United Genesis Corporation v. Dan Brown--Appeal from 224th Judicial District Court of Bexar County

MEMORANDUM OPINION
No. 04-06-00355-CV
UNITED GENESIS CORPORATION,
Appellant
v.
Dan BROWN,
Appellee
From the 224th Judicial District Court, Bexar County, Texas
Trial Court No. 2006-CI-05218
Honorable Karen H. Pozza, Judge Presiding

Opinion by: Steven C. Hilbig, Justice

 

Sitting: Catherine Stone, Justice

Karen Angelini, Justice

Steven C. Hilbig, Justice

 

Delivered and Filed: May 9, 2007

 

AFFIRMED

 

United Genesis Corporation ("United") brought suit against attorney Dan Brown alleging legal malpractice and violations of the Texas Deceptive Trade Practices Act ("DTPA"). The trial court granted summary judgment in favor of Brown. United appeals. We affirm.

 

FACTUAL AND PROCEDURAL BACKGROUND

United desired to purchase a fast food restaurant in the San Antonio area. It hired Bradfield Properties, Inc. ("Bradfield"), a real estate brokerage firm, to assist in this endeavor. Bradfield, through its agent Rich Tomlinson, directed United to a property known as The Pizza Kitchen. Tomlinson and United's president, Nancy Gimenez, met with Mohammad Rohim Qureshi, who claimed to own The Pizza Kitchen through Qureshi Enterprises, Inc.

United and Qureshi Enterprises, Inc. entered into an earnest money contract pursuant to which United would purchase The Pizza Kitchen and all equipment for $60,000.00. Tomlinson recommended Brown as the escrow agent and closing attorney. Bradfield engaged Brown, forwarded him the earnest money contract, and requested he prepare the closing documents. Brown prepared a document entitled "Escrow Instructions," a bill of sale, a non-competition agreement, an escrow money contract, a promissory note, and a security agreement. As relevant, these documents indicate United was the buyer and Qureshi Enterprises, Inc. was the seller. Brown also conducted a general index search on the name of the purported seller (Qureshi Enterprises, Inc.) and found no existing liens. Though Tomlinson claims to have provided Brown with a certificate of good standing for an entity named Kazi & Qureshi Enterprises, Inc., Brown conducted no lien search with regard to this entity. Brown did not attempt to determine if a certificate of good standing existed for Qureshi Enterprises, Inc. because he contends he was not provided with the necessary information to do so as was required by the Escrow Instructions.

On August 23, 2002, the parties met at Brown's office and signed the closing documents. The day after the closing, United began to experience problems-inventory was short, a computer was missing, and the overall appearance of the restaurant was poor. United also began receiving collection letters and telephone calls. Qureshi disappeared. At United's request, Tomlinson performed a lien search under the name Kazi & Qureshi Enterprises, Inc. The search revealed a lien in the amount of $2,500.00 secured by The Pizza Kitchen's equipment. It was also later determined that Qureshi Enterprises, Inc. had lost its certificate of good standing.

United brought suit against Qureshi and the related entities, Bradfield, and Brown. As to Brown, United alleged legal malpractice and violations of the DTPA. Brown filed a no evidence and traditional motion for summary judgment as to both of United's claims. The trial court entered an order in which it appears to grant both motions, rendering a take nothing judgment in favor of Brown. Following a severance, United perfected this appeal.STANDARD OF REVIEW

Courts review traditional and no evidence motions for summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). A trial court must grant a traditional motion for summary judgment when the movant establishes there are no genuine issues of material fact and it is entitled to judgment as a matter of law on grounds expressly set forth in the motion. Browning v. Prostok, 165 S.W.3d 336, 344 (Tex. 2005). In reviewing an order granting a traditional motion for summary judgment appellate courts take evidence favorable to the nonmovant as true and indulge every reasonable inference from the evidence in favor of the nonmovant Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). A trial court must grant a no evidence motion for summary judgment if the non-movant fails to present more than a scintilla of probative evidence to raise a genuine issue of material fact on the challenged element or elements. Fort Worth Osteopathic Hosp., Inc. v. Reese, 148 S.W.3d 94, 99 (Tex. 2004). More than a scintilla of evidence exists only when the evidence supporting the finding, as a whole, rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). Less than a scintilla exists when the evidence is so weak as to do no more than create a mere surmise or suspicion of a fact. Southwestern Bell Tel. v. Garza, 164 S.W.3d 607, 620 (Tex. 2004); Moore v. K Mart Corp., 981 S.W.2d 266, 269 (Tex. App.-San Antonio 1998, pet. denied).

LEGAL MALPRACTICE

To recover on a claim for legal malpractice a plaintiff must establish: (1) the attorney owed the plaintiff a duty; (2) the attorney breached that duty; (3) the breach proximately caused injury; and (4) the plaintiff suffered damages. Alexander v. Turtur & Assocs., Inc., 146 S.W.3d 113, 117 (Tex. 2004). In his no evidence motion for summary judgment, Brown specifically alleged there was no evidence of damages. In response to Brown's no evidence motion for summary judgment, United produced only one piece of evidence relevant to the element of damages-the affidavit of Gimenez. As to damages, the affidavit states, in toto:

Had Dan Brown made that telephone call, I would not have paid "Qureshi Enterprises, Inc." tens of thousands of dollars for a business and assets that "Qureshi Enterprises, Inc." did not own, nor would I have suffered additional damages resulting from this fraudulent transaction. Those damages amount to economic losses of approximately $75,000.00. . . . Had Dan Brown done what I paid him to do and relied on him to do, United Genesis Corporation and I would not have suffered the damages we did as a result of this transaction.

 

Conclusory statements in affidavits are insufficient to raise a fact issue precluding summary judgment. See Coastal Transp. Co., Inc. v. Crown Cent. Petroleum Corp., 136 S.W.3d 227, 232 (Tex. 2004) (stating that even unobjected-to conclusory testimony is incompetent evidence and does not raise fact issue ). "A conclusory statement is one that does not provide the underlying facts to support the conclusion." 1001 McKinney Ltd. v. Credit Suisse First Boston Mortg. Capital, 192 S.W.3d 20, 27 (Tex. App.-Houston [14th Dist.] 2005, pet. denied). Of the three statements in Gimenez's affidavit that could possibly be construed to refer to damages, only the one alleging a $75,000.00 loss actually addresses the damages allegedly suffered by United. However, Gimenez has failed to provide any underlying facts to support her conclusion that United suffered $75,000.00 in damages as a result of Brown's actions or inactions. Her statement is nothing more than a bare conclusion and is therefore insufficient to raise a fact issue precluding summary judgment. Because United failed to present any competent summary judgment evidence on the element of damages, the trial court did not err in granting Brown's no evidence motion for summary judgment as to the legal malpractice claim. (1) Accordingly, we overrule the portion of United's first issue challenging the trial court's order granting Brown's no evidence motion for summary judgment as to legal malpractice. (2) DECEPTIVE TRADE PRACTICES ACT

Brown alleged in his traditional motion for summary judgment that United has no claim under the DTPA as a matter of law. He contends United's DTPA claims were nothing more than recast malpractice claims for which recovery under the DTPA is precluded. We agree.

Section 17.49(c) of the DTPA states the statute is inapplicable to "a claim for damages based on the rendering of a professional service, the essence of which is the providing of advice, judgment, opinion, or similar professional skill." Tex. Bus. & Com. Code Ann. 17.49(c) (Vernon Supp. 2006). A professional service is one that consists of acts particular to the individual's specialized vocation. Nast v. State Farm Fire & Cas. Co., 82 S.W.3d 114, 122 (Tex. App.-San Antonio 2002, no pet.). An act is not a professional service if its only distinction is performance by a professional; rather, it must be an act that requires the professional to use his specialized knowledge or training. Id. This exemption from the DTPA does not apply to an express misrepresentation of material fact that cannot be characterized as advice, judgment, or opinion. Tex. Bus. & Com. Code Ann. 17.49(c)(1) (Vernon Supp. 2006).

Brown argues United's DTPA claims are prohibited because United's allegations against him are based on actions he failed to take in his rendition of professional services. United counters its DTPA action is viable because Brown misrepresented the identity of the owner of The Pizza Kitchen as Qureshi Enterprises, Inc.

United generally pled that based upon information set forth in the petition all defendants violated the DTPA. United then specifically pled four particular violations. Each specific violation is limited to Bradfield's misrepresentation that The Pizza Kitchen was owned by Qureshi or Qureshi Enterprises, Inc. As to Brown, United simply alleged he violated the DTPA based on preceding paragraphs in the petition-those in the factual rendition and the legal malpractice portions of the petition. In those paragraphs United pled that Brown: (1) failed to follow the escrow instructions (which required him to exercise his "independent professional judgment" on behalf of both the buyer and the seller); (2) failed to ensure the property was actually owned by Qureshi Enterprises, Inc. and that the entity was in corporate good standing with the Texas Secretary of State; and (3) prepared the closing documents based solely on Bradfield's representation without independent verification of identity of ownership or corporate standing. These omissions are not express misrepresentations of material facts but are arguably acts that Brown's legal knowledge or training should have prompted him to undertake despite Bradfield's representation. United's complaints are clearly based on omissions that required Brown to utilize his professional judgment and skill thereby rendering them professional services for which no DTPA action is permitted. See Nast, 82 S.W.3d at 122. According to United's own pleadings, the misrepresentation of fact with regard to identity of ownership was Bradfield's, not Brown's. Accordingly, the trial court did not err in granting Brown's traditional motion for summary judgment on United's DTPA claims. (3)

CONCLUSION

Based upon the foregoing, we overrule United's issues and affirm the trial court's judgment.

 

Steven C. Hilbig, Justice

 

1. United sought punitive damages claiming Brown was grossly negligent. Because United produced no evidence of damages with regard to its claim of legal malpractice, it is not entitled to punitive damages. See Nabours v. Longview Sav. & Loan Ass'n, 700 S.W.2d 901, 904 (Tex. 1985) (holding recovery of actual damages is prerequisite to receipt of exemplary damages).

2. Because the trial court correctly granted Brown's no evidence motion for summary judgment on the legal malpractice claim, we need not address the portion of United's second issue challenging the trial court's order granting Brown's traditional motion for summary judgment on that claim.

3. Because the trial court correctly granted Brown's traditional motion for summary judgment on United's DTPA claims, we need not address the portion of United's first issue challenging the trial court's order granting Brown's no evidence motion for summary judgment on that claim.