Simulis, L. L.C. v. Gen. Elec. Capital Corp.

439 S.W.3d 571

SIMULIS, L.L.C., Appellant

v.GENERAL ELECTRIC CAPITAL CORPORATION, Appellee.

No. 14–13–00383–CV.

Court of Appeals of Texas, Houston (14th Dist.).

July 31, 2014.

Gerald Fowler, Houston, for Appellant.

John Campbell Barker, Austin, R. Paul Yetter, Houston, for Appellee.

Panel consists of Justices BOYCE, and BROWN.

OPINION

WILLIAM J. BOYCE, Justice.

Simulis, L.L.C. challenges two orders on appeal: (1) a “Final Summary Judgment” signed on January 29, 2013, in which the trial court directed that Simulis take nothing on its counterclaims against General Electric Capital Corp. (“GE Capital”); and (2) an “Order Enforcing Jury Waiver Agreement” signed on February 11, 2013. Simulis contends that the trial court erred in signing the first order and lacked subject matter jurisdiction to sign the second order. We affirm the trial court's grant of summary judgment.

Background

This is the fourth appeal arising from a decade-long commercial dispute between GE Capital and software company Simulis in connection with a failed software marketing effort.

Two prior appeals addressed the disposition of Simulis's claims against GE Capital. See Simulis, L.L.C. v. General Electric Capital Corp., 392 S.W.3d 729 (Tex.App.-Houston [14th Dist.] 2011, pet. denied) (“Simulis II ”); Simulis, L.L.C. v. General Electric Corp., No. 14–06–00701–CV, 2008 WL 1747483 (Tex.App.-Houston [14th Dist.] Apr. 17, 2008, no pet.) (“Simulis I ”). The third appeal addressed the propriety of a post-judgment garnishment obtained by GE Capital in connection with its claim against Simulis to collect on a promissory note. Simulis, L.L.C. v. G.E. Capital Corp., 276 S.W.3d 109 (Tex.App.-Houston [1st Dist.] 2008, no pet.).

Simulis's claims are grounded on allegations that GE Capital, which provides commercial financial services, approached Simulis in 2000 about forming a “strategic alliance” to market Simulis's training software to other companies and entities associated with General Electric.

Simulis is a limited liability company formed under Delaware law. GE Capital invested $5 million in Simulis in late 2000 in exchange for a 20 percent ownership interest. Under the “Second Amended and Restated Limited Liability Company Agreement of Simulis, L.L.C.,” effective as of September 29, 2000, GE Capital became a “member” of the limited liability company and held 20 percent of the “units” in Simulis. See 6 Del. C. §§ 18–101(11), 18–303. GE Capital loaned an additional $100,000 to Simulis in 2002.

According to Simulis's live pleading, the “strategic alliance” between GE Capital and Simulis contemplated that (1) “G.E. companies would have access to Simulis software and development techniques;” and (2) “Simulis' association with G.E. would ensure even greater credibility in the marketplace, as well as access to additional markets and business relationships.” GE Capital allegedly told Simulis to “ ‘staff up’ in order to meet the product needs of G.E.'s industrial divisions;” maintain “an additional office;” meet “minimum employment targets;” and create “working mock-ups of the products that would be supplied.”

Simulis contends that GE Capital represented “these extraordinary expenditures would be accompanied by G.E. company investments in Simulis products.” Simulis alleges: “Despite the promises and representations by G.E. Capital, no G.E. company ever purchased a single product from Simulis.” It continues: “Ultimately, Simulis incurred millions of dollars in additional costs and expenses in reliance on G.E. Capital's representations that it had the ability to provide business from its G.E. sister divisions.” Simulis further alleges: “... G.E. Capital did not have the ability to secure G.E. business for Simulis, and it never did. And it was G.E. Capital's representation that it did have this ability, or its failure to tell Simulis the truth about the matter, that caused damage to Simulis.”

Procedural History

The legal fight began when GE Capital sued Simulis in 2005 for breach of contract and asserted a sworn account claim after Simulis defaulted on a promissory note in connection with GE Capital's $100,000 loan.

GE Capital moved for summary judgment on its claims. Simulis did not deny liability; instead, Simulis asserted an offset defense and counterclaims against GE Capital for breach of contract, promissory estoppel, and quantum meruit. After the trial court granted an interlocutory summary judgment in favor of GE Capital on the note, GE Capital filed a combined no-evidence and traditional motion for summary judgment on Simulis's counterclaims and defenses. The trial court granted summary judgment, and Simulis pursued the first appeal in this case.

In its first appeal, Simulis challenged only the trial court's grant of summary judgment with respect to the counterclaims for promissory estoppel and quantum meruit; Simulis did not challenge summary judgment with respect to the underlying promissory note, its offset defense, or its breach of contract claim. Simulis I, 2008 WL 1747483, at *1.

This court affirmed the grant of summary judgment on Simulis's counterclaim for promissory estoppel. Id. at *2. “While a specific, detailed promise might support a promissory estoppel claim, relying on a vague, indefinite promise of future business is unreasonable as a matter of law.” Id. (citations omitted).

“Here, Simulis presented evidence that GE promised that Simulis would ‘receive business' and that the volume of business would be a ‘company maker’ for Simulis.” Id. “The parties never discussed or negotiated the specific pieces of business, the price, when and for how long such transactions would occur, or any other terms.” Id. “Relying on such promises is unreasonable as a matter of law and cannot be the basis for a promissory estoppel claim.” Id. This court distinguished cases relied upon by Simulis because they “all involve much more definite promises that GE made here.” Id. at *2 n. 1 (citing Preload Tech., Inc. v. A.B. & J. Constr. Co., 696 F.2d 1080, 1082–83, 1085 (5th Cir.1983) ; CWTM Corp. v. AM Gen. LLC, No. Civ. A. H–04–2857, 2005 WL 1923605, at *1 (S.D.Tex. Aug. 10, 2005) ; ‘ Moore’ Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 937–38 (Tex.1972) ; Wheeler v. White, 398 S.W.2d 93, 94–95 (Tex.1965) ; Frost Crushed Stone Co. v. Odell Geer Constr. Co., 110 S.W.3d 41, 45 (Tex.App.-Waco 2002, no pet.) ).

This court reversed the grant of summary judgment on Simulis's counterclaim for quantum meruit after concluding that the evidence raised a fact issue with respect to whether GE Capital received valuable services from Simulis. Id. at *3. Accordingly, this court reversed and remanded “for further proceedings consistent with this opinion.” Id.

Simulis did not pursue its quantum meruit claim on remand. Simulis II, 392 S.W.3d at 732. Instead, Simulis amended its pleadings to add more than half a dozen new causes of action. Id.

GE Capital filed special exceptions in response to the amended pleadings. Among other things, GE Capital contended that Simulis violated this court's Simulis I mandate by adding new causes of action on remand. Id. The trial court granted GE Capital's special exceptions and ordered Simulis to replead. Id.

After Simulis filed another amended pleading that still contained new causes of action, GE Capital filed a motion to dismiss on grounds that Simulis had failed to comply with the trial court's order. The trial court signed another order, in which it required Simulis to file an amended petition asserting only a claim for quantum meruit. Id. Simulis again filed an amended pleading containing new causes of action. GE Capital again moved to dismiss based on a failure to comply with the trial court's order to replead and assert only a claim for quantum meruit. Id. The trial court granted GE Capital's motion and dismissed all of Simulis's claims with prejudice. Id. Simulis then pursued the second appeal in this case.

This court reversed. “Because our opinion and mandate did not include any language limiting Simulis to a quantum meruit claim only, Simulis was free to amend its pleadings to add new claims or parties, except as to those claims on which we rendered summary judgment in GE's favor.” Id. at 735. This court expressed no opinion on the merits of GE Capital's additional assertions that Simulis's newly added claims were foreclosed by res judicata, collateral estoppel, and law of the case based on the decision in Simulis I . See Simulis II, 392 S.W.3d at 735 n. 7. This court again remanded “for proceedings consistent with this opinion.”Id. at 736.

After the second remand, Simulis filed its fifth amended counterclaim. This is the live pleading for purposes of the current appeal.

Simulis's fifth amended counterclaim asserts claims based on (1) breach of fiduciary duty; (2) fraudulent misrepresentation; (3) fraud by nondisclosure; (4) negligent misrepresentation; (5) misappropriation of trade secrets; (6) gross negligence; and (7) exemplary damages.¹ Simulis also asserts its entitlement to attorneys' fees. GE Capital filed a traditional motion for summary judgment under Texas Rule of Civil Procedure 166a(c) on November 16, 2012. Simulis filed its response on December 7, 2012. The trial court signed a “Final Summary Judgment” on January 25, 2013, in which it dismissed all of Simulis's counterclaims with prejudice and stated that “Simulis shall take nothing on its claims.”

On January 22, 2013, GE Capital filed a separate document entitled “GE Capital's Motion to Enforce Jury Waiver Agreement.” This filing asserted that the trial court should dismiss all of Simulis's counterclaims based on the then-pending motion for summary judgment; in the alternative, GE Capital contended that the case should be tried to the bench if it went forward because Simulis signed a jury waiver agreement. Simulis filed no response to this motion. The trial court signed an order granting GE Capital's motion on February 11, 2013.

Simulis filed a motion for new trial on February 26, 2013. The...