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CAUSE NO. 2018-49711
E.D. IMAGING AND SOLUTIONS, IN THE DISTRICT COURT
INC.
Plaintiff, TH JUDICIAL DISTRICT
OF HARRIS COUNTY TEXAS
COAST 2 COAST AUTO GROUP,
INC., COAST TO COAST
MOTORS, LLC, FONALITY, INC.,
COMCAST PHONE, LLC,
PENNINGTON AUTO GROUP,
LLC, MYRON MILLER, REQUESTED FOR SUBMISSION (WITHOUT
CHRISTOPHER DONNELLEY, HEARING) ON AUGUST 26, 2019 PURSUANT TO
AND LARRY PENNINGTON, THIS COURT’S PROCEDURES
Defendants.
FONALITY, INC.’S NO-EVIDENCE MOTION FOR SUMMARY JUDGMENT
AND SUPPORTING BRIEF
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW Fonality, Inc. (“Fonality”) and files this Motion for No-Evidence
Summary Judgment with Supporting Brief. Defendant would respectfully show this Court the
following:
INTRODUCTION AND BACKGROUND
Plaintiff E.D. Imaging and Solutions, Inc. (“EDI”) initiated this lawsuit against
Defendants Fonality, Coast to Coast Auto Group, Inc. , Coast to Coast Motors, LLC, Comcast
Phone, LLC, Pennington Auto Group, LLC, Myron Miller, Christopher Donnelly, and Larry
Plaintiff alternatively refers to this Defendant as Coast 2 Coast Auto Group, Inc. and Coast to Coast Auto Group,
Inc.
Pennington on July 26, 2018 through the Original Petition (“Petition”).
2. The Petition seeks unspecified damages (including exemplary damages, specific
performance, declaratory judgment, restitution, attorneys’ fees, and a permanent injunction) for
breaches of contract (apparently between Coast to Coast Motors, LLC and EDI), alleged
tortious interference (presumably with the same contract), and alleged unspecified
misrepresentations.
3. As to Defendant Fonality, Plaintiff contends that it had an agreement with
Fonality to provide enterprise communications solutions and managed network services.
(Petition at ¶ 20). Plaintiff alleges that these contracts were to assist Plaintiff in providing IT
services for Defendants “Coast to Coast Auto Group, Inc. and/or Coast to Coast Auto Motors,
LLC.” (Petition at ¶¶ 18 & 20). Plaintiff alleges that in April 25, 2018, Defendant Pennington
Auto Group, LLC terminated the contract between Plaintiff EDI and Coast to Coast Motors,
LLC and that this termination was wrongful. (Petition at ¶¶ 27-31.)
4. Plaintiff alleges that Defendant Fonality engaged in unspecified willful, tortious
conduct that caused the breach of the Plaintiff’s agreement with Coast to Coast. (Petition at ¶¶
43-46). Plaintiff has no evidence of any such conduct, or of any breach of contract proximately
caused by such conduct, or of any damages caused by this unspecified conduct.
5. Moreover, the evidence will show that, pursuant to the plain language of
Plaintiff’s agreement with Fonality, Plaintiff was not permitted to use Fonality’s products for
Coast to Coast, and any such use would have been in breach of Plaintiff’s contract with
Fonality:
Customer [EDI] agrees and represents that it is purchasing the Product for its own
internal use. Customer shall not sell, resell, transfer or assign, or make a charge
for the Product without the advance written permission of Fonality. (See attached
Contract with incorporated Terms of Service at ¶ 5.2)
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Plaintiff cannot recover for engaging in conduct that was in breach of its contract with Fonality.
6. Plaintiff also alleges that Defendant Fonality engaged in unspecified negligent
misrepresentations. (Petition at ¶¶ 38-42). Plaintiff has no evidence of any such
misrepresentations, or of any negligence of Fonality in making these unspecified
misrepresentations, or of any justifiable reliance by Plaintiff on such misrepresentations, or how
such reliance proximately caused EDI damages.
7. After taking no discovery for almost a year, just after 12 am on July 23, 2019,
Plaintiff serve a request for disclosure and request for documents upon all Defendants. None of
these documents will support Plaintiff’s claim against Fonality.
8. Pursuant to this Court’s rules and procedures, Fonality brings this no evidence
motion for summary judgment, within 30 days of trial, because Plaintiff has no evidence to
support key elements of the alleged claims against Fonality and this action should, in the
interests of justice and judicial efficiency, be dismissed with prejudice prior to trial as to
Fonality.
II. ARGUMENT & AUTHORITY
A. No-Evidence Summary Judgment Standard
9. The proponent of a no-evidence motion for summary judgment asserts that there
is no evidence of one or more essential elements of claims upon which the opposing party
would have the burden of proof. See EX R. IV ROC. § 166a(i); McCombs v. Children’s
Med. Ctr. of Dallas, 1 S.W.3d 256, 258 (Tex. App.—Texarkana 1999, pet. denied). Unlike the
movant for traditional summary judgment, a movant for no-evidence summary judgment does
not bear the burden of establishing a right to judgment by proving each claim or defense.
Holmstrom v. Lee, 26 S.W.3d 526, 530 (Tex. App.—Austin 2000, no pet.). A no-evidence
motion for summary judgment must be granted if, after adequate time for discovery, the
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respondent produces no summary judgment evidence raising a genuine issue of material fact on
those elements. LMB, Ltd. v. Moreno, 201 S.W.3d 686, 688 (Tex. 2006) (citing Sudan v.
Sudan, 199 S.W.3d 291 (Tex. 2006). Stated another way, a no-evidence summary judgment
motion is properly granted if the nonmovant fails to produce more than a scintilla of probative
evidence raising a genuine issue of fact as to an essential element of a claim on which the
nonmovant would have the burden of proof at trial. See EX R. IV ROC. § 166a(i);
Holmstrom, 26 S.W.3d at 530.
B. Discovery Statement
10. Plaintiff has had adequate time to take discovery in this case and develop its
theories of liability. This lawsuit was filed on or about July 26, 2018, over a year ago, and trial
is set for September 23, 2019.
11. After taking no discovery for almost a year, just after 12 am on July 23, 2019,
Plaintiff serve a request for disclosure and request for documents upon all Defendants. None of
these documents will support Plaintiff’s claim against Fonality.
12. Pursuant to this Court’s procedures, Defendant has set this motion for
submission, not more than thirty days prior to trial.
13. Plaintiff has no evidence to support key elements of its claims against Fonality.
C. No Evidence of Any Element of Negligent Misrepresentation of Any “Fact.”
14. To assert a claim against Fonality for negligent misrepresentation, EDI must
prove that “(1) the defendant made a representation in the course of the defendant's business, or
in a transaction in which the defendant had a pecuniary interest; (2) the defendant supplied
‘false information’ for the guidance of others in their business; (3) the defendant did not
exercise reasonable care or competence in obtaining or communicating the information; and (4)
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112840826\V-2
the plaintiff suffered pecuniary loss by justifiably relying on the representation.” Lindsey
Constr., Inc. v. AutoNation Fin. Servs., LLC, 541 S.W.3d 355, 366 (Tex. App. - Houston 2017)
(citing Federal Land Bank Ass'n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991).)
15. Plaintiff does not have probative evidence that: (a) Fonality supplied “false
information” to EDI; (b) Fonality failed to use reasonable care or competence in communicating
this allegedly “false information”; or (c) EDI suffered a financial loss by justifiably relying
upon the representation.
16. EDI’s only allegation of any “representation” at any time by Fonality is that,
upon receipt of contractually owed payments from EDI, Fonality said “thank you” to their
apparent EDI contact, Defendant Myron Miller. (Petition at ¶ 23.) According to EDI, Miller
was not a management level employee with authority to bind EDI. But even if EDI could prove
that Fonality knew Miller’s role prior to thanking him, it is unclear how Fonality “thanking”
Miller was “false,” or how EDI relied upon this “thank you” to its detriment (when EDI
supposedly knew Miller was not the actual payor), or how EDI was “harmed” by Fonality
“thanking” an apparent agent of EDI.
17. Apart from this allegation, Plaintiff has not alleged any representations of any
kind (“false” or not) by Fonality. Less than 30 days before trial, Plaintiff has no probative
evidence that (a) Fonality supplied “false” information to EDI; (b) Fonality failed to use
reasonable care or competence in conveying information to EDI; (c) EDI relied upon
information supplied by Fonality; (c) EDI justifiably relied upon the information; and/or (d)
EDI was harmed as a result of this justifiable reliance. Summary judgment should be granted to
Fonality on the claim for negligent misrepresentation.
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D. No Evidence of Any Tortious Interference with Existing Contracts.
18. To succeed on a tortious interference with existing contracts claim a plaintiff
must prove: (1) the plaintiff had a valid contract subject to interference; (2) willful and
intentional interference by the defendant; (3) the defendant’s interference proximately caused
the plaintiff’s injury; and (4) the plaintiff incurred actual damage or loss. See Prudential Ins.
Co. of Am. v. Financial Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000).
19. Although Fonality has not seen such evidence, Fonality assumes EDI will be able
to prove it had a contract with either Coast to Coast Auto Group, Inc. or Coast to Coast Motors,
LLC (Plaintiff fails to specify which). However, Plaintiff has no probative evidence that: (a)
Fonality willfully and intentionally interfered with that contract; or (b) Fonality’s non-existent
interference with that contract proximately caused Plaintiff’s injury; or (c) Plaintiff incurred
actual damage or loss as a result of the termination of contract.
20. Further, as also discussed above, the evidence will show that, pursuant to the
plain language of Plaintiff’s agreement with Fonality, Plaintiff was not permitted to use
Fonality’s products for Coast to Coast, and that any such use would have been in breach of
Plaintiff’s contract with Fonality:
Customer [EDI] agrees and represents that it is purchasing the Product for its own
internal use. Customer shall not sell, resell, transfer or assign, or make a charge
for the Product without the advance written permission of Fonality. (See attached
Contract with incorporated Terms of Service at ¶ 5.2)
Plaintiff cannot recover for engaging in conduct that was in breach of the contract.
21. Because Plaintiff has no evidence to support its tortious interference with
existing contracts, summary judgment should be granted to Defendant Fonality.
III. CONCLUSION
22. WHEREFORE, PREMISES CONSIDERED, Defendant Fonality prays that
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upon notice and submission hereof that Defendant’s No-Evidence Motion for Summary
Judgment be granted, that Plaintiff’s claims for negligent misrepresentation and tortious
interference with existing contracts be dismissed with prejudice, that Defendant Fonality, Inc.
thus be dismissed from this case with prejudice, and for all other and further relief to which
Defendant may be justly entitled at law or in equity.
Dated: August 5, 2019
Respectfully Submitted,
ENTONS US LLP
/s/Leanna M. Anderson ________________
Leanna M. Anderson
State Bar No. 24085833
2000 McKinney Avenue, Suite 1900
Dallas, TX 75201
Telephone: (214) 259-0900
Facsimile: (214) 259-0910
Email: leanna.anderson@dentons.com
ATTORNEYS FOR DEFENDANT
FONALITY, INC.
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CERTIFICATE OF SERVICE
I hereby certify on August 5, 2019, Fonality, Inc.’s No-Evidence Motion for Summary
Judgment was served by email and electronic service to all counsel of record as follows:
Lucy Nkechinyelumka “Kechi” Chukwurah
Durham Center
5151 Katy Freeway, Suite 306
Houston, Texas 7707
lucy@chukwurahlawgroup.com
Zeke O. Fortenberry
Fortenberry Firm PLLC
17304 Preston Road, Suite 800
Dallas, TX 75252
zeke@fortenberryfirm.com
James Phillips
Baker Hostetler
811 Main Street, Suite 1100
Houston, TX 77002
jphillips@bankerlaw.com
adlewis@bakerlaw.com
/s/Leanna M. Anderson
Leanna M. Anderson
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Preview
CAUSE NO. 2018-49711 E.D. IMAGING AND SOLUTIONS, IN THE DISTRICT COURT INC. Plaintiff, TH JUDICIAL DISTRICT OF HARRIS COUNTY TEXAS COAST 2 COAST AUTO GROUP, INC., COAST TO COAST MOTORS, LLC, FONALITY, INC., COMCAST PHONE, LLC, PENNINGTON AUTO GROUP, LLC, MYRON MILLER, REQUESTED FOR SUBMISSION (WITHOUT CHRISTOPHER DONNELLEY, HEARING) ON AUGUST 26, 2019 PURSUANT TO AND LARRY PENNINGTON, THIS COURT’S PROCEDURES Defendants. FONALITY, INC.’S NO-EVIDENCE MOTION FOR SUMMARY JUDGMENT AND SUPPORTING BRIEF TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW Fonality, Inc. (“Fonality”) and files this Motion for No-Evidence Summary Judgment with Supporting Brief. Defendant would respectfully show this Court the following: INTRODUCTION AND BACKGROUND Plaintiff E.D. Imaging and Solutions, Inc. (“EDI”) initiated this lawsuit against Defendants Fonality, Coast to Coast Auto Group, Inc. , Coast to Coast Motors, LLC, Comcast Phone, LLC, Pennington Auto Group, LLC, Myron Miller, Christopher Donnelly, and Larry Plaintiff alternatively refers to this Defendant as Coast 2 Coast Auto Group, Inc. and Coast to Coast Auto Group, Inc. Pennington on July 26, 2018 through the Original Petition (“Petition”). 2. The Petition seeks unspecified damages (including exemplary damages, specific performance, declaratory judgment, restitution, attorneys’ fees, and a permanent injunction) for breaches of contract (apparently between Coast to Coast Motors, LLC and EDI), alleged tortious interference (presumably with the same contract), and alleged unspecified misrepresentations. 3. As to Defendant Fonality, Plaintiff contends that it had an agreement with Fonality to provide enterprise communications solutions and managed network services. (Petition at ¶ 20). Plaintiff alleges that these contracts were to assist Plaintiff in providing IT services for Defendants “Coast to Coast Auto Group, Inc. and/or Coast to Coast Auto Motors, LLC.” (Petition at ¶¶ 18 & 20). Plaintiff alleges that in April 25, 2018, Defendant Pennington Auto Group, LLC terminated the contract between Plaintiff EDI and Coast to Coast Motors, LLC and that this termination was wrongful. (Petition at ¶¶ 27-31.) 4. Plaintiff alleges that Defendant Fonality engaged in unspecified willful, tortious conduct that caused the breach of the Plaintiff’s agreement with Coast to Coast. (Petition at ¶¶ 43-46). Plaintiff has no evidence of any such conduct, or of any breach of contract proximately caused by such conduct, or of any damages caused by this unspecified conduct. 5. Moreover, the evidence will show that, pursuant to the plain language of Plaintiff’s agreement with Fonality, Plaintiff was not permitted to use Fonality’s products for Coast to Coast, and any such use would have been in breach of Plaintiff’s contract with Fonality: Customer [EDI] agrees and represents that it is purchasing the Product for its own internal use. Customer shall not sell, resell, transfer or assign, or make a charge for the Product without the advance written permission of Fonality. (See attached Contract with incorporated Terms of Service at ¶ 5.2) 2 112840826\V-2 Plaintiff cannot recover for engaging in conduct that was in breach of its contract with Fonality. 6. Plaintiff also alleges that Defendant Fonality engaged in unspecified negligent misrepresentations. (Petition at ¶¶ 38-42). Plaintiff has no evidence of any such misrepresentations, or of any negligence of Fonality in making these unspecified misrepresentations, or of any justifiable reliance by Plaintiff on such misrepresentations, or how such reliance proximately caused EDI damages. 7. After taking no discovery for almost a year, just after 12 am on July 23, 2019, Plaintiff serve a request for disclosure and request for documents upon all Defendants. None of these documents will support Plaintiff’s claim against Fonality. 8. Pursuant to this Court’s rules and procedures, Fonality brings this no evidence motion for summary judgment, within 30 days of trial, because Plaintiff has no evidence to support key elements of the alleged claims against Fonality and this action should, in the interests of justice and judicial efficiency, be dismissed with prejudice prior to trial as to Fonality. II. ARGUMENT & AUTHORITY A. No-Evidence Summary Judgment Standard 9. The proponent of a no-evidence motion for summary judgment asserts that there is no evidence of one or more essential elements of claims upon which the opposing party would have the burden of proof. See EX R. IV ROC. § 166a(i); McCombs v. Children’s Med. Ctr. of Dallas, 1 S.W.3d 256, 258 (Tex. App.—Texarkana 1999, pet. denied). Unlike the movant for traditional summary judgment, a movant for no-evidence summary judgment does not bear the burden of establishing a right to judgment by proving each claim or defense. Holmstrom v. Lee, 26 S.W.3d 526, 530 (Tex. App.—Austin 2000, no pet.). A no-evidence motion for summary judgment must be granted if, after adequate time for discovery, the 3 112840826\V-2 respondent produces no summary judgment evidence raising a genuine issue of material fact on those elements. LMB, Ltd. v. Moreno, 201 S.W.3d 686, 688 (Tex. 2006) (citing Sudan v. Sudan, 199 S.W.3d 291 (Tex. 2006). Stated another way, a no-evidence summary judgment motion is properly granted if the nonmovant fails to produce more than a scintilla of probative evidence raising a genuine issue of fact as to an essential element of a claim on which the nonmovant would have the burden of proof at trial. See EX R. IV ROC. § 166a(i); Holmstrom, 26 S.W.3d at 530. B. Discovery Statement 10. Plaintiff has had adequate time to take discovery in this case and develop its theories of liability. This lawsuit was filed on or about July 26, 2018, over a year ago, and trial is set for September 23, 2019. 11. After taking no discovery for almost a year, just after 12 am on July 23, 2019, Plaintiff serve a request for disclosure and request for documents upon all Defendants. None of these documents will support Plaintiff’s claim against Fonality. 12. Pursuant to this Court’s procedures, Defendant has set this motion for submission, not more than thirty days prior to trial. 13. Plaintiff has no evidence to support key elements of its claims against Fonality. C. No Evidence of Any Element of Negligent Misrepresentation of Any “Fact.” 14. To assert a claim against Fonality for negligent misrepresentation, EDI must prove that “(1) the defendant made a representation in the course of the defendant's business, or in a transaction in which the defendant had a pecuniary interest; (2) the defendant supplied ‘false information’ for the guidance of others in their business; (3) the defendant did not exercise reasonable care or competence in obtaining or communicating the information; and (4) 4 112840826\V-2 the plaintiff suffered pecuniary loss by justifiably relying on the representation.” Lindsey Constr., Inc. v. AutoNation Fin. Servs., LLC, 541 S.W.3d 355, 366 (Tex. App. - Houston 2017) (citing Federal Land Bank Ass'n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991).) 15. Plaintiff does not have probative evidence that: (a) Fonality supplied “false information” to EDI; (b) Fonality failed to use reasonable care or competence in communicating this allegedly “false information”; or (c) EDI suffered a financial loss by justifiably relying upon the representation. 16. EDI’s only allegation of any “representation” at any time by Fonality is that, upon receipt of contractually owed payments from EDI, Fonality said “thank you” to their apparent EDI contact, Defendant Myron Miller. (Petition at ¶ 23.) According to EDI, Miller was not a management level employee with authority to bind EDI. But even if EDI could prove that Fonality knew Miller’s role prior to thanking him, it is unclear how Fonality “thanking” Miller was “false,” or how EDI relied upon this “thank you” to its detriment (when EDI supposedly knew Miller was not the actual payor), or how EDI was “harmed” by Fonality “thanking” an apparent agent of EDI. 17. Apart from this allegation, Plaintiff has not alleged any representations of any kind (“false” or not) by Fonality. Less than 30 days before trial, Plaintiff has no probative evidence that (a) Fonality supplied “false” information to EDI; (b) Fonality failed to use reasonable care or competence in conveying information to EDI; (c) EDI relied upon information supplied by Fonality; (c) EDI justifiably relied upon the information; and/or (d) EDI was harmed as a result of this justifiable reliance. Summary judgment should be granted to Fonality on the claim for negligent misrepresentation. 5 112840826\V-2 D. No Evidence of Any Tortious Interference with Existing Contracts. 18. To succeed on a tortious interference with existing contracts claim a plaintiff must prove: (1) the plaintiff had a valid contract subject to interference; (2) willful and intentional interference by the defendant; (3) the defendant’s interference proximately caused the plaintiff’s injury; and (4) the plaintiff incurred actual damage or loss. See Prudential Ins. Co. of Am. v. Financial Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000). 19. Although Fonality has not seen such evidence, Fonality assumes EDI will be able to prove it had a contract with either Coast to Coast Auto Group, Inc. or Coast to Coast Motors, LLC (Plaintiff fails to specify which). However, Plaintiff has no probative evidence that: (a) Fonality willfully and intentionally interfered with that contract; or (b) Fonality’s non-existent interference with that contract proximately caused Plaintiff’s injury; or (c) Plaintiff incurred actual damage or loss as a result of the termination of contract. 20. Further, as also discussed above, the evidence will show that, pursuant to the plain language of Plaintiff’s agreement with Fonality, Plaintiff was not permitted to use Fonality’s products for Coast to Coast, and that any such use would have been in breach of Plaintiff’s contract with Fonality: Customer [EDI] agrees and represents that it is purchasing the Product for its own internal use. Customer shall not sell, resell, transfer or assign, or make a charge for the Product without the advance written permission of Fonality. (See attached Contract with incorporated Terms of Service at ¶ 5.2) Plaintiff cannot recover for engaging in conduct that was in breach of the contract. 21. Because Plaintiff has no evidence to support its tortious interference with existing contracts, summary judgment should be granted to Defendant Fonality. III. CONCLUSION 22. WHEREFORE, PREMISES CONSIDERED, Defendant Fonality prays that 6 112840826\V-2 upon notice and submission hereof that Defendant’s No-Evidence Motion for Summary Judgment be granted, that Plaintiff’s claims for negligent misrepresentation and tortious interference with existing contracts be dismissed with prejudice, that Defendant Fonality, Inc. thus be dismissed from this case with prejudice, and for all other and further relief to which Defendant may be justly entitled at law or in equity. Dated: August 5, 2019 Respectfully Submitted, ENTONS US LLP /s/Leanna M. Anderson ________________ Leanna M. Anderson State Bar No. 24085833 2000 McKinney Avenue, Suite 1900 Dallas, TX 75201 Telephone: (214) 259-0900 Facsimile: (214) 259-0910 Email: leanna.anderson@dentons.com ATTORNEYS FOR DEFENDANT FONALITY, INC. 7 112840826\V-2 CERTIFICATE OF SERVICE I hereby certify on August 5, 2019, Fonality, Inc.’s No-Evidence Motion for Summary Judgment was served by email and electronic service to all counsel of record as follows: Lucy Nkechinyelumka “Kechi” Chukwurah Durham Center 5151 Katy Freeway, Suite 306 Houston, Texas 7707 lucy@chukwurahlawgroup.com Zeke O. Fortenberry Fortenberry Firm PLLC 17304 Preston Road, Suite 800 Dallas, TX 75252 zeke@fortenberryfirm.com James Phillips Baker Hostetler 811 Main Street, Suite 1100 Houston, TX 77002 jphillips@bankerlaw.com adlewis@bakerlaw.com /s/Leanna M. Anderson Leanna M. Anderson 8 112840826\V-2