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RHI Tech Services, LLC v. Owens

Court of Appeals of Texas, Eleventh District

August 22, 2019

RHI TECH SERVICES, LLC, Appellant
v.
DAN OWENS D/B/A OWENS SERVICE ELECTRIC AND DRO, LLC, Appellees

          On Appeal from the 441st District Court Midland County, Texas Trial Court Cause No. CV51894

          Panel consists of: Bailey, C.J., Stretcher, J., and Wright, S.C.J. [2]

          MEMORANDUM OPINION

          KEITH STRETCHER JUSTICE

         Appellant, RHI Tech Services, LLC (RHI), appeals from a summary judgment granted by the trial court in favor of Dan Owens d/b/a Owens Service Electric and DRO, LLC, Appellees. In two issues on appeal, RHI argues that the trial court erred in granting Appellees' motion regarding RHI's claims for (1) conversion and (2) money had and received. Because we hold that RHI failed to bring forth sufficient evidence to raise a fact issue on essential elements of both claims, we affirm.

         Background Facts

         RHI alleged that it entered into a Master Service Agreement (the Agreement) with an independent contractor, Paul Hunter (Hunter), whereby Hunter was to provide general service and repair work, "including electrical, mechanical, and related oilfield service activity," to RHI's customers. Under the terms of the Agreement, Hunter was authorized to order and pick up parts and equipment from Warren Power & Machinery, Inc. (Warren) on RHI's credit account with Warren. RHI alleged that, "on numerous occasions and without RHI's knowledge and authorization, Hunter ordered and received from Warren parts and equipment on behalf of himself or other unknown parties. Hunter charged those parts and equipment to RHI's account with Warren." RHI further alleged that Hunter then wrongfully took and sold those parts to Appellees. After Warren sued RHI for payment on RHI's account with Warren, RHI impleaded Hunter and Appellees as third-party defendants, alleging claims for (1) conversion and (2) money had and received. RHI alleged that Appellees had sold, disposed, or remained in possession of the parts and equipment charged to RHI's account by Hunter.

         In response, Appellees filed a motion for no-evidence summary judgment. Although Appellees admitted that they had purchased parts from Hunter, Appellees argued that, despite conducting "months of discovery," RHI had been unable to show "any piece of evidence indicating that those parts originated from Warren" or that "Hunter did not have clear title to those specific parts." Thus, Appellees argued that RHI's allegations were "based entirely upon speculation rather than upon even an iota of evidence." Appellees stressed that, at most, RHI had demonstrated that Appellees purchased parts from Hunter that were "extremely common" in the industry and "could have originated from any number of sources." Appellees argued that RHI had not produced any documents indicating the origins of the parts sold by Hunter to Appellees or establishing that Appellees purchased specific parts rightfully belonging to RHI. Instead, Appellees argued that RHI was offering mere guesses. Appellees also pointed to the deposition testimony of Mark Rittenhouse, a principal of RHI, in which he admitted that he did not have enough information to identify the specific parts that RHI alleged were received by Appellees.

         RHI filed a response to Appellees' no-evidence motion. RHI attached affidavits from Jan Rittenhouse (RHI's manager) and Kerwin Stephens (RHI's attorney) to the response. Included with Jan Rittenhouse's affidavit were invoices demonstrating sales from Warren to RHI for numerous parts. Attached to Stephens's affidavit were (1) excerpts from Jan Rittenhouse's deposition, (2) excerpts from Dan Owens's deposition, (3) discovery responses from Hunter to RHI, and (4) RHI's discovery responses to Appellees. Jan Rittenhouse's deposition testimony and affidavit explained that she believed Appellees were in possession of the disputed parts because (1) Warren told RHI that Hunter was working for Appellees, (2) "Hunter had to have a market for those parts," and (3) invoices purporting to show sales from Hunter to Appellees were for identical parts. However, Jan Rittenhouse's deposition testimony also showed that, when questioned about the disputed parts, Jan Rittenhouse admitted that, although RHI knew Hunter received parts from Warren, "[w]hat he did with [the parts] after that we have no idea." Similarly, in deposition testimony, Owens stated that, although Appellees purchased parts from Hunter, Hunter told Appellees that the parts belonged to him and were from a previous business. Owens stated that Appellees "took [Hunter] at his word."

         Following a hearing on Appellees' motion for no-evidence summary judgment, the trial court granted Appellees' motion thereby dismissing RHI's claims against Appellees. This appeal followed. We note that RHI obtained judgment against Hunter in the amount of $103, 000 plus attorney's fees, that Hunter did not file a notice of appeal, and that Warren's claims against RHI were severed into a separate cause. Thus, those claims are not before this court at this time.

         Analysis

         In two issues, RHI argues that (1) the trial court erred in granting Appellees' no-evidence summary judgment motion with respect to RHI's claim for conversion and (2) the trial court erred in granting Appellees' no-evidence summary judgment motion in regard to RHI's claim for money had and received. Conversely, Appellees argue that RHI failed to produce more than a scintilla of evidence that Appellees "actually received parts that were charged to RHI's account with Warren"-an essential element of both of RHI's claims. Thus, Appellees urge us to affirm the trial court's grant of their no-evidence motion for summary judgment. We agree with Appellees and overrule RHI's two issues.

         The party that files a no-evidence motion for summary judgment alleges that there is no evidence of one or more essential elements of a claim or defense on which the adverse party would have the burden of proof at trial. See Tex. R. Civ. P. 166a(i). The adverse party then must respond with evidence to raise a genuine issue of material fact on each of the challenged elements in the claim or defense. See id. A no-evidence summary judgment is essentially a pretrial directed verdict, and we apply the same legal sufficiency standard in reviewing a no-evidence summary judgment as we apply in reviewing a directed verdict. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex. 2003).

         With a no-evidence motion, we review the evidence in the light most favorable to the nonmovant, disregarding all contrary evidence and inferences. Id. at 751 (citing Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). 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. Id. (citing Tex.R.Civ.P. 166a(i); Wal-Mart Stores, Inc. v. Rodriguez, 92 S.W.3d 502, 506 (Tex. 2002)). "Less than a scintilla of evidence exists when the evidence is 'so weak as to do no more than create a mere surmise or suspicion' of a fact." Id. (quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)). "More than a scintilla of evidence exists when the evidence 'rises to a level that would enable reasonable and fair-minded people to differ in their conclusions.'" Id. (quoting Merrell Dow Pharm., 953 S.W.2d at 711); see Evans v. Globe Life & Accident Ins. Co., No. 11-13-00092-CV, 2014 WL 5565007, at *2-3 (Tex. App.- Eastland Oct. 31, 2014, no pet.) (mem. op.).

         Here, RHI alleged claims for conversion and money had and received. A conversion occurs when one person makes an unauthorized, wrongful assumption and exercises dominion and control over the personal property of another to the exclusion of, or inconsistent with, the owner's rights. Waisath v. Lack's Stores, Inc.,474 S.W.2d 444, 447 (Tex. 1971); Paschal v. Great W. Drilling, Ltd., 215 S.W.3d 437, 456 (Tex. App.-Eastland 2006, pet. denied). Thus, to "establish a claim for conversion, a plaintiff must prove that: (1) the plaintiff owned or had possession of the property or entitlement to possession; (2) the defendant unlawfully and without authorization assumed and exercised control over the property to the exclusion of, or inconsistent with, the plaintiff's rights as an owner; (3) the plaintiff demanded return of the property; and (4) the defendant refused to return the property." Tex. Integrated Conveyor Sys, Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 365-66 (Tex. App.-Dallas 2009, pet. denied). ...


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