, misleading or deceptive acts or practices in violation of
Sections 17.46(b) and 17.50(a)(1) of the Texas Deceptive Trade Practices Act (the
DTPA),3 (3) unconscionable actions or courses of action in violation of Sections
17.45(5) and 17.50(a)(3) of the DTPA,4 (4) fraud, and (5) breach of contract (i.e.,
the Agreement).5
ACE moved for a no-evidence and traditional summary judgment on each
cause of action and a traditional summary judgment on certain of its affirmative
1
The “Clerk’s Record” will be cited “CR” followed by the relevant page(s) and a
parenthetical identifying the cited document (e.g., CR7-13 (Pet.)). The “Reporter’s Record” will
be cited as “RR” followed by the relevant page(s) and line(s) (e.g., “RR __:_.”).
The pages of KWM’s Brief are not numbered. So that ACE can refer to specific pages of
it, Exhibit A hereto is a copy of the Brief on which handwritten page numbers have been written.
Citations to the Brief’s pages are to the interlineated ones on Exhibit A.
2
CR5, 23 (Orig. Pet. ¶ 6 & Exh. A (the Agreement)).
3
Tex. Bus. & Com. Code §§ 17.46(b), 17.50(a)(1).
4
Id. §§ 17.45(5), 17.50(a)(3).
5
CR7-20 (Orig. Pet.).
7
defenses.6 The Court granted the motion, entering a final summary judgment that
did not specify the grounds on which it was granted.7 KWM timely appealed.8
STATEMENT REGARDING ORAL ARGUMENT
Oral argument should not be granted in this appeal because the appeal is
frivolous. As discussed below, KWM’s brief (the Brief or Br.) does not comply
with Texas Rule of Appellate Procedure 38 and does not raise any appellate issues
because its arguments are not clear and concise and generally fail to cite relevant
legal authorities or the record. For example, even though the trial court granted a
no-evidence summary judgment, the Brief not only fails to identify the elements of
each cause of action challenged by the summary-judgment motion, but, even
worse, fails to identify any specific evidence raising a fact issue with respect to
each challenged element. The Brief also fails to mention each affirmative defense
on which the traditional summary judgment was granted.
KWM’s argument that the trial court “erred when it failed to consider
[KWM’s] amended [summary-judgment] response”9 ignores the proper standard of
review and is frivolous because (1) it is contrary to Texas Rule of Civil Procedure
166a(c)’s express language, and (2) is based on the relation-back doctrine—a
6
CR69 (Am. MSJ).
7
CR600 (Final Summary Judg.).
8
CR602 (Notice of Appeal).
9
Br. “Argument” § II, at 17.
8
doctrine relating to limitations and pleadings and not to summary-judgment
responses.
ACE needlessly was forced to waste tens of thousands of dollars defeating
KWM’s meritless claims in the trial court and in preparing this brief, it should not
be forced to waste thousands of dollars more on oral argument in a frivolous
appeal.
STATEMENT OF FACTS
Even though Texas Rule of Appellate Practice 38.1(d) required the Brief’s
“Statement of Facts” to be “supported by record references,” the statement is a
mere regurgitation of the Petition’s “Statement of Facts” with minor
modifications.10 In fact, every “record reference” in the statement is to the
Petition. As this is an appeal from a summary judgment and as pleadings are not
proper summary-judgment evidence,11 the Statement of Facts is unsupported by
any such evidence.12 Moreover, many of the factual assertions in the Statement of
10
Compare Br. Statement of Facts (6-15) with Pet. ¶¶ 7-20 (CR6-11).
11
E.g., Laidlaw Waste Sys., Inc. v. City of Wilmer, 904 S.W.2d 656, 660 (Tex. 1995)
(“Generally, pleadings are not competent evidence, even if sworn or verified”). Although the
Petition contained a number of exhibits, they also are not proper summary-judgment evidence
because “[d]ocuments submitted as summary judgment proof must be sworn to or certified.
‘Unauthenticated or unsworn documents, or documents not supported by any affidavit, are not
entitled to consideration as summary judgment evidence.’” Wawarosky v. Fast Grp. Houston,
Inc., No. 01-13-0446-CV, 2015 Tex. App. LEXIS 1522 (Tex. App.—Houston [1st Dist.] Feb. 17,
2015, no pet. h.) (mem. op.) (quoting Mackey v. Great Lakes Invests., Inc., 255 S.W.3d 243, 252
(Tex. App.—San Antonio 2008, pet. denied)).
12
As discussed below, the trial court granted ACE’s amended summary-judgment
motion. CR69-406. KWM’s original response to the motion was unaccompanied by any
9
Facts are not supported by citations to the Petition, presumably because the
Petition does not support them.13
Because there is no summary-judgment evidence supporting KWM’s
version of the facts and because the material facts set forth in the Brief’s
“Statement of Facts” are untrue, ACE takes issue with every such fact in it and
below sets forth an accurate statement of facts based on the uncontroverted
summary-judgment evidence.
A. The Parties.
KWM is a Texas not-for-profit corporation that purports to operate a
ministry.14 It is owned and operated by Kenneth Williams (Williams), a self-
summary-judgment evidence. CR407-24. Although KWM filed an amended response on the
day of the summary-judgment hearing containing summary-judgment evidence, the trial court
denied KWM’s oral request at the hearing for leave to file it, CR600 (Final Summ. Judg.), and
the Statement of Facts does not cite that evidence. In fact, that evidence is not even cited in the
Brief’s arguments. See Br. “Argument” §§ III-IV, at 19-21. Rather, KWM simply refers the
Court to portions of the amended response. Id.
13
See, e.g., Br. at 8 (“At the outset of their relationship, and at all times thereafter,
Defendant instructed Plaintiff to make payment checks payable to “AAA” and not to [ACE].
Not knowing the reason or justification for this request, Plaintiff nonetheless complied with
Defendant’s instructions.”), 10 (“On November 17, 2011, Defendant finally provided Plaintiff
with a copy of the Contract. Over three (3) months had passed from the time the Contract was
signed until Defendant finally gave Plaintiff a copy of the Contract.”), 14 (“Defendant confirmed
this balance due by handing the written statement of its Chief Operating Officer, Tedd Martin to
Plaintiff in a meeting on December 22, 2011.”), 15 (“Defendant finally paid Plaintiff its over-
collection on proceeds of collateral in early May, 2012, almost six (6) months after it terminated
its loan relationship with Plaintiff, four and one half (4½) months from the date of its last
meeting with Plaintiff and over three and one half (3½) months after its last sale of any
vehicles.”).
14
CR150 (Am. MSJ at 82 (Williams Depo. at 7)).
10
proclaimed minister.15 KWM, during its more than six years in existence,16 has
never filed a federal-income tax return and maintains no contemporaneous
accounting or financial records for any of its businesses and does not even
maintain copies of all of its bank statements.17
In addition to its “ministry,” KWM currently is in the home-remodeling
business and formerly was in the used-car business.18 The latter business, which is
the subject of this action, operated under the name “C.R.U.S.H. Auto Sales.”19
KWM began selling used vehicles in May 201020 at a used-car lot located on
East Lancaster in Fort Worth, Texas.21 In or about December 2011, it moved its
used-car lot to a location on South East Loop 820 in Fort Worth after learning that
the person from whom it was leasing the East Lancaster location did not own it and
15
The exact nature of KWM’s ministry is unclear. CR150-51 (Am. MSJ at 82-83
(Williams Depo. at 7-8)). It is, however, clear that Williams, KWM’s guiding force, has a
checkered past with jobs running the gambit from mechanic to day-care owner to home-
remodeling franchisee to pastor and has had run-ins both with the law and his creditors. CR163-
67 (Am. MSJ at 95-99 (Williams Depo. at 23-25, 88-90, 95-99)).
16
CR152 (Am. MSJ 84 (Williams Depo. at 9)).
17
CR172-74 (Am. MSJ at 104-106 (Williams Depo. at 108-10)).
18
CR184-55 (Am. MSJ at 86-87 (Williams Depo. at 14-15)).
19
CR153-54, 159 (Am. MSJ at 85-86, 91 (Williams Depo. at 13-14, 26)).
20
CR212, 159 (Am. MSJ at 144 (Sewell Depo. at 22), 91 (Williams Depo. at 26)).
21
CR213 (Am. MSJ at 145 (Sewell Depo. at 26)).
11
that it was not zoned for use as a used-car lot.22 KWM’s small inventory of used
vehicles was purchased at used-car and salvage auctions.23
ACE provides, among other things, floor-plan financing for used car
dealers.24 Floor-plan financing provides a car dealer with a revolving credit line to
finance vehicle purchases.25
ACE’s typical floor-plan financing plan provides for a 56-day “Advance”
(or loan) for the vehicle’s purchase price. An Advance generally must be paid the
earlier of when it is due or immediately upon the vehicle’s sale, together with a
floor-plan fee, interest, and a dealer-reserve fee.26 If the vehicle does not sell
within the Advance’s 56-day term, ACE, in the exercise of its sole discretion and
upon the dealer’s request, can make an “Extension” on the Advance for another 28
22
CR213-15 (Am. MSJ. at 145-47 (Sewell Depo. at 26-28)).
23
CR216 (Am. MSJ at 148 (Sewell Depo. at 30)).
24
CR280 (Am. MSJ at 212 (Valdes Aff. ¶ 2)).
25
Id.
26
CR133, 145, 280-91 (Am. MSJ at 65, 77 (Agr. § 2.3(e) and Term Sheet), 212-23
(Valdes Aff. ¶ 3)). Section 2.3(e) of the Agreement provides that “Dealer shall pay all
Obligations . . . with respect to Lender-Financed Inventory on the earlier of: (a) twenty-four (24)
hours from the time Dealer receives payment by or on behalf of the purchasers of an item of
Lender-Financed Inventory, (b) forty-eight (48) hours after the disposition by sale or otherwise
of an item of Lender-Financed Inventory, (c) the Maturity Date [of an Advance] or (d) upon
demand by Lender.” CR133 (Am. MSJ at 65).
The “dealer-reserve fee” is a fee charged on each Advance and is placed in a “Reserve
Account.” The account’s purpose is to provide ACE with additional security for the dealer’s
performance under the Agreement. CR140, 329 (Am. MSJ at 72 (Agr. § 12.12); 261 (Valdes
Supp. Aff. ¶ 4)). Any excess funds from the sale of repossessed vehicles after a dealer’s default
also are placed in the Reserve Account. CR329 (Am. MSJ at 261 (Valdes Supp. Aff. ¶ 4)).
12
days.27 When an Extension is granted, the dealer must repay at least 20 percent of
the Advance’s outstanding principal amount as well as interest and a floor-plan
fee.28 Like an Advance, an Extension generally must be repaid the earlier of when
it is due or immediately upon the vehicle’s sale.29
B. KWM And ACE Enter Into A Floor-Plan Financing Agreement.
In August 2011, Joe Madrid (Madrid), ACE’s Irving, Texas, Branch
Manager, met with Williams and KWM’s “general counsel,” Yolonda Sewell
(Sewell), about ACE’s floor-plan financing program.30 Williams told Madrid that
KWM and he had poor credit and that he wanted to upgrade KWM’s used-car
inventory by using floor-plan financing to purchase newer and better quality used
vehicles.31
As required by ACE, Williams filled out a credit application.32
Unbeknownst to ACE, the application was rife with lies. For example, it
misrepresented the amount of time in which KWM had been in the used-car
27
CR281 (Am. MSJ at 213 (Valdes Aff. ¶ 4)).
28
Id.
29
CR133, 281 (Am. MSJ 65 (Agr. § 2.3(e), 213 (Valdes Aff. ¶ 4)).
30
CR128-29 (Am. MSJ at 60-61 (Madrid Aff. ¶ 3)).
31
Id.
32
CR242-43 (Am. MSJ at 174-75 (Sewell Depo. Exh. 4 (Credit Application)).
13
business and its average monthly vehicle sales.33 ACE would never have approved
KWM’s application had it known that any of the information on the credit
application was false.34
Williams also told Madrid that KWM was willing to give ACE titles to
certain vehicles that it owned outright as collateral for floor-plan loans.35 ACE
would not have agreed to provide floor-plan financing to KWM had KWM not
agreed to do this.36 In fact, ACE often requires dealers with poor credit histories,
such as KWM, to provide such titles as collateral.37
On August 11, 2011, KWM signed a floor-plan financing agreement with
ACE (i.e., the Agreement),38 which provided a $75,000 floor-plan revolving credit
line for vehicle purchases.39 The Agreement was signed at ACE’s Irving, Texas,
office by Williams. Because Williams always has Sewell review KWM’s
33
Williams represented in the application that that KWM had been a dealer for “2+”
years and that it had been operating at the East Lancaster location for that period of time, when,
in fact, KWM had began operating only for about fifteen months. CR242, 183-84 (Am. MSJ at
174 (Sewell Depo. Exh. 4), 115-16 (Williams Depo. at 141-42)). Worse, he represented in the
application that KWM averaged fifteen vehicle sales per month, when it had never sold more
than thirteen vehicles in a month and only averaged six sales per month. CR312 (Am. MSJ at
244 (Reynolds Aff. Exh. C)).
34
CR326 (Am. MSJ at 258 (Supp. Madrid Aff. ¶ 5)).
35
CR128-29 (Am. MSJ at 60-61 (Madrid Aff. ¶ 3)).
36
CR129, 333-34 (Am. MSJ at 61 (Madrid Aff. ¶ 4); 265-66 (Supp. Valdes Aff. ¶ 21)).
37
CR129, 333-34 (Am. MSJ at 61 (Madrid Aff. ¶ 4); 265-66 (Supp. Valdes Aff. ¶ 21)).
38
CR128, 133-45 (Am. MSJ at 60, 65-77 (Madrid Aff. ¶ 2 & Exh. A)).
39
Id.; see also CR281-82 (Am. MSJ at 212-13 (Valdes Aff. ¶ 3)).
14
contracts before he signs them, he brought Sewell with him to ACE’s office.40
Curiously, however, Sewell reviewed only part of the Agreement before Williams
signed it.41 And, Williams, who claimed that he had questions about certain of its
provisions, including its provisions regarding Extensions, never bothered to discuss
them with Sewell, Madrid, or any other ACE employee before signing the
Agreement.42
Under the Agreement, the decision whether to make an Advance to KWM
for the purchase of a vehicle, as well as the decision to make an Extension, was
within ACE’s sole discretion.43 Likewise, KWM had no obligation to finance its
used-car purchases through ACE.44 Under the Agreement, ACE also had the right,
for any or no reason, to call all of KWM’s “Obligations” (i.e., outstanding
Advances and Extensions) at any time (i.e., on “demand”).45 To ensure the full and
40
CR168-69, 220-21 (Am. MSJ at 100-01 (Williams Depo. at 72-73), 152-53 (Sewell
Depo. at 40-41)).
41
CR168-69, 221-22 (Am. MSJ at 100-01 (Williams Depo. at 72-73), 153-54 (Sewell
Depo. at 41-42)).
42
CR169-70 (Am. MSJ at 101-02 (Williams Depo. at 73-74)).
43
See CR133 (Am. MSJ at 65 (Agr. §§ 2.3(a) (“The decision to make an Advance to
Dealer is the exclusive right of Lender, and Dealer understands and agrees that Lender may
refuse to make an Advance at any time, with or without cause and without prior notice to
Dealer . . . .” (emphasis added)), 2.3(f) (“If Dealer is in compliance with all other provisions of
this Agreement, Lender may, in its sole discretion, permit an Extension of the Maturity Date
relative to an item of Lender-Financed Inventory . . . .” (emphasis added))).
44
CR133 (Am. MSJ (Agr. §§ 2.3(a) and 2.3(f))).
45
CR133 (Am. MSJ (Agr. § 2.3(e))).
15
prompt payment of Advances and Extensions under the Agreement, KWM gave
ACE a security interest in, among other things, all of its vehicles and other
property, and not merely in those vehicles financed by ACE. 46
C. KWM Defaults Under The Agreement.
Shortly after entering into the Agreement, the parties’ relationship soured
because (1) KWM’s checks began bouncing, (2) KWM sold vehicles “out-of-trust”
(i.e., selling vehicles without immediately repaying the Advance or Extension
relating to it), and (3) KWM failed to repay Advances at all.47 On November 16,
2011, as permitted by the Agreement, ACE demanded full payment of all
outstanding amounts due and owing under the Agreement (i.e., all Advances and
Extensions) and further advised KWM that it would no longer make Advances or
Extensions to KWM.48 ACE also repossessed a number of vehicles whose titles
were in its possession. It, however, refrained from immediately selling those
46
CR133-34 (Am. MSJ at 66-67 (Agr. § 3.1)).
47
CR129-30, 246, 247, 255, 275-79 (Am. MSJ at 61-62 (Madrid Aff. ¶¶ 8-9), 178
(Sewell Depo. Exh. 11 (November 8, 2011 Madrid email asking when KWM would pay past due
on Advances), 179 (Sewell Depo. Exh. 12 (November 15, 2011 Madrid email noting that KWM
was past due on six Advances)), 187 (Sewell Depo. Exh. 19 (November 18, 2011 Madrid letter
noting that KWM had sold six vehicles out-of-trust)), 207-11 (Sewell Depo. Exhs. 28-29 (NSF
checks in the amounts of $9,940 and $6,780))).
48
CR248-50 (Am. MSJ at 180-82 (Sewell Depo. Exh. 13 (11/21/11 Williams letter))).
ACE properly demanded full payment of KWM’s indebtedness and properly declined to make
future Advances or Extensions because the decision to make Advances or Extensions was solely
in ACE’s discretion, see CR133 (Am. MSJ at 65 (Agr. §§ 2.1, 2.3(f))), and because the
Advances were demand loans, id. (Agr. § 2.3(e) (requiring KWM to pay all “Obligations” on
“demand”)).
16
vehicles at auction because KWM repeatedly promised to repay its indebtedness
under the Agreement promptly.49 After KWM failed to honor its promises, ACE
sold five of the vehicles through independent and well-attended automobile
auctions and applied the sales proceeds to KWM’s indebtedness under the
Agreement, all as permitted by the Agreement.50 ACE then refunded $4,723 to
KWM, which was the balance of KWM’s Reserve Account.51
D. ACE Reports KWM’s Default To Auction Insurance Agency (AIA).
AIA is an insurer that, among other things, insures automobile auctions
against NSF checks and other payment defaults by dealers who purchase vehicles
at their auctions.52 It is affiliated with AutoTec LLC and AuctionACCESS, a
dealer registration system that provides memberships to car dealers, which, in turn,
allows the member-dealers to purchase vehicles at certain automobile auctions.53
KWM became an AuctionACCESS member in about May 2010.54
On November 18, 2011, ACE informed Sam Compton (Compton), an AIA
Recovery and Loss Prevention Agent, that KWM had given ACE an NSF check
49
CR244-45, 251-54, 256-74 (Am. MSJ at 176-77, 183-86, 188-206 (Sewell Depo. Exhs.
10, 17, 18, 20, 21, 22, 24, 25, 26)).
50
CR130, 138-39 (Am. MSJ at 62, 70-71 (Madrid Aff. ¶¶ 10-11, Agr. §§ 11.3, 11.9).
51
CR282, 289-91, 330-31, 336-38 (Am. MSJ at 214, 221-23 (Valdes Aff. ¶ 8 & Exhs. C-
D); 262-63, 268-70 (Supp. Valdes Aff. ¶¶ 12-13 & Exhs. A-B)).
52
CR292 (Am. MSJ at 224 (Compton Aff. ¶ 2)).
53
CR294 (Am. MSJ at 226 (Dukes Aff. ¶ 2)).
54
CR295 (Am. MSJ at 227 (Dukes Aff. ¶ 3)).
17
and had defaulted on its floor-plan credit line.55 AIA subsequently informed its
insured auctions that no further coverage would be provided under its insurance
policies with respect to KWM’s checks for the purchase of vehicles at their
auctions.56
Compton contacted Williams on November 22, 2011, to inform him about
ACE’s report. He also told Williams how KWM could have its checks once again
covered by AIA’s insurance policies, which, in turn, would have allowed it to
purchase vehicles at certain auctions.57 Williams was uninterested in having KWM
reinstated by AIA.58
Later in November 2011, KWM allegedly was told by an auction that it
could not purchase vehicles at auction because of ACE’s report to AIA.59
Thereafter, KWM never again attempted to buy vehicles at an auction60 or made
any effort to be reinstated by AIA, as Compton told Williams it could be.61
55
CR293 (Am. MSJ at 225 (Compton Aff. ¶ 4)).
56
Id.
57
Id.
58
Id. (Am. MSJ at 225 (Compton Aff. ¶ 5)).
59
CR216-17, 226-28, 230-31, 189-96 (Am. MSJ at 148-49, 158-60, 162-63 (Sewell
Depo. at 30-31, 146-48, 152-53), 121-28 (Williams Depo. at 199-206)).
60
CR218-19 (Am. MSJ at 150-51 (Sewell Depo. at 32-33)).
61
CR293 (Am. MSJ at 225 (Compton Aff. ¶ 5)).
18
E. KWM Sues ACE.
On May 7, 2012, KWM sued ACE (the 2012 Action), asserting claims for
the Agreement’s breach, fraud, and defamation.62 Because KWM was represented
by Sewell, who was a critical fact witness regarding the Agreement’s execution
and KWM’s dealings with ACE, ACE moved to disqualify her from acting as
KWM’s trial attorney in the action.63 On October 17, 2012, the trial court granted
ACE’s motion and ordered KWM to obtain new trial counsel within thirty days.64
After KWM failed to do so, the Court dismissed the 2012 Action without
prejudice.65
F. KWM Sues ACE Again.
On December 12, 2013, more than a year after the 2012 Action was
dismissed, KWM filed this action. It asserted the same contract, fraud, and
defamation claims asserted in the 2012 Action.66 In addition, it asserted DTPA
claims.67 Specifically, KWM alleged that ACE:
62
CR90 (Am. MSJ at 22).
63
Id.
64
Id. Notwithstanding her disqualification and this Court’s denial of KWM’s mandamus
petition regarding it, see In re K.W. Ministries, Inc. d/b/a CRUSH Auto Sales, No. 05-13-0085-
CV, Memorandum Op. (Jan. 28, 2013), Sewell is KWM’s lead attorney in this appeal.
65
CR90 (Am. MSJ at 22).
66
CR11-18 (Pet. ¶¶ 21-51).
67
CR18-20 (Pet. ¶¶ 52-64).
19
 breached the Agreement by (1) charging greater than permitted NSF-
check fees, (2) requiring KWM to make payments with “certified
funds” after it gave ACE two NSF checks, (3) failing to grant
Extensions under the Agreement, (4) foreclosing on two vehicles after
they allegedly had been sold by KWM, (5) charging for multiple lot
checks, (6) repossessing vehicles that had more than “double the
value” of KWM’s indebtedness to ACE, (7) repossessing vehicles
after KWM defaulted on the Agreement instead of exercising its rights
against KWM’s bond, (8) failing to return any excess proceeds from
the sale of the repossessed/seized vehicles and/or KWM’s reserve
account to KWM after the parties’ relationship ended, and (9) failing
to provide an accounting;68
 defrauded KWM into entering into the Agreement by misrepresenting
that KWM had to provide the titles to certain vehicles as collateral to
obtain floor-plan financing;69
 defamed KWM when ACE “published a statement by oral
communication and conduct to AIA asserting as fact that [KWM] did
not pay its bills [sic] that [KWM] owed [ACE] money when it did
not;”70
 engaged in false, misleading, and deceptive acts or practices in
violation of DTPA §§ 17.46(b)(8), (12), and (24)71 “when [ACE]
informed [KWM] that relinquishment of titles to four high-end
vehicles was necessary to obtain floor-plan financing” (i.e., the same
alleged misrepresentation underlying the fraud claim);72 and
 engaged in five unconscionable actions or courses of action in
violation of the DTPA: (1) demanding and obtaining free and clear
68
CR11-14, 314-15 (Pet. ¶¶ 21-31); Am. MSJ at 246-47 (KWM’s Sec. Am. Resp. to
Interrog. 2).
69
CR14 (Pet. at ¶ 33); see also CR318 (Am. MSJ at 250 (KWM’s Sec. Am. Resp. to
Interrog. 3), 117-19 (Williams Depo. at 156-58), 161 (Sewell Depo. at 150)).
70
CR16 (Pet. at ¶ 44).
71
Tex. Bus. & Comm. Code §§ 17.46(b)(8), (12), (24).
72
CR320 (Am. MSJ at 252 (KWM’s Sec. Am. Resp. to Interrog. 4)).
20
certificates of title that were unnecessary for floor-plan financing,
(2) failing to provide an accounting, (3) failing to return excess
proceeds, (4) charging fees for vehicles that were never
repossessed/seized by ACE, and (5) repossessing/seizing vehicles
under retail-installment contracts.73
Even though KWM’s credit line was only $75,000 and its relationship with
ACE lasted only about three months during which it floor-planned only ten
vehicles, KWM claimed that it suffered hundreds of thousands of dollars in
economic damages from ACE’s alleged wrongdoing.74
ACE’s “Answer,” in addition to generally denying KWM’s
allegations, asserted the following affirmative defenses, among others:
....
5. Plaintiff’s defamation claim is barred (a) because any
alleged defamatory statements were true, (b) because any alleged
defamatory statements were privileged, and (c) by the one-year
limitations period applicable to defamation claims,
6. Plaintiff’s DTPA claims are barred (1) because the
transaction is exempt under Section 17.49(f) of the DTPA, Tex. Bus.
& Comm. Code § 17.49(f), and (b) by the two-year limitations period
of Section 17.565 of the DTPA,
. . . . .75
On July 8, 2014, ACE filed a traditional summary-judgment motion on all of
KWM’s claims and certain of ACE’s affirmative defenses.76 The motion was set
73
CR322 (Am. MSJ at 254 (KWM’s Sec. Am. Resp. to Interrog. 5)).
74
E.g., CR316 (Am. MSJ at 248 (KWM’s Sec. Am. Resp. to Interrog. 2)).
75
CR67 (Ans. at 2 (citations omitted)).
21
for hearing on Friday, August 8, 2014.77 A few days before the hearing, KWM
filed a slew of motions in an effort to delay it, including motions to compel
discovery and for a continuance.78 As a result, ACE agreed to continue the
summary-judgment hearing until Monday, September 15, 2014.79
ACE filed an amended summary-judgment motion on August 25, 2014 (the
Amended MSJ). It was identical to the original motion except that it also sought a
no-evidence summary judgment on each of KWM’s claims.80 Specifically, the
Amended MSJ argued the following:
 The Defamation Claim. ACE was entitled to a traditional summary
judgment on the claim because (1) it was barred by the one-year
limitations period for defamation claims, (2) the alleged defamatory
statements were true, (3) the alleged defamatory statements were
subject to a qualified privilege, and/or (4) KWM failed to mitigate its
damages. ACE also was entitled to a no-evidence summary judgment
on the defamation claim because there was no evidence establishing
that KWM was damaged by the alleged defamatory statements and/or
the dollar amount of the damages.81
 The DTPA Claim for False, Misleading, or Deceptive Acts or
Practices. ACE was entitled to a traditional summary judgment on
the claim because (1) the alleged representation (i.e., the vehicle titles
had to be provided as security to obtain floor-plan financing) does not
76
CR612, 614 (Docket Sheet at 4,6).
77
See RR33-34; CR612, 614 (Docket Sheet at 4, 6).
78
CR612 (Docket Sheet at 4).
79
CR614 (Docket Sheet at 6).
80
CR66 (Am. MSJ).
81
CR77, 93-97, 125-26 (Am. MSJ at 9, 25-29, 57-58).
22
constitute a laundry-list violation as required by DTPA §
17.50(a)(1)(A),82 (2) the representation was true—ACE would not
have extended floor-plan financing to KWM without the titles, (3) the
representation was not a producing cause of KWM’s economic
damages as KWM was able to sell the vehicles at any time even
though ACE held their titles as collateral and, in any event, the
Agreement gave ACE a security interest in the vehicles (and all of
KWM’s used-car business’s other assets), (4) the claim was barred by
the DTPA’s two-year limitations period,83 (5) the claim was barred by
the DTPA’s exemption for claims arising out of written contracts
involving more than $100,000,84 and/or (6) KWM failed to mitigate
its damages. ACE also was entitled to a no-evidence summary
judgment on the DTPA claim because there was no evidence
establishing that (a) there was a laundry-list violation as required by
DTPA §17.50(a)(1)(A), (b) the violation was a producing cause of
KWM’s economic damages as required by DTPA §17.50(a),85 (c)
KWM was damaged by the alleged false, misleading, or deceptive act
or practice, and/or (d) the dollar amount of the DTPA damages.86
 The DTPA Claim for Unconscionable Actions or Courses of
Action. ACE was entitled to a traditional summary judgment on the
claim because (1) none of the actions underlying it constitute an
unconscionable action or course of action within the DTPA’s
meaning, (2) the claim was barred by the DTPA’s two-year limitation
period, (3) the claim was barred by the DTPA’s exemption for claims
arising out of written contracts involving more than $100,000, and/or
(4) KWM failed to mitigate its damages. ACE also was entitled to a
no-evidence summary judgment on the DTPA claim because there
was no evidence establishing (a) that any of the alleged wrongful acts
constitute an unconscionable action or course of action within the
DTPA’s meaning, (b) that any of the alleged unconscionable actions
or courses of action were a producing cause of KWM’s economic
82
Tex. Bus. & Comm. Code § 17.50(a)(1)(A).
83
Id. § 17.565.
84
Id. § 17.49(f).
85
Id. § 17.50(a).
86
CR77-78, 97-103, 125-26 (Am. MSJ at 9-10, 29-35, 57-58).
23
damages, (c) that KWM was damaged by the alleged unconscionable
actions or courses of action, and/or (d) the dollar amount of KWM’s
DTPA damages.87
 The Fraud Claim. ACE was entitled to a traditional summary
judgment on the claim, which was based on the same alleged
misrepresentation underlying KWM’s DTPA claim for false,
misleading, or deceptive acts or practices (i.e., ACE’s alleged
representation to KWM that, to obtain floor-plan financing, KWM
had to give ACE, as collateral, titles to certain vehicles that it owned
outright), because (1) the representation was true—ACE would not
have extended floor-plan financing to KWM without the titles, (2)
KWM was not damaged by the alleged fraud as KWM was able to sell
the vehicles at any time even though ACE held their titles as security
and, in any event, the Agreement gave ACE a security interest in the
vehicles, and/or (3) KWM failed to mitigate its damages. ACE also
was entitled to a no-evidence summary judgment on the fraud claim
because there is no evidence establishing (a) that the representation
was false, (b) that KWM was damaged by it, and/or (c) the dollar
amount of KWM’s fraud damages.88
 The Contract Claim. ACE was entitled to a traditional summary
judgment on the contract claim because (1) each of the alleged
breaches either did not occur or did not violate the Agreement’s
provisions, and/or (2) KWM failed to mitigate its damages. ACE also
was entitled to a no-evidence summary judgment on the contract
claim because there was no evidence establishing (a) that ACE
breached the Agreement, (b) that KWM was damaged by the alleged
breaches, and/or (c) the dollar amount of the contract damages.89
87
CR78-79, 104-10, 125-26 (Am. MSJ at 10-11, 36-42, 57-58).
88
CR79-80, 111-13, 125-26 (Am. MSJ at 11-12, 43-45, 57-58).
89
CR80-81, 113-26 (Am. MSJ at 11-13, 45-58).
24
On September 8, 2014, the last day to timely file a response to the amended
summary-judgment motion,90 KWM filed one (the Original Response).91 The
Original Response, which was unaccompanied by any summary-judgment
evidence, addressed only one of KWM’s five claims—the defamation claim,
arguing that it was not barred by limitations and that the allegedly defamatory
statements were not subject to a qualified privilege.92 It also argued that ACE’s
summary affidavits (i.e., the Madrid, Valdes, and Reynolds affidavits) should not
be considered for a number of bogus reasons.93 Curiously, the Original Response
wholly ignored ACE’s request for a no-evidence summary judgment, failing to
direct the trial court to any evidence creating a fact issue with respect to any of
elements of KWM’s claims challenged by the Amended MSJ.94
In addition to the Original Response, KWM, in a bad faith attempt to delay
the summary-judgment hearing and its day of reckoning further, again filed
90
Tex. R. Civ. P. 166a(c) (providing that a summary judgment response must be filed
“not later than seven days prior to the hearing”); Br. “Argument” § II, at 17 (admitting that
KWM’s “response was due on or before September 8, 2015 [sic]”).
91
CR407 (Orig. Resp.).
92
CR415-18 (Orig. Resp. at 9-12).
93
CR419-23 (Orig. Resp. at 13-17). KWM also filed a motion to strike the affidavits
primarily because they were undated. RR27-28. The motion, which is not in the appellate
record, was denied by the trial court. CR600 (Final Summary Judg. (“the Court hereby . . .
denies Plaintiff’s motions”)). More importantly, KWM has waived any error regarding the
affidavits because the Brief does not mention them.
94
CR407 (Orig. Resp.).
25
motions to compel and for continuance,95 neither of which are part of the appellate
record and only one of which, the continuance motion, was set for hearing.96
As evidenced from the summary-judgment hearing transcript, the motion to
compel falsely claimed that ACE had failed to provide complete information about
other lawsuits by its customers alleging fraud, DTPA, or defamation claims,97
whereas the continuance motion sought a continuance of the summary-judgment
hearing so that KWM could investigate the facts surrounding the other lawsuits
and not because it needed additional time to respond to the Amended MSJ’s
arguments or to obtain affidavits or other evidence to support its claims or contest
ACE’s affirmative defenses.98
Perhaps most importantly, not only had KWM thoroughly questioned
Madrid about the “other lawsuits” during his deposition,99 but the trial court also
recognized, and KWM’s attorney even admitted, that the lawsuits were irrelevant
to the issues raised by the Amended MSJ:
THE COURT: . . . I did want to give you the opportunity to try
to help the Court understand what the discovery is that you claim
you’ve been diligent in trying to pursue, notwithstanding that
95
See RR4-27 (discussing the motions); CR613 (Docket Sheet at 3).
96
RR8:1-7; CR613 (Docket Sheet at 3).
97
RR4-27.
98
Id.
99
RR16-19.
26
diligence you haven’t gotten, and it limits your ability to respond to
the motion for summary judgment.
I have to be honest with you, Mr. Leslie, I don’t entirely
understand the answers to all of those questions. You have told me
about a lot of things that, to Mr. Wise’s point and in fairness, they are
not in the record that’s in front of me on the motion for continuance
....
But even if I were to . . . consider what you have said . . ., there still is
this hole in this respect, two things: One, I still haven’t heard on what
issue related to this summary judgment these lawsuits . . . would
provide any type of evidence that you think is relevant to your being
able to respond to the motion for summary judgment; but the second
issue . . . is that as it relates to the DTPA claims, the defamation
claim, the DTPA laundry list and the unconscionable conduct claims,
the motions [sic] posit legal grounds for the Court to dispose of those
claims, arguably things that you could respond to without any
additional evidence . . . . And I don’t know, frankly, what evidence
you would need to be able to respond to some of the legal arguments
that are made.
.....
. . . I haven’t heard about anything related to these other lawsuits that
these other lawsuits that has to do with your ability to respond to
those legal arguments, yet you filed a response that doesn’t cite any
authority or attach any evidence which you have the ability to get.
Your client’s affidavit. Your client is here. He has been here. He was
here at the last proceeding. You have the ability to get his affidavit on
different points. So you have that. And so I don’t really understand
why you haven’t been able to respond to both the legal arguments and
even the argument of truth being a defense.
So tell me . . .—what these lawsuits have to do with that, those
aspects of the defamation claim.
MR. LESLIE: On the issue of limitations, Your Honor, the
lawsuits don’t have anything to do with it. . . .
....
27
THE COURT: What do the lawsuits have to do with
responding to the argument about the limitations argument and the
exemption arguments [i.e., DTPA § Section 17.49(f), Tex. Bus. &
Comm. Code § 17.49(f)]?
MR. LESLIE: Nothing.
THE COURT: And as it relates to . . . the [DTPA] laundry list
[violations], . . . the lawsuits obviously don’t bear on that.
MR. LESLIE: No, your honor.100
ACE promptly filed a reply to the Original Response debunking its minimal
arguments.101 On Friday, September 12, 2014, the last business day before the
summary-judgment hearing, KWM filed a “Document Supplement” to the Original
Response, which contained some unsworn and unauthenticated documents and
excerpts from Williams’ and Madrid’s deposition transcripts.102 The Document
Supplement was unaccompanied by a motion seeking leave to file it late.103
100
RR21:9-22:17, 23:2-18, 25:16-25 (emphasis added). The trial court denied the
continuance motion, CR600 (Final Summary Judg. (“the Court hereby . . . denies Plaintiff’s
motions”)), and, more importantly, KWM has waived any appellate issue regarding it because it
is not mentioned in the Brief.
101
CR425 (Reply Br.).
102
CR459 (Doc. Supp.).
103
The trial court never entered an order allowing KWM to file the Document
Supplement and KWM does not complain about this failure in the Brief. Of course, absent such
an order, the evidence was not properly before the trial court. Benchmark Bank v. Crowder, 919
S.W.2d 657, 663 (Tex. 1996) (“There is no order in this record granting the Crowders leave to
file McCool’s affidavit late. McCool’s affidavit was not properly before the trial court on the
motions for summary judgment.”).
28
Finally, on the morning of the hearing, KWM filed an amended summary-
judgment response,104 which was accompanied by Sewell’s affidavit, which related
solely to the defamation claim, some unsworn and unauthenticated documents, and
excerpts from Williams’, Sewell’s, and Madrid’s deposition transcripts105
(collectively with the amended response, the “Amended Response”). As was the
case with the Document Supplement, the Amended Response was unaccompanied
by a motion seeking leave to file it. The Amended Response was received by
ACE’s attorneys as they were leaving for the summary-judgment hearing and was
not received by the trial court before the hearing began.106
At the summary-judgment hearing, KWM’s attorney asked the trial court to
“receive my oral motion for leave to amend and accept our response to the
summary judgment motion that was filed this morning.”107 When asked point
blank by the trial court why the Amended Response had not been filed timely,
KWM’s attorney had no explanation:
104
CR483.
105
CR521-99.
106
RR23:18-21 (“MR. LESLIE: . . . We filed an amended response this morning. THE
COURT: I’m not aware of any amended response.”), 34:21-25 (“[MR. WISE:] . . . This morning
at 11:30 as Ms. Fayne and I were leaving to . . . come to court, I got an e-mail from the court
system saying he filed something. My paralegal printed it out and we read it sitting out in the
hallway.”).
107
RR33:8-11.
29
Mr. LESLIE: That is addressed in the amended response.
There’s the affidavit of Ms. Sewell, who has been previously
identified as a fact witness in this case, with which I agreed.
The COURT: So tell me why you—Ms. Sewell has been here.
She’s been here before you were here. Why would I not have an
affidavit to support the response when it was due versus the morning
of the proceeding . . . ?
Mr. LESLIE: I don’t have a satisfactory answer for that, Your
Honor.108
The trial court denied KWM’s oral request for leave to file the Amended
Response late.109
SUMMARY OF ARGUMENT
KWM first claims that the trial court “erred” in not considering the
Amended Response in ruling on the Amended MSJ because (1) a trial court must
consider any response and evidence on file before the summary-judgment hearing
irrespective of when it was filed, and (2) under Section 16.068 of the Texas Civil
Practice & Remedies Code, the Amended Response’s filing related back to the
filing of the timely Original Response. Both arguments are frivolous.
108
RR24:3-13 (emphasis added). Later during the hearing, KWM’s attorney complained
that ACE filed the Amended MSJ at the last possible minute, id. at 30:6-16, 31:2-7, and “that’s
not a lot of time for us to respond to a whole new set of summary judgment arguments[,]” id. at
31:2-7. Nonetheless, when the trial court asked him if KWM’s key witnesses, Williams and
Sewell, were unavailable between the filing of the Amended MSJ and the September 8, 2014
deadline to respond to it, he candidly admitted they were available. Id. at 30:17-20 (“THE
COURT: Is there some record in front of me that Ms. Sewell and Mr. Williams have not been
available to you between the 26th of August and the 8th of September? MR. LESLIE: There is
not.”).
109
CR600 (Final Summary Judg. (“the Court hereby . . . denies Plaintiff’s oral request at
the September 15, 2015 hearing for leave to file its amended summary judgment response”)).
30
Texas Rule of Civil Procedure 166a(c) expressly provides that “leave of
court” is required to file a summary-judgment response or summary-judgment
evidence, such as the Amended Response, less than seven days before the hearing.
Here, KWM never sought such leave and, even if it had, there was no good cause
for its failure to timely file the Amended Response.
Section 16.068 of the Texas Civil Practice and Remedies Code, by its
express terms, only applies to pleadings and pleas of limitation. A summary
judgment response is neither a pleading nor relates to limitations. Accordingly, the
trial court did not abuse its discretion in failing to consider the Amended Response.
KWM’s second and third arguments are that the trial court erred in granting
either a no-evidence or traditional summary judgment. The arguments fail for two
reasons. First, as even KWM implicitly concedes, the Original Response was
wholly inadequate to defeat summary judgment. Because KWM’s arguments are
based on the Amended Response and because the trial court did not abuse its
discretion in failing to consider it, the summary judgment must be affirmed.
Second, even if the trial court abused its discretion in not considering the
Amended Response, the Brief’s arguments are wholly conclusory, fail to address
each no-evidence and traditional summary judgment ground, fail to cite any
authorities, and fail to direct the court to the summary-judgment evidence raising a
fact issue on even the two claims and one defense mentioned in passing in the
31
Brief. Thus, they fail to comply with Texas Rule of Appellate Procedure 38.1(i)
and are inadequate. Accordingly, the summary judgment must be affirmed.
ARGUMENT
A. The Trial Court Did Not Abuse Its Discretion In Failing To Consider
The Amended Response.
1. The standard of review.
An appellate court “reviews a trial court’s ruling on a motion for leave to file
a summary-judgment response or summary-judgment evidence late for an abuse of
discretion.”110 A trial court “abuses its discretion when it acts without reference to
any guiding rules or principles.”111
2. The trial court did not abuse its discretion by not considering the
Amended Response.
KWM claims that the trial court “erred” in failing to consider the Amended
Response for two reasons.112 Initially, claiming that Texas Rule of Civil Procedure
166a(c) requires a trial court to consider any response or evidence on file at the
time of the summary-judgment hearing irrespective of when it was filed, KWM
concludes that the trial court was required to consider the Amended Response
110
Carpenter v. Cimarron Hydrocarbons Corp., 98 S.W.3d 682, 686 (Tex. 2002); accord
Brown v. Melissa 121/5 Partners, Ltd., No. 05-13-01189-CV, 2014 Tex. App. LEXIS 8467, at
*3 (Tex. App.—Dallas Aug. 4, 2014, no pet.) (mem. op.).
111
Carpenter, 98 S.W.3d at 687; accord Brown, 2014 Tex. App. LEXIS 8467, at *3.
112
Br. “Argument” § II, at 17-19.
32
because it was filed on the morning of the hearing.113 Next, it argues that, since the
Original Response was timely filed, the Amended Response also was timely filed
because, under Section 16.068 of the Texas Civil Practice and Remedies Code, the
Amended Response’s filing relates back to the Original Response’s filing.114 Both
arguments are frivolous.
a. Texas Rule of Civil Procedure 166a(c) expressly requires
leave of court to file a summary-judgment response or
summary-judgment evidence late.
KWM’s argument that Rule 166a(c) required the trial court to consider any
response or evidence filed before the summary-judgment hearing ignores the
Rule’s express language, which requires leave of court for the filing of a summary-
judgment response or summary-judgment evidence late: “Except on leave of court,
the adverse party, not later than seven days prior to the day of hearing may file and
serve opposing affidavits or other written response.”115
Unsurprisingly, given Rule 166a(c)’s clear language, the Texas Supreme
Court and this Court repeatedly have held that the Rule requires leave of court for
such late filings.116 As recently explained by this Court:
113
Id.
114
Id. at 18-19.
115
Tex. R. Civ. P. 166a(c) (emphasis added).
116
Carpenter, 98 S.W.3d at 686 (“Our summary judgment rules afford a party in this
situation an opportunity to obtain additional time to file a response, either by moving for leave to
file a late response or by requesting a continuance of the summary-judgment hearing.” (citing
33
In a summary judgment proceeding, the nonmoving party may file
and serve opposing affidavits or other written responses no later than
seven days prior to the scheduled date of the hearing. The nonmoving
party must obtain leave to file evidence after the deadline. A motion
for leave to file a late summary judgment response should be granted
when the nonmovant establishes good cause by showing that the
failure to timely respond (1) was not intentional or the result of
conscious indifference but the result of accident or mistake and (2)
allowing the late response will not cause any undue delay or otherwise
injure the party seeking summary judgment.117
KWM wholly ignored the good-cause standard in the trial court. The
Amended Response was unaccompanied by a motion for leave and an affidavit
explaining why its late filing was not intentional or the result of conscious
indifference or why it would not cause undue delay or otherwise injure ACE. And,
at the summary-judgment hearing, KWM’s attorney did not mention either prong
of the standard.118 Similarly, the Brief also ignores the good-cause standard.
It, however, is clear that neither prong of the standard was met here.
Initially, KWM’s failure to timely file the Amended Response was intentional or
the result of conscious indifference as evidenced by the fact that it filed a frivolous
continuance motion that falsely claimed that ACE had failed to provide discovery
Tex. R. Civ. P. 166a); Benchmark Bank v. Crowder, 919 S.W.2d 657, 663 (Tex. 1996)
(“Summary judgment evidence may be filed late, but only with leave of court.” (citing Tex. R.
Civ. P. 166a(c)); Brown, 2014 Tex. App. LEXIS 8467, at *3 (“The nonmoving party must obtain
leave to file evidence after the deadline.”); Judge David Hitner & Lynne Liberato, Summary
Judgments in Texas: State and Federal Practice, 46 Houston L. Rev. 1379, 1406, 1423 (2010)
(pointing out that leave of court is required to file a summary-judgment response or summary-
judgment evidence late).
117
Brown, 2014 Tex. App. LEXIS 8467, at *3; accord Carpenter, 98 S.W.3d 688.
118
See RR29-36.
34
about matters—other lawsuits—that (1) KWM had already had full and complete
discovery about, and (2) were wholly irrelevant to any issue raised by the
Amended MSJ and, therefore, did not preclude KWM from responding to the
Amended Motion fully in a timely manner.119 Of course, a failure to file a proper
continuance motion shows intent or conscious indifference.120
Perhaps more importantly, KWM offered no evidence about what steps, if
any, it took to obtain timely the allegedly needed discovery so as to establish that it
was not acting intentionally or with conscious indifference.121 To the contrary, as
its lawyer candidly admitted at the summary-judgment hearing, there was no
excuse for its failure to file the Sewell Affidavit on time and it was uncontroverted
that (1) KWM had unfettered access to its principal witnesses, Sewell and
Williams, at all times, and (2) the documents and deposition-transcript excerpts
attached to the Amended Response had been in its attorney’s possession long
119
See discussion supra notes 97-100.
120
See Tenneco, Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 647 (Tex. 1996) (holding that
a nonmovant who needs additional evidence to prepare a summary-judgment response must
properly request a continuance), rev’d on other grounds, 379 S.W.3d 267 (Tex. 2012); PNS
Stores, Inc. v. Rivera, 335 S.W.3d 265, 284 (Tex. App.—San Antonio 2010), rev’d on other
grounds, 379 S.W.3d 267 (Tex. 2012) (same).
121
It was evident that KWM made no effort to obtain any evidence about the other
lawsuits (or anything else) after the Madrid deposition. E.g., RR16:21-18:8 (discussing the fact
that ACE obtained an affidavit from one of the lawyers in one of the “other lawsuits” explaining
the lawsuit’s nature).
35
before the September 8, 2014 deadline to file a timely summary-judgment
response.122
Not only is the first good-cause element not established, but it also is clear
that had the trial court granted KWM leave to file the Amended Response late,
ACE would have been greatly prejudiced. As pointed out above, the Amended
Response was not filed until the morning of the summary-judgment hearing, was
received by ACE’s attorneys as they left for the hearing, and was not received by
the trial court before the hearing. Thus, the granting of leave to file the Amended
Response necessarily would have required the Court to postpone the summary-
judgment hearing so that it could consider the response and so that ACE could
reply to it. This, in turn, would have resulted in undue delay—a delay of both the
summary-judgment hearing, which already had been rescheduled once because of
KWM’s shenanigans, and the entry of summary judgment. The granting of leave
also would have caused ACE to incur considerable additional attorneys’ fees
122
See discussion supra notes 99-103, 106. See also PNS Stores, 335 S.W.3d at 284
(“Moreover, there is no evidence about what steps, if any, PNS took to obtain the documents
before its response was due so as to establish it was not acting intentionally or with conscious
indifference.); Allison v. Post-Newsweek Stations Houston LP, Nos. 01-10-00775-CV, 01-11-
00767-CV, 2011 Tex. App. LEXIS 10158, at *12 (Tex. App.—Houston [1st Dist.]
Dec. 22, 2011, no pet.) (mem. op.) (“Dorinda presented no evidence to show that her failure to
respond was not intentional or the result of conscious indifference. There is only the bare
assertion in her affidavit that she did not receive the notice, which is insufficient to show a lack
of intent or conscious indifference. There is no evidence that the notice was delivered to an
incorrect address or that Loase was unauthorized to receive mail at Dorinda’s place of business.
Nor is there evidence of any other accident or mistake. Accordingly, we cannot say that the trial
court abused its discretion in denying Dorinda’s motion for new trial to allow her to file a late
response to the motion for summary judgment.” (citation omitted)).
36
because all the time spent preparing for the summary-judgment hearing on
September 15, 2014, would have been wasted and ACE would have been forced to
spend thousands of dollars more in attorneys’ fees preparing a second reply brief
(it had already replied to the original response) and preparing for another
summary-judgment hearing.
In Brown v. Melissa 121/5 Partners, Ltd., this Court recently held, on
similar facts, that there was sufficient prejudice to negate the second good-cause
element:
[E]ven assuming his unverified arguments established the first
Carpenter element, appellant failed to show the late response would
not cause any undue delay or otherwise injure appellee. In fact, the
motion does not even mention the possibility of delay if the court
granted the motion for leave. Appellee, however, specifically argued
in its response that it would be prejudiced by a delay because it would
delay entry of judgment and cause increased legal fees. Thus, we
conclude appellant wholly failed to establish the second Carpenter
element-that allowing the late response would not unduly delay or
otherwise injure appellee. As such, appellant failed to establish good
cause for not timely filing her motion for summary judgment
response.123
Finally, it is worth noting that an appellant, such as KWM, who complains
on appeal about the exclusion of summary-judgment evidence, must not only
establish that the trial court abused its discretion in excluding the evidence, but
123
2014 Tex. App. LEXIS 8467, at *3-5 (citation omitted); accord Swett v. At Sign, Inc.,
No. 2-08-315-CV, 2009 Tex. App. LEXIS 3579, at *5-6 (Tex. App.—Fort Worth May 21, 2009,
no pet.) (mem. op.) (holding that the trial court’s denial of leave to file a late summary-judgment
response was not an abuse of discretion when neither the unsworn motion nor the attached
affidavits discussed the possibility of delay if leave were granted).
37
also that the evidence’s exclusion probably caused the rendition of an improper
judgment.124 Here, KWM merely claims that the trial court “erred” in not
considering the Amended Response. Nothing in the Brief, however, explains how
the exclusion of its late-filed summary-judgment evidence probably resulted in an
improper summary judgment (i.e., why it created a fact issue on any of KWM’s
claims or on ACE’s affirmative defenses). Indeed, the Brief is wholly devoid of
any citation or reference to that evidence. Simply put, KWM has failed to
establish that the trial court’s failure to consider the Amended Response constitutes
reversible error.
b. The relation-back doctrine is inapplicable to a summary-
judgment response.
KWM’s second argument—that the Amended Response, under Section
16.068 of the Texas Civil Practice and Remedies Code, related back to the filing of
the Original Response—is absurd. Initially, as pointed out above, Texas Rule of
Civil Procedure 166a(c) expressly requires “leave of court” for the filing of a
summary-judgment response or summary-judgment evidence late.
124
Wawarosky v. Fast Grp. Houston Inc., N0. 01-13-00466-CV, 2015 Tex. App. LEXIS
1522, at *10 (Tex. App.—Houston [1st Dist.] Feb. 17, 2015, no pet. h.) (mem. op.) (“To reverse
a judgment based on a claimed error in admitting or excluding evidence, a party must show that
the error probably resulted in an improper judgment.”); Godfrey v. Sec. Serv. Fed. Credit Union,
356 S.W.3d 720, 723 (Tex. App—El Paso 2011, no pet.) (“A party complaining on appeal of the
admission or exclusion of evidence must show both that the trial court’s ruling was erroneous
and probably caused rendition of an improper judgment.”); Tex. R. App. P. 44.1(a)(1) (“No
judgment may be reversed on appeal on the ground that the trial court made an error of law
unless the court of appeals concludes that the error complained of: (1) probably caused the
rendition of an improper judgment . . . .”).
38
Moreover, Section 16.068, by its express terms, only applies to pleadings
and pleas of limitation:
If a filed pleading relates to a cause of action, cross action,
counterclaim, or defense that is not subject to a plea of limitation
when the pleading is filed, a subsequent amendment or supplement to
the pleading that changes the facts or grounds of liability or defense is
not subject to a plea of limitation unless the amendment or
supplement is wholly based on a new, distinct, or different transaction
or occurrence.125
A summary-judgment response is not a “pleading”126 and does not concern a
“plea of limitation.” In fact, the Texas Supreme Court has made clear that the
relation-back doctrine relates only to limitations defenses: “But narrow or broad,
the purpose of the relation-back doctrine is to determine not when, but on what
limitations runs.”127
In sum, the trial court did not abuse its discretion in refusing to consider the
Amended Response.
125
Tex. Civ. Prac. & Rem. Code § 16.068 (emphasis added).
126
See In re S.A.P., 156 S.W.3d 574, 576 n.3 (Tex. 2005) (“[A] motion for summary
judgment is not a pleading.”); Miller v. Argumaniz, 2015 Tex. App. LEXIS 1274, at *5 (Tex.
App.—El Paso Feb. 11, 2015, no pet. h.) (mem. op.) (same); Tex. R. Civ. P. 45(a) (“Pleadings in
the district and county courts shall (a) be by petition and answer . . . .”).
127
Univ. of Tex. Health Science Ctr. v. Bailey, 332 S.W.3d 395, 400 (Tex. 2011); see
Lone Star Partners v. NationsBank Corp., 893 S.W.2d 593, 601 (Tex. App.—Texarkana 1994,
no writ) (“When an amended pleading sets up a new cause of action under Section 16.068, it will
relate back to the date of the original pleading for the purposes of limitations, so long as the
amended pleading does not allege a wholly new, distinct, or different transaction.” (emphasis
added)).
39
B. The Summary Judgment Must Be Affirmed For Multiple Reasons.
1. The summary-judgment standard.
An appellate court reviews a summary judgment de novo.128 The standards
for reviewing no-evidence and traditional summary judgments are well established.
A no-evidence summary judgment is proper if there is no evidence regarding
one or more elements of a cause of action.129 The trial court must grant the motion
unless the nonmovant produces “more than a scintilla of evidence [that] raises a
genuine issue of material fact” on the challenged elements.130 “Less than a scintilla
of evidence exists when the evidence is so weak as to do no more than create a
mere surmise or suspicion of a fact.”131
A defendant is entitled to a traditional summary judgment if the evidence
establishes, as a matter of law, either that at least one element of the plaintiff’s
cause of action cannot be established132 or that each element of an affirmative
128
Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Tarrant
Restoration v. Tex. Arlington Oaks Apts., Ltd., 225 S.W.3d 721, 727 (Tex. App.—Dallas 2007,
no pet.).
129
Malcomson Rd. Util. Dist. v. Newsom, 171 S.W.3d 257, 262 (Tex. App.—Houston
[1st Dist.] 2005, pet. denied).
130
Forbes, Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 172 (Tex. 2003);
Malcomson, 171 S.W.3d at 262.
131
Forbes, 124 S.W.3d at 172; Malcomson, 171 S.W.3d at 262.
132
Karcher v. Classic Foods, L.P., 2005 Tex. App. LEXIS 3062, at *3 (Tex. App.—Fort
Worth Apr. 21, 2005, no pet.); accord Elliot-Williams Co. v. Diaz, 9 S.W.3d 801, 803 (Tex.
1999).
40
defense has been established.133 Once the defendant produces sufficient evidence
to establish its right to summary judgment, “the burden shifts to the plaintiff to
come forward with competent controverting evidence raising a genuine issue of
material fact with regard to the element challenged by the defendant.”134 And,
“[w]hen reviewing a summary judgment, [the appellate court] accept[s] all
evidence favorable to the nonmovant as true, indulge[s] the nonmovant with every
favorable reasonable inference, and resolve[s] any doubt in the nonmovant’s favor.
The appellate court must affirm the summary judgment if any one of the movant’s
theories has merit.”135
Finally, when, as here, “the trial court’s summary judgment does not specify
the basis for the ruling, [the appellate court] must affirm the judgment if any of the
summary judgment grounds are meritorious. When the appeal does not challenge
one of the grounds for summary judgment, the judgment may be affirmed on that
ground alone.”136
133
Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 224 (Tex. 1999); Johnson & Johnson
Med., Inc. v. Sanchez, 924 S.W.2d 925, 927 (Tex. 1996).
134
Karcher, 2005 Tex. App. LEXIS 3062, at *3; accord Centeq Realty, Inc. v. Siegler,
899 S.W.3d 195, 197 (Tex. 1995).
135
Valence Operating, 164 S.W.3d at 661; Tarrant Restoration, 225 S.W.3d at 727.
136
Ketter v. ESC Med. Sys., Inc., 169 S.W.3d 791, 797 (Tex. App.—Dallas 2005, no pet.)
(citation omitted); accord Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995).
41
2. Both the no-evidence and traditional summary judgment must be
affirmed.
The summary judgment must be affirmed for multiple reasons. First, as
KWM implicitly concedes, the Original Response was wholly inadequate to defeat
summary judgment because it failed to address the no-evidence grounds for
summary judgment, wholly failed to contain legal authorities, only partially
addressed only the defamation claim and then only with respect to the traditional
summary-judgment motion, and cited no summary-judgment evidence because it
was unaccompanied by any such evidence.137 Because the trial court did not abuse
its discretion in denying KWM leave to file the Amended Response and because
the Original Response was wholly deficient, both the no-evidence and traditional
summary judgment were properly granted.138
Second, even if the trial court abused its discretion in not considering the
Amended Response, which it did not, the Brief is so inadequate that it does not
raise an appellate issue regarding either the no-evidence or traditional summary
judgment.
137
The Brief does not argue that the Original Response raised a fact issue with respect to
ACE’s traditional summary-judgment motion on the defamation claim. Rather, it baldly alleges
that the Amended Response raised fact issues with respect to certain claims. Br. “Argument” §§
III, at 20 (“The facts and law outlined in the amended response amount to more than a scintilla
of evidence . . . .” (emphasis added)), IV, at 21 ([T]he amended response brings to light both
genuine issues of material fact as well as defeats the affirmative defense claimed by [ACE].”
(emphasis added)).
138
Tex. R. Civ. P. 166a(i) (“The court must grant the motion unless the respondent
produces summary judgment evidence raising a genuine issue of material fact.”).
42
For example, the sum and substance of its argument regarding the no-
evidence summary judgment is that KWM
offered evidence to show that [ACE] breached the agreement by
charging excessive insufficient fund fees, by requiring certified funds,
by declining curtailments or extensions, by repossessing vehicles
under retail installment contract [sic], by charging for multiple lot
checks, by selling collateral for less than commercially reasonable
values, by failing to proceed against the bond, by failing to timely
return excess proceeds, and by failing to provide an accounting.
Similarly, [KWM] provided evidence that [ACE] was not entitled to a
qualified privilege on the defamation claim. Further, [KWM]
introduced evidence of [ACE’s] unconscionable actions as it relates to
the [DTPA].139
Each assertion is supported only by citations to the Amended Response and
not by any summary-judgment evidence (either ACE’s or that in the Amended
Response).140 Moreover, the Brief wholly fails to mention the defamation claim,
the fraud claim, or the DTPA claim for false, deceptive, or misleading acts or
practices, much less explain why a fact issue exists on any of the challenged
elements of those claims. Further, even though the Amended Motion sought a no-
evidence summary judgment with respect to each of KWM’s claims on the
grounds that there was no evidence that KWM had been damaged by the alleged
139
Br. “Argument” § III, at 19-20 (footnotes omitted). Because “a qualified privilege” is
an affirmative defense, Burbage v. Burbage, 447 S.W.3d 249, 254 (Tex. 2014) (noting that
qualified privilege “operates as an affirmative defense in the nature of confession and
avoidance”), ACE sought a traditional, and not a no-evidence summary judgment, on it. CR96-
97 (Am. MSJ at 28-29).
140
Br. “Argument” §§ III-IV, at 19-21.
43
wrongdoing or, if had been damaged, the dollar amount of its damages,141 the Brief
fails to mention this fact, much less (1) explain, for each cause of action, how
KWM was damaged and the amount of its damages, or (2) cite any evidence
establishing the damages or their amounts.142 Finally, even with respect to the two
causes of action actually referenced in the Brief—the contract claim and the DTPA
claim for unconscionable actions and courses of action—the Brief is woefully
deficient.
For example, with respect the contract claim, the Brief not only fails to cite a
single provision of the Agreement that required or prohibited the alleged breaching
conduct, but more importantly fails to cite any evidence establishing that the
alleged breaching conduct occurred.143 The Brief’s treatment of the DTPA claim
141
See discussion supra notes 80-88.
142
Br. “Argument” § III, at 19-20.
143
Id. The frivolity of KWM’s contract claims is easily demonstrated. For example, one
of the alleged Agreement breaches is ACE’s failure to allow Extensions even though, under the
Agreement, ACE had absolute discretion to decline to make them. CR133 (Madrid Aff. Exh. A
(Agr. § 2.3(f) (“If Dealer is in compliance with all other provisions of this Agreement, Lender
may, in its sole discretion, permit an Extension of the Maturity Date relative to an item of
Lender-Financed Inventory . . . .” (emphasis added))). Thus, ACE had no obligation to grant
KWM any Extension. And, when it refused to grant them, it did so only after KWM had
breached the Agreement by providing NSF checks, by selling vehicles out-of-trust, by not paying
Advances at all, and by not immediately repaying its indebtedness under the Agreement in full
after ACE demanded that it do so on November 16, 2011. CR280-81 (Valdes Aff. ¶ 3).
Another of the alleged breaches is ACE’s repossessing and selling at auction vehicles
after KWM defaulted on the Agreement instead of “proceed[ing] against [KWM’s] bond.”
Section 11 of Agreement not only provided ACE with many remedies in the event of a default
(e.g., including repossession and sale of KWM’s vehicles), but also provided that ACE “may, at
its option and without notice exercise any and all of its rights in a separate, successive or
concurrent fashion and such exercise of any right shall not preclude pursuit of other rights and
44
for unconscionable acts or courses of action is similarly deficient. Thus, none of
the five allegedly unconscionable actions or courses of action are mentioned, no
cases are cited in support of KWM’s contention that each, in fact, constitutes an
unconscionable action or course of action, and the Brief wholly fails to explain
how each was a producing cause of KWM’s damages.144
The sum and substance of the Brief’s argument regarding the traditional
summary judgment is equally sparse and inadequate: “As stated in argument
section three, the amended response brings to light genuine issues of material fact
as well as the affirmative defense claimed by [ACE]. Namely, [ACE] charged
excessive insufficient fund fees, was not legally entitled to a claim of qualified
privilege, and committed unconscionable actions . . . .”145
remedies at a later time.” CR138 (Madrid Aff. Exh. 1A (Agr. § 11.1 (emphasis added)).
Although proceeding against KWM’s bond was one potential remedy for KWM’s default, ACE
had no obligation to proceed against it. Accordingly, it did not breach the Agreement by failing
to do so.
A third alleged breach is ACE’s alleged failure to provide an accounting. Nothing in the
Agreement, however, specifically (or the law generally) required an accounting, CR133-45
(Madrid Aff. Exh. 1A (Agr.), and ACE effectively provided one when it met with Williams and
another KWM employee, Fred Darden, on December 22, 2011, and explained the
collection/repossession fees charged to KWM and the unpaid balance owed under the Agreement
for Advances/Extensions. CR131 (Madrid Aff. ¶ 13); CR326 (Supp. Madrid Aff. ¶ 3).
144
Br. “Argument” § III, at 19-20.
145
Id. “Argument” § IV, at 21.
45
Not a single legal authority is cited regarding the two claims and one defense
mentioned in passing.146 Even worse, the Brief (1) wholly ignores the defamation,
fraud, and DTPA claims for false, misleading, and deceptive acts or practices,
(2) wholly ignores the affirmative defenses to the defamation claim on which ACE
sought summary judgment other than the qualified-privileged defense, (3) wholly
ignores all the affirmative defenses to the DTPA claims on which ACE sought
summary judgment, (4) wholly ignores the fact that a traditional summary
judgment was sought on each claim on the grounds that the evidence established
that KWM had not been damaged by the alleged wrongdoing, and (5) wholly fails
to direct this Court to any evidence in the record on the two claims and one defense
mentioned in the Brief in passing—the contract claim, the DTPA claim for
unconscionable actions or courses of action, and qualified privilege.147
As recently held by the Houston (First District) Court of Appeals:
An appellant’s brief “must contain a clear and concise argument for
the contentions made, with appropriate citations to authorities and to
the record.” A party asserting error on appeal bears the burden of
showing that the record supports the contention raised and of
specifying the place in the record where matters upon which it relies
or of which it complains are shown. [An appellate court is] not
required to sift through a voluminous record without guidance from
the appellant to determine whether an assertion of error is valid.148
146
Id. “Argument” § IV, at 20-21.
147
Id.
148
Helitrans Co. v. Rotorcraft Leasing Co. 2015 Tex. App. LEXIS 1410, at *8 (Tex.
App.—Houston [1st Dist.] Feb. 12, 2015, no pet. h.) (quoting Tex. R. App. P. 38.1(i)) (citations
46
Because the Brief’s arguments regarding the summary judgment are
conclusory, fail to address each no-evidence and traditional summary judgment
ground, fail to cite any authorities, and fail to direct the court to any specific
summary-judgment evidence raising a fact issue on even the two claims and one
defense mentioned in passing, they are inadequate and the summary judgment
must be affirmed.149
PRAYER
For the foregoing reasons the summary judgment should be affirmed.
omitted); accord Arellano v. Magana, 315 S.W.3d 576, 577-578 (Tex. App.—El Paso 2010, no
pet.); Baylor Health Care Sys. v. Maxtech Hldgs., Inc., 111 S.W.3d 654, 657 (Tex. App.—Dallas
2003, no pet.).
149
Arellano, 315 S.W.3d at 577-578 (“Here, Appellants’ first issue merely consists of a
few conclusory statements . . . . Although they attack the credibility of Appellees’ attorney, they
fail to discuss why the evidence supporting the verdict is insufficient. Moreover, Appellants’
second and third issues merely recite the issues stated without providing any discussion,
argument, authority, or substantive analysis. Accordingly, we find Appellants inadequately
briefed their complaints and overrule the same.”); Brown v. Tex. Bd. of Nurse Exam’rs, 194
S.W.3d 721, 723 (Tex. App.—Dallas 2006, no pet.) (“Brown does not cite any authority or offer
a clear and concise argument to support her contention that she has a constitutional due process
right to bill of review, and that the vexatious litigant statute violates that right. . . . We conclude
the issue is inadequately briefed and presents nothing for review.”); Santillan v. Nat’l Union Fire
Ins. Co., 166 S.W.3d 823, 824 (Tex. App.—El Paso 2005, no pet.) (issue inadequately briefed
where appellant merely uttered conclusory sentences); Sterling v. Alexander, 99 S.W.3d 793, 799
(Tex. App.—Houston [14th Dist.] 2003, pet. denied) (issue inadequately briefed when appellant
failed to make a cogent argument).
47
Respectfully submitted,
LILLARD WISE SZYGENDA PLLC
By: /S/ Robert K. Wise
Robert K. Wise
State Bar No. 21812700
bwise@lwsattorneys.com
5949 Sherry Lane, Suite 1255
Dallas, Texas 75225
214 • 739 • 2000 Telephone
214 • 739 • 2010 Fax
ATTORNEYS FOR APPELLEE
AUCTION CREDIT ENTERPRISES,
LLC
48
CERTIFICATE OF COMPLIANCE WITH RULE 9.4
This brief complies with the limitations of Tex. R. App. P. 9.4(i)(2)(B)
because it contains 11,047 words, excluding the parts of the brief exempted by
Tex. R. App. P. 9.4(i)(1), and it complies with the typeface requirements of Tex. R.
App. P. 9.4(e) because it was prepared in a proportionally spaced typeface using
Microsoft Word 2010 in Times New Roman 14 pt. font for text and 12 pt. font for
the footnotes.
Dated: April 8, 2015
/s/ Robert K. Wise
Robert K. Wise,
Attorney for Appellee
CERTIFICATE OF SERVICE
On April 8, 2015, a true and correct copy of this brief was served by EFC
and U.S. certified-mail, return-receipt requested on Appellant’s attorneys:
John Leslie
John Leslie│PLLC
1805 West Park Row Drive, Suite C
Arlington, Texas 76013
Yolonda Sewell
6731 Bridge Street, Suite 379
Fort Worth, Texas 76112
/s/ Robert K. Wise
49
, ACCEPTED
05-14-01392-CV
FIFTH COURT OF APPEALE
DALLAS, TEXAS
3/24/2015 12:00:10 AM
LISA MATZ
CLERK
Appeal No. 05-14-01392-CV
In the Court of Appeals
Fifth Judicial District
Dallas, Texas
K.W. Ministries, Inc. v. Auction Credit Enterprises, LLC
APPELLANT'S BRIEF
ORAL ARGUMENT REQUESTED
Yolonda Sewell
Attorney for Appellant
State Bar No. 24044111
6731 Bridge Street, Suite 379
Fort Worth, Texas 76112
Telephone: (806)239-2130
Facsimile: (817)531-9977
E-mail: yolonda sewell@yahoo.com
John E. Leslie
State Bar No. 12231400
JOHN LESLIE I PLLC
1805 West Park Row Drive, Suite C
Arlington, Texas 76013
Telephone: (817) 505-1291
Facsimile: (817) 505-1292
Email: arlingtonlaw@aol.com
EXHIBIT A
Identity of Parties and Counsel
The following is a list of all parties and all counsel in this matter:
Appellant in this matter is K.W. Ministries, Inc. f/d/b/a C.R.U.S.H. Auto Sales, and
is Plaintiff in the underlying case described below. The attorneys representing Appellant
are:
Yolonda Sewell John Leslie
6731 Bridge Street, Suite 379 John Leslie PLLC
Fort Worth, Texas 76112 1805 W. Park Row Drive, Suite C
Tel: (806) 239-2130 Arlington, Texas 76013
Fax: (817) 531-9977 Tel: (817) 505-1291
Fax: (817) 505-1292
Appellee in this matter is Auction Credit Enterprises, LLC, and is Defendant in the
underlying case described below. The attorneys representing Appellee are:
Robert Wise
Lillard Wise & Szygenda, PLLC
5949 Sherry Lane, Suite 1255
Dallas, Texas 75225
Tel: (214) 739-2005
Fax: (214) 739-2010
\
Table of Contents
Identity of Parties and Counsel ............................................... 2
Table of Contents ................................................................................. 3, 4
Index of Authorities ................................................................................. 5
Statement of the Case ................................................................................ 6
Issues Presented ........................................................................................ 6
I. The trial court erred when it failed to consider K.W. Ministries, Inc.'s
amended response .......................................................... 17, 18, 19
II. The trial court erred in granting Auction Credit Enterprises, LLC's no-
evidence motion for summary judgment when there is some evidence to
support K.W. Ministries, Inc. 's claims ...................................... 19, 20
III. The trial court erred in granting Auction Credit Enterprises, LLC's
traditional motion for summary judgment when there is a genuine issue of
material fact. ........................................................................ 20
Statement of Facts ............................................. 7, 8, 9, 10, 11, 12, 13, 14, 15, 16
Summary of Argument ........................................................................ 16, 17
Argument ............................................................................................. 17
I. Standard of Review ............................................................ 17, 18
II. Amended Summary Judgment Response Disallowed ................ 18, 19, 20
III. Some Evidence to Defeat No-Evidence Motion ........................... 20, 21
IV. Genuine Issue Material Fact to Defeat Traditional Motion ............... 21, 22
Prayer ................................................................................................ 22
Appendix .................................................................................. 23, 24, 25
I. Copy of Pinal Summary Judgment ............................................. 23
II. Text of Texas Rule of Civil Procedure 166a .......................... 23, 24, 25
III. Text of Texas Civil Practice & Remedies Code §16.068 ..................... 25
IV. Contract Between The Parties .................................................... 25
3
Index ofAuthorities
Rules
Texas Rule of Civil Procedure 166a ........................................................... 17, 18
Statutes
Texas Civil Practice & Remedies Code §16.068 .............................................. 19
Cases
Austin v. !net Technologies, Inc., 118 S.W.3d 491, 495 (Tex. App.-Dallas 2003) .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16, 17, 21
Havlen v. McDougall, 22 S.W.3d 343, 345 (Tex. 2000) ........................................ 16
Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 ((Tex.1985) ....... 16, 17
Wayment v. Texas Kentworth Company, 248 S.W.3d 883, 885 (Tex. App.-Dallas 2008)
(citing Tex.R.Civ.P. 166a(i) and Western Inv., v. Urena, 162 S.W.3d 547, 550 (Tex.
2005)) ............................................................................................. 17, 19
Statement of the Case
1. The underlying suit arises out of Cause No. DC-13-14570, styled "K.W.
Ministries, Inc. d/b/a C.R.U.S.H. Auto Sales v. Auction Credit Enterprises, LLC," in the
I 16th Judicial District Court, Dallas County, Texas. 1
2. The underlying suit is an action for breach of contract, fraud, defamation,
deceptive trade practices, and damages arising from a motor vehicle floorplan financing
agreement. 2
3. Appellee, Auction Credit Enterprises, LLC, filed a traditional and no-
evidence motion for summary judgment. 3 Appellant filed an original and amended
response. 4 The district court did not consider the amended response. 5
4. The district court granted Appellee's motion for summary judgment. 6 This
appeal ensued. 7
Issues Presented
I. The trial court erred when it failed to consider K.W. Ministries, Inc.'s
amended summary judgment response.
a. Texas Rule of Civil Procedure 166a applies
b. The Relation-Back Doctrine applies
II. The trial court erred in granting Auction Credit Enterprises, LLC's no-
1 C.R. at 5-65.
2
Id.
3
Id. at 69-406
4
Id. at 407-424 and 483-522.
5 R.R. at 29-36.
6
C.R. at 600-01.
7
Id. at 602-04.
5
evidence motion for summary judgment when there is some evidence to
support K.W. Ministries, Inc. 's claims.
III. The trial court erred in granting Auction Credit Enterprises, LLC's traditional
motion for summary judgment when there is a genuine issue of material fact.
Statement of Facts
In the summer of 2011, Plaintiff was engaged in the business of selling used
vehicles to retail customers from a lot on Lancaster Street in Fort Worth, Texas under
the assumed name "C.R.U.S.H. Auto Sales". 8 Defendant was in the business of
providing inventory financing to used car dealers, commonly referred to as "floorplan
financing". 9 In late July or early August 2011, Joe Madrid ("Madrid"), Defendant's
Regional Manager, made a "cold call" on Plaintiff at its business premises to see if
Plaintiff was interested in obtaining floor plan financing for its used car inventory. 10
Defendant, after one or more follow-up calls and meetings with Plaintiff, offered to
extend "floor plan" financing to Plaintiff through its representative, Madrid. Plaintiff
accepted Defendant's offer. 11
In furtherance of the "floor plan" lending arrangement, on August 11, 2011
Plaintiff, by and through Kenneth Williams ("Williams"), its President, signed a
"Demand Promissory Note and Security Agreement" (the "Contract") at Defendant's
office under the direction of Defendant's representative "Agnes." 12 Although
8
C.R. at 6.
9
Id.
10
Id.
11 Id.
12 Id.
Williams' signature was notarized within the Contract, Madrid, the Notary Public who
purportedly acknowledged Williams' signature to the Contract, was not present when
Williams signed the Contract and Williams never saw Madrid affix his notary signature
or stamp to the Contract. 13 Neither Williams nor Plaintiff was given a copy of the
Contract at the time it was signed, or at any time thereafter. 14 After making demand
on Defendant for a copy of the Contract, Plaintiff finally received a copy of the
Contract on November 17, 2011, following Defendant's termination of its floorplan
relationship with Plaintiff. 15
At the time the Contract was entered into by Plaintiff, Plaintiff had no previous
experience with floorplan financing arrangements, a fact communicated by Williams
to Madrid. 16 Defendant, being fully aware of Plaintiffs lack of knowledge of the
details of floorplan financing and Plaintiffs inferior bargaining position, told Plaintiff
that its physical possession of titles to vehicles Plaintiff owned outright, free and clear
of liens, of an aggregate value of $75,000.00, together with a lien and security interest
on all of Plaintiffs then-existing and after-acquired property, was necessary to initially
secure the floorplan arrangement. 17 In accordance with its demand, at the time the
Contract was signed, Defendant took physical possession of titles to the following
vehicles: a 2010 Cadillac SRX Luxury (VIN #3GYFNAEYIAS516971); a 2010
Toyota Camry LE (VIN#4Tl BF3EK5AUI00605); a 2008 Chrysler 300 (VIN
13Id.
14 Id.
IS Id.
16 Id.
11 Id.
7
#2C3LA53G08H303839); and a 2007 Cadillac CTS (VIN# IG6DP577670122419),
promising to return the titles to Plaintiff on November 1, 2011 (collectively, the
"Pledged Vehicles"). 18
During August, September and October, 2011, Plaintiff purchased a number of
vehicles with the floorplan financing provided by Defendant and paid for these
vehicles on a timely basis, without default, according to the terms of the Contract. 19
At the outset of their relationship, and at all times thereafter, Defendant instructed
Plaintiff to make payment checks payable to "AAA" and not to Auction Credit
Enterprises, LLC. Not knowing the reason or justification for this request, Plaintiff
nonetheless complied with Defendant's instructions.
From time to time, Defendant requested post-dated checks from Plaintiff to pay
for vehicles financed through Defendant which were contracted for sale, but not yet
funded by the purchasers or their banks. 20 Defendant was instructed by Plaintiff to
hold these checks until the sales were closed and the purchase price was received by
Plaintiff. 21 Nonetheless, on two occasions Defendant deposited Plaintiffs payment
check earlier than agreed upon, resulting in the checks being returned "NSF" by
Plaintiffs bank. 22 In at least one instance, Defendant charged Plaintiff a $200.00 fee
per returned check, even though Plaintiffs recollection was that the Contract provided
18
Id. at 6-7.
19
Id. at 7.
20
Id.
z1 Id.
22
Id.
for only a $50.00 returned check fee. 23 Plaintiff believed Defendant's demand for the
higher NSF fee was in violation of the Contract's terms. However, Plaintiff paid the
higher fee without question or complaint in order to preserve its then-cordial business
relationship with Defendant. 24
As November 1, 2011 approached, Plaintiff began to make inquiries of
Defendant about the promised return of the titles to the Pledged Vehicles. 25 Defendant
refused to return these titles to Plaintiff, even though Plaintiff was not in payment
default under the Contract. 26 In order to assure Defendant of its fully (and actually,
over) secured position under the Contract, Plaintiff attempted to pay for several
vehicles in its inventory in advance of the payment date required under the Contract. 27
Defendant refused to accept Plaintiff's payment for these vehicles, accelerated all
amounts due under the Contract, and demanded payment of the entire amount
advanced to Plaintiff under the Contract, even though payments on specific vehicles
were not yet due. 28 There was no outstanding uncured event of default under the
Contract when this demand was made. On November 16, 2011, at approximately 3:45
p.m., Defendant, by and through its employees Madrid and Jesse Hidalgo, came to
Plaintiffs car lot under the auspices of an "inventory check". 29 At that time, Defendant
demanded possession of, and removed the following vehicles from Plaintiff's business
23 Id. (referencing Contract §2.3(1)).
24
Id. at 7.
25 Id.
26 Id.
21 Id.
2s Id.
29 Id.
premises: a 2008 Chrysler 300 (VIN#2C3LA53G08H303839, one of the
aforementioned "Pledged Vehicles"); a 2007 Kia Spectra (VIN
#KNAFE121675453928); and a 2006 Nissan Maxima (VIN
#IN4BA4IEX6C853039). 30
On November 17, 2011, Defendant finally provided Plaintiff with a copy of the
Contract. Over three (3) months had passed from the time the Contract was signed
until Defendant finally gave Plaintiff a copy of the Contract.
On November 18, 2011, Defendant took possession of an additional vehicle
owned by Plaintiff: a 2010 Cadillac SRX Luxury (VIN# 3GYFNAEYIAS516971,
being the second of the "Pledged Vehicles"). 31 This vehicle was seized at the Manheim
Dallas - Fort Worth auction facility where it had been placed by Plaintiff for sale. On
that same day, Defendant came to Plaintiffs business premises and attempted to take
possession of a 2010 Toyota Camry LE (VIN #4TIBF3EK5AUI00605, the last
remaining "Pledged Vehicle"). 32 Defendant used a different vehicle to block the sole
entry to Plaintiffs car lot, thereby preventing Plaintiffs customers and employees
from entering or exiting Plaintiffs business premises while Defendant unsuccessfully
attempted to seize the aforementioned Toyota Camry. 33 One of Plaintiffs salesmen
suffered bodily injury as a result of Defendant's actions. 34
On November 21, 2011, Defendant took possession of a 2006 Kia Sorento from
30
Id. at 7-8.
31
Id. at 8.
32 Id.
33 Id.
34 Id.
JO
a third-party repair facility and a 2004 Nissan Maxima from Plaintiff's business
premises while the vehicle was being repaired. 35 At the time of repossession,
Defendant's representatives were told that the 2004 Nissan Maxima was owned by,
and titled to, a customer of Plaintiff who was paying for the vehicle under a retail
installment contract. This fact was of no consequence to Defendant, who defiantly
repossessed the vehicle. As a result of Defendant's actions, Plaintiff was forced to
provide its customer with a replacement vehicle. Defendant did not return the Maxima
for over three (3) months, finally surrendering the vehicle to Plaintiff in March 2012.
By the time the Maxima had been returned to Plaintiff, Plaintiff had lost the
opportunity to sell the loaned vehicle before the model year change, thereby being
damaged by its loss of value.
After the wrongful repossessions of vehicles on November 21, 2011, Plaintiff
that same day sent Defendant a letter detailing its position with respect to the actions
taken by Defendant and requested that Defendant refrain from further interruption of
Plaintiff's business. 36 On the following day, Plaintiff spoke with Defendant regarding
its intent to pay Defendant all amounts properly due under the Contract. In response,
Defendant requested that Plaintiff submit a written payment plan to Defendant by
Friday, November 25, 2011. 37
Prior to expiration of the November 25, 2011 deadline, the following described
3s Id.
36 Id.
37
Id. at 8-9.
I{
exchanges of correspondence occurred38 :
On November 23, 2011, Plaintiff received a letter from Defendant notifying
Plaintiff of its private disposition of collateral in satisfaction of Plaintiffs
obligations to Defendant.
On November 23, 2011, Plaintiff responded to Defendant's notice of private
disposition of collateral, seeking clarification of certain items prior to
submitting its payment plan to Defendant.
On November 25, 2011, Plaintiff submitted its payment plan to Defendant.
On November 28, 2011, Defendant replied by demanding payment in full of all
vehicles sold "out of trust" by December 2. 2011.
Between December 6-8, 2011, Plaintiff paid Defendant $3 6, 670. 00 in certified
funds, representing over sixty percent (60%) of the total balance alleged to be due
Defendant. On December 22, 2011, Plaintiff remitted another certified funds payment
to Defendant in the amount of $8,300.00, bringing total payments to $44,970.00,
approximately 80% of the total amount claimed as due by Defendant. 39
On December 6, 2011, Plaintiff remitted certified funds to Defendant in
payment for a 2005 Ford F-150, a 2004 Nissan Maxima, and a 2007 Kia Spectra. 40 At
that time, Plaintiff also intended to remit payment for a 2007 Pontiac G5; however,
since Defendant had not received title to the vehicle, Plaintiffs payment for the vehicle
38
Id. at 9.
39Id.
40Jd.
1).._
was not accepted by Defendant. 41 Accordingly, Plaintiff tendered payment for a 2007
Hyundai Elantra for which title had been received, using the check originally
designated for the 2007 Pontiac G5. 42 The 2007 Hyundai Elantra had been recently
sold to a customer of Plaintiff, and was in the customer's possession. 43 Defendant
refused this tender of payment, stating that the cashier's check showed "2007 Pontiac
GS." Plaintiff suggested striking through 2007 Pontiac G5, inserting 2007 Hyundai
Elantra, and initialing the change in its capacity as remitter of the check. 44 Defendant
continued to refuse tender of this check.
Plaintiff indicated that it would return the next day with a new, replacement
check for the 2007 Hyundai Elantra. 45 However, that same night, before Plaintiffcould
bring a replacement check to Defendant, Defendant repossessed the 2007 Hyundai
Elantrafrom Plaintiff's customer's residence. 46 The following day, Plaintiff tendered
payment for the 2007 Hyundai Elantra, as originally promised, and paid the
repossession fee to Defendant, even though repossession was unwarranted and
wrongful, resulting in damages to Plaintiff, both for the repossession fee and in its
business reputation with its customer. 47
The following additional wrongful acts by Defendant occurred on the same day
as the acts complained of in the immediately preceding paragraph. All of the acts of
41 Id. at 9-10.
42
Id. at 10.
43 Id.
44 Id
4s Id.
46 Id.
41 Id.
Defendant on December 6, 2011 eventually led to the closure of Plaintiffs used car
business. On December 6, 2011, Plaintiff discovered that Defendant had placed
unnecessary and unjustified liens on the following vehicles: a 2007 Suzuki XL 7; a
2007 Kia Spectra; a 2005 Ford F-150, and a 2004 Nissan Maxima. At the time these
liens were placed on the vehicle titles, Defendant had actual physical possession of the
titles and/or possession of the vehicles on which the liens were placed; therefore,
recording liens on the titles was unnecessary. Thereafter, after these titles and the titled
vehicles were returned to Plaintiff, Defendant knowingly executed invalid releases of
lien on the same vehicles, as Madrid, Defendant's Branch Manager negligently and
carelessly failed to write and sign his legal name on the titles in the manner required
by the Texas Department of Motor Vehicles, thereby invalidating the releases and
further damaging Plaintiff and its business reputation. 48
On December 22, 2011 while making payment on a 2006 Nissan Maxima,
Plaintiff was informed that Defendant charged additional repossession fees on the
following vehicles: a 2004 Nissan Maxima; a 2006 Kia Sorento; a 2004 GMC Savana;
a 2001 Nissan Altima; a 1997 Mitsubishi Montero Sport; a 2005 Ford F-150; and a
2007 Hyundai Elantra, increasing the remaining balance allegedly due Defendant
under the Contract to $17,998.88. 49 Defendant confirmed this balance due by handing
the written statement of its Chief Operating Officer, Tedd Martin to Plaintiff in a
meeting on December 22, 2011. However, despite its reasonable and repeated
48 Id.
49 Id.
I'-{
requests, Defendant never provided Plaintiff with a full accounting of the debt alleged
to be due. 50 Defendant, in its pleadings, denies that it was obligated to provide Plaintiff
with any accounting of the funds allegedly due Defendant. 51
Defendant sold the 1997 Mitsubishi Montero Sport, 2001 Nissan Altima, 2004
GMC Savana, 2006 Kia Sorento, 2008 Chrysler 300, and 2010 Cadillac SRX which it
52
had previously repossessed to satisfy the debt.
On April 10, 2012, Plaintiff made demand on Defendant for damages under the
Texas Deceptive Trade Practices Act, set forth in Tex. Bus. And Comm. Code section
17.41 et seq. ("DTPA"). 53
Defendant finally paid Plaintiff its over-collection on proceeds of collateral in
early May, 2012, almost six (6) months after it terminated its loan relationship with
Plaintiff, four and one half (4Yz) months from the date of its last meeting with Plaintiff
and over three and one half (3 Yz) months after its last sale of any vehicles.
Summary ofArgument
The trial court erred when it failed to consider K. W. Ministries, Inc.' s amended
summary judgment response. The amended summary judgment response was timely
pursuant to Texas Rule of Civil Procedure 166a and the relation back doctrine as articulated
in Texas Civil Practice and Remedies Code §16.068. The amended response contains
50
Id. at 10-11.
51
C.R. at 69 et seq.
52
C.R. at 11.
53 Id.
evidence sufficient to defeat the no-evidence and traditional motions for summary
judgment.
Argument
L Standard ofReview
A defendant moving for a traditional summary judgment must either ( 1)
conclusively disprove at least one element of the plaintiffs theory ofrecovery; or (2) plead
and conclusively establish each element of an affirmative defense. 54 When a defendant
moves for summary judgment on an affirmative defense, it is the defendant's burden to
conclusively establish the defense. 55 Once the movant establishes the right to summary
judgment, the burden shifts to the non-movant to present the trial court with evidence of
any issues that would preclude summary judgment. 56 A motion for summary judgment on
traditional grounds is subject to de novo review. 57 In reviewing a motion for summary
judgment, the appellate court must determine if any genuine issue of material fact exists to
defeat the motion. 58 Evidence favoring the non-movant is taken as true and all reasonable
inferences must be resolved in favor of the non-moving party. 59
In a no-evidence summary judgment motion, the movant asserts there is no
evidence of one or more elements upon which an adverse party has the burden of proof at
5
4 Austin v. Inet Technologies, Inc., 118 S.W.3d 491, 495 (Tex. App.-Dallas 2003).
55
Havlen v. McDougall, 22 S.W.3d 343, 345 (Tex. 2000).
56
Austin, 118 S.W.3d at 495.
57
Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985).
58 Id.
59 Id.
trial. 60 To defeat a no-evidence summary judgment motion, the non-moving party must
point out evidence that raises a fact issue on the challenged elements. 61 Like a motion for
traditional summary judgment, the standard of review for a no-evidence summary
judgment is de novo. The reviewing court must construe the record in the light most
62
favorable to the non-movant while disregarding all contrary evidence and inferences.
IL Amended Summary Judgment Response Disallowed
The trial court erred when it failed to consider K.W. Ministries, Inc.'s amended
response.
The trial court erred when it failed to consider K.W. Ministries, Inc. 's amended
response in deciding Auction Credit LLC's amended traditional and no-evidence motion
for summary judgment. Auction Credit LLC filed its amended traditional and no-
evidence motion for summary judgment on August 25, 2014. 63 Pursuant to Texas Rule of
Civil Procedure 166a, K.W. Ministries, Inc. 's response was due on or before September
8, 2015. 64 K.W. Ministries, Inc. filed a response to the motion on said date. 65
Additionally, K.W. Ministries, Inc. filed an amended response the morning of, but prior
to the summary judgment hearing. 66 The trial court declined to consider the amended
response and the factual and legal evidence contained within the response. 67
Texas Rule of Civil Procedure 166a(c) states
60
Wayment v. Texas Kentworth Company, 248 S.W.3d 883, 885 (Tex. App.-Dallas 2008) (citing Tex.R.Civ.P.
166a(i) and Western Inv., v. Urena, 162 S.W.3d 547, 550 (Tex. 2005)).
61
Austin, 118 S.W.3d at 495.
62 Jd.
63
See generally C.R. at 69-127.
64
Tex. R. Civ. Pro. 166a(c) (2014).
65
C.R. at 407-24.
66
See generally C.R. at 483-522.
67
R.R. at 29-30, 36-37.
JI
The judgment sought shall be rendered forthwith if (i) the deposition transcripts,
interrogatory answers, and other discovery responses referenced or set forth in the
motion or response, and (ii) the pleadings, admissions, affidavits, stipulations of the
parties, and authenticated or certified public records, if any, on file at the time ofthe
hearing, or filed thereafter and before judgment with permission of the court, show
that, except as to the amount of damages, there is no genuine issue as to any material
fact and the moving party is entitled to judgment as a matter of law on the issues
expressly set out in the motion or in an answer or any other response. 68
In the instant case, the amended response was on file at the time of the hearing, but the
trial court failed to consider the amended response. 69 The amended response was
sufficient to raise a genuine issue of material fact to defeat the traditional motion for
summary judgment. 70 Likewise, the amended response proffered more than a scintilla of
probative evidence as necessary to defeat the no-evidence motion for summary
judgment. 71 Consequently, the court erred in failing to consider the amended response
prior to rendering a decision on Auction Credit LLC's motion and in granting the
summary judgment.
The trial court also erred in failing to consider the amended summary
judgment response when the relation back doctrine applies. The trial court indicated that
the deadline to file a response was September 8, 2015. As such, the trial court found that
K. W. Ministries, Inc.' s amended response was untimely. 72 However, the relation back
doctrine applies. The relation-back doctrine states that an amendment of a timely-filed
pleading is timely unless the amendment is "wholly based on a new, distinct, or different
68
Tex. R. Civ. Pro. 166a(c) (2014) (emphasis added).
69
R.R. at 29-30, 36-37.
70
See generally C.R. at 483-522.
11 Jd.
72
R.R. at 36-37.
transaction or occurrence." 73 In this case, the amended response was based on the same
case, the same parties, the same contract, the same facts, and the same circumstances.
Therefore, the amended response should be deemed the same transaction or occurrence and
found to be timely in accordance with the relation-back doctrine. The trial court erred in
deeming the amended response untimely and failing to consider the contents of the same.
IIL Some Evidence to Defeat No-Evidence Motion
The trial court erred in granting Auction Credit Enterprises, LLC's no-evidence
motion for summary judgment when there is some evidence to support K.W.
Ministries, Inc.' s claims.
The trial court erred in granting Auction Credit Enterprises, LLC' s no-evidence
motion for summary judgment because there exists some evidence to support K.W.
Ministries, Inc.' s claims. In order to prevail on a no-evidence summary judgment motion,
the movant must show that there is no evidence of one or more elements upon which an
adverse party has the burden of proof at trial. 74 On the contrary, to defeat a no-evidence
summary judgment motion, the non-moving party must point out evidence that raises a
fact issue on the challenged elements.
Auction Credit Enterprises, LLC did not meet its burden. For example, on the
breach of contract claim, K. W. Ministries, Inc. offered evidence to show that Auction
Credit Enterprises, LLC breached the agreement by charging excessive insufficient fund
73
Tex. Civ. Prac & Rem. Code §16.068 (2014).
74
Wayment, 248 S.W.3d at 885.
J(
fees, 75 by requiring certified funds, 76 by declining curtailments or extensions, 77 by
repossessing vehicles under retail installment contract, 78 by charging for multiple lot
checks, 79 by selling collateral for less than commercially reasonable values, 80 by failing
to proceed against the bond, 81 by failing to timely return excess proceeds, 82 and by failing
to provide an accounting. 83 Similarly, K.W. Ministries, Inc. provided evidence that
Auction Credit Enterprises, LLC was not entitled to a qualified privilege on the
defamation claim. 84 Further, K.W. Ministries, Inc. introduced evidence of Auction Credit
Enterprises, LLC's unconscionable actions as it relates to the Texas Deceptive Trade
Practices Act claim. 85 The facts and law outlined in the amended response amount to
more than a scintilla of probative evidence necessary to defeat the no-evidence motion
for summary judgment. 86 Therefore, the trial court erred by granting the motion for
summary judgment.
IV. Genuine Issue of Material Fact to Defeat Traditional Motion
The trial court erred in granting Auction Credit Enterprises, LLC's traditional
motion for summary judgment when there is a genuine issue of material fact.
The trial court erred in granting the amended traditional motion for summary
15
R.R. at 509-10.
16
Id. at 510-11.
11 Id. at 511-12.
78
Id. at 512-15.
19
Id. at 515.
80
Id. at 515-16.
81 Id. at 516-17.
82
1d.at517.
83
Id. at 518-19.
84
Id. at 492-97.
85
Id. at 506-07.
86
See generally id. at 483-522.
judgment because there exists a genuine issue of material fact to defeat the motion. To be
successful on a traditional motion for summary judgment, the moving party must prove
there exists no genuine issue of material fact. 87 As stated in argument section three, the
amended response brings to light both genuine issues of material fact as well as defeats
the affirmative defense claimed by Auction Credit Enterprises, LLC. 88 Namely, Auction
Credit Enterprises, LLC charged excessive insufficient fund fees, was not legally entitled
to a claim of qualified privilege, and committed unconscionable actions as articulated in
mandatory precedent. 89 The trial court erred by granting the motion in light of the
evidence in the amended response.
Prayer
K. W. Ministries, Inc. prays that this Court find that the trial court erred by
disallowing the amended response and granting the motion for summary judgment when
more than a scintilla of probative evidence exists.
87
Austin, 118 S.W.3dat495.
88
See generally R.R. at 483-522.
89
See notes 22-32.
Respectfully submitted,
By: /sNolonda Sewell
Yolonda Sewell
Texas Bar No. 24044111
6731 Bridge Street, Suite 379
Fort Worth, Texas 76112
Tel. (806) 239-2130
Fax. (817) 531-9977
E-mail yolonda_ sewell@yahoo.com
Attorney for Appellant
K.W. Ministries, Inc. dba CRUSH Auto Sales
CERTIFICATE OF SERVICE
I certify that, on February 21, 2015, I served a copy of Appellant's Brief by
electronic service on Robert K. Wise at bwise@lwsattorneys.com. I further certify
that a copy of this corrected brief was served on Robert K. Wise, appellee's counsel,
by electronic service at bwise@lwsattorneys.com on March 23, 2015.
/s/Yolonda Sewell
Yolonda Sewell
?-)_
Appendix
I. Copy of Final Summary Judgment
IL Text of Texas Rule of Civil Procedure 166a
III. Text of Civil Practice and Remedies Code § 16.068
IV. Contract Between The Parties