Opinion
No. 01-03-00091-CV
Opinion issued July 21, 2005.
On Appeal from the 11th District Court Harris County, Texas, Trial Court Cause No. 2001-2847.
Panel consists of Chief Justice RADACK and Justices KEYES and ALCALA.
MEMORANDUM OPINION
Appellants filed a motion for rehearing from our December 9, 2004 opinion. We DENY the motion. However, we withdraw our opinion of December 9, 2004 and issue this opinion in its stead. We also issue today a supplemental opinion to address issues raised in appellants' motion for rehearing.
This is an appeal from a summary judgment granted in a suit arising out of the sale of a house. Appellants, Harpreet and Rajinder Kang, filed suit against appellees, Real Estate Champions and Barbara Keen (collectively, "Champions"), a real estate company and its agent, alleging that Champions, knew of, or conspired to remove, allegedly expensive fixtures from a house that the Kangs purchased in "as is" condition. The trial court granted summary judgment in favor of Champions and awarded Champions $25,000 in attorney's fees after finding that the Kangs' suit was groundless and brought in bad faith. In two issues, the Kangs contend that the trial court erred in (1) granting Champions' traditional motion for summary judgment and (2) awarding Champions attorney's fees. We affirm.
The Kangs also sued the sellers of the seller of the house and several other entities, but settled their claims against these parties after the trial court entered judgment. The only appellees in this appeal are Barbara Keen and Real Estate Champions.
BACKGROUND
The Kangs' petition alleges that on December 15, 1998, the Kangs viewed a house located at 7415 Naramore Street in Spring, Texas, and executed an earnest money contract on the house that same day. The Kangs had the house inspected on January 13, 1999, and closed on the house on January 14, 1999. The Kangs further allege that, on January 17, 1999, they returned to the house for the first time since the closing and noticed that "multiple high quality and expensive fixtures had been either completely removed or had been replaced with fixtures of a drastically lesser quality."
On January 12, 2001, the Kangs filed suit against Champions alleging "negligence, malice, fraud, theft, conspiracy to commit theft, breach of contract, breach of fiduciary duty, and violations of the Texas Deceptive Trade Practices Act and § 27.01 of the Business Commerce Cody[.]"
Champions filed a counterclaim, asserting that the Kangs' pleadings were brought in bad faith and for the purposes of harassment. Champions sought attorney's fees and costs under rules 13 and 215-2(b) of the Texas Rules of Civil Procedure and section 17.50(c) of the Texas Business and Commerce Code.
On April 5, 2002, the Kangs' attorney filed a motion to withdraw, which the trial court granted.
Two months later, on June 6, 2002, Champions filed a motion for summary judgment. The Kangs were provided notice of the summary judgment hearing, but did not file a response to the motion for summary judgment or request a continuance to obtain counsel. On July 9, 2002, the trial court granted Champions' motion for summary judgment.
Twenty days later, the Kangs, having obtained new counsel, filed a motion for new trial, which the trial court denied.
On September 6, 2002, the trial court held a bench trial on Champions' counterclaim for attorney's fees.
On September 20, 2002, the Kangs filed an amended petition, which asserted the same claims against Champions that had been disposed of by the earlier summary judgment, but also added an identical claim against another real estate agent, Jagjit Singh Thandi.
Champions moved to strike the amended petition and for the imposition of Rule 13 sanctions. On November 11, 2002, the Court held a hearing to determine the amount of damages owed to Champions for defending a groundless appeal. The parties announced that they had agreed to an amount of attorney's fees, subject to the Kangs' right to appeal the trial court's granting of summary judgment and determination that attorney's fees were appropriate.
On December 30, 2002, the trial court signed a final judgment (1) ordering that the Kangs take nothing on their claims against Champions; (2) finding that "[t]he filing of the Amended Petition was done with knowledge of the court's prior finding that the claims were groundless"; and (3) awarding Champions $25,000 in attorney's fees, plus post-judgment interest, for expenses occurred in "defending [the Kangs'] groundless claims brought in bad faith." This appeal followed.
PROPRIETY OF THE SUMMARY JUDGMENT
In their first issue, the Kangs contend that the trial court erred in granting Champions' traditional motion for summary judgment. Traditional summary judgment under rule 166a(c) is proper only when a movant establishes that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995). When evaluating a summary judgment, we assume that all evidence favorable to the non-movant is true and indulge every reasonable inference in favor of the nonmovant. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997). If the movant shows that he is entitled to judgment as a matter of law, the non-movant must present evidence raising a fact issue in order to defeat summary judgment. See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995). If the non-movant fails to file a response, as in this case, the non-movant can attack only the legal sufficiency of the movant's summary judgment proof on appeal. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979).
Champions' motion for summary judgment sought to negate an essential fact necessary to the Kangs' claim, i.e., that the "expensive" fixtures alleged to have been removed from the house after January 13, 1999 — the date of the Kangs' inspection — were, in fact, not in the house prior to that date. In support of this argument, Champions introduced the following evidence:
(1) photographs showing no draperies or expensive furnishings;
(2) testimony of Jeff Edwards, an Eckerd's photo lab manager, that the photographs were developed in July 1998, some four months before the Kangs ever saw the house; and
(3) a cancelled check for the film developing, which was signed by appellee Keen, and bore the notation "Naramore."
The Kangs filed no response to this summary judgment evidence; thus the only issue on appeal is the legal sufficiency of the evidence to prove that the fixtures were not in the house when the Kangs agreed to buy it. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d at 678.
On appeal, the Kangs contend that this evidence is legally insufficient because there is no evidence that (1) the photographs are of the house in question, (2) the photographs were of the areas of the house in question where the fixtures were alleged to have been, or (3) that the fixtures had not been removed from the house for the photographs, put back in the house when the Kangs viewed it, and removed again after closing.
However, the Kangs made no objection to the authentication of the photographs that were attached to Champions' motion for summary judgment. Without a proper objection, defects in the authentication of attachments in support of a motion for summary judgment or response are waived. Watts v. Hermann Hosp, 962 S.W.2d 102, 105 (Tex.App.-Houston [1st. Dist.] 1997, no pet.) (holding that objection to authentication of hospital discharge records attached to motion for summary judgment waived because not raised in trial court); Marchal v. Webb, 859 S.W.2d 408, 417 n. 6 (Tex.App.-Houston [1st Dist.] 1993, writ denied). Because the Kangs did not object to the authentication of the photographs in the court below, their first two contentions have been waived.
Regarding the Kangs' third contention — that the fixtures may have been removed from the house for the photographs, replaced in the house for the Kangs' viewing, and removed from the house again after closing — there is simply no evidence to support the Kangs' speculation. As such, the Kangs did not raise a fact question on the issue of whether or not the fixtures were in the house at the time they inspected it.
Because Champions carried its summary judgment burden of disproving what the Kangs concede is a "bedrock fact" upon which all their claims rest — that the fixtures were removed from the house after the Kangs' inspection — the trial court did not err by granting Champions' motion for summary judgment.
We overrule the Kangs' first issue.
ATTORNEY'S FEES
In the final judgment, the trial court awarded Champions $25,000 "in satisfaction of all reasonable and necessary attorneys' fees and expenses in defending [the Kangs'] groundless claims brought in bad faith." In their second issue, the Kangs contend that the trial court erred in awarding Champions attorney's fees on its counterclaim under section 17.50(c) of the Texas Business and Commerce Code, which provides:
(c) On a finding by the court that an action under this section was groundless in fact or law or brought in bad faith, or brought for the purpose of harassment, the court shall award to the defendant reasonable and necessary attorneys' fees and court costs.
Tex. Bus. Com. Code Ann. § 17.50(c) (Vernon 2002).
Under Sec. 17.50(c), "groundless" means a claim having no basis in law or fact and not warranted by any good faith argument for the extension, modification, or reversal of existing law. Donwerth v. Preston II Chrysler-Dodge, Inc., 775 S.W.2d 634, 637 (Tex. 1989). The standard for determining whether a suit is groundless is "whether the totality of the tendered evidence demonstrates an arguable basis in fact and law for the consumer's claim." Splettstosser v. Myer, 779 S.W.2d 806, 808 (Tex. 1989). The court may consider evidence that is legally inadmissible or subject to other defects in making this determination if there is some good faith belief that the tendered evidence might be admissible or that it could reasonably lead to the discovery of admissible evidence. Donwerth, 775 S.W.2d at 637. The trial court must examine facts available to the litigant and circumstances existing when the litigant filed his or her pleadings. Neely v. Comm'n for Lawyer Discipline, 976 S.W.2d 824, 827 (Tex.App.-Houston [1st Dist.] 1998, no pet.) (describing evidence necessary to Rule 13 hearing).
Whether a suit is groundless or brought in bad faith is a question of law for the trial court. Donwerth, 775 S.W.2d at 637. Our review of the trial court's determinations under Section 17.50(c) is a question of law under an abuse of discretion standard. Id. at 637 n. 3.; see Selig v. BMW of N. Am., Inc., 832 S.W.2d 95, 103 (Tex.App.-Houston [14 Dist.] 1992, no writ). When we review a trial court's determination under an abuse of discretion standard, we may not substitute our judgment for that of the trial court. Schlager v. Clements, 939 S.W.2d 183, 190 (Tex.App.-Houston [14th Dist.] 1996, writ denied).
In this case, the trial court held a bench trial on the attorney's fees issue after granting Champions' motion for summary judgment. At the trial, both of the Kangs testified that they had seen the expensive fixtures in the house many times before their final inspection.
The record shows that the Kangs began looking at the house in August 1998, before entering the earnest money agreement in December 1998.
Similarly, the Kangs' inspector testified that he had seen the fixtures (but did not note them on his report) during the January 13, 1999 inspection, but when he returned for a second inspection on March 3, 1999, the fixtures had been removed. The Kangs also introduced their inspector's report from the March 3, 1999 inspection, in which he detailed the missing fixtures.
Champions presented Barbara Keen, who testified that in July 1998, she took pictures of the Naramore house and that, at that time, it did not contain any expensive fixtures. Keen testified that the 8,000-square-foot house sold for only $350,000 because it had been "stripped down." She testified that the house was a foreclosure, and that she had seen the previous owner selling off the fixtures in July 1998, which was several months before the Kangs ever made an offer on the house. Indeed, some of the pictures that Keen took in July 1998 show price tags hanging from the light fixtures.
Champions also introduced the testimony of an Eckerd's photo lab manager, who was able to confirm, by matching up the envelopes with the negatives, that Keen's photographs had been developed on July 4, 1998.
The Kangs admitted that they had no explanation for why the July 1998 photographs show that the fixtures had already been removed from the house. Ms. Kang testified that her testimony and that of the Eckerd's photo lab manager could not both be true, and Mr. Kang acknowledged his belief that someone at Eckerd's had doctored-up the photographs. Mr. Kang acknowledged that either someone at Eckerd's was committing fraud or he was.
Champions also introduced evidence that called into question the credibility of the Kang's inspector's March 3, 1999 report. Specifically, the language used in the report to document the missing fixtures was very similar to a document that the Kangs had prepared about the allegedly missing fixtures.
Finally, and perhaps most importantly, the Kangs admitted that they had been made aware of the photographs taken by Keen before they ever filed their lawsuit.
Based on the record before us, we cannot conclude the trial court abused its discretion in finding the Kangs' case was groundless and brought in bad faith.
Accordingly, we overrule issue two.
CONCLUSION
We affirm the judgment of the trial court.