Court: Court of Appeals of Texas; June 16, 2011; Texas; State Appellate Court
Andy Gray, the appellant, appeals a summary judgment granted in favor of Entis Mechanical Services, L.L.C., the appellee. The Court of Appeals of Texas determined that the appellee did not meet the necessary burden for summary judgment, leading to a reversal and remand for further proceedings. The case originated from appellant's work as an electrical subcontractor for appellee at a medical facility from September to December 2008, during which he submitted unpaid invoices totaling $30,894.90. After unsuccessful attempts to collect payment, appellant's attorney notified appellee on March 16, 2009, of intent to file a mechanic's lien if invoices remained unpaid. A mechanic's lien was filed on March 25, 2009, followed by a lawsuit for the unpaid invoices.
On April 2, 2009, appellee mailed a check for the full amount, made payable to both appellant and his attorney, asserting it was full payment for the work. Appellant did not cash the check and refused to release the lien, prompting appellee to file a lawsuit alleging that appellant had filed a fraudulent lien under section 12.002 of the Texas Civil Practices and Remedies Code. Appellee claimed that appellant demanded an additional $5,790.00 to release the lien, though no evidence supported this. Appellant's response included a verified defense indicating another suit was pending between the parties regarding the same claim.
Appellee's motion for traditional summary judgment relied on appellant's lien affidavits and invoices. Despite initially seeking a continuance, appellant ultimately did not respond or appear at the hearing. The trial court granted summary judgment in favor of appellee, awarding $10,000.00 in damages and attorney's fees, and discharged appellant's lien. Appellant's subsequent motion for a new trial was denied, leading to this appeal.
Appellant contests the trial court's summary judgment favoring appellee, asserting that appellee did not conclusively prove all elements of its fraudulent-lien claim. The standard for granting a traditional summary judgment requires the moving party to demonstrate the absence of genuine material facts and entitlement to judgment as a matter of law, as outlined in Texas Rules of Civil Procedure. Specifically, the plaintiff must conclusively establish all essential elements of the claim, shifting the burden to the nonmovant only after a prima facie case is made. The nonmovant is not obligated to respond unless the movant's proof is legally sufficient. Summary judgment may not be granted by default if the movant's evidence is inadequate, and on appeal, the court reviews the case de novo, favoring the nonmovant's evidence and resolving doubts in their favor.
In this case, appellee, claiming the lien was fraudulent, carries the burden to prove specific elements under the fraudulent-lien statute. This statute prohibits the creation or use of fraudulent documents with knowledge of their fraudulent nature, intent for them to have legal effect, and intent to cause financial injury. Appellee's summary judgment evidence must conclusively demonstrate that appellant knowingly used a fraudulent lien, intended it to be legally recognized, and aimed to cause financial harm. The appeal focuses on whether appellee met its burden of proof regarding these elements.
The court first evaluates whether the appellant, Andy Gray, was required to present summary judgment evidence demonstrating a genuine issue of material fact. The primary focus is on the appellant's claim that the appellee, Entis Mechanical Services, L.L.C., failed to conclusively prove that Gray intended to inflict financial harm when he filed a lien on the Tomball Property. To support its fraudulent-lien claim, Entis provided four categories of evidence: (1) a second lien affidavit by Gray on another property, (2) a check for $30,894.90 issued to Gray for work on the Tomball Property, (3) letters from Entis's attorney requesting the release of the lien, and (4) a portion of Jason Bice's affidavit indicating that Entis requested Gray to release multiple liens, which Gray did not do.
The court finds that this evidence does not prove, as a matter of law, that Gray intended to cause financial harm. Specifically, the lien affidavit on an unrelated property is deemed irrelevant, and the refusal to cash a check marked "paid in full" does not establish intent to inflict financial harm legally. The evidence merely creates a genuine issue of material fact for a jury to resolve, aligning with precedents that reject the notion that intent is self-evident based solely on a refusal to remove a lien. Consequently, the court sustains Gray's appeal, reversing the trial court's judgment and the order discharging the lien, remanding the case for further proceedings.
Justice Frost concurs but notes that while the majority's conclusion is correct, it relies on an unnecessary and inaccurate interpretation of the evidence regarding the claim under Texas Civil Practice and Remedies Code section 12.002, which requires proof of intent to cause various forms of injury.
Entis did not claim in its petition or summary-judgment motion that Gray sought to cause it physical injury, mental anguish, or emotional distress, limiting its statutory claim to one possibility under section 12.002(a)(3). The court found that the trial court incorrectly granted summary judgment because the evidence did not definitively establish that Gray intended to cause financial harm to Entis. An affidavit from Entis manager Jason Bice indicated that Gray filed multiple liens, including one on the Tomball Property, and that Gray refused payment for completed work. Bice noted that none of the liens had been released, but the majority opinion wrongly concluded that Gray admitted this lien was not released. The conclusion was unnecessary as Bice's statement, even if interpreted as indicating no liens were released, did not provide conclusive proof of Gray's intent to cause financial injury. The author of the dissent does not agree with the majority opinion but concurs with the court's judgment. Additional notes clarify that the liens filed by Gray on other properties are not part of this appeal and that the admission regarding the Tomball Property lien negates the need to discuss the implications of Bice's double negative.
