Preview
} . @
CAUSE NO. 04-01100-M
CRAIG DYER, IN THE DISTRICT COURT
Plaintiff,
vs.
DYER CUSTOM INSTALLATION, INC.
(DCI), JOSEPH GEETING,
SUSAN LAMBERT, RICHARD GEETING
and LAURI GEETING
Defendants.
PRO PLUMBING & APPLIANCE
INSTALLATION, INC. f/k/a DYER
CUSTOM INSTALLATION, INC.
2
wo
3
298M JUDICIAL Di RIG, & °
Plaintiff,
vs.
CRAIG DYER, MELISA CONTRERAS,
and THE ESTATE OF LARRY DYER
Defendants. DALLAS COUNTY, TEXAS
DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE
MOTION FOR SUMMARY AGAINST PLAINTIFF CRAIG DYER
TO THE HONORABLE JUDGE OF SAID COURT:
COME NOW, Dyer Custom Installation, Inc. (“DCI”) n/k/a Pro Plumbing & Appliance
Installation, Inc. and Joseph Geeting (““Geeting”), Defendants in the above-styled and numbered
cause, and file this their Traditional and No-Evidence Motion for Summary Judgment Against
Plaintiff Craig Dyer in accordance with Rule 166a(c) and (i) of the TEXAS RULES OF ClVIL
PROCEDURE, and in support thereof, would respectfully show the court as follows:
DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page |L
SUMMARY JUDGMENT EVIDENCE
1.01 In support of their motion for summary judgment, DCI and Joseph Geeting rely
on the pleadings of the parties and the following evidence, the authenticity of which is
undisputed:
A.
Application for Temporary Restraining Order, Temporary Injunction, and Permanent
Injunction, a truc and correct copy of which is attached as Exhibit “A”;
Order Granting Plaintiffs Application for Temporary Restraining Order and Order to
Show Cause, a true and correct copy of which is attached as Exhibit “B”;
Transcript from the 3-19-04 Hearing on DCI’s Application for Temporary Restraining
Order and Temporary Injunction, a true and correct copy of which is attached as Exhibit
“Or;
Matthew Nowak letter dated 3-26-04, a true and correct copy of which is attached hereto as
Exhibit “D";
Lawrence Hosmer letter dated 4-1-04, a true and correct copy of which is attached hereto
as Exhibit “E”;
Agreed Temporary Injunction, a true and correct copy of which is attached hereto as
Exhibit “F”;
Order of Dismissal, a true and correct copy of which is attached hereto as Exhibit “G”;
Mitchell Madden letter dated 2-28-05, a true and correct copy of which is attached hereto as
Exhibit “H”;
Melisa Contreras and Larry Dyer Assignments, true and correct copies of which are attached
hereto as Exhibit “1”;
DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER = Page 2J. Excerpts from Deposition of Melisa Contreras, a true and correct copy of which is
attached as Exhibit “J”;
K. Excerpts from Deposition of Larry Dyer, a true and correct copy of which is attached as
Exhibit “K”, and
L. Pro Plumbing & Appliance Installation, Inc. f/k/a Dyer Custom Installation, Inc.'s
Petition for Declaratory Judgment, a true and correct copy of which is attached as Exhibit
“LY,
1,02 The above-listed evidence is hereby incorporated by reference.
I.
B ACKGROUND FACTS
2.01 On or about February 11, 2004, Plaintiff Craig Dyer (‘Dyer’) filed suit against
DCI, Joseph Geeting and Susan Lambert in the Dallas County District Courts, alleging numerous
frivolous causes of action and seeking discovery of DCI’s financial and corporate records. [See
Plaintiff's Original Petition]. On March 9, 2004, Matthew A. Nowak, counsel for DCI, filed an
Application for Temporary Restraining Order, Temporary Injunction and Permanent Injunction
against Dyer in the 362™ District Court of Denton County, Texas, seeking to enjoin Dyer and his
attomey, Mitchell Madden, from contacting DCI’s customers and interfering with DCI's
contracts and existing business relationships. [See Application for Temporary Restraining Order,
Temporary Injunction, and Permanent Injunction, Exhibit A]. The Denton County District Court
granted DCI’s Temporary Restraining Order on March 9, 2004, and a hearing on the Temporary
Injunction was scheduled for March 19, 2004. [See Order Granting Plaintiffs Application for
Temporary Restraining Order and Order to Show Cause, Exhibit B]. The purpose of the March
rg" hearing on DCI’s Application for Temporary Injunction, as reflected by the transcript
attached hereto as “Exhibit C,” was to extend the relief granted in the March 9, 2004 temporary
DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 3restraining order; namely, to prevent Dyer and his attomey from continuing to contact and
represent to DCI’s customers that he had a controlling ownership interest in the company. [See
Exhibit B; see also 3-19-04 Hearing Transcript, Exhibit C].
2.02 On the date of the March 19" hearing, Ken Nye, former counsel for Dyer, offered
to agree to the relief requested in DCI’s Application for Temporary Injunction. [See Exhibit C].
Specifically, Mr. Nye, on behalf of Dyer, agreed that Dyer would refrain from continuing to
contact DCI’s customers and interfering with DCI’s existing business relationships. [See Exhibit
C]}. However, Mr. Nye also represented to both counsel for DCI and the 362" District Court that
Melisa Contreras (“Contreras”), Dyer’s common-law wife, had validly assigned her 10%
ownership interest in DCI to Dyer (though he failed to produce a copy of said Assignment at the
hearing), making Dyer’s total alleged ownership interest in the company 29%. [See Exhibit C].
That was the very first time that counsel for DCI had ever been made aware of this purported
assignment. In exchange for Dycr’s agrcement to refrain from representing that he owned a
controlling interest in the company, Mr. Nye requested that Dyer be allowed to “represent to
anybody” that he owned a 29% ownership interest in DCI. [See Exhibit C].
2.03 Content with Dyer’s agreement to refrain from representing that he owned a
controlling interest in DCI and relying on Mr. Nye’s representations to both counsel for DC! and
the Court that Contreras had validly assigned her interest in DCI to Dyer, DCI agreed to allow
Dyer to represent to anybody that he owned a 29% interest in DCI. [See Exhibit C]. Thus, both
Mr. Nowak and Mr. Nyc read into the record the substance of the parties’ agreement regarding
the Temporary Injunction. [See Exhibit C]. Specifically, Mr. Nyc, on behalf of Dyer, agreed
that Dyer would not “unlawfully interfere with the business of DCI,” would not “represent to any
customers or third persons that he is an agent, officer, or director of DCI,” would not “disparage
DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER Page 4DCI or its officers or directors to third parties,” and would not “represent that he’s an authorized
representative” of DCI. [See Exhibit C]. In exchange for said agreement, DCI agreed that it
would not disparage Dyer. [See Exhibit C]. In addition, based upon Mr. Nye’s representation of
an alleged valid assignment, DCI agreed that Dyer would be allowed to “represent to anybody”
that he owned a 29% interest in DCI. [See Exhibit C].
2.04 By letter dated March 26, 2004 - a week after the March 19" hearing — counsel
for DCI forwarded Mr. Nye a proposed order outlining the terms of the parties’ agreement on
DCI’s temporary injunction. [See M. Nowak 3-26-04 Letter, Exhibit D]. In the proposed order,
Dyer agreed that he and “his agents, employees and attorneys” would immediately cease from
1) representing that Craig Dyer owns a majority of stock or has control of [DCI]
to any third parties, [DCI’s] customers, or any business entities;
2) representing that Craig Dyer is an authorized representative or agent of [DCI]
to any third parties, [DCI’s] customers or any business entities;
3) unlawfully interfering with [DCI’s] existing business relationships (including,
but not limited to The Home Depot, The Great Indoors, Lowes Home
Improvement and Fry’s Electronics);
4) making any disparaging communications or remarks with regard to [DCI], its
Officers, or its directors to any third parties, [DCI’s] customers or any business
entities.
(Sce Exhibit D]. In exchange for this agreement, DCI agreed that Dyer could compete with DCI
in the marketplace, and that DCI would refrain from “making any disparaging communications
or remarks with regard to Craig Dyer to any third parties or business entities.” [Exhibit D]. The
proposed order did not address nor even mention Contreras’ alleged assignment of shares to
Dyer or Dyer’s ability to represent that he owned a 29% interest in DCI to third parties. [See
Exhibit D].
DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 52.05 By letter dated April 1, 2004, Lawrence Hosmer, an attorney in the Law Offices
of Mitchell Madden, responded to counsel for DCI’s March 26, 2004 letter, making “a few
changes to [DCI’s] proposed Order to more accurately reflect the agreement reached" at the
March 19, 2004 hearing. [See L. Hosmer 4-1-04 Letter, Exhibit E]. Counsel for Dyer did not
modify the proposed order to reflect Contreras’ alleged assignment of shares to Dyer or Dyer’s
ability to represent that he owned a 29% interest in DCI to third parties. [See Exhibit E]. In fact,
except for a few minor changes in the wording, counsel for Dyer made no modifications to the
material terms of the parties’ agreement. [See Exhibit E]. Thus, the Agreed Temporary
Injunction, which was executed by the 362™ District Court of Denton County on May 6, 2004,
contains no mention or reference to the Contreras assignment or the validity and effect
thereof. [Agreed Temporary Injunction, Exhibit F]. The Denton County case was eventually
dismissed for want of prosecution on January 22, 2007. [Order of Dismissal, Exhibit G].
2.06 Over the course of the next several weeks and months, counsel for DCI repeatedly
requested that counsel for Dyer produce a copy of the legal document which purported to assign
Conteras’ shares to Dyer. However, it was not until February 28, 2005 — almost a year after
the March 19, 2004 hearing — that counsel for Dyer finally produced the purported assignment
in question, as well as the purported assignment of Larry Dyer, Dyer’s father. Specifically, by
letter dated February 28, 2005, Mitchell Madden forwarded counsel for DCI the alleged
assignments in question. [See M. Madden 2-28-05 Letter, Exhibit H]. In that letter, Mr. Madden
informed DCI that “Ms. Contreras and Mr. Dyer have conveyed all of their right, title and interest in
the stock ownership in DCI to my client, Craig Dyer.” [Exhibit H]. Additionally, both Contreras’
assignment and Larry Dyer’s assignment, which were attached to Madden letter and sworn to by
both Contreras and Larry Dyer, alleged that the stock in question was “TRANSFERRED FOR
DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 6GOOD AND VALUABLE CONSIDERATION.” [See Assignments, Exhibit I]. After taking
both Larry Dyer’s and Conteras’ depositions, however, DC] learned that neither Contreras nor
Dyer had received any consideration whatsoever for the assignment of the stock in question,
contrary to the plain language of the assignments. [See M. Contreras Deposition, Exhibit J at p.
15, 1. 1-14; L. Dyer Deposition, Exhibit K at p. 89, 1. 23 - p. 90, 1. 4]. Thus, once it was
determined that the assignments in question were invalid and fraudulent on their face, DCI filed
suit against both Contreras and the Estate of Larry Dyer (who had since passed away) on
November 15, 2006, secking a declaratory judgment establishing the legal invalidity of the
assignments in question. [See Pro Plumbing & Appliance Installation, Inc. f/k/a Dyer Custom
Installation, Inc.’s Petition for Declaratory Judgment, Exhibit L).
2.07 This case was scheduled to go to trial on January 5, 2009. However, counsel for
Dyer filed a Motion for Continuance a few days before the January 5" trial setting, which was
granted by the Court on or about December 29, 2008. [See Motion for Continuance}. Thus, the
January 5" trial setting was continued by this Court. [See Order Granting Continuance]. Despite
the fact that the pleading deadline had long since passed, Dyer, in a transparent attempt to
disqualify counsel for Defendants, Matt Nowak, by unnecessarily labeling him a fact witness in
this case, filed his Second Amended Original Petition on February 26, 2009, alleging a breach of
Rule 11 agreement claim against DCI and Geeting, despite the fact that Geeting was not a party to
the Rule 11 agreement and despite the fact that the Rule 11 agreement in question had been
extinguished by the subsequent May 6, 2004 Agreed Temporary Injunction. ' [See Plaintiff's
Second Amended Original Petition]. Specifically, Dyer now alleges that Mr. Nowak’s agreement,
" Incidentally, a thorough review of Texas authority has failed to reveal a single Texas case in which a lawyer was
disqualified under Rule 3.08 of the Texas Disciplinary Rules of Professional Conduct for being a fact witness to a
Rule 11 agreement. Undoubtedly, no Texas court has ever ruled as such because of the dangerous precedent it
would set, making every attorney who enters into a Rule 1] agreement on behalf of his client a potential fact
witness, subject to disqualification.
DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 7on behalf of DCI, to allow Dyer to “represent to anybody" that he owned a 29% interest in DCI at
the March 19, 2004 hearing on DCI’s Application for Temporary Injunction, somehow constitutes
an agreement by DCI recognizing the legal “validity and effect” of Contreras’ assignment — a legal
document that was not produced by counsel for Dyer until almost a year after the hearing, and that
Mr. Nye represented to both the Court and Mr. Nowak (cither negligently, recklessly or
intentionally) was valid and enforceable. [See Plaintiff's Second Amended Orginal Petition, see
also Exhibit C]. Apparently, Dyer alleges that DCI (and Geeting) — by filing a declaratory
judgment action seeking to invalidate the fraudulent assignment — has somehow breached this
purported Rule 11 agreement, and that he has standing to assert this claim in a separate, subsequent
lawsuit. As explained below, not only is there no evidence of each element of Dyer’s breach of
Rule }1 agreement claim, but the summary judgment attached hereto and the caselaw cited herein
conclusively negate one or more of the essential elements of Dyer’s claims for breach of Rule 11
agreement against DCI and Geeting.
It
SUMMARY JUDGMENT STANDARD
A. Traditional Summary Judgment
3.0! A party against whom a claim is asserted may, at any time, move for summary
judgment. TEX. R. Civ. P. 166a(b). A defendant is entitled to summary judgment if it disproves
at least one essential element of the plaintiff's cause of action as a matter of law. See
Friendswood Dev. Co. v. McDade & Co., 926 S.W.2d 280, 282 (Tex. 1996). A defendant is
equaily entitled to summary judgment if it proves every element of its affirmative defense. See
Velsicol Chem. Corp. v. Winograd, 956 S.W.2d 529, 530 (Tex. 1997). The purpose of the
summary judgment rule is to climinate unmeritorious claims or untenable defenses. See City of
Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 n. 5 (Tex. 1979) (citing Gulbenkian v.
DC] AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 8Penn, 252 S.W.2d 929, 931 (Tex. 1952). Summary judgment allows quick disposal of cases that
do not present genuine issues of material fact. See New Jersey Bank v. Knuckley, 637 S.W.2d
920, 921 (Tex. 1982).
B. No-Evidence Summary Judgment
3.02 A movant is entitled to summary judgment if the movant can show that adequate
time for discovery has passed and the non-movant fails to produce evidence to support one or
more essential elements of the non-movant’s claim or defense. TEX. R. Civ. P. 166a(i).
Although the plaintiff need not marshal his proof, he must present sufficiently probative
evidence to raise a genuine issue of material fact as to the challenged clements. See
Southwestern Elec. Power Co. v. Grant, 73 §.W.3d 211, 215 (Tex. 2002). The Court must grant
this Motion unless the respondent produces summary judgment evidence that raises a genuine
issue of material fact. See Flameout Design & Fabrication, Inc. v. Penncoil Caspien Corp., 994
S.W.2d 830 (Tex.App.—Houston 1999, no writ) (citing Jackson v. Fieston Mart, Inc., 979 S.W.2d
68, 70 (Tex.App.—Austin 1998, no pet.). The evidence produced must “rise to a level that would
enable reasonable and fair-minded people to differ in their conclusions.” Valero Mktg. & Supply
Co. v. Kalama Int'l, 51 §.W.3d 345, 351 (Tex. App.— Houston [1* Dist.] 2001, no pet.) (quoting
Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). This case has been on
file since February 11, 2004. As such, there has been an adequate time for discovery.
IV.
ARGUMENTS & AUTHORITIES
4.01 As stated above, Dyer alleges that during the hearing on DCI's Application for
Temporary Injunction filed in the 362™ Judicial District Court of Denton County, Texas,
“Nowak & Stauch, on behalf of their clients agreed on the record and in open court to the Contreras
transfer (of shares to Dyer] and to the validity and effect thereof.” [See Plaintiff's Second Amended
DC] AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 9Original Petition]. As proof of this purported agreement, Dyer relies on the following excerpt
from the transcript of the March 19, 2004 hearing:
Mr. Nye: That’s agreed, Judge.
We have discussed the fact — if we could just have a moment about
ownership. We don’t have any problem with that, saying he’s an
authorized representative of DCI. Mr. Dyer will not represent that he
controls DCI. | believe, though, that Mr. Dyer can represent to
anybody his actuai ownership of the company that’s undisputed.
Mr. Stauch: — The undisputed ownership being 19 percent.
Mr. Nye: Plus the ten percent he just got.
Mr. Nowak: 29 percent, that’s fine.
(Exhibit C]. Dyer apparently contends that Mr. Nowak’s four-word statement, “29 percent, that’s
fine,’ somehow constitutes a “valid and enforceable” Rule 11 agreement wherein DCI and Geeting
agreed to the legal “validity and effect” of Contreras’ assignment to Dyer.
4.02 However, as the summary judgment evidence attached hereto makes clear, neither
DCI nor Geeting ever stipulated to the legal validity and effect of the Contreras’ assignment at the
March 19, 2004 hearing, nor was this stipulation one of the clear and definite terms of Mr, Nye’s
offer or the parties’ agreement. To the contrary, Mr. Nowak’s four-word statement was directly in
response to Mr. Nyc’s statement regarding what Dyer could represent to third parties, not
conclusive proof of his ownership interest in DCI. Additionally, the summary judgment evidence
and casclaw cited herein will further show that the Agreed Temporary Injunction executed by the
Denton County court on May 6, 2004 replaced the Rule 1] agreement upon which Dyer’s breach of
Rule 11 agreement claim is based, and as such, the Rule 11 agreement has been extinguished and is
no longer enforceable. The summary judgment evidence will further show that DCI’s agreement to
allow Dyer to represent that he owned a 29% interest in DCI was predicated on Mr. Nyc’s
DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 10representations to both the Court and counsel for DCI that Contreras had validly assigned her shares
in DCI to Dyer. However, said representations were false. Moreover, the casclaw cited herein will
show that even if the Court were to agree with Dyer’s allegation that the DCI and Geeting stipulated
to the “validity and effect” of the Contreras’ assignment, neither DCI, Geeting or the Court is bound
by said legal conclusion, and Dyer does not have standing to file suit to enforce said stipulation in
this lawsuit. Finally, Dyer cannot, by answers to interrogatories, admissions on file, deposition
testimony or any other admissible evidence, present sufficient summary judgment evidence to
establish a genuine issue of material fact as to one or more of the essential elements of his breach
of Rule 11 agreement claim against DCI and Geeting. For these reasons, DCI and Geeting
respectfully request that the Court grant their Traditional and No Evidence Motion for Summary
Judgment against Dyer.
A Dyer Has Insufficient Summary Judgment Evidence of One or More Elements of His
Breach of Rule 11 Agreement Claim Against DCI and Geeting
4.03 To prevail on a breach of contract claim, a plaintiff must establish the following
elements: 1) there was a valid, enforceable contract with the defendant; 2) the plaintiff
performed, tendered performance of, or was excused from performing his contractual
obligations; 3) the defendant breached the contract, and 4) the defendant’s breach caused the
plaintiff's injury. Residential Dynamics, LLC v. Loveless, 186 S.W.3d 192, 198 (Tex.App.—
Fort Worth 2006, no pet.). In order to prove the existence of a valid and enforceable contract,
the plaintiff must establish the following elements: 1) there was an offer; 2) there was an
acceptance in strict compliance with the terms of the offer; 3) there was a meeting of the minds;
4) cach party consented to the terms of the offer; and 5) the parties executed the contract with the
intent that it be mutual and binding. Searcy v. DDA, Inc., 201 $.W.3d 319, 322 (Tex.App.—
Dallas 2006, no pet.).
DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page I4.04 Furthermore, both the terms of the offer and the party’s acceptance of the offer
must be “clear and definite” for the agreement to be legally enforceable. Engelman Irr. Dist. v.
Shields Bros., Inc., 960 S.W.2d 343, 352 (Tex.App—Corpus Christi 1997, pet. denied). The
question of whether an agreement is legally enforceable or binding is a question of law for the
court. Texaco, Inc. v. Pennzoil Co., 729 S.W.2d 768, 814 (Tex.App.—Houston [1st Dist.] 1987,
writ ref'd mr.e.), cert. dism‘d, 485 U.S. 994 (1988). Thus, the enforceability of an agreement
depends on whether it is sufficiently definite to allow the court to determine the parties’ legal
obligations and liabilities. 7:0. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex.
1992). All essential terms of the agreement must be agreed upon before it may be enforced by
the courts. Searcy, 201 $.W.3d at 322. If the agreement upon which the plaintiff relies is so
indefinite as to make it impossible for the court to determine the legal obligations of the parties,
it is unenforceable as a matter of law. /d. Moreover, the Texas Supreme Court is clear that an
agreement between parties cannot be given greater effect than intended. Austin v. Austin, 603
§.W.2d 204, 207 (Tex. 1980). As such, the jury may not be called upon to construe the legal
effect of an agreement or to supply an essential term upon which the parties did not mutually
agree. Id.; see also University Nat'l Bank v. Ernst & Whinney, 773 S.W.2d at 710. If the plaintiff
cannot present sufficient summary judgment evidence establishing the clear and definite terms of
the contract, then the defendant is entitled to summary judgment as a matter of law. Searcy, 201
$.W.3d at 322 (summary judgment proper where plaintiff failed to provide sufficient summary
judgment evidence of a “meeting of the minds on the material terms of the alleged contract such
to indicate the legal obligations and liabilities of the parties.”).
DCi AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 124.05 In this case, Dyer cannot present sufficient summary judgment evidence
establishing a genuine issue of material fact as to each of the following clements of his breach of
Rule 11 agreement claim:
1, There was a valid, enforceable Rule !1 agreement between Dyer and DCl/Geeting
wherein DCI/Geeting agreed to the legal validity and effect of Contreras’ transfer of
shares to Dyer,
2. Dyer performed, tendered performance of, or was excused from performing his
obligations under the Rule 11 agreement;
3. DCI/Geeting breached the alleged Rule 11 agreement; and
4. DCI/Geeting’s alleged breach caused Dyer’s injury.
Residential Dynamics, LLC, 186 S.W.3d at 198. In fact, Dyer cannot even present sufficient
summary judgment evidence establishing a genuine issue of material fact that there was a valid
and enforceable contract wherein DCI and Geeting agreed to the “validity and effect” of the
Contreras’ transfer. Specifically, Dycr cannot present sufficient summary judgment evidence
that:
1, Dyer’s offer clearly and definitively communicated his agreement to refrain from
contacting DCI’s customers in exchange for DCI/Geeting’s agreement to recognize the
legal validity and effect of the Contreras’ transfer;
2. DC1/Geeting accepted Dyer’s offer in strict compliance with such terms;
3. There was a meeting of the minds between DCI/Geeting and Dyer regarding such terms;
and
4, DCl/Geeting consented to such terms.
Searcy, 201 S.W.3d at 322.
4.06 Asa preliminary matter, it must be pointed out that Geeting was not a party to the
Application for Temporary Restraining Order, Temporary Injunction, and Permanent Injunction
filed by DCI in the 362" District Court of Denton County. [See Exhibit A]. The only two
parties to the Application for Temporary Restraining Order, Temporary Injunction, and
DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 13Permanent Injunction were DCI and Dyer. Texas law is clear that Rule 11 applies only to
agreements between the partics to a pending lawsuit. TEX. R. Crv. P. 11; Austin, 603 S.W.2d at
207. In this case, since the Rule 11 agreement in question was between only DCI and Dyer, it
cannot be enforced against Geeting, since he was not a party to the Denton County lawsuit.
4.07 Moreover, a review of the plain language of the entire transcnpt from the March
19" hearing on DCI’s Application for Temporary Injunction establishes that the parties never
agrecd to the validity and effect of Contreras’ purported transfer. As stated above, the question
regarding whether the terms of a contract are sufficiently definite to determine the parties’ legal
obligations and liabilities is a question of law to be decided by the trial court. 7.0. Stanley Boot
Co., 847 S.W.2d at 221; Searcy, 201 S.W.3d at 322. When interpreting a contract, the trial court
must examine the entire agreement in an effort to harmonize and give effect to all provisions of
the contract so that none will be meaningless. Worldwide Asset Purchasing, L.L.C. v. Rent-A-
Center East, Inc., --- S.W.3d ----, 2009 WL 2343258, *3 (Tex.App.—Dallas 2009, no pet.). This
is especially true in the case of Rule 11 agreements, where the trial court must review “the
language used in the entire agreement ‘in light of the surrounding circumstances, including the
state of the pleadings, the allegations therein, and the attitude of the partics in respect to the
issues.” Sitaram v. Aetna U.S. Healthcare of North Texas, Inc., 152 S.W.3d 817, 824
(Tex.App.—Texarkana 2004, no pet.) quoting Herschbach v. City of Corpus Christi, 883 S.W.2d
720, 734 (Tex.App.—Corpus Christi 1994, writ denied). If the agreement upon which the
plaintiff relies is so indefinite as to make it impossible for the court to determine the legal
obligations of the parties, the agreement is unenforceable as a matter of law. Searcy, 201 S.W.3d
at 322.
DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER Page 144.08 In this case, it is clear from the plain language of the transcript from the March
19, 2004 hearing on DCI’s Application for Temporary Injunction — as well as the pleadings, the
surrounding circumstances, the correspondence and the attitude of the parties - that DCI never
stipulated to the legal “validity and effect” of Contreras’ purported assignment. Sitaram, 152
S.W.3d at 824. In fact, a review of the entire March 19" transcript will reveal that the question
of whether the Contreras assignment is valid and effective is never even raised by the parties’
attorneys during the March 19" hearing. [See Exhibit C]. Moreover, a review of DCI’s
Application for Temporary Restraining Order, Temporary Injunction, and Permanent Injunction,
which was filed in the Denton County lawsuit, will reveal that the purpose behind DCI’s
Application for Temporary Restraining Order was not to establish the validity and effect of
Contreras’ assignment - which, incidentally, DCI never even learned of until the date of the
March 19" hearing. To the contrary, the purpose of the hearing on DCI’s Application for
Temporary Injunction was to extend the relief granted in the March 9, 2004 temporary
restraining order; namely, to prevent Dyer from continuing to contact DCI’s customers and
represent that he had a controlling ownership interest in the company. [See Exhibit B; see also
3-19-04 Hearing Transcript, Exhibit C]. Even the Denton County District Court acknowledged
as much at the March 19, 2004 hearing, stating that the parties had “come to an agreement to
extend the temporary restraining order.” [See Exhibit C]. That is why Mr. Nye agreed that
Dyer would not “unlawfully interfere with the business of DCI,” would not “represent to any
customers or third persons that he is an agent, officer, or director of DCI,” would not “disparage
DCI or its officers or directors to third parties,” and would not “represent that he’s an authorized
representative” of DCI. [See Exhibit C].
DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 15.4.09 If the Court, after reviewing the March 19, 2004 hearing transcript and the
pleadings of the parties in the Denton County lawsuit, is sti// not convinced that the “validity and
effect” of Contreras’ purported assignment was never onc of the material terms of the parties’
March 19, 2004 Rule 11 agreement, then a review of the Agreed Temporary Injunction and the
correspondence between the parties regarding same should remove any such doubt. Specifically,
the May 6, 2004 Agreed Temporary Injunction (which effectively replaced the March 19, 2004
Rule 11 agreement and rendered it unenforceable as a matter of law, as explained below) signed
by both counsel for DCI and counsel for Dyer wholly fails to mention the “validity and effect” of
Contreras’ alleged assignment of shares to Dyer, nor Dyer’s ability to represent to third parties
that he owns a 29% interest in DCI. [See Exhibit F]. Although counsel for DCI forwarded
counsel for Dyer a draft of the proposed order on March 26, 2009, and requested that he make
any necessary modifications to the proposed order [See Exhibit D], and although counsel for
Dyer represented in his letter dated April 1, 2004 that he reviewed the proposed order and
compared it to the transcript from the March 19, 2004 hearing {See Exhibit E], counsel for Dyer
did not modify the proposed order to include any reference to the Contreras assignment, or the
“validity and effect thereof.” (See Exhibit F]. Thus, it is clear from the plain language of the
Agreed Temporary Injunction, as well as the correspondence between counsel regarding same,
that the parties never intended to the Rule 11 agreement in question to establish the “validity and
effect” of the Contreras assignment at the March 19, 2004 hearing. As such, there is no way that
such a stipulation can reasonably be interpreted as a “clear and definite” term of the parties’ Rule
11 agreement, as required to be enforceable against DCI and Geeting. Engelman Irr. Dist., 960
S.W.2d at 352.
DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER Page 164.10 Despite the plain language and purpose of the Rule 11 agreement in question, as
well as the plain language of the Agreed Temporary Injunction and the correspondence between
counsel regarding same, counsel for Dyer would like for this Court to believe that Mr. Nowak’s
four-word response to Mr. Nye somehow constituted a stipulation by DCI recognizing the legal
validity and effect of Contreras’ assignment of shares to Dyer — an assignment that counsel for
DCI had never seen, and in fact, had never even heard of until Mr. Nye disclosed the existence of
same at the March 19, 2004 hearing. In so doing, counsel for Dyer is attempting to give the Rule
11 agreement in question far greater effect than was actually intended by the parties. Austin, 603
$.W.2d at 207. It is clear from “the language used in the entire agreement ‘in light of the
surrounding circumstances, including the state of the pleadings, the allegations therein, and the
attitude of the parties in respect to the issues,’” that neither DCI nor Geeting ever agreed to the
legal validity and effect of the Contreras assignment. Sitaram, 152 8.W.3d at 824. It is also
clear that this latest manufactured claim is nothing more than an attempt by counsel for Dyer to
make Mr. Nowak a fact witness in this case, in violation of the Texas Disciplinary Rules of
Professional Conduct.
4.11 The Dallas Court of Appeals made clear in Searcy v. DDA, Inc. that if the plaintiff
asserting a breach of contract claim cannot present sufficient summary judgment evidence
establishing the “clear and definite” terms of the parties’ contract, then the defendant is entitled
to summary judgment as a matter of law. Searcy, 201 S.W.3d at 322 (summary judgment proper
where plaintiff failed to provide sufficient summary judgment evidence of a “mecting of the
minds on the material terms of the alleged contract such to indicate the legal obligations and
liabilities of the parties”). In this case, not only does Dyer have insufficient summary judgment
evidence to raise a genuine issue of material fact regarding whether the “validity and effect” of
DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER ~ Page 17Contreras’ assignment of shares to Dyer was a “clear and definite” term of the partics’
agreement, but the summary judgment evidence attached hereto establishes that neither DCI nor
Geeting ever stipulated to the “validity and effect” of Contreras’ assignment and that counsel for
Dyer is attempting to give this stipulation far greater effect than was actually intended by the
parties. As such, DCI and Geeting respectfully request that the Court grant their Traditional and
No Evidence Motion for Summary Judgment as to Dyer’s breach of Rule 11 agreement claim.
B. Rule 11 Agreement Extinguished by Agreed Temporary Injunction
4.12 “Merger, with respect to the law of contracts, refers to the extinguishment of one
contract by its absorption into another contract and is largely a matter of the intention of the
parties.” Smith v. Smith, 794 §.W.2d 823, 827-828 (Tex.App.—Dallas, 1990, no writ) (emphasis
added). Merger happens when the same parties to an earlicr agreement later enter into a written
agreement covering the same subject matter. Fish v. Tandy Corp., 948 S.W.2d 886, 898
Tex.App.—Fort Worth,1997, pet. denied). Absent pleading and proof of ambiguity, fraud, or
accident, all prior oral and written agreements between the parties are presumed to merge into
the subsequent wrilten agreement. Yasuda Fire and Marine Ins. Co. of America v. Criaco, 225
S.W.3d 894, 899 (Tex.App.—Houston [14 Dist.], 2007, no pet.). Additionally, Texas law is
clear that the merger doctrine equally applies to Rule 11 agreements. See /d. Where a Rule 11
agreement is superseded by a subsequent settlement agreement, the Rule 11 agreement is
extinguished and therefore cannot add to, subtract or vary the obligations contained in the
language of the settlement agreement. /d.; In re S.A.H, M.R.H., 2001 WL 124493, *2
(Tex.App.—Houston [14 Dist.] 2001, no pet. his.) (where subsequent settlement agreement
incorporated all of prior Rule 11 agreement except for one provision, the settlement agreement
superseded prior Rule 11 agreement, which is unenforceable). The applicability of the merger
DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER — Page 18doctrine is a question of law. GXG, Inc. v. Texacal Oil & Gas, 977 S.W.2d 403, 415
(Tex.App.—Corpus Christi 1999, pet. denied).
4.13 As explained in detail above, it is undisputed that DCI and Dyer entered into an
Agreed Temporary Injunction less than two months after the March 19, 2004 Rule |] agreement
was entered into the record wherein Dyer agreed to immediately cease from
1) representing that [he] owns a majority of stock or has control of [DCI] to any
third parties, [DCI’s] customers, or any business entities,
2) representing that (he) is an authorized representative or agent of [DCI] to any
third parties, [DCI’s] customers or any business entities,
3) unlawfully interfering with [DCI’s] existing business relationships (including,
but not limited to The Home Depot, The Great Indoors, Lowes Home
Improvement and Fry’s Electronics);
4) making any disparaging communications or remarks with regard to [DCI], its
officers, or its directors to any third parties, [DCI’s] customers or any business
entities.
(Exhibit F]. It is undisputed that the March 19, 2004 Rule 11 agreement and the subsequent
Agreed Temporary Injunction concerned the exact same subject matter and involved the exact
same parties. (See Exhibit C; Exhibit F]. Although counsel for Dyer had an opportunity to
review and modify the proposed Agrecd Temporary Injunction, and did in fact make minor
modifications to the Agreed Temporary Injunction [See Exhibit E], it is undisputed that the
Agreed Temporary Injunction is silent regarding Contreras’ alleged assignment of shares to Dyer
and the “validity and effect” thereof. [See Exhibit F]. Because the May 6, 2004 Agreed
Temporary Injunction concerns the exact same subject matter and exact same parties as the
March 19, 2004 Rule 11 agreement, Texas law presumes that the March 19, 2004 Rule
agreement has been extinguished and superseded by the subsequent Agreed Temporary
Injunction. Criaco, 225 S.W.3d at 899. Thus, since Dyer has failed to plead or present any
DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 19evidence of ambiguity, fraud, or accident with regard to the subsequent Agreed Temporary
Injunction, Texas law is clear that the March 19, 2004 Rule 11 agreement is unenforceable as a
matter of law. Therefore, DCI and Geeting respectfully request that the Court grant their
Traditional and No Evidence Motion for Summary Judgment as to Dyer’s breach of Rule 11
agreement claim.
Cc Dyer’s Breach of Rule 11 Agreement Claim is Barred by Res Judicata
4.14 Rule 11 of the Texas Rules of Civil Procedure provides that “no agreement
between attorneys or parties touching any suit pending will be enforced unless it be in writing,
signed and filed with the papers as part of the record, or unless it be made in open court and
entered of record.” TEX. R. Clv. P. 11. As the Texas Supreme Court observed, “Rule 11 is a
minimum requirement for enforcement of all agreements concerning pending suits.” Kennedy v.
Hyde, 682 S.W.2d 525, 528 (Tex. 1984) (emphasis added). Moreover, where a party, through
the use of diligence, could have litigated a cause of action or defense in a prior lawsuit, the
doctrine of res judicata bars re-litigation of that issue in a subsequent lawsuit. Bonnivwell v.
Beech Aircraft Corp., 663 $.W.2d 816, 818 (Tex. 1984); Antonini v. Harris County Appraisal
Dist., 999 S.W.2d 608, 615 (Tex.App—Houston tia Dist.] 1999, no pet.).
4.15 As stated above, Dyer argues that during the March 19, 2004 hearing on DCI’s
temporary injunction, DCI’s attorneys stipulated to the “validity and effect” of Contreras’ March
3, 2004 assignment of shares to Dyer, and breached that agreement by filing a declaratory judgment
action secking to invalidate Contreras’ purported assignment. It is undisputed that the alleged
stipulation that Dyer is secking to enforce against DCI and Gceting was entered into the record in a
proceeding before the 362™ Judicial District Court of Denton County, Texas, not in this lawsuit.
[See Exhibit C]. It is also undisputed that at the time of DCI and Geeting’s alleged breach ~ which
DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER Page 20occurred on November 15, 2006, the date DCI’s filed its Petition for Declaratory Judgment
seeking to declare Conteras’ assignment of shares to Dyer invalid — the lawsuit before the 362”
Judicial District Court was still pending. [See Exhibit G]. As such, Dyer could have, and indeed,
should have brought his claim for breach of Rule 11 agreement in the Denton County lawsuit at that
time. Instead of doing so, Dyer allowed the Denton County lawsuit to be dismissed for want of
prosecution on January 22, 2007. [Exhibit G]. As referenced above, Texas law is clear that the
doctrine of res judicata “prevents the litigation of a claim or cause of action that has been finally
adjudicated, as well as all related matters that, with the use of diligence, should have been litigated
in the prior suit.” Antonini, 999 $.W.2d at 615. Because Dyer did not diligently bring his cause
of action for breach in the Denton County lawsuit, but instead allowed the Denton County
lawsuit to be dismissed for want of prosecution, Dyer is prevented by the doctrine of res judicata
from asserting a breach of Rule 11 agreement cause of action in this lawsuit. DCI and Gecting
are therefore entitled to summary judgment as to Dyer’s breach of Rule 1! agreement claim as
matter of law.
D. Stipulations as to Legal Conclusions are not Binding on DCI or this Court
4.16 While stipulations as to facts may be enforceable against a party under a breach of
contract claim, stipulations as to legal conclusions are not binding on either courts or partics.
Caprock Investment Corp. v. Federal Deposit Ins. Corp., 17 $.W.3d 707, 713 (Tex.App.—
Eastland 2000, pet. denied). The question regarding whether Contreras’ March, 3, 2004
assignment to Dyer is “valid and effective” is a legal question to be decided by this Court, not a
factual stipulation to be agreed to by the parties. In fact, DCI’s declaratory judgment action
seeks a judicial determination regarding this very issue. [See DCI’s First Amended Petition for
Declaratory Judgment]. Because the stipulation that Dyer is attempting to enforce against DCI is
DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 21a tegal conclusion, and not a stipulation of fact, Texas law is clear that the stipulation is not
binding on either DCI or this Court. /d. Therefore, the caselaw cited herein makes clear that
DCI and Geeting are entitled to summary judgment on Dyer’s breach of Rule 1] agreement
claim as a matter of law.
E. The Summary Judgment Evidence Establishes _DCI’s_ Affirmative Defense of
Fraudulent Inducement/Negligent Misrepresentation
4.17 To the extent that the Court determines that DCI and/or Geeting agreed to the
validity and effect of the Contreras assignment to Dyer during the March 19, 2004 hearing on
DCI’s Application for Temporary Injunction, DC] is entitled to summary judgment as to Dyer’s
breach of Rule 11 agreement claim because the summary judgment evidence attached hereto
establishes DCI’s affirmative defense of fraudulent inducement/negligent misrepresentation as a
matter of law. In order to prove a cause of action for fraudulent inducement, a party must
establish the following elements: 1) that a material representation was made; 2) the
representation was false; 3) when the representation was made, the speaker knew it was false or
made it recklessly without any knowledge of the truth and as a positive assertion, 4) the speaker
made the representation with the intent that the other party should act upon it; 5) the party acted
in reliance on the representation; and 6) the party thereby suffered injury. Jn re FirstMerit Bank,
N.A., 52 §.W.3d 749, 758 (Tex. 2001). In order to prove a cause of action for negligent
misrepresentation, a party must establish the following elements: 1) the defendant made a
representation to the plaintiff, 2) the defendant supplicd false information for the guidance of
others; 3) the defendant did not exercise reasonable care or competence in obtaining or
communicating the information, 4) the plaintiff justifiably relied on the representation; and 5) the
defendant’s negligent misrepresentation proximately caused the plaintiff's injury. McCamish,
Martin, Brown & Loeffler v. F.E. Appling Interests, 991 S.W.2d 787, 791 (Tex.1999).
DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 224.18 In this case, the summary judgment evidence attached hereto conclusively
establishes that Dyer, through his former counsel, Ken Nye, fraudulently/negligently induced
DCI to enter into the March 19, 2004 Rule 11 agreement by virtue of Mr. Nyc’s representations
that Contreras had perfected a valid assignment of her 10% ownership interest in DCI to Dyer.
(See Exhibit C]. Said representation was false, as Contreras purported assignment was
fraudulent on its face. Specifically, although Contreras stated, under oath, in the legal document
purporting to assign her interest in DCI to Dyer that the stock in question was “TRANSFERRED
FOR GOOD AND VALUABLE CONSIDERATION,” in truth, Contreras received no
consideration for said transfer. Specifically, when questioned regarding whether she received
any consideration for the assignment in question at her deposition, Contreras testified as follows:
Q. Did you receive any type of consideration -- and when I say that, I'm not just taking about
payment in money -- services or anything like that that you received for your transfer or
assignment of your shares to Craig Dyer?
A. No.
MR. SEWELL: Objection, form.
Q. So if | understood you correctly, Ms. Dyer, you basically didn’t receive any money, any
payment or any type of service or consideration for your transfer of your ten percent of
the shares of DCI to Craig Dyers. Is that correct?
MR. SEWELL: Objection, form.
A. That's correct.
(See Exhibit J at p. 15,1. 1 - 14).
4.19 Thus, it is clear from Ms. Contreras’ deposition testimony that the purported
assignment was fraudulent on its face, and Dyer’s representation through his counsel, Kenneth
Nye, to counsel for DCI at the March 19, 2004 hearing was false. It is also clear that Dyer either
knew the representation was false, made the representation recklessly, or negligently.
DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 23Specifically, Dyer was obviously aware that he had paid Contreras no consideration for such
shares. [See Exhibit J at p. 15,1. 1 — 14]. Despite this fact, Mr. Nye, on behalf of Dyer, made
this false representation with the intent that counsel for DC] and Gecting rely on it, and DCI and
Geeting did in fact rely on it, agreeing to enter into the Rule 11 agreement in question. [See
Exhibit C]. Moreover, DCI and Geeting have suffered injury and damages as a result of Dyer’s
false representation in the form of attorney’s fees to defend against the breach of Rule 11
agreement claims asserted by Dyer and Contreras. Because the summary judgment evidence
attached hereto cstablishes DCI and Geeting’s affirmative defense of fraudulent
inducement/negligent misrepresentation, DCI and Geeting are entitled to summary judgment as
to Dyer’s breach of Rule 11 agreement claim as a matter of law.
PRAYER
WHEREFORE, PREMISES CONSIDERED, Dyer Custom Installation, Inc. n/k/a Pro
Plumbing & Appliance Installation, Inc. and Joseph Geeting respectfully request that their
Traditional and No-Evidence Motion for Summary Judgment against Craig Dyer be set for
hearing in accordance with Texas Rule of Civil Procedure 166a and, at the conclusion of said
hearing, that DCI’s Traditional and No-Evidence Motion for Summary Judgment be granted in
its entirety, and that DCI and Geeting be granted such other and further relief, at law or in equity,
to which they may be justly entitled.
DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 24Respectfully submitted,
Nowak & STAUCH, LLP
py _LKtthal ft rae
Matthew A. Nowak
State Bar No, 00794382
Thomas R. Stauch
State Bar No. 00794687
Brandon L. Starling
State Bar No. 24047556
4144 N. Central Expressway, Suite 300
Dallas, Texas 75204
(214) 823-2006 telephone
(214) 823-2007 facsimile
ATTORNEYS FOR DEFENDANTS
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document was served in
accordance with TEXAS RULES OF CIVIL PROCEDURE 21 and 21a on ail parties to this case
on this the 24 day of August 2009.
Matthew A. Nowak
DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 25FIAT
Ut
A hearing on this motion is scheduled for Ga. 00 &¥p-m,, on the
day of _\ Jo Vv , 2009, in the above-referenced court.
Signed this zt day of August, 2009.
Gris. fllewth
JUDE PRESIDING QS
DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER -- Page 26Cope PK
DYER CUSTOM INSTALLATION, INC,
Plaintiff, geureche
vs. ee
CRAIG DYER,
Defendant.
§ DENTON COUNTY, TEXAS
APPLICATION FOR TEMPORARY RESTRAINING ORDER, TEMPORARY
INJUNCTION, AND PERMANENT INJUNCTION
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW, DYER CUSTOM INSTALLATION, INC. and files this its Application
for Temporary Restraining Order, Temporary Injunction, and Permanent Injunction, and would
show the Court as follows:
I
PARTIES
Dyer Custom Installatio
Preview
} . @ CAUSE NO. 04-01100-M CRAIG DYER, IN THE DISTRICT COURT Plaintiff, vs. DYER CUSTOM INSTALLATION, INC. (DCI), JOSEPH GEETING, SUSAN LAMBERT, RICHARD GEETING and LAURI GEETING Defendants. PRO PLUMBING & APPLIANCE INSTALLATION, INC. f/k/a DYER CUSTOM INSTALLATION, INC. 2 wo 3 298M JUDICIAL Di RIG, & ° Plaintiff, vs. CRAIG DYER, MELISA CONTRERAS, and THE ESTATE OF LARRY DYER Defendants. DALLAS COUNTY, TEXAS DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST PLAINTIFF CRAIG DYER TO THE HONORABLE JUDGE OF SAID COURT: COME NOW, Dyer Custom Installation, Inc. (“DCI”) n/k/a Pro Plumbing & Appliance Installation, Inc. and Joseph Geeting (““Geeting”), Defendants in the above-styled and numbered cause, and file this their Traditional and No-Evidence Motion for Summary Judgment Against Plaintiff Craig Dyer in accordance with Rule 166a(c) and (i) of the TEXAS RULES OF ClVIL PROCEDURE, and in support thereof, would respectfully show the court as follows: DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page |L SUMMARY JUDGMENT EVIDENCE 1.01 In support of their motion for summary judgment, DCI and Joseph Geeting rely on the pleadings of the parties and the following evidence, the authenticity of which is undisputed: A. Application for Temporary Restraining Order, Temporary Injunction, and Permanent Injunction, a truc and correct copy of which is attached as Exhibit “A”; Order Granting Plaintiffs Application for Temporary Restraining Order and Order to Show Cause, a true and correct copy of which is attached as Exhibit “B”; Transcript from the 3-19-04 Hearing on DCI’s Application for Temporary Restraining Order and Temporary Injunction, a true and correct copy of which is attached as Exhibit “Or; Matthew Nowak letter dated 3-26-04, a true and correct copy of which is attached hereto as Exhibit “D"; Lawrence Hosmer letter dated 4-1-04, a true and correct copy of which is attached hereto as Exhibit “E”; Agreed Temporary Injunction, a true and correct copy of which is attached hereto as Exhibit “F”; Order of Dismissal, a true and correct copy of which is attached hereto as Exhibit “G”; Mitchell Madden letter dated 2-28-05, a true and correct copy of which is attached hereto as Exhibit “H”; Melisa Contreras and Larry Dyer Assignments, true and correct copies of which are attached hereto as Exhibit “1”; DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER = Page 2J. Excerpts from Deposition of Melisa Contreras, a true and correct copy of which is attached as Exhibit “J”; K. Excerpts from Deposition of Larry Dyer, a true and correct copy of which is attached as Exhibit “K”, and L. Pro Plumbing & Appliance Installation, Inc. f/k/a Dyer Custom Installation, Inc.'s Petition for Declaratory Judgment, a true and correct copy of which is attached as Exhibit “LY, 1,02 The above-listed evidence is hereby incorporated by reference. I. B ACKGROUND FACTS 2.01 On or about February 11, 2004, Plaintiff Craig Dyer (‘Dyer’) filed suit against DCI, Joseph Geeting and Susan Lambert in the Dallas County District Courts, alleging numerous frivolous causes of action and seeking discovery of DCI’s financial and corporate records. [See Plaintiff's Original Petition]. On March 9, 2004, Matthew A. Nowak, counsel for DCI, filed an Application for Temporary Restraining Order, Temporary Injunction and Permanent Injunction against Dyer in the 362™ District Court of Denton County, Texas, seeking to enjoin Dyer and his attomey, Mitchell Madden, from contacting DCI’s customers and interfering with DCI's contracts and existing business relationships. [See Application for Temporary Restraining Order, Temporary Injunction, and Permanent Injunction, Exhibit A]. The Denton County District Court granted DCI’s Temporary Restraining Order on March 9, 2004, and a hearing on the Temporary Injunction was scheduled for March 19, 2004. [See Order Granting Plaintiffs Application for Temporary Restraining Order and Order to Show Cause, Exhibit B]. The purpose of the March rg" hearing on DCI’s Application for Temporary Injunction, as reflected by the transcript attached hereto as “Exhibit C,” was to extend the relief granted in the March 9, 2004 temporary DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 3restraining order; namely, to prevent Dyer and his attomey from continuing to contact and represent to DCI’s customers that he had a controlling ownership interest in the company. [See Exhibit B; see also 3-19-04 Hearing Transcript, Exhibit C]. 2.02 On the date of the March 19" hearing, Ken Nye, former counsel for Dyer, offered to agree to the relief requested in DCI’s Application for Temporary Injunction. [See Exhibit C]. Specifically, Mr. Nye, on behalf of Dyer, agreed that Dyer would refrain from continuing to contact DCI’s customers and interfering with DCI’s existing business relationships. [See Exhibit C]}. However, Mr. Nye also represented to both counsel for DCI and the 362" District Court that Melisa Contreras (“Contreras”), Dyer’s common-law wife, had validly assigned her 10% ownership interest in DCI to Dyer (though he failed to produce a copy of said Assignment at the hearing), making Dyer’s total alleged ownership interest in the company 29%. [See Exhibit C]. That was the very first time that counsel for DCI had ever been made aware of this purported assignment. In exchange for Dycr’s agrcement to refrain from representing that he owned a controlling interest in the company, Mr. Nye requested that Dyer be allowed to “represent to anybody” that he owned a 29% ownership interest in DCI. [See Exhibit C]. 2.03 Content with Dyer’s agreement to refrain from representing that he owned a controlling interest in DCI and relying on Mr. Nye’s representations to both counsel for DC! and the Court that Contreras had validly assigned her interest in DCI to Dyer, DCI agreed to allow Dyer to represent to anybody that he owned a 29% interest in DCI. [See Exhibit C]. Thus, both Mr. Nowak and Mr. Nyc read into the record the substance of the parties’ agreement regarding the Temporary Injunction. [See Exhibit C]. Specifically, Mr. Nyc, on behalf of Dyer, agreed that Dyer would not “unlawfully interfere with the business of DCI,” would not “represent to any customers or third persons that he is an agent, officer, or director of DCI,” would not “disparage DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER Page 4DCI or its officers or directors to third parties,” and would not “represent that he’s an authorized representative” of DCI. [See Exhibit C]. In exchange for said agreement, DCI agreed that it would not disparage Dyer. [See Exhibit C]. In addition, based upon Mr. Nye’s representation of an alleged valid assignment, DCI agreed that Dyer would be allowed to “represent to anybody” that he owned a 29% interest in DCI. [See Exhibit C]. 2.04 By letter dated March 26, 2004 - a week after the March 19" hearing — counsel for DCI forwarded Mr. Nye a proposed order outlining the terms of the parties’ agreement on DCI’s temporary injunction. [See M. Nowak 3-26-04 Letter, Exhibit D]. In the proposed order, Dyer agreed that he and “his agents, employees and attorneys” would immediately cease from 1) representing that Craig Dyer owns a majority of stock or has control of [DCI] to any third parties, [DCI’s] customers, or any business entities; 2) representing that Craig Dyer is an authorized representative or agent of [DCI] to any third parties, [DCI’s] customers or any business entities; 3) unlawfully interfering with [DCI’s] existing business relationships (including, but not limited to The Home Depot, The Great Indoors, Lowes Home Improvement and Fry’s Electronics); 4) making any disparaging communications or remarks with regard to [DCI], its Officers, or its directors to any third parties, [DCI’s] customers or any business entities. (Sce Exhibit D]. In exchange for this agreement, DCI agreed that Dyer could compete with DCI in the marketplace, and that DCI would refrain from “making any disparaging communications or remarks with regard to Craig Dyer to any third parties or business entities.” [Exhibit D]. The proposed order did not address nor even mention Contreras’ alleged assignment of shares to Dyer or Dyer’s ability to represent that he owned a 29% interest in DCI to third parties. [See Exhibit D]. DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 52.05 By letter dated April 1, 2004, Lawrence Hosmer, an attorney in the Law Offices of Mitchell Madden, responded to counsel for DCI’s March 26, 2004 letter, making “a few changes to [DCI’s] proposed Order to more accurately reflect the agreement reached" at the March 19, 2004 hearing. [See L. Hosmer 4-1-04 Letter, Exhibit E]. Counsel for Dyer did not modify the proposed order to reflect Contreras’ alleged assignment of shares to Dyer or Dyer’s ability to represent that he owned a 29% interest in DCI to third parties. [See Exhibit E]. In fact, except for a few minor changes in the wording, counsel for Dyer made no modifications to the material terms of the parties’ agreement. [See Exhibit E]. Thus, the Agreed Temporary Injunction, which was executed by the 362™ District Court of Denton County on May 6, 2004, contains no mention or reference to the Contreras assignment or the validity and effect thereof. [Agreed Temporary Injunction, Exhibit F]. The Denton County case was eventually dismissed for want of prosecution on January 22, 2007. [Order of Dismissal, Exhibit G]. 2.06 Over the course of the next several weeks and months, counsel for DCI repeatedly requested that counsel for Dyer produce a copy of the legal document which purported to assign Conteras’ shares to Dyer. However, it was not until February 28, 2005 — almost a year after the March 19, 2004 hearing — that counsel for Dyer finally produced the purported assignment in question, as well as the purported assignment of Larry Dyer, Dyer’s father. Specifically, by letter dated February 28, 2005, Mitchell Madden forwarded counsel for DCI the alleged assignments in question. [See M. Madden 2-28-05 Letter, Exhibit H]. In that letter, Mr. Madden informed DCI that “Ms. Contreras and Mr. Dyer have conveyed all of their right, title and interest in the stock ownership in DCI to my client, Craig Dyer.” [Exhibit H]. Additionally, both Contreras’ assignment and Larry Dyer’s assignment, which were attached to Madden letter and sworn to by both Contreras and Larry Dyer, alleged that the stock in question was “TRANSFERRED FOR DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 6GOOD AND VALUABLE CONSIDERATION.” [See Assignments, Exhibit I]. After taking both Larry Dyer’s and Conteras’ depositions, however, DC] learned that neither Contreras nor Dyer had received any consideration whatsoever for the assignment of the stock in question, contrary to the plain language of the assignments. [See M. Contreras Deposition, Exhibit J at p. 15, 1. 1-14; L. Dyer Deposition, Exhibit K at p. 89, 1. 23 - p. 90, 1. 4]. Thus, once it was determined that the assignments in question were invalid and fraudulent on their face, DCI filed suit against both Contreras and the Estate of Larry Dyer (who had since passed away) on November 15, 2006, secking a declaratory judgment establishing the legal invalidity of the assignments in question. [See Pro Plumbing & Appliance Installation, Inc. f/k/a Dyer Custom Installation, Inc.’s Petition for Declaratory Judgment, Exhibit L). 2.07 This case was scheduled to go to trial on January 5, 2009. However, counsel for Dyer filed a Motion for Continuance a few days before the January 5" trial setting, which was granted by the Court on or about December 29, 2008. [See Motion for Continuance}. Thus, the January 5" trial setting was continued by this Court. [See Order Granting Continuance]. Despite the fact that the pleading deadline had long since passed, Dyer, in a transparent attempt to disqualify counsel for Defendants, Matt Nowak, by unnecessarily labeling him a fact witness in this case, filed his Second Amended Original Petition on February 26, 2009, alleging a breach of Rule 11 agreement claim against DCI and Geeting, despite the fact that Geeting was not a party to the Rule 11 agreement and despite the fact that the Rule 11 agreement in question had been extinguished by the subsequent May 6, 2004 Agreed Temporary Injunction. ' [See Plaintiff's Second Amended Original Petition]. Specifically, Dyer now alleges that Mr. Nowak’s agreement, " Incidentally, a thorough review of Texas authority has failed to reveal a single Texas case in which a lawyer was disqualified under Rule 3.08 of the Texas Disciplinary Rules of Professional Conduct for being a fact witness to a Rule 11 agreement. Undoubtedly, no Texas court has ever ruled as such because of the dangerous precedent it would set, making every attorney who enters into a Rule 1] agreement on behalf of his client a potential fact witness, subject to disqualification. DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 7on behalf of DCI, to allow Dyer to “represent to anybody" that he owned a 29% interest in DCI at the March 19, 2004 hearing on DCI’s Application for Temporary Injunction, somehow constitutes an agreement by DCI recognizing the legal “validity and effect” of Contreras’ assignment — a legal document that was not produced by counsel for Dyer until almost a year after the hearing, and that Mr. Nye represented to both the Court and Mr. Nowak (cither negligently, recklessly or intentionally) was valid and enforceable. [See Plaintiff's Second Amended Orginal Petition, see also Exhibit C]. Apparently, Dyer alleges that DCI (and Geeting) — by filing a declaratory judgment action seeking to invalidate the fraudulent assignment — has somehow breached this purported Rule 11 agreement, and that he has standing to assert this claim in a separate, subsequent lawsuit. As explained below, not only is there no evidence of each element of Dyer’s breach of Rule }1 agreement claim, but the summary judgment attached hereto and the caselaw cited herein conclusively negate one or more of the essential elements of Dyer’s claims for breach of Rule 11 agreement against DCI and Geeting. It SUMMARY JUDGMENT STANDARD A. Traditional Summary Judgment 3.0! A party against whom a claim is asserted may, at any time, move for summary judgment. TEX. R. Civ. P. 166a(b). A defendant is entitled to summary judgment if it disproves at least one essential element of the plaintiff's cause of action as a matter of law. See Friendswood Dev. Co. v. McDade & Co., 926 S.W.2d 280, 282 (Tex. 1996). A defendant is equaily entitled to summary judgment if it proves every element of its affirmative defense. See Velsicol Chem. Corp. v. Winograd, 956 S.W.2d 529, 530 (Tex. 1997). The purpose of the summary judgment rule is to climinate unmeritorious claims or untenable defenses. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 n. 5 (Tex. 1979) (citing Gulbenkian v. DC] AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 8Penn, 252 S.W.2d 929, 931 (Tex. 1952). Summary judgment allows quick disposal of cases that do not present genuine issues of material fact. See New Jersey Bank v. Knuckley, 637 S.W.2d 920, 921 (Tex. 1982). B. No-Evidence Summary Judgment 3.02 A movant is entitled to summary judgment if the movant can show that adequate time for discovery has passed and the non-movant fails to produce evidence to support one or more essential elements of the non-movant’s claim or defense. TEX. R. Civ. P. 166a(i). Although the plaintiff need not marshal his proof, he must present sufficiently probative evidence to raise a genuine issue of material fact as to the challenged clements. See Southwestern Elec. Power Co. v. Grant, 73 §.W.3d 211, 215 (Tex. 2002). The Court must grant this Motion unless the respondent produces summary judgment evidence that raises a genuine issue of material fact. See Flameout Design & Fabrication, Inc. v. Penncoil Caspien Corp., 994 S.W.2d 830 (Tex.App.—Houston 1999, no writ) (citing Jackson v. Fieston Mart, Inc., 979 S.W.2d 68, 70 (Tex.App.—Austin 1998, no pet.). The evidence produced must “rise to a level that would enable reasonable and fair-minded people to differ in their conclusions.” Valero Mktg. & Supply Co. v. Kalama Int'l, 51 §.W.3d 345, 351 (Tex. App.— Houston [1* Dist.] 2001, no pet.) (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). This case has been on file since February 11, 2004. As such, there has been an adequate time for discovery. IV. ARGUMENTS & AUTHORITIES 4.01 As stated above, Dyer alleges that during the hearing on DCI's Application for Temporary Injunction filed in the 362™ Judicial District Court of Denton County, Texas, “Nowak & Stauch, on behalf of their clients agreed on the record and in open court to the Contreras transfer (of shares to Dyer] and to the validity and effect thereof.” [See Plaintiff's Second Amended DC] AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 9Original Petition]. As proof of this purported agreement, Dyer relies on the following excerpt from the transcript of the March 19, 2004 hearing: Mr. Nye: That’s agreed, Judge. We have discussed the fact — if we could just have a moment about ownership. We don’t have any problem with that, saying he’s an authorized representative of DCI. Mr. Dyer will not represent that he controls DCI. | believe, though, that Mr. Dyer can represent to anybody his actuai ownership of the company that’s undisputed. Mr. Stauch: — The undisputed ownership being 19 percent. Mr. Nye: Plus the ten percent he just got. Mr. Nowak: 29 percent, that’s fine. (Exhibit C]. Dyer apparently contends that Mr. Nowak’s four-word statement, “29 percent, that’s fine,’ somehow constitutes a “valid and enforceable” Rule 11 agreement wherein DCI and Geeting agreed to the legal “validity and effect” of Contreras’ assignment to Dyer. 4.02 However, as the summary judgment evidence attached hereto makes clear, neither DCI nor Geeting ever stipulated to the legal validity and effect of the Contreras’ assignment at the March 19, 2004 hearing, nor was this stipulation one of the clear and definite terms of Mr, Nye’s offer or the parties’ agreement. To the contrary, Mr. Nowak’s four-word statement was directly in response to Mr. Nyc’s statement regarding what Dyer could represent to third parties, not conclusive proof of his ownership interest in DCI. Additionally, the summary judgment evidence and casclaw cited herein will further show that the Agreed Temporary Injunction executed by the Denton County court on May 6, 2004 replaced the Rule 1] agreement upon which Dyer’s breach of Rule 11 agreement claim is based, and as such, the Rule 11 agreement has been extinguished and is no longer enforceable. The summary judgment evidence will further show that DCI’s agreement to allow Dyer to represent that he owned a 29% interest in DCI was predicated on Mr. Nyc’s DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 10representations to both the Court and counsel for DCI that Contreras had validly assigned her shares in DCI to Dyer. However, said representations were false. Moreover, the casclaw cited herein will show that even if the Court were to agree with Dyer’s allegation that the DCI and Geeting stipulated to the “validity and effect” of the Contreras’ assignment, neither DCI, Geeting or the Court is bound by said legal conclusion, and Dyer does not have standing to file suit to enforce said stipulation in this lawsuit. Finally, Dyer cannot, by answers to interrogatories, admissions on file, deposition testimony or any other admissible evidence, present sufficient summary judgment evidence to establish a genuine issue of material fact as to one or more of the essential elements of his breach of Rule 11 agreement claim against DCI and Geeting. For these reasons, DCI and Geeting respectfully request that the Court grant their Traditional and No Evidence Motion for Summary Judgment against Dyer. A Dyer Has Insufficient Summary Judgment Evidence of One or More Elements of His Breach of Rule 11 Agreement Claim Against DCI and Geeting 4.03 To prevail on a breach of contract claim, a plaintiff must establish the following elements: 1) there was a valid, enforceable contract with the defendant; 2) the plaintiff performed, tendered performance of, or was excused from performing his contractual obligations; 3) the defendant breached the contract, and 4) the defendant’s breach caused the plaintiff's injury. Residential Dynamics, LLC v. Loveless, 186 S.W.3d 192, 198 (Tex.App.— Fort Worth 2006, no pet.). In order to prove the existence of a valid and enforceable contract, the plaintiff must establish the following elements: 1) there was an offer; 2) there was an acceptance in strict compliance with the terms of the offer; 3) there was a meeting of the minds; 4) cach party consented to the terms of the offer; and 5) the parties executed the contract with the intent that it be mutual and binding. Searcy v. DDA, Inc., 201 $.W.3d 319, 322 (Tex.App.— Dallas 2006, no pet.). DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page I4.04 Furthermore, both the terms of the offer and the party’s acceptance of the offer must be “clear and definite” for the agreement to be legally enforceable. Engelman Irr. Dist. v. Shields Bros., Inc., 960 S.W.2d 343, 352 (Tex.App—Corpus Christi 1997, pet. denied). The question of whether an agreement is legally enforceable or binding is a question of law for the court. Texaco, Inc. v. Pennzoil Co., 729 S.W.2d 768, 814 (Tex.App.—Houston [1st Dist.] 1987, writ ref'd mr.e.), cert. dism‘d, 485 U.S. 994 (1988). Thus, the enforceability of an agreement depends on whether it is sufficiently definite to allow the court to determine the parties’ legal obligations and liabilities. 7:0. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). All essential terms of the agreement must be agreed upon before it may be enforced by the courts. Searcy, 201 $.W.3d at 322. If the agreement upon which the plaintiff relies is so indefinite as to make it impossible for the court to determine the legal obligations of the parties, it is unenforceable as a matter of law. /d. Moreover, the Texas Supreme Court is clear that an agreement between parties cannot be given greater effect than intended. Austin v. Austin, 603 §.W.2d 204, 207 (Tex. 1980). As such, the jury may not be called upon to construe the legal effect of an agreement or to supply an essential term upon which the parties did not mutually agree. Id.; see also University Nat'l Bank v. Ernst & Whinney, 773 S.W.2d at 710. If the plaintiff cannot present sufficient summary judgment evidence establishing the clear and definite terms of the contract, then the defendant is entitled to summary judgment as a matter of law. Searcy, 201 $.W.3d at 322 (summary judgment proper where plaintiff failed to provide sufficient summary judgment evidence of a “meeting of the minds on the material terms of the alleged contract such to indicate the legal obligations and liabilities of the parties.”). DCi AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 124.05 In this case, Dyer cannot present sufficient summary judgment evidence establishing a genuine issue of material fact as to each of the following clements of his breach of Rule 11 agreement claim: 1, There was a valid, enforceable Rule !1 agreement between Dyer and DCl/Geeting wherein DCI/Geeting agreed to the legal validity and effect of Contreras’ transfer of shares to Dyer, 2. Dyer performed, tendered performance of, or was excused from performing his obligations under the Rule 11 agreement; 3. DCI/Geeting breached the alleged Rule 11 agreement; and 4. DCI/Geeting’s alleged breach caused Dyer’s injury. Residential Dynamics, LLC, 186 S.W.3d at 198. In fact, Dyer cannot even present sufficient summary judgment evidence establishing a genuine issue of material fact that there was a valid and enforceable contract wherein DCI and Geeting agreed to the “validity and effect” of the Contreras’ transfer. Specifically, Dycr cannot present sufficient summary judgment evidence that: 1, Dyer’s offer clearly and definitively communicated his agreement to refrain from contacting DCI’s customers in exchange for DCI/Geeting’s agreement to recognize the legal validity and effect of the Contreras’ transfer; 2. DC1/Geeting accepted Dyer’s offer in strict compliance with such terms; 3. There was a meeting of the minds between DCI/Geeting and Dyer regarding such terms; and 4, DCl/Geeting consented to such terms. Searcy, 201 S.W.3d at 322. 4.06 Asa preliminary matter, it must be pointed out that Geeting was not a party to the Application for Temporary Restraining Order, Temporary Injunction, and Permanent Injunction filed by DCI in the 362" District Court of Denton County. [See Exhibit A]. The only two parties to the Application for Temporary Restraining Order, Temporary Injunction, and DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 13Permanent Injunction were DCI and Dyer. Texas law is clear that Rule 11 applies only to agreements between the partics to a pending lawsuit. TEX. R. Crv. P. 11; Austin, 603 S.W.2d at 207. In this case, since the Rule 11 agreement in question was between only DCI and Dyer, it cannot be enforced against Geeting, since he was not a party to the Denton County lawsuit. 4.07 Moreover, a review of the plain language of the entire transcnpt from the March 19" hearing on DCI’s Application for Temporary Injunction establishes that the parties never agrecd to the validity and effect of Contreras’ purported transfer. As stated above, the question regarding whether the terms of a contract are sufficiently definite to determine the parties’ legal obligations and liabilities is a question of law to be decided by the trial court. 7.0. Stanley Boot Co., 847 S.W.2d at 221; Searcy, 201 S.W.3d at 322. When interpreting a contract, the trial court must examine the entire agreement in an effort to harmonize and give effect to all provisions of the contract so that none will be meaningless. Worldwide Asset Purchasing, L.L.C. v. Rent-A- Center East, Inc., --- S.W.3d ----, 2009 WL 2343258, *3 (Tex.App.—Dallas 2009, no pet.). This is especially true in the case of Rule 11 agreements, where the trial court must review “the language used in the entire agreement ‘in light of the surrounding circumstances, including the state of the pleadings, the allegations therein, and the attitude of the partics in respect to the issues.” Sitaram v. Aetna U.S. Healthcare of North Texas, Inc., 152 S.W.3d 817, 824 (Tex.App.—Texarkana 2004, no pet.) quoting Herschbach v. City of Corpus Christi, 883 S.W.2d 720, 734 (Tex.App.—Corpus Christi 1994, writ denied). If the agreement upon which the plaintiff relies is so indefinite as to make it impossible for the court to determine the legal obligations of the parties, the agreement is unenforceable as a matter of law. Searcy, 201 S.W.3d at 322. DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER Page 144.08 In this case, it is clear from the plain language of the transcript from the March 19, 2004 hearing on DCI’s Application for Temporary Injunction — as well as the pleadings, the surrounding circumstances, the correspondence and the attitude of the parties - that DCI never stipulated to the legal “validity and effect” of Contreras’ purported assignment. Sitaram, 152 S.W.3d at 824. In fact, a review of the entire March 19" transcript will reveal that the question of whether the Contreras assignment is valid and effective is never even raised by the parties’ attorneys during the March 19" hearing. [See Exhibit C]. Moreover, a review of DCI’s Application for Temporary Restraining Order, Temporary Injunction, and Permanent Injunction, which was filed in the Denton County lawsuit, will reveal that the purpose behind DCI’s Application for Temporary Restraining Order was not to establish the validity and effect of Contreras’ assignment - which, incidentally, DCI never even learned of until the date of the March 19" hearing. To the contrary, the purpose of the hearing on DCI’s Application for Temporary Injunction was to extend the relief granted in the March 9, 2004 temporary restraining order; namely, to prevent Dyer from continuing to contact DCI’s customers and represent that he had a controlling ownership interest in the company. [See Exhibit B; see also 3-19-04 Hearing Transcript, Exhibit C]. Even the Denton County District Court acknowledged as much at the March 19, 2004 hearing, stating that the parties had “come to an agreement to extend the temporary restraining order.” [See Exhibit C]. That is why Mr. Nye agreed that Dyer would not “unlawfully interfere with the business of DCI,” would not “represent to any customers or third persons that he is an agent, officer, or director of DCI,” would not “disparage DCI or its officers or directors to third parties,” and would not “represent that he’s an authorized representative” of DCI. [See Exhibit C]. DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 15.4.09 If the Court, after reviewing the March 19, 2004 hearing transcript and the pleadings of the parties in the Denton County lawsuit, is sti// not convinced that the “validity and effect” of Contreras’ purported assignment was never onc of the material terms of the parties’ March 19, 2004 Rule 11 agreement, then a review of the Agreed Temporary Injunction and the correspondence between the parties regarding same should remove any such doubt. Specifically, the May 6, 2004 Agreed Temporary Injunction (which effectively replaced the March 19, 2004 Rule 11 agreement and rendered it unenforceable as a matter of law, as explained below) signed by both counsel for DCI and counsel for Dyer wholly fails to mention the “validity and effect” of Contreras’ alleged assignment of shares to Dyer, nor Dyer’s ability to represent to third parties that he owns a 29% interest in DCI. [See Exhibit F]. Although counsel for DCI forwarded counsel for Dyer a draft of the proposed order on March 26, 2009, and requested that he make any necessary modifications to the proposed order [See Exhibit D], and although counsel for Dyer represented in his letter dated April 1, 2004 that he reviewed the proposed order and compared it to the transcript from the March 19, 2004 hearing {See Exhibit E], counsel for Dyer did not modify the proposed order to include any reference to the Contreras assignment, or the “validity and effect thereof.” (See Exhibit F]. Thus, it is clear from the plain language of the Agreed Temporary Injunction, as well as the correspondence between counsel regarding same, that the parties never intended to the Rule 11 agreement in question to establish the “validity and effect” of the Contreras assignment at the March 19, 2004 hearing. As such, there is no way that such a stipulation can reasonably be interpreted as a “clear and definite” term of the parties’ Rule 11 agreement, as required to be enforceable against DCI and Geeting. Engelman Irr. Dist., 960 S.W.2d at 352. DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER Page 164.10 Despite the plain language and purpose of the Rule 11 agreement in question, as well as the plain language of the Agreed Temporary Injunction and the correspondence between counsel regarding same, counsel for Dyer would like for this Court to believe that Mr. Nowak’s four-word response to Mr. Nye somehow constituted a stipulation by DCI recognizing the legal validity and effect of Contreras’ assignment of shares to Dyer — an assignment that counsel for DCI had never seen, and in fact, had never even heard of until Mr. Nye disclosed the existence of same at the March 19, 2004 hearing. In so doing, counsel for Dyer is attempting to give the Rule 11 agreement in question far greater effect than was actually intended by the parties. Austin, 603 $.W.2d at 207. It is clear from “the language used in the entire agreement ‘in light of the surrounding circumstances, including the state of the pleadings, the allegations therein, and the attitude of the parties in respect to the issues,’” that neither DCI nor Geeting ever agreed to the legal validity and effect of the Contreras assignment. Sitaram, 152 8.W.3d at 824. It is also clear that this latest manufactured claim is nothing more than an attempt by counsel for Dyer to make Mr. Nowak a fact witness in this case, in violation of the Texas Disciplinary Rules of Professional Conduct. 4.11 The Dallas Court of Appeals made clear in Searcy v. DDA, Inc. that if the plaintiff asserting a breach of contract claim cannot present sufficient summary judgment evidence establishing the “clear and definite” terms of the parties’ contract, then the defendant is entitled to summary judgment as a matter of law. Searcy, 201 S.W.3d at 322 (summary judgment proper where plaintiff failed to provide sufficient summary judgment evidence of a “mecting of the minds on the material terms of the alleged contract such to indicate the legal obligations and liabilities of the parties”). In this case, not only does Dyer have insufficient summary judgment evidence to raise a genuine issue of material fact regarding whether the “validity and effect” of DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER ~ Page 17Contreras’ assignment of shares to Dyer was a “clear and definite” term of the partics’ agreement, but the summary judgment evidence attached hereto establishes that neither DCI nor Geeting ever stipulated to the “validity and effect” of Contreras’ assignment and that counsel for Dyer is attempting to give this stipulation far greater effect than was actually intended by the parties. As such, DCI and Geeting respectfully request that the Court grant their Traditional and No Evidence Motion for Summary Judgment as to Dyer’s breach of Rule 11 agreement claim. B. Rule 11 Agreement Extinguished by Agreed Temporary Injunction 4.12 “Merger, with respect to the law of contracts, refers to the extinguishment of one contract by its absorption into another contract and is largely a matter of the intention of the parties.” Smith v. Smith, 794 §.W.2d 823, 827-828 (Tex.App.—Dallas, 1990, no writ) (emphasis added). Merger happens when the same parties to an earlicr agreement later enter into a written agreement covering the same subject matter. Fish v. Tandy Corp., 948 S.W.2d 886, 898 Tex.App.—Fort Worth,1997, pet. denied). Absent pleading and proof of ambiguity, fraud, or accident, all prior oral and written agreements between the parties are presumed to merge into the subsequent wrilten agreement. Yasuda Fire and Marine Ins. Co. of America v. Criaco, 225 S.W.3d 894, 899 (Tex.App.—Houston [14 Dist.], 2007, no pet.). Additionally, Texas law is clear that the merger doctrine equally applies to Rule 11 agreements. See /d. Where a Rule 11 agreement is superseded by a subsequent settlement agreement, the Rule 11 agreement is extinguished and therefore cannot add to, subtract or vary the obligations contained in the language of the settlement agreement. /d.; In re S.A.H, M.R.H., 2001 WL 124493, *2 (Tex.App.—Houston [14 Dist.] 2001, no pet. his.) (where subsequent settlement agreement incorporated all of prior Rule 11 agreement except for one provision, the settlement agreement superseded prior Rule 11 agreement, which is unenforceable). The applicability of the merger DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER — Page 18doctrine is a question of law. GXG, Inc. v. Texacal Oil & Gas, 977 S.W.2d 403, 415 (Tex.App.—Corpus Christi 1999, pet. denied). 4.13 As explained in detail above, it is undisputed that DCI and Dyer entered into an Agreed Temporary Injunction less than two months after the March 19, 2004 Rule |] agreement was entered into the record wherein Dyer agreed to immediately cease from 1) representing that [he] owns a majority of stock or has control of [DCI] to any third parties, [DCI’s] customers, or any business entities, 2) representing that (he) is an authorized representative or agent of [DCI] to any third parties, [DCI’s] customers or any business entities, 3) unlawfully interfering with [DCI’s] existing business relationships (including, but not limited to The Home Depot, The Great Indoors, Lowes Home Improvement and Fry’s Electronics); 4) making any disparaging communications or remarks with regard to [DCI], its officers, or its directors to any third parties, [DCI’s] customers or any business entities. (Exhibit F]. It is undisputed that the March 19, 2004 Rule 11 agreement and the subsequent Agreed Temporary Injunction concerned the exact same subject matter and involved the exact same parties. (See Exhibit C; Exhibit F]. Although counsel for Dyer had an opportunity to review and modify the proposed Agrecd Temporary Injunction, and did in fact make minor modifications to the Agreed Temporary Injunction [See Exhibit E], it is undisputed that the Agreed Temporary Injunction is silent regarding Contreras’ alleged assignment of shares to Dyer and the “validity and effect” thereof. [See Exhibit F]. Because the May 6, 2004 Agreed Temporary Injunction concerns the exact same subject matter and exact same parties as the March 19, 2004 Rule 11 agreement, Texas law presumes that the March 19, 2004 Rule agreement has been extinguished and superseded by the subsequent Agreed Temporary Injunction. Criaco, 225 S.W.3d at 899. Thus, since Dyer has failed to plead or present any DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 19evidence of ambiguity, fraud, or accident with regard to the subsequent Agreed Temporary Injunction, Texas law is clear that the March 19, 2004 Rule 11 agreement is unenforceable as a matter of law. Therefore, DCI and Geeting respectfully request that the Court grant their Traditional and No Evidence Motion for Summary Judgment as to Dyer’s breach of Rule 11 agreement claim. Cc Dyer’s Breach of Rule 11 Agreement Claim is Barred by Res Judicata 4.14 Rule 11 of the Texas Rules of Civil Procedure provides that “no agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record.” TEX. R. Clv. P. 11. As the Texas Supreme Court observed, “Rule 11 is a minimum requirement for enforcement of all agreements concerning pending suits.” Kennedy v. Hyde, 682 S.W.2d 525, 528 (Tex. 1984) (emphasis added). Moreover, where a party, through the use of diligence, could have litigated a cause of action or defense in a prior lawsuit, the doctrine of res judicata bars re-litigation of that issue in a subsequent lawsuit. Bonnivwell v. Beech Aircraft Corp., 663 $.W.2d 816, 818 (Tex. 1984); Antonini v. Harris County Appraisal Dist., 999 S.W.2d 608, 615 (Tex.App—Houston tia Dist.] 1999, no pet.). 4.15 As stated above, Dyer argues that during the March 19, 2004 hearing on DCI’s temporary injunction, DCI’s attorneys stipulated to the “validity and effect” of Contreras’ March 3, 2004 assignment of shares to Dyer, and breached that agreement by filing a declaratory judgment action secking to invalidate Contreras’ purported assignment. It is undisputed that the alleged stipulation that Dyer is secking to enforce against DCI and Gceting was entered into the record in a proceeding before the 362™ Judicial District Court of Denton County, Texas, not in this lawsuit. [See Exhibit C]. It is also undisputed that at the time of DCI and Geeting’s alleged breach ~ which DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER Page 20occurred on November 15, 2006, the date DCI’s filed its Petition for Declaratory Judgment seeking to declare Conteras’ assignment of shares to Dyer invalid — the lawsuit before the 362” Judicial District Court was still pending. [See Exhibit G]. As such, Dyer could have, and indeed, should have brought his claim for breach of Rule 11 agreement in the Denton County lawsuit at that time. Instead of doing so, Dyer allowed the Denton County lawsuit to be dismissed for want of prosecution on January 22, 2007. [Exhibit G]. As referenced above, Texas law is clear that the doctrine of res judicata “prevents the litigation of a claim or cause of action that has been finally adjudicated, as well as all related matters that, with the use of diligence, should have been litigated in the prior suit.” Antonini, 999 $.W.2d at 615. Because Dyer did not diligently bring his cause of action for breach in the Denton County lawsuit, but instead allowed the Denton County lawsuit to be dismissed for want of prosecution, Dyer is prevented by the doctrine of res judicata from asserting a breach of Rule 11 agreement cause of action in this lawsuit. DCI and Gecting are therefore entitled to summary judgment as to Dyer’s breach of Rule 1! agreement claim as matter of law. D. Stipulations as to Legal Conclusions are not Binding on DCI or this Court 4.16 While stipulations as to facts may be enforceable against a party under a breach of contract claim, stipulations as to legal conclusions are not binding on either courts or partics. Caprock Investment Corp. v. Federal Deposit Ins. Corp., 17 $.W.3d 707, 713 (Tex.App.— Eastland 2000, pet. denied). The question regarding whether Contreras’ March, 3, 2004 assignment to Dyer is “valid and effective” is a legal question to be decided by this Court, not a factual stipulation to be agreed to by the parties. In fact, DCI’s declaratory judgment action seeks a judicial determination regarding this very issue. [See DCI’s First Amended Petition for Declaratory Judgment]. Because the stipulation that Dyer is attempting to enforce against DCI is DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 21a tegal conclusion, and not a stipulation of fact, Texas law is clear that the stipulation is not binding on either DCI or this Court. /d. Therefore, the caselaw cited herein makes clear that DCI and Geeting are entitled to summary judgment on Dyer’s breach of Rule 1] agreement claim as a matter of law. E. The Summary Judgment Evidence Establishes _DCI’s_ Affirmative Defense of Fraudulent Inducement/Negligent Misrepresentation 4.17 To the extent that the Court determines that DCI and/or Geeting agreed to the validity and effect of the Contreras assignment to Dyer during the March 19, 2004 hearing on DCI’s Application for Temporary Injunction, DC] is entitled to summary judgment as to Dyer’s breach of Rule 11 agreement claim because the summary judgment evidence attached hereto establishes DCI’s affirmative defense of fraudulent inducement/negligent misrepresentation as a matter of law. In order to prove a cause of action for fraudulent inducement, a party must establish the following elements: 1) that a material representation was made; 2) the representation was false; 3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion, 4) the speaker made the representation with the intent that the other party should act upon it; 5) the party acted in reliance on the representation; and 6) the party thereby suffered injury. Jn re FirstMerit Bank, N.A., 52 §.W.3d 749, 758 (Tex. 2001). In order to prove a cause of action for negligent misrepresentation, a party must establish the following elements: 1) the defendant made a representation to the plaintiff, 2) the defendant supplicd false information for the guidance of others; 3) the defendant did not exercise reasonable care or competence in obtaining or communicating the information, 4) the plaintiff justifiably relied on the representation; and 5) the defendant’s negligent misrepresentation proximately caused the plaintiff's injury. McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests, 991 S.W.2d 787, 791 (Tex.1999). DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 224.18 In this case, the summary judgment evidence attached hereto conclusively establishes that Dyer, through his former counsel, Ken Nye, fraudulently/negligently induced DCI to enter into the March 19, 2004 Rule 11 agreement by virtue of Mr. Nyc’s representations that Contreras had perfected a valid assignment of her 10% ownership interest in DCI to Dyer. (See Exhibit C]. Said representation was false, as Contreras purported assignment was fraudulent on its face. Specifically, although Contreras stated, under oath, in the legal document purporting to assign her interest in DCI to Dyer that the stock in question was “TRANSFERRED FOR GOOD AND VALUABLE CONSIDERATION,” in truth, Contreras received no consideration for said transfer. Specifically, when questioned regarding whether she received any consideration for the assignment in question at her deposition, Contreras testified as follows: Q. Did you receive any type of consideration -- and when I say that, I'm not just taking about payment in money -- services or anything like that that you received for your transfer or assignment of your shares to Craig Dyer? A. No. MR. SEWELL: Objection, form. Q. So if | understood you correctly, Ms. Dyer, you basically didn’t receive any money, any payment or any type of service or consideration for your transfer of your ten percent of the shares of DCI to Craig Dyers. Is that correct? MR. SEWELL: Objection, form. A. That's correct. (See Exhibit J at p. 15,1. 1 - 14). 4.19 Thus, it is clear from Ms. Contreras’ deposition testimony that the purported assignment was fraudulent on its face, and Dyer’s representation through his counsel, Kenneth Nye, to counsel for DCI at the March 19, 2004 hearing was false. It is also clear that Dyer either knew the representation was false, made the representation recklessly, or negligently. DCI AND JOSEPH GEETING’S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 23Specifically, Dyer was obviously aware that he had paid Contreras no consideration for such shares. [See Exhibit J at p. 15,1. 1 — 14]. Despite this fact, Mr. Nye, on behalf of Dyer, made this false representation with the intent that counsel for DC] and Gecting rely on it, and DCI and Geeting did in fact rely on it, agreeing to enter into the Rule 11 agreement in question. [See Exhibit C]. Moreover, DCI and Geeting have suffered injury and damages as a result of Dyer’s false representation in the form of attorney’s fees to defend against the breach of Rule 11 agreement claims asserted by Dyer and Contreras. Because the summary judgment evidence attached hereto cstablishes DCI and Geeting’s affirmative defense of fraudulent inducement/negligent misrepresentation, DCI and Geeting are entitled to summary judgment as to Dyer’s breach of Rule 11 agreement claim as a matter of law. PRAYER WHEREFORE, PREMISES CONSIDERED, Dyer Custom Installation, Inc. n/k/a Pro Plumbing & Appliance Installation, Inc. and Joseph Geeting respectfully request that their Traditional and No-Evidence Motion for Summary Judgment against Craig Dyer be set for hearing in accordance with Texas Rule of Civil Procedure 166a and, at the conclusion of said hearing, that DCI’s Traditional and No-Evidence Motion for Summary Judgment be granted in its entirety, and that DCI and Geeting be granted such other and further relief, at law or in equity, to which they may be justly entitled. DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 24Respectfully submitted, Nowak & STAUCH, LLP py _LKtthal ft rae Matthew A. Nowak State Bar No, 00794382 Thomas R. Stauch State Bar No. 00794687 Brandon L. Starling State Bar No. 24047556 4144 N. Central Expressway, Suite 300 Dallas, Texas 75204 (214) 823-2006 telephone (214) 823-2007 facsimile ATTORNEYS FOR DEFENDANTS CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing document was served in accordance with TEXAS RULES OF CIVIL PROCEDURE 21 and 21a on ail parties to this case on this the 24 day of August 2009. Matthew A. Nowak DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER - Page 25FIAT Ut A hearing on this motion is scheduled for Ga. 00 &¥p-m,, on the day of _\ Jo Vv , 2009, in the above-referenced court. Signed this zt day of August, 2009. Gris. fllewth JUDE PRESIDING QS DCI AND JOSEPH GEETING'S TRADITIONAL AND NO EVIDENCE MOTION FOR SUMMARY AGAINST CRAIG DYER -- Page 26Cope PK DYER CUSTOM INSTALLATION, INC, Plaintiff, geureche vs. ee CRAIG DYER, Defendant. § DENTON COUNTY, TEXAS APPLICATION FOR TEMPORARY RESTRAINING ORDER, TEMPORARY INJUNCTION, AND PERMANENT INJUNCTION TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW, DYER CUSTOM INSTALLATION, INC. and files this its Application for Temporary Restraining Order, Temporary Injunction, and Permanent Injunction, and would show the Court as follows: I PARTIES Dyer Custom Installatio