The Trebeschs sold a racehorse to
the Morrises with partial payment and the balance to be paid when possession of
the horse was delivered in several months.
Later, the Trebeschs sold the horse to another person for a higher price
but refused to refund the partial payment to the Morrises on the ground they
breached the contract and the partial payment was non-refundable earnest money.
The trial court granted summary judgment for the Morrisses and in this
opinion the Court of Appeals agrees. There
was no evidence that the money paid to the Trebeschs was a non-refundable
deposit rather than a down payment on the horse.
So the Morrisses get there money back, plus substantial attorneys'
Appellants Pat and Nancy Trebesch
agreed to sell a racehorse to Appellees Michael and Belinda Morris. After
Appellees paid a portion of the purchase price, Appellants sold the horse to
another buyer. Appellees sued for the return of their money, alleging breach of
contract and conversion. The trial court granted summary judgment in Appellees'
favor, awarded attorneys' fees, and severed Appellants' counterclaim. We affirm
the trial court's judgment.
The parties agree that in March 2000, Appellants orally
contracted to sell Appellees a racehorse, "I'm Too Impulsive," for
$30,000. The parties further agree that Appellees paid Appellants $20,000 and
that the horse was to be delivered to Appellees in July 2000, at which time the
balance of the purchase price was due. It is undisputed that in July the deal
between the parties fell through, and four or five days later Appellants sold
the horse to another buyer for $35,000. Appellants refused to return Appellees'
$20,000, resulting in this lawsuit being filed by Appellees.
Appellants filed a counterclaim alleging they were damaged by
a letter written by Appellees on February 14, 2001 to the American Paint Horse
Association attacking the personal character of Appellant Pat Trebesch because
of the transaction involving "I'm Too Impulsive."
In three issues on appeal, Appellants contend: there was a
material fact regarding whether the contract was an earnest money contract,
permitting Appellants to keep the money paid by Appellees; by not requesting
attorneys' fees in Appellees' motion for summary judgment or submitting proof
with the motion, Appellees waived their claim for attorneys' fees; and the
motion to sever Appellants' counterclaim was improperly granted because the
issues in the counterclaim were intertwined with Appellees' suit.
WAS THE $20,000
NON‑REFUNDABLE EARNEST MONEY?
In their first issue, Appellants assert there was an issue of
fact raised as to which party breached the contract and whether the contract was
an earnest money contract that would permit Appellants to retain the $20,000.
In a summary judgment case, the issue on appeal is whether the
movants met their summary judgment burden by establishing that no genuine issue
of material fact exists and that the movants are entitled to judgment as a
matter of law. Tex.R. Civ. P. 166a(c);
S.W. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex.2002);
City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979).
The burden of proof is on the movants, and all doubts about the existence of a
genuine issue of material fact are resolved against the movants.
S.W. Elec. Power Co., 73 S.W.3d at 215;
Rhone‑Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex.1999); Great Am. Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391
S.W.2d 41, 47 (Tex.1965). Therefore, we must view the evidence and its
reasonable inferences in the light most favorable to the nonmovants.
Great Am., 391 S.W.2d at 47.
Appellants' brief provides no
discussion or analysis regarding their statement that the evidence raised an
issue of fact as to which party breached the contract, nor do Appellants direct
this court to any evidence in the record raising an issue regarding which party
breached the contract, nor do they further brief their contention. For an issue
to be properly before this court, the issue must be supported by argument and
authorities and must contain appropriate citations to the record.
See Tex.R.App. P. 38 .1(h); Knoll v.
Neblett, 966 S.W.2d 622, 639 (Tex.App.‑Houston [14th Dist.] 1998, pet.
denied). We are not required to search the record, with no guidance from
Appellants, to see if an issue of material fact was raised by the record.
See Hall v. Stephenson, 919 S.W.2d 454, 466‑67 (Tex.App.‑Fort
Worth 1996, writ denied). Thus, an inadequately briefed issue may be waived on
appeal. Id. at 467; see also Fredonia State Bank v. Gen. Am. Life Ins. Co., 881 S.W.2d
279, 284 (Tex.1994) (discussing "longstanding rule" that point may be
waived due to inadequate briefing). Accordingly, we do not further consider this
complaint. See Fredonia, 881 S.W.2d at
284; TXO Prod. Co. v. M.D. Mark, Inc.,
999 S.W.2d 137, 143 (Tex.App.‑Houston [14th Dist.] 1999, pet. denied).
With regard to whether the $20,000 was a refundable deposit or
non‑refundable earnest money, Appellants contend that Appellant Nancy
Trebesch's deposition testimony that the $20,000 was "like earnest
money" established that Appellants were entitled to retain the $20,000 as
A review of the summary judgment evidence reveals the
following testimony concerning the $20,000:
[Deposition of Appellant Nancy Trebesch:]
the Morrisses ever advised by you or your husband that their deposit on the
horse would be nonrefundable?
really wasn't a deposit. No, I guess the question would be‑‑the
answer would be no.
was the $20,000?
Partial payment for the horse. It was‑‑actually, what it was is, we
call it‑‑and what we told them‑‑I'm trying to think how
you put this‑‑it was like earnest money.
was no agreement between you all and the Morrises that you would keep earnest
money in the event that the sale didn't go through?
all just did that?
That's customary in our‑‑in our business.
they‑‑if they breached a contract, yes.
[Deposition of Appellant Pat
the contract provide that you could keep any monies paid to you?
you ever tell them that their deposits would be nonrefundable?
was no such agreement like that, was there?
then, did you keep the money?
Counsel]: Objection as to form.
Because of the verbal contract that their loss‑of‑use insurance was
supposed to be paid and I was supposed to be paid up front.
this entitled you to keep $20,000?
Viewing the summary judgment evidence in the light most
favorable to Appellants, we conclude that the testimony relied upon by
Appellants does not raise a genuine issue of material fact concerning whether
the contract between the parties provided that the $20,000 paid by Appellees was
non‑refundable earnest money. We overrule Appellants' first issue.
In their third issue, Appellants contend Appellees waived
their right to attorneys' fees because their motion for summary judgment did not
properly request attorneys' fees and no summary judgment evidence was presented
in support of any claim for attorneys' fees.
In their original petition, Appellees specifically sought
attorneys' fees under section 38.001 of the Texas Civil Practice and Remedies
Code. Tex. Civ. Prac. & Rem.Code Ann. § 38.001(8) (Vernon 1997). [FN1]
"A person may recover reasonable attorney's fees from an individual ..., in
addition to the amount of a valid claim and costs, if the claim is for ... an
oral or written contract."
Appellees' motion for summary judgment contends Appellants had
no contractual right to retain Appellees' advance payment and Appellees are
entitled to judgment as a matter of law. In closing, Appellees "pray for
judgment against Defendants, including
attorneys' fees and for any further relief to which they may be
entitled." [Emphasis added.] Attached to Appellees' motion were excepts
from Appellants' depositions. These excerpts pertained to Appellees' breach of
contract claim. There was no summary judgment evidence relating to Appellees'
claim for attorneys' fees.
Appellants filed a summary judgment response attempting to
show why Appellees had not established their breach of contract claim as a
matter of law. Appellants' response does not mention any claim by Appellees for
On May 16, 2002, the trial court granted Appellees' motion for
summary judgment. The order simply granted the motion, it does not contain any
decreetal language ordering Appellants to pay any sum of money to Appellees, nor
does the order mention Appellees' claim for attorneys' fees or Appellants'
counterclaim for damages. The order did not contain a "Mother Hubbard"
clause that purported to dispose of all issues in the lawsuit, nor did the order
recite that it was a final judgment.
On May 30, 2002, Appellees filed an application for attorneys'
fees and a motion to sever Appellants' counterclaim from the claim of Appellees.
In the application for attorneys' fees, Appellees claimed that because the court
had ruled in their favor on their breach of contract claim, Appellees were
entitled to attorneys' fees pursuant to section 38.001(8). Attached to the
application for attorneys' fees was an affidavit from Appellees' attorney
stating the extent of his work in this case and that $12,228 was the amount of
reasonable and necessary attorneys' fees for Appellees to recover as a result of
Appellants' breach of contract.
On August 2, 2002, Appellants filed a response to Appellees'
application for attorneys' fees and a response to Appellees' motion to sever.
The trial court held an evidentiary hearing on Appellees' application for
attorneys' fees and motion to sever. Appellees' attorney testified regarding his
attorneys' fee claim, and Appellants reiterated their argument that Appellees
had waived their claim for attorneys' fees because Appellees' pleadings did not
seek attorneys' fees, and Appellees' motion for summary judgment did not attach
proof of Appellees' entitlement to attorneys' fees.
On August 14, 2002, the trial court signed a "Final
Judgment" awarding Appellees $20,000 in damages, pre‑ and
post‑judgment interest, and $12,228 in attorneys' fees. On the same day,
the court signed a separate order granting Appellees' motion to sever.
attorneys' fees a ground in Appellees' motion for summary judgment?
Summary judgment cannot be granted except on the grounds
expressly presented in the motion. Johnson
v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 204 (Tex.2002);
Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 912 (Tex.1997). In
determining whether grounds are expressly presented, reliance may not be placed
on briefs or summary judgment evidence.
McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex.1993).
The purpose of this requirement is to provide the opposing party with adequate
information for opposing the motion and to define the issues or points for the
purpose of summary judgment. Westchester
Fire Ins. Co. v. Alvarez, 576 S.W.2d 771, 772 (Tex.1978),
overruled on other grounds by City of Houston v. Cleak Creek Basin Auth.,
589 S .W.2d 671, 678 (Tex.1979); Camden
Mach. & Tool, Inc. v. Cascade Co., 870 S.W.2d 304, 309‑10 (Tex.App.‑Fort
Worth 1993, no writ).
Although Appellees' prayer in their motion for summary
judgment seeks judgment against Appellants "including attorneys'
fees," we conclude that Appellees' claim for attorneys' fees was not
actually a ground listed in the motion for summary judgment. The motion
addressed Appellees' breach of contract claim and put Appellants on notice that
Appellees were seeking summary judgment on that ground. The mere mention of
attorneys' fees in the prayer would certainly not be sufficient to put
Appellants on notice that attorneys' fees were a ground being sought by the
motion, and in fact Appellants' response in no way addressed the attorneys' fee
issue. We hold that because Appellees' motion for summary judgment did not
involve Appellees' claim for attorneys' fees, the trial court did not abuse its
discretion in subsequently holding an evidentiary hearing on Appellees'
application for attorneys' fees and in awarding attorneys' fees to Appellees. We
overrule Appellants' third issue.
In their second issue, Appellants contend the trial court
abused its discretion in severing Appellants' counterclaim from the claims of
Appellees. Appellants' position is that their counterclaim was so intertwined
with Appellees' claims that it constituted a compulsory counterclaim and
severance of their compulsory counterclaim was an abuse of discretion. Appellees
claim the counterclaim was permissive and severance was proper under the
guidelines of Rule 41. Tex.R. Civ. P. 41 (stating "actions which have been
improperly joined may be severed" and "[a]ny claim against a party may
be severed and proceeded with separately").
A severance splits a single suit into two or more independent
actions, each action resulting in an appealable final judgment.
Van Dyke v. Boswell, O'Toole, Davis & Pickering, 697 S.W.2d 381, 383
(Tex.1985). Severance of claims under the Texas Rules of Civil Procedure rests
within the sound discretion of the trial court.
Liberty Nat'l Fire Ins. Co. v. Akin, 927 S.W.2d 627, 629 (Tex.1996) (orig.proceeding).
[FN2] A claim is properly severable if (1) the controversy involves more than
one cause of action, (2) the severed claim is one that would be the proper
subject of a lawsuit if independently asserted, and (3) the severed claim is not
so interwoven with the remaining action that they involve the same facts and
issues. Guar. Fed. Sav. Bank v. Horseshoe
Operating Co., 793 S.W.2d 652, 658 (Tex.1990) (op. on reh'g). The
controlling reasons for a severance are to do justice, avoid prejudice, and
further convenience. Id.
trial court abuses its discretion when it acts without reference to any guiding
rule or principle or acts arbitrarily or unreasonably. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241‑ 42
Appellants contend their counterclaim is compulsory and
therefore the trial court abused its discretion in severing the counterclaim
from the claims of Appellees. A counterclaim is compulsory if "it arises
out of the transaction or occurrence that is the subject matter of the opposing
party's claim and does not require for its adjudication the presence of third
parties of whom the court cannot acquire jurisdiction." Tex.R. Civ. P.
There is a split in the courts of appeals regarding whether an
order severing a compulsory counterclaim will automatically constitute an abuse
of discretion. Compare Rucker v. Bank One
Tex ., N.A., 36 S.W.3d 649, 651 (Tex.App.‑Waco 2000, pet. denied);
Goins v. League Bank & Trust, 857 S.W.2d 628, 630 (Tex.App.‑Houston
[1st Dist.] 1993, no writ); and Mathis v.
Bill De La Garza & Assocs., 778 S.W.2d 105, 106‑07 (Tex.App.‑Texarkana
1989, no writ) (all holding that severance of a compulsory counterclaim is an
abuse of discretion), with In re
Occidental Permian Ltd., No. 07‑03‑0016‑CV, slip op. at 4,
2003 WL 1799012, at *2 (Tex.App.‑Amarillo April 7, 2003, orig. proceeding
[pet. for mandamus filed] ) (holding that so long as trial court abides by Rule
41 it is not error to sever and proceed separately with compulsory
counterclaim); see also Hart v.
Attorneys‑At‑Law, No. 01‑97‑890‑CV, 1999 WL
2391, *6 (Tex.App.‑ Houston [1st Dist.] Dec. 30, 1998, no pet.) (not
designated for publication) (disagreeing with argument that severance of
compulsory counterclaim was abuse of discretion and applying criteria of Rule
"Opinions not designated for publication by the court of appeals under
these or prior rules have no precedential value but may be cited with the
notation, '(not designated for publication).' " Tex.R.App. P. 47.7.
recognizes the split among the circuits, but states it is bound by the holding
of the Texas Supreme Court in McGuire v. Commercial Union Ins. Co., 431 S.W.2d 347, 350‑51
(Tex.1968). Occidental, slip op. at 4,
2003 WL 1799012, at *2 n. 2. In McGuire,
the court citing Rule 41 held that it "is not necessary to determine
whether or not the McGuire claim was, in fact, a compulsory counterclaim, since
the trial court had the discretionary power to sever the McGuire claim."
McGuire, 431 S .W.2d at 351. In
Cherokee Water Co. v. Forderhause, the court of appeals held that a
counterclaim was compulsory in nature and was improperly severed. 641 S.W.2d
522, 523‑26 (Tex.1982). Without further discussion regarding the nature of
the counterclaim, the supreme court applied the criteria of Rule 41 and McGuire regarding appropriateness of the severance, and reversed
the court of appeals. Id. at
We conclude that we need not determine the nature of
Appellants' counterclaim, but we must apply the criteria of Rule 41 and Guaranty Federal Saving Bank, 793 S.W.2d at 658.
In their counterclaim, Appellants alleged causes of action for
defamation, business disparagement, malicious civil prosecution, and malicious
criminal prosecution. These causes of action all arose out of a letter sent by
Appellees on February 14, 2001 to the American Paint Horse Association attacking
the personal character of Appellant Pat Trebesch because of the transaction
involving "I'm Too Impulsive."
breach of contract and conversion claims against Appellants culminated in July
2000 when Appellants sold the horse to a third party and refused to return
Appellees' $20,000. Appellants' counterclaim did not arise until February 2001
when Appellees sent their letter to the American Paint Horse Association. We
hold that these two claims involve two separate causes of action, each of which
would be the proper subject of a lawsuit if independently asserted, and that the
claims are not so interwoven as to involve the same facts and issues.
Accordingly, the trial court did not abuse its discretion in severing
Appellants' counterclaim from the remainder of the case. We overrule Appellants'
Having overruled all of Appellants' issues on appeal, we
affirm the judgment of the trial court.
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