Opinion
No. 01-04-00152-CV
Opinion Issued March 31, 2005.
On Appeal from the 61st District Court, Harris County, Texas, Trial Court Cause No. 2002-59971.
Panel consists of Chief Justice RADACK and Justices HIGLEY and BLAND.
MEMORANDUM OPINION
Robert D. Frisch sued Westin Homes of Texas, Inc. (Westin) for breach of contract and quantum meruit. The trial court rendered summary judgment for Westin. We hold that a genuine issue of fact exists on Frisch's breach of contract claim, and that no genuine issue of fact exists on Frisch's quantum meruit claim. We therefore affirm in part, and reverse and remand in part.
Background
Westin, a home building company, hired Frisch as a builder in October 2000. Westin compensated Frisch with a salary and completion bonuses. On May 15, 2002, Westin fired Frisch. Frisch sued Westin for breach of contract and quantum meruit, alleging that Westin did not pay Frisch (1) unpaid vacation pay, (2) unpaid salary, (3) unpaid completion bonuses, (4) bonuses improperly paid to a second builder, Kevin Love, (5) a properly computed bonus for one-story homes, (6) a six-month buyer satisfaction survey bonus, and (7) bonuses for May 2002 homes under construction. Westin moved for a traditional and a no-evidence summary judgment, asserting that Frisch proved neither a breach nor an injury. See Tex. R. Civ. P. 166a(c), (i).
Westin attached to its traditional motion for summary judgment (1) an affidavit by Jason Golan, the Westin General Manager, (2) Westin's April 2001 bonus plan, and (3) Westin's final paycheck to Frisch dated May 30, 2002. Frisch responded to the motion for summary judgment, attaching his own affidavit and Westin's January 2001 bonus plan. Westin objected to Frisch's affidavit. The trial court rendered summary judgment without ruling upon Westin's objection to the affidavit.
Westin's no-evidence motion for summary judgment did not include these attachments. The Texas Supreme Court recently has held that if a motion for summary judgment brought solely under subsection (i) attaches evidence, then "that evidence should not be considered unless it creates a fact question, but such a motion should not be disregarded or treated as a motion under subsection (a) or (b)." Binur v. Jacobo, 135 S.W.3d 646, 651 (Tex. 2004); see also Tex. R. Civ. P. 166a(a), (b), (i).
Unpaid Vacation Pay
Frisch earned two weeks vacation per year, which he could either use or accept cash as a substitute. The final paycheck provides that Westin paid Frisch $1,100 for his remaining 35.21 hours of vacation, thereby creating a zero balance of vacation hours. Golan avers that he paid Frisch in lieu of his remaining vacation days; however, Frisch avers that Westin owes him $1,400 for about one week of vacation that he never took.
Unpaid Salary
Westin hired Frisch in October 2000. Frisch avers that Westin agreed to employ him through May 31, 2002. Westin fired Frisch on May 15, 2002 — two weeks shy of the agreement. Frisch therefore contends that Westin owes him a balance of $2,500 for unpaid salary. Frisch did not offer an employment contract as summary judgment evidence. Westin, however, does not dispute the existence of an employment contract, but instead contends that it did not breach the agreement. Rather, Westin terminated Frisch for cause and thus, Frisch is not entitled to a salary for the last two weeks in May after his termination.
Westin did not cite authority in the trial court, nor on appeal, that Frisch's termination for cause would, as a matter of law, preclude him from obtaining a salary for the last two weeks in May. At oral argument, however, it appeared that Westin claims that Frisch's prior breach precludes recovery for his unpaid salary. As we reverse for other fact issues related to the employment agreement, and this particular issue is not briefed, we express no opinion as to the merit of this portion of Frisch's claim.
Unpaid Completion Bonuses
The April 2001 bonus plan provides that Westin will pay the builder a "completion bonus" of $750 for homes "finished and closed" in 84 days after the foundation is poured. In addition, Westin will pay an "early closing bonus" of $15 per day for each day the home is closed before the 84th day. Westin will deduct a "penalty" of $15 per day for each day after the 84th day. For example, if a home is closed in 82 days, Westin pays $780: a $750 completion bonus, plus a $30 early closing bonus (2 days early multiplied by $15 per day). If a home closed in 86 days, Westin pays $720: a $750 completion bonus less a $30 penalty (2 days late multiplied by $15 per day).
The April 2001 bonus plan provides that the home must be "complete and signed off" to begin computing the bonus. Golan avers that the "sign off" date is the date management signs off on a home. Frisch avers that David Dorn, the vice-president of construction, delayed the sign-off date because he "failed to walk the unsold homes with [Frisch] to assess the specifications and make a correction list prior to the 84 day deadline." Golan avers that Westin paid Frisch his proper completion bonus. Frisch avers, however, that Westin failed to pay him a correct completion bonus on over 40 homes that he closed between January 2001 and May 2002, resulting in an amount that "very likely exceeds $10,000 or $11,000."
The January 2001 plan does not provide that the home must be completed and "signed off." Despite Frisch's averment that the January and April 2001 plans provide the same completion bonus computations, some differences exist in dollar amounts and time periods.
Bonuses Improperly Paid to Kevin Love
In February 2001, Westin hired Kevin Love as a second builder and as Frisch's assistant. Westin transferred six of Frisch's homes to Love. Frisch avers that Westin agreed to pay Frisch a pro-rata share of the completion bonuses on these homes based on the construction phase of each home as of the date of the transfer. The January 2001 bonus plan includes a handwritten notation that states, "Split of hours w/my assistant — pro rata share of house @ stage turned over." Westin paid Love $4,200 when the homes were completed in March 2001. Frisch avers that his pro-rata share is $3,000, and that despite his numerous requests to Westin, Westin has not paid him. Golan's affidavit does not address Love or the homes six homes completed in 2001 before Frisch's termination. Golan avers that Frisch was not eligible to receive a bonus on any homes completed after Frisch's termination because "the builder who took over the homes previously being built by Mr. Frisch were to be paid a bonus pursuant to the bonus plan regardless of the state of the home at the time the home was reassigned."
77-day Completion Bonus
Frisch avers that the January and April 2001 bonus plan provide an 84-day completion bonus deadline; however, the April 2001 plan provides a 84-day deadline, and the January 2001 plan provides a 91-day deadline. A handwritten notation on the January 2001 plan states, "Slab pour — 12 weeks 2 story, 11 weeks 1 story," thus resulting in a 77-day deadline for one story homes. Frisch avers that Westin improperly computed his bonus for one-story homes based on a 77-day deadline — instead of the agreed upon 84-day deadline — thereby resulting in shortage of $105 per home (7 day penalty of $15 per day). Frisch avers that Westin improperly computed the bonus on 35 one-story homes; therefore, Westin owes him $3,675. Frisch does not state the date of these closings. Golan's affidavit, which refers only to the April 2001 bonus plan's 84-day deadline, does not address this issue.
Six-month Buyer Satisfaction Survey Bonus
The January 2001 bonus plan states that, to determine customer satisfaction, Westin will provide new homeowners with a survey after they have lived in a home for six months. Westin will pay the builder $50 for each survey scoring four or higher. The April 2001 bonus plan eliminates this six-month survey bonus. Frisch avers that he should have received this bonus for 12 homes that he closed between January and April 2001 before his termination; therefore, Westin owes him $600.
Bonuses for May 2002 Homes under Construction
Frisch avers that, as of his termination on May 15, 2002, he had 14 homes under construction. These homes were completed after his termination. Frisch avers that Westin owes him $9,000 for his pro rata share of the completion bonus. Golan avers, however, that Frisch was not eligible to receive a bonus for homes completed after his termination:
Instead, the builders who took over the homes previously being built by Mr. Frisch were to be paid a bonus pursuant to the bonus plan regardless of the state of the home at the time the home was reassigned. Additionally, there was no agreement or understanding, either express or implied, that Mr. Frisch was to be paid extra or additional compensation for the homes that were completed after his employment was terminated that would be over and above the compensation provided by the employment agreement and bonus plan.
Frisch contradicts Golan's assessment. Frisch avers that his agreement with Westin provided that he would not forfeit his pro rata share of the completion bonus for homes under construction at the time of his termination.
Standard of Review
We review a summary judgment under a de novo standard. Provident Life Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). We view all evidence in a light favorable to the nonmovant, and we indulge every reasonable inference in the nonmovant's favor. Id. For a traditional summary judgment, the moving party must show that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c). After adequate time for discovery, a party may move for a no-evidence summary judgment on the ground that no evidence exists 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). The trial court must grant the motion unless the respondent produces summary judgment evidence raising a genuine issue of material fact. Id. If, as here, the trial court's order does not specify the grounds for its summary judgment, then we affirm should any of the theories presented to the trial court and preserved for appellate review have merit. See Knott, 128 S.W.3d at 216.
Objection to Frisch's Affidavit
Without pointing to any specific statements within Frisch's affidavit, Westin generally objected to it on the basis that the affidavit "contains conclusions, unsubstantiated opinions, hearsay," and "self-serving statements of an interested party." The trial court rendered summary judgment without ruling on Westin's objections. Westin contends that the trial court implicitly granted Westin's objections. In Green v. Industrial Specialty Contractors, we addressed these issues and held that an objection based on a summary judgment affidavit's conclusory statements is an objection to substance, which may be raised for the first time on appeal; whereas, an objection based on lack of foundation or hearsay is an objection to form, which requires a written ruling for appellate review. 1 S.W.3d 126, 130 (Tex.App.-Houston [1st Dist.] 1999, no pet.) (reviewing challenge to summary judgment in favor of employer when employee did not obtain trial court ruling on her objection to employer's summary judgment affidavits).
Before the new Texas Rules of Appellate Procedure took effect on September 1, 1997, "a party objecting to summary judgment evidence had to obtain a written ruling on the objection or to a lack of a ruling." Frazier v. Yu, 987 S.W.2d 607, 609 (Tex.App.-Fort Worth 1999, pet. denied). Rule 33.1(a), which replaced former Rule 52(a), relaxed the requirement of an express ruling and recognized implied rulings. See id. at 610. Under this substantive change, error is preserved "as long as the record indicates in some way that the trial court ruled on the objection either expressly or implicitly." Id.
The Fort Worth Court of Appeals holds that the existence of written objections, and a recitation that the court reviewed all competent evidence, creates an inference that the trial court implicitly sustained objections to summary judgment evidence. See id. Other courts hold that the granting of a summary judgment motion does not necessarily provide an implicit ruling that either sustains or overrules objections to the summary judgment evidence. Well Solutions, Inc. v. Stafford, 32 S.W.3d 313, 317 (Tex.App.-San Antonio 2000, no pet.); Dolcefino v. Randolph, 19 S.W.3d 906, 926 (Tex.App.-Houston [14th Dist.] 2000, pet. denied) (stating that "the better practice is for the trial court to disclose, in writing, its rulings on all objections to summary-judgment evidence at or before the time it enters the order granting or denying summary judgment.").
Here, Westin's objection that Frisch's affidavit is conclusory is an objection to the substance of the affidavit, which may be raised for the first time on appeal. See id. (citing City of Wilmer v. Laidlaw Waste Sys., Inc., 890 S.W.2d 459, 467 (Tex.App.-Dallas), aff'd, 904 S.W.2d 656, 660-61 (Tex. 1995)). Thus, Westin did not need to obtain a ruling to raise this objection on appeal. See id. Contrary to Westin's assertion, however, Frisch's affidavit is not conclusory. Rather, it is based on Frisch's personal knowledge derived from his employment with Westin and provides the underlying specific factual basis for his statements. We therefore hold that the affidavit is not conclusory. See id.
Westin's objections that Frisch's affidavit contains statements of opinion and hearsay are objections to the form of the affidavit. See id. To preserve these complaints for appellate review, Westin had to obtain a written ruling on its objections. See id. Westin did not do so, and therefore, failed to preserve these objections for appellate review.
Even if a trial court's summary judgment is adequate to infer that it impliedly had sustained a movant's specific objections to the non-movant's summary judgment evidence under Rule 33.1(a), here, Westin's global objection is too general to present an issue for review. See Tex.R.App.P. 33.1(a)(1)(A) (requiring that complaint be sufficiently specific to make trial court aware of complaint). Westin objected to Frisch's five-page affidavit without pointing to any specific statements within the affidavit. Westin's objection thus lacked sufficient specificity for an appellate court to review the objection for its merit without a specific ruling from the trial court. See id. Under these facts, a ruling cannot be inferred. We hold that Frisch's affidavit was properly before the trial court, and that the trial court did not implicitly grant Westin's objection to the affidavit when it rendered summary judgment for Westin.
Under other circumstances, such may well be the case.
Westin also objected that Frisch's affidavit was self-serving. The fact the affidavit is self-serving does not make it improper summary judgment evidence. Trico Techs. Corp. v. Montiel, 949 S.W.2d 308, 310 (Tex. 1997). Summary judgment based on the uncontroverted affidavit of an interested witness is proper if the evidence is clear, positive, direct, otherwise credible, free from contradictions and inconsistencies, and could have been readily controverted. Id.; Tex. R. Civ. P. 166a(c). The affidavit describes with specific details (1) the nature of the agreement, (2) the alleged breaches, and (3) the specific amounts owed under the agreement. It is neither contradictory nor internally inconsistent. In addition, both parties submitted documentation that is consistent with their respective affidavits. Frisch's controverting affidavit meets the requirements of rule 166a(c), and thus was proper summary judgment evidence. See Tex. R. Civ. P. 166a(c).
Breach of Contract
To prevail on a contract claim, a plaintiff must prove: (1) a contract existed between the parties; (2) the contract created duties; (3) the defendant breached a material duty under the contract; and (4) the plaintiff sustained damages. Bayway Services, Inc. v. Ameri-Build Const., L.C., 106 S.W.3d 156, 160 (Tex.App.-Houston [1st Dist.] 2003, no pet.). Westin asserts that Frisch proved neither a breach nor an injury.
Frisch avers in his affidavit that Westin owes him (1) $1,400 for about one week of unpaid vacation, (2) $2,500 for unpaid salary for the last two weeks in May after his termination, (3) $10,000 or 11,000 for unpaid completion bonuses, (4) $3,000 for his pro-rata share of bonuses improperly paid to Love, (5) $3,675 for the 77-day completion bonus, (6) $600 for the six-month buyer satisfaction survey bonus, and (7) $9,000 for his pro-rata share of bonuses for May 2002 homes under construction. In response, Golan avers that Westin either paid or does not owe these amounts. Viewing Frisch's affidavit in the light most favorable to Frisch, we hold that the affidavit raises genuine issues of fact with regard to whether Westin owes Frisch on the disputed items. We therefore hold that the trial court erred in rendering summary judgment on the breach of contract claim.
Quantum Meruit
Alternatively, Frisch contends that Westin owes him the completion bonuses on the homes closed after his termination, based on the doctrine of quantum meruit. Quantum meruit is an equitable theory of recovery based on an implied agreement to pay for benefits received. Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992). A plaintiff must establish that (1) valuable services and/or materials were furnished, (2) to the party sought to be charged, (3) which were accepted by the party sought to be charged, and (4) under such circumstances as reasonably notified the recipient that the plaintiff, in performing, expected to be paid by the recipient. Id. An action based on quantum meruit involves obligations outside the scope of the express contract. Vortt Exploration Co. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990). The parties here do not dispute the existence of an employment contract.
Our sister court addressed a similar fact pattern in General Homes, Inc. v. Denison, 625 S.W.2d 794 (Tex.App.-Houston [14th Dist.] 1981, no writ). In Denison, a sales counselor in a home-building business sought recovery for commissions on the sale of 22 residences closed after he was terminated from employment, but for which he claimed that he had initiated before leaving his employment. Id. at 795. He sued his employer for quantum meruit, contending that such services were not covered by the written contract. Id. The Fourteenth Court of Appeals held that Denison had not performed any additional or extra work beyond the scope of the written contract, nor was he a volunteer of "extra work" without compensation beyond the scope of the written contract. Id. at 797 (holding that trial court erred in denying motion for judgment n.o.v.).
Frisch contends that Denison is distinguishable because, in that case, the company's personnel manual provided that the company would divide any commissions initiated by former employees among the remaining salesmen in the subdivision. Id. at 795. As in Denison, however, Frisch offers no evidence that he performed any "extra work" beyond the scope of the agreement. See id.
Without offering any an employment contract or personnel manual, Frisch avers that he and Westin "expressly addressed this issue at the time the original bonus plan was compiled in January 2001, and agreed not to include a forfeiture clause in the bonus plan." Frisch contends that he and Westin agreed that Westin would pay him a pro-rata share of the completion bonuses on homes closed after his termination. By his own assertion, Frisch contends that these bonuses were part of the agreement. Because an express contract covers the work in question, no recovery in quantum meruit exists. See Vortt, 787 S.W.2d at 944. Thus, the trial court properly rendered summary judgment on Frisch's quantum meruit claim.
Conclusion
We hold that a genuine issue of fact exists on Frisch's breach of contract claim, and therefore reverse that portion of the judgment of the trial court and remand the cause for further proceedings. We further hold that no genuine issue of fact exists on Frisch's quantum meruit claim and therefore affirm the trial court's summary judgment on that claim.