author: Opinion By Justice FILLMORE.

text:
    AN COLLISION CENTER OF ADDISON, INC. d/b/a Bankston Collision Center, Appellant, v. The TOWN OF ADDISON, Appellee.
    No. 05-09-00272-CV.
    Court of Appeals of Texas, Dallas.
    April 12, 2010.
    Bryan D. Perkins, Amanda Maxine In-abnett, Gibson, McClure, Wallace & Daniels, LLP, Dallas, TX, for Appellant.
    Robert F. Maris, Maris & Lanier, P.C., Dallas, TX, for Appellee.
    Before Justices MOSELY, FITZGERALD and FILLMORE.
   OPINION

Opinion By Justice FILLMORE.

Appellant AN Collision Center of Addison, Inc. d/b/a Bankston Collision Center appeals the summary judgment granted appellee The Town of Addison. In two issues, Collision Center contends the trial court erred in granting Addison summary judgment on the affirmative defense of limitations to Collision Center’s request for abatement of a nuisance and on Collision Center’s claim that Addison intentionally diverted rainwater off its property and onto Collision Center’s property. We affirm the trial court’s judgment.

Background

The Addison Airport was constructed in 1956 and 1957 by a third-party. Addison purchased the Airport in 1976. In 1997, Collision Center purchased real property located on Lindbergh Drive that lies adjacent to the southern end of the Airport on which Collision Center operates a vehicle paint and body repair shop. Since at least 1992, including the period of Collision Center’s ownership, the property has flooded every time there is a hard rain lasting more than fifteen minutes.

Collision Center filed suit against Addison alleging that its premises were flooded on eight occasions between January 3, 2005 and March 18, 2008. In its petition, Collision Center alleged Addison diverted or impounded rainwater from the Airport onto Collision Center’s property. Collision Center alleged that because Addison’s diversion or impounding of water was intentional and with knowledge that the flooding of Collision Center’s property would occur, Collision Center’s damages are the result of a taking in violation of article I, section 17 of the Texas Constitution. See Tex. Const, art. I, § 17 (“No person’s property shall be taken, damaged or destroyed for or applied to public use without adequate compensation being made, unless by the consent of such person.”). Collision Center further alleged Addison’s diversion of water is a compensable nuisance under article I, section 17 of the Texas Constitution. Collision Center requested the trial court abate the continuing nuisance in the form of injunctive relief under chapter 65 of the civil practice and remedies code. See Gen. Mills Rests., Inc. v. Texas Wings, Inc., 12 S.W.3d 827, 834 (Tex.App.-Dallas 2000, no pet.) (party may be entitled to abatement of nuisance or damages if not susceptible to abatement).

Addison filed a traditional and no-evidence motion for summary judgment on Collision Center’s claims. Without stating the ground or grounds, the trial court granted Addison summary judgment as to all of Collision Center’s affirmative claims for relief. Collision Center appealed.

Standard of Review

The standard for reviewing a traditional summary judgment is well established. See Tex.R. Civ. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985). A defendant who moves for summary judgment must show the plaintiff has no cause of action. A defendant may meet this burden by either disproving at least one essential element of each theory of recovery or conclusively proving all elements of an affirmative defense. See Gen. Mills, 12 S.W.3d at 832. A matter is conclusively established if ordinary minds cannot differ as to the conclusion to be drawn from the evidence. See Triton Oil & Gas Corp. v. Marine Contractors & Supply, Inc., 644 S.W.2d 443, 446 (Tex.1982); Ling v. BDA & K Bus. Servs., Inc., 261 S.W.3d 341, 345 (Tex.App.-Dallas 2008, no pet.). After the movant has established a right to summary judgment, the burden shifts to the nonmovant to present evidence creating a fact issue. See Kang v. Hyundai Corp., 992 S.W.2d 499, 501 (Tex.App.-Dallas 1999, no pet.)

We review a no-evidence summary judgment under the same legal sufficiency standard used to review a directed verdict. See Tex.R. Civ. P. 166a(i); Gen. Mills, 12 S.W.3d at 832-33. Thus, we must determine whether the nonmovant produced more than a scintilla of probative evidence to raise a fact issue on the material questions presented. Id. at 833. When analyzing both traditional and no-evidence summary judgments, we consider the evidence in the light most favorable to the nonmov-ant. See Nixon, 690 S.W.2d at 549 (traditional summary judgment); Gen. Mills, 12 S.W.3d at 833 (no-evidence summary judgment).

Where, as here, the trial court’s order granting summary judgment does not state the ground or grounds relied on for its ruling, the summary judgment will be affirmed on appeal if any of the theories advanced in the motion are meritorious. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex.1989).

Discussion

On appeal, Collision Center has challenged only the summary judgment granted on its request for abatement of the alleged nuisance. See Jarvis v. Rocanville Corp., 298 S.W.3d 305, 313 (Tex.App.-Dallas 2009, pet. denied) (if appellant does not challenge each possible ground on which summary judgment could have been granted, summary judgment upheld on unchallenged ground or grounds). Therefore, we consider whether any ground asserted by Addison supports the summary judgment on Collision Center’s request for abatement of the alleged nuisance.

We begin our analysis with Collision Center’s second issue, in which it contends the trial court improperly granted Addison’s no-evidence summary judgment because there was evidence in the record to create a genuine issue of material fact that Addison intentionally diverted rainwater off its property and onto Collision Center’s property with knowledge that flooding would result, was resulting, or was substantially certain to result.

Addison is a governmental subdivision. A nuisance claim can only be brought against a governmental entity if that nuisance rises to the level of a constitutional taking or unless governmental immunity is specifically waived by the Texas Tort Claims Act. See City of Dallas v. Jennings, 142 S.W.3d 310, 315-16 (Tex.2004); see also Gen. Servs. Comm’n v. Little-Tex Insulation Co., 39 S.W.3d 591, 598 (Tex.2001) (to establish takings claim, claimant must prove governmental entity intentionally performed certain acts that resulted in “taking” of property for public use). Negligence contributing to damage to property does not constitute a taking. City of Tyler v. Likes, 962 S.W.2d 489, 505 (Tex.1997). Collision Center cannot maintain a suit against Addison for any negligent nuisance, or for an abatement thereof, and Collision Center acknowledges it is not suing Addison for negligence.

On appeal, Addison contends the trial court properly granted summary judgment as to Collision Center’s request to abate a continuing nuisance because Collision Center did not produce a scintilla of evidence showing that Addison performed any intentional act that damaged Collision Center. Collision Center acknowledges that in order to refute the motion for summary judgment on its claim that Addison created a nuisance in violation of article I, section 17 of the Texas Constitution, the burden is on Collision Center to produce sufficient evidence that Addison performed an intentional act that resulted in the flooding. See Jennings, 142 S.W.3d at 314.

Collision Center argues it produced more than scintilla of evidence of intentional, unlawful acts by Addison. Collision Center asserts the summary judgment record contains evidence that Addison has caused flood waters to flow onto Collision Center’s property; Addison has knowledge that the development and alteration of the natural landscape of the Airport has caused the flooding on Collision Center’s property; and Addison has knowledge that the flooding of Collision Center’s property is substantially certain to continue unless Addison acts to alleviate its diversion of rainwater. Collision Center asserts this satisfies its obligation to produce evidence of intentional conduct for purposes of Collision Center’s nuisance claim under the Texas Constitution.

Collision Center has not alleged, nor produced any summary judgment evidence of, an act by Addison that caused the flooding on Collision Center’s property. Collision Center’s summary judgment evidence with regard to an intentional act that caused flooding of its property is the original construction of the Airport, which occurred in 1956 and 1957, before Addison purchased the Airport in 1976. Collision Center’s expert, Jim Koch, was asked by Collision Center to perform an analysis of flooding conditions occurring on Collision Center’s property. Koch did not offer any test results that indicate flooding on Collision Center’s property occurred for any reason other than the construction of the Airport or that show any action of Addison increased the flooding of Collision Center’s property.

Collision Center contends there is summary judgment evidence that Addison maintained and operated the airport with knowledge that flooding of Collision Center’s property was an inevitable result. It is uncontested that Addison has maintained and operated the Airport since it purchased the Airport in 1976. However, Collision Center has produced no evidence that the maintenance and operation of the airport caused or causes the flooding of Collision Center’s property.

We disagree with Collision Center’s assertion that language of City of Houston v. Renault, Inc., 431 S.W.2d 322 (Tex.1968) “strongly suggests” that Addison’s continued maintenance of its property, with knowledge of the flooding to Collision Center’s property, was sufficient to satisfy the intentional act requirement. In Renault, the plaintiffs complained of the city’s maintenance of a roadway and existing culvert, which caused flooding of the plaintiffs’ property. Id. at 323-24. The roadway was constructed by Harris County prior to annexation of the area by the city of Houston. Id. at 323. The Texas Supreme Court ruled in favor of the city, concluding the flooding was unintentional. Id. at 325. It did not appear the culvert was altered by the city, and the city maintained the road only by repairing and improving the road for public travel. Id. at 325-26. The plaintiffs in Renault showed no knowledge on the part of the city that flooding was resulting or was substantially certain to result from the maintenance of the road with the existing culvert. Id. at 326. Here, Collision Center produced no evidence that Addison had knowledge that flooding of Collision Center’s property was resulting or substantially certain to result from maintenance or operation of the Airport.

Collision Center also relies on Tarrant Regional Water District v. Gragg, 151 S.W.3d 546 (Tex.2004) in support of its argument regarding Addison’s maintenance and operation of the Airport. In Gragg, the issue was whether the evidence was legally sufficient to support the trial court’s determination that construction and operation of the Tarrant Regional Water District’s Richland-Chambers Reservoir caused a change in flooding characteristics that damaged the Gragg Ranch. Id. at 548-49. Although the Texas Supreme Court affirmed an inverse condemnation claim against the Water District, Gragg is distinguishable from the case at bar. Unlike Addison’s lack of involvement with the construction of the airport, in Gragg the water district was responsible for the design and construction of the Richland-Chambers Reservoir. Id. at 550. Further, in Gragg, there was evidence that the reservoir’s operation — flood gate releases — changed the character of the flooding which had occurred prior to construction of the reservoir. Id. at 555.

Collision Center cites summary judgment evidence in the record that Addison has been aware of the flooding of the Collision Center’s property for over twenty years. A drainage channel known as the Lindbergh Channel is located adjacent to the south edge of Collision Center’s property. The Lindbergh Channel is not within the property owned by Addison. Since the development of Addison Airport, the watershed at the southern end of Addison Airport exceeds what the Lindbergh Channel can accommodate and the rainwater exceeding the capacity of Lindbergh Channel floods Collision Center’s property. Neither Collision Center nor its expert, Koch, make any allegation that the flooding of Collision Center’s property occurred by means other than water overflowing the Lindbergh Channel, which is owned by DART.

Collision Center argues that despite Addison’s knowledge that the flooding was occurring since the mid-1980s, Addison failed to make any changes to the Airport, the Lindbergh Channel, or otherwise to alleviate the flooding to Collision Center’s property. Collision Center points to proposed plans to alleviate flooding and Addison’s failure to pursue any of them. In the mid-1980s, Addison hired an engineer to perform a conceptual study of drainage situations in Addison, including the channel adjacent to Collision Center’s property. Collision Center also relies on evidence that Addison procured civil construction plans in February 2001 for Lindbergh Channel drainage improvement. Nancy Cline, Addison’s Director of Public Works and also an expert for Addison, acknowledged that Addison terminated the plan for the drainage channel improvements even though Addison knew that by terminating the project, Collision Center’s property would continue to experience flood problems.

The evidence of Addison’s failure to implement a flood control plan shows, at best, a failure to correct a problem that Addison knew existed. The alleged failure to act cannot be construed to be an intentional act or acts resulting in damage to or taking of Collision Center’s property. Absent an intentional act resulting in the taking of private property for public use, claims for inverse condemnation and non-negligent nuisance under the takings clause of the Texas Constitution are barred by governmental immunity. See Bell v. City of Dallas, 146 S.W.3d 819, 825 (Tex.App.-Dallas 2004, no pet.). A failure to act, including a failure to take corrective measures, is not enough to rise to the level of taking; it is merely an allegation of negligent conduct. Coyne v. Kaufman County, 144 S.W.3d 129, 135 (Tex.App.-Eastland 2004, no pet.) (county’s failure to widen roads, pave roads, and enforce traffic regulations not intentional act establishing taking and nuisance claims). The Texas Supreme Court has repeatedly held that acts of mere negligence will not support a taking claim. Gragg, 151 S.W.3d at 554; Jennings, 142 S.W.3d at 313; Likes, 962 S.W.2d at 505. “[W]e strive to avoid what would be anomalous result if the State, an entity otherwise generally entitled to immunity for negligence, were subject to liability for something less than intentional behavior.” Gragg, 151 S.W.3d at 554.

Collision Center has not produced a scintilla of summary judgment evidence raising a genuine issue of material fact as to an intentional action taken by Addison that caused the alleged nuisance of flooding Collision Center’s property. See State v. Hale, 136 Tex. 29, 36, 146 S.W.2d 731, 736 (Tex.1941) (true test is, did State intentionally perform certain acts in exercise of its lawful authority which resulted in taking or damaging of plaintiffs property, and which acts were proximate cause of taking or damaging of such property). We conclude the trial court properly granted summary judgment on Collision Center’s request for abatement of a nuisance. We overrule Collision Center’s second issue.

In its first issue, Collision Center contends the trial court improperly granted summary judgment on the request to abate a continuing nuisance because the statute of limitations does not bar a suit to abate a continuing nuisance. Having concluded in our disposition of Collision Center’s second issue that Addison established its entitlement to a no-evidence summary judgment on Collision Center’s request for abatement of a nuisance, it is not necessary to address Collision Center’s first issue. See Tex.R.App. P. 47.1 (opinion need only address issues “necessary to final disposition of the appeal”).

We affirm the trial court’s judgment.

      . Collision Center settled claims against Dallas Area Rapid Transit (DART), Regional Rail Right-of-Way Company, Explorer Pipeline Company, and Sprint Communications Company, L.P., and dismissed those defendants with prejudice, leaving Addison as the sole remaining defendant.

      . Addison moved for a traditional summary judgment on five grounds: (1) Collision Center does not have standing to sue, because the cause of action alleged by Collision Center accrued before Collision Center owned the property, and that cause of action was not assigned to Collision Center by the prior owner; (2) because the causes of action accrued more than fifteen years ago, Collision Center’s claims are barred by the two-year statute of limitations; (3) Collision Center's request to abate a continuing nuisance is barred by the statute of limitations because Collision Center is seeking barred damages, not injunctive relief; (4) Collision Center’s allegations of a new injury are barred by the statute of limitations because the new injury does not change the nature of the injury that is barred by limitations; and (5) to the extent Collision Center’s allegations involve Addison's negligence, those claims are barred by the doctrine of sovereign immunity.
      Addison moved for a no-evidence summary judgment on three grounds, asserting Collision Center could not produce more than a scintilla of evidence raising a genuine issue of material fact that (1) Addison performed any intentional act that damaged Collision Center, (2) any alleged "new injury” changed the nature of the alleged nuisance, and (3) any alleged improvement caused any identifiable injury to Collision Center.

      . Collision Center contends the Airport landscape was graded in such a manner that surface water flows off of that property and onto Collision Center's property. Collision Center also contends the development of the Airport included roadways, taxiways, and buildings and a significant amount of impervious ground cover in the form of asphalt, concrete, and buildings, thereby preventing rainwater falling on the Airport from infiltrating into the soil and increasing the water runoff.

      . In response to Addison’s motion for summary judgment, Collision Center stated that in the two years prior to Collision Center filing suit, Addison undertook numerous improvement projects at the Airport, such as replacement of a portion of chain link fence, adding a mowing strip along the replaced fencing, and regrading a swale at the end of the Airport where storm water ponded. However, Collision Center produced no evidence that the improvements to the Airport affected the flow of water off the Airport. Addison produced affidavit summary judgment evidence to the contrary.

      . According to Collision Center, storm water runoff from Addison Airport is conveyed through storm pipes under Lindbergh Drive, where it then flows toward the Lindbergh Channel. Lindbergh Drive, a roadway constructed by Addison in 1981, also drains toward the Lindbergh Channel. There is no evidence in the record that construction of Lindbergh Drive increased the flow of water runoff from the Airport.


source: Caselaw Access Project

author: Opinion by Justice MORRIS.

license: Public Domain

text:
    UNITED AUTOMOBILE INSURANCE COMPANY, Appellant, v. 1/2 PRICE CHECKS CASHED, Appellee.
    No. 05-08-01685-CV.
    Court of Appeals of Texas, Dallas.
    April 14, 2010.
    Theodore Cassiday Keramidas, Kerami-das and Associates, Richardson, TX, for appellant.
    Gavin Lewis, Aledo, TX, for appellee.
    Before Justices MORRIS, O’NEILL, and FILLMORE.
   OPINION

Opinion by Justice MORRIS.

In this appeal, United Automobile Insurance Company contends the trial court erred in awarding attorneys’ fees to appel-lee ½ Price Checks Cashed in appellee’s suit to recover on a dishonored check. UAIC argues that, under Texas case law, including an opinion by this court, the trial court’s award of fees was erroneous as a matter of law. Concluding UAIC’s argument has merit, we reverse the portion of the trial court’s judgment awarding attorneys’ fees and render judgment that appel-lee is not entitled to recover attorneys’ fees in this case.

I.

The relevant facts of this case are undisputed. On October 17, 2007, UAIC issued a check made payable to Patrick Bretton, Brandy Bretton, and DBD Motor Company, Inc. The payees endorsed the check and negotiated it to appellee as part of a check-cashing transaction. Appellee deposited the check into its bank account, and the check was forwarded to appellant’s bank for payment. Appellant’s bank dishonored the check, and the check was returned to appellee. Appellee filed suit against UAIC in justice court asserting a claim under section 3.414(b) of the Texas Business and Commerce Code. Appellee sought to recover the face amount of the check, statutory damages, and interest. Appellee also requested attorneys’ fees pursuant to section 38.001(8) of the Texas Civil Practice and Remedies Code. The court awarded appellee $1,318.64 in actual and statutory damages and $1,995 in attorney’s fees.

UAIC sought a de novo appeal of the judgment in the trial court below. Appel-lee moved for summary judgment arguing the evidence conclusively established UAIC’s liability on the check as a matter of law. In its response to the motion, UAIC did not dispute its liability but argued that appellee was not entitled to recover attorneys’ fees. UAIC contended there was no legal basis for an award of fees because there was no oral or written contract between the parties as required by section 38.001(8) of the civil practice and remedies code. The trial court granted summary judgment in favor of appellee and awarded damages in the amount of $1,279.98. The court also awarded attorneys’ fees in the amount of $2,995. This appeal ensued.

II.

In its sole issue on appeal, UAIC contends the trial court erred in awarding appellee attorneys’ fees because there is no legal basis to support the award. The sole basis asserted for the fee award was section 38.001(8) of the civil practice and remedies code. Attorneys’ fees are recoverable under section 38.001(8) only if the party seeking the award has prevailed and recovered on a claim based on an oral or written contract. See Tex. Civ. Prac. & Rem.Code Ann. § 38.001(8) (Vernon 2008). UAIC argues that appellee’s claim in this case was not for breach of an oral or written contract and, therefore, appellee is not entitled to recover fees. UAIC further argues our decision in this case is controlled by our earlier holding in Time Out Grocery v. The Vanguard Group, 187 S.W.3d 41 (Tex.App.-Dallas 2005, no pet.). We agree.

The facts presented in Time Out Grocery are essentially identical to those presented here. Vanguard issued a check to a payee who endorsed the check and cashed it at Time Out Grocery. See id. at 42. When the check was presented to Vanguard’s bank for payment, the bank refused. Id. Time Out Grocery sued Vanguard under the business and commerce code and recovered the amount owed on the check along with statutory penalties. Id. The trial court refused, however, to award Time Out Grocery attorneys’ fees under section 38.001(8). Id. This court affirmed the trial court’s decision, holding that Vanguard’s obligation to Time Out Grocery arose from “a statutory, not a contractual, obligation.” Id. at 44. We further stated that “the promise and obligation embodied by sections 3.104 and 3.414(b) [of the business and commerce code] lack the element of mutual promises necessary to create a contract between them.” Id.; see also Zamora v. The Money Box, No. 04-08-00549-CV, 2009 WL 2050207, at ⅜4 (Tex.App.-San Antonio July 15, 2009, pet. denied) (mem. op.) (agreeing with the reasoning of Time Out Grocery).

Appellee contends this case is distinguishable from Time Out Grocery because, in this case, appellee pleaded a claim for breach of contract. An examination of appellee’s petition shows that it asserted UAIC’s legal obligation to pay on the check arose under section 3.414(b) of the business and commerce code. Although appellee characterized UAIC’s failure to pay as a breach of contract, we focus on the true nature of the dispute rather than allow artful pleading to morph a claim into a different cause of action to gain favorable redress under the law. See Baylor Univ. v. Sonnichsen, 221 S.W.3d 632, 636 (Tex.2007). UAIC’s liability in this case was purely statutory and, as such, attorney’s fees were not recoverable under section 38.001(8) of the civil practice and remedies code. We sustain UAIC’s sole issue.

Based on the foregoing, we reverse the portion of the trial court’s judgment awarding appellee attorneys’ fees and render judgment that appellee is not entitled to recover fees under section 38.001(8) of the Texas Civil Practice and Remedies Code. We affirm the trial court’s judgment in all other respects.

      . Appellee asks us to reconsider our holding in Time Out Grocery. We decline to do so.


text:
    2007 EAST MEADOWS, L.P., Appellant, v. RCM PHOENIX PARTNERS, L.L.C., Appellee.
    No. 05-08-00987-CV.
    Court of Appeals of Texas, Dallas.
    April 14, 2010.
    Rehearing Overruled May 18, 2010.

      Kenneth B. Chaiken, Chaiken & Chaiken, P.C., Dallas, TX, for Appellant.
    John W. Slates, Gardere Wynne Sewell, LLP, Dallas, TX, for Appellee.
    Before Justices MORRIS, O’NEILL and FILLMORE.
   OPINION

Opinion By Justice FILLMORE.

Appellant 2007 East Meadows, L.P. filed suit in Texas against appellee RCM Phoenix Partners, L.L.C. RCM Phoenix filed a special appearance contesting the trial court’s jurisdiction. East Meadows appeals the trial court’s order granting the special appearance. We affirm the trial court’s order.

Background

This lawsuit arises out of a Purchase and Sale Agreement (Agreement) by and between RCM Phoenix and Eureka Holdings Acquisitions, L.P. for transfer of ownership of the Phoenix Apartments located in Indianapolis, Indiana. Seller RCM Phoenix is a Connecticut limited liability company having its principal office and place of business in Connecticut. Purchaser Eureka Holdings is a Texas entity. The First Amendment to the Agreement references assignment of Eureka Holdings’ rights under the Agreement to East Meadows. East Meadows is an Indiana limited partnership with its principal place of business in Dallas, Texas.

Sale of the Phoenix Apartments property was not completed. East Meadows filed suit against RCM Phoenix in Dallas, Texas. The claims raised by East Meadows were for declaratory judgment, breach of contract, specific performance, common law and statutory fraud, and constructive trust.

RCM Phoenix filed a special appearance. Following an evidentiary hearing, the trial court granted RCM Phoenix’s special appearance and dismissed East Meadows’ lawsuit for lack of personal jurisdiction. The trial court did not file findings of fact or conclusions of law. East Meadows filed this appeal.

Standard of Review

Whether a court can exercise personal jurisdiction over a nonresident defendant is a question of law, and thus we review de novo the trial court’s determination of a special appearance. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex.2007); BMC Software Belgium, N.V. v. Marehand, 83 S.W.3d 789, 793 (Tex.2002). When, as here, the trial court does not file findings of fact and conclusions of law in support of its special appearance ruling, we infer all facts necessary to support the judgment and supported by the evidence. Moki Mac, 221 S.W.3d at 574 (citing BMC Software, 83 S.W.3d at 795).

In Personam Jurisdiction

Texas courts may assert in per-sonam jurisdiction over a nonresident if (1) the Texas long-arm statute authorizes the exercise of jurisdiction, and (2) the exercise of jurisdiction comports with federal and state constitutional due process guarantees. Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex.2009). The long-arm statute’s broad language allows Texas courts to “reach as far as the federal constitutional requirements of due process will allow.” Moki Mac, 221 S.W.3d at 575 (quoting Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex.1991)). Under constitutional due process analysis, personal jurisdiction is achieved “when the nonresident defendant has established minimum contacts with the forum state, and the exercise of jurisdiction comports with traditional notions of fair play and substantial justice.” Moki Mac, 221 S.W.3d at 575 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). The purpose of minimum contacts analysis is to protect a nonresident defendant from being haled into court when its relationship with the forum state is too attenuated to support jurisdiction. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex.2002). “Significant contacts suggest that the defendant has taken advantage of forum-related benefits, while minor ones imply that the forum itself was beside the point.” Spir Star AG v. Kimich, 310 S.W.3d 868, 872 (Tex.2010). Only if minimum contacts are established does the court consider the second prong of the constitutional due process-analysis-whether maintenance of the action offends traditional notions of fair play and substantial justice. See Clark v. Noyes, 871 S.W.2d 508, 520 (Tex.App.-Dallas 1994, no pet.).

A defendant’s contacts with a forum can give rise to either specific or general jurisdiction. BMC Software, 83 S.W.3d at 795-96. On appeal, East Meadows asserts specific jurisdiction as the basis for personal jurisdiction over RCM Phoenix. Specific jurisdiction is dispute-specific and it attaches when the plaintiffs cause of action arises out of or relates to the nonresident defendant’s contacts with the forum state. Conner v. ContiCarriers & Terminals, Inc., 944 S.W.2d 405, 410 (Tex.App.-Houston [14th Dist.] 1997, no writ). In a specific jurisdiction analysis, we focus on the relationship among the defendant, the forum, and the litigation. Retamco, 278 S.W.3d at 338. Specific jurisdiction arises when (1) the defendant purposefully avails itself of the privilege of conducting activities in the forum state, and (2) the cause of action arises from or is related to those contacts or activities. Id. In determining whether a defendant has purposefully availed itself of a forum, we consider three factors. First, only the defendant’s contacts with the forum are relevant, not the unilateral activity of another party or third person. Id. at 339. Second, the contacts must be purposeful rather than random, fortuitous, or attenuated. Id. Third, the defendant must seek some benefit, advantage, or profit by availing itself of the jurisdiction. Id. What is important is the quality and nature of the defendant’s contacts with the forum state rather than their number. Id.

Burden of Proof

The plaintiff bears the initial burden to plead sufficient allegations to bring a nonresident defendant within the reach of the Texas long-arm statute. Id. at 338; BMC Software, 83 S.W.3d at 793. Once the plaintiff has pleaded sufficient jurisdictional allegations, the defendant filing a special appearance bears the burden of negating all bases of jurisdiction alleged by the plaintiff. BMC Software, 83 S.W.3d at 793; Capital Tech. Info. Servs., Inc. v. Arias & Arias Consultores, 270 S.W.3d 741, 748 (Tex.App.-Dallas 2008, pet. denied) (en banc). “Because the plaintiff defines the scope and nature of the lawsuit, the defendant’s corresponding burden to negate jurisdiction is tied to the allegations in the plaintiffs pleading.” Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex.2010). The defendant can discharge its burden to negate those allegations on either a factual or legal basis:

Factually, the defendant can present evidence that it has no contacts with Texas, effectively disproving the plaintiffs allegations. The plaintiff can then respond with its own evidence that affirms its allegations, and it risks dismissal of its lawsuit if it cannot present the trial court with evidence establishing personal jurisdiction. Legally, the defendant can show that even if the plaintiffs alleged facts are true, the evidence is legally insufficient to establish jurisdiction; the defendant’s contacts with Texas fall short of purposeful availment; for specific jurisdiction, that the claims do not arise from the contacts; or that traditional notions of fair play and substantial justice are offended by the exercise of jurisdiction.

Id. at 659.

Analysis

East Meadows satisfied its initial burden, pleading allegations of breach of contract and fraud by RCM Phoenix that were sufficient to invoke jurisdiction under the Texas long-arm statute. See Marchand, 83 S.W.3d at 793. However, in this case, merely pleading was not enough. When challenged by RCM Phoenix, East Meadows also had to present evidence that RCM Phoenix’s relevant acts (i.e., those connected to East Meadows’ claims) occurred, at least in part, in Texas. See Gen. Interior Constr., 301 S.W.3d at 660-61.

RCM Phoenix supported its special appearance, and sought to negate bases of jurisdiction alleged by East Meadows, with the affidavit of its manager. The affidavit attests: The Agreement does not require RCM Phoenix to perform any of its obligations in Texas; no employee or representative of RCM Phoenix traveled to Texas in connection with the negotiation or execution of the Agreement; RCM Phoenix did not make any express representations, warranties, or covenants to Eureka or East Meadows in Texas; RCM Phoenix is a limited liability company with its principal place of business in Connecticut; and, RCM Phoenix is not registered to do business in Texas, has no office or place of business in Texas, has no officers or employees in Texas, is not required to maintain and does not maintain a registered agent for service of process in Texas, has no bank accounts in Texas, does not own real or personal property in Texas, does not design, manufacture, or sell products or services in Texas, does not market or advertise in Texas, does not maintain an interactive website that would allow Texas residents to place orders via the Internet for products or services to be delivered, in whole or in part, in Texas, and has not purposefully availed itself of the benefits and protections of Texas law.

In support of its contention that specific jurisdiction exists over RCM Phoenix, East Meadows asserts RCM Phoenix transacted business in Texas when it marketed its property to a Texas domestic entity; entered into a contract with East Meadows which is performable, at least in part, in Texas; performed some required contractual obligations in Texas; and, committed torts in Texas. Therefore, we consider whether RCM Phoenix, through its conduct, triggered specific jurisdiction.

East Meadows first asserts that RCM Phoenix triggered specific jurisdiction because it marketed its property to a Texas entity, Eureka Holdings. Targeting marketing efforts in a state to generate business there may justify jurisdiction in disputes arising from that business. See Mold Mac, 221 S.W.3d at 575-76. However, we begin with the observation that RCM Phoenix did not reach out beyond the borders of Connecticut to solicit business with the original purchaser, Eureka Holdings, concerning the sale of the Phoenix Apartments property. RCM Phoenix did not market the Indiana real property in Texas; the marketing of this property was handled by Marcus & Millichap, a Connecticut broker. It was the third party Connecticut broker that facilitated contact between the foreign corporation, RCM Phoenix, and the domestic entity, Eureka Holdings. See Rauscher Pierce Refsnes, Inc. v. Great Sw. Sav., F.A., 923 S.W.2d 112, 115 (Tex.App.-Houston [14th Dist.] 1996, no writ) (broker whose duty consists of bringing parties together to negotiate sale is “middleman” rather than “agent” of either party). Contact between the third party broker, Marcus & Millichap, and Eureka Holdings does not support a claim of purposeful availment by RCM Phoenix.

East Meadows next contends RCM Phoenix entered into a contract performable, at least in part, in Texas. Specifically, East Meadows asserts RCM Phoenix contracted to make a series of deliveries of due-diligence documents and information to East Meadows in Texas. RCM Phoenix does not dispute this term of the Agreement. However, RCM Phoenix’s only actual contact with Texas, sending a limited number of due diligence documents and monthly rent rolls for the property, did not establish sufficient minimum contacts with Texas to support jurisdiction. See U-Anchor Adver., Inc. v. Burt, 553 S.W.2d 760, 763 (Tex.1977) (contracting with Texas company and submitting contractually required payments to company’s Texas place of business do not alone necessarily establish sufficient minimum contacts to demonstrate specific jurisdiction); Olympia Capital Assocs., L.P. v. Jackson, 247 S.W.3d 399, 417-18 (Tex.App.-Dallas 2008, no pet.) (financial statements and monthly fund asset valuations sent for over a year to six funds that were parties to agency and administration agreement and nine Texas investors in the funds do not establish specific jurisdiction over defendant).

East Meadows further asserts RCM Phoenix is subject to personal jurisdiction because the Agreement provided a Dallas, Texas address for any notices to the purchaser. There is no evidence, however, that any such notices were delivered to the person designated in the contract for delivery of notices to the purchaser. Moreover, contracting with a Texas company, exchanging information, or communicating with a Texas company while performing a contract do not alone support jurisdiction, but are factors to consider. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); Kelly Inv., Inc. v. Basic Capital Mgmt., Inc., 85 S.W.3d 371, 375 (Tex.App.-Dallas 2002, no pet.). Furthermore, “the Court long ago rejected the notion that personal jurisdiction might turn on ‘mechanical’ tests, or on ‘conceptualistie ... theories of place of contracting or of performance.’ ” Burger King Corp., 471 U.S. at 478, 105 S.Ct. 2174 (citing Int'l Shoe Co., 326 U.S. at 319, 66 S.Ct. 154). “Prior negotiations and contemplated future consequences, along with the terms of the contract and the parties’ actual course of dealing” are the appropriate factors. Burger King Corp., 471 U.S. at 479, 105 S.Ct. 2174.

East Meadows next contends that RCM Phoenix contracted to close the real estate transaction in Texas, and that this constitutes an additional purposeful contact with Texas by RCM Phoenix. As an initial observation, we note that no real estate closing took place in Texas. Specific jurisdiction exists where the cause of action “arises or is related to an activity conducted within the forum.” BMC Software, 83 S.W.3d at 796. Although each case must be decided on its facts, the consistent trend is that specific jurisdiction arises out of a defendant’s liability-creating activity within the forum state. See Buxton v. Wyland Galleries Hawaii, 275 Ill.App.3d 980, 212 Ill.Dec. 507, 657 N.E.2d 708, 711 (1995), appeal denied, 165 Ill.2d 548, 214 Ill.Dec. 856, 662 N.E.2d 422 (1996) (“more difficult question” as to whether unfulfilled promise to perform contract within state will support jurisdiction, because claim does not arise out of local activity).

Relying on language in the Agreement which provides that the closing of the transaction “shall take place at the office of Purchaser’s title company,” East Meadows contends that the escrow closing of this transaction was to take place in Texas at East Meadows’ title company. East Meadows’ interpretation ignores the remainder of the language of the Agreement stating that the closing shall take place at the purchaser’s title company “... or at such other place as the parties may mutually and reasonably agree.... ” The contract did not specify Texas as the location for closing, and the record is not clear that the parties had ever agreed on that detail.

Further, there is no evidence in the record that the parties contemplated at the time of execution of the Agreement that the closing was to take place in Texas. All references in the Agreement to the escrow agent and to a title company are to Indianapolis, Indiana locations. The Agreement contains several references to “Escrow Agent” identified as Lawyers Title Insurance Corporation in Indiana, Indianapolis. The Agreement provides that any notice to “Escrow Agent” shall be given to Lawyers Title Insurance Corporation, Indianapolis, Indiana and that a nonrefundable deposit would be made through Lawyers Title Insurance Corporation as Escrow Agent. The Agreement states that if any of the consents and approval required by the “conditions precedent” paragraph are denied or not obtained by the closing date, either purchaser or seller may terminate the Agreement by written notice to the other and Escrow Agent. It further provides that seller and purchaser shall negotiate a form of escrow agreement acceptable to the seller, purchaser, and Escrow Agent. According to the Agreement, the purchase price would be wired to Escrow Agent and disbursed in accordance with instructions from the seller to Escrow Agent. The Amendment states that on the date of RCM Phoenix’s execution of the Amendment, East Meadows shall instruct the Escrow Agent to release a portion of a deposit to RCM Phoenix.

The Agreement also contains provisions regarding information to be delivered to the purchaser’s title company but does not specifically identify the purchaser’s title company. However, the Agreement provides that the purchaser shall “cause title to the Property to be searched and a title insurance commitment to be issued by Lawyers Title Insurance Corporation ....,” the Indianapolis, Indiana entity identified in the Agreement as “Escrow Agent.” Attached to the Agreement are “permitted exceptions” for the Lawyers Title Insurance Corporation title policy.

East Meadows also relies on the testimony of the manager of RCM Phoenix to establish the closing was to take place in Dallas, Texas. When questioned with regard to the closing provision of the Agreement, he testified that he assumed the closing would occur in Indianapolis, Indiana, the location of the property. He testified he was aware the closing documents had to be delivered to the purchaser’s title company, and if that title company was in Dallas, Texas, the delivery requirement would apply to Dallas, Texas, and if the purchaser’s title company was in Dallas, the closing would occur in Dallas. Testimony of East Meadows’ witness was that he never personally informed RCM Phoenix of a closing in Dallas, but it was his understanding that this information was conveyed to RCM Phoenix. He did not testify from personal knowledge. East Meadows’ speculation that RCM Phoenix was informed the closing was to take place in Dallas does not support haling RCM Phoenix to court in Texas. See Le Meridien Hotels & Resorts v. LaSalle Hotel Operating P’Ship, I, L.P., 141 S.W.3d 870, 879-80 (Tex.App.-Dallas 2004, no pet.), overruled on other grounds by Arias & Arias Consul-tores, 270 S.W.3d at 755 (refusing to allow speculation to defeat evidence opposing jurisdictional allegations).

The Agreement provides that the closing will take place at the office of the purchaser’s title company or such other location as the parties may agree. The purchaser had the right to cause the closing to occur in Texas, if that was the location of the purchaser’s title company. There is nothing to suggest that it mattered to RCM Phoenix where the closing of the transaction occurred. “If ... the plaintiffs decision to perform the contractual obligation within its own forum state is totally unilateral, it cannot be viewed as purposeful on the part of the nonresident and the weight is necessarily diminished.” Command-Aire Corp. v. Ontario Meek Sales & Serv., Inc., 963 F.2d 90, 94 (5th Cir.1992). Based on the record before us, we disagree with East Meadows’ contention that RCM Phoenix’s agreement, if any, to close the real estate transaction in Texas constituted a purposeful contact with Texas supporting exerting personal jurisdiction over RCM Phoenix.

East Meadows finally alleges RCM Phoenix committed fraudulent acts that were directed to East Meadows in Texas or which involved concealment of information RCM Phoenix was required under the Agreement to disclose to East Meadows in Texas. In particular, East Meadows asserts RCM Phoenix concealed material facts and information about the property, delayed delivery to East Meadows of other information about the property, made material misrepresentations to East Meadows and concealed changes in the truthfulness of one or more of the warranties and covenants in the Agreement.

RCM Phoenix denies these allegations. RCM Phoenix further contends East Meadows has put forth no actual evidence that RCM engaged in any fraudulent conduct in Texas or concealed information RCM Phoenix was required to disclose to East Meadows in Texas. RCM Phoenix asserts on appeal that East Meadows’ fraud claims are nothing more than factually unsupported allegations.

We agree. East Meadows offered no evidence regarding the alleged fraud by RCM Phoenix at the hearing on the special appearance. That RCM Phoenix is alleged to have committed a tort in Texas is not dispositive of the jurisdictional issue presented; such allegations alone do not give Texas courts jurisdiction over a nonresident. See Hoppenfeld v. Crook, 498 S.W.2d 52 (Tex.Civ.App.-Austin 1973, writ refd n.r.e.). Specific jurisdiction is not established merely by allegations or evidence that a nonresident committed a tort in the forum state or “directed a tort” at the forum state. Michiana v. Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 790-92 (Tex.2005). If the plaintiff alleges an action in tort that arose out of an act committed in Texas, the necessary proof is that the purposeful act was committed in this state. See Gen. Interior Constr., 301 S.W.3d at 659 (plaintiff must plead, and when challenged by defendant, present evidence that defendant’s relevant acts connected to plaintiffs claims occurred, at least in part, in Texas). In the record before us, we find no eommunication by RCM Phoenix directed to and intended to be relied upon by East Meadows in Texas that, if false, gives rise to the common law or statutory fraud causes of action alleged by East Meadows.

Finally, we note that the Agreement includes a choice of law provision specifying that it shall be governed by and construed in accordance with the laws of Indiana. While a foreign choice of law provision does not prevent Texas courts from also exercising personal jurisdiction, a choice of law provision cannot be ignored when considering whether a defendant purposefully invoked the benefits and protections of a state’s laws. IRA Res., Inc. v. Griego, 221 S.W.3d 592, 598 (Tex.2007); Michiana, 168 S.W.3d at 792 (citing Burger King Corp., 471 U.S. at 482, 105 S.Ct. 2174); Preussag Aktiengesellschaft v. Coleman, 16 S.W.3d 110, 125 (Tex.App.Houston [1st Dist.] 2000, pet. dism’d w.o.j.) (choice of law provision warrants some weight in considering whether defendant purposefully invoked benefits and protection of state’s law for jurisdictional purposes). Here, the choice of law provision of the Agreement does not support an inference of RCM Phoenix’s purposeful availment of the benefits of conducting activities in Texas. See Olympia Capital Assocs., 247 S.W.3d at 417.

Conclusion

Giving the choice of law provision its due weight and considering the totality of the facts of the case and the quality and nature of the alleged contacts, we conclude the evidence fails to show that RCM Phoenix had sufficient minimum contacts to support the exercise of specific jurisdiction. Therefore, we need not decide whether the exercise of jurisdiction over RCM Phoenix comports with the traditional notions of fair play and substantial justice. We conclude the trial court did not err in granting RCM Phoenix’s special appearance. Accordingly, we resolve East Meadows’ sole issue against it.

      . The record contains the First Amendment to the Agreement, which references the assignment from the original purchaser Eureka Holdings to East Meadows. In the Amendment, East Meadows and RCM Phoenix confirm that subject to the terms and conditions of the Amendment regarding the closing date, execution of the Amendment in counterparts, and the effective date of the Amendment, all terms, conditions and provisions of the Agreement remain unmodified and unchanged. That includes the provisions regarding "Escrow Agent,” and references to Lawyers Title Insurance Corporation.

      . The Agreement contains representations, warranties and covenants that were to be provided by RCM Phoenix to East Meadows. They include: that there are no undisclosed contracts effecting the property; that there are no assessments levied, threatened or pending against the property; that there are no pending or threatened condemnation or similar proceeding against the property; that there are no undisclosed civil, administrative, arbitration or other actions, suits or proceedings pending or threatened against or affecting the property; and, that there are no facts which could create an event or default under the assumable loan which is the subject of the Agreement.


author: MACKEY K. HANCOCK, Justice.

text:
    In the Matter of the MARRIAGE OF Robert Grant HARRISON and Julia Elizabeth Harrison.
    No. 07-08-00486-CV.
    Court of Appeals of Texas, Amarillo, Panel A.
    April 14, 2010.
    Rehearing Overruled June 4, 2010.
    Donald M. Hunt, Latrelle Bright Joy, Mullin Hoard & Brown, L.L.P., Lubbock, TX, for Appellee.

      Aubrey J. Fouts, The Fouts Law Firm, Lubbock, TX, for Appellant.
    Before CAMPBELL and HANCOCK and PIRTLE, JJ.
   OPINION

MACKEY K. HANCOCK, Justice.

Appellant, Robert Grant Harrison (Robert), appeals from a judgment of divorce that granted a constructive trust in favor of intervenor, Mack Elston (Mack), in certain funds previously deposited into the registry of the court pursuant to an agreed order. Robert presents four issues for our consideration. First, Robert contends that the evidence was legally and factually insufficient to support 1) a finding of a confidential relationship between Robert and Mack, and 2) a finding that Robert committed fraud against Mack. The third issue requests that we render judgment confirming the unchallenged finding of fact that the monies in the registry of the court were his separate property. The fourth issue is a conditional issue which, because of our resolution of the other issues, we need not address.

Factual and Procedural Background

Robert and Julia “Julie” Harrison (Julie) were married September 13, 2006. After the marriage, the couple moved into Robert’s home in Winchester, Kentucky. On December 28, 2006, while Robert and Julie were out of town, the home and all its contents were destroyed by a fire. After living in a motel in Winchester for a period of time, the parties, who are both from Lubbock, Texas, decided to move back to Lubbock. They did so in January 2007 and decided to purchase a home in Lubbock. On February 8, 2007, they purchased a home for the sum of $434,000. At the closing of the purchase, $215,816.92 was paid in cash to the seller. This sum represented the proceeds from the insurance payment for the casualty loss to Robert’s home in Kentucky. Additionally, Julie borrowed $10,000 from Mack, her father, for the escrow payment, and Robert borrowed $9,664.14 from his mother. The balance of the purchase price was made up by a note to a bank.

The parties immediately began spending money to furnish the house and for other personal expenses. The record reflects that, soon after the marriage, Julie moved her 401(k) that she had received in the property division of a previous divorce from TIAA CREF to Modern Woodmen of the World where the fund would be administered by Robert’s brother. On February 16, 2007, Julie deposited the first $100,000 she had withdrawn from her 401 (k) into her First United bank account. On March 1, 2007, Julie withdrew another $130,000 from her 401 (k) and deposited it into her First United bank account.

At the time of each withdrawal, Julie executed a document with Modern Woodmen of the World that she did not desire to have federal income taxes withheld from the amount withdrawn. The testimony at trial was that Robert actually filled out the withdrawal forms. However, Julie admitted that she did sign each of the requests to withdraw funds from her 401(k).

After the funds were spent on personal items, Robert and Julie were faced with the task of putting the funds back in Julie’s 401(k) or else suffering a substantial IRS penalty for early withdrawal. The possible tax ramifications of the withdrawals led Robert and Julie to contact Mack about furnishing the funds to replenish the 401(k) account. Precisely what was said by whom during the conversation(s) regarding funds for the 401 (k) account was hotly disputed at the trial. However, what is clear is that, following the conversations, Mack furnished $100,000 on April 16, 2007, in the form of two checks for $50,000 each. These funds were placed into Julie’s 401 (k) on April 23, 2007. On May 27, 2007, Mack furnished another $100,000 to replenish Julie’s 401(k). Those funds were deposited into Julie’s 401(k) on June 1, 2007.

During the trial, Julie initially testified that Robert told her he would repay the money that Mack had furnished to replenish her 401(k) out of the proceeds of the insurance from the casualty loss in Kentucky. Later, during cross-examination, Julie testified that the $200,000 in loans from Mack were to be paid out of proceeds from the payment for the contents destroyed in the Kentucky fire. Mack testified that he expected to be repaid out of the proceeds of the insurance but did not specify any portion of the Kentucky casualty loss from which he was to be repaid.

Robert filed for divorce from Julie on June 29, 2007. Julie answered the petition for divorce on July 6, 2007. On September 4, 2007, the agreed temporary orders were entered that required the proceeds from the sale of the parties’ Lubbock home to be placed into the registry of the court. On April 29, 2008, Mack filed a petition in intervention alleging that Robert had been guilty of committing fraud against him and breaching a fiduciary duty owed to him. Mack sought damages in the amount of $200,000 and, requested that the trial court impose a constructive trust in favor of Mack on the $217,239.74 deposited into the registry of the court. Trial was to the court on June 10-11, 2008. At the conclusion of the testimony, the trial court took the case under advisement and, on July 3, 2008, sent a letter to counsel advising them of his decision. A final decree was prepared and entered on October 6, 2008. Subsequently, based upon Robert’s request, the trial court entered its Findings of Fact and Conclusions of Law on November 12, 2008. This appeal followed.

Through his issues, Robert contends that some of the trial court’s findings of fact were based upon legally or factually insufficient evidence. Additionally, Robert contends that this court should render judgment that the entire sum held in the registry of the court should be paid over to him as his separate property. Lastly, Robert has an alternative issue, concerning economic contribution, should we decide to remand this matter.

Standards of Review

As this matter was tried without a jury and the trial court filed findings of fact and conclusions of law, we treat those findings with the same force and dignity as a jury’s verdict upon jury questions. See Latch v. Gratty, Inc., 107 S.W.3d 543, 545 (Tex.2003) (citing Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex.1994)). The trial court’s findings of fact are reviewed for legal and factual sufficiency of the evidence under the same standards as applied to jury findings. See Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex.1996).

Legal Sufficiency

In reviewing a challenge to the legal sufficiency of the evidence, we must credit evidence that supports the verdict if a reasonable fact finder could have done so and disregard contrary evidence unless a reasonable fact finder could not have done so. See Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. & Research Corp., 299 S.W.3d 106, 115 (Tex.2009). Challenges to the legal sufficiency of the evidence will be sustained when 1) there is a complete absence of evidence of a vital fact, 2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, 3) the evidence offered to prove a vital fact is no more than a scintilla, or 4) the evidence conclusively establishes the opposite of the vital fact. Id,. If the evidence is so weak as to do no more than create a mere surmise or suspicion, then that evidence does not exceed a scintilla. Id.

Factual Insufficiency

In a factual sufficiency review, we must review all of the evidence both for and against the finding of the trial court. See Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex.1989). After considering all of the evidence in a neutral light, if we find that the evidence supporting the finding is so weak that it does not support the finding or is so against the great weight of the evidence that the finding is clearly wrong and unjust, then we will reverse. See Pool v. Ford Motor Co., 715 S.W.2d 629, 685 (Tex.1986).

Conclusions of Law

The trial court’s conclusions of law are not reviewable from an evidentiary standpoint, however, we may review the conclusions drawn from the facts to determine their correctness. See Ashcraft v. Lookadoo, 952 S.W.2d 907, 910 (Tex.App.-Dallas 1997, writ denied) (en banc).

Analysis

In order to be entitled to a constructive trust, Mack must prove the following elements:

(1) Breach of an informal relationship of special trust or confidence arising prior to the transaction in question, or actual fraud;
(2) Unjust enrichment of the wrongdoer;
(3) Tracing to an identifiable res.

See Mowbray v. Avery, 76 S.W.3d 663, 681 n. 27 (Tex.App.-Corpus Christi 2002, pet. denied). For the purposes of our analysis, we will assume that the evidence is sufficient to prove that there was fraud and unjust enrichment of Robert. We will con-céntrate our analysis on the third element, tracing to an identifiable res.

The trial court entered a finding that the $217,239.74 that was deposited into the registry of the court originated from the casualty loss suffered by Robert to his separate property home in Kentucky. The testimony and exhibits entered into evidence confirm that finding. However, that same evidence proves that the money placed into the registry of the court was initially received by Robert as payment for the loss of his Kentucky home and became part of the downpayment for the home the parties purchased on February 8, 2007. The trial court also found that Robert had promised to repay the advance of funds made by Mack out of the proceeds of the casualty insurance on the residential property that Robert owned in Kentucky. However, there is no finding as to when that promise was made. The documentary evidence at trial reflects that a deposit for $100,000 was made into the community bank account of Robert and Julie on April 14, 2007. The record further reflects that, on April 23, 2007, a check for $100,000 was written on that same bank account to Julie’s 401(k) account. On May 22, 2007, there is a $100,000 deposit into the community bank account with the notation that it was from Mack and Doris Elston. On June 1, 2007, a second check was written from the community bank account payable to Julie’s 401 (k) in the corresponding amount of $100,000.

Mack’s testimony did not pinpoint the date when he had the conversation(s) with Robert about repayment of the loan being made from proceeds of the casualty insurance. However, Mack testified the conversation(s) took place after Robert had brought over the $32,000 check that Mack testified was intended as repayment for money previously loaned to Julie. That check was drawn on the community bank account on March 7, 2007. Therefore, the evidence suggests that sometime between March 7, 2007 and April 14, 2007, when the first $100,000 loan was deposited into the couple’s bank account, Robert spoke to Mack about advancing the first $100,000 to repay Julie’s 401(k). Therefore, we can deduce that, at the time Robert made any statement(s) about repaying from the proceeds of insurance he was not referring to the original payment for the structure loss since those funds had previously been paid and used to purchase the community home in Lubbock.

Using the foregoing factual findings and evidence from the trial, we begin analyzing the tracing issue by noting that, when a party attempts to impose a constructive trust over funds, “... the trust fund must be clearly traced into other specific property; that nothing must be left to conjecture, and that no presumptions, except the usual and necessary deductions from facts proven, can be indulged.” Meyers v. Baylor Univ., 6 S.W.2d 393, 394 (Tex.Civ.App.-Dallas 1928, writ ref'd.) The proposition regarding the tracing of funds into the trust was reaffirmed by the Texas Supreme Court in Wilz v. Flournoy, 228 S.W.3d 674, 676 (Tex.2007). The foregoing rule is subject to modification when the trustee, the wrongdoer, mingles the trust funds with his own property or invests it in such a manner that the trust funds can no longer be separated or identified. See Meyers, 6 S.W.2d at 395. The Wilz opinion states that, once the burden of tracing has been met, the entire property will be treated as subject to the trust, except insofar as the trustee can distinguish and separate that which is his own. Wilz, 228 S.W.3d at 676 (citing Eaton v. Husted, 141 Tex. 349, 172 S.W.2d 493, 498-99 (1943)).

The record demonstrates that the property on which the trial court imposed the constructive trust had already been converted from the proceeds of the casualty loss to the separate property home in Kentucky into the downpayment for the home in Lubbock. The closing on the purchase of the Lubbock residence occurred on February 8, 2007. According to Mack’s own testimony, he did not discuss the loan of the money to Robert and Julie until some date after March 7, 2007. Therefore, Mack, as proponent of the constructive trust, is not able to trace the funds he claimed were wrongfully procured into the specific property that the trial court impressed with the constructive trust.

Mack cites the court to a number of cases he contends support the imposition of the constructive trust at issue. However, the cases cited by Mack do not support his contention. In the case of In re Nolder, 48 S.W.3d 432, 434 (Tex.App.-Texarkana 2001, no pet.), the stock that the trust was traced to was in existence and the proceeds from the stock options ordered divided between the parties by the court could be traced directly to the new stock. In our fact scenario, the property cannot be traced back to Mack’s loan or the funds that were promised to be used for repayment. In Hudspeth v. Stoker, 644 S.W.2d 92, 94 (Tex.App.-San Antonio 1982, writ refd.), the facts involved a replacement insurance policy and a violation of a court order. Although the Hudspeth court talked at length about the general considerations of equity that give rise to the remedy of a constructive trust, the fact remains that the court there could trace the promise broken, the court order, directly into the replacement policy. Id. at 95-96. Such is not the state of the evidence before us.

Mack also places great faith in this court’s decision in Sever v. Mass. Mut. Life Ins. Co., 944 S.W.2d 486, 492 (Tex.App.-Amarillo 1997, writ denied). However, the issues addressed in Sever were beneficiary designation and whether an actual trust, as opposed to a constructive trust, should have been imposed over the funds at issue. Id. The issue litigated at trial and on appeal did not involve tracing of funds into a constructive trust. In In re Loftis, 40 S.W.3d 160, 165 (Tex.App.-Texarkana 2001, no pet.), the issue was a resulting trust and the res was the property purchased; the case did not involve the tracing of funds into a constructive trust. In Zapata Corp. v. Zapata Galf Matine Corp., 986 S.W.2d 785, 786 (Tex.App.Houston [1st Dist.] 1999, no pet.), and in Pinnacle Data Servs., Inc. v. Gillen, 104 S.W.3d 188, 193-94 (Tex.App.-Texarkana 2003, no pet.), there were no issues regarding the tracing of funds into a constructive trust. The same is true for the case of Blankenship v. Citizen’s Nat’l Bank of Lubbock, 449 S.W.2d 77, 79 (Tex.Civ.App.-Amarillo 1970, writ ref'd n.r.e.), in which there was never an issue of tracing raised by any of the litigants. All of these cases stand for a general proposition that constructive trusts are used to right a wrong or prevent unjust enrichment, but none of them involve tracing of funds. Finally, it should be noted that the relief Mack seeks, the imposition of a constructive trust, does not request that the trial court trace the funds Mack loaned. Had he done so, we would be discussing imposition of a constructive trust on Julie’s 401(k).

We, therefore, hold that there is a complete absence of a vital fact, the tracing of the funds to an identifiable res. See Mowbray, 76 S.W.3d at 681 n. 27. The absence of evidence regarding an element of Mack’s case results in the evidence being legally insufficient. See Akin, Gump, Strauss, Hauer & Feld, L.L.P., 299 S.W.3d at 115. Accordingly, we reverse the judgment imposing a constructive trust to benefit Mack and render judgment that the funds on deposit with the court be paid over to Robert pursuant to the trial court’s finding of fact and conclusion of law that the same are his separate property. In all other respects, the trial court’s judgment is affirmed.

Conclusion

The judgment of the trial court is reversed and rendered in part and affirmed in part.

      . We make no assumption regarding the sufficiency of the evidence to prove breach of an informal relationship of special trust or confidence.


author: /s/ John D. Minton Jr. Chief Justice

text:
    BINGO PALACE and Jamie Dizney, Movants, v. Henry G. LACKEY (Commissioner, Kentucky Department of Charitable Gaming), Respondent.
    No. 2009-SC-000079-I.
    Supreme Court of Kentucky.
    Aug. 27, 2009.
    As Modified Oct. 29, 2009.
   OPINION AND ORDER

Before this Court is a request to review (pursuant to CR 65.09) a decision of the Court of Appeals, which denied interlocutory relief (pursuant to CR 65.07) from an interlocutory order of the Franklin Circuit Court denying a temporary injunction (pursuant to CR 65.04), which would allow Bingo Palace to continue operating while its appeal of a license nonrenewal was pending. Seeing no extraordinary cause for such relief, the request is denied.

Bingo Palace (Palace Concessions, LLC) is a for-profit enterprise located in Jefferson County, which has operated a licensed (FAC 0227) charitable gaming facility since March of 2004. In October of 2008, Bingo Palace filed its annual renewal application. In November, the Department of Charitable Gaming (the “Department”) sent Bingo Palace a notice of intent to seek a license revocation for alleged violations of three charitable gaming laws. Bingo Palace filed a notice of appeal, and the matter sat. In December of 2008, the Department sent movants a notice that their renewal application was denied for the reasons given in the November notice. Before a revocation hearing was scheduled, the annual license expired.

The movants filed a complaint and a request for a temporary injunction in the Franklin Circuit Court to permit operation until the administrative appeal was over. The circuit court conducted a hearing on December 17, 2008, and, thereafter, denied the request. The circuit court, in denying the request, ruled that the decision to review a gaming license is discretionary with the respondents and that under Maupin v. Stansbury, 575 S.W.2d 695, 699 (Ky.App.1978), the movants had not presented a substantial question or a substantial probability of success on the merits at trial.

Movants’ request for interlocutory relief in the Court of Appeals to require the respondents to issue a temporary license pending the administrative appeal was denied. In affirming the trial court’s denial, the Court of Appeals relied on Bobbie Preece Facility v. Com., Dept. of Charitable Gaming, 71 S.W.3d 99, 103 (Ky.App.2001), for the proposition that there is “no ‘fundamental right’ to a license to operate a charitable gaming facility.” Id. (quoting Commonwealth v. Louisville Atlantis Community/Adapt, Inc., 971 S.W.2d 810, 817 (Ky.App.1997)). Therefore, the panel concluded that the issuance of a temporary charitable gaming license was purely discretionary.

On appeal to this Court, movants contend the Court of Appeals erred in holding that the annual renewal of a charitable gaming facility license is a purely discretionary function. Movants argue that a renewal is a mandatory ministerial act by statute and regulation, citing 820 KAEt 1:029, Section 1(5) and KRS 238.565(4). Hence, they maintain that a temporary license should have been issued pending review of the renewal denial.

Maupin, 575 S.W.2d 695, provides the courts with guidance in dealing with interlocutory relief in the nature of a preliminary injunction. In Maupin, the Court of Appeals stated: “Because the injunction is an extraordinary remedy, sufficiency of the evidence below must be evaluated in light of both substantive and equitable principles.” Id. at 697. CR 65.04 authorizes the granting of a temporary injunction (interlocutory relief) if the movant’s rights are being violated and the movant will suffer immediate and irreparable injury pending a final judgment, or if waiting would render the final judgment meaningless. According to Maupin, “In order to show harm to his rights, a party must first allege possible abrogation of a concrete personal right.” Id. at 698 (citing Morrow v. City of Louisville, 249 S.W.2d 721 (Ky.1952)). “[Djoubtful cases should await trial of the merits.” Id. (citing Oscar Ewing, Inc. v. Melton, 309 S.W.2d 760 (Ky.1958)). And further, there must be “a clear showing that these rights will be immediately impaired.” Id.

In evaluating an alleged “right” of the movants, we first look to the statutory scheme on “Charitable Gaming,” KRS Chapter 238. KRS 238.525 authorizes the issuance of annual, biennial, and even temporary gaming licenses and renewals thereof. KRS 238.535(8)(d) allows charitable organizations to hold events off premises if the location is licensed. KRS 238.540 contains the restrictions on the location for charitable gaming, and KRS 238.555 controls the charitable gaming facility license. 820 KAR 1:029, Section 1(5) provides that when an application for a license or a renewal is submitted, the Office of Charitable Gaming “shall issue a license if the applicant has met the requirements for licensure .... ” KRS 238.560 authorizes the Office of Charitable Gaming to police the gaming operations and facilities, and appeals of such administrative actions are governed by KRS 238.565. Section four of this appeal process provides for a stay of all administrative orders until the appeal is final. KRS 238.565(4).

Movants contend that the licensing scheme, including renewals and appeal of denials, creates a mandatory ministerial act which is the equivalent of a “right” to a renewal. The respondents rely on Bobbie Preece Facility, 71 S.W.3d 99, which appears to be on point. In that case, a bingo hall owner also challenged the denial of a renewal application for a license to operate a charitable gaming establishment. In affirming the trial court’s denial of said license, the Court of Appeals noted that the operator of the hall “has no ‘fundamental right’ to a license to operate a charitable gaming facility[.]” Id. at 103 (quoting Louisville Atlantis, 971 S.W.2d at 817). Also, the “license is more akin to a privilege than a license.” Id. at 104. While we agree the movants do not have a property right to a license, we conclude that the movants do have a right to a renewal unless cause is shown that would have justified a revocation or nonrenewal of the license.

In the case sub judice, movants applied for a license renewal at about the same time as the Office of Charitable Gaming sought to revoke said license. Because the license expired before it could be revoked, there was no harm to the existing license. The renewal, however, was denied for the same unknown three reasons listed in the revocation notice. Therefore, movants were entitled to appeal the nonre-newal. Not knowing the reasons or evidence for the nonrenewal, we cannot determine whether the public interest would be harmed by the issuance of an injunction, whether a substantial question has been presented, or if irreparable injury was shown. See Maupin, 575 S.W.2d at 698-99. In denying the injunction, we are not ruling on the outcome of the appeal, but only instructing the parties to return to the administrative hearing below for a final judgment before appealing through the courts.

For the foregoing reasons, this Court affirms the Court of Appeals denial of interlocutory relief, albeit for different reasons.

All sitting. All concur.

Entered: AUGUST 27, 2009.

/s/ John D. Minton Jr. Chief Justice

      . The record before us does not reveal the nature of, or citation to, the gaming laws allegedly violated.

      . The suit in Bobbie Preece Facility was for a "taking” without just compensation after the renewal was denied. Id. at 101. In the instant case, movants are seeking renewal of the license.

      . 820 KAR 1:029, Section 1(5) (requiring that the Department "shall issue a license (3) 27” if conditions are met); 820 KAR 1:130, Section 4 (l)(d) (a license renewal application may be denied if "a license holder fails to fulfill any requirement, qualification or eligibility restriction for licensure set forth in KRS Chapter 238 or 820 KAR Chapter 1.”)


author: TAYLOR, Judge.

text:
    HARVEST HOMEBUILDERS LLC and Barbara A. Jeter, Appellants, v. COMMONWEALTH BANK AND TRUST COMPANY, Appellee.
    No. 2008-CA-001897-MR.
    Court of Appeals of Kentucky.
    Jan. 29, 2010.
    Robert E. Salyer (argued), Frankfort, KY, for appellants.
    David J. Kellerman (argued), Louisville, KY, for appellee.
    . Before COMBS, Chief Judge; TAYLOR, Judge; HENRY, Senior Judge.

      . Senior Judge Michael L. Henry sitting as Special Judge by assignment of the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statutes 21.580.

   OPINION

TAYLOR, Judge.

Harvest Homebuilders LLC and Barbara A. Jeter bring this appeal from a September 10, 2008, judgment of the Old-ham Circuit Court awarding Commonwealth Bank and Trust Co. (Commonwealth Bank) a deficiency judgment in the amount of $207,334.35. We affirm.

On June 24, 2005, Harvest Homebuild-ers executed and delivered a promissory note in the amount of $247,500 to obtain a loan from Commonwealth Bank. The loan was used to purchase real property located in Oldham County, Kentucky. To secure repayment of the note indebtedness, Harvest Homebuilders additionally granted a mortgage to Commonwealth Bank against said real property. Barbara Jeter and Charles Jeter, partners in Harvest Home-builders, also executed personal guarantees to secure repayment of the loan debt to Commonwealth Bank.

In 2007, Harvest Homebuilders defaulted under the terms of the promissory note. Commonwealth Bank then filed an action against Barbara, Charles, and Harvest Homebuilders alleging breach of the promissory note, seeking enforcement of the personal guarantees, and further pursuing foreclosure of the mortgage encumbering the real property that secured the debt.

In an attempt to sell the real property prior to foreclosure, Barbara entered into an option agreement with Sterling Development Group. Therein, Sterling Development was given an option to purchase the mortgaged property for $235,000 and would exercise the option provided Sterling Development could get “R2 zoning and site plan approval.” The option agreement contained no expiration date. Sterling Development did not exercise its option to purchase the real property. Barbara then attempted to sell the real property to two other prospective buyers, John Thunderburke and the Hallgarten Group, to no avail.

A judgment and order of sale was entered in December 2007. On February 5, 2008, the real estate was sold by the Commissioner to Commonwealth Bank for $67,000. The purchase price of $67,000 did not satisfy the outstanding judgment. Consequently, Commonwealth Bank filed a motion for deficiency judgment in the amount of $210,253.37 against Barbara and Harvest Homebuilders. In response, Harvest Homebuilders and Barbara (collectively referred to as appellants) filed a motion for relief from judgment. Appellants argued that Commonwealth Bank breached its implied duty of good faith and fair dealing by not acquiescing to the sale of the real property prior to foreclosure and by failing to negotiate with Sterling Development to sell Sterling the real property. By judgment entered September 10, 2008, the circuit court awarded Commonwealth Bank $207,334.35 representing the deficiency owed on the original judgment and $817.50 in attorney’s fees. This appeal follows.

Appellants contend that the circuit court erred by awarding Commonwealth Bank a deficiency judgment. Specifically, appellants assert that Commonwealth Bank breached the implied covenant of good faith and fair dealing, thus precluding it from pursuing a deficiency judgment. In support thereof, appellants point to Commonwealth Bank’s refusal to consent to the sale of the subject real property to either Thunderburke or to the Hallgarten Group during the foreclosure proceedings. And, appellants point to Commonwealth Bank’s apparent negotiations during the foreclosure proceedings to sell the real property to Sterling Development after appellants and Sterling had entered into the option agreement. Appellants argue that these facts clearly demonstrate that Commonwealth Bank breached the implied covenant of good faith and fair dealing. Under the authority of Pearman v. West Point National Bank, 887 S.W.2d 366 (Ky.App.1994), appellants allege that Commonwealth Bank is barred from recovering a deficiency judgment as a result of its breach of the implied covenant of good faith and fair dealing.

In Pearman, the Court of Appeals was faced with materially different facts. Id. Therein, West Point National Bank foreclosed upon real property owned by Pear-man. The real property was sold at two-thirds of its appraised value ($31,000) to West Point National Bank at the foreclosure sale. A deficiency judgment was entered for $16,000 against Pearman. However, the day before entry of the deficiency judgment, West Point National Bank contracted to sell the real property to a third party for $45,000 and actually sold the property to the third party for said amount. The sale price of $45,000 was in excess of Pearman’s total indebtedness owed to the Bank.

Under these “qualifying facts and circumstances,” the Court of Appeals held that West Point National Bank breached the implied covenant of good faith and fair dealing, thus resulting “in effacement of the deficiency.” Id. at 368. Pivotal to the Court’s holding was the fact that “the bank contracted with third parties ... to sell the mortgaged property during the foreclosure action and, in fact, ultimately sold same for an amount which would have wholly satisfied the debt owed by Pear-man.” Id. at 368.

These facts are clearly distinguishable from the facts in our case. In Pea,rman, the Bank contracted with third parties to sell the real property during the foreclosure action and actually sold the property for an amount in excess of Pearman’s total indebtedness. Id. By contrast, Commonwealth Bank neither entered into a contract to sell the real property during the foreclosure proceedings nor actually sold the real property to a third party. We, thus, do not view Pearman as controlling, and we reject appellants’ attempt to broaden the holding of Pearman to encompass these facts. See id.

As to appellants’ general argument that Commonwealth Bank breached the covenant of good faith and fair dealing, we do not think the evidence supports same. The implied covenant of good faith and fair dealing simply “impose[s] on the parties ... a duty to do everything necessary to carry” out the contract, de Jong v. Leitchfield Deposit Bank, 254 S.W.3d 817, 823 (Ky.App.2007)(quoting Farmers Bank and Trust Co. v. Willmott Hardwoods, Inc., 171 S.W.3d 4, 11 (Ky.2005)). The record clearly demonstrates that Commonwealth Bank did not enter into a contract with Sterling Development to sell the real property. Any alleged attempt by Commonwealth Bank to do so is simply insufficient alone to constitute a breach of the covenant. Additionally, Commonwealth Bank asserts that it did not consent to selling the subject real property prior to foreclosure because Barbara insisted that the sale be conditioned upon the Bank’s releasing Harvest Homebuilders and Barbara from liability for any resulting deficiency. In support thereof, we are cited to Volume I at page 123 of the circuit court record. There is found a written instrument signed by Barbara. It reads, in relevant part, as follows:

I, Barbara Jeter, owner of Harvest Homebuilders, LLC release Alex Hall-garten to speak with W.S. Reisz, counsel for Barbara Jeter and David Kellerman, attorney for Commonwealth Bank and Trust, concerning the purchase of the property/mortgage of 6.7 acres located in Pewee Valley, KY owned by Harvest Homebuilders, LLC. It is agreed that Alex Hallgarten group may only purchase the property/mortgage if they obtain a written release of liability/full satisfaction of debt for Barbara Jeter, Charles Jeter, and Harvest Homebuild-ers from Commonwealth Bank and Trust.

Thus, Barbara conditioned the sale of the real property upon “a written release of liability/full satisfaction” of the debt from Commonwealth Bank. As such, the record clearly establishes that Commonwealth Bank did not breach the implied covenant of good faith and fair dealing. We also believe the record sets forth sufficient facts upon which the circuit court could rule on appellants’ motion for relief from judgment and that additional discovery was not warranted.

Upon the whole, we cannot say the circuit court erred by rendering a deficiency judgment in favor of Commonwealth Bank.

We view any remaining issues to be without merit.

For the foregoing reasons, the judgment of the Oldham Circuit Court is affirmed.

ALL CONCUR.

      . It appears that Charles Jeter was never successfully served with summons and copy of the complaint. Commonwealth Bank and Trust Company elected to only pursue claims against Barbara Jeter and Harvest Home-builders LLC.