Court of Appeals of Texas, Fifth District, Dallas
On Appeal from the 162nd Judicial District Court Dallas County, Texas Trial Court Cause No. 10-03559
Before Justices Moseley, Lang, and Richter 
MARTIN RICHTER JUSTICE.
The trial court granted summary judgment in favor of appellee Minyard Food Stores, Inc. (Minyard). Because genuine issues of material fact exist, we reverse the trial court's judgment and remand the cause. Because the facts are well known to the parties and the issues of law are settled, we issue this memorandum opinion. Tex.R.App.P. 47.4.
Minyard brought this suit for declaratory judgment against appellant North Central Distributors, Inc. (North Central). Minyard seeks a declaration that it is entitled to a setoff of amounts it owes North Central for goods received. The trial court granted summary judgment for Minyard, ruling that Minyard was entitled to a setoff against North Central's receivable and could recover its attorney's fees. North Central raises seven issues challenging the trial court's judgment. In issues three, five, and six, North Central contends the trial court erred by granting summary judgment because genuine issues of material fact exist. We sustain these issues. In parts of its second and fourth issues, North Central also contends that the trial court erred by not granting its cross-motion for summary judgment. We overrule these complaints. We need not reach North Central's remaining issues.
Although only North Central and Minyard are parties to this lawsuit, several other individuals and entities are involved in the dispute. The record reflects that the receivable Minyard seeks to offset was originally owned by an entity called NCD Acquisition, L.L.C. (NCD Acquisition). North Central contends that NCD Acquisition was formed in 2006 when Joseph and Gretchen Minyard Williams purchased the assets of North Central's business. The record reflects that North Central financed the purchase of NCD Acquisition through a promissory note and security agreement. Prior to the purchase, North Central had distributed tobacco products and other goods to Minyard stores. After the purchase, NCD Acquisition continued this business relationship with Minyard. After several years, NCD Acquisition defaulted on the promissory note to North Central. North Central foreclosed on NCD Acquisition's assets in early 2010.
Before the foreclosure by North Central, NCD Acquisition had distributed goods to Minyard for which Minyard had not paid. In its original counterclaim, North Central alleged that the fair market value for these goods at the time Minyard took possession was $371, 325.12.
In 2009, Minyard assigned a lease for warehouse space in Coppell, Texas, to NCD Acquisition. The lessor was KTR Coppell, LLC (KTR), an unrelated entity; Minyard was the original tenant. At the time of the assignment, Minyard subleased a portion of the premises back from NCD Acquisition. Another portion of the premises was used by a printing business called Momentum Advertising and Communications, L.P. (Momentum). Although KTR consented to the assignment, Minyard remained liable on the lease.
After NCD Acquisition failed to pay rent under the lease for several months in 2009, KTR sued both NCD Acquisition and Minyard for the amounts due. North Central was not a party to this lawsuit. The lawsuit was settled by written agreement effective May 27, 2010. Joseph Williams signed the settlement agreement on behalf of NCD Acquisition (as "Its Member"), Momentum (as the Member of Momentum's General Partner, Momentum GP, L.L.C.), and individually. The settlement agreement, however, expressly provided that Minyard did not release "any claim or right of offset" against "NCD [Acquisition] and/or North Central, " and expressly excepted claims pending in this lawsuit from the releases.
In this lawsuit, Minyard does not seek to recover in damages the amounts it paid to KTR to settle KTR's claims. Instead, Minyard seeks a declaration that it is entitled to a setoff of North Central's claim for NCD Acquisition's unpaid receivable because North Central has no defenses against setoff, and the setoff exceeds any amount due on the receivable. The trial court's summary judgment states that Minyard "is entitled to a setoff in the amount of $832, 462.50 against the account receivable that is the subject of this lawsuit, " and orders that North Central take nothing on its counterclaims. In this appeal, North Central contends that genuine issues of material fact exist on both the existence and the amount of the offset. Because we agree, we reverse the trial court's judgment and remand the cause for trial.
Standard of Review
Minyard sought summary judgment on both traditional and no-evidence grounds. The standard for reviewing a traditional summary judgment is well established. See Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985); McAfee, Inc. v. Agilysys, Inc., 316 S.W.3d 820, 825 (Tex. App.—Dallas 2010, no pet.). The movant has the burden of showing 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).
We review a no-evidence summary judgment under the same legal sufficiency standard used to review a directed verdict. See Tex. R. Civ. P. 166a(i); Flood v. Katz, 294 S.W.3d 756, 762 (Tex. App.—Dallas 2009, pet. denied). Thus, we must determine whether the nonmovant produced more than a scintilla of probative evidence to raise a fact issue on the material questions presented. See id. When analyzing a no-evidence summary judgment, we consider all the evidence in the light most favorable to the nonmovant, indulging every reasonable inference and resolving any doubts against the movant. Sudan v. Sudan, 199 S.W.3d 291, 292 (Tex. 2006) (quoting City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex.2005)). A no-evidence summary judgment is improperly granted if the respondent brings forth more than a scintilla of probative evidence to raise a genuine issue of material fact. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003). "More than a scintilla of evidence exists when the evidence 'rises to a level that would enable reasonable, fair-minded persons to differ in their conclusions.'" Id. (quoting Merrell Dow ...