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Ewing Insurance Services, Inc. v. Texas Independent Automobile Dealers Association

Court of Appeals of Texas, Sixth District, Texarkana

April 12, 2019

EWING INSURANCE SERVICES, INC. AND CHARLES CANDLER, Appellants
v.
TEXAS INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION, AND JUAN SABILLON AND BRENT RHODES, INDIVIDUALLY, Appellees

          Date Submitted: February 4, 2019

          On Appeal from the 200th District Court Travis County, Texas Trial Court No. D-1-GN-18-003251

          Before Morriss, C.J., Burgess and Stevens, JJ.

          MEMORANDUM OPINION

          MORRISS, CHIEF JUSTICE

         When the Texas Independent Automobile Dealers Association (TIADA) revoked the membership of Ewing Insurance Services, Inc., and reported to TIADA members that it had taken such action, Ewing and its president, Charles Candler, sued TIADA and two of its board members, Juan Sabillon and Brent Rhodes, individually, alleging defamation, negligent misrepresentation, business disparagement, [1] and intentional infliction of emotional distress.[2] Ewing and Candler sought actual damages, lost profits, exemplary damages, and attorney fees. The trial court granted TIADA's motion for summary judgment on all causes of action.

         On appeal, Ewing contends that the trial court erred in granting TIADA's motion for summary judgment because the motion was directed to a superseded petition, at least some of TIADA's arguments should have been first addressed by special exceptions, the court applied the wrong limitations period to Ewing's claims, privileges did not apply to Sabillon and Rhodes, the court erroneously granted TIADA's objections to Ewing's summary judgment evidence before denying Ewing's motion for summary judgment, and it erred by overruling Ewing's objections to TIADA's summary judgment evidence.

         We reverse the summary judgment only as to Ewing's claims for negligent misrepresentation and remand that portion of the case for further proceedings. Except for that limited reversal, we otherwise affirm the trial court's judgment. We reach that disposition, because

(1) the disposition of the negligent-misrepresentation claims was premature without resort to special-exception practice;
(2) TIADA's motion for summary judgment was broad enough to cover the claims and evidence raised in Ewing's latest pleading;
(3) Ewing's argument regarding the continuing-tort doctrine is moot;
(4) Ewing's argument on appeal regarding its claim for intentional infliction of emotional distress is forfeited due to inadequate briefing;
(5) the issue of privilege is moot on appeal, given Ewing's forfeiture of any attack on the "truth" defense;
(6) there was no reversible error in sustaining TIADA's objections to Candler's affidavit;
(7) Ewing's cross-motion for summary judgment was not before the trial court for hearing; and
(8) Ewing's objections to TIADA's summary judgment evidence were not preserved for appellate review.

         Because this is a summary judgment case, the factual background is based on the parties' pleadings and summary-judgment proof. Ewing Insurance Services, Inc., a/k/a Ewing Insurance Agency, [3] is primarily in the business of selling insurance to car dealerships. In September 2009, Ewing, through Praetorian Insurance Company, sold a twelve-month insurance policy to Texas Auto Center (TAC)[4] for $9, 932.00, which TAC claimed to have paid Ewing in full. Ewing alleged that Praetorian later discovered that TAC had failed to disclose relevant insurance-related information and that, based on that information, it issued a new insurance policy with an adjusted premium of $15, 294.00. Ewing asserts that, after several notices went unanswered and the added premiums went unpaid, the policy was cancelled.[5] TAC denied receiving any notice and claims that, in August 2010, it learned, for the first time, that the company had been without insurance coverage for the preceding nine months.

         TAC subsequently filed a complaint against Ewing and its agent and president, Charles Candler, with the TDI and the TIADA, alleging that Ewing was conducting a "scam" by collecting insurance premiums and converting them to Ewing's own use. TAC requested that TIADA revoke Ewing's membership in the TIADA. Ewing denied any wrongdoing and alleged that, "[b]efore May 15, 2015," it informed TIADA of TDI's finding that Haggerty was the person "who stole the monies" giving rise to the false statements TAC provided to TIADA.

         Based on TAC's allegations against Ewing and Candler, on January 18, 2016, TIADA's board of directors voted to revoke Ewing's membership; on April 18, 2016, the board denied Ewing's appeal and made the revocation final. Ewing alleges that, in the March 2016 edition of TIADA's member magazine, Texas Dealer, the following statement appeared:

A motion was made under Article III Section 7 of the bylaws to revoke the membership of Ewing Insurance, and all principals in that company, either singularly or as principals in any current or future entities, from remaining or becoming a member of TIADA. On request by Ewing Insurance, within a 180 day window of this decision by the Board of TIADA, all membership dues collected from 2010 to 2016 will be refunded to Ewing Insurance. Moved by Juan Sabillon, seconded by Trey Crouch - PASSED.

         Article III, Section 7 of the TIADA bylaws states, in relevant part that "[a]n individual is disqualified for membership if his business, function, or operation, or that of his employer, is or becomes inconsistent with or contrary to the ethical standards of the Association."

         On January 17, 2017, Ewing filed suit against TIADA and Sabillon and Rhodes, individually, alleging that TIADA needlessly published the statement at the willful and malicious direction of board members Sabillon and Rhodes. TIADA, Sabillon, and Rhodes[6] filed a general denial, special exceptions, and affirmative defenses. Ewing's second amended petition raised claims against TIADA, Sabillon, and Rhodes for negligent misrepresentation, defamation, business disparagement, and intentional infliction of emotional distress and sought actual damages, lost profits, mental anguish damages, exemplary damages, additional damages, interest, and attorney fees and costs.

         In response to the second amended petition, TIADA moved for summary judgment. TIADA's January 23, 2018, amended motion for summary judgment alleged that: (a) the claim of negligent misrepresentation was barred by the statute of limitations and Ewing failed to state a cause of action by failing to plead the necessary elements; (b) the claim of defamation was barred by the statute of limitations, the claim failed because the published statement was true and the claim failed because it was not published; (c) the claim of business disparagement was barred by the statute of limitations and the claim failed because the published statement was true; (d) the claim for intentional infliction of emotional distress was barred by the statute of limitations and the statement did not constitute extreme and outrageous conduct as a matter of law; and (e) the claims against Sabillon and Rhodes, individually, were barred by privilege.

         The evidence in support of its motion included the two Candler affidavits Ewing had previously attached as evidence to its first and second amended petitions, as well as all the exhibits that Ewing had attached to the first affidavit, which included the minutes from TIADA's board of directors meetings on January 18 and April 18, 2016; several pages from Texas Dealer, in which the minutes appeared; copies of several pages from the TIADA's website indicating that all TIADA members received both digital and paper copies of Texas Dealer every month; a copy of Article III, Section 7, of the TIADA's bylaws; TAC's complaint letter to the TIADA accusing Ewing of wrong-doing; and Candler's written verification for Ewing's first amended petition. TIADA also attached affidavits from its president, Jeff Martin, and board member and former president, Rhodes. Martin's affidavit stated that, from 2006 through the time of the affidavit, no one other than Ewing's counsel had requested the minutes of any TIADA board meeting and that the information related to TAC's grievance against Ewing had not been disclosed to anyone other than the TIADA board members as a part of the grievance process. Rhodes' affidavit asserted that, based on the evidence, the board determined that Ewing was responsible for the actions of its agent and that, in revoking Ewing's membership, the board members acted in good faith. In the affidavit, Rhodes claimed that he did not participate in the vote to revoke Ewing's membership and denied having anything to do with the announcement of Ewing's revocation.

         On March 5, 2018, Ewing filed a third amended petition;[7] on March 30, 2018, ten days before the summary judgment hearing, it filed an amended response to TIADA's amended motion for summary judgment and a cross motion for summary judgment. The evidence attached to it included another amended affidavit by Candler, which included all of the material allegations of the previous affidavits, as well as the same exhibits referenced above as having been attached to the first affidavit, emails in which Candler had previously reported companies owned or operated by Rhodes and Sabillon for insurance fraud, pages from the TIADA website regarding changes to TIADA's bylaws, email notification that the TIADA board had denied Ewing's appeal, emails between Martin and Candler regarding whether and when the TIADA board suspended Ewing's membership benefits, documentary evidence regarding TAC's insurance coverage, TAC's complaint to the TDI, Ewing's request for disclosures, and pages from the TIADA website indicating that it is a non-profit trade association organized under Section 501(c)(6) of the Internal Revenue Code.

         Ewing's amended response also objected to all of TIADA's summary judgment evidence, arguing that it should be excluded because TIADA failed to timely disclose the witnesses and evidence in response to Ewing's requests for disclosure. In turn, TIADA filed objections to several sentences in Candler's affidavit that was attached to Ewing's response, arguing that the sentences were conclusory, conjecture, and unsupported by any factual basis.

         After a hearing, the trial court sustained TIADA's objections to the affidavit and granted TIADA's motion for summary judgment. Ewing's amended motion for new trial was denied by operation of law. Ewing appealed.

         We review de novo the summary judgment. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). Summary judgment is proper when there are no disputed issues of material fact and the movant is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c). When reviewing a summary judgment, we take as true all evidence favorable to the non-movant, and we indulge every reasonable inference and resolve any doubts in the non-movant's favor. Dorsett, 164 S.W.3d at 661; Knott, 128 S.W.3d at 215.

         (1) The Disposition of the Negligent-Misrepresentation Claims Was Premature Without ...


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