author: GEORGE C. HANKS, JR., Justice.

text:
    TMC WORLDWIDE, L.P., Appellant, v. Richard GRAY, Appellee.
    No. 01-04-00624-CV.
    Court of Appeals of Texas, Houston (1st Dist.).
    May 26, 2005.

      Bennett S. Bartlett and T. Brooke Farnsworth, Farnsworth <& VonBerg, Houston, for Appellant.
    Christine R. Thrash, Richard Joseph Tholstrup, Houston, for Appellee.
    Panel consists of Justices NUCHIA, HANKS, and HIGLEY.
   OPINION

GEORGE C. HANKS, JR., Justice.

Appellant, TMC Worldwide, L.P., appeals from the denial of its application for a temporary injunction in its suit to enforce a non-competition covenant and misappropriation of trade secrets. See Tex. Civ. PRAc. & Rem.Code Ann. § 51.014(a)(4) (Vernon Supp.2004-2005). In two points of error, TMC argues that the trial court abused its discretion by not enjoining Richard Gray, appellee, (1) from continuing to use TMC’s trade secrets in competition with TMC and (2) from continuing to compete against TMC in violation of Gray’s covenant not to compete. We affirm.

Background

Glenn Atkinson was the sole owner of Automatic Insect Control Enterprises, Inc. (AICE), a business that installed a nozzle placement system around homes that had a time-released emission of insecticides to eliminate mosquitos and other biting insects around the house. Atkinson explained that the business survived on referrals and the monthly maintenance of the systems.

In June 2001, Richard Gray signed a confidentiality agreement and became an at-will marketing consultant for AICE. AICE operated under the business name Champions Mosquito Control (“Champions”) in Houston. The confidentiality agreement contained a covenant not to compete and provided as follows:

Whereas, [Gray] would like to receive and review confidential information relating to the products and business of AICE, AICE agrees to provide such information with absolute performance of the following points:
1.[Gray] agrees to accept and maintain in confidence all trade secrets, formulas and other confidential business information which [Gray] receives during consultation with AICE and further agrees to protect the same against disclosures to unauthorized persons.
2. In addition, [Gray] agrees not to use, directly or indirectly, for [his] own benefit or for the benefit of any other person, firm, corporation, etc., any confidential business information, trade secrets or formulas disclosed to [Gray] during or as a result of consultation with AICE or review of AICE’s confidential information. It is understood that such information may be disclosed by [Gray] to employees of [his] company when necessary in furtherance of the relationship which exists between [Gray] and AICE; however, all such employees who receive such information shall agree to the terms of the AGREEMENT.
3. These obligations shall not apply to any information which is in the public domain as evidenced by printed publication and shall terminate if such information shall become public in such manner, except for such publications caused by an act or omission on [Gray’s] part in breach of the AGREEMENT. In addition, these obligations shall apply to any information which is presently in [Gray’s] possession or which may be disclosed to third persons without [Gray’s] solicitation.
4. Notwithstanding the termination of this Agreement, [Gray] agrees that for a period of three (3) years following any termination they [sic] will not directly or indirectly in any capacity either as owner, partner, shareholder, broker, dealer, agent, employee, consultant, or otherwise, engage in the business of providing any program, service, equipment or product similar or competitive with the operation of AICE.
5. AICE and [Gray] agree that the foregoing restrictions which pertain to the three (3) year period immediately following the termination of this agreement, are reasonable, but recognize that damages in the breach of these restrictions will be difficult to ascertain and, therefore, agree that in addition to and without limiting any other remedy or right AICE may have, AICE shall have the right to an injunction against [Gray] issued by a Court of competent jurisdiction enjoining any such breach.

Atkinson testified that, when he started working for AICE, Gray signed this confidentiality agreement containing a non-compete clause, and he was given a customer list. However, Gray testified that he was not given a customer list until June 2002, one year after he started working for AICE. In October 2002, Gray stopped coming to work. He never quit and was not fired.

John Fleming, who lived in Corpus Christi, contacted Atkinson because Fleming was interested in getting a system from Champions. Don Carlson, a Champions consultant, went to Fleming’s home and told him about the system. In November 2002, Carlson returned to give Fleming an estimate, and, this time, Carlson was accompanied by Gray. Gray and Carlson informed Fleming that they were “branching off” of the company and starting their own business to compete with Atkinson. They gave Fleming an estimate from Champions, and then under-cut it with a bid from their new venture, Affordable Automatic Mosquito Control (AAMC). Fleming testified that Gray told him that Champions was “going under.” Fleming bought a system from AAMC. Fleming testified that Gray inquired if Fleming would be interested in becoming a distributor for AAMC. Fleming testified that he declined.

In January 2003, Fleming started his own mosquito business, TMC Worldwide, L.P., to service south Texas residents. During the first quarter of 2003, Fleming became aware of the fact that Gray possessed Champions’s customer list. Fleming asked to see the list, but Gray would not let him. In November 2003, Fleming bought Champions’s assets, including its customer list that contained more than 3000 names from across the United States.

In February 2004, Fleming received a telephone call from Mrs. Orloff, one of Fleming’s customers, who informed him that she had received a letter from Gray. Mrs. Orloff faxed a copy of the letter to Fleming. The letter was generically addressed to “Resident,” stated the various services offered by Gray’s company, and offered a price for insecticide refills that was less than TMC’s price. Fleming kept Mrs. Orloff as his customer by offering her a discount on the price of her insecticide refills. Fleming also testified that he later learned of at least one former Champions client, Mrs. West, who was now using Gray’s services.

TMC filed suit, in which it alleged that Gray had breached his confidentiality agreement by using trade secrets — TMC’s customer list — and by actively soliciting TMC’s customers in violation of the non-compete clause. TMC also alleged that Gray misappropriated trade secrets. In its petition, TMC sought a temporary restraining order, a temporary injunction, and a permanent injunction. Gray’s confidentiality agreement with AICE and a solicitation letter from Gray on AAMC letterhead were attached as exhibits to the petition.

In his answer, Gray generally denied the allegations and specifically stated that the covenant not to compete was unenforceable because (1) there was no separate enforceable agreement as is required by Texas Business and Commerce Code section 15.50(a), (2) Gray was an at-will employee, and (3) there was no geographic restriction in the covenant not to compete and no reasonable limitation on the scope of the activities to be restrained. Gray further denied misappropriating any trade secrets.

Three months after denying the temporary injunction and two weeks after TMC filed its appellate brief, the trial court issued the following combined findings of fact and conclusions of law.

1. Richard Gray, (“Gray”), executed a Confidentiality Agreement (the “Agreement”) with Automatic Insect Control Enterprises, Inc. (“AICE”) on or about June; 10, 2001.
2. Gray was first given confidential information in the form of the AICE customer list (“Customer List”) in June 2002, an entire year
after the execution of the Agreement.
3. The restrictions in the Agreement were not reasonably limited.
4. There is no geographic restriction in the Agreement.
5. The Customer List contains customers located in most states in the United States.
6. The restrictions in the Agreement are not a reasonable limitation on the scope of activity to be restrained and the Agreement’s limitations did impose a greater restraint than was necessary to protect AICE’s business interests.
7. There was no separate, enforceable agreement between AICE and Gray for the primary purpose of obligating the [sic] Gray to render personal services. ■
8. In the alternative, AICE and Gray had an at-will, verbal commissioned sales agreement for Gray to provide sales services to AICE.
9. AICE’s former owner, Glen Atkinson (“Atkinson”) provided the Customer List to all contract sales personnel and at least one installation personnel.
10. The Customer List was not marked “CONFIDENTIAL.”
11. Out-of-Date issues of the Customer List were not collected and/or destroyed by Atkinson or any other officer or employee of AICE.
12. AICE nor Atkinson made any effort to collect the Customer List from personnel or contractors who left employment with AICE.
13. Atkinson knew that Gray was competing with AICE at least as early as April/May 2003.
14. It is not known whether the 16 customers common to the Customer List and Gray’s customer list were solicited by Gray, or sought Gray out because of a prior relationship with Gray.
15. TMC Worldwide, L.P. (“TMC”) purchased the assets of AICE.
16. TMC’s General Partner is John Fleming (“Fleming”).
17. Fleming was aware of the Customer List in Gray’s possession before TMC acquired the assets of AICE.
18. Fleming requested a copy of the Customer List in Gray’s possession, from Gray, before TMC acquired the assets of AICE.
19. Atkinson took no or insufficient action that would indicate a concern for protecting the distributed copies of the Customer List.
20. The Agreement does not comport with the covenant not to compete provisions of Tex. Bus. Com.Code §§ 16.60-16.62U
21. AICE’s promise to provide proprietary information to Gray is illusory because there was no separate, enforceable agreement for the primary purpose of obligating the [sic] Gray to render personal services.
22. An at-will services agreement cannot be an enforceable agreement for purposes of enforcing a covenant not to compete because the parties always retain the option of discontinuing services for any reason.
23. Injunctive relief may be based on the application of general equitable principles or on express authorization contained in a statute.
24. Procedures governing courts of equity are controlling as long as they are not in conflict with Texas statutes or rules of procedure.
25. In the absence of an enforceable agreement not to compete, TMC is not entitled to an injunction preventing Gray from soliciting clients with whom Gray established a relationship during his tenure with AICE.
26. TMC must establish that the Customer List is entitled to trade secret protection until the trial on the merits.
27. To establish that the Customer List is entitled to trade secret protection until the trial on the merits, TMC must show a probability of success in proving that the Customer List is entitled to trade secret protection.
28. TMC did not show a probability of success in proving that the Customer List is entitled to trade secret protection pending trial on the merits because of 1) the extent to which the Customer List was known by employees and others involved in the business, 2) the lack of measures taken by AICE to guard the secrecy of the Customer List, and 3) the ease or difficulty with which the Customer List could be properly acquired or duplicated by others.

(Emphasis added.) TMC does not challenge specific findings of fact. See McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex.1986) (holding unchallenged findings of fact are binding unless contrary is established as matter of law or there is no evidence to support finding); Aldine Indep. Sch. Dist. v. Ogg, 122 S.W.3d 257, 265 (Tex.App.-Houston [1st Dist.] 2003, no pet.).

Temporary Injunction

In two points of error, TMC argues that the trial court abused its discretion by not enjoining Gray from (1) continuing to use TMC’s trade secrets in competition with TMC and (2) continuing to compete against TMC in violation of Gray’s covenant not to compete.

A temporary injunction’s purpose is to preserve the status quo of the litigation’s subject matter pending a trial on the merits. Walling v. Metcalfe, 863 S.W.2d 56, 57 (Tex.1993). A temporary injunction is an extraordinary remedy and does not issue as a matter of right. Id. To obtain a temporary injunction, the applicant must plead and prove three specific elements: (1) a cause of action against the defendant; (2) a probable right to the relief sought; and (3) a probable, imminent, and irreparable injury in the interim. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex.2002). An injury is irreparable if the injured party cannot be adequately compensated in damages or if the damages cannot be measured by any certain pecuniary standard. Id.

The decision to grant or deny a temporary injunction lies in the sound discretion of the trial court, and the court’s ruling is subject to reversal only for a clear abuse of discretion. Walling, 863 S.W.2d at 58. We must not substitute our judgment for the trial court’s judgment unless the trial court’s action was so arbitrary that it exceeded the bounds of reasonable discretion. Johnson v. Fourth Ct. App., 700 S.W.2d 916, 918 (Tex.1985). In reviewing an order granting or denying a temporary injunction, we draw all legitimate inferences from the evidence in a manner most favorable to the trial court’s judgment. CRC-Evans Pipeline Int'l v. Myers, 927 S.W.2d 259, 262 (Tex.App.-Houston [1st Dist.] 1996, no writ). Abuse of discretion does not exist if the trial court heard conflicting evidence, and evidence appears in the record that reasonably supports the trial court’s decision. Davis v. Huey, 571 S.W.2d 859, 862 (Tex.1978); Myers, 927 S.W.2d at 262. "When, as here, specific findings of fact and conclusions of law are filed and a statement of facts is before the appellate court, the findings will be sustained if there is evidence to support them, and the appellate court will review the legal conclusions drawn from the facts found to determine their correctness. See Myers, 927 S.W.2d at 263.

Non-Compete

In point of error two, TMC contends that the trial court abused its discretion by failing to enjoin Gray from continuing to compete against TMC in violation of Gray’s covenant not to compete. We disagree.

The Covenants Not to Compete Act, Texas Business and Commerce Code Annotated sections 15.50-52 (Vernon 2002), governs the enforceability of the involved covenant not to compete, as well as the procedures and remedies in an action such as this one. See Light v. Centel Cellular Co. of Texas, 883 S.W.2d 642, 644 (Tex.1994). The enforceability of a covenant not to compete is a question of law for the court. Id.

Section 15.50 reads in relevant part:

[A] covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.

Tex. Bus. & Com.Code Ann. § 15.50(b) (Vernon 2002). In the present case, we are concerned only with the first of the two criteria for enforceability of a covenant not to compete — whether the covenant not to compete involved here was “ancillary to or part of an otherwise enforceable agreement at the time the agreement [was] made.” Under section 15.50, the relevant point in time is the moment the agreement is made; the issue is whether, “at the time the agreement is made,” there exists other mutually binding promises to which the covenant not to compete is ancillary or part and parcel. Light, 888 S.W.2d at 644.

Gray was an “at-will” employee of Champions. An “otherwise enforceable agreement” can emanate from at-will employment, but only so long as the consideration for a promise is not dependent on a period of continued employment. Myers, 927 S.W.2d at 268. A promise dependent on a period of continued employment would be illusory because it fails to bind the promisor, who always retains the option of discontinuing employment in lieu of performance. Light, 883 S.W.2d at 644-45.

An “otherwise enforceable agreement” is a contract and, as such, must be supported by consideration. Tom James of Dallas, Inc. v. Cobb, 109 S.W.3d 877, 885 (Tex.App.-Dallas 2003, no pet.). “Consideration is a present exchange bargained for in return for a promise. It consists of either a benefit to the promisor or detriment to the promisee.” Roark v. Stallworth Oil & Gas, Inc. 813 S.W.2d 492, 496 (Tex.1991) (emphasis added) (internal citations omitted).

There must be a contemporaneous exchange of consideration between the parties at the time the “otherwise enforceable agreement” is executed for the promise not to be illusory. See id. Under section 15.50, the time relevant to this determination “is the moment the agreement is made; the issue is whether, ‘at the time the agreement is made,’ there exists other mutually binding promises to which the covenant not to compete is ancillary or part and parcel.” Myers, 927 S.W.2d at 263; see Light, 883 S.W.2d at 644-45. The fact that Atkinson gave new confidential information and training to Gray some time after entering into the agreement will not suffice; we must evaluate the consideration given at the time the agreement was made. See Olander v. Compass Bank, 172 F.Supp.2d 846, 854 (S.D.Tex.2001). When we evaluate the agreement at the time it was made, Champions’ provision of confidential information and training to Gray before signing the agreement will not support its promises in the agreement. See Roark, 813 S.W.2d at 496 (“Consideration is a present exchange bargained for in return for a promise.” (Emphasis added.)); see also Jordan Leibman & Richard Nathan, The Enforceability of Post-employment Noncompetition Agreements Formed After At-will Employment Has Commenced: The “Afterthought” Agreement, 60 S. Cal. L.Rev. 1465, 1528-29 (1987) (“If anything in the classical law of contracts is clear, it is that past [or future] consideration is not good consideration. Any exchange has to be contemporaneous by definition, because the promise and the consideration for that promise must serve as reciprocal conventional inducements.”).

A promise to give confidential information is not sufficient. Light, 883 5.W.2d at 647 n. 14. The employer must actually give the confidential information in return for the employee’s promise not to disclose it. The Texas Supreme Court stated in Light that, “if an employer gives an employee confidential and proprietary information or trade secrets in exchange for the employee’s promise not to disclose them, and the parties enter into a covenant not to compete, the covenant is ancillary to an otherwise enforceable agreement.” Light, 883 S.W.2d at 647 n. 14 (emphasis added).

Accordingly, a promise to provide confidential information is illusory and cannot be the basis of an “otherwise enforceable agreement” unless (1) the employer promises to deliver the confidential information to the employee and (2) the employer actually delivers the confidential information at or near the time the employee makes the promise to keep the information confidential. See Wright v. Sport Supply Group, Inc. 137 S.W.3d 289, 297 (Tex.App.-Beaumont 2004, no pet.) (court found that employer’s promise to provide confidential information was not illusory where, subsequent to signing the agreement, the employer, on a daily basis, made confidential information available to the employee.) We only need to find one non-illusory promise to establish an otherwise enforceable contract.

In this case, TMC asserts that Champions’ promise to provide Gray with confidential information in return for his promise to keep the information confidential was non-illusory and thus was the basis of an “otherwise enforceable” contract that was ancillary to the covenant not to compete. However, Gray testified that he did not receive this confidential information until one year after he started working for Champions. The trial court believed this testimony and made findings of fact consistent with Gray’s recollection of the events. Because the record reflects that there was no contemporaneous exchange of consideration for the contract— the confidential information was not provided close to the time that the agreement was made—Champions’ promise was illusory and, thus, cannot be the basis of an otherwise enforceable contract ancillary to the covenant. See Roark, 813 S.W.2d at 496; Wright, 137 S.W.3d at 297.

In support of its argument, TMC relies on the holdings in Ireland v. Franklin, 950 S.W.2d 155 (Tex.App.-San Antonio 1997, no writ) and Curtis v. Ziff Energy Group, Ltd., 12 S.W.3d 114 (Tex.App.-Houston [14th Dist.] 1999, no pet.). This reliance is misplaced because neither opinion discusses the issue of whether and to what extent the employer’s delay in complying with a promise to deliver confidential information will render the promise illusory. To the extent that these opinions can be read to hold that, in an at-will employment relationship, there is no requirement that the consideration be contemporaneously exchanged to make a promise to provide confidential information not illusory, we decline to follow these opinions.

Accordingly, we hold that the trial court did not abuse its discretion in denying TMC’s temporary injunction relating to the covenant not to compete. We overrule point of error two.

Trade Secrets

In its first point of error, TMC argues that the trial court abused its discretion by not enjoining Gray from continuing to use TMC’s trade secrets — the customer list — in competition with TMC. We disagree.

Gray provided AAMC’s customer list, which contained approximately 80 names, 16 of which were also found on TMC’s list. Gray testified that he obtained the customers through his relationship with builders and landscaping companies who gave him references. He also testified that he received some referrals from other customers and from Terry Clark, a former Champions installer, and Don Carlson, a former Champions salesperson. He testified that some of his customers sought him out because of his prior relationship with them and because they were dissatisfied with the service provided by TMC. Gray testified that Mrs. West, a former Champions client, was one such customer. Notably, TMC does not challenge the trial court’s finding that it was unknown if the 16 customers common to TMC’s list and Gray’s customer list were solicited by Gray through his use of Champions’ customer list or if they sought Gray out because of a prior relationship with him. Gray testified that he has not shared the Champions list with anyone, he has not made any copies of the list, the list is currently in the possession of his attorney, and no one has asked him to return it.

In contrast, Fleming testified that, on December 10, 2003, two days after he bought Champions, he met with Gray. Fleming testified that Gray was angered by the news of Fleming’s decision to purchase Champions, and he informed Fleming that he had already “taken over a hundred customers from Champions,” and that “[Gray’s] goal was to take one hundred customers a year” and increase it to “approximately 500 a year.”

Fleming testified that Gray told him that he had Champions’ customer list and that “he would do with it whatever he blank well pleased.” Fleming also testified that Gray told him that he was going to use the Champions list as a guide to target neighborhoods for mass mailings. Fleming said that, at the December 10th meeting, he requested that Gray not use the list in direct competition with Fleming. Fleming testified that, after he purchased Champions, he asked Gray for the list and Gray never returned the list to him.

At the temporary injunction hearing, Fleming provided evidence that only one of TMC’s 3000 customers, Mrs. Orloff, had received a mass mailing from Gray, and he testified that Orloff is still a TMC customer. Fleming also testified that he “lost” Mrs. West to Gray as a customer because she was unhappy with TMC’s service.

In light of the conflicting testimony regarding Gray’s conduct and the lack of any evidence that Gray used the Champions customer list to obtain the 16 customers that are common to both Gray’s list and TMC’s list, we hold that the trial court did not abuse its discretion in denying TMC’s temporary injunction relating to the alleged trade secrets. See Wright, 137 S.W.3d at 292 (“The trial court does not abuse its discretion when basing its decision on conflicting evidence, nor does it abuse its discretion so long as some evidence of substantive and probative character exists to support its decision.”) The trial court did not abuse its discretion when it found that “TMC did not show a probability of success in proving that the Customer List is entitled to trade secret protection pending trial on the merits.” See Butnaru, 84 S.W.3d at 204. We overrule point of error one.

Conclusion

We affirm the trial court’s denial of the temporary injunction.

      . Customers were charged approximately $235 a month to refill the insecticide.

      . Atkinson also testified that the confidentiality agreement had no geographic provision.

      . Gray testified that he never asked for the customer list and was never told what to do with the list. He testified that the customer list included customers throughout the United States. He also testified that his job did not require him to make "cold calls.” He was only to follow the "leads” provided by the company.

      . Texas Business and Commerce Code section 15.50(a) provides that
      Notwithstanding Section 15.05 of this code, a covenant not to compete is enforceable if it .is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.
      Tex. Bus. & Com.Code Ann. §' 15.50 (Vernon 2002).

      . Cf. Strickland v. Medtronic, Inc. 97 S.W.3d 835, 839 (Tex.App.-Dallas 2003) (pet. dism’d w.o.j.) (court found that, in the context of an at-will employment relationship, a promise to provide an employee with confidential information is inherently an illusory promise and cannot be the basis of an otherwise enforceable contract. The court noted that this promise necessarily depends on an additional period of employment, and an employer could always terminate the employee without providing the promised confidential information.)

      . For instance, a promise of a raise in wages to an at-will employee is illusory because it is dependent upon some period of continued employment; the employer could fire the employee and be under no obligation to perform the promise. Light, 883 S.W.2d at 645 n. 5. In contrast, a promise to give 14-days written notice to terminate employment, or to provide an inventory upon termination, would not be "illusory” because it binds the promisor even though employment ends. Id. at 646.

      . Gray testified that, before the December 10th meeting, Fleming had an agreement with him to buy some equipment from Gray and serve as his distributor. Gray also testified that he spent about $22,000 buying mosquito product from Fleming. Gray testified that, at the meeting, Fleming informed him of his purchase of Champions and that Fleming wanted to continue his business relationship with Gray. Gray testified that he told Fleming that he did not want to continue to do business with Fleming because Fleming was now in direct competition with Gray. Gray testified that this competition was in violation of an unwritten business agreement between them.


source: Caselaw Access Project

author: LAURA CARTER HIGLEY, Justice.

license: Public Domain

text:
    GREENE’S PRESSURE TREATING & RENTALS, INC., and H. Rowe Greene Leasing Company, L.L.C., Appellants, v. FULBRIGHT & JAWORSKI, L.L.P., John Mings, Jack Vaughan, John Barrett, and David Tannenbaum, Appellees.
    No. 01-03-01084-CV.
    Court of Appeals of Texas, Houston (1st Dist.).
    June 2, 2005.

      Guy E. Matthews, Kelly D. Stephens, The Matthews Firm, Houston, TX, for Appellants.
    Joe W. Redden, Jr., John S. Adcock, Russell S. Post, Beck, Redden & Secrest, L.L.P., Houston, TX, for Appellees.
    Panel consists of Justices TAFT, ALCALA, and HIGLEY.
   OPINION

LAURA CARTER HIGLEY, Justice.

This is an appeal from a summary judgment granted to appellees, Fulbright & Jaworski, L.L.P., John Mings, Jack Vaughan, John Barrett, and David Tannenbaum (collectively “Fulbright”), in a case involving allegations of breach of fiduciary duty brought by appellants, Greene’s Pressure Treating & Rentals, Inc., and H. Rowe Greene Leasing Company, L.L.C. (collectively “Greene”). In two issues, Greene contends that the trial court erred in granting Fulbright’s motion for summary judgment as to Greene’s breach of fiduciary duty claim because (1) Greene met its burden to show the duty element of its claim and (2) Fulbright failed to show that Greene’s claims are barred by limitations, as alleged.

We affirm.

FACTS AND PROCEDURAL HISTORY

In 1991, United States Patent No. 5,027,842 (“the '842 patent”) was issued to Marvin Powers for his method of commissioning pipelines. Powers assigned the patent to BJ Services Company (“BJS”). During the same period, Coulter Service Company (“Coulter”) also developed a commissioning process (“the Coulter Process”). BJS initially claimed that the Coulter Process infringed on the '842 patent, but later abandoned its claim.

In 1992, Pipetronix acquired Coulter and the rights to the Coulter Process. BJS reappeared and threatened suit against Pipetronix for infringement on the '842 patent. In 1997, Pipetronix retained Fulbright to provide a legal opinion concerning whether the Coulter Process infringed on the '842 patent. Fulbright issued a confidential opinion letter that the Coulter Process did not infringe on the '842 patent.

In 1999, Pipeline Integrity International (“PII”) acquired Pipetronix. PII used the Coulter Process. BJS initially threatened infringement action, but later abandoned its claim. Eventually, PII sold 95% of the original Pipetronix assets to General Electric (“GE”) and the remaining 5% to Greene. Rights to the Coulter Process were included in the 5% to Greene.

Greene began using the Coulter Process. In 2000, BJS appeared again and asserted that such use constituted an infringement on the '842 patent. On November 22, 2000, Greene filed an action for declaratory judgment. On December 19, 2000, BJS, represented by Fulbright, filed an action against Greene, claiming infringement. Greene notified Fulbright that Fulbright’s position in this suit (asserting infringement) appeared to. conflict with Fulbright’s position in its prior opinion letter (declaring non-infringement). Fulbright continued to represent BJS. Greene filed a Motion to Disqualify Plaintiffs Counsel, which was later denied as moot due to ongoing settlement negotiations and, on a motion by BJS, the case was dismissed.

On May 1, 2003, Greene filed suit against Fulbright for malpractice, breach of fiduciary duty, and violations of the Deceptive Trade Practices Act (“DTPA”), based on Fulbright’s representation of BJS. Fulbright moved for summary judgment on the grounds that Fulbright owed no duty to Greene as a matter of law and that Greene was not a consumer under the DTPA. Fulbright attached to its motion, as evidence, Greene’s original petition; the affidavit of Gunnar Kopp of Pipetronix, stating that less than 5 percent of Pipetro-nix’s assets were sold to Greene; the affidavit of William R. Pakalka of Fulbright, stating that Greene has never sought or obtained legal services from Fulbright; the asset purchase agreement between PII, as successor in interest to Pipetronix; and Fulbright’s non-infringement opinion letter. In response to the motion, Greene’s evidence included the affidavit of Robert Vilyus, president of PII, stating that Greene purchased the Coulter Process from PII; and the affidavit of Eric Langlinais, president of Greene, stating that Greene’s purchase of the Coulter Process was conditioned on the representation that it did not infringe on any patent.

On September 23, 2003, the trial court granted summary judgment in favor of Fulbright. Greene solely appeals the summary judgment as to its breach of fiduciary duty claim.

ANALYSIS

In its first issue, Greene contends that the trial court erred in granting summary judgment for Fulbright on the ground that Greene failed to meet its burden as to the duty element of breach of fiduciary duty claim. Greene contends that a fiduciary duty arose solely from an attorney-client relationship that was created between it and Fulbright by virtue of the transfer of the Coulter Process.

Summary Judgment

A. Standard of Review

We review a trial court’s granting of a summary judgment de novo. Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex.1994). A summary judgment under Rule of Civil Procedure 166a(c) is properly granted only when a movant establishes that there are no genuine issues of material fact and that he is entitled to judgment as a matter of law. Tex.R. Civ. P. 166a(c); Nixon v. Mr. Prop. Mgmt., 690 S.W.2d 546, 548 (Tex.1985). A defendant moving for summary judgment must either (1) disprove at least one element of the plaintiffs cause of action, or (2) plead and conclusively establish each essential element of an affirmative defense to rebut plaintiffs cause. Cathey v. Booth, 900 S.W.2d 339, 341 (Tex.1995). In deciding whether there is a disputed material fact precluding summary judgment, every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in its favor. Tex.R. Civ. P. 166a; Nixon, 690 S.W.2d at 549.

When, as here, a trial court does not state the basis for its decision in its summary judgment order, we must uphold the order if any of the theories advanced is meritorious. State Farm, Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 380 (Tex.1993).

B. Breach of Fiduciary Duty

To recover on a breach of fiduciary duty claim, a plaintiff must first show that the defendant owed a fiduciary duty. Abetter Trucking Co. v. Arizpe, 113 S.W.3d 503, 508 (Tex.App.-Houston [1st Dist.] 2003, no pet.) (enumerating elements of breach of fiduciary duty claim as existence of fiduciary duty, breach of that duty, causation, and damages). An attorney has a fiduciary duty to his client when an attorney-client relationship is created. See Willis v. Maverick, 760 S.W.2d 642, 645 (Tex.1988); Thompson v. Vinson & Elkins, 859 S.W.2d 617, 623 (Tex.App.-Houston [1st Dist.] 1993, writ denied). An attorney-client relationship arises when an attorney agrees to render professional services to a client. Mellon Serv. Co. v. Touche Ross & Co., 17 S.W.3d 432, 437 (Tex.App.-Houston [1st Dist.] 2000, no pet.). This relationship may be expressly created by contract, or impliedly created through the parties’ actions. Id.

Greene does not contend that it created a formal contractual relationship with Fulbright. Rather, Greene asserts that it has an attorney-client relationship with Fulbright solely by virtue of Greene’s purchase of the Coulter Process. In 1997, Fulbright issued an opinion letter to its client, Pipetronix, stating that the Coulter Process did not infringe on the '842 patent. Greene contends that this opinion transferred with the sale of the Coulter Process asset from Pipetronix, through PII, to Greene. Greene maintains that it relied upon this letter when it purchased the Coulter Process from PII, and that such reliance created an attorney-client relationship between Fulbright and Greene. It is this alleged attorney-client relationship that provides the basis for Greene’s assertion that Fulbright owed Greene a fiduciary duty. In essence, Greene asks this Court to find that, when it purchased the Coulter Process, it purchased the right to assert the former attorney-client relationship that once concerned the asset.

Whether a prior attorney-client relationship transfers depends on whether the transaction is characterized as a merger or merely as an acquisition of assets. In re Cap Rock Elec. Coop., Inc., 35 S.W.3d 222, 227 (Tex.App.-Texarkana 2000, no pet.). An attorney-client relationship will transfer when a merger of two corporations takes place. Id. (citing Commodity Futures Trading Comm’n v. Weintraub, 471 U.S. 343, 349, 105 S.Ct. 1986, 1991 (1985)). In a merger, the successor organization stands in the shoes of prior management and continues the operations of the prior entity. Id. at 228. Generally, the rights and liabilities transfer, including a prior attorney-client relationship. Id. at 227-28; see Tex. Bus. Corp. Act Ann. art. 5.06(A)(2) (Vernon Supp.2004-2005).

However, when a corporate transaction is merely a sale of assets, it is not a merger, and rights and liabilities do not transfer unless expressly assumed. In re Cap Rock Elec. Coop., Inc., 35 S.W.3d at 227-28; Tex. Bus. Corp. Act Ann. art. 5.10(B)(1) (Vernon 2003). A mere transfer of assets, with no attempt to continue the pre-existing operation, does not transfer the prior attorney-client relationship. In re Cap Rock Elec. Coop., Inc., 35 S.W.3d at 227-28.

Here, the parties agree that the transaction between PII and Greene was not a merger. However, Greene contends that its purchase of the Coulter Process from PII constitutes a continuation of “an operating division or unit of a company” and because it was “that division or unit to which representation by the attorney applies, then the privileges between the attorney and the division of the company sold should transfer.”

In examining the transfer between PII and Greene, the agreement, entitled “Agreement for Purchase of Assets,” provides, in pertinent part, that PII intended to sell all of its “right, title and interest in and to [a list of assets, including technical and office equipment] and the rights relating thereto, including the goodwill associated with PIPETRONIX’s prior use and operation of such equipment.” PII states that the assets are purchased “as is” and that PII makes no warranties with respect to any of the assets. To the extent that PII had knowledge, it warranted that none of the assets nor the use of such assets violated or infringed on any patent. Moreover, the agreement states that the “Buyer confirms that it has made its own investigation” and has not relied on any statement or information furnished by the Seller unless specifically provided for in the agreement.

In addition, the evidence shows that the affidavit of Gunnar Kopp of Pipetronix states that less than five percent of Pipe-tronix’s assets were sold to Greene. This evidence suggests that the parties did not contemplate that Greene would take over ongoing operations; rather, it appears that Greene was to use the assets it purchased in conducting its own operations. In addition, the affidavit of William R. Pakalka of Fulbright states that Greene never sought or obtained legal services from Fulbright and that Fulbright’s non-infringement opinion letter, written to Pipetronix, was considered confidential and privileged by the parties.

Based on the language of the agreement, we conclude there is no support for Greene’s contention that the transaction should be treated as anything more than a purchase of assets. In addition, we conclude that there is nothing in the agreement to support Greene’s contention that PII had the intent or the ability to transfer the prior attorney-client relationship that existed between its predecessor, Pipetro-nix, and Fulbright. Further, the affidavit evidence supports that a bare transfer of assets took place.

Greene’s sole authority for its proposition that we treat its acquisition of the Coulter Process asset as something less than a merger, but something more than an acquisition of an asset, is Graco Children’s Products, Inc. v. Regalo Intern. L.L.C., 1999 WL 553478 (E.D.Pa.1999). Even if Graco could be construed as support, we are bound by precedent holding that the attorney-client relationship belongs to the management of a solvent corporation. See Weintraub, 471 U.S. at 348-49, 105 S.Ct. at 1991. The evidence shows that no merger took place between PII and Greene, and that PII remains a solvent corporation as a subsidiary of GE.

We conclude as a matter of law that no attorney-client relationship was created by virtue of Greene’s purchase of the Coulter Process asset; thus, Fulbright owed no fiduciary duty to Greene on this basis. We conclude that Fulbright has carried its burden to show that Greene cannot show evidence of the duty element of its claim. Accordingly, the rendition of summary judgment on this ground was proper.

We overrule Greene’s first issue.

Limitations Defense

Having found that Greene’s claim fails as a matter of law because Greene failed to meet its burden to show evidence of the duty element of its claim, we need not reach Greene’s second issue concerning whether its claim was filed before the expiration of the limitations period.

CONCLUSION

We affirm the trial court’s judgment.

      . "Commissioning” refers to purging a pipeline of its unwanted materials and preparing it for safe movement of petrochemicals.


author: ELSA ALCALA, Justice.

text:
    Paula ROBNETT, Appellant, v. THE KIRKLIN LAW FIRM, Appellee.
    No. 01-03-00561-CV.
    Court of Appeals of Texas, Houston (1st Dist.).
    June 2, 2005.

      Lennon C. Wright, Law Offices of Lennon C. Wright, Houston, TX, for Appellant.
    Stephen R. Kirklin and Charles B. Kirk-lin, The Kirklin Law Firm, P.C., Friends-wood, TX, for Appellee.
    Panel consists of Justices TAFT, ALCALA, and HIGLEY.
   OPINION

ELSA ALCALA, Justice.

This dispute concerns competing rights to attorney’s fees under contingency-fee contracts that appellant, Paula Robnett, referred to appellee, the Kirklin Law Firm (the firm), at least one of which the firm, in turn, referred to a third law firm. The firm prevailed by summary judgment after intervening in the trial-court cause, the “Thomas” case, seeking a declaration that it was entitled to attorney’s fees in that lawsuit and in a second action, the “Tru-tec” case. Appellant, Paula Robnett, opposed the firm’s intervention and claimed competing rights to the fees. The firm opposed Robnett’s challenge and sought traditional summary judgment on its intervention claim on the grounds that, when Robnett signed the initial, contingency-fee contracts in both cases, her license to practice law in Texas had been suspended for nonpayment of her attorney-occupation tax and for failing to meet requirements under the Texas Guaranteed Student Loan Program. The trial court rendered summary judgment in favor of the firm and enjoined Robnett from seeking attorney’s fees from her former clients in both cases. In rendering summary judgment, the trial court ruled that Robnett was not retroactively reinstated when she executed the contingency-fee contracts in either the Thomas case or the Trutec case, that the firm was entitled to $15,542.13, or one-half of the funds deposited in the court’s registry, and that Robnett could not seek attorney’s fees in the Thomas case and was not entitled to receive any attorney’s fees in the Trutec case.

Robnett challenges the summary judgment in five issues. She argues that her bar memberships were reinstated retroactively as a matter of law, and that her initial, contingency-fee contracts were therefore valid, which precludes summary judgment in favor of the firm. She also contends that the firm had no standing to challenge the validity of her initial contract because her former clients in the Thomas case later ratified their initial, contingency-fee contract; she contends, alternatively, that whether her former clients ratified their earlier contract presents a factual dispute that precluded summary judgment. Finally, Robnett contends that the trial court improperly enjoined her from seeking referral fees under her initial contracts.

We hold that Robnett’s bar-membership suspensions were not retroactively reinstated; that her contingency-fee contracts in both the Thomas and Trutec cases, which were signed during two periods of suspended licensure, were therefore void; and that Robnett did not timely present her remaining issues to the trial court. Because the firm established its right to summary judgment as a matter of law, we affirm.

Undisputed Facts and Procedural History

Robnett and her former clients, the plaintiffs in the trial-court cause, the Thomas case, signed their initial, 40% contingency-fee contract on October 19, 1998. When she signed the contract, however, Robnett had been suspended from practicing since September 1, 1998 for nonpayment of attorney’s occupation tax. See Tex. Tax Code Ann. § 191.1441 (Vernon 2002); see also State Bae R. art. Ill, § 8, reprinted in Tex. Gov’t Code Ann., tit. 2, subtit. G app. A (Vernon 2005) (State Bar Rules confirming requirements and penalties). Robnett was not reinstated for this violation until October 30, 1998. Rob-nett and her former clients in the Trutec case signed their initial, contingency-fee contract in that case on January 27, 2000. Two days earlier, however, on January 25, 2000, Robnett was suspended from practicing law for noncompliance with Supreme Court of Texas rules governing minimum repayment requirements under the Texas Guaranteed Student Loan program. See Tex. Gov’t Code Ann. § 82.022(c) (Vernon 2005); Order of the Supreme Court of Texas, June 18, 59 Tex. B.J. 844 (1996). Robnett was not licensed, therefore, and was precluded from practicing law when she signed both contracts. Both the Thomas contract and the Trutec contract authorize attorney’s fee sharing, through provisions permitting involvement of other attorneys to prosecute the respective claims.

On February 20, 2001, the firm and Rob-nett negotiated a letter agreement to split, equally, the 40% contingency-based attorney’s fees relating to the Thomas case. Under the agreement, the firm would thereafter advance the necessary expenses of the litigation to Robnett’s former clients. On the same day, Robnett transferred the entire case to the firm, and the firm agreed to pay Robnett one-half of the 40% contingency fees.

Robnett and the firm executed a similar agreement, on January 22, 2001, to share attorney’s fees in the Trutec case. Rob-nett’s client in the Trutec case terminated the contract with Robnett on November 13, 2001, however, and, on the same day, the firm notified Robnett that it would not share fees with her, as contemplated by the January 22, 2001 agreement.

On January 14, 2002, Robnett’s clients in the Thomas case terminated their contracts with both Robnett and the firm and hired new counsel. Despite the competing claims for attorney’s fees asserted by Rob-nett and the firm, new counsel settled the case. Pursuant to the order of the trial court, defense counsel for Thomas deposited $31,084.26 into the trial-court registry pending resolution of the competing claims to that sum under the firm’s intervention claim and Robnett’s counterclaim.

The firm moved for traditional summary judgment on the grounds that Robnett had fraudulently induced the firm to undertake duties imposed by her initial, contingency-fee contracts in both the Thomas and Tru-tec cases because, unknown to the firm, Robnett had been suspended from practicing law when those contracts were executed, which invalidated those contracts as a matter of law. • The firm requested that Robnett be precluded from asserting any rights under the contracts. The firm supplied verified, summary judgment proof, in the form of documentary evidence of Rob-nett’s suspensions, provided by the Supreme Court of Texas, which showed that Robnett was not reinstated until after each of the contracts had been executed. The firm also provided verified proof of the following: Robnett’s former clients in the Trutec case had terminated their contract with her on November 13, 2001, the firm disclaimed any obligation to Robnett for the Trutec case on the same date, and Robnett’s former clients in the Thomas case terminated their contract with her on January 14, 2002.

Robnett timely responded to the firm’s motion for summary judgment by acknowledging that she had been “administratively suspended” on several occasions, but claimed that she was consistently reinstated retroactively, pursuant to section 7 of the State Bar Rules. See State BaR R. art. Ill, § 7(A), reprinted in Tex. Gov’t Code Ann., tit. 2, subtit. G app. A (Vernon 2005) (providing for retroactive restoration of former status on removal of default for “nonpayment of dues or assessments”). Robnett also argued, in the alternative, that even disbarred attorneys may recover referral fees under Texas law.

The firm’s motion for summary judgment was set to be heard on October 25, 2002. On October 26, 2002, the plaintiffs in the Thomas case signed a settlement agreement for their ■wrongful death and personal injury claims, in which they also covenanted not to sue the firm or its principals concerning their representation. Robnett and the firm signed the settlement agreement. In January 2003, the trial court ordered that funds be deposited into the registry of the court and that funds due to the Thomas plaintiffs under the settlement be released. Certain funds remained in the court registry pending resolution of the fee dispute between Rob-nett and the firm.

The trial court rendered summary judgment on February 27, 2003. On the same day, without having sought leave to file a late response, Robnett filed her supplemental response to the firm’s motion for summary judgment.

Standard of Review

In moving for summary judgment under rule 166a(a) on its intervention claim, the firm had the burden to prove that it was entitled to judgment by establishing each element of its claim or defense as a matter of law, or by negating an element of the claim or defense of the opposing party, in this case, Robnett, as a matter of law. See Tex.R. Civ. P. 166a(a) — (b) (comment). Shmmary judgment is proper only when the movant establishes that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222 (Tex.1999); Jones v. Legal Copy, Inc., 846 S.W.2d 922, 924 (Tex.App.-Houston [1st Dist.] 1993, no writ). In reviewing a summary judgment, we assume that all evidence favorable to the non-movant is true, Walker v. Harris, 924 S.W.2d 375, 377 (Tex.1996), and indulge every reasonable inference and resolve any reasonable doubt in the non-movant’s favor. Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex.1997); Jones, 846 S.W.2d at 924.

Once the movant establishes that it is entitled to summary judgment, the non-movant can defeat that showing only by producing evidence that raises a fact issue. Walker, 924 S.W.2d at 377; Haight v. Savoy Apartments, 814 S.W.2d 849, 851 (Tex.App.-Houston [1st Dist.] 1991, writ denied).

Retroactive Reinstatement — Validity of Initial Contracts

A. Retroactivity of Reinstatements Following Suspensions for Nonpayment of Student Loans and Attorney-Occupation Tax

Robnett’s first issue challenges the trial court’s rulings by claiming that her reinstatements on October 30, 1998 and February 18, 2000 operated retroactively and therefore validated the contingency-fee contracts that she executed with her former clients in the Thomas and Trutec cases.

Robnett bases her contention that she was reinstated retroactively on article III, section 7 of the State Bar Rules. See State BáR R. art. Ill, § 7(A), reprinted in Tex. Gov’t Code Ann., tit. 2, subtit. G app. A. Section III of the rules pertains only to membership in the bar and imposes a duty to pay membership fees. Id. art. Ill, § 3. Section 5 of article III provides for suspension of a member of the bar who is in default of payment of membership fees or any assessment levied by the Supreme Court of Texas and further provides that “[a]ny practice of law during such suspension shall constitute professional misconduct and subject the member to discipline.” Id. art. Ill, § 5. Section 7(A) of article III, however, provides that when an attorney remedies her suspension for nonpayment by removing the default, as provided in section 7, “the suspension shall automatically be lifted and the member restored to former status ... retroactive to inception of suspension,” but without affecting any disciplinary proceedings. Id. art. Ill, § 7(A); see Satterwhite v. State, 979 S.W.2d 626, 628-29 (Tex.Crim.App.1998). Article XII of the State Bar Rules contains similar provisions for retroactive reinstatement for suspensions premised on noncompliance with minimum continuing legal education requirements (MCLE). See State BaR R. art. XII, §§ 8, 10, reprinted in Tex. Gov’t Code Ann, tit. 2, subtit. Gapp. A (Vernon 2005).

Robnett concedes that she was suspended from the practice of law when she entered into the contingency-fee contracts for the Thomas and Trutec cases. She also recognizes that the suspensions on which the firm relied in challenging the validity of the contracts she assigned to the firm derive from her failure to pay her attorney-occupation tax and her lack of compliance with the Guaranteed Student Loan Program and were not premised on either nonpayment of dues and assessments required by article III of the State Bar Rules or on her noncompliance with the MCLE requirements imposed by article XII of the rules. Robnett argues, however, that her reinstatements after suspension for nonpayment of her attorney-occupation tax and student loans should also be treated as effecting retroactive reinstatement, in the same manner as reinstatements under article III, section 7(A) and article XII, section 10 of the State Bar Rules after suspension for nonpayment of dues and noncompliance with MCLE requirements. We disagree.

1. Reinstatement Following Suspension for Nonpayment of Attorney-Occupation Tax

Section 191.142 of the Tax Code imposes an annual tax of $200.00 on Texas lawyers, except those exempted by section 191.144. Tex. Tax Code Ann. §§ 191.142(a)-(b), 191.144(l)-(2) (Vernon 2002). The Tax Code requires the supreme court to administer the tax and authorizes the supreme court to suspend noneomplying attorneys from the practice of law. Tex. Tax Code Ann §§ 191.1431, 1441(a) (Vernon 2002). The statute also authorizes reinstatement as follows: “An attorney who is suspended under Subsection (a) [of section 1441] shall be reinstated on payment of the tax and any interest and penalties.” Id. In contrast to the State Bar Rules governing reinstatement following suspension for nonpayment of dues or noncompliance with MCLE requirements, the Tax Code does not provide for retroactive reinstatement after suspension for nonpayment of the attorney-occupation tax. Consistent with the Tax Code provisions, article III, section 8(g) of the State Bar Rules also provides for reinstatement of the attorney suspended for nonpayment of the attorney-occupation tax “on payment of the tax and any interest and penalties,” but does not provide for retroactive reinstatement. State Bae R. art. Ill, § 8(g).

In construing a statute, we must presume that the Legislature intended the entire statute to be effective, and that it intended a just and reasonable result. See Tex. Gov’t Code Ann. § 311.021(2), (3) (Vernon 2005) (Code Construction Act); see also Fleming Foods of Texas, Inc. v. Rylander, 6 S.W.3d 278, 284 (Tex.1999) (noting, as “cardinal rule,” that courts construing statutes give effect to intent of Legislature). In discerning legislative intent, we may presume that omissions in newly enacted statutes are intentional. In re Ament, 890 S.W.2d 89, 41 (Tex.1994).

Robnett contends that the retroactivity provisions of article III, section 7(A) of the State Bar Rules should control here. We note, however, that under article Ill’s default provisions, section 5, article III applies to “fees or any assessment levied by” the Supreme Court of Texas. State Bar R. art. Ill, § 5; see State Bae R. art. 1(9) (defining “court”). Under the Tax Code, by contrast, the Legislature — not the supreme court — levies and assesses the attorney-occupation tax. See Tex. Tax Code Ann § 191.142(b) (Vernon 2002). The supreme court’s role under the Tax Code, therefore, is limited to administering collection of tax. See Tex. Tax Code Ann § 191.1431; State Bar R. art. Ill, § 8.

Because neither the Tax Code nor the State Bar Rules provides for retroactive reinstatement for suspensions arising from nonpayment of attorney-occupation tax, we conclude that the trial court correctly ruled that Robnett was not retroactively reinstated on October 30, 1998, when the contingency-fee contract in the Thomas case was signed. Because Robnett was thus still suspended from the practice of law when the Thomas contract was signed, she had no authority to enter into that contract.

2. Reinstatement Following Suspension for Nonpayment of Student Loans

In extending rule-making authority to the supreme court for licensing attorneys, the Legislature authorized the court to adopt rules “relating to the nonrenewal of the license of a lawyer who is in default on a loan guaranteed under Chapter 57 [of the] Education Code, by the Texas Guaranteed Student Loan Corporation.” Tex. Gov’t Code Ann. § 82.022(c) (Vernon 2005). The rules enacted by the supreme court pursuant to this authority require suspension and state as follows:

Unless the attorney submits satisfactory evidence of compliance, or establishes error, the attorney’s license is suspended. The court will remove the suspension upon presentation of satisfactory evidence that the attorney has entered a repayment agreement on the defaulted loan(s).

Order of the Supreme Court of Texas, June 18, 1996, 59 Tex. B.J. 844 (1996).

Like the Tax Code and article III, section 8(g) of the State Bar Rules, the supreme court’s order has no provision for retroactive reinstatement. The supreme court’s order imposes no “fees or assessments” that might, arguably, trigger the retroactivity provisions of article III, section 7(A), but simply effects suspension with no provision for retroactive reinstatement. We again conclude, therefore, that Robnett relies mistakenly on article III, section 7(A)’s retroactivity provision. See State Bar R. art. Ill, § 5, art. 1(9).

We hold that the trial court correctly ruled that Robnett remained under suspension from the practice of law and was not retroactively reinstated on January 27, 2000, when the contingency-fee contract in the Trutec case was signed.

We overrule Robnett’s first issue.

Right to Fees As a Matter of Law?

In her fourth issue, Robnett alternatively contends that she is entitled, as a matter of law, to recover attorney’s fees under the contingency-fee contracts that she generated, despite being suspended from the practice of law when she signed them, pursuant to A.W. Wright & Assoc. v. Glover, Anderson, Chandler & Uzick, L.L.P., 993 S.W.2d 466 (Tex.App.-Houston [14th Dist.] 1999, pet. denied) and Lee v. Cherry, 812 S.W.2d 361 (Tex.App.-Houston [14th Dist.] 1991, writ denied). Robnett’s reliance on A.W. Wright and Lee is misplaced. ■

In AW. Wright, our sister court recognized its prior holding in Lee, which upheld the rights of a disbarred attorney to receive attorney’s fees negotiated before referring the case to a different law firm. Id. at 468 (citing Lee, 812 S.W.2d at 364). In Lee, the attorney seeking to enforce a referral-fee agreement had voluntarily resigned his law licence. See id. at 362. In each case, however, the attorney asserting a right to fees had completed his personal legal work on the case and relationship ■with the referred clients before becoming separated from the bar, by disbarment in A.W. Wright, and by voluntary relinquishment in Lee. A.W. Wright, 993 S.W.2d at 469; Lee, 812 S.W.2d at 363. Here, by contrast, Robnett initiated both the Thomas and Trutec contracts while suspended from the bar. Accordingly, the rule first enunciated in Lee and reaffirmed in A.W. Wright does not apply.

We overrule Robnett’s fourth issue.

Contentions Not Timely Presented to the Trial Court

Rule 166a(c) and settled law construing rule 166a(e) impose deadlines for filing a summary judgment motion and any response to the motion. See Tex.R. Civ. P. 166a(e); see also Benchmark Bank v. Crowder, 919 S.W.2d 657, 663 (Tex.1996) (“Summary judgment evidence may be filed late, but only with leave of court.”); IN A of Texas v. Bryant, 686 S.W.2d 614, 615 (Tex.1985) (presuming that trial court did not consider late-filed summary judgment response because summary judgment did not reflect that trial court granted leave to file).

The firm filed its motion for summary judgment on October 1, 2002, and set it for a hearing on October 25, 2002. Robnett timely filed her initial response, but did not file her supplemental response to the firm’s motion until February 27, 2003. Although the attorney’s-fee dispute was the only matter still pending after the parties to the Thomas case had settled in late December 2002, and although funds had been deposited into the court’s registry and distributed pursuant to the trial court’s orders in January 2003, nothing in the record suggests that Robnett had sought leave from the trial court when she late-filed her response on February 27, 2003, the same day on which the trial court rendered final summary judgment for the firm.

Robnett’s second, third, and fifth issues assert evidentiary and substantive arguments from her late-filed supplemental response. In her second issue, Robnett relies on affidavits, provided by her former clients in the Thomas case, in support of Robnett’s contention that summary judgment in favor of the firm was precluded because the former clients orally ratified their initial, contingency-fee contract with Robnett. Despite the allegations in the firm’s pleadings, that Robnett fraudulently induced the firm to accept both the Thomas case and the Trutec case, by not disclosing that her license was suspended when both contracts were signed, Robnett contends, in her third issue, that the firm may not challenge the validity of the original contracts. Finally, although Robnett never asserted any objection or exception to the firm’s reliance on the Trutec contract in support of its intervention claim and relied on the Trutec contract in refuting the firm’s intervention claim, Robnett’s fifth issue challenges the trial court’s encompassing issues concerning Robnett’s right to attorney’s fees in the Trutec case in the final summary judgment.

Because Robnett did not timely present any of these contentions to the trial court and did not seek leave to present them, we may presume that the trial court did not consider her contentions in rendering summary judgment in favor of the firm. See Tex.R. Civ. P. 166a(c); Crowder, 919 S.W.2d at 668; INA of Texas, 686 S.W.2d at 615. Because we presume that the trial court did not consider them, we may not consider them as grounds for reversing the summary judgment. See' Tex.R. Civ. P. 166a(c) (“Issues not expressly presented to the trial court by written motion, answer, or other response shall not be considered on appeal as grounds for reversal.”).

We overrule Robnett’s second, third, and fifth issues.

Conclusion

We affirm the judgment of the trial court.

      . The trial-court cause was a wrongful death and personal injury action, Venus Thomas, individually and as Representative of the Estate of Daizhane Jaime Price, and Alfred Price, Sr., individually v. Henry Parker, Cause No.2000-45780, in the 333rd District Court of Harris County, Texas. We will refer to this case as the “Thomas” case.

      . The related action was pending in the 152nd District Court of Harris County as Cause No. 200016476 and involved Sam Ari-yo, Trutec Investment Services Company Limited, Martindale Associates, Limited, and Tru-tec Oil & Gas, Inc. We will refer to the related action as the "Trutec” case.

      . Because the parties to the trial-court cause had previously settled, the summary judgment became a final, appealable judgment.

      . See Tex. Pen.Code Ann. §§ 38.122-.123 (Vernon 2003); see also Satterwhite v. State, 979 S.W.2d 626, 628-29 (Tex.Crim.App.1998) (construing section 38.122 of Penal Code in context of noncompliance with bar-dues requirement of State Bar Rules).

      . Robnett also claimed, incorrectly, that she executed the fee agreements in the Thomas and Trutec cases when she was not under suspension.

      . Pursuant to article 1(9) of the rules, references to “Court” in the rules means the Supreme Court of Texas. State Bar R. art. 1(9), reprinted in Tex. Gov’t Code Ann., tit. 2, subtit. G app. A (Vernon 2005).