Motion-Secondary: RED MANGO FC LLC vs. HOWARD GROSSER

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                                Filed
13 November 6 P7:01
Gary Fitzsimmons

District Clerk
Dallas District
CAUSE NUMBER DC-12-07867
RED MANGO FC, LLC § IN THE DISTRICT COURT
Plaintiff/Counter Defendant, §
§
vs. §
§ 160" JUDICIAL DISTRICT
HOWARD GROSSER §
Defendant §
and § DALLAS COUNTY, TEXAS
PHROZEN ASSETS LLC §
Third-Party Plaintiff. §

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT

Respectfully submitted,

 

Texas State Bar No. 24072083

Cheryl Mullin

Texas State Bar No. 24037807
2425 N. Central Expy., Suite 200
Richardson, Texas 75080
(972) 852-1708 — Telephone
(972) 931-0124 — Facsimile
COUNSEL FOR PLAINTIFFTABLE OF CONTENTS

 

 

T. SUMMARY usisessessssssssssssessssssesssssssssssssssssesesssssssssessesssessessssessssssssssssssssssessessssnssseesnsensesssssssssseesnsens 1
II. SUMMARY JUDGMENT EVIDENCE... ssssssssessesssessesssssssssssesssessesssssssesssssssseesssssessssssssssseeseens 2
TID, FACTS ..ssssssssessssssessssssssssssesssssssssssssssssssessssesessssssssssssessssssessssesssssssessssssessnsessesssesssessssssessssnsssssseeseens 3
A. The Franchise Agreement. ........ssssssssssssssssssssssssssssssessssssseesssesssesssessssessssssssssesesssssssssessesssesssessseees 3
B. The Escrow Agreement. ......ssssssssssssssssssssssssssssessssesssssssesssssssssssssssessssssesssssesseessesssssssesssseessesssesseses 6

IV. ARGUMENTS AND AUTHORITIES ........csssecsseers

 
  

A. Red Mango objects and has filed a corresponding Motion to Si
summary-judgment evidence. ......sssesseseesees eave see

B. Grosser has provided no support or basis for bringing a No-Evidence Motion for Partial
Summary J UdGMENL.........sssssssssssssscsesssssssssecseesssessseessssssssessssssssssssssssssssseesssssssssseesssssssesssessssssessessseseseess 8

C. Grosser’s Traditional Motion for Partial Summary Judgment should be denied because
Grosser cannot meet his burden of proof and evidence submitted by Red Mango raises a genuine
issue of material fact as to each of Grosser’s claims. 9

1. Grosser has not met his burden to show that no genuine issue of material fact exists on

 

 

 
 

 

his breach-of-Franchise-A greement claim. 9
la. Phrozen Assets, LLC is not a proper party to the Franchise Agreement. .10
1b. Grosser did not perform, tender performance of, or was excused from performing his
contractual obligations under the Franchise Agreement. .10
1c. Red Mango did not breach the Franchise Agreement. 11
1d. Grosser has suffered no damages ...........sseesesseere 13

 

2. Grosser has not met his burden to show that no genuine issue of material fact exists
on his breach of Escrow Agreement claim. 14

15

    

2a. Phrozen Assets, LLC is not a proper party to this agreement

 

 

 

2b. Red Mango did not breach the Escrow Agreement............ 15

2c. Grosser has failed to show he was injured. ........c.sese wld

3. Grosser has not met his burden to show that no genuine issue of material fact exists

on his breach of fiduciary duty Claim. ......ssssesssssssessssesssessssssssssssssssssesseesssessssssessssesssesseneees 17

3a. Red Mango owes no Fiduciary Duty to Phrozen Assets, LLC. ......essssseseceersersseene £8

3b. Red Mango did not breach its fiduciary duty... ecesssesseessesssseesneessecsueessersseesnenseeesee 18

3c. Grosser has failed to show he was injured. ........cccsssesssecsseesseeeseesseeseernsecneensenseeesneesse LO)

D. Grosser is Not Entitled to Attorneys’ Fees. .s.sssssssssssessessssssessessssesssssessssseessssssessssssensssessessesenees 19

ilTABLE OF AUTHORITIES

Cases
Allen v. Am. Gen. Fin., Inc., 251 S.W.3d 676 (Tex. App. San Antonio 2007)......ccsessessneessecsneesnsessneess 16
Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154 (Tex.2003)......ccsessscsssessessssessesessessesessesscssesesseseenease 12

 

Anderson v. Vinson Exploration, 832 S.W.2d 657 (Tex. App. El Paso 1992).
Baldwin v. Smith, 586 S.W.2d 624 (Tex. Civ. App. Tyler 1979)..
De Santis v. Wackenhut Corp., 732 S.W.2d 29 (Tex. App. Houston 14th Dist. 1987)
Dearing, Inc. v. Spiller, 824 S.W.2d 728 (Tex. App. Fort Worth 1992)... essessecssecsseessseesneessessneereees 18
E.P. Towne Ctr. Partners, L.P. v. Chopsticks, Inc., 242 S.W.3d 117 (Tex. App. El Paso 2007) ..........0 11
Findlay v. Cave, 611 S.W.2d 57 (Tex. 1981) ....scesssesecsseerneessees
Foley v. Daniel 346 s.w.3d 687 (Tex. App.—EI Paso 2009, no pet.)
Ft. Worth v. Pippen, 439 S.W.2d 660 (Tex. 1969)... eee
Garcia v. Kastner Farms, 789 S.W.2d 656 (Tex. App. Corpus Christi 1990) ........esecsseesssecsseesseessneeseeee 10
J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) ....sseessesssessseesstecseesnsecsecsneesssessueesseesseeennees 12
Krayem v. USRP (PAC), L.P. 194 s.w.3d 91 (Tex. App. — Dallas 2006, pet. denied) .
Lear Siegler, Inc. v. Perez, 819 S.W.2d 470 (Tex. 1991) o...eseecseesseesseeceesnerneees
Mandell v. Hamman Oil & Ref, Co. 822 s.w.2d 153 (Tex.A pp.—Houston [1 Dist.] 1991, writ denied) 10
Mead v. Johnson Group, Inc., 615 S.W.2d 685 (Tex. 1981)... sssecsseessssssseessecsneesssecssecssetsseesneesseesseeesnees 15
Meek v. Bishop Peterson & Sharp, P.C., 919 S.W.2d 805 (Tex. App. Houston 14th Dist. 1996)............ 12
Nixon v. Mr. Property Mgmt. Co., Inc., 690 S.W.2d 546 (Tex. 1985) ......seessessseessecsneesneeseeesee
NP Anderson Cotton Exch., L.P. v. Potter, 230 S.W.3d 457 (Tex.A pp.-Fort Worth 2007, no pet.
Priddy v. Rawson, 282 S.W.3d 588 (Tex. App. Houston 14th Dist. 2009)... ..esssecsecsseessseesneessessneerees 18
Rankin v. Naftalis 557 s.w.2d 940 (Tex. 1977) v.ccscscsccssssssssssessesessessesessessssessecsssecsecsssecseessseeseesssesscensseesceees 18

Republic Nat'l Bank of Dallas v. Nat'l Bankers Life Ins. Co., 427 S.W.2d 76 (Tex.Civ.App.-Dallas 1968,
WYit Vef'D W.T.€.) scecsessesessessesessessesessessesessecsssessecsssessecsssucsecsssucsecscsucssussesscsussesscsucsesscsecscsscseescsncaseecaeateneaee 12

Snyder v. Eanes ISD, 860 s.w.2d 692 (Tex.App.—Austin 1993, writ denied) .......escessessecseesseesseeeseee 10

Southwell v. University of the Incarnate Word, 974 S.W.2d 351 (Tex.App—San Antonio 1998, pet.
Demied) 0... ecsesesseesssessseessseessecsuecsnsecssccsnecssscssuecsueessucssneecsneesusesssecsuecsuessueesueessecssucesuecsusennsennueesneenseeesneess 11

Thomas v. Omar Invs., 156 s.w.3d 681 (Tex. App. — Dallas 2005, no pet.)...........8
Trahan v. Lone Star Title Co. 247 s..w.3d 269 (TexA pp—E] Paso 2007, pet denied)
Trevino v. Brookhill Capital Res. 782 s.w.2d 279 (Tex.A pp.—Houston [1 Dist.] 1989, writ denied) ....19
Uhlir v. Golden Triangle Dev. Corp., 763 S.W.2d 512 (Tex. App. Fort Worth 1988)... 11

 
 

 

  

 

 

 

 

 

 

 

 

iliWaite v. Woodard, Hall & Primm, P.C., 137 s.w.3d 277 (Tex.A pp—Houston [1 Dist] 2004, no pet.)....8
Watkins v. Williamson, 869 s.w.2d 383 (Tex.A pp.—Dallas 1993, no WYit)......sssesssesseesneecsecsneesseeseeess 19
Wesson v. Jefferson S&L Ass'n, 641 s.w.2d 903 (Tex. 1982)
Williams v. Clash, 789 S$.W.2d 261 (Tex. 1990)
Wynnewood State Bank v. Embrey, 451 S.W.2d 930 (Tex.Civ.A pj
Texas Statutes

TEX. R. CIV. P. 166a(C)..ccesceccscssessessecssessesstessessesssssessesssesssssessssesssssissusssessssssesseseesusssessessessseesneaseesees 9

 

 
   

allas 1970, writ ref'd n.re.

ivCAUSE NUMBER DC-12-07867

RED MANGO FC, LLC § IN THE DISTRICT COURT
Plaintiff/Counter Defendant, §
§
vs. §
§ 160" JUDICIAL DISTRICT
HOWARD GROSSER §
Defendant §
and § DALLAS COUNTY, TEXAS
PHROZEN ASSETS LLC §
Third-Party Plaintiff. §

PLAINTIFF’S OBJECTIONS, SPECIAL EXCEPTIONS, AND RESPONSE TO DEFENDANT’S
AND THIRD-PARTY PLAINTIFF’S TRADITIONAL AND NO EVIDENCE MOTION FOR
PARTIAL SUMMARY JUDGMENT

Plaintiff Red Mango FC, LLC (“Red Mango”) submits this Response to Defendant Howard
Grosser’s and Third-Party Plaintiff Phrozen Assets LLC’s (collectively “Grosser”) Traditional and No
Evidence Motion for Partial Summary Judgment (“Grosser’s Motions”) and respectfully requests that
Grosser’s Motions be denied in their entirety.

I. SUMMARY
1 While the lack of organization and structure in Grosser’s Motions makes it difficult to ascertain
the specific relief that Grosser is requesting!, from what Red Mango can gather, Grosser is requesting
summary judgment be granted on the following claims: 1. breach of Franchise Agreement; 2. breach of
Escrow Agreement; and 3. breach of fiduciary duty.?
2. Grosser’s Motions fail as a matter of law because Grosser does not meet his burden of proof,

and evidence submitted by Red Mango raises a genuine issue of material fact as to the following:

1. Breach of Franchise Agreement. Grosser has failed to meet his burden that no genuine issue of
material fact exists on the following elements:

a. that Phrozen Assets, LLC is a proper party to sue for breach of the Franchise A greement;

a. that Grosser performed, tendered performance of, or was excused from performing his
contractual obligations;

| The title of Grosser’s Motions include “No-Evidence” summary judgment, but the brief itself does not provide
support for this type of motion. On page 1 of Grosser’s Motions, Grosser states that he is seeking summary
Judgment on unjust enrichment, but never addresses this claim anywhere else in the motion.

Grosser Mot. Summ. J. p. 10, (1)(b).

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE-1b. that Red Mango breached the Franchise Agreement; and
c. that Grosser suffered injury.

2. Breach of Escrow Agreement. Grosser has failed to meet his burden that no genuine issue of
material fact exists on the following elements:

a. that Phrozen Assets is a proper party to the Escrow Agreement;
b. that Red Mango breached the Escrow Agreement;
c. that Grosser was injured.

3. Breach of Fiduciary Duty. Grosser has failed to meet his burden that no genuine issue of material
fact exists on the following elements:

a. that Phrozen Assets is a proper party to this agreement;
b. that Red Mango breached any fiduciary duty;
c. that Grosser was injured or alternatively that Red Mango was benefited.

Il. SUMMARY JUDGMENT EVIDENCE
3. Red Mango offers the following as summary judgment evidence in support of its response to
Grosser’s Motions:
e Exhibit 1 - Affidavit of Amanda Gribble (“A. Gribble Aff.”), including the following Exhibits:

o Exhibit A - franchise agreement between Red Mango and Howard Grosser (“Franchise
Agreement”)

o Exhibit B—V.17 2010 Red Mango Franchise Disclosure Document
o Exhibit C — Grosser’s signed FDD receipt page
e Exhibit 2 — Excerpts of the Oral Deposition of Howard Grosser (“H. Grosser Depo.”);

e Exhibit 3 — Merchants FoodService invoices provided by Grosser in response to Red Mango’s
Requests for Production;

e Exhibit 4 — Excerpts of the Oral Deposition of Phrozen Assets, LLC’s corporate representative
(“Phrozen Depo.”), including the following Exhibit:

o Phrozen Depo Exhibit 18 —JMA Contracting Invoices

o Phrozen Depo Exhibit 23 — Letter from Howard Grosser to Miguel Foegal, COO of Red
Mango, dated January 2, 2013 (“Grosser Refusal Letter’)

e Exhibit 5 — Grosser’s Responses and Objections to Red Mango’s Second Set of Interrogatories
(“Grosser Rogs”);

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE -2e Exhibit 6 — Email and summary of Grosser’s Grand Opening (“Grand Opening Summary”);
e Exhibit 7 — New Store Approval Check List and Contractor Punch List (“Punch List”);
e Exhibit 8 - Affidavit of Sal Rincione (“S. Rincione Aff.”), including the following Exhibits:
o Exhibit A — Load King Quotation Form and Load King Terms and Conditions
o Exhibit B — Photo of exterior of Grosser’s Store
o Exhibit C — Email correspondences regarding construction of Grosser’s Store
o Exhibit D — email correspondences regarding $7,500 payment to Load King
e Exhibit 9 — Affidavit of Greg Kaloustian (“G. Kaloustian Aff.”);

e Exhibit 10 — Email correspondences from Grosser produced in response to Red Mango’s
Requests for Production;

e Exhibit 11 - Excerpts of the Oral Deposition of Red Mango’s Corporate representative (“Red
Mango Corp. Rep”); and

e Exhibit 12 — Excerpts of the Oral Deposition of Sal Rincione (“S. Rincione Depo”).
4, True and correct copies of all exhibits listed above are attached hereto and incorporated herein
for all purposes as if set forth at length.

Ill. FACTS

A. The Franchise Agreement.
5. On or about February 18, 2011, Grosser entered into a franchise agreement with Red Mango
(“Franchise Agreement”), under which Grosser acquired the right and undertook the obligation to
develop and operate a RED MANGO*® store (“‘Store”).’
6. Section 3.1 of the Franchise Agreement states that Grosser “must identify and acquire a site for
the Store by the Control Date specified in the Summary Pages. . . Ultimate site-selection is solely
[Grosser’s] responsibility.”

7. Section 4.2 of the Franchise Agreement states that Grosser “shall pay Red Mango a

3 Exhibit 1 ~ A. Gribble Aff, Ex. 1A pp. 1-49.

“Td. atp. 9, § 3.1.

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE -3nonrefundable and continuing royalty fee in an amount specified in the Summary Pages . . > The
Summary Pages specifies “6% of Gross Revenue derived during the applicable Accounting Period” as
the royalty fee (“Royalty Fee”).

8. Section 4.4 of the Franchise Agreement states “No Set-Off Rights. [Grosser] may not set off,
deduct or otherwise withhold any fees or other amounts due Mango under this A greement on the grounds
of alleged non-performance by Mango of any of its obligations or for any other reason. Withholding
royalties or any other amounts due Mango is a material breach of this Agreement.”

9. Section 4.9 of the Franchise Agreement states that “Any payments not received by Mango by the
Due Date will accrue interest at the rate of 18% per annum or the highest lawful interest rate permitted
by the jurisdiction in which the Store operates, whichever is less.” (“Interest”).®

10. Section 9.3 of the Franchise Agreement states that Grosser “shall contribute to the Brand

Development Fund (the “Fund”) the amount stated in the Summary Pages.”

The Summary Pages
specifies an “amount designated by Mango not to exceed 4% of Gross Revenue derived during the
applicable Accounting Period” as the Brand Development Fund Contribution (“Brand Development
Fund”).!°

11. Section 9.5.2 of the Franchise Agreement states that “all proceeds from the sale of all gift
certificates and stored value cards belong exclusively to Mango, and [Grosser] shall remit the proceeds of
such sales to Mango according to the procedures that Mango prescribes periodically. (“Gift Card
Charges”)'! (Royalty Fee, Brand Development Fund, Interest, and Gift Card Charges are hereinafter

referred to collectively as “Past-Due Fees”).

5 Id. at p. 10, § 4.2,

8Id. at, p.4.
"Id. atp. 11, § 4.4,

8 Id. atp. 11-12, § 4.9.

°Td. at pp. 18-19, § 9.3.

101d. at, p. 4.
Td. at pp. 20, § 9.5.2.

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE-412.

During the time that Grosser’s Store was open, Grosser displayed Red Mango’s trademarks on the
Store’s signage’® and on the frozen yogurt cups," provided seating and tables with umbrellas displaying
the Red Mango trademark", and sold Red Mango’s frozen yogurt product (collectively, “Red Mango

System”).!° Grosser has failed and refused to pay Red Mango any Past-Due Fees for the period in which

Grosser opened his Store in late March of 2012 and closed his store in mid-January 2013.”

his Store was open.”

13.

The franchise disclosure document provided to Grosser prior to the execution of the franchise

agreement (“Red Mango FDD”) states the following:

14,

traditional (self-serve) $354,500.00 and non-traditional (no seating in a mall).'° While Grosser’s store

was located in an indoor mall, Grosser’s Store did provide seating and tables to its customers”, offered a

We currently offer three franchise opportunities: the Traditional Store, the Non-
Traditional Outlet, and the Self-Serve Store. A Traditional Store is a full service Store
offering a variety of flavors. It occupies approximately 1,000 to 1,200 square feet of
commercial space, and typically is located on a major thoroughfare, in or adjacent to a
retail strip mall or shopping center, or in an urban storefront. A Non-Traditional Outlet
offers limited or no seating (for example, as in a shopping mall environment) and may
offer limited product selections. It typically occupies approximately 250 to 800 square
feet of commercial space and typically is located within an enclosed shopping mall,
college campus or other closed market environment. A Self-Serve Store offers self-serve
yogurt, and features a variety of flavors. It occupies approximately 1,400 to 2,000 square
feet of commercial space and typically is located on a major thoroughfare, in or adjacent
to aretail strip mall, or in an urban storefront.'®

In response to Red Mango’s interrogatories, Grosser stated that “my store is a hybrid of

variety of flavors”!, and permitted customers to serve the yogurt themselves.”

2
13
uu

15

Exhibit 2 — H.Grosser Depo p. 255, lines 7-12.
Id. at p. 256 line 2.
Id. at p. 257 lines 2 ~ 11.
Id. at p. 263 lines 5 ~ 20.

16 See Exhibit 3 p. 266 lines 63 — 64, p. 267 line 23; See also Exhibit 4 — Phrozen Depo. p. 274 line 20 — 22.

 

”” Exhibit 4 — Phrozen Depo p. 275 lines 3 ~ 6, p. 277 lines 13 — 16, & Phrozen Depo Exhibit 23 — Grosser Refusal

Letter.

 

18 Exhibit 1 — A. Gribble Aff., Ex. 1B. p. 56. (emphasis added).

19
20
a
2

Exhibit 5 — Grosser Rogs, p. 287 19.

Exhibit 2 — H.Grosser Depo. p. 263 lines 5 ~ 20.
Id. at p. 258 line 20 — p. 259 line 3.

Id. at p. 259 ~ 262.

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE-515. Grosser entered into a Franchise Agreement for a “Traditional or Self-Serve Store” and paid a
$35,000 initial franchise fee.” In return, Red Mango granted Grosser a 10-year term on his Franchise
Agreement.“ Had Grosser signed a Non-Traditional franchise agreement, he would have only been
granted a five-year term.”°

16. Grosser paid a $9,600 project management fee, which Red Mango paid to Cassidy Turley to
assist Grosser with real estate selection, site selection, and construction support.”° The only time that the
$9,600 fee is not required from a franchisee is when the franchisee does not need such real estate and
development services.””

17. Grosser paid a $10,000 grand opening fee, and in retum Grosser received a grand-opening
package.”

B. The Escrow Agreement.

18. Grosser entered into a written contract with Load King, under which Grosser agreed to “pay
Load King 50% of the total contract price stated in the Quotation upon Customer’s execution of the
Quotation, and the remaining 50% of the total contract price one week prior to the Requested Ship
Date”? Upon Load King’s request for the 50% remaining balance of its fees, Grosser failed and refused
to pay the remaining balance.*’ The $7,500 balance that Grosser failed and refused to pay to Load King

represented Load King’s labor costs to install Grosser’s millwork.*! Upon Grosser’s request,” Mr.

x Exhibit 1 - A. Gribble Aff. Ex. 1A_p. 4, p. 7, § 1.1.
Id.

51d. at_p. 5; Exhibit 11 ~ Red Mango Depo, p. 342, Page 91 lines 10 ~ 16, p. 340, Page 178 lines 1 ~ 14.
26 Exhibit 11 — Red Mango Depo. , p. 340, Page 178 line 15 — Page 179 line 11; p. 341 Page 243 lines 12 — 25.

271d. Page 243 lines 12-25.
8 Exhibit 6 — Grand Opening Summary.

* Exhibit 8 — S. Rincione Aff Ex. 8A p. 309, 14.
30 Td. at Ex. 8C, p. 315, p 320 (Grosser - “I will send a check for the balance less $7,500.00” Load King - “We will

need to get full payment to ship. Cannot short $7,500. The balance due is $35,008.49.”), p. 319(Load King - “Sal,
Call me on this. Howard just hung up on me. Does not want to pay the installation until complete.”). [delete
comment]

31 Id. at _p. 322 (Grosser ~ “Please break out the labor component of each item . . .” Load King “Our install is
$7,500”), p. 317 (Grosser — “I requested a labor breakout and Mr. Rees provided one. I explained to Mr. Rees that I
am choosing to delete the labor portion of Load King’s responsibilities for this project”).

* Id. at Ex. C, p. 315 (“The only alternative I can think of, is putting the install monies in escrow.”).

 

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE-6Rincione agreed to hold the funds “until I have completed the final walk through and you are satisfied. .

2933

19. On March 24, 2012, Sal Rincione, Greg Kaloustian, and Howard Grosser conducted a
walkthrough of Grosser’s Store, and both Grosser and Mr. Rincione signed off on Red Mango’s New
Store Open Approval Checklist and Contractor’s Punch List (“Punch List”)."* After signing the Punch
List, Grosser agreed in front of Mr. Kaloustian and Mr. Rincione that the $7,500 check Red Mango was
holding in escrow could be released to Load King.*> Grosser shook both Mr. Kaloustian and Mr.
Rincione’s hand on this agreement.*° On April 3, 2013 Load King asked Mr. Rincione when the $7,500
check would be cut, and Theda Rapant from Red Mango advised that the check would be cut on Friday,
April 6, 2012.°”

20. Atsome point after the Store walkthrough, Grosser and his general contractor, JMA Contracting,
Inc. (“JMA”), entered into a separate agreement with Load King, whereby JMA agreed to perform some
of Load King’s remaining Punch List items (“Punch List Agreement”).°*> Red Mango was not a party to

39

this Punch List Agreement.”” The remaining three items on the Punch List included 1. “Install Stainless

cover on ice chest enclosure”; 2. “Replace smoothie topping bar with 30” Unit”; and 3. “tail piece for
topping bar owed from Load King”.’° JMA subsequently performed the second Punch List item and
submitted an invoice in the amount of $4,240 for this work." On or about May 4, 2014, Load King paid

this invoice to JMA directly, and JMA has made no demands on Grosser for payment on this invoice."

33 Id. at p. 314.

* Exhibit 7 - Punch List; Exhibit 8 ~ S. Rincione Aff. p. 306 5; Exhibit 9 ~ G. Kaloustian Aff. p. 327 (5.

35 Exhibit 8 — S. Rincione Aff p. 306 15.; Exhibit 9 — G. Kaloustian Aff. p. 327 95; Exhibit 12 — S. Rincione Depo.
p. 345, Page 11 lines 5-12.

1d.

*” Exhibit 8 ~ S. Rincione Aff, Ex. 8D, p. 324-325.

38 Exhibit 10 p. 338.

39 Id.

*° Exhibit 7 - Punch list, p. 304.

' Exhibit 10 p. 335; See also Exhibit 4 - Phrozen Depo. p. 271-272 lines 21 ~ 19 and Phrozen Depo Exhibit 18, p.
279.

* See Exhibit 10 p.335; See also, Exhibit 4 - Phrozen Depo. p. 273 lines 1-10.

 

 

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE -721. On May 4, 2013 Load King asked Grosser who the best onsite contact would be for the
remaining two Punch List items, and advised Grosser that the tail piece (Punch List item #3) had come
in.” In response, on May 6, 2012 Grosser emailed Jon Rees listing no less than seven different items not
included on the Punch List that Grosser demanded that Load King include as part of the final Punch
List.“ Mr. Rees responded stating that “As far as the punch list, we will not be completing the items you
feel are ‘open’”, and referred the matter to Load King’s legal division.”®

IV. ARGUMENTS AND AUTHORITIES

A. Red Mango objects and has filed a corresponding Motion to Strike all of Grosser’s summary-
judgment evidence.

22. Red Mango realleges and incorporates herein by reference each of the factual allegations above
as though fully set forth herein.

23. Red Mango incorporates herein by reference Red Mango’s accompanying Objections and
Motion to Strike all of Grosser’s summary judgment evidence.*® Grosser cannot meet his burden to
prove that no genuine issue of material fact exists to each of his claims and that he is entitled to judgment
as a matter of law because the “evidence” Grosser attached to the Grosser Motions are inadmissible and
should not be considered by the Court.

B. Grosser has provided no support or basis for bringing a No-Evidence Motion for Partial

Summary Judgment.

24. Red Mango realleges and incorporates herein by reference each of the factual allegations above
as though fully set forth herein.

25. A party can only file a no-evidence summary judgment motion on a claim or defense on which

the non-movant (i.e. Red Mango) has the burden of proof.” The only instance in which a no-evidence

43 Exhib p. 335.
“1d.
45 Id.

6 See Pl.’s Objections to Def.’s Summ. J. Evidence and Mot. to Strike.
“’ Thomas v. Omar Invs., 156 s.w.3d 681, 684 (Tex. App. — Dallas 2005, no pet.); Waite v. Woodard, Hall & Primm,
P.C., 137 s.w.3d 277, 280 (Tex.App.—Houston [1* Dist] 2004, no pet.).

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE-8motion can help the movant is when the burden of proof is on the non-movant.’® Here, Grosser has
presented a “Traditional and No-Evidence Motion for Partial for Summary Judgment”, yet he only seeks
summary judgment on claims in which he — not Red Mango — has the burden of proof. Moreover,
Grosser’s Motions present no arguments or bases for why Grosser should be entitled to relief under a no-
evidence summary judgment motion.

26. Thus, Grosser’s no-evidence motion for partial summary judgment should be denied.

C. Grosser’s Traditional Motion for Partial Summary Judgment should be denied because

Grosser cannot meet his burden of proof and evidence submitted by Red Mango raises a
genuine issue of material fact as to each of Grosser’s claims.

 

27. Red Mango realleges and incorporates herein by reference each of the factual allegations above
as though fully set forth herein.

28. For a traditional summary-judgment motion, the moving party bears the burden of proving that
there exists no genuine issue of material fact and that they are entitled to judgment as a matter of law.”
If the movant does not conclusively establish that it is entitled to summary judgment as a matter of law,
summary judgment is improper.’ All doubts as to the existence of a genuine issue of material fact are
resolved against the movant and every reasonable inference must be indulged in favor of the non-
movant.*!

29. In examining the record in the light most favorable to the plaintiff, Red Mango, and disregarding
all contrary evidence and inferences, this Court should deny Grosser’s Traditional Motion for Summary
Judgment for the reasons set forth below.

1. Grosser has not met his burden to show that no genuine issue of material fact exists on
his breach-of-Franchise-A greement claim.

30. Red Mango realleges and incorporates herein by reference each of the factual allegations above

“8d.

“9 TEX. R. CIV. P. 166a(c); Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex. 1991); Nixon v. Mr. Property
Mgmt. Co., Inc., 690 S.W.2d 546 (Tex. 1985).

°° See, e.g. Wesson v. Jefferson S&L Ass'n, 641 s.w.2d 903, 906 (Tex. 1982).

5! Williams v. Clash, 789 S.W.2d 261, 264 (Tex. 1990); Nixon v. Mr. Property Management Co., 690 S.W.2d 546,
548-549 (Tex. 1985).

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE -9as though fully set forth herein.

31. To prevail on a claim for breach of contract the claimant must establish that 1. a valid,
enforceable contract exists; 2. the claimant is a proper party to sue for breach of contract; 3. the plaintiff
performed, tendered performance of, or was excused from performing its contractual obligations; 4 the
defendant breached the contract; 5. the defendant’s breach caused claimant injury.** Grosser has not met
his burden of proof for the following reasons: a. Phrozen Assets, LLC is not a proper party to the
Franchise Agreement; b. Grosser did not fully perform his obligations under the Franchise Agreement; c.
Red Mango did not breach any obligation it had under the Franchise Agreement; e. Grosser was not
injured.

1a. Phrozen Assets, LLC is not a proper party to the Franchise Agreement.

 

32. Grosser has presented no evidence to show that Phrozen Assets, LLC is a proper party to the
Franchise A greement. Phrozen Asseets, LLC is not a signatory on the Franchise A greement, thus has no
standing to bring a claim against Red Mango for breach of the Franchise Agreement.

1b. Grosser did not perform, tender performance of, or was excused from performing his contractual
obligations under the Franchise Agreement.

 

33. To prove an action for breach of contract, the plaintiff must establish that it fully or substantially

performed its contractual obligations or show that it was excused from performing its contractual

obligations.** Whether or not a contract was fully or only substantially performed is a question of fact.°°

Full performance means all contractual duties have been fulfilled and nothing is left to be done.*°
Substantial performance is the legal equivalent of full performance; meaning that all the essential

elements of a contract were performed.°’ A party “substantially performs” if 1. it satisfies all essential

32 Foley v. Daniel 346 s.w.3d 687, 690 (Tex. App.—E] Paso 2009, no pet.); Mandell v. Hamman Oil & Ref, Co. 822
s.w.2d 153, 161 (Tex.App.—Houston [1 Dist.] 1991, writ denied); Snyder v. Eanes ISD, 860 s.w.2d 692, 695
(Tex.App.—Austin 1993, writ denied).

°° Exhibit 1 ~ Aff. A Gribble Ex. 1A, pp. 4, 5, 32, 35, 39, 48, 49.

54 Krayem v. USRP (PAC), L.P. 194 s.w.3d 91, 94 (Tex. App. — Dallas 2006, pet. denied).

55 Baldwin v. Smith, 586 S.W.2d 624, 628 (Tex. Civ. App. Tyler 1979).

86 Garcia v. Kastner Farms, 789 S.W.2d 656, 660-601 (Tex. App. Corpus Christi 1990).

57 Anderson v. Vinson Exploration, 832 S.W.2d 657, 666 (Tex. App. El Paso 1992).

 

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE - 10elements of the contract and 2. any defect in its performance does not destroy the purpose of the
contract.

34. Grosser argues that “Grosser paid Mango $35,000 for a Traditional Store, thereby satisfying his
contractual obligations.”® Grosser conveniently leaves out the fact that Grosser failed and expressly
refused to pay any Past-Due Fees, as obligated under the Franchise Agreement, despite operating his
Store under the Red Mango System from March 2012 until January 2013.

35. Grosser has provided no evidence to support an argument that he was excused from paying the
Past-Due Fees. Moreover, Section 4.4 of the Franchise Agreement expressly states that Grosser “may
not set off, deduct, or otherwise withhold any fees or other amounts due to Mango under this Agreement
on the grounds of alleged nonperformance by Mango of any of its obligations or for any other reason.’"!
36. Thus, a genuine issue of material fact exists as to whether or not Grosser fully or substantially
performed his contractual obligations under the Franchise Agreement, and as such, summary judgment is
not warranted.

1c. Red Mango did not breach the Franchise Agreement.

i. Franchise Agreement imposes no obligation on Red Mango to “provide” Grosser with a
certain type of store.

37. To prove an action for breach of contract, the plaintiff must establish that the defendant breached
the contract.” “Breach” means the failure, without legal excuse, to perform a promise that forms all or
part of an agreement, the refusal to recognize the existence of an agreement, or the doing of something

inconsistent with its existence. Whether a defendant breached the contract is a question of law for the

58 Uhlir v. Golden Triangle Dev. Corp., 763 S.W.2d 512, 514 (Tex. App. Fort Worth 1988).

5° Grosser Mot. Summ. J., p. 13.

60 Exhibit 4 — Phrozen Depo. p. 275 lines 3 — 6, p. 277 lines 13 — 16; Phrozen Depo Exhibit 23 — Grosser Refusal
Letter pp. 280 - 281.

°' Exhibit 1 - A. Gribble Aff. Ex.1A, p. 11 § 4.4.

® ‘Southwell v. University of the Incarnate Word, 974 S.W.2d 351, 354-55 (Tex.App.—San Antonio 1998, pet.
Denied).

®3 De Santis v. Wackenhut Corp., 732 S.W.2d 29, 34 (Tex. App. Houston 14th Dist. 1987).

 

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE-11court, not a fact question for the jury." The court must examine the contract and determine what conduct
is required of the parties, and then, if there is a dispute concerning the failure of a party to comply with
the contract, the court should submit the disputed fact question to the jury. When construing a written
contract, the primary concern of the court is to ascertain the true intent of the parties as expressed in the
instrument. — In doing so, the court must examine and consider the entire contract in an effort to
harmonize and give effect to all provisions so that none are rendered meaningless.”
38. Contractual provisions should be considered with reference to the entire instrument; no one
phrase, sentence, or section should be isolated from its setting and considered apart from the other
provisions. Moreover, in construing a contract, courts may not rewrite it nor add to its language.”
39. Grosser attempts to add his own language to the Franchise Agreement by asserting that “[Red]
Mango agreed to provide Grosser with a Traditional Store.””” Grosser presents no evidence and cites no
provision in the Franchise Agreement to support his assertion that Red Mango had an obligation or
agreed to “provide” Grosser with a Traditional Store. Indeed, Section 3.1 of the Franchise Agreement
puts the obligation of store selection solely on Grosser— not Red Mango.”

ii. Grosser’s store was not a “Non-Traditional” Store.
40. Red Mango disputes that Grosser’s Store was a “Non-Traditional” store. While a “Traditional”

Store is typically located in a major thoroughfare whereas a “Non-Traditional” Store is typically located

°F P. Towne Ctr. Partners, L.P. v. Chopsticks, Inc., 242 S.W.3d 117, 123 (Tex. App. El Paso 2007).

®5 Meek v. Bishop Peterson & Sharp, P.C., 919 S.W.2d 805, 808 (Tex. App. Houston 14th Dist. 1996).

5 See NP Anderson Cotton Exch., L.P. v. Potter, 230 S.W.3d 457, 463 (Tex.App.-Fort Worth 2007, no pet.); See
also, Republic Nat'l Bank of Dallas v. Nat'l Bankers Life Ins. Co., 427 S.W.2d 76, 79-80 (Tex.Civ.App.-Dallas
1968, writ ref'd n.re.) (noting that courts should not consider the “intention which the parties may have had, but
failed to express in the instrument”).

57 See Potter, 230 S.W.3d at 463; J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003).

88 See Webster, 128 S.W.3d at 229; Potter, 230 S.W.3d at 463; See also, Wynnewood State Bank v. Embrey, 451
S.W.2d 930, 932 (Tex.Civ.App.--Dallas 1970, writ ref'd n.re.).

®9 See Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 162 (Tex.2003).

7 Grosser Mot. Summ. J., p. 10.

7| Exhibit 1 - A. Gribble Aff, Ex. 1A p. 9 § 3.1. (“You must identify and acquire a site for the Store by the control
Date specified . . . Ultimate site selection is solely [Grosser’s] responsibility.”).

   

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE - 12within an enclosed shopping mall,” these features are not requirements that must be met to satisfy the
definitions of Traditional versus a Non-Traditional Store. Grosser cites to no provision in the Franchise
Agreement that states Grosser must open a store (or that Red Mango must provide Grosser a store)
meeting certain criteria such as square footage or venue.

41, While Grosser’s store was located in an indoor mall, which is typically a feature of a Non-
Traditional Store,” Grosser’s Store also offered a variety of flavors” provided seating and tables to its
customers”, and permitted customers to serve the yogurt themselves,”° all of which were features of a
both Traditional and Self-Serve Stores.”” Grosser himself even admitted that his actual store location was
a hybrid between Non-Traditional and Self Serve.” Even if, arguendo, Grosser’s store fit 100% of the
description of the features of a Non-Traditional Store, Red Mango still did not breach the Franchise
Agreement since Red Mango did not agree to provide Grosser with a particular type of store location, and
such responsibility fell solely on Grosser.”?

1d. Grosser has suffered no damages

42. Grosser argues that he is entitled to recover $32,100, calculated based on his argument that he
should have paid $17,500 instead of $35,000 as an Initial Franchise Fee; $0 instead of $9,600 for a
Project Management Fee; and $5,000 instead of $10,000 for a Grand Opening Fee.”

43, Grosser entered a Franchise Agreement for a “Traditional or Self-Serve Store” and paid a

"1d. at Ex. 1B.p. 56 (“A Traditional Store . . . typically is located on a major thoroughfare, in or adjacent to a retail
strip mall or shopping center, or in an urban storefront. A Non-Traditional Outlet . . . typically is located within an
enclosed shopping mall . . .”) (emphasis added).

% Id. (“A Non-Traditional Outlet . . . typically occupies approximately 250 — 850 sqare feet . . . and is typically
located within an enclosed shopping mall . . .”).

™ Exhibit 2 — H.Grosser Depo. p. 95 line 20 ~ p. 96 line 3.

® Id. at p. 263 lines 5 ~ 20.

™ Td, at p. 259 - 262.
7 Exhibit 1 - A. Gribble Aff., Ex. 1B. p. 56 (“A Traditional Store is a full service Store offering a variety of flavors .

. A Self-Serve Store offers self-serve yogurt, and features a variety of flavors”).

78 Exhibit 5 — Grosser Rogs., p. 287 {9 (“my store is a hybrid of traditional (self-serve) $354,500.00 and non-
traditional (no seating in a mall)”).

” Exhibit 1 - A. Gribble Aff, Ex. 1A, p.9 § 3.1.

5° Grosser Mot. Summ. J. p. 10.

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE - 13$35,000 initial franchise fee.*! In return, Red Mango granted Grosser a 10-year term on his Franchise
Agreement.” Had Grosser signed a Non-Traditional franchise agreement, he would have only been
granted a five-year term.®* Grosser does not argue in his motion that Red Mango unilaterally reduced the
term of the Franchise Agreement from ten years to five years.

44, Grosser paid a $9,600 project management fee, which Red Mango paid to Cassidy Turley to
assist Grosser with real estate selection, site selection, and construction support. The only time that the
$9,600 fee is not required from a franchisee is when the franchisee does not need such real estate and
development services. Grosser does not argue, nor does he present evidence to show, that he was not
provided with site-selection and build-out assistance in return for the $9,600 project management fee.

45. Grosser paid a $10,000 grand opening fee, and in retum Grosser received a grand-opening
package.®° Grosser does not argue, nor does he present evidence to show, that he was not provided with a
grand-opening package.

46. Thus, Grosser suffered no damages, and is not entitled to summary judgment based on his claim
that Red Mango breached the Franchise A greement.

2. Grosser has not met his burden to show that no genuine issue of material fact exists on
his breach of Escrow Agreement claim.

47. Red Mango realleges and incorporates herein by reference each of the factual allegations above

as though fully set forth herein.

Exhibit 1 -A. Gribble Aff., Ex. 1A p. 4, p.7,§ 11.

Id.
83 Td. at_p. 5 (“Traditional or Self-Serve Store: on the 10" anniversary of the Store opening . . .”); Exhibit 11 — Red
Mango Depo, p. 342, Page 91 lines 10 — 16 (“[Grosser] would have been faced with a shorter franchise term of five
years. If he had opted for a full ten-year term, he would have received an exact franchise fee and the royalties
associated with it.”), p. 340, Page 178 lines 1 — 14 (“If [Grosser] had signed a nontraditional franchise agreement for
the same term that he signed here, which is ten years, he would have paid the $35,000. The franchise fee is half of
the 35 for a standard nontraditional store because the term is half.”).
° Exhibit 11 — Red Mango Depo, p. 340, Page 178 line 15 ~ p. 179 line 11 (A -“The project management fee is not
our fee. It’s a fee that’s charged that is passed through the project manager for that location. Q - “So a nontraditional
store, Mr. Grosser would not have been charged that $9,600?” A -“To the extent that he used the services he used in
this case, which was real estate selection, site selection, construction support, et. cetera, he would have been charged
the fee.” Q. - “Would it have equaled the total of $9,600?” A. “Yes, same fee.”.); See also, p. 243 lines 12 — 25.
® Id. at_p. 341, Page 243 lines 12-25,
°° Exhibit 6 — Grand Opening Summary, pp. 296-298.

 

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE- 1448. Grosser has not met his burden to establish there is no genuine issue of material facts as to the
following elements on his breach of Escrow Agreement claim: a. that Phrozen Assets is a proper party to
this agreement; b. that Red Mango breached the Escrow Agreement; c. that Grosser was injured.

2a. Phrozen Assets, LLC is not a proper party to this agreement.

 

49. Grosser has presented no evidence to show that Phrozen Assets, LLC is a proper party to the

Escrow Agreement. Thus, Phrozen Assets, LLC does not have standing to bring this claim.

2b. Red Mango did not breach the Escrow Agreement.

50. On March 24, 2012, Sal Rincione, Greg Kaloustian, and Howard Grosser conducted a
walkthrough of Grosser’s Store and both Grosser and Mr. Rincione signed off on the Punch List.*” A fter
signing the Punch List, Grosser agreed in front of Mr. Kaloustian and Mr. Rincione that the $7,500 check
Red Mango was holding in escrow could be released to Load King." Grosser shook both Mr. Kaloustian
and Mr. Rincione’s hand on this agreement."

51. On April 3, 2013 Jon Rees from Load King emailed Sal Rincione asking when the $7,500 check
would be cut to Load King, and Theda Rapant from Red Mango advised that the check would be cut on
Friday, April 6, 2012. Red Mango contends after sending the $7,500 check to Load King, it fully
satisfied its obligations to both Load King and Grosser under the terms of the Escrow Agreement and
owed no additional obligations under the terms thereunder.

52. Thus, Red Mango did not breach the terms of the Escrow Agreement, and Grosser has failed to
meet his burden that no genuine issue of material fact on this element on his claim for breach of the

Escrow Agreement.

2c. Grosser has failed to show he was injured.

°” Exhibit 7 - Punch List pp. 299-304; Exhibit 8 — S. Rincione Aff p. 306 §5.; Exhibit 9 ~ G. Kaloustian Aff.p. 328
©.
58 Exhibit 8 — S. Rincione Aff p. 306 §5; Exhibit 9 ~ G. Kaloustian Aff.p. 328 §5; Exhibit 12 — S. Rincione Depo. p.

345, Page 11 lines 5-12.
"id.

 

 

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE - 1553. Plaintiff must show that injury is a natural, probable, and foreseeable consequence of the
defendant’s breach.*! To recover actual damages, plaintiff must prove it suffered some monetary
loss as a result of the breach.”

54. Grosser has not provided evidence of how he was injured by Red Mango’s alleged breach, and
instead just claims he is owed back his $7,500.

55. Under the terms of Grosser’s written contract with Load King, Grosser agreed to “pay Load King
50% of the total contract price stated in the Quotation upon Customer’s execution of the Quotation, and
the remaining 50% of the total contract price one week prior to the Requested Ship Date.”*? Despite the
terms of their written contract, Grosser failed and refused to pay the remaining 50% balance one week
prior to the Requested Ship Date. The $7,500 balance that Grosser refused to pay to Load King
represented Load King’s labor costs for installation of Grosser’s millwork.°> Grosser cannot claim he
was injured when he was obligated, pursuant to the terms of his written contract with Load King, to pay
this $7,500. Further, Grosser has provided no evidence to show that, had Load King not installed
Grosser’s millwork, Grosser would have not incurred similar costs associated with hiring a different
contractor to install his millwork.

56. Grosser further alleges that he had to complete the Punch List items himself “at his additional
cost and expense”, but provides no evidence of what “additional cost and expense” Grosser incurred.®°
Instead, Grosser merely cites “Exhibit F” to support his claim for additional costs, but Exhibit F only

consists of a string of emails between Grosser and Load King prior to the creation of the Punch List on

 

° Exhibit 8 — S. Rincione Aff., Ex. D, pp. 324-325,

5! Mead v. Johnson Group, Inc., 615 S.W.2d 685, 687 (Tex. 1981).

% allen v. Am. Gen. Fin., Inc., 251 S.W.3d 676, 685 (Tex. App. San Antonio 2007).

°S Exhibit 8 ~ S. Rincione Aff Ex. 8A p. 309, 94.

* Exhibit 8 — S. Rincione Aff Ex. 8C, p. 320 (Grosser - “I will send a check for the balance less $7,500.00” Load
King - “We will need to get full payment to ship. Cannot short $7,500. The balance due is $35,008.49.”), p. 319
(Load King - “Sal, Call me on this. Howard just hung up on me. Does not want to pay the installation until
complete.”).

%5 Td. at pp. 321-322 (Grosser — “Please break out the labor component of each item . . .” Load King “Our install is
$7,500”), p. 317 (Grosser — “I requested a labor breakout and Mr. Rees provided one. I explained to Mr. Rees that I
am choosing to delete the labor portion of Load King’s responsibilities for this project”).

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE - 16March 23, 2013.” The Punch List contained three items to be complete by Load King: 1. “Install
Stainless cover on ice chest enclosure”; 2. “Replace smoothie topping bar with 30” Unit”; and 3. “tail
piece for topping bar owed from Load King”. Not only has Grosser provided no evidence to show what
“additional expenses” he incurred regarding these three Punch List items, but evidence shows that Load
King — not Grosser was the one that incurred expenses related to the remaining Punch List items.

57. At some point after Punch List was created, Grosser and JMA, entered into a separate agreement
with Load King, whereby JMA agreed to perform some of Load King’s remaining Punch List items
under (“Punch List Agreement”).°* Red Mango was not a party to this Punch List Agreement. JMA
subsequently performed the Punch List item #2 and submitted an invoice in the amount of $4,240 to
Load King for this work.'' On or about May 4, 2014, Load King paid this invoice to JMA directly.”
JMA has made no demands on Grosser for payment of this invoice.'° Thus a genuine issue of material
fact exists as to what expenses, if any, Grosser incurred.

3. Grosser has not met his burden to show that no genuine issue of material fact exists on
his breach of fiduciary duty claim.

58. To prove an action for breach of fiduciary duty, the plaintiff must establish that the defendant

breached its fiduciary duty.!“ General fiduciary duties of escrow agents include duty of loyalty, duty of

 

6 Grosser. Mot. Summ. J. p. 3.
*” Exhibit 7, p. 303.

°° Exhibit 7, p. 304.
% Exhibit 10 p. 338 (“I understand that there was a verbal agreement with JMA concerning JMA performing some of

Load King’s work. Initially, it was expected that JMA would issue a deductive change order for this work, but with
no account from which to deduct, I will advise JMA to bill you directly and expect that the agreement between you
two is honored.”).

100 Id.

1" Exhibit 10. p. 335, Exhibit 4 - Phrozen Depo. p. 271-272, lines 21 ~ 19 and Phrozen Depo Exhibit 18 p.
379(“This was specifically for Load King deficiencies. This invoice. . . .that $3,305 was the fabrication of a new
solid surface countertop to replace the one that Load King provided that was incorrect. And it was also . . . to
reinstall the sneeze guard . . . and John’s labor to gather up the materials that Load King requested be returned to
them.”).

102 Exhibit 10 p. 335 (“JMA approval for invoice sent to accounting today”); See also, Exhibit 4 - Phrozen Depo p.
273 lines 1-10 (Q. — “Has JMA made any demands for this outstanding invoice within the last year?” A. — “No.
John’s not talked to me about it. . . if I owe him money, I’ll make it up to him. He’s not asked me.” Q. Did JMA
ever receive any money from Load King?” A. “Load King says they paid him.”).

 

108 Priddy v. Rawson, 282 S.W.3d 588, 599 (Tex. App. Houston 14th Dist. 2009).

PLAINTIFF’S RESPONSE TO DEFENDANT’S AND THIRD-PARTY PLAINTIFF’S
TRADITIONAL AND NO EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE -17full disclosure, and duty to refrain from self dealing.'® Fiduciary duties do not extend to matters beyond
the scope of the parties’ underlying relationship.’ Escrow agents owe a fiduciary duty to both parties to
the contract.!”” Grosser has failed to meet his burden that no genuine issue of material fact exists as to
the following elements: a. that Red Mango owed a Fiduciary Duty to Phrozen Assets, LLC; b. that Red
Mango breached one of its fiduciary duties; or c. that Grosser was injured, or alternatively that Red
Mango benefited from such alleged breach.

3a. Red Mango owes no Fiduciary Duty to Phrozen Assets, LLC.

 

59. Grosser has presented no evidence to show that Phrozen Assets, LLC is a proper party to the
Escrow