San Sebastion Realty Co., Inc. v. Roel Huerta and Rosa M. Huerta

Citation: Not availableDocket: 14-14-00819-CV

Court: Texas Supreme Court; December 21, 2015; Texas; State Supreme Court

Original Court Document: View Document

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Affirmed on December 22, 2015, in the Fourteenth Court of Appeals (Case No. 14-14-00819-CV), San Sebastian Realty Co. Inc. appealed a trial court ruling granting a no-evidence summary judgment in favor of Roel and Rosa M. Huerta, concerning an alleged breach of a commercial real estate listing agreement. San Sebastian challenged the trial court's decisions to grant the Huertas’ objections to its evidence, grant the summary judgment, and deny due process.

The factual background reveals that in November 2011, the Huertas entered into a listing agreement with San Sebastian to find a buyer for their property in Houston, agreeing to a 6% broker's fee. In November 2012, the Huertas leased the property to Richard Nichols, who had an option to purchase for $125,000, specifying the exercise method and conditions. San Sebastian claimed Nichols exercised this option in July 2013, but Rosa Huerta refused to complete the sale or pay the broker's fee. Consequently, in January 2014, San Sebastian filed a breach of contract lawsuit against the Huertas, seeking $7,500 in fees and attorney’s costs.

Following Roel Huerta’s death, Rosa became the representative of his estate and filed an amended answer with affirmative defenses and a counterclaim for attorney’s fees. San Sebastian moved for summary judgment, asserting that the listing agreement conditions for the broker's fee were met when Nichols executed the option, and that the Huertas accepted his earnest money check, indicating willingness to proceed.

In contrast, the Huertas’ response and cross-motion argued that the broker's fee was contingent upon the sale being closed and funded, or a breach occurring after the fee was earned. They acknowledged that the fee was earned but contended that San Sebastian failed to provide competent evidence that the fee was payable.

The Huertas contended that San Sebastian’s broker fee was not due because Nichols's letter, which purportedly notified them of his intention to exercise a purchase option, did not reach them. They argued that Nichols did not agree to the purchase terms specified in the option and that they did not refuse to sell on different terms. Rosa Huerta testified that before the alleged letter was sent, Nichols proposed a ten-year financing plan instead of the five years stipulated in the purchase option, to which she expressed willingness to negotiate, but discussions did not progress. She learned of the letter when she visited to collect August rent and confirmed to Nichols that she had not received it. Nichols later reiterated his interest in a ten-year term, stating that the five-year term would be financially burdensome, and subsequently withdrew his offer before the Huertas could respond. 

Rosa acknowledged receiving a $1,000 check from Nichols labeled 'Earnest Money,' but claimed it was treated as rent payment since it matched their monthly rental amount and no additional payment was made. The Huertas maintained that they did not refuse to sell and were still willing to negotiate, with Rosa indicating they had reached a preliminary agreement for a ten-year financing plan, expecting to close by July 31, 2014. They argued that San Sebastian’s broker fee was never earned, supported by additional affidavits and documentation. 

The Huertas also challenged parts of Surrency’s affidavit and asserted that there was no evidence of a breach of the listing agreement or a contract between San Sebastian and Roel Huerta. They sought summary judgment on their counterclaim for attorney’s fees. In response, San Sebastian maintained that the lease required only that notice be sent to a specified address, which was done, and that the Huertas’ actual knowledge of Nichols’s intent to exercise the option negated the necessity for receipt. San Sebastian argued that any renegotiation did not impact its entitlement to the fee or the Huertas’ obligation to convey the property, citing a 'time is of the essence' clause in the lease. San Sebastian reiterated these points in response to the Huertas’ motion for summary judgment.

San Sebastian contended that the Huertas' acceptance of Nichols's earnest money check constituted acceptance of the property's sale terms, which meant the Huertas could not apply the earnest money to rent. San Sebastian claimed this misapplication and the refusal to adhere to the listing agreement terms amounted to a breach of that agreement. To support this claim, San Sebastian included additional evidence and a second affidavit from Gene Surrency, dated June 6, 2014, along with a copy of Rosa’s affidavit related to San Sebastian's summary judgment motion. The Huertas responded by stating that San Sebastian failed to provide evidence that a broker's fee was owed under the listing agreement and objected to two of San Sebastian’s exhibits and Surrency's second affidavit. On October 2, 2014, the trial court granted the Huertas' motion for summary judgment, denying all other requested relief without ruling on the evidentiary objections. The same day, it denied San Sebastian’s summary judgment motion. San Sebastian filed a notice of appeal on October 10, 2014, and a motion for new trial on October 29, 2014, which was implicitly overruled on December 16, 2014, due to the court's failure to rule on it. The court had plenary power until January 15, 2015. On December 3, 2014, the Huertas filed two motions to modify the judgment to reflect the court's sustaining of their objections to San Sebastian’s summary judgment evidence, indicating that such a ruling was essential for the court to grant their summary judgment. San Sebastian opposed these motions, and a hearing was held. Subsequently, on December 16, 2014, the trial court issued a ruling sustaining the Huertas' objections to San Sebastian's evidence but did not incorporate it into the summary judgment order. The Huertas expressed concern through letters sent on December 29 and 31, 2014, requesting a new judgment to clarify the court's ruling, which San Sebastian's counsel did not receive until January 6, 2015.

On January 6, 2015, the trial court vacated its October 2 judgment and issued a new judgment, which upheld all objections to San Sebastian's evidence made by the Huertas. San Sebastian's counsel objected to this modified judgment, arguing that the Huertas’ letters were not proper motions and lacked a request for a hearing, while also claiming that their previous motions were untimely. San Sebastian requested a new trial, asserting that the Huertas had admitted to challenging the defendants' summary judgment evidence. The trial court did not issue further orders before the expiration of its plenary power.

San Sebastian contends that the trial court erred in three respects: (1) granting the Huertas’ objections to its summary judgment evidence, (2) granting summary judgment for the Huertas, and (3) denying due process. In cases of cross-motions for summary judgment, the courts consider evidence from both parties to determine if either is entitled to judgment as a matter of law.

Regarding the evidentiary rulings, San Sebastian claims that the Huertas waived their objections to its evidence, except for one affidavit, because they did not obtain rulings on them during the October 2 hearing. However, the court found that the objections were not waived, as the October 2 order was vacated, and the January 6 judgment explicitly sustained the Huertas’ objections. The trial court had previously ruled on these objections on December 16, 2014, and the same judge addressed the Huertas’ motions and objections. Thus, the objections were properly preserved, distinguishing this case from others where objections were not ruled upon.

San Sebastian asserts that the Huertas’ motions and letters from December are untimely, as they were filed beyond the thirty-day limit following the October 2 summary judgment order. Specifically, San Sebastian claims the Huertas’ December motion for modification and subsequent letters were filed late, violating Texas procedural rules. Moreover, San Sebastian contends that the trial court's December 16 ruling and January 6 judgment were abuses of discretion, arguing that the court's decision came too late and lacked clarity regarding which motions were considered. Despite these claims, the trial court maintains broad plenary power over its judgment until January 15, 2015, following the timely filing of San Sebastian's motion for new trial, allowing it to modify or vacate judgments regardless of the timeliness of related motions. The court's authority includes the ability to address untimely motions at its discretion. Furthermore, the trial court’s December 16 ruling effectively granted the Huertas' request for a ruling on objections to San Sebastian's summary judgment evidence, countering claims of vagueness and lack of specific rulings.

The trial court upheld the Huertas’ objections to San Sebastian’s summary judgment evidence, providing two proposed orders that outline these objections—one relating to San Sebastian's motion and the other addressing evidence in response to the Huertas’ motion. The October 2 order was not modified, and while the trial court did not rule on each objection individually, it confirmed that all objections were sustained in the January 6 judgment. San Sebastian claims the trial court may not have considered individual objections; however, the full hearing transcript clarifies that the judge intended to review the evidence before making a decision on the objections. Although she initially hesitated about her ruling power, she recognized her plenary authority after San Sebastian filed for a new trial. The judge stated she would look into the objections before making any rulings. The objections were raised by the Huertas in their responses to San Sebastian’s motions. Both the October 2 order and the January 6 judgment indicated that the trial court reviewed all motions, evidence, pleadings, and arguments before granting the Huertas’ motion for summary judgment. While the Huertas may have been slow in pursuing their objections after the summary judgment was granted, the trial court acted within its discretion to consider their subsequent motions and letters. The court executed both the objection ruling and the January 6 judgment while retaining plenary jurisdiction. Although San Sebastian contests the validity of the Huertas’ objections, the evidentiary rulings are subject to an abuse of discretion standard, and the trial court’s decisions must be upheld if there is any legitimate basis for them. San Sebastian does not argue that the denial of its summary judgment motion was erroneous but specifically challenges the rulings on the Huertas’ objections to certain exhibits and affidavits submitted in response to the Huertas’ cross-motion for summary judgment.

Huertas objected to San Sebastian’s exhibits 2 and 6, claiming they were unauthorized hearsay. Exhibit 2 is a purported letter from Nichols’s attorney to the Huertas regarding Nichols exercising a purchase option on their property. Exhibit 6 is a copy of a check labeled 'Earnest Money' obtained from Nichols. The Huertas argued the trial court correctly ruled these exhibits as unauthenticated hearsay, as Surrency's June 6 affidavit failed to establish them as business records or true copies. Although Surrency attempted to authenticate the exhibits in his May 7 affidavit, he did not adequately explain how the documents were business records of San Sebastian or how they were created in the regular course of business. His authentication was ineffective, merely confirming that the documents were obtained from another source. The trial court did not abuse its discretion by excluding these documents, emphasizing that it is not obligated to consider evidence not directed to it. In the context of cross-motions for summary judgment, both parties' evidence was before the court. The Huertas’ cited authorities were irrelevant as they dealt with general objections to voluminous exhibits rather than cross-motions. Surrency asserted that the documents were kept in the regular course of business, but he failed to substantiate how he gained personal knowledge of the facts in his affidavits, which were also challenged by the Huertas for hearsay and lack of foundation. For summary judgment, affidavits must be based on personal knowledge, present admissible facts, and demonstrate the affiant’s competence to testify, which was not sufficiently met in this case. Conclusory statements without factual support are inadequate to oppose summary judgment.

A conclusory statement lacks supporting facts, and objections to such statements in an affidavit concern the affidavit's substance rather than its form, allowing for these objections to be raised on appeal. The Huertas contested statements in Surrency’s June 6 affidavit, which claimed knowledge of the Huertas’ sale conditions and refusal to close on a property sale. These statements were deemed conclusory because Surrency did not provide factual backing or demonstrate personal knowledge regarding the information he relayed. Consequently, the trial court acted within its discretion by upholding the Huertas’ objections to these statements. 

Additionally, Surrency's May 7 affidavit contained similar unsupported claims, leading to the conclusion that the trial court did not err in sustaining objections. The Huertas’ cross-motion for summary judgment was based on the assertion that there was no evidence of a breach of the listing agreement with San Sebastian. A no-evidence summary judgment requires the moving party to claim a lack of evidence for specific elements of a claim, and the non-movant must present more than a scintilla of evidence to avoid summary judgment. San Sebastian's commission was contingent upon the closing of a sale, the Huertas' refusal to sell, or a breach of the agreement. Since San Sebastian only alleged refusal to sell, it needed substantial evidence to support this claim. The court previously excluded related documents and affidavits that did not establish this refusal. San Sebastian contended that Rosa Huerta's affidavit provided sufficient evidence to challenge the summary judgment for the Huertas.

San Sebastian asserts that Rosa validated both the listing and lease agreements with Nichols, confirming that she and Roel had entered into the listing agreement. Rosa accepted an earnest money check from Nichols but did not proceed with the sale, instead applying the funds as rent. Despite knowing that Nichols exercised his option in July 2013, Rosa did not complete the sale by July 31, 2014, despite a 'time is of the essence' clause. San Sebastian points out that the Huertas informed the court in December that the property remained unsold a year and a half after Nichols provided notice. They dispute Rosa's claims of renegotiating the sale terms, arguing it does not excuse her failure to sell under the lease. The Huertas counter that San Sebastian’s broker’s fee is only due upon the sale closing or if they refuse to sell after the fee is earned, and assert there is no evidence of such a refusal. The evidence shows the Huertas did not receive any notice of Nichols's intention to purchase, and Nichols communicated to Rosa that he did not wish to buy under the existing terms. The earnest money check was treated as rent, and although Nichols proposed financing over a ten-year term, the Huertas were willing to sell only under a five-year term. The lack of a sale does not indicate refusal to sell. Rosa testified that the Huertas never refused to sell, and there is no contrary evidence. Therefore, San Sebastian failed to show the Huertas refused to sell under the lease, leading to the trial court's summary judgment in favor of the Huertas. 

In a separate issue, San Sebastian claims the trial court violated its due process rights in multiple ways: entering a judgment based on letters that weren't e-filed, ruling before San Sebastian had a chance to be heard, considering relief that was not permissible under Texas procedural rules, maintaining two separate docket sheets, backdating an electronic docket sheet, acting as an advocate against San Sebastian, and demonstrating bias as a judge.

San Sebastian claims that due process was violated due to a lack of meaningful notice, a fair trial, and an impartial judge, requesting the case be remanded for the trial judge's recusal. San Sebastian argues that the Huertas’ letters dated December 29 and 31 sought more relief than previous motions and contends that since the timeframe for modifying the judgment expired thirty days post the October 2, 2014 judgment, the judge lacked authority to grant the relief sought by the Huertas. They assert that the judge's actions denied them fair notice and the opportunity to respond, particularly because the Huertas failed to e-file their requests or comply with procedural rules. San Sebastian alleges the trial court back-dated a docket sheet to misrepresent when it received their January 6 letter, suggesting this was done to defend against claims of ex parte communication. They also accuse the judge of maintaining inconsistent records due to discrepancies between the electronic docket sheet and the physical docket sheet. Despite these claims, the court retained plenary power to consider post-judgment motions, and San Sebastian had the opportunity to respond during hearings. The court ultimately found that the Huertas’ requests were not for new relief but to clarify existing judgments, and it had the authority to correct party names in the final judgment. San Sebastian's allegations of misconduct were deemed speculative and unsupported by evidence, leading the court to overrule their claims and affirm the trial court’s judgment.