Opinion
NO. 14-19-00036-CV
01-12-2021
PODS ENTERPRISES, LLC, Appellant v. WORLD TRADE DISTRIBUTION, INC., Appellee
On Appeal from the County Civil Court at Law No. 1 Harris County, Texas
Trial Court Cause No. 1109769
MEMORANDUM OPINION
This dispute involves a warehouse lien. World Trade Distribution, Inc. is a warehouse business that provides storage and cargo distribution services in Houston, Texas. PODS Enterprises, LLC rents moveable storage containers. PODS delivered to World Trade Distribution's warehouse a storage container that contained a third party's personal belongings. World Trade Distribution unloaded the container, but PODS did not try to retrieve it for several months.
World Trade Distribution eventually sent PODS a notice of intent to foreclose on a warehouse lien by selling the container. PODS then demanded to pick up the container, but World Trade Distribution would not relinquish the container without satisfaction of the lien. After PODS filed this lawsuit, bringing various causes of action challenging the validity and enforcement of the lien, the trial court rendered summary judgment for World Trade Distribution, awarded attorney's fees to World Trade Distribution, and denied a summary judgment motion filed by PODS. PODS challenges the trial court's summary judgment, attorney's fees award, and denial of PODS' motion for summary judgment. We affirm.
Background
Kathleen Suros rented a storage container from PODS and paid PODS to ship her personal belongings from California to World Trade Distribution's warehouse in Houston. Suros paid World Trade Distribution to receive the PODS container, unload it, and ship Suros' property to Mexico. PODS did not retrieve the container after Suros' property was unloaded.
Nearly seven months later, World Trade Distribution sent PODS the notice of intent to foreclose on a warehouse lien by selling the container. PODS sought a temporary restraining order to prevent the sale. The trial court denied the temporary restraining order. PODS then amended its petition to add claims for conversion, violation of the Texas Theft Liability Act, violation of the warehouse lien statute, fraud by nondisclosure, tortious interference with prospective business relations, and unjust enrichment. World Trade Distribution moved for no evidence summary judgment as to all PODS' claims, and PODS moved for traditional summary judgment on all but its unjust enrichment claim. After hearing the motions, the trial court rendered final summary judgment for World Trade Distribution and against PODS and awarded attorney's fees to World Trade Distribution.
Discussion
In three issues, PODS challenges the trial court's grant of summary judgment for World Trade Distribution, award of attorney's fees, and denial of PODS' summary judgment motion. We review a summary judgment de novo. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). Because the parties presented the case through competing summary judgment motions and the trial court granted World Trade Distribution's no-evidence motion while denying PODS' traditional motion, we review the summary judgment evidence presented by both sides and render the judgment that the trial court should have rendered. See Trial v. Dragon, 593 S.W.3d 313, 316-17 (Tex. 2019); Farmers Ins. Exch. v. Rodriguez, 366 S.W.3d 216, 221 (Tex. App.—Houston [14th Dist.] 2012, pet. denied).
PODS challenges the trial court's grant of summary judgment on all PODS' claims except unjust enrichment.
To prevail on a no-evidence summary judgment, the movant must allege that no evidence exists to support one or more essential elements of a claim for which the non-movant bears the burden of proof at trial. PAS, Inc. v. Engel, 350 S.W.3d 602, 607 (Tex. App.—Houston [14th Dist.] 2011, no pet.) (citing Tex. R. Civ. P. 166a(i)). The motion must specifically state the elements for which there is no evidence. Id. The non-movant must then present evidence raising a genuine issue of material fact on the challenged elements. Id. A fact issue exists when there is more than a scintilla of probative evidence. Buck v. Palmer, 381 S.W.3d 525, 527 (Tex. 2012) (per curiam). More than a scintilla of evidence is present when evidence rises to a level that would allow reasonable and fair-minded people to differ in their conclusions as to the existence of a vital fact. Dworschak v. Transocean Offshore Deepwater Drilling, Inc., 352 S.W.3d 191, 196 (Tex. App.—Houston [14th Dist.] 2011, no pet.) (citing Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004)).
The party moving for traditional summary judgment bears the burden of showing no genuine issue of material fact exists and it is entitled to judgment as a matter of law. Fielding, 289 S.W.3d at 848 (citing Tex. R. Civ. P. 166a(c)). The evidence raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their conclusions given all the summary judgment evidence. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007).
I. Conversion
World Trade Distribution moved for no-evidence summary judgment as to each element of PODS' conversion claim, and PODS moved for traditional summary judgment on this claim. Conversion is the unauthorized and unlawful assumption and exercise of dominion and control over the personal property of another to the exclusion of, or inconsistent with, the owner's rights. Freezia v. IS Storage Venture, LLC, 474 S.W.3d 379, 386 (Tex. App.—Houston [14th Dist.] 2015, no pet.). The elements of conversion are (1) the plaintiff owned, had legal possession of, or was entitled to possession of the property; (2) the defendant assumed and exercised dominion and control over the property in an unlawful and unauthorized manner, to the exclusion of and inconsistent with the plaintiff's rights; and (3) the defendant refused the plaintiff's demand for return of the property.Id. at 386-87.
In its reply brief, PODS contends that World Trade Distribution did not move for summary judgment on "willful violation" as an element of conversion. We do not address this issue because we conclude that PODS did not prove that World Trade Distribution assumed and exercised dominion and control over the container in an unlawful and unauthorized manner, to the exclusion of and inconsistent with PODS' rights.
PODS presented the affidavit of its associate general counsel, Lockwood Gray, in support of the conversion claim. Gray attested that PODS owns the container but did not authorize World Trade Distribution to maintain possession of it. According to Gray, he demanded the return of the container, and World Trade Distribution refused to return it. However, Gray also attested that PODS had a contract with Suros, Suros arranged to have the container delivered to World Trade Distribution, and under the contract:
World Trade Distribution objected to the affidavit on several grounds. We presume without deciding that the affidavit was legally sufficient but conclude that PODS did not show it was entitled to reversal.
[T]he customer is required to give notice to PODS of the time and place designated for pick-up of PODS' property. Ms. Soros [sic] never requested that PODS pick up [the container] from [World Trade Distribution's] location. To date, PODS has still not received any communication from Ms. Suros requesting pick-up of [the container].Under the contract, PODS could pick up the container upon request or if Suros defaulted on her payments to PODS. The statements that Suros had the container delivered to World Trade Distribution and never asked PODS to pick up the container are inconsistent with the second element of conversion—that World Trade Distribution assumed and exercised dominion and control over the container in an unlawful and unauthorized manner, to the exclusion of and inconsistent with PODS' right to pick up the container.
PODS has not alleged or presented evidence of an event of default entitling it to take possession of the container. Gray attested in November 2018 that PODS stopped collecting rent for the container in August 2018 but did not explain why PODS stopped collecting rent. PODs filed the lawsuit in May 2018.
World Trade Distribution also presented evidence that it had a warehouse lien over the container. Under the warehouse lien statute, "[a] warehouse has a lien against the bailor on the goods covered by a warehouse receipt or storage agreement or on the proceeds thereof in its possession for charges for storage." Tex. Bus. & Com. Code § 7.209(a). The statute "creates a statutory possessory lien in favor of the warehouse on the goods stored with the warehouse or on the proceeds of the goods. The warehouse loses its lien if it loses possession of the goods or the proceeds." Id. § 7.209(e) & cmt. 4.
The parties agree that PODS owns the container and it is being stored by World Trade Distribution, but PODS contends that World Trade Distribution does not have a lien because PODS is not the bailor and the container is not part of a storage agreement. The statute does not define "bailor," but in the common law, the bailor delivers goods to another party, the bailee, for a specific purpose, such as storage or transportation. See State v. $281,420.00 in United States Currency, 312 S.W.3d 547, 551 (Tex. 2010); Lawyers Title Co. v. J.G. Cooper Dev., Inc., 424 S.W.3d 713, 720 (Tex. App.—Dallas 2014, pet. denied). PODS contends that Suros is the bailor, but World Trade Distribution presented evidence that PODS delivered the container to World Trade Distribution in a PODS delivery truck, which makes PODS the bailor of its own property.
A bailment can be created through "an express or implied contract between the parties that the specific purpose [for the bailment] will be realized." $281,420.00 in United States Currency, 312 S.W.3d at 551. PODS' delivery of the container to World Trade Distribution is some evidence of an agreement by implication that World Trade Distribution would store the container until it was retrieved by PODS. PODS presented no evidence to the contrary. Thus, World Trade Distribution presented evidence that it was entitled to a lien over the container and PODS did not have a right to retrieve the container until it satisfied the lien.
PODS has not shown on this record that World Trade Distribution assumed and exercised dominion and control over the container in an unlawful and unauthorized manner, to the exclusion of and inconsistent with PODS right to retrieve the container. We conclude that PODS did not present evidence raising a fact question or conclusively establishing this element of conversion.
PODS also presented a statement by World Trade Distribution's general manager, Brenda Reichert, in which she acknowledged that PODS owned the container. That statement does not establish that PODS had the right to pick up the container before the lien was satisfied.
II. Texas Theft Liability Act
World Trade Distribution moved for no-evidence summary judgment as to each element of PODS' Theft Liability Act claim, and PODS moved for traditional summary judgment on this claim. Under the Theft Liability Act, a person who commits theft as defined in the Penal Code is liable for the damages resulting from the theft. Tex. Civ. Prac. & Rem. Code §§ 134.002(2), 134.003(a). Theft is defined in the Penal Code as "unlawfully appropriat[ing] property with intent to deprive the owner of property." Tex. Pen. Code § 31.03(a). Appropriation of property is unlawful if it is without the owner's effective consent or stolen and the actor knows it was stolen by another. Id. § 31.03(b)(1)-(2).
As discussed, PODS knowingly delivered the container to World Trade Distribution and alleges that Suros never asked PODS to pick it up. Moreover, World Trade Distribution presented evidence that it had a warehouse lien over the container. PODS has not established on this record that World Trade Distribution unlawfully appropriated PODS' property with the intent of depriving PODS of its property. See O'Kane v. Coleman, No. 14-06-00657-CV, 2008 WL 2579832, at *6 (Tex. App.—Houston [14th Dist.] July 1, 2008, no pet.) (mem. op.). PODS accordingly did not present evidence raising a fact question or conclusively establishing this element of theft.
III. Warehouse Lien Statute
PODS argues that the warehouse lien is invalid because the container is not covered by a warehouse receipt or storage agreement. As discussed, World Trade Distribution presented evidence that PODS delivered the container to World Trade Distribution in a PODS delivery truck as bailor, which is some evidence that a storage agreement was created by implication. See $281,420.00 in United States Currency, 312 S.W.3d at 551. PODS did not present evidence to the contrary.
PODS also contends that the lien notice does not meet all the statutory requirements. The following requirements must be satisfied to enforce a warehouse lien on goods: (1) notice must be sent to "[a]ll persons known to claim an interest in the goods" that includes an itemized statement of the claim, a description of the goods, a demand for payment within a specified time, and "a conspicuous statement that unless the claim is paid within that time the goods will be advertised for sale and sold by auction at a specified time and place"; (2) the sale must conform to the terms of the notification and be held at the nearest suitable place to where the goods are held or stored; and (3) an advertisement of the sale must be published for a certain time including specific information before the sale can be held. Tex. Bus. & Com. Code § 7.210(b). A warehouse is liable for damages caused by the failure to comply with the requirements for sale, and in the case of a willful violation, is liable for conversion. Id. § 7.210(i).
World Trade Distribution contends that PODS failed to present evidence that World Trade Distribution sold the container and thus cannot establish a violation of the warehouse lien statute resulting in damages. We agree. In its live petition, PODS sought damages under the statute "caused by failure to comply with the requirements for any sale." To establish damages, PODS was required to prove that World Trade Distribution caused damages to PODS resulting from "the failure to comply with the requirements for sale." PODS has not shown on this record that it sustained any damages, in light of the fact that it did not present evidence that World Trade Distribution actually sold the container or otherwise caused PODS any damages resulting from a failure to comply with the requirements for sale. See id. PODS did not meet its burden to present evidence raising a fact question or conclusively establishing a violation of the warehouse lien statute resulting in damages.
IV. Fraud by Nondisclosure
To meet its summary judgment burden on fraud by nondisclosure, PODS was required to establish that (1) World Trade Distribution deliberately failed to disclose material facts to PODS that World Trade Distribution had a duty to disclose, (2) World Trade Distribution knew PODS was ignorant of the facts and that PODS did not have an equal opportunity to discover them, (3) by failing to disclose the facts, World Trade Distribution intended to induce PODS to take some action or refrain from acting, and (4) PODS relied on the nondisclosure and suffered injury as a result of that reliance. See Cho v. Kim, 572 S.W.3d 783, 801 (Tex. App.—Houston [14th Dist.] 2019, no pet.). PODS contends that World Trade Distribution (1) deliberately failed to disclose that it was charging for storage fees and storage fees were not being paid by Suros, and (2) had a duty to disclose that information to PODS.
World Trade Distribution presented evidence that PODS knew its container was warehoused at World Trade Distribution: PODS delivered the container there, and despite evidence that Suros arranged with PODS to "pick up the empty . . . container the next day," PODS never retrieved it. PODS, however, contends that it had no notice that World Trade Distribution "was holding PODS responsible for storage charges" until PODs received the notice of intent by World Trade Distribution to exercise a warehouse lien. As discussed, a warehouse has a lien over goods delivered by the owner for storage, and a storage agreement arises by implication upon delivery. See Tex. Bus. & Com. Code § 7.209(a); $281,420.00 in United States Currency, 312 S.W.3d at 551. PODS did not present evidence showing it did not know its delivery of the container to World Trade Distribution and failure to retrieve it would result in a storage agreement by implication. Nor did PODS present evidence showing that World Trade Distribution knew PODS was unaware of the law. The evidence does not show that World Trade Distribution (1) deliberately failed to disclose any material facts to PODS, (2) knew PODS was ignorant of the facts and that PODS did not have an equal opportunity to discover them, or (3) intended to induce PODS to take some action or refrain from acting. Accordingly, PODS did not present evidence raising a fact question or conclusively establishing these elements of fraud by nondisclosure.
PODS contends there is no evidence that Suros instructed PODS to pick up the container. To the contrary, Reichert stated that Suros "arranged with PODS to move her items in a PODS container to our warehouse where we would unload the items from the PODS container and they would pick up the empty PODS container the next day." PODS does not challenge Reichert's statement on appeal and in fact relies on it.
V. Tortious Interference with Prospective Business Relations
PODS contends that it could have rented the container to a third party but for World Trade Distribution's interference. To establish tortious interference with prospective business relations, PODS was required to prove (1) there was a reasonable probability that PODS would have entered into a business relationship with a third party; (2) World Trade Distribution either acted with a conscious desire to prevent the relationship from occurring or knew the interference was certain or substantially certain to occur as a result of the conduct; (3) World Trade Distribution's conduct was independently tortious or unlawful; (4) the interference proximately caused PODS injury; and (5) PODS suffered actual damage or loss as a result. See Coinmach Corp. v. Aspenwood Apt. Corp., 417 S.W.3d 909, 923 (Tex. 2013); see also Fjell Tech. Group v. Unitech Int'l, Inc., No. 14-14-00255-CV, 2015 WL 457805, at *9 (Tex. App.—Houston [14th Dist.] Feb. 3, 2015, pet. denied) (mem. op.).
PODS did not present evidence supporting any of these elements. PODS concedes that Suros paid rent for the container until after the lawsuit was filed. Based on that fact alone, there could not be a reasonable probability that PODS would have entered into a business relationship with a third party or any evidence that World Trade Distribution did anything to prevent the formation of a business relationship with a third party. Similarly, PODS has not established that World Trade Distribution committed any tortious or unlawful acts. As to proximate causation and damages, PODS has not shown that it was injured from its inability to enter into a rental contract with a third party while it was collecting rent from Suros, that any such injury was caused by World Trade Distribution, or that PODS suffered any damages. PODS, accordingly, did not present evidence raising a fact question or conclusively establishing the elements of tortious interference with prospective business relations.
VI. Attorney's Fees
World Trade Distribution sought attorney's fees under the Theft Liability Act. Under the act, the prevailing party "shall be awarded court costs and reasonable and necessary attorney's fees." Tex. Civ. Prac. & Rem. Code § 134.005(b). PODS contends that World Trade Distribution is not entitled to attorney's fees because "PODS put forth more than a scintilla of evidence [in response] to [World Trade Distribution's] No-Evidence Motion for Summary Judgment on the Texas Theft Liability Act, thereby precluding summary judgment on this cause of action." As discussed above, we disagree. PODS has not challenged the trial court's award of attorney's fees under the Theft Liability Act on any other grounds. Accordingly, we do not disturb the trial court's attorney's fees award.
PODS also challenges the trial court's attorney's fees award under Texas Civil Practice and Remedies Code section 38.001. See Tex. Civ. Prac. & Rem. Code § 38.001 (allowing recovery of attorney's fees for certain claims). The trial court did not tie its award to a particular statute, and PODS does not complain on appeal that the trial court failed to segregate fees. See Cullins v. Foster, 171 S.W.3d 521, 535-36 (Tex. App.—Houston [14th Dist.] 2005, pet. denied) (holding lack of objection to failure to segregate fees waives error). Accordingly, we do not address the propriety of an attorney's fee award under section 38.001. --------
Conclusion
We conclude the trial court did not err in granting summary judgment in favor of World Trade Distribution and against PODS or err in awarding attorney's fees to World Trade Distribution. We affirm the judgment of the trial court.
/s/ Frances Bourliot
Justice Panel consists of Justices Bourliot, Hassan, and Poissant.