Robin Singh Educational Services, Inc. v. Test Masters Educational Services, Inc.--Appeal from 270th District Court of Harris County
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Affirmed and Majority and Concurring Opinions filed March 8, 2011.
In The
Fourteenth Court of Appeals
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NO. 14-09-00974-CV
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ROBIN SINGH EDUCATIONAL SERVICES, INC., Appellant
V.
TEST MASTERS EDUCATIONAL SERVICES, INC., Appellee
On Appeal from the 270th District Court
Harris County, Texas
Trial Court Cause No. 2009-07572
MAJORITY
OPINION
Appellant, Robin Singh Educational Services, Inc., appeals from the granting of a
motion for summary judgment in favor of appellee, Test Masters Educational Services,
Inc. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Appellant and appellee both offer test preparation courses for various standardized
scholastic examinations. Appellant is a California company based in Los Angeles, while
appellee is a Texas company based in Houston. Appellee operates as ―Test Masters
Educational Services‖ and owns the domain name ―www.testmasters.com‖ and
corresponding email addresses.
Appellant operates as ―Testmasters‖ and owns the
domain names ―www.testmasters.net‖ and ―www.testmasters180.com.‖ Appellant and
appellee have engaged in extensive litigation over the use of the name ―Testmasters‖ in all
of its various forms. In the litigation involved in this appeal, appellant asserts a single
cause of action against appellee: conversion.
Specifically, appellant contends that
potential consumers of appellant’s test preparation courses, confused as a result of the
similar names of the two businesses, mistakenly sent email communications to appellee.
Appellant further asserts (1) it has a right to possess these ―misdirected‖ emails; (2) it has
demanded that appellee ―return‖ them; and (3) that appellee has refused to do so.
Eventually, appellee moved for summary judgment. In its motion, appellee argued
it was entitled to summary judgment because (1) email communications are intangible
property incapable of being converted as a matter of law; and (2) receipt of misdirected
intangible electronic communications is not conversion of property under Texas law.
Following a hearing, the trial court granted appellee’s motion without specifying the
reason and dismissed appellant’s claim. This appeal followed.
DISCUSSION
In two issues on appeal, appellant asserts the trial court erred when it granted
appellee’s motion for summary judgment. Initially, appellant contends the trial court
erroneously determined that email communications are intangible property incapable of
being converted under Texas law. In his second issue, appellant argues that if we
conclude emails are intangible property, we should still reverse the summary judgment
because the so-called merger exception applies to the misdirected emails.
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I.
The standard of review.
The movant for summary judgment has the burden to show there is no genuine issue
of material fact and it is entitled to judgment as a matter of law. Nixon v. Mr. Prop. Mgmt.
Co., 690 S.W.2d 546, 548 (Tex. 1985). If there is no genuine issue of material fact,
summary judgment should issue as a matter of law. Haase v. Glazner, 62 S.W.3d 795,
797 (Tex. 2001). In addition, summary judgment is proper where a plaintiff’s claim is not
cognizable under Texas law. See Express One Int’l v. Steinbeck, 53 S.W.3d 895, 898
(Tex. App.—Dallas 2001, no pet.). We review a trial court’s summary judgment de novo.
Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).
II.
Does Texas conversion law encompass intangible property?
―The unauthorized and wrongful assumption and exercise of dominion and control
over the personal property of another, to the exclusion of or inconsistent with the owner’s
rights, is in law a conversion.‖
Hunt v. Baldwin, 68 S.W.3d 117, 131 (Tex.
App.—Houston [14th Dist.] 2001, no pet.) (quoting Waisath v. Lack’s Stores, Inc., 474
S.W.2d 444, 447 (Tex. 1971)). The elements of a cause of action for conversion are: (1)
the plaintiff owned, had legal possession of, or was entitled to possession of the property;
(2) the defendant assumed and exercised dominion and control over the property in an
unlawful and unauthorized manner, to the exclusion of and inconsistent with the plaintiff’s
rights; and (3) the defendant refused plaintiff’s demand for return of the property. Id.
Appellant’s claim is based solely on the alleged conversion of intangible electronic
communications which appellant alleges were mistakenly sent to appellee by potential
customers of appellant. However, under Texas law, a tort action for conversion is limited
to tangible property.
See Express One, 53 S.W.3d at 901 (―Texas law has never
recognized a cause of action for conversion of intangible property except in cases where an
underlying intangible right has been merged into a document and that document has been
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converted.‖) Because the allegedly misdirected emails are intangible, they cannot support
a conversion claim. See id. Therefore, we overrule appellant’s first issue.1
III.
Did appellant waive its second issue?
In its second issue, appellant asserts that if we decide emails are intangible personal
property, then the so-called ―merger exception‖ should apply to defeat appellee’s motion
for summary judgment. Under the ―merger exception,‖ some courts have held that certain
types of intangible property rights can be converted where the underlying intangible right
has been merged into a physical document and that document itself has been converted.
Pebble Beach Co. v. Tour 18 I, Ltd., 942 F.Supp. 1513, 1569 (S.D. Tex. 1996). Under this
so-called ―merger exception,‖ Texas courts have recognized conversion claims involving
the following types of intangible property: lease documents, Prewitt v. Branham, 643
S.W.2d 122, 123 (Tex. 1983); confidential customer lists, Deaton v. United Mobile
Networks, L.P., 926 S.W.2d 756, 762 (Tex. App.—Texarkana 1996), rev’d in part on other
grounds, 939 S.W.2d 146 (Tex. 1997); and shares of stock, Watts v. Miles, 597 S.W.2d
386, 387–88 (Tex. App.—San Antonio 1980, no writ).
In response to this issue, appellee asserts appellant waived this argument on appeal
because it was not presented in appellant’s summary judgment response. To preserve an
argument against the granting of a motion for summary judgment for appellate review, the
non-movant must expressly present that argument to the trial court within its written
response to the motion. Priddy v. Rawson, 282 S.W.3d 588, 597 (Tex. App.—Houston
[14th Dist.] 2009, pet. denied). Appellant did not include in its summary judgment
response any argument that the trial court should deny appellee’s motion because the
misdirected emails fall within the ―merger exception.‖ Thus, appellant failed to preserve
this issue for appellate review. We overrule appellant’s second issue.
1
To the extent appellant invites this court to extend the law of conversion to include misdirected
intangible email communications, we decline that invitation. See Bren-Tex Tractor Co., Inc. v.
Massey-Ferguson, Inc., 97 S.W.3d 155, 161 (Tex. App.—Houston [14th Dist.] 2002, no pet.) (stating that
the creation of a new tort duty is beyond the province of an intermediate appellate court).
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CONCLUSION
Having overruled appellant’s issues on appeal, we affirm the trial court’s final
judgment.
/s/
John S. Anderson
Justice
Panel consists of Justices Anderson, Frost, and Brown. (Frost, J., Concurring.)
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