Garza v. Reed (Tex. App. - Houston [14th Dist.] Jul. 7, 2009)(Hudson) (DTPA claim against
insurer of complained-of business fails on summary judgment; misrepresentation as to insurance
coverage of buy-back guarantee)(no-evidence summary judgment affirmed)
There is no evidence in the record that Reed or Houston Surplus Lines had any
contact with any of the appellants, and no evidence shows that Reed and
Houston Surplus Lines even knew about either the buy-back program or ATC's
alleged intent to use the promise of insurance coverage to entice people into
buying its pay phones. As such, appellants have not produced a scintilla of
evidence to raise a genuine issue of material fact as to whether Reed or
Houston Surplus Lines misrepresented the terms of the insurance policy.
AFFIRMED: Opinion by Justice Hudson
Before Chief Justice Hedges, Justices Hudson and Frost
14-08-00211-CV Joe M Garza, Pay Phone Owners Legal Fund, and Ernest R. Bustos v. Jack P.
Reed and Houston Surplus Lines, Inc.
Appeal from 434th Judicial District Court of Fort Bend County
Trial Court Cause No. 07-CV-155905A
M E M O R A N D U M O P I N I O N
Appellants Joe M. Garza, Pay Phone Owners Legal Fund, and Ernest R. Bustos appeal a venue
transfer order and the trial court's grant of summary judgment on all of their claims against appellees
Jack P. Reed and Houston Surplus Lines, Inc. We affirm.
Appellants are apparently victims of a Ponzi scheme involving the purchase of pay phones. They
purchased pay phones from American Telecommunications Company, Inc. (“ATC") in 2000 and 2001
as an investment. Appellants claim that ATC promised it would buy back the pay phones at full cost if
appellants were not satisfied with their purchase. ATC also allegedly promised that it had secured
insurance for the buy-back program through four separate insurance companies. When appellants
requested that ATC buy back their pay phones, ATC refused. Some appellants made claims on the
insurance policies, and those claims were denied because the policies were general commercial
policies that did not cover such a claim.
Appellee Reed is president of appellee Houston Surplus Lines, a managing general agent for one of
the insurance companies. Reed and Houston Surplus Lines dealt only with retail insurance agents,
and at the request of those agents, Reed and Houston Surplus Lines issued a certificate of
insurance for a general commercial liability policy. Reed and Houston Surplus Lines had no direct
contact with appellants at all.
Appellants sued Reed and Houston Surplus Lines, as well as several other insurance companies and
agents, in Hidalgo county alleging violations of the Deceptive Trade Practices - Consumer Protection
Act (“DTPA") and the Texas Insurance Code. As to Reed and Houston Surplus Lines, appellants
claimed that the insurance certificate constituted a misrepresentation that the insurance policy
covered ATC's buy-back program.
Reed and Houston Surplus Lines filed a motion to transfer venue, which the trial court granted. The
case was transferred to Fort Bend County. Reed and Houston Surplus Lines then moved for
summary judgment, and the trial court granted their motion. This appeal followed.
In their first issue, appellants argue the Hidalgo county trial court erred in granting the motion to
transfer venue. Our record does not contain the motion to transfer venue or the response, but we
take as true statements of fact in briefs unless the opposing party contradicts them. See Tex. R.
App. P. 38.1(g). The parties agree that appellees requested a venue transfer, among other
grounds, on the basis of convenience. See Tex. Civ. Prac. & Rem. Code Ann. § 15.002(b) (Vernon
2002) (authorizing a court to transfer venue “[f]or the convenience of the parties and witnesses and
in the interest of justice"). A trial court's decision to grant or deny a transfer based on convenience
“is not grounds for appeal" and “is not reversible error." Id. § 15.002(c). The trial court's order did
not specify the basis for granting the venue transfer. Thus, the trial court could have granted the
motion based on convenience, and the statute precludes reversal of any ruling made on
convenience grounds. The Texas Supreme Court confronted the exact situation of a trial court not
specifying the basis for its venue transfer when one of the grounds moved upon was convenience,
and the court held that an appellate court must affirm any such order. See Garza v. Garcia, 137 S.W.
3d 36, 37, 40-41 (Tex. 2004); accord Trend Offset Printing Servs., Inc. v. Collin County Cmty. Coll.
Dist., 249 S.W.3d 429, 429 (Tex. 2008). Accordingly, we overrule appellants' first issue.
In their second issue, appellants argue the trial court erred in granting summary judgment on their
claims against Reed and Houston Surplus Lines. Reed and Houston Surplus Lines moved for both
traditional and no evidence summary judgment. See Tex. R. Civ. P. 166a(c), 166a(i). To prevail on
a traditional motion for summary judgment, the movant must show that there is no genuine issue of
material fact and that he is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Sw. Elec.
Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002). A defendant moving for summary judgment
must conclusively negate at least one essential element of each of the plaintiff's causes of action or
conclusively establish each element of an affirmative defense. Sci. Spectrum, Inc. v. Martinez, 941 S.
W.2d 910, 911 (Tex. 1997); Shirvanian v. DeFrates, 161 S.W.3d 102, 106 (Tex. App.- Houston [14th
Dist.] 2004, pet. denied). When we review a summary judgment, we take as true all evidence
favorable to the non‑movant; we also indulge every reasonable inference and resolve any doubts in
favor of the non‑movant. Grant, 73 S.W.3d at 215. As to a no evidence summary judgment motion,
the movant must state the specific elements of a cause of action for which there is no evidence.
Cuyler v. Minns, 60 S.W.3d 209, 212 (Tex. App.- Houston [14th Dist.] 2001, pet. denied). If the
movant has identified specific elements he claims lack evidence, we must then determine de novo
whether the non‑movant has produced more than a scintilla of probative evidence to raise a genuine
issue of material fact. Allen v. Connolly, 158 S.W.3d 61, 64 (Tex. App.- Houston [14th Dist.] 2005, no
Appellants do not specify which sections of the DTPA and Insurance Code they contend support their
claims, but the essence of their claims is that Reed and Houston Surplus Lines falsely represented
that the insurance policy at issue covered ATC's buy-back plan, and they relied on this alleged
representation in purchasing the pay phones. Appellees moved for summary judgment arguing, in
part, that appellants have no evidence of any misrepresentation. We agree. Appellants allege that
the insurance documents constitute a misrepresentation that the policy covered the buy-back plan,
but there is nothing on the face of the documents so indicating. There is no evidence in the record
that Reed or Houston Surplus Lines had any contact with any of the appellants, and no evidence
shows that Reed and Houston Surplus Lines even knew about either the buy-back program or ATC's
alleged intent to use the promise of insurance coverage to entice people into buying its pay phones.
As such, appellants have not produced a scintilla of evidence to raise a genuine issue of material fact
as to whether Reed or Houston Surplus Lines misrepresented the terms of the insurance policy.
Thus, the trial court did not err in granting summary judgment, and we overrule appellants' second
Having overruled appellants' two issues, we affirm the trial court's judgment.
/s/ J. Harvey Hudson
Panel consists of Chief Justice Hedges, Justice Frost, and Senior Justice Hudson.*
Senior Justice Harvey Hudson sitting by assignment.