Tim Beverick v. KOCH Power, Inc., Flint Hills Resources, L.P. and Entergy-Koch Trading, L.P.--Appeal from 133rd District Court of Harris County

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Laws-info.com » Cases » Texas » 1st District Court of Appeals » 2005 » Tim Beverick v. KOCH Power, Inc., Flint Hills Resources, L.P. and Entergy-Koch Trading, L.P.--Appeal from 133rd District Court of Harris County

State: Texas

Court: Texas Northern District Court

Docket No: 01-03-01300-CV

Case Date: 12/29/2005

Plaintiff: Michael Alan Walker

Defendant: Thomasson Lumber Company and Cahaba Pressure Treated Forest Products, Inc.--Appeal from 270th Distr

Preview:Tim Beverick v. KOCH Power, Inc., Flint Hills
Resources, L.P. and Entergy-Koch Trading, L.P.--
Appeal from 133rd District Court of Harris County
Opinion issued December 29, 2005
In The
Court of Appeals
For The
First District of Texas
NO. 01-03-01300-CV
TIM BEVERICK, Appellant
V.
KOCH POWER, INC., FLINT HILLS RESOURCES, L.P., AND ENTERGY-KOCH TRADING L.P., Appellees
On Appeal from the 133th District Court
Harris County, Texas
Trial Court Cause No. 2001-48858
O P I N I O N
Tim Beverick, appellant, sued Koch Power, Inc., Flint Hills Resources, L.P., and Entergy-Koch Trading L.P. (hereafter
collectively referred to as Koch ) for breach of contract, promissory estoppel, fraud, quantum meruit, and punitive
damages after they failed to pay him the bonus they allegedly promised to pay him for legal services rendered.
Beverick contends that the trial court erred in granting Koch s motions for summary judgment. We affirm.
BackgroundBeverick, an attorney for Koch Power, Inc., alleges that Koch orally promised him a bonus of based on the
savings for his work on the Pine Bend Power Project ( the Project ). The Project involved negotiating a new contract
for the purchase of electricity over a 10-year period for Koch s Pine Bend Refinery. The goal of the Project, as fellow
attorney Bill Windle stated in testimony, was to save money for the refinery. According to Beverick, Koch promised
that he and Windle would split a bonus of 10 to 15% of the net present value of the after-tax expected savings from
the Project in a lump sum at the Project s closing. // Koch failed to pay the bonus at closing, and, instead proposed to
Beverick that he would receive a bonus of approximately $400,000. Beverick initially sued Koch Power under theories
of breach of contract, promissory estoppel, and fraud; later, he added a claim for quantum meruit. //
Koch filed no-evidence and traditional motions for summary judgment and also filed a separate motion attacking
Beverick s claim for punitive damages. The trial court granted both of Koch s summary judgment motions without
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specifying its grounds and rendered a take-nothing judgment against Beverick.
Standard of Review
We follow the usual standard of review for an order granting summary judgment without specifying grounds. See Dow
Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001). When a trial court does not state the basis for its decision in its
summary judgment order, as in this case, we must uphold the order if any of the theories advanced in the motion is
meritorious. See Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 79 (Tex. 1989).
When reviewing a trial court s granting of a motion for summary judgment, we consider the evidence in the light most
favorable to the non-movant and indulge every reasonable inference in the non-movant s favor. Tex. R. Civ. P. 166a(i);
Flameout Design & Fabrication, Inc. v. Pennzoil Caspian Corp., 994 S.W.2d 830, 834 (Tex. App. Houston [1st Dist.]
1999, no pet). A summary judgment for the defendant that disposes of a plaintiff s entire case is proper only if the
defendant can show that the plaintiff could not succeed on any of the theories pleaded. Wheeler v. Yettie Kersting
Mem l Hosp., 866 S.W.2d 32, 36 (Tex. App. Houston [1st Dist.] 1993, no writ).
No-Evidence Motion for Summary Judgment
A rule 166a(i) motion for summary judgment is properly granted when a movant establishes that, [a]fter adequate time
for discovery[,] . . . there is no evidence of one or more essential elements of a claim or defense on which an adverse
party would have the burden of proof at trial. Tex. R. Civ. P. 166a(i); see also Johnson v. Brewer & Pritchard, P.C., 73
S.W.3d 193, 207 (Tex. 2002). A no-evidence summary judgment is, therefore, like a directed verdict. Flameout, 994
S.W.2d at 834. To defeat a no-evidence motion for summary judgment, the non-movant must produce summary
judgment evidence raising a genuine issue of material fact. Tex. R. Civ. P. 166a(i); Ford Motor Co. v. Ridgway, 135
S.W.3d 598, 600 (Tex. 2004). A genuine issue of material fact exists if the non-movant produces more than a scintilla
of evidence establishing the existence of the challenged element. Fort Worth Osteopathic Hosp., Inc. v. Reese, 148
S.W.3d 94, 99 (Tex. 2004); A.H. Belo Corp. v. Corcoran, 52 S.W.3d 375, 378 (Tex. App. Houston [1st Dist.] 2001,
pet. denied). More than a scintilla of evidence exists when the evidence rises to a level that would enable reasonable
and fair-minded people to differ in their conclusions. See Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499
(Tex. 1995).
Traditional Motion for Summary Judgment
To succeed in a motion for summary judgment under rule 166a(c), a movant must establish that there is no genuine
issue of material fact so that the movant is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Randall s
Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995). In deciding whether there is a disputed issue of
material fact, every doubt must be resolved in favor of the non-movant. Johnson, 891 S.W.2d at 644; Nixon v. Mr.
Prop. Mgmt. Co., 690 S.W.2d 546, 548 49 (Tex. 1985). Additionally, we take all evidence favorable to the non-movant
as true. Lawson v. B Four Corp., 888 S.W.2d 31, 33 (Tex. App. Houston [1st Dist.] 1994, writ denied).
Statute of Frauds
In their traditional motion for summary judgment, Koch asserted that Beverick s causes of action for breach of
contract, promissory estoppel, and fraud were barred by the statute of frauds because these claims were based upon an
alleged oral promise that could not be performed within one year. // Beverick argues that, because it was possible for
the project to be completed within one year, the statute of frauds does not apply. We agree.
Whether a contract falls within the statute of frauds is a question of law. Iacono v. Lyons, 16 S.W.3d 92, 94 (Tex. App.
Houston [1st Dist.] 2000, no pet.); see also Niday v. Niday, 643 S.W.2d 919, 920 (Tex. 1982) (stating that, if an
agreement, either by its terms or by the nature of the required acts, cannot be performed within one year, it falls within
the statute of frauds and must be in writing.) A contract that could possibly be performed within a year, however
improbable performance within one year may be, does not fall within the statute of frauds. Hall v. Hall, 308 S.W.2d 12,
15 (Tex. 1957). The fact that the entire performance within one year is not required, or expected, will not bring an
agreement within the statute. Iacono, 16 S.W.3d at 95.
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Beverick completed this project in two years. When asked if he could have completed the project in less time,
Beverick testified, Not under the circumstances, no. We moved everything along as fast as we could. Beverick was
asked specifically if there was any way to have completed the project in one year, and he answered, I mean, if the
moon [sic] lined up and if Northern States Power didn t fight to let us go and all of the parties - - you know, we had
some pro forma contract to do this on, then it would be easy. Beverick testified that I won t say it was impossible, but
there were a lot of things that would have had to fall in place for [the deal to have been completed within one year].
The summary judgment evidence, viewed in a light most favorable to Beverick, establishes the possibility that
Beverick could have completed the Project in one year. Therefore, the statute of frauds did not preclude Koch from
entering into an oral contract with Beverick.
Breach of Contract
Beverick contends that the evidence was sufficient to create a fact issue and that the trial court erred in granting
summary judgment on his breach-of-contract claim.
In their no-evidence motion for summary judgment, Koch asserted that there was no evidence that
(1)The contract alleged by Plaintiff was a valid oral contract including:
(a)an offer by any Defendant from a person with authority to make an offer on behalf of each Defendant;
(b) acceptance by Plaintiff;
(c)a meeting of the minds between an authorized agent of each Defendant on behalf of any Defendant and Plaintiff;
(d)consent to the terms by Plaintiff and an authorized agent of each Defendant;
(e)execution of a contract with the intent that it be mutual and binding; or
(f) consideration provided by Plaintiff;
(2)The Plaintiff tendered the performance demanded by the contract;
(3) Any Defendant breached the contract; or
(4) Plaintiff was damaged as a result of any Defendant s breach.
To prevail on a breach-of-contract claim, it must be proven that (1) a valid contract between plaintiff and defendant
existed, (2) the plaintiff performed or tendered performance, (3) the defendant breached the contract, and (4) the
plaintiff sustained damages as a result of the breach. Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636
(Tex. App. Houston [1st Dist.] 2002, pet. denied).
Valid Contract
The elements of a valid contract are: (1) an offer, (2) an acceptance, (3) a meeting of the minds, (4) each party s
consent to the terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding. Id.
In their no-evidence motion for summary judgment, Koch contested each element of the valid contract with Beverick.
Beverick was therefore required to
produce more than a scintilla of evidence raising a genuine issue of material fact on each element. Flameout Design &
Fabrication, Inc., 994 S.W.2d at 834.
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Offer
Beverick does not allege the breach of a written contract. Rather, he asserts that Koch orally promised him a bonus
based on expected savings of the Project. In determining the existence of an oral contract, the court looks to the
communications between the parties and to the acts and circumstances surrounding those communications. Prime
Prods., 97 S.W.3d at 636. For Beverick s contract claim to be valid and enforceable, he must allege and prove that the
oral contract was made with an authorized agent who had authority to bind Koch. S. County Mut. Ins. Co. v. First
Bank & Trust of Groves, 750 S.W.2d 170, 172 (Tex. 1988).
In his response to Koch s motions for summary judgment, Beverick argued that Bill Windle, who worked with Mr.
Beverick on Pine Bend, testified that based on the representations of Defendants management, he believed that the Pine
Bend bonus was to be paid on the expected savings on the project. He further stated that Windle, an employee of EKT
[Entergy-Koch Trading], told Beverick that Rob Smith, an officer of KET [Koch Energy Trading], represented that
Windle and Beverick would split a bonus pool on Pine Bend of ten to fifteen percent of the expected after-tax savings.
Despite Beverick s allegations of oral contract representations from several Koch executives, in his deposition, he
acknowledged that the only person who directly promised him the bonus at issue in this case was Bill Windle, a fellow
employee. Beverick testified further that he agreed that Windle lacked the authority to enter into a bonus agreement
with Beverick on behalf of Koch. Beverick testified as follows:
Q. Now, are you claiming that Mr. Windle had the authority on behalf of any of these defendants - -
A. Not Windle.
Q. - - to bind them to pay you half of 10 to 15 percent of the expected savings?
A. Not Windle, no. I mean, I don t know if he would have had - - I mean, if the promise didn t come from him, I don t
know if he had authority or not.
Q. Well, you know that he did not have authority to bind the company he was working for or any - - at the time - - or
any of these defendants to pay you any sort of bonus; correct?
A. Well, he wasn t the promisor in this case, right.
Q. So he did not have that authority, did he?
A. Correct.
Q. But as you have just already testified, back when your deposition was taken a year ago, and have testified here
again today, Bill Windle is the only person you re claiming told you that your Pine Bend bonus was going to be half of
the 10 to 15 percent number, correct?
A. Well, I mean, as far as - - as far as I was concerned, when he came to me he had just talked to Rob [Smith], and
Rob and David [Owens] were David Sobotka s mouthpieces.
Q. But Rob Smith never made that representation to you, did he?
A. He knew by telling Bill - - Bill and I were together every day for two years. He knew by Bill it was telling me.
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Q. Did Rob Smith make that representation to you?
A. No, he didn t have to. He knew - -
Beverick argues that, despite Windle s lack of authority to bind, there was at
least one person with authority who neglected to correct Beverick s mistaken belief
that he was getting a more substantial bonus. Beverick said that he
repeatedly stated his understanding that his bonus would be 10-15% of expected savings and Mr. Owens [an executive
with KET] never disputed it or told Beverick that he was incorrect. Thus, by leading Mr. Beverick to believe that his
understanding was correct, and by not objecting to Mr. Beverick s statements concerning his understanding of the
bonus agreement, Owens manifested his belief in the truth of those statements and adopted those statements as true.
We disagree. Beverick may not establish the existence of an offer through the silence of another party. Silence cannot
satisfy the basic requirements of contract creation. See Texas Ass n of Counties County Gov t Risk Mgmt. Pool v.
Matagorda County, 52 S.W.3d 128, 132 (Tex. 2000) (holding that silence and inaction will not be construed as an
assent to an offer). Beverick admitted that he could not swear under oath that Owens ever made an offer of a bonus
based on 10 to 15% of savings. At most, Beverick testified that he inferred it.
Accordingly, we hold that there is no evidence that Beverick established the existence of an offer. Without an offer, we
need not determine if there was evidence of the remaining elements of a valid contract.
We overrule point of error one.
Promissory Estoppel
Beverick contends that the trial court erred in granting Koch s promissory estoppel motion for summary judgment.
In their no-evidence motion for summary judgment, Koch asserted that there was no evidence that
(1)An authorized representative of any Defendant made an authorized oral promise to Plaintiff;
(2)An authorized representative made any oral promise for which it was reasonable and foreseeable that Plaintiff would
rely; or
(3)Plaintiff reasonably and justifiable [sic] relied to his detriment on any oral promise made by an authorized
representative of any Defendant.
Beverick asserts that he provided sufficient evidence of promissory estoppel to survive summary judgment. The
elements of promissory estoppel are (1) a promise, (2) Koch s foreseeability of Beverick s reliance thereon, and (3)
substantial reliance by Beverick to his detriment. See English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983); Leach v.
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Conoco, Inc., 892 S.W.2d 954, 959 (Tex. App. Houston [1st Dist.] 1995, writ dism d w.o.j.). As we held above, there is
no evidence that a person with authority promised Beverick that he would receive a split of 10 to 15% of expected net
savings. Beverick does not dispute that Koch employed him at will and paid him an agreed salary.
We hold that the trial court did not err when it granted Koch s summary judgment on Beverick s promissory estoppel
claim.
FraudBeverick asserts that the trial court erred by granting Koch s summary judgment motion for his claim of fraud.
In their no-evidence motion for summary judgment, Koch asserted that there was no evidence that
(1)Any Defendant authorized any party to make an oral representation to Plaintiff regarding an alleged bonus;
(2)An authorized representation was made on behalf of any Defendant;
(3)An authorized representative of any Defendant orally made a representation that any Defendant knew to be false at
the time it was made;
(4)Plaintiff reasonable [sic] relied on any oral representation by a representative of any Defendant; or
(5)That Plaintiff was injured in any way or suffered damages [sic] a result of his reliance.
A cause of action for fraud requires (1) a material misrepresentation, (2) that was either known to be false when made
or was asserted without knowledge of its truth, (3) which was intended to be acted upon, (4) which was relied upon,
and (5) which caused injury. Formosa Plastics Corp. USA v. Presidio Eng rs and Contractors, Inc., 960 S.W.2d 41, 47
(Tex. 1998). The mere failure to perform a contract is not evidence of fraud. Id. at 48. When a promise is made to do a
future act with no intention of performing the act, the promise constitutes an actionable misrepresentation when made
with no intention of performing the act. Id.; Oliver v. Rogers, 976 S.W.2d, 792, 804 (Tex. App. Houston [1st Dist.]
1998, no pet).
The first element of a claim for fraud is that the defendant made a material misrepresentation. Formosa Plastics, 960
S.W.2d at 48. Beverick has not produced evidence that anyone with authority made a representation to him regarding
the alleged bonus. Beverick asserts that the same facts support both his claim for breach of contract and his claim for
fraud. Although Beverick states that David Owens s silence led him to believe that he would receive one-half of 10 to
15% of the expected Pine Bend savings, Beverick has not demonstrated that Owens had a duty to disclose the actual
amount of the bonus to him.
A failure to disclose, however, is only actionable as fraud when there is a duty to disclose. See Bradford v. Vento, 48
S.W.3d 749, 755 (Tex. 2001). A duty to disclose arises only out of a confidential or fiduciary relationship. Moorehouse
v. Chase Manhattan Bank, 76 S.W.3d 608, 615 (Tex. App. San Antonio 2002, no pet.). Texas does not recognize a
fiduciary duty or a duty of good faith and fair dealing owed by an employer to an employee. City of Midland v. O
Bryant, 18 S.W.3d 209, 216 (Tex. 2000) (holding that there is no duty of good faith and fair dealing in the employment
context). //
Koch had no duty to disclose the amount of Beverick s project bonus; therefore, their failure to disclose it is not an
actionable misrepresentation. There is no evidence that Koch made an actionable misrepresentation to Beverick.
Accordingly, we hold that there is no evidence that there was a material misrepresentation made. Having so held, we
need not address the remaining elements of fraud.
Quantum Meruit
Beverick contends that the trial court erred by rendering summary judgment on his quantum-meruit claim.
In their no-evidence motion for summary judgment, Koch asserted that there was no evidence
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(1)That Plaintiff performed any services for any Defendant for which he was not compensated; or
(2)Of the reasonable value of any uncompensated services performed by Plaintiff for any Defendant.
The quasi-contractual theory of quantum meruit is based on a promise implied by law to pay for beneficial services
rendered and knowingly accepted. C.M. Asfahl Agency v. Tensor, Inc., 135 S.W.3d 768, 792 (Tex. App. Houston [1st
Dist.] 2004, no pet.). To be entitled to submit a claim of quantum meruit, the claimant must present more than a
scintilla of evidence that: (1) the plaintiff rendered valuable services or furnished materials; (2) for the party sought to
be charged; (3) the party sought to be charged accepted and enjoyed the services or materials; and (4) the party sought
to be charged had reasonable notice that the plaintiff, in performing the services or providing the materials, expected
payment. See Vortt Expl. Co. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990).
Beverick was in-house counsel for Koch, and he provides no evidence that his assignment on the Project was not part
of his job duties falling under his employment contract. Even if his work benefitted Koch, proof of a benefit does not
prove that the services were beyond the scope of his employment. If the work that Beverick performed on the Project
was within the scope of his employment, then his work was performed pursuant to his employment for Koch, and he
cannot make a claim in quantum meruit. See Murray v. Crest Constr., Inc., 900 S.W.2d 342, 345 (Tex. 1995).
Furthermore, Beverick presented no evidence relating to (1) the description of the work that he performed outside of
his regular work, (2) the value of such work, and (3) the reasonableness of any value that could be assigned to the
work. Accordingly, we hold that the trial court did not err in granting summary judgment on Beverick s quantum
meruit claim.
Punitive DamagesBeverick contends that the trial court erred in ruling that he did not have a valid punitive damages
claim.
Beverick s argument presumes a valid contract, a duty to disclose to correct a mistaken impression, and a deliberate
decision not to disclose. We have already held that there was no valid contract and that there is no duty to disclose in
an employment-bonus context.
Beverick s only basis for punitive damages was fraud, and we have held that he did not sufficiently establish a cause of
action for fraud. Punitive damages may be awarded only when there are some actual damages in tort. Juliette Fowler
Homes, Inc. v. Welch Assoc., Inc., 793 S.W.2d 660, 667 (Tex. 1990). We hold that the trial court did not err in finding
that Beverick presented no evidence to support his punitive damages claim.
Having held accordingly, we need not address Beverick s issues relating to the relevance of the Bonus Document or
his alleged acceptance of the first installment as satisfaction of Koch s complete obligation to his entire bonus claim.
CONCLUSION
We affirm the trial court s orders granting Koch s motions for summary judgment.
George C. Hanks, Jr.
Justice
Panel consists of Justices Taft, Hanks, and Bland.
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