IN THE COURT OF APPEALS FIFTH DISTRICT OF TEXAS AT DALLAS No. 05-10-00642-CV EVAN LANE VAN SHAW, Appellant v. MID-CONTINENT CASUALTY CO., Appellee TRIAL CAUSE NO. CC-09-08193-E ON APPEAL FROM THE COUNTY COURT AT LAW NO. 5 DALLAS COUNTY, TEXAS HONORABLE MARK GREENBERG PRESIDING APPELLEE S OPENING BRIEF Respectfully submitted, DOWNS & STANFORD, P.C. M. Gaddy Wells Texas State Bar No. 21153500 Jay R. Downs Texas State Bar No. 06088200 2001 Bryan Street, Suite 4000 Dallas, Texas 75201 (214) 748-7900 (214) 748-4530 (Facsimile) ATTORNEYS FOR APPELLEE ORAL ARGUMENT REQUESTED BY APPELLEES
IN THE COURT OF APPEALS FIFTH DISTRICT OF TEXAS AT DALLAS No. 05-10-00642-CV EVAN LANE VAN SHAW, Appellant v. MID-CONTINENT CASUALTY CO., Appellee TRIAL CAUSE NO. CC-09-08193-E ON APPEAL FROM THE COUNTY COURT AT LAW NO. 5 DALLAS COUNTY, TEXAS HONORABLE MARK GREENBERG PRESIDING APPELLEE S OPENING BRIEF TO THE HONORABLE JUSTICES OF THE COURT OF APPEALS: Appellee Mid-Continent Casualty Company (Mid-Continent) files its Appellee s Brief 1 and will show that the Final Summary Judgment in its favor should be affirmed in its entirety or dismissed for lack of subject matter jurisdiction due to Shaw s lack of standing. Supplement. 1 CR refers to pages in the Clerk s Record and CRSupp references pages in the Clerk s Record APPELLEE S OPENING BRIEF -i-
TABLE OF CONTENTS Table of Authorities... iii Statement of the Case...1 Points of Error Presented and Replies...2 Point of Error 1: The Court erred in granting summary judgment on grounds not contained in movant s motion for summary judgment....4 Reply to Point of Error 1: The Court correctly granted summary judgment on grounds in movant s motion for summary judgment...4 Point of Error 2: The Court erred in granting summary judgment on affirmative defenses no pled in movant s answer...19 Reply to Point of Error 2: The Court did not grant summary judgment on any affirmative defenses...19 Statement of the Facts...2 Summary of Argument...4 Conclusion...20 Certificate of Service...21 APPELLEE S OPENING BRIEF -ii-
TABLE OF AUTHORITIES CASES American National Ins. Co. v. Warnock, 143 S.W.2d 624, 628 (Tex.Civ.App. - El Paso 1940, err. dism d, judg t correct)...5 Broesche v. Jacobson, 218 S.W.3d 267, 273 n9 (Tex.App.-Houston [14 Dist.] 2007, pet.denied).....8, 20 Centex Corp. v. Dalton, 840 S.W.2d 952, 956 (Tex.1992)...7 City of Beaumont v. Excavators & Constr., Inc., 870 S.W.2d 123, 136-37 (Tex.App.-Beaumont 1993, writ denied)...13 Continental Cas. Co. v. Marx, 480 So.2d 177 (Fla.App. 3 Dist.,1985)...10, 11 Gleason v. Taub, 180 S.W.3d 711, 713 (Tex.App.-Fort Worth 2005, pet. denied)...17 Heldenfels Brothers v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex.1992)...14 House v. Houston Waterworks Co., 88 Tex. 233, 31 S.W. 179, 179 (1895)...17 Hruska v. First State Bank of Deanville, 747 S.W.2d 783, 785 (Tex.1988)...12 Jacobson v. SCI Texas Funeral Services, Inc., Not Reported in S.W.3d, 2001 WL 225339 Mid-Continent2 (Tex.App.-Dallas,2001)(citing Tex.R.Civ.P. 94); In re P.M.S., Not Reported in S.W.3d, 2006 WL 1459993 Mid-Continent2 (Tex.App.-Tyler 2006, no pet.) 16, 19 Laurentis v. United Servs. Auto. Ass'n, 162 S.W.3d 714, 726 (Tex.App.-Houston [14th Dist.] 2005, pet. denied). 5 APPELLEE S OPENING BRIEF -iii-
Love of God Holiness Temple Church v. Union Standard Ins. Co., 860 S.W.2d 179, 180 (Tex.App.-- Texarkana 1993, no writ)...7 MCI Telecomm. Corp. v. Tex. Util. Elec. Co., 995 S.W.2d 647, 652 (Tex.1999)...9, 17 Mercantile Bank & Trust Co. v. Schuhart, 115 Tex. 114, 119 277 S.W. 621, 623-24 (1925)...5 P. Ryan Enterprises, Inc. v. Matthaei, Not Reported in S.W.3d, 2007 WL 1219443 Mid-Continent5 (Tex.App.-Beaumont 2007, no pet.)...8 Patino v. Complete Tire, Inc., 158 S.W.3d 655, 659 (Tex.App.-Dallas 2005, pet. denied)...6 Phillips v. Dow Chem. Co., 186 S.W.3d 121, 127 (Tex.App.-Houston [1st Dist.] 2005, no pet.)...16 Preston Nat. Bank v. Stuttgart Auto Center Inc., Not Reported in S.W.3d, 2010 WL 3310727 Mid-Continent3 (Tex.App.-Dallas 2010, no pet.h.)...6 Rodarte v. Investeco Group, L.L.C., 299 S.W.3d 400, 406 (Tex.App.-Houston [14th Dist.] 2009, no pet.)) 16, 19 Sierra Club v. Morton, 405 U.S. 727, 731-32, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972)... 17 South Texas Water Authority v. Lomas, 223 S.W.3d 304, 306 (Tex. 2007)...9 Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex.1995)...4 Stine v. Stewart, 80 S.W.3d 586, 589 (Tex.2002)...9 T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 223 (Tex.1992)...15 APPELLEE S OPENING BRIEF -iv-
Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 444-45 (Tex.1993)...16 Union Pac. R.R. Co. v. Novus Int'l, Inc., 113 S.W.3d 418, 422 (Tex.App.-Houston [1st Dist.] 2003, pet. denied). 10 West v. Brenntag Sw., Inc., 168 S.W.3d 327, 334 (Tex.App.-Texarkana 2005, pet. denied)....17 Williams v. Eggleston, 170 U.S. 304, 309, 18 S.Ct. 617, 42 L.Ed. 1047 (1898)...17 APPELLEE S OPENING BRIEF -v-
STATEMENT OF THE CASE This case is a suit by Shaw, the attorney for Buescher Homes, Inc. (Buescher), the insured, against Buescher s liability insurer, Mid-Continent, under several legal theories seeking to recover his attorney s fees for defending Buescher, at Buescher s request, against a claim in a prior lawsuit. Mid-Continent did not ask Shaw to defend Buescher and did not agree to or approve of his defense of Buescher. APPELLEE S OPENING BRIEF PAGE 1
POINTS OF ERROR PRESENTED Shaw s Point of Error 1: The Court erred in granting summary judgment on grounds not contained in movant s motion for summary judgment. Reply to Point of Error 1: The Court correctly granted summary judgment on the grounds in movant s motion for summary judgment. Shaw s Point of Error 2: The Court erred in granting summary judgment on affirmative defenses not pled in movant s answer. Reply to Point of Error 2: The Court did not grant summary judgment on any affirmative defenses. APPELLEE S OPENING BRIEF PAGE 2
STATEMENT OF THE FACTS Mid-Continent generally agrees with the Statement of Facts filed by Shaw with the following additions. Buescher hired Shaw to defend it against a claim made in a prior lawsuit. Mid- Continent did not retain Shaw to defend Buescher and did not promise or agree to pay his attorney s fees for services that he provided to Buescher. [CR at 150] Shaw is not a named insured in the general liability insurance policy that Mid- Continent issued to Buescher ( Policy ). Shaw is not an insured under the terms of the Policy and is not claiming to be an insured. [CR - 38 to 92, the Policy]. Shaw rendered no legal services to Mid-Continent. APPELLEE S OPENING BRIEF PAGE 3
SUMMARY OF ARGUMENT Point of Error 1: The Court erred in granting summary judgment on grounds not contained in movant s motion for summary judgment. Reply to Point of Error 1: The Court correctly granted summary judgment on the grounds in movant s motion for summary judgment. A. INTRODUCTION Shaw asserts a claim against Mid-Continent for his legal fees for his services to Mid-Continent s insured, Buescher. Shaw bases his claim on the following legal theories: 1. Breach of the insurance contract as a direct or third-party beneficiary the Policy; 2. Waiver; 3. Estoppel; and 4. Quantum meruit. To prevail on appeal when the trial court grants summary judgment without stating its reasons, as in this case, Shaw must demonstrate that summary judgment would be improper on all grounds presented in Mid-Continent s motion. Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex.1995). Shaw has not contested or responded in his brief to any of the traditional and no evidence grounds in Mid-Continent s Motion for Summary Judgment. Instead, Shaw asserts that the trial court improperly granted summary judgment on grounds not in Mid-Continent s Motion for Summary Judgment. Shaw did not challenge or brief any of the grounds in Mid-Continent s Motion for Summary Judgment on which the judgment could be upheld. Because Shaw APPELLEE S OPENING BRIEF PAGE 4
failed to negate each ground on which the judgment may have been granted, this Court must uphold the summary judgment. Laurentis v. United Servs. Auto. Ass'n, 162 S.W.3d 714, 726 (Tex.App.-Houston [14th Dist.] 2005, pet. denied). B. MID-CONTINENT S GROUNDS CHALLENGED ONE OR MORE ELEMENTS IN EACH OF SHAW S CAUSES OF ACTION. Shaw asserts that, in the no-evidence grounds of its Motion for Summary Judgment, Mid-Continent failed to allege the elements of Shaw s causes of action for waiver, estoppel and quantum meruit in violation of Rule 166a(i), Texas Rules of Civil Procedure. However, Rule 166a(i) only requires Mid-Continent to state the elements of Shaw s causes of action as to which there is no evidence, not identify all of the elements of each cause of action. In its Motion for Summary Judgment, Mid-Continent s grounds included the following: S S There is no evidence that Mid-Continent had a duty to Shaw under any legal theory. There is no evidence that Mid-Continent breached any duty to Shaw under any legal theory. All causes of action at common law include as elements a duty of one party to another and a breach of that duty. Mercantile Bank & Trust Co. v. Schuhart, 115 Tex. 114, 119 277 S.W. 621, 623-24 (1925)(At common law, cause of action ordinarily consists of two distinct and separate elements, the primary right and duty of the parties respectively and the wrongful act or omission violating it.). American National Ins. Co. v. Warnock, 143 S.W.2d 624, 628 (Tex.Civ.App. - El Paso 1940, APPELLEE S OPENING BRIEF PAGE 5
err. dism d, judg t correct)(essential elements of cause of action are right possessed by one party, a corresponding duty of other party, and a breach of such duty). By asserting no evidence grounds that Mid-Continent had a duty to him or breached any duty to him, Mid-Continent specifically challenged one or more essential elements of each of Shaw s causes of action. Preston Nat. Bank v. Stuttgart Auto Center Inc., Not Reported in S.W.3d, 2010 WL 3310727 Mid- Continent3 (Tex.App.-Dallas 2010, no pet.h.). Mid-Continent's no-evidence grounds were legally sufficient to challenge the duty and breach of duty elements of all of Shaw s legal theories. Id. Nothing in the record indicates that Shaw responded or produced evidence to counter Mid-Continent s grounds that the duty and breach of duty elements of Shaw s claims were unsupported by evidence. Summary judgment was proper because Shaw did not offer any evidence of the challenged elements of duty and breach of duty in his response to Mid-Continent s Motion for Summary Judgment. Preston Nat. Bank v. Stuttgart Auto Center Inc., Not Reported in S.W.3d, 2010 WL 3310727 Mid-Continent3 (Tex.App.-Dallas 2010, no pet.h.); Patino v. Complete Tire, Inc., 158 S.W.3d 655, 659 (Tex.App.-Dallas 2005, pet. denied). C. SHAW MISCONSTRUES THE EFFECT OF MID-CONTINENT S FAILURE TO DENY THAT ALL CONDITIONS PRECEDENT HAVE BEEN MET Shaw pled that all conditions precedent had been performed. Mid-Continent filed a general denial and did not deny Shaw s allegation about conditions precedent APPELLEE S OPENING BRIEF PAGE 6
having been performed as an affirmative defense. Therefore, any conditions precedent applicable to Shaw s claim would have been deemed to have occurred if any of Shaw s legal theories were valid. Rule 54, Texas Rules of Civil Procedure. Shaw asserts in his brief that, because Mid-Continent did not plead any affirmative defenses or deny that all conditions precedent had been performed, the grounds in Mid-Continent s Motion for Summary Judgment did not challenge any of his legal theories and the trial court erred in granting Summary Judgment on grounds not in the Motion. Shaw incorrectly treats a failure to deny conditions precedent have been met related to his causes of action as a bar to Mid-Continent s challenging elements of his causes of action. [A] condition precedent is an event that must happen or be performed before a right can accrue to enforce the obligation. Centex Corp. v. Dalton, 840 S.W.2d 952, 956 (Tex.1992). Conditions precedent are stipulations that call for the performance of some act or the occurrence of some event before an agreement is enforceable. Love of God Holiness Temple Church v. Union Standard Ins. Co., 860 S.W.2d 179, 180 (Tex.App.-- Texarkana 1993, no writ). The agreement itself, i.e., the promise of the insurer to pay if a loss covered by the general terms of the policy occurs, is not a condition precedent. Love of God Holiness Temple Church v. Union Standard Ins. Co., 860 S.W.2d 179, 180 (Tex.App.-- Texarkana 1993, no writ). APPELLEE S OPENING BRIEF PAGE 7
Although proof of performance of any conditions precedent is an essential element of a party s claim, such proof does not relieve the party of the burden of proving the other elements of the claim. Broesche v. Jacobson, 218 S.W.3d 267, 273 n9 (Tex.App.-Houston [14 Dist.] 2007, pet.denied). Thus, even though Mid- Continent failed to specifically deny that Mid-Continent met all conditions precedent, Shaw is not thereby entitled to judgment as a matter of law on his claim. Id.; P. Ryan Enterprises, Inc. v. Matthaei, Not Reported in S.W.3d, 2007 WL 1219443 Mid- Continent5 (Tex.App.-Beaumont 2007, no pet.). Mid-Continent s failure to deny that all conditions precedent have occurred did not relieve Shaw of his burden to respond to the grounds and evidence in Mid- Continent s Motion for Summary Judgment. Shaw had to produce summary judgment evidence that Mid-Continent had a duty to him under each of his legal theories and that Mid-Continent breached that duty. He failed to produce such evidence. D. TRIAL COURT PROPERLY GRANTED SUMMARY JUDGMENT ON MID-CONTINENT S GROUNDS ATTACKING SHAW S BREACH OF CONTRACT THEORY Shaw sued for breach of contract, claiming that Mid-Continent had a contractual duty to him as a direct or third-party beneficiary under the Policy to pay him for his legal services to Buescher. In its Motion for Summary Judgment, Mid- Continent asserted several traditional and no evidence grounds. APPELLEE S OPENING BRIEF PAGE 8
Mid-Continent produced the Policy as its summary judgment evidence. The Policy proves that Shaw is not a named insured in the Declaration page of the Policy and does not meet the description of an insured in Policy. The terms of the Policy conclusively prove that Shaw is not an insured, a direct beneficiary or a third-party beneficiary under the Policy. Shaw made no argument and cited no authority in his brief to challenge Mid-Continent s traditional grounds on his breach of contract claim under the Policy or on his claim to be a direct or third party beneficiary of the Policy. There is a presumption against conferring third-party-beneficiary status on noncontracting parties. South Texas Water Authority v. Lomas, 223 S.W.3d 304, 306 (Tex. 2007). A court will not create a third-party beneficiary contract by implication. Stine v. Stewart, 80 S.W.3d 586, 589 (Tex.2002). Absent clear indication in the Policy that Mid-Continent and Buescher intended to confer a direct benefit to him, Shaw may not maintain an action against Mid- Continent as a third-party beneficiary. MCI Telecomm. Corp. v. Tex. Util. Elec. Co., 995 S.W.2d 647, 652 (Tex.1999). In deciding whether a third party may enforce or challenge a contract between others, it is the contracting parties' intent in the contract that controls. South Texas Water Authority v. Lomas, 223 S.W.3d 304, 306 (Tex. 2007). The intent to confer a direct benefit upon a third party must be clearly and fully spelled out in the contract or enforcement by the third party must be denied. South Texas Water Authority v. Lomas, 223 S.W.3d 304, 306 (Tex. 2007). The requisite APPELLEE S OPENING BRIEF PAGE 9
intent to confer third-party beneficiary status is manifest if express reference is made to the contracting parties' obligation to a specific third party and it is unmistakable that the contracting parties contemplated conferring on the third party the right to enforce the obligation. Union Pac. R.R. Co. v. Novus Int'l, Inc., 113 S.W.3d 418, 422 (Tex.App.-Houston [1st Dist.] 2003, pet. denied). In both his response to the Motion for Summary Judgment and in his brief, Shaw fails to show that the Policy contains any indication, much less an express reference, of an intent by Buescher and Mid- Continent to confer a direct benefit on Shaw as an insured or as a third-party beneficiary. Mid-Continent found no Texas case on point regarding a claim like Shaw s for attorney s fees by an insured s attorney against the insured s liability insurer. However, a Florida case exactly on point is Continental Cas. Co. v. Marx, 480 So.2d 177 (Fla.App. 3 Dist.,1985) [Appendix at 1-3 - Continental Cas. Co. v. Marx Opinion]. In that case, Marx was the retained attorney defending Jay and Paul Dash who were sued in a federal stockholders' derivative action. Continental Casualty Co. insured the Dashes under a Directors and Officers liability insurance policy, which covered the Dashes losses by way of damages, judgments, settlements and costs, costs of investigation and defense of legal actions. Marx sued Continental Casualty Co. to recover the attorney fees that he generated in representing the Dashes in the stockholder derivative action. APPELLEE S OPENING BRIEF PAGE 10
Marx obtained a judgment against Continental Casualty Co. in the trial court. The appeals court stated, [S]imply stated, there is utterly no cognizable legal basis upon which Marx's recovery against Continental can be sustained. Continental Cas. Co. v. Marx, 480 So.2d 177, 178 (Fla.App. 3 Dist.,1985). There is utterly no cognizable legal basis upon which Shaw s recovery against Mid-Continent can be sustained in this case. In discussing the attorney s claim for his attorney s fees, the court in Continental Cas. Co. v. Marx said Contrary to his primary argument, the appellee-attorney is not a third party beneficiary of the agreement in the policy issued by Continental to the Dashes to pay their legal expenses.... No court has ever held-indeed the proposition seems never before even to have been advanced-that the lawyer may himself sue upon an insurance policy or any other agreement which obliges one contracting party to pay the other's legal fees. We shall not be the first. Continental Cas. Co. v. Marx, 480 So.2d 177, 178-79 (Fla.App. 3 Dist.,1985)(emphasis added). The summary judgment evidence proves, as a matter of law, that no valid contract exists between Mid-Continent and Shaw. Since Shaw has no valid breach of contract claim against Mid-Continent, he has no valid claim for attorney s fees under Texas Civil Practice & Remedies Code Section 38.001 related to his breach of contract claim. The trial court properly granted summary judgment in Mid- Continent s favor on Shaw s claim under his breach of contract theory and his claim for attorney s fees under Section 38.001. APPELLEE S OPENING BRIEF PAGE 11
D. TRIAL COURT PROPERLY GRANTED SUMMARY JUDGMENT ON MID-CONTINENT S GROUNDS ATTACKING SHAW S WAIVER THEORY In paragraph 10 of his Second Amended Petition, Shaw asserts that Mid- Continent waived its argument as to the payment of his fees because Mid-Continent paid a portion of those fees. The function of waiver is to preserve rights, not to create an independent cause of action. Hruska v. First State Bank of Deanville, 747 S.W.2d 783, 785 (Tex.1988). Waiver is defensive in nature and operates to prevent the loss of existing rights. Id. Waiver does not operate to create liability where it does not otherwise exist. Id. Shaw had no right under the Policy to be paid by Mid-Continent for his services to his client, Buescher. No alleged waiver by Mid-Continent could have created a duty in Mid-Continent to pay anything to Shaw because waiver cannot create liability. Mid-Continent s grounds are sufficient to assert that there is no evidence that Mid-Continent had a duty to Shaw or breached any duty to Shaw under a legal theory of waiver. Shaw did not respond to that ground for summary judgment in the trial court and has not briefed the issue on appeal. The trial court properly granted summary judgment on Shaw s waiver theory. E. TRIAL COURT PROPERLY GRANTED SUMMARY JUDGMENT ON MID-CONTINENT S GROUNDS ATTACKING SHAW S ESTOPPEL THEORY In Paragraph 11 of his Second Amended Petition in Intervention, Shaw pled that Mid-Continent is estopped from arguing that attorney s fees are not due APPELLEE S OPENING BRIEF PAGE 12
because Mid-Continent promised to pay for a defense for Buescher, partially paid for that defense, but did not fully pay for that defense. Shaw is generally alleging a legal theory of promissory estoppel, the elements of which are 1. A promise was made to a person; 2. The promisor could foresee that the person would rely on the promise; 3. The person did substantially rely on the promise to his detriment; and 4. Injustice can be avoided only by the legal enforcement of the promise against the promisor. City of Beaumont v. Excavators & Constr., Inc., 870 S.W.2d 123, 136-37 (Tex.App.-Beaumont 1993, writ denied). Mid-Continent s grounds are sufficient to assert that there is no evidence that Mid-Continent had a duty to Shaw or breached any duty to Shaw under a legal theory of estoppel. In order for Mid-Continent to have had a duty to pay Shaw his attorney s fees for defending Buescher, Shaw had to prove the first three elements - that Mid-Continent made a promise to pay him for providing legal services to Buescher, Mid-Continent could foresee that Shaw would rely on the promise, and Shaw did substantially rely on the promise to his detriment. Shaw did not submit any evidence that Mid-Continent had a duty to pay Shaw s claim for attorney s fees under a legal theory of estoppel. There is no evidence that Mid-Continent made a promise to Shaw to pay his fees for his work for Buescher or that Shaw relied on any promise by Mid-Continent to provided legal services to Buescher. In fact, Shaw s admissions in his Second Amended Petition and his summary judgment evidence show that Shaw was retained by Buescher, not APPELLEE S OPENING BRIEF PAGE 13
by Mid-Continent, to defend Buescher. [CR at 150, 8] The trial court properly granted summary judgment on Shaw s claim under a legal theory of estoppel. F. TRIAL COURT PROPERLY GRANTED SUMMARY JUDGMENT ON MID-CONTINENT S GROUNDS ATTACKING SHAW S QUANTUM MERUIT THEORY In his Second Amended Petition in Intervention, Shaw pled that Mid-Continent is liable for his attorney s fees under a legal theory of quantum meruit, the elements of which are 1. The claimant furnished either valuable services or materials or both; 2. The services and/or materials were furnished to the party sought to be charged; 3. The services and/or materials were accepted by the party sought to be charged, 4. The services and/or materials were furnished and accepted under such circumstances that the party accepting the services and/or materials was reasonably notified that the party, in performing, expected to be paid by the party who accepted the services and/or materials. Heldenfels Brothers v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex.1992). Mid-Continent s grounds are sufficient to assert that there is no evidence that Mid-Continent had a duty to Shaw or breached any duty to Shaw under a legal theory of quantum meruit. Mid-Continent had no duty to Shaw under his legal theory of quantum meruit unless 1. Shaw furnished legal services (there is evidence of his services); 2. The legal services were furnished to Mid-Continent as the party sought to be charged (no evidence); 3. The legal services were accepted by Mid-Continent (no evidence); 4. The legal services were furnished and accepted under such circumstances that Mid-Continent was reasonably notified that Shaw, in performing, expected to be paid by Mid-Continent, who accepted the services (no evidence). APPELLEE S OPENING BRIEF PAGE 14
The summary judgment evidence shows that Shaw furnished legal services to Buescher from 2005 to 2008. There is no evidence that Shaw provided legal services to Mid-Continent at all or to Buescher at Mid-Continent s request or approval. There is no evidence that Mid-Continent was reasonably notified that Shaw, in performing services for Buescher, expected to be paid by Mid-Continent. The trial court properly granted summary judgment on Shaw s claim under a legal theory of quantum meruit. G. TRIAL COURT PROPERLY GRANTED SUMMARY JUDGMENT ON MID-CONTINENT S GROUNDS ATTACKING SHAW S STANDING In its Motion for Summary Judgment, Mid-Continent asserted a traditional ground that Shaw has no standing to assert a third party beneficiary claim and a ground that there is no evidence that Shaw has standing to bring the claim that he asserts in this case. In his response to the Motion for Summary Judgment and in his brief, Shaw asserts that standing is an affirmative defense that raises a procedural defect in Shaw s pleading and that Mid-Continent cannot assert standing as a ground in Mid-Continent s Motion for Summary Judgment because it did not plead standing as an affirmative defense. An affirmative defense must be pleaded or it is waived. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 223 (Tex.1992). In contrast, standing is a component of subject matter jurisdiction and a constitutional prerequisite to maintaining a suit under Texas law. Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 APPELLEE S OPENING BRIEF PAGE 15
S.W.2d 440, 444-45 (Tex.1993). Standing may be raised at any time and may not be waived by the parties. Tex. Ass'n of Bus., 852 S.W.2d at 445. Because it can be challenged at any time, standing is not an affirmative defense. Jacobson v. SCI Texas Funeral Services, Inc., Not Reported in S.W.3d, 2001 WL 225339 Mid-Continent2 (Tex.App.-Dallas,2001)(citing Tex.R.Civ.P. 94); In re P.M.S., Not Reported in S.W.3d, 2006 WL 1459993 Mid-Continent2 (Tex.App.-Tyler 2006, no pet.). The absence of standing may be raised by a motion for summary judgment. Rodarte v. Investeco Group, L.L.C., 299 S.W.3d 400, 406 (Tex.App.-Houston [14th Dist.] 2009, no pet.). A challenge to standing is appropriate for resolution by summary judgment. Phillips v. Dow Chem. Co., 186 S.W.3d 121, 127 (Tex.App.-Houston [1st Dist.] 2005, no pet.). Mid-Continent properly raised the issue of Shaw s lack of standing by the grounds in its Motion for Summary Judgment. Shaw s only response to that issue in the trial court and this court is to incorrectly assert that standing is an affirmative defense that was an improper ground for summary judgment. As a constitutional prerequisite to maintaining this suit, Shaw must affirmatively show the court s jurisdiction to proceed with his causes of action by showing his standing to sue Mid-Continent for his attorney s fees for representing Buescher. Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 445 (Tex.1993). Standing deals with whether a litigant is the proper person to bring the lawsuit. West v. Brenntag Sw., Inc., 168 S.W.3d 327, 334 (Tex.App.-Texarkana APPELLEE S OPENING BRIEF PAGE 16
2005, pet. denied). Standing deals whether the party has a sufficient stake in an otherwise justiciable controversy to obtain a judicial resolution of his claim. Sierra Club v. Morton, 405 U.S. 727, 731-32, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972). Without a breach of a legal right belonging to Shaw, he has no standing to litigate. Gleason v. Taub, 180 S.W.3d 711, 713 (Tex.App.-Fort Worth 2005, pet. denied). A person may not sue for the breach of a contract unless he is a party or third-party beneficiary to the contract. Williams v. Eggleston, 170 U.S. 304, 309, 18 S.Ct. 617, 42 L.Ed. 1047 (1898); MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 651 (Tex.1999); House v. Houston Waterworks Co., 88 Tex. 233, 31 S.W. 179, 179 (1895). The fact that Shaw received some payment of his fees as an incidental benefit from the Policy to which he is not a party does not give Shaw a right of action to enforce the Policy. House v. Houston Waterworks Co., 88 Tex. 233, 31 S.W. 179, 180 (Tex.1895) Assuming the facts in Shaw s Second Amended Petition are true, Buescher might have a right to sue Mid-Continent for breach of contract based on the Policy, but not Shaw. As shown above, Shaw was not an insured, a direct beneficiary or a third-party beneficiary under the Policy. Therefore, he has no standing to sue Mid- Continent for breach of contract. Shaw s allegation of a right against Mid-Continent based on waiver is improper. Waiver is not a cause of action and does not create a legal right against APPELLEE S OPENING BRIEF PAGE 17
another. Shaw has no standing to sue Mid-Continent for his attorney s fees based on waiver. Shaw s has not alleged facts in his petition or produced summary judgment evidence that would give him standing to sue Mid-Continent under a theory of promissory estoppel. Shaw does not allege or offer evidence that Mid-Continent made a promise to him that it would pay him as inducement for him to defend Buescher or that he relied on such a promise by Mid-Continent to provide legal services to Buescher. His petition shows that Buescher retained Shaw, not Mid- Continent, because Mid-Continent did not agree to defend Buescher against the claim. There is no evidence and no briefing showing that Shaw has standing to sue Mid-Continent under a legal theory of estoppel. Shaw s has not alleged facts in his petition or produced summary judgment evidence that would give him standing to sue Mid-Continent under a theory of quantum meruit. Shaw admits that he provided legal services to Buescher, not to Mid-Continent. There is no allegation or evidence that Shaw provided services to Mid-Continent or that Mid-Continent accepted legal services from Shaw or that Mid- Continent was reasonably notified that Shaw, in performing for Buescher, expected to be paid for those services by Mid-Continent. Shaw has no standing to sue Mid- Continent under a legal theory of quantum meruit. Shaw failed to offer any evidence or make an argument to refute Mid- Continent s challenge to his standing to bring his claim against Mid-Continent for his APPELLEE S OPENING BRIEF PAGE 18
legal fees under any legal theory. The trial court properly granted summary judgment on Shaw s claim based on the ground of Shaw s lack of standing. Point of Error 2: The Court erred in granting summary judgment on affirmative defenses not pled in movant s answer. Reply to Point of Error 2: The Court did not grant summary judgment on any affirmative defenses. As shown above, none of Mid-Continent s grounds in its Motion for Summary Judgment were based affirmative defenses. Despite Shaw s assertion to the contrary, standing is not an affirmative defense, Jacobson v. SCI Texas Funeral Services, Inc., Not Reported in S.W.3d, 2001 WL 225339 Mid-Continent2 (Tex.App.-Dallas,2001)WL 1459993 Mid-Continent2 (Tex.App.-Tyler 2006, no pet.). Standing can be properly raised for the first time in the Motion for Summary Judgment. Rodarte v. Investeco Group, L.L.C., 299 S.W.3d 400, 406 (Tex.App.-Houston [14th Dist.] 2009, no pet.). Admittedly, Mid-Continent did not specifically deny that all conditions had been met regarding Shaw s claims. However, none of Mid-Continent s grounds in its Motion for Summary Judgment were based any non-occurrence or non-performance of any conditions precedent to Shaw s claim. Although proof of performance of any conditions precedent is an essential element of a party s claim, such proof does not relieve the party of the burden of proving the other elements of the claim. Broesche v. Jacobson, 218 S.W.3d 267, 273 n9 (Tex.App.-Houston [14 Dist.] 2007, pet.denied). Mid-Continent s grounds APPELLEE S OPENING BRIEF PAGE 19
attack elements of Shaw s legal theories for his claim other than the performance of any conditions precedent. Shaw had to respond with some evidence for each element that Mid-Continent challenged with its traditional and no evidence grounds for summary judgment. He failed to do so. CONCLUSION Mid-Continent s grounds for summary judgment were proper and adequate. The summary judgment does not state on which ground or grounds the trial court granted it. In this appeal, Shaw was required to negate each ground on which the summary judgment could have been granted. Shaw s Response to the Motion for Summary Judgment and his brief in this Court failed to attack any of Mid-Continent s grounds. Therefore, this judgment should be affirmed. Shaw s appeal is based on two incorrect assertions - (1) Mid-Continent s failure to deny that all conditions precedent had been met precluded it from contesting Shaw s causes of action and (2) that Mid-Continent s failure to plead standing as an affirmative defense in its answer precluded it from raising standing as a no evidence ground for summary judgment. As shown above, neither of those assertions have merit. This Court should affirm the summary judgment. APPELLEE S OPENING BRIEF PAGE 20
Respectfully submitted, DOWNS & STANFORD, P.C. BY: M. Gaddy Wells Texas State Bar No. 21153500 Jay R. Downs Texas State Bar No. 06088200 2001 Bryan Street, Suite 4000 Dallas, Texas 75201 Telephone: 214.748.7900 Facsimile: 214.748.4530 Email: jdowns@downsstanford.com ATTORNEYS FOR APPELLEE CERTIFICATE OF SERVICE This is to certify that a true and correct copy of Appellee s Brief has been served upon all counsel of record in this cause on this the day of October, 2010, by certified mail, return receipt requested as shown below: Van Shaw Law Office of Van Shaw 2723 Fairmount Street Dallas, Texas 75201 M. Gaddy Wells APPELLEE S OPENING BRIEF PAGE 21