STEVE CHILDERS v. KING RANCH, INC. AND JACK HUNT--Appeal from 105th District Court of Kleberg County

NUMBER 13-03-006-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI EDINBURG

STEVE CHILDERS, Appellant,

v.

KING RANCH, INC. AND JACK HUNT, Appellees.

On appeal from the 105th District Court

of Kleberg County, Texas.

M E M O R A N D U M O P I N I O N

Before Chief Justice Valdez and Justices Ya ez and Garza

Opinion by Chief Justice Valdez

This is an appeal of a summary judgment granted in favor of appellees, King Ranch, Inc. (King Ranch) and Jack Hunt (Hunt), and against appellant, Steve Childers. In two issues, appellant asserts the trial court erred: (1) by denying appellant s motion to modify discovery control plan and granting appellees motion to quash and for protective order; and (2) by granting appellees motion for summary judgment. We affirm.

I. Factual and Procedural Background

This case involves claims asserted in connection with the termination of appellant s employment at King Ranch. Appellant s November 22, 2000 original petition named King Ranch as defendant and asserted causes of action for breach of contract, defamation, respondeat superior and wrongful discharge. Appellant requested discovery be conducted under discovery control plan level III, // but failed to request the trial court enter a docket control order. The trial court did not enter an order.

On December 21, 2000, appellant served King Ranch with a request for disclosure, and King Ranch timely responded on January 23, 2001. During the nine-month discovery period, // appellant did not seek any additional discovery and took no depositions. On September 25, 2001, the parties executed a rule 11 agreement // which stated: Steve Childers, Plaintiff, and King Ranch, Inc., Defendant, agree and stipulate that the discovery deadline of October 19, 2001, is extended until December 19, 2001 for the limited purpose of allowing the parties to take additional depositions. Discovery ended pursuant to the parties rule 11 agreement on December 19, 2001. King Ranch took the deposition of a non-party witness during this extended discovery period; appellant did not schedule or take any depositions.

On January 9, 2002, appellant filed his first amended original petition adding Hunt as a defendant. Appellant modified the causes of action asserted, abandoning previously asserted causes of action for breach of contract and wrongful termination and adding new causes of action for tortious interference with a business relationship, quantum meruit, and equitable estoppel. Appellant again requested discovery be conducted under discovery control plan level III. Appellees timely filed an answer on January 24, 2002.

On May 15, 2002, appellant served King Ranch with a request for production and Hunt with a request for disclosure. On May 31, 2002, the parties executed a second rule 11 agreement whereby appellant withdrew his request for production to King Ranch and agreed that Hunt was only required to respond if the trial court denied appellees June 6, 2002 motion to quash and for protective order. Appellant submitted a motion to modify discovery control plan, and a hearing was held on all submitted discovery motions on June 27, 2002. By order dated August 8, 2002, the trial court granted appellees motion to quash and for protective order and denied appellant s motion to modify discovery control plan. Thereafter, appellant filed his second amended original petition on August 26, 2002. Appellant s second amended original petition abandoned his claims for tortious interference with a business relationship and quantum meruit. Appellant asserted claims for defamation, under a theory of respondeat superior, against King Ranch and equitable estoppel against Hunt.

Appellees filed a motion for summary judgment on June 4, 2002, and a hearing was held on the motion on August 29, 2002. The court granted appellees motion, and a final judgment granting summary judgment was signed on September 30, 2002. Appellant timely filed a notice of appeal on October 31, 2002.

II. Analysis

A. Jurisdiction

In a sub-issue of appellant s second issue on appeal, appellant asserts the order granting appellees motion for summary judgment is not final, as it does not dispose of all causes of action submitted. Appellant s complaint is that appellees June 4, 2002 motion for summary judgment asserted a right to judgment on appellant s defamation, tortious interference with a contract, quantum meruit and equitable estoppel causes of action, but not his respondeat superior claim. This presents a challenge to the Court s jurisdiction which must be addressed as a preliminary matter. See Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001).

Standard of Review

The Court reviews challenges to the finality of a summary judgment under a de novo standard of review. See Garcia v. Comm'rs Court, 101 S.W.3d 778, 783-84 (Tex. App. Corpus Christi 2003, no pet.).

Analysis

Generally, an appeal may be taken only from a final judgment. See id. A judgment issued without a conventional trial is final for purposes of appeal only if it actually disposes of all claims and parties then before the court, regardless of its language. See Lehmann, 39 SW.3d at 200. Because the law does not require that a final judgment be in any particular form, whether a judicial decree is a final judgment must be determined from its language and the record in the case. See Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 272 (Tex. 1992). Appellant s live pleading at the time the judgment was rendered included a claim for defamation, under a theory of respondeat superior, against King Ranch and a claim for equitable estoppel against Hunt. See Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 155 (Tex. 2004) (providing an explanation of the plaintiff s live pleading). Although appellees motion does not specifically request judgment on appellant s respondeat superior claim, it does request judgment on appellant s defamation claims. Appellant cannot maintain his respondeat superior claim without the underlying defamation claim. See Minyard Food Stores v. Goodman, 80 S.W.3d 573, 577-78 (Tex. 2002). Thus, we conclude the trial court s judgment disposes of all parties and claims asserted. See Garcia, 101 S.W.3d at 792-93. Accordingly, we conclude the trial court s judgment is final, and we are therefore vested with jurisdiction. Appellant s sub-issue challenging finality is overruled. //

B. Summary Judgment

Appellant s second issue asserts the trial court erred by granting appellees motion for summary judgment, asserting the trial court improperly applied the summary judgment standard. Appellees motion for summary judgment covered causes of action for defamation, tortious interference with a contract, quantum meruit and equitable estoppel. However, appellant amended his petition prior to the trial court s ruling on appellees motion. Appellant s live pleading at the time the judgment was rendered consisted of a claim for defamation, under a theory of respondeat superior, against King Ranch and a claim for equitable estoppel against Hunt. See Two Thirty Nine Joint Venture, 145 S.W.3d at 155. We will therefore only address these claims. See Tex. R. App. P. 47.4.

Standard of Review

Appellees filed a traditional motion for summary judgment, and the standard of review used in traditional challenges is well-settled. See Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995). Accordingly, we will not recite it here. See Tex. R. App. P. 47.4.

Analysis

1. Defamation

Appellees motion for summary judgment asserts appellant s defamation claims fail because (1) the claims against Hunt are barred by the one-year limitations period; (2) the alleged statements are not defamatory; (3) if made, the statements are true; and (4) the alleged statements are protected by a qualified privilege and there is no evidence of actual malice to defeat the privilege. The trial court s final judgment does not specify which ground or grounds served as the basis of its summary judgment. When the trial court enters a broad judgment not specifying the grounds upon which the judgment is granted, then all grounds asserted by the movant will be considered to determine if any ground supports the judgment. See Rogers v. Ricane, 772 S.W.2d 76, 79 (Tex. 1989).

Qualified Privilege

An employer has a conditional or qualified privilege that attaches to communications made in the course of an investigation following a report of employee wrongdoing. See Randall's Food Mkts. v. Johnson, 891 S.W.2d 640, 646 (Tex. 1995). The privilege remains intact as long as communications pass only to persons having an interest or duty in the matter to which the communications relate. Id. Proof that a statement was motivated by actual malice existing at the time of publication defeats the privilege. Id. In the defamation context, a statement is made with actual malice when the statement is made with knowledge of its falsity or with reckless disregard as to its truth. See Hagler v. Procter & Gamble Mfg. Co., 884 S.W.2d 771, 772 (Tex. 1994) (per curiam). To invoke the privilege on summary judgment, an employer must conclusively establish that the allegedly defamatory statement was made with an absence of malice. See Jackson v. Cheatwood, 445 S.W.2d 513, 514 (Tex. 1969) (per curiam).

The record establishes that the assertions were made in an employment context, and appellant does not dispute the statements were only published to interested parties. To establish lack of actual malice, appellees rely on affidavits of interested parties and the lack of evidence offered to show actual malice by appellant. The basis of appellees contention is that Hunt relied on conclusions in the Nillies Report // and had no reason to believe that the statements and assertions, when published, were allegedly false.

The only evidence offered to establish Hunt s frame of mind, which is necessary to establish good faith or lack of malice, was his own affidavit. See id. Our summary judgment rule permits the granting of a summary judgment on the basis of uncontroverted affidavit testimonial evidence of an interested witness if that evidence "is clear, positive and direct, otherwise credible and free from contradictions and inconsistencies, and could have been readily controverted." Tex. R. Civ. P. 166a. The difficulty arises in the application of the final prong of this rule. The Texas Supreme Court overruled its prior precedent // in Casso and provided:

We believe that "could have been readily controverted" does not simply mean that the movant's summary judgment proof could have been easily and conveniently rebutted. Rather, it means that testimony at issue is of a nature which can be effectively countered by opposing evidence. If the credibility of the affiant or deponent is likely to be a dispositive factor in the resolution of the case, then summary judgment is inappropriate. On the other hand, if the non-movant must, in all likelihood, come forth with independent evidence to prevail, then summary judgment may well be proper in the absence of such controverting proof.

Casso v. Brand, 776 S.W.2d 551, 558 (Tex. 1989).

To prevail at trial, a plaintiff must show that defendant made a false and defamatory statement of fact "with knowledge that it was false or with reckless disregard of whether it was false or not." Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 171 (Tex. 2003) (quoting New York Times Co. v. Sullivan, 376 U.S. 254, 279-80 (1964)). Actual malice, as used in defamation cases, is a term of art which is separate and distinct from traditional common law malice. It does not include ill will, spite or evil motive, but rather requires "sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication." See id. (quoting St. Amant v. Thompson, 390 U.S. 727, 731 (1968)). It is not enough for the jury to disbelieve defendant's testimony; rather, the plaintiff must offer clear and convincing affirmative proof to support a recovery. See Casso, 776 S.W.2d at 558. While it is conceivable that a defendant's trial testimony, under the rigors of cross-examination, could provide that requisite proof, it is more likely that plaintiff will have to secure that evidence elsewhere. See id. If he cannot secure it during the discovery process, he is unlikely to stumble on to it at trial. See id.

Appellant points to his own affidavit to controvert appellees asserted qualified privilege. Appellant s affidavit broadly denies the material representations contained in appellees summary judgment proof and contends that appellee Jack Hunt acted with actual malice. However, no affirmative proof was attached to the affidavit to substantiate his contentions regarding appellee s alleged malice. Further, we examined the summary judgment record and found no other controverting proof on the question of actual malice. Thus, we conclude appellant has failed to present affirmative proof raising a genuine issue of material fact on the issue of actual malice. Accordingly, summary judgment was proper. See id.

Because we find appellee is entitled to a qualified privilege, we need not address appellant s remaining contentions and overrule his second issue on appeal. See Tex. R. App. P. 47.4; Rogers, 772 S.W.2d at 79. We further conclude we need not address appellant s respondeat superior claim, as it is premised on his defamation claim. See Tex. R. App. P. 47.4; Minyard Food Stores, 80 S.W.3d at 577-78. 2. Equitable Estoppel

Appellant s equitable estoppel claim is based on alleged oral representations by Hunt that the proposed new incentive program would be more beneficial to appellant, allowing appellant the opportunity to make more money. Appellees assert that equitable estoppel is not an independent cause of action. We agree.

We have previously held that estoppel is not an independent cause of action. See Traylor v. Gray, 547 S.W.2d 644, 652 (Tex. Civ. App. Corpus Christi 1977, writ ref'd n.r.e.). Estoppel is defensive in character, and its function is to preserve rights, and not to bring into being an independent cause of action. Id. Liability cannot be based on estoppel alone; the effect of estoppel is to prevent an opposed party from asserting a legal right to which he would otherwise have been entitled. Id. Accordingly, we sustain appellees contention.

C. Discovery Motions

In his first issue, appellant asserts the trial court erred by denying his motion to modify discovery control plan to level III and granting appellees motion to quash and for protective order. Appellant s complaints regarding discovery as to Hunt are moot; appellant s live pleading does not allege a tenable cause of action against Hunt. // Therefore, we will only address this complaint as it applies to King Ranch. See Tex. R. App. P. 47.4.

Standard of Review

The abuse of discretion standard used in challenges to a trial court s ruling on a discovery motion is well-settled. See Collier Serv. Corp. v. Salinas, 812 S.W.2d 372, 377 (Tex. App. Corpus Christi 1991, no writ). Accordingly, we will not recite it here. See Tex. R. App. P. 47.4.

Analysis

Rule 11 Agreements

The parties executed two rule 11 agreements which set limitations on discovery. When the requisites for a rule 11 agreement are met, // the trial court has a ministerial duty to grant relief in strict accordance with the parties' agreement. See EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 91 (Tex. 1996). However, a party has the right to revoke its consent to a rule 11 agreement at any time before the rendition of judgment. See State v. Bristol Hotel Asset Co., 65 S.W.3d 638, 651-52 (Tex. 2002) (holding that a rule 11 agreement setting discovery deadline valid and enforceable where State did not repudiate or object to agreement in trial court). Nevertheless, a court is not precluded from enforcing a rule 11 agreement once it has been repudiated by one of the parties, but an action to enforce a rule 11 agreement to which consent has been withdrawn must be based on proper pleading and proof. See Padilla v. LaFrance, 907 S.W.2d 454, 462 (Tex. 1995). In such a case, a party may seek to enforce the agreement under contract law. See id. at 461-62.

Neither King Ranch nor appellant contests the validity of the rule 11 agreements or assert consent was withdrawn. Therefore, the trial court was tasked with the ministerial duty to grant relief in strict accordance with the parties' agreements. In the September 25, 2001 agreement, appellant agreed and stipulated to extend the October 19, 2001 discovery deadline to December 19, 2001, for the limited purpose of allowing the parties to take additional depositions. Thus, pursuant to the parties agreement, discovery as to King Ranch ended for all purposes on December 19, 2001. The trial court s ruling strictly conforms to the parties agreement, and accordingly, we conclude the trial court did not abuse its discretion.

III. Conclusion

We affirm the trial court s ruling.

Rogelio Valdez,

Chief Justice

Memorandum Opinion delivered and filed

this 7TH day of April, 2005.