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Rick Lovelady Carpets, Inc. v. G.R. Chapman Limited Partnership

Court of Appeals of Texas, Seventh District, Amarillo

April 26, 2017


         On Appeal from the 251st District Court Potter County, Texas Trial Court No. 101, 442-C, Honorable Ana Estevez, Presiding

          Before QUINN, C.J., and CAMPBELL and HANCOCK, [1] JJ.



         Appellant Rick Lovelady Carpets, Inc. ("RLCI") sued appellee G.R. Chapman Limited Partnership and George R. Chapman a/k/a G.R. Chapman, alleging a false representation of material fact by Chapman caused RLCI injury under various tort and contract theories.[2] Chapman sought and obtained summary judgment against RLCI on the entire case. Finding on this record the case was not capable of disposition by summary judgment, we will reverse the judgment of the trial court and remand the case for further proceedings consistent with this opinion.


         The summary judgment record presents starkly different versions of telephone conversations between Rick Lovelady and George Chapman, conversations that led to the parties' agreement and eventually to the present suit. Because we here review a summary judgment granted on Chapman's motion, we must take as true all evidence favorable to the nonmovant, Lovelady, and indulge every reasonable inference and resolve any doubts in Lovelady's favor. Kachina Pipeline Co. v. Lillis, 471 S.W.3d 445, 449 (Tex. 2015); State v. Ninety Thousand Two Hundred Thirty-Five Dollars & No Cents in U.S. Currency, 390 S.W.3d 289, 292 (Tex. 2013). For our purpose, therefore, we accept Lovelady's version of the telephone conversations.

         Lovelady's deposition testimony describes the initial December 2007 conversation like this: "Mr. Chapman called me on the phone one day and had mentioned to me that the lot next door might be for sale and wanted to know if I would be interested in being a partner with him on the deal." He continued, "He called and asked me if I'd be interested in being a partner over there on the lot next door to me.

         The purchase price was 400, 000, and we're going to split it 200 a piece, 50/50 partners."

         The lot to which Chapman was referring was a vacant lot fronting on the Interstate 40 service road, adjacent to RLCI's Amarillo carpet store. In an affidavit, Lovelady indicated Chapman also referred to the $400, 000 price as "very favorable." Lovelady asked for time to think about the prospect.

         Chapman called Lovelady back about a week later and this time Lovelady expressed interest in the proposal. When Chapman again called Lovelady in January 2008, Lovelady's evidence shows, "Chapman said that he had already purchased the property for $400, 000, but he reiterated that he would 'let me in for half of the property for $200, 000.'" Lovelady agreed to the proposal. According to Lovelady he "decided to have [his] corporation [RLCI] make the investment with Chapman."

         Chapman and RLCI created a new entity, I-40 Development, LLC, to own the lot. Each had a 50% interest in the company; Chapman had primary responsibility for managing its financial affairs and maintaining the books and records. For its interest, RLCI contributed $200, 000 cash. Chapman contributed an undivided half interest in the lot for its 50% interest; the LLC then purchased the remaining undivided interest in the lot from Chapman for RLCI's contributed $200, 000. The LLC was formed, and its acquisition of the lot was consummated, in mid-January 2008.

         During an early 2013 conversation with Lovelady, George Chapman's son Justin told Lovelady that he did not believe his father paid $400, 000 for the lot. Lovelady immediately confronted Chapman with this information. Chapman vehemently denied the assertion and again represented the purchase price was $400, 000. Lovelady asked to see, and Chapman agreed to show him, the closing documents for his purchase.

         The documents were not provided and over the ensuing weeks Lovelady made at least three requests of Chapman for the documents. Each time Chapman represented that he paid $400, 000 for the lot and would provide the supporting documentation.

         When the documentation was not provided, Lovelady retained counsel who contacted the entity that sold Chapman the lot. It refused to disclose the sale information. Lovelady contacted the title company that handled the closing, but it refused to provide sale documentation without Chapman's approval.

         In March 2013, Chapman told Lovelady that Lovelady did not need to see the closing documents. Lovelady filed suit in May 2013. Through third-party discovery, Lovelady's counsel obtained copies of the title company's closing documents. This record indicated Chapman bought the lot in December 2007 for $174, 319.

         In its live petition, RLCI alleged claims against Chapman for common-law and statutory fraud, [3] fraudulent inducement, breach of fiduciary duty, breach of contract and unjust enrichment and an action for an accounting. It requested imposition of a constructive trust on the lot, an award of compensatory and exemplary damages, and recovery of attorney's fees. To suspend ...

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