Clark D. Sadler v. NationsBank of Texas, N.A. and Bank of America, N.A.--Appeal from 81st Judicial District Court of Frio County

MEMORANDUM OPINION
No. 04-03-00706-CV
Clark D. SADLER,
Appellant
v.
BANK OF AMERICA, N.A., as successor in interest to NationsBank of Texas, N.A.,
Appellee
From the 81st Judicial District Court, Frio County, Texas
Trial Court No. 00-01-00029-CVF
Honorable Stella Saxon, Judge Presiding

Opinion by: Catherine Stone, Justice

Sitting: Catherine Stone, Justice

Sarah B. Duncan, Justice

Karen Angelini, Justice

Delivered and Filed: June 23, 2004

AFFIRMED

Clark D. Sadler ("Sadler") appeals the trial court's order granting summary judgment in favor of Bank of America, N.A. ("BOA"), as successor in interest to NationsBank of Texas, N.A. We affirm the trial court's order.

Background

On January 25, 2000, Sadler filed suit against BOA, claiming that BOA breached the terms of a Compromise Settlement Agreement ("Agreement") that settled an earlier lawsuit between the parties. Specifically, Sadler contended that BOA had a duty under the Agreement to report to any appropriate credit agency that the debt evidenced by the promissory note upon which BOA initiated the earlier lawsuit had settled. Sadler asserted that his credit was damaged because BOA failed to make the requisite report. The order dismissing the earlier lawsuit was not signed by the trial court until October 4, 2000.

On January 10, 2003, BOA moved for summary judgment on both traditional and no-evidence grounds. BOA asserted that Sadler had failed to produce any settlement agreement and any oral promise was unenforceable under Rule 11 of the Texas Rules of Civil Procedure. BOA also asserted that any attempt to relitigate the claims or issues in the earlier lawsuit were barred by res judicata and/or collateral estoppel.

Sadler responded by producing a copy of the Agreement that was not signed by BOA or Sadler. In the signature space for Sadler's signature, the notation "/s/" appears; however, the space for notarizing Sadler's signature is blank. Sadler also attached his affidavit and affidavits from his attorneys to his response. Sadler stated that BOA's attorneys proposed the Agreement. Sadler stated that he executed the Agreement and directed his attorneys to sign the dismissal order. Sadler stated that the dismissal order was executed because the Agreement was signed. Sadler stated that he returned his signed copy of the Agreement to BOA's attorneys. Sadler stated that he was required to sign the Agreement in order to obtain the settlement money. W. Burl Brock, one of Sadler's attorneys, stated in his affidavit that the Agreement was drafted by BOA's attorneys. Brock stated that BOA paid Sadler and his attorneys the settlement amount, Sadler cashed the check and executed the Agreement, and the attorneys executed the dismissal order. Brock stated that his files did not contain a fully executed copy of the Agreement; however, Sadler and his attorneys relied upon the representations of BOA's attorneys. Sadler's other attorney, Grady Roberts, produced an affidavit containing the same language as is contained in Brock's affidavit.

BOA objected to Sadler's summary judgment evidence, asserting that Sadler's affidavit is not based on personal knowledge and statements contained in the affidavit are speculative, conclusory, constitute legal conclusions or opinions, or are parol evidence. BOA also objected to the attorneys' affidavits, asserting that the affidavits are not based on personal knowledge and statements contained in the affidavits are hearsay, speculative, inadmissible parol evidence or legal conclusions. Finally, BOA responded that the unsigned Agreement was unenforceable under Rule 11.

BOA later filed a supplement to its motion for summary judgment, asserting that if the trial court considered the terms of the Agreement, summary judgment was still appropriate because no duty had arisen under the express terms of the Agreement. The Agreement contained an obligation to report to credit reporting agencies after the "Closing Date" which is defined as "the last date this Agreement is signed by any party." Since BOA contended the Agreement was never signed by Sadler or BOA, BOA asserted that the obligation to report was never triggered.

Sadler then filed a supplemental response, asserting that BOA was estopped from denying the existence of the Agreement and that the facts surrounding the Agreement give rise to genuine issues of material fact regarding its enforceability. BOA filed a reply to Sadler's supplemental response, asserting that an unsigned Rule 11 agreement is unenforceable as a matter of law. BOA further replied that Sadler had failed to come forward with summary judgment proof to raise a fact issue concerning his estoppel defense. BOA noted that Sadler had "not shown any promise by BOA to send credit reporting letters nor any detrimental reliance thereon or that BOA promised to sign the [Agreement]." BOA further replied that the execution of the Agreement by all parties was a condition precedent to any duty to report to the credit agencies.

BOA also filed additional objections to Sadler's summary judgment evidence. BOA contended that the Agreement had not been properly authenticated, constituted inadmissible hearsay,

and violated the best evidence rule. BOA noted that Sadler had produced a second version of the Agreement on June 30, 2003, which contained handwritten notations, increasing the amount of the costs. In the second version of the Agreement, the language regarding the duty to report to credit agencies was underlined.

The trial court sustained the objections and granted summary judgment in favor of BOA.

Standard of Review

Under traditional summary judgment standards, we must adhere to these well-established guidelines: (1) the movant has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law; (2) in deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true; and (3) every reasonable inference must be indulged in favor of the non-movant and any doubts must be resolved in favor of the non-movant. American Tobacco Co., Inc., v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997); Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985). Summary judgment is "proper if the defendant disproves at least one element of each of the plaintiff's claims." American Tobacco Co., 951 S.W.2d at 425; Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 476-77 (Tex. 1995).

We apply the same legal sufficiency standard in reviewing a no-evidence summary judgment as we apply in reviewing a directed verdict. Moore v. K Mart Corp., 981 S.W.2d 266, 269 (Tex. App.--San Antonio 1998, pet. denied). We look at the evidence in the light most favorable to the respondent against whom the summary judgment was rendered, disregarding all contrary evidence and inferences. Id. A no-evidence summary judgment is improperly granted if the respondent brings forth more than a scintilla of probative evidence to raise a genuine issue of material fact. Id. 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. Id. More than a scintilla of evidence exists when the evidence rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. Id.

Discussion

In his brief, Sadler broadly asserts in his single point of error that the trial court erred in granting summary judgment because he had raised genuine issues of material fact. In the argument section of Sadler's brief, Sadler has three separate subheadings entitled: Estoppel; Affidavits; and Res Judicata. In its brief, BOA asserts that summary judgment should be affirmed on grounds that Sadler has failed to address, namely BOA's objections to Sadler's summary judgment evidence and the failure to satisfy the condition precedent to BOA's alleged duty to report to the credit agencies.

In addressing the affidavits, Sadler's brief contains two sentences, stating, "In this case, the affidavits of W. Burl Brock, Clark D. Sadler and Grady L. Roberts, Jr. clearly reflect that they are proper affidavits and that they were sworn as subscribed to before a notary public. In all three cases, W. Burl Brock, Clark D. Sadler and Grady L. Roberts, Jr. were intimately involved in the preceding lawsuit, and clearly have knowledge of the facts and clearly swore to facts contained in the affidavits." We agree that Sadler's brief is inadequate. The brief fails to address BOA's specific objections and contains no citation to appropriate authority. See Tex. R. App. P. 38.1(h); Carlton Firm, P.C. v. Edwards, No. 08-03-00009-CV, 2004 WL 540324, at *4 (Tex. App.--El Paso Mar. 18, 2004, no pet.) (not designated for publication); Chapman Children's Trust v. Porter & Hedges, L.L.P., 32 S.W.3d 429, 435 (Tex. App.--Houston [14th Dist.] 2000, pet. denied); Thedford v. Union Oil Co., 3 S.W.3d 609, 615-16 (Tex. App.--Dallas 1999, pet. denied). Sadler's failure to adequately brief the reasons he believed the trial court's ruling on the objections was erroneous would ordinarily result in a waiver of the issue. However, the waiver of this issue would require an affirmance of the trial court's judgment because Sadler would not have produced any summary judgment evidence in response to BOA's no-evidence motion. This court is not permitted to affirm a judgment on the basis of briefing inadequacies without first ordering the party to re-brief. Inpetco, Inc. v. Texas American Bank/Houston N.A., 729 S.W.2d 300 (Tex. 1987). Accordingly, we do not rest our decision on Sadler's briefing inadequacies.

With regard to Sadler's breach of contract claim, the Agreement is required to conform with Rule 11 because it is an agreement "between attorneys or parties touching" a pending suit. Tex. R. Civ. P. 11. In order to be enforceable, an agreement governed by Rule 11 must be "signed and filed with the papers as part of the record." Tex. R. Civ. P. 11. Because there is no signed agreement filed with the record of this case, it is not enforceable as a matter of law. See Kennedy v. Hyde, 682 S.W.2d 525, 530 (Tex. 1984) (holding settlement agreement that was unsigned by one party was not enforceable).

With regard to Sadler's estoppel claim, we note that the Texas Supreme Court has acknowledged that "a nonconforming agreement may be enforced for similar equitable reasons." Kennedy, 682 S.W.2d at 529. However, as one court has recently noted, "[a]pplication of the exception has been extremely limited." Miller v. KFC Corporation, No. Civ.A.3:99-CV-41566D, 2000 WL 1123588, at *1 (N.D. Tex. Aug. 3, 2000) (quoting Valley Ranch Dev. Co. v. FDIC, 960 F.2d 550, 554 n.1 (5th Cir. 1992)), as being unaware of any case invoking the equity exception to enforce disputed oral agreements). Even assuming that promissory estoppel would be an appropriate means by which to enforce a promise allegedly made in an unenforceable Rule 11 agreement, Sadler has not met his summary judgment burden in this case.

Because Rule 11 is analogous to the statute of frauds, see Padilla v. LaFrance, 907 S.W.2d 454, 460 (Tex. 1995), the same summary judgment burden applicable in asserting a promissory estoppel defense to the statute of frauds should apply when a non-movant asserts promissory estoppel as a defense to Rule 11. When a movant for summary judgment establishes the applicability of the statute of frauds as a matter of law, the movant does not have the burden to negate the plaintiff's claim of promissory estoppel. Saucedo v. Rheem Mfg. Co., 974 S.W.2d 117, 125 (Tex. App.--San Antonio 1998, pet. denied). Instead, the non-movant has the burden to raise a fact issue as to its promissory estoppel defense. Id. In general, the elements required to establish promissory estoppel are: (1) a promise; (2) foreseeability of reliance thereon by the promisor; and (3) substantial reliance by the promisee to his detriment. Ford v. City State Bank of Palacios, 44 S.W.3d 121, 139 (Tex. App.--Corpus Christi 2001, no pet.). When promissory estoppel is raised as a bar to the application of the statute of frauds, the oral promise relied upon must be to sign a written agreement that satisfies the statute of frauds. Nagle v. Nagle, 633 S.W.2d 796, 800 (Tex. 1982); Ford, 44 S.W.3d at 139; Saucedo, 974 S.W.2d at 125.

The summary judgment evidence presented in this case is similar to the evidence presented in Barnett v. Legacy Bank of Texas, No. 11-02-00114-CV, 2003 WL 22358578, at *6 (Tex. App.--Eastland Oct. 16, 2003, pet. denied) (not designated for publication). In that case, Barnett raised promissory estoppel as a defense to Legacy Bank's claim that the statute of frauds barred his contract claim. 2003 WL 22358578, at *6. In his affidavit, Barnett stated that based on representations made by two Legacy Bank employees, Barnett's "understanding was that the Bank was promising to sign written documents, or had already done so." The court noted that no summary judgment evidence was introduced to show: "(1) that any Legacy Bank employee represented that Legacy Bank would sign a written agreement complying with the statute of frauds or (2) that Legacy Bank promised or agreed to sign an agreement complying with the statute of frauds." Id. The court concluded, "Barnett's statement as to 'his understanding' is no evidence that Legacy Bank [] promised to sign a written agreement that complied with the statute of frauds." Id. The court, therefore, held that Barnett did not raise a fact issue on his promissory estoppel defense. Id.

In this case, Sadler stated in his affidavit that BOA, through its attorneys, "proposed a settlement to [Sadler] which involved the payment of $91,153.40 and they agreed that 'As soon as practicable following the Closing Date, NATIONSBANK will report to any appropriate credit reporting agency that the debt evidenced by the promissory note upon which NATIONSBANK initiated the Action has been settled.'" Sadler further stated that he believed that the Agreement was binding upon the parties when the court ordered the dismissal of the case. Sadler's attorneys both stated in their affidavits that they were "under the belief that [BOA] also executed the release because they represented in the Dismissal which they drafted that the parties had reached a settlement agreement." The attorneys further generally state that they "relied upon the representations made by the attorney for the bank."

None of these affidavits contains any evidence that BOA promised to sign a written agreement in compliance with Rule 11. Accordingly, Sadler failed to raise a fact issue on his promissory estoppel defense. We further note that although Sadler stated in his affidavit that he relied on the Agreement in accepting the settlement money and directing the dismissal of the earlier lawsuit, the earlier lawsuit was not dismissed until after Sadler filed the instant lawsuit claiming that BOA failed to report to the credit agencies. In fact, the earlier lawsuit was not dismissed until over eight months after the instant lawsuit was filed. Accordingly, it is questionable whether Sadler sufficiently raised a genuine issue of material fact with regard to the reliance element of his promissory estoppel defense.

Conclusion

The trial court's judgment is affirmed.

Catherine Stone, Justice