Texas

Warning: The following opinion is provided for purposes of discussion only. We have not Shepardized™ this opinion, and do not know the subsequent disposition of this case nor whether the effect of the opinion has been overruled or superceded by other law.

1994 Land Fund II v. Ramur, Inc.
2001.TX.0000831 (Tex.App. Dist.5 02/05/2001)

Synopsis

The Resolution Trust Corporation assigned a note it acquired from a failing financial institution to 1994 Land Fund II. Land Fund sued Ramur, Inc. and others, alleging fraudulent transfer and conspiracy to fraudulently procure a release of lien from the RTC on property securing the note. Land Fund appeals the summary judgment in favor of RTC. The issue in this case is whether a civil conspiracy can exist in a real estate transaction. A civil conspiracy consists of two or more persons combining to accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful means. The essential elements of conspiracy are: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as the proximate result. The court held that the evidence is sufficient to raise a fact issue on whether there was a meeting of the minds between Ramur and Watson to fraudulently secure the release of lien on Lot 2, and whether Ramur performed an overt act in furtherance of the conspiracy in its correspondence with the RTC.

Opinion

1994 Land Fund II v. Ramur, Inc., 2001.TX.0000831 (Tex.App. Dist.5 02/05/2001)

In The Court of Appeals Fifth District of Texas at Dallas

No. 05-98-00074-CV

2001.TX.0000831

February 5, 2001

1994 LAND FUND II - DALLAS 1, L.P., APPELLANT

V.

RAMUR, INC., APPELLEE

On Appeal from the 193rd Judicial District Court, Dallas County, Texas, Trial Court Cause No. 97-11136-L

Before Justices Morris, Whittington, and Bridges

The opinion of the court was delivered by: David L. Bridges, Justice

REVERSED and REMANDED; Opinion Filed February 5, 2001

OPINION

Justice Bridges

The Resolution Trust Corporation (RTC) assigned a note it acquired from a failing financial institution to 1994 Land Fund II - Dallas 1, L.P. (Land Fund). Land Fund sued Ramur, Inc. (Ramur) and others, alleging fraudulent transfer and conspiracy to fraudulently procure a release of lien from the RTC on property securing the note. Land Fund appeals the summary judgment granted to Ramur. We reverse the summary judgment and remand the cause to the trial court for further proceedings.

FACTS

First Texas Capital and Realty Corporation, formerly known as First Texas Realty Corporation (First Texas), borrowed $1.465 million from Centre Savings, and the RTC acquired the loan as the receiver of Centre Savings. The loan was secured by a deed of trust on several tracts of land and personally guaranteed by Vernon Watson, who owned and controlled First Texas. After First Texas and Watson defaulted on the loan, they entered into an agreement with the RTC promising to pay over to the RTC the net proceeds from the sale of any property encumbered by the deed of trust. Fidelity National Title Agency, Inc. (Fidelity), the title company regularly used by First Texas, also signed the agreement and promised to notify the RTC of all contracts to sell the encumbered property.

Without notifying the RTC, Watson replatted Lot 2 under the deed of trust into Lot 2-R and Lot 4 and contracted to sell Lot 2-R for $225,000. According to Land Fund's petition, Watson then developed a scheme to avoid paying the RTC the proceeds on the Lot 2-R sale. Watson arranged for Mark Pappas and Centre Estates Development Corporation (Centre Development) to act as an intermediary to purchase Lot 2 for $66,500, to sell Lot 2-R for $225,000 at the same time, to use the proceeds from Lot 2-R to pay for Lot 2 and secure a release of the property from the RTC, to disburse the remaining funds to Watson, and to transfer Lot 4 without consideration to Post Oak Land Corporation (Post Oak), an entity owned by Watson's wife and controlled by Watson. These transactions were closed in July 1994 by Lois Cunningham of Fidelity. Although First Texas, Watson, and Fidelity had a written agreement to notify the RTC of all contracts to sell the encumbered property, they did not inform the RTC of the $225,000 contract on Lot 2-R or the transfer of Lot 4 to Post Oak. Contemporaneously with the closing of this transaction and during the time the RTC was reviewing the closing documents and preparing the release of lien for Lot 2, David Murdock, a friend of Watson, sent a letter to the RTC on Watson's behalf in an attempt to negotiate a compromise and settlement of the First Texas loan and to secure a release of the RTC's lien on the remaining property securing the loan. The letter did not discuss the release of lien on Lot 2, but did discuss the poor real estate market and Watson's depleted financial condition.

In 1995, Murdock and another investor formed Ramur, with Murdock as its president. In April 1995, Ramur loaned Post Oak $75,000, secured by a deed of trust on Lot 4. According to Land Fund, this money went to Watson since Post Oak served only as Watson's alter ego. In July 1995, Murdock sent another letter on Watson's behalf to the RTC representative, again attempting to negotiate a release of the RTC's lien on the remaining property securing the First Texas loan. The RTC was unwilling to settle the loan on Murdock and Watson's proposed terms. Watson and Post Oak then defaulted on the loan from Ramur, and Post Oak transferred Lot 4 to Ramur by deed in lieu of foreclosure.

The RTC subsequently assigned the First Texas note to Land Fund, and Land Fund discovered the Lot 2-R and Lot 4 transactions while attempting to collect the balance of the note. Land Fund sued First Texas, Watson, Post Oak, Centre Development, Pappas, Fidelity, Cunningham, and Ramur. The claims against Ramur alleged intentional misrepresentation, negligent misrepresentation, fraud in a real estate transaction, civil conspiracy, conversion, and unjust enrichment, stemming from the July 1994 transactions, and a claim that Post Oak fraudulently transferred Lot 4 to Ramur. Ramur moved for summary judgment, claiming it was not involved in any of the 1994 transactions and claiming the 1995 foreclosure on Lot 4 was not a fraudulent transfer because Ramur paid valuable consideration when it loaned Post Oak $75,000. The court granted summary judgment on all allegations against Ramur and severed these claims. This appeal followed.

In four issues, Land Fund argues it has standing to bring the suit against Ramur as the successor to the RTC, *fn1 summary judgment was improper on the fraudulent transfer claim and on the claims for civil conspiracy and other torts, and the RTC's independent appraisal of Lot 2 did not deprive it of the right to rely on misrepresentations made by Ramur and other defendants.

STANDARD OF REVIEW

The standards for reviewing summary judgments are well established. Nixon v. Mr. Property Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). For a defendant to prevail on summary judgment under rule 166a(c), he must show there is no genuine issue of material fact concerning one or more essential elements of the plaintiff's cause of action or establish each element of an affirmative defense as a matter of law. See Tex. R. Civ. P. 166a(c); Black v. Victoria Lloyds Ins. Co., 797 S.W.2d 20, 27 (Tex. 1990). After the defendant produces evidence entitling it to summary judgment as a matter of law, the burden shifts to the plaintiff to present evidence creating a fact issue. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979); Muckelroy v. Richardson Indep. Sch. Dist., 884 S.W.2d 825, 828 (Tex. App._Dallas 1994, writ denied).

In a no-evidence summary judgment, the movant must specifically state the elements as to which there is no evidence. Tex. R. Civ. P. 166a(i); Saenz v. S. Union Gas Co., 999 S.W.2d 490, 492 (Tex. App._El Paso 1999, pet. denied). The purpose of the rule requiring specificity in a motion for summary judgment is to provide the opposing party with adequate information for opposing the motion and to define the issues. Dear v. City of Irving, 902 S.W.2d 731, 734 (Tex. App._Austin 1995, writ denied). The specificity requirement is satisfied if the grounds in the motion give "fair notice" to the non-movant. Roth v. FFP Operating Partners, L.P., 994 S.W.2d 190, 194 (Tex. App._Amarillo 1999, pet. denied). The burden is upon the non-movant to bring forth evidence that raises a fact issue on the challenged elements. See General Mills Restaurants, Inc. v. Texas Wings, Inc., 12 S.W.3d 827, 832 (Tex. App._Dallas 2000, no pet.). A no-evidence summary judgment is essentially a pretrial directed verdict, and we apply the same legal sufficiency standard in reviewing a no-evidence summary judgment as we apply in reviewing a directed verdict. See id. at 832-33; Moore v. KMart Corp., 981 S.W.2d 266, 269 (Tex. App._San Antonio 1998, pet. denied).

In any motion for summary judgment, we take all evidence favorable to the non-movant as true and indulge every reasonable inference in the non-movant's favor. See Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997); Nixon, 690 S.W.2d at 549. When a summary judgment order does not specify the grounds upon which the ruling was granted, we will affirm the judgment if any theory advanced in the motion is meritorious. See State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 380 (Tex. 1993). However, a motion for summary judgment must "stand or fall on the grounds expressly presented in the motion." McConnell v. Southside Indep. Sch. Dist. , 858 S.W.2d 337, 341 (Tex. 1993). Granting a summary judgment on causes of action not addressed in the motion is reversible error. Mafrige v. Ross , 866 S.W.2d 590, 591 (Tex. 1993). Any issue not expressly presented to the trial court in a written motion or response may not be raised as grounds for reversal on appeal. Green v. Unauthorized Practice of Law Comm., 883 S.W.2d 293, 300 (Tex. App._Dallas 1994, no writ).

FRAUDULENT TRANSFER

In its second issue, Land Fund contends the court erred in granting summary judgment on its fraudulent transfer claims. Land Fund's petition alleges two theories of fraudulent transfer. See Tex. Bus. & Com. Code Ann. §§ 24.005(a)(1), (2), 24.006(a) (Vernon 1987 & Supp. 2001). Land Fund claims that Watson, using Post Oak as an alter ego, fraudulently transferred Lot 4 to Ramur. *fn2

If Post Oak is the alter ego of Watson and Lot 4 was fraudulently transferred to Ramur, Land Fund could obtain an avoidance of the transfer to the extent necessary to satisfy Land Fund's claim against Watson. See id. § 24.008 (Vernon 1987).

Ramur's motion for summary judgment asserts the transfer was not fraudulent because Ramur paid value for the property when it loaned Post Oak $75,000, there is no evidence of a fraudulent action by Ramur against the RTC, and no evidence that Ramur had knowledge of alleged fraudulent actions by other defendants against the RTC. In response to Ramur's motion for summary judgment, Land Fund alleged fact issues exist concerning the value of the property, Ramur's knowledge of Watson's insolvency, and Ramur's knowledge of Watson's intent to hinder, delay or defraud the RTC. We will consider each of Land Fund's theories of recovery.

The first fraudulent transfer claim alleges Watson and Post Oak transferred Lot 4 to Ramur with the intent to hinder, delay, or defraud the RTC, Watson's creditor. See id. § 24.005(a). *fn3

A transfer of property is not voidable under this section of the code if the transferee took the property in good faith and for reasonably equivalent value. See id. § 24.009(a) (Vernon 1987). "Reasonably equivalent value" means the value received is within the range of values for which the transferor would have sold the asset in an arm's length transaction. See id. § 24.004(d) (Vernon Supp. 2001). If a grantee has knowledge of his grantor's intent to delay, hinder or defraud creditors, the entire conveyance may be avoided as to such creditors even though a valuable consideration has been paid. See First S. Properties, Inc. v. Gregory, 538 S.W.2d 454, 457-58 (Tex. Civ. App._Houston [1st Dist.] 1976, no writ); Glenney v. Crane, 352 S.W.2d 773, 775 (Tex. Civ. App._Houston 1961, writ ref'd n.r.e.) (op. on reh'g). If the transferee took the property in good faith but did not pay reasonably equivalent value , the transferee may be entitled to a priority lien, to the extent of the value actually given. See Tex. Bus. & Com. Code Ann. 24.009(d)(1) (Vernon Supp. 2001).

Although Ramur's motion for summary judgment contends Ramur paid value for the property and had no knowledge of any fraudulent actions, Ramur presented no summary judgment evidence on any essential element of the claim or defense. Ramur presented no summary judgment evidence to establish Watson's and Post Oak's intent, Ramur's lack of knowledge concerning their intent, or the reasonably equivalent value of the property. *fn4 Furthermore, Land Fund presented deposition transcripts and letters as evidence that raised fact issues about the value of the property, Watson's continued control over the property, Watson's intent to defraud or hinder the RTC, *fn5

Watson's use of Post Oak as an alter ego, Ramur's knowledge of Watson's financial condition, and Ramur's knowledge of Watson's debt to the RTC under the First Texas loan.

Ramur's statements that it took no part in defrauding the RTC and had no knowledge of fraud by other defendants do not entitle it to summary judgment, even if true. Even an unsecured creditor may set aside a transfer of property intended to defraud creditors. See B & H Auto Supply, Inc. v. Andrews , 417 S.W.2d 341, 345 (Tex. Civ. App._Dallas 1967, no writ) (defining creditor under predecessor statute); see also Eckert v. Wendel, 120 Tex. 618, 622, 40 S.W.2d 796, 797 (1931) (describing right of unsecured creditor at common law). Land Fund's fraudulent transfer claim does not depend upon proof of Watson's fraudulent scheme to obtain a release of lien on the property from the RTC. Even if the other 1994 transactions were not at issue and the RTC had no valid lien on Lot 4 at the time of the transfer from Post Oak to Ramur , the RTC remained Watson's creditor for the unpaid balance of the First Texas loan.

Furthermore, Land Fund's fraudulent transfer claim does not require proof of Ramur's intent to defraud the RTC, even though Ramur's knowledge of Watson's intent to hinder the RTC would affect Land Fund's remedy. If Ramur knew Watson intended to delay, hinder, or defraud the RTC from its collection efforts, the transfer could be avoided even though Ramur paid valuable consideration for the property. See First S. Properties, Inc., 538 S.W.2d at 457-58. If Ramur took the property in good faith without knowledge of Watson's intent, but Ramur did not pay reasonably equivalent value for the property , Ramur would only be entitled to a priority lien, not a dismissal of the claim. See Tex. Bus. & Com. Code Ann. 24.009(d)(1). In either event, because Ramur presented no evidence to support its motion and Land Fund presented evidence to raise a fact issue concerning the essential elements of the claim, we conclude that Ramur was not entitled to summary judgment on this theory of recovery.

Land Fund's second fraudulent transfer claim alleges Watson and Post Oak transferred the property while insolvent and did not receive "reasonably equivalent value" in exchange for the transfer. See Tex. Bus. & Com. Code Ann. §§ 24.005(a)(2), 24.006(a) . *fn6

Under this theory of recovery, Watson's intent to hinder, delay, or defraud the RTC is not at issue. Land Fund need only prove that Post Oak was insolvent and that it did not receive a reasonable value for the property. Ramur's motion for summary judgment does not address this theory of recovery. Granting a summary judgment on causes of action not addressed in the motion is reversible error. See Mafrige, 866 S.W.2d at 591. When the defendant is the movant, summary judgment is proper only if the plaintiff cannot, as a matter of law, succeed upon any theory pleaded. Centeq Realty, Inc. v. Siegler , 899 S.W.2d 195, 197 (Tex. 1995); WTFO, Inc. v. Braithwaite, 899 S.W.2d 709, 719 (Tex. App._Dallas 1995, no writ). Moreover, Land Fund presented summary judgment evidence to raise a fact issue concerning the reasonably equivalent value of the property, Watson's and Post Oak's insolvency, Watson's use of Post Oak as an alter ego, and Ramur's knowledge of Watson's financial condition.

We conclude the court erred in granting summary judgment on both of Land Fund's fraudulent transfer claims. Therefore, we sustain Land Fund's second issue.

CONSPIRACY AND RELATED TORT CLAIMS

In its third issue, Land Fund contends the court erred in granting summary judgment on its conspiracy and related tort claims. To show entitlement to summary judgment on the civil conspiracy claim, Ramur alleged it had no part in procuring the release from the RTC, and it did not agree to participate in any type of alleged fraudulent scheme against the RTC. The only summary judgment evidence Ramur produced in support of these allegations was Murdock's affidavit. *fn7

Murdock stated he was not a party to any transfer of the subject property from Watson to Centre Development in 1994, and he was not aware of and is not aware of any fraudulent actions or any details of such transactions. Land Fund argues the affidavit was narrowly and carefully worded and does not cover all of the transactions which comprise the conspiracy. Furthermore, because the affidavit merely contains conclusory allegations about Murdocks lack of knowledge of "fraudulent transactions" without factual detail, it does not negate any element of the conspiracy claim. We agree.

Conclusory affidavits are not credible or susceptible to being readily controverted. Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 122 (Tex. 1996) (per curiam). A statement that a witness did not "agree" or "conspire" is not competent summary judgment evidence. Am. Petrofina Co. of Tex. v. Crump Bus. Forms, Inc., 597 S.W.2d 467, 471 (Tex. App._Dallas 1980, writ ref'd n.r.e.). Furthermore, self-serving statements of an interested witness about what he knew or intended are not competent summary judgment evidence. See Casso v. Brand, 776 S.W.2d 551, 558 (Tex. 1989); see also Lawrence v. TD Indus., 730 S.W.2d 843, 845 (Tex. App._Dallas 1987, writ ref'd n.r.e.) (Issues of intent, knowledge, and state of mind are not susceptible to being readily controverted and are best left to the determination of the trier of fact). Therefore, we agree that Watson's affidavit that he was not "aware of" any fraudulent transaction is conclusory and does not support summary judgment in Ramur's favor.Conspiracy and Fraud in a Real Estate Transaction

Ramur's motion for summary judgment also makes a "no-evidence" challenge to the claims of conspiracy and fraud in a real estate transaction. *fn8 Ramur's motion for summary judgment asserted that no evidence exists that Ramur participated in the fraudulent transfers and/or schemes in 1994 at Fidelity or that Ramur was aware of any fraudulent transactions that occurred in 1994. Rule 166a(i) provides that the motion "must state the elements as to which there is no evidence." Tex. R. Civ. P. 166a(i). Land Fund contends Ramur did not meet this requirement because the motion is merely a general denial of liability and does not contain any reference to any specific element of the causes of action for conspiracy or fraud in a real estate transaction. *fn9

We will consider the elements of conspiracy and fraud in a real estate transaction to determine whether Ramur's no-evidence assertions challenge any essential element of these claims. See Tex. R. Civ. P. 166a(i).

A civil conspiracy consists of two or more persons combining to accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful means. Massey v. Armco Steel Co., 652 S.W.2d 932, 934 (Tex. 1983). The essential elements of conspiracy are:

(1) two or more persons; (2) an object to be accomplished; (3) a meeting of minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as the proximate result. Id.*fn10 We conclude that Ramur's assertion that no evidence exists that Ramur participated in the fraudulent transfers or that Ramur was aware of any fraudulent transactions is specific enough to give Land Fund fair notice Ramur challenges the existence of evidence of a meeting of the minds between Ramur and any alleged co-conspirator and evidence that Ramur performed any unlawful or overt act in furtherance of the conspiracy. See Roth, 994 S.W.2d at 194.

Fraud in a real estate transaction consists of a false representation of a past or existing material fact, made to a person to induce him to enter into a contract, and relied on by that person in entering into the contract. See Tex. Bus. & Com. Code Ann. § 27.01(a) (Vernon 1987). A person also commits fraud in a real estate transaction if he has actual awareness of the falsity of a representation or promise made by another person, fails to disclose the falsity of the representation or promise to the person defrauded, and benefits from the false representation or promise. See id. § 27.01(d). Actual awareness may be inferred where objective manifestations indicate that a person acted with actual awareness. Id. We conclude that Ramur's no-evidence challenge is specific enough to give Land Fund fair notice that Ramur challenges the existence of evidence that Ramur knowingly made any false representation or promise to the RTC. See Roth, 994 S.W.2d at 194.

Ramur's motion also asserts there is no evidence Ramur owed a duty to disclose anything to the RTC relating to the 1994 transactions. Actionable nondislosure fraud requires a duty to disclose. See Bradford v. Vento, 997 S.W.2d 713, 725 (Tex. App._Corpus Christi 1999, pet. granted) (en banc); Hoggett v. Brown, 971 S.W.2d 472, 487 (Tex. App._Houston [14th Dist.] 1997, pet. denied). False representations can arise from silence when the particular circumstances impose on a person a duty to speak. World Help v. Leisure Lifestyles, Inc., 977 S.W.2d 662, 670 (Tex. App._Fort Worth 1998, pet. denied). A duty to disclose may arise in four situations:

(1) when there is a fiduciary relationship; (2) when one voluntarily discloses information, the whole truth must be disclosed; (3) when one makes a representation, new information must be disclosed when that new information makes the earlier representation misleading or untrue; and (4) when one makes a partial disclosure and conveys a false impression. Hoggett, 971 S.W.2d at 487; Ralston Purina Co. v. McKendrick, 850 S.W.2d 629, 635-36 (Tex. App._San Antonio 1993, writ denied).

Land Fund's petition alleged both overt misrepresentations of fact and concealment of material facts from the RTC. In response to Ramur's no-evidence challenges, Land Fund's summary judgment evidence included copies of letters written to RTC representatives, one written by Murdock on July 27, 1994 and one written by Murdock on behalf of Ramur on July 7, 1995. Where a motion is presented under rule 166a(i) asserting there is no evidence of one or more essential elements of a claim, the nonmoving party is not required to marshal all of its proof. See Tex. R. Civ. P. 166a(i) cmt. These letters and the favorable inferences that may be drawn therefrom raise genuine fact issues about Ramur's participation in the conspiracy and its knowledge of misrepresentations. Intent to defraud is generally proven by circumstantial evidence because it is not susceptible to direct proof. Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 435 (Tex. 1986). While the letters do not specifically discuss the lien on Lot 2, the letters were written on Watson's behalf and make representations regarding the value of properties securing the note, the poor market for obtaining buyers, and Watson's poor financial situation. One of the letters was sent contemporaneously with the closing of the allegedly fraudulent transaction and during the time the RTC was reviewing the closing documents and preparing the release of lien for Lot 2, yet the letter fails to provide information concerning the proceeds anticipated from the sale of Lot 2-R. Murdock's deposition testimony stated he sent the letters merely as Watson's friend and that he received no fee for sending them. Ramur subsequently obtained a lien interest in Lot 4. The letters attempt to negotiate a release of lien on additional lots which, arguably, could have been accomplished by the funds Watson received from the sale of Lot 2-R and/or the loan from Ramur on Lot 4.

We conclude the evidence is sufficient to raise a fact issue on whether there was a meeting of the minds between Ramur and Watson to fraudulently secure the release of lien on Lot 2, whether Ramur performed an overt act in furtherance of the conspiracy in its correspondence with the RTC, whether Ramur knowingly made false representations to the RTC, whether Ramur created a duty to disclose by making a partial disclosure that conveyed a false impression, and whether Ramur or Watson concealed or failed to disclose information that either had a duty to disclose. Because there is some evidence on each of the challenged elements, summary judgment was improper. We therefore sustain Land Fund's third issue as it relates to the claims for fraud in a real estate transaction and conspiracy to commit fraud in a real estate transaction.

Unjust Enrichment

A party may recover under an unjust enrichment theory when a person has obtained a benefit from another by fraud, duress, or the taking of an undue advantage. Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41(Tex. 1992) . Ramur's motion for summary judgment asserted that, because it received Lot 4 from Post Oak after the RTC had released its lien, Ramur did not wrongfully obtain money or anything else of value from the RTC. However, Land Fund alleged that all of the defendants were unjustly enriched by the fraudulent transfers which occurred in 1994. If Ramur is found to have conspired with the other defendants in defrauding the RTC, Ramur will be liable for its own independent tortious conduct and also for any torts committed by its co-conspirators. See Carroll v. Timmers Chevrolet, Inc., 592 S.W.2d 922, 926 (Tex. 1979). Ramur offered no summary judgment evidence negating an unjust enrichment for Ramur's alleged co-conspirators and no negating the alleged fraud, duress, or taking of an undue advantage by Ramur's alleged co-conspirators. Therefore, we conclude Ramur is not entitled to summary judgment on this claim. We sustain Land Fund's third issue as it relates to the unjust enrichment claim.

Intentional Misrepresentations

Ramur's motion for summary judgment asserts that "[a]ll intentional misrepresentations set forth in Plaintiff's Original Petition, pages 9 and 10, sections A-J, are not any representations made by Defendant RAMUR, INC., as RAMUR, INC. had no part in that transaction." However, Ramur's allegations in the motion for summary judgment do not constitute summary judgment evidence. See Musgrave, 861 S.W.2d at 264. Land Fund's first amended original petition specifically identifies false representations and material omissions allegedly made by Ramur, and Ramur offered no summary judgment evidence to dispute these. Furthermore, Ramur offered no summary judgment evidence to negate the intentional misrepresentation claim asserted against Ramur's alleged co-conspirators. See Carroll, 592 S.W.2d at 926. Therefore, we sustain Land Fund's third issue as it relates to the intentional misrepresentation claim.

Negligent Misrepresentation and Conversion

Ramur's motion for summary judgment does not address Land Fund's claims for negligent misrepresentation *fn11 or conversion. Granting a summary judgment on causes of action not addressed in the motion is reversible error. Mafrige, 866 S.W.2d at 591. Therefore, we sustain Land Fund's third issue as it relates to the negligent misrepresentation and conversion claims.

INDEPENDENT APPRAISAL

In its fourth issue, Land Fund challenges Ramur's summary judgment claim that the RTC's independent appraisal of the subject property deprived the RTC of the right to rely on any misrepresentations made by Ramur or its alleged co-conspirators. Land Fund argues that its damages were not the type that could have been discovered by its independent appraisal of the property. Land Fund claims the misrepresentations concerning the sham sale of the property to Centre Development misled the RTC about the amount for which the land was sold, not just the value of the property. Furthermore, Land Fund's petition alleged First Texas, Watson, and Fidelity violated their agreement to provide the RTC with information about contracts received on the encumbered property and their agreement to give the RTC the net proceeds of the sale of property. We agree that information about outstanding contracts would not be depicted in the appraisal conducted by the RTC. Because an independent appraisal of property value would not reveal the information Land Fund complains was misrepresented, we conclude the independent appraisal conducted by the RTC is not a defense to the claim that the RTC detrimentally relied upon misrepresentations allegedly made by Ramur and/or other defendants in this case. Therefore, we sustain Land Fund's fourth issue.

Having sustained all of Land Fund's issues, we reverse the summary judgment and remand this case to the trial court for further proceedings.

MORRIS, J., Concurs without opinion.

Do Not Publish

Tex. R. App. P. 47

980074F.U05

Opinion Footnotes

*fn1 The loan assignment from the RTC originally conveyed to Land Fund the RTC's interest in the property subject to the deed of trust "less any portions thereof conveyed out pursuant to any partial releases of record in Dallas County, Texas." Ramur's motion for summary judgment contended Land Fund had no standing to assert its claims because, when it purchased the note and deed of trust from the RTC, the subject property had already been released and the assignment from the RTC conveyed no interest in the causes of action asserted by Land Fund. However, the RTC subsequently executed a "Ratification, Confirmation, and Acknowledgment of Assignment" that expanded and clarified its assignment to Land Fund to include all claims it may have had against any party whether arising in tort, contract, or otherwise. Land Fund supplemented its petition to incorporate the Ratification, Confirmation, and Acknowledgment of Assignment from the RTC, thus correcting any impediment to its standing to bring this suit. On appeal, Ramur does not challenge Land Fund's standing to bring suit. We conclude Land Fund had standing to bring this claim. See Tex. Farmers Ins. Co. v. Gerdes, 880 S.W.2d 215, 217 (Tex. App._Fort Worth 1994, writ denied) (to recover on an assigned cause of action, the party claiming the assigned rights must plead and prove a cause of action existed that was capable of assignment and that the cause was in fact assigned to the party seeking recovery.). Accordingly, we sustain Land Fund's first issue.

*fn2 Land Fund presented summary judgment evidence showing that, although Post Oak is nominally owned by Watson's wife, Watson controlled Post Oak. Further, through Watson's deposition, Land Fund established that Post Oak had no assets from 1990 until Lot 4 was transferred to it, and that the $75,000 borrowed by Post Oak was distributed to Watson.

*fn3 Section 24.005(a)(1) of the Texas Business and Commerce Code provides: (a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or within a reasonable time after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation: (1) with actual intent to hinder, delay, or defraud any creditor of the debtor; Tex. Bus. & Com. Code Ann. § 24.005(a)(1) (Vernon Supp. 2001).

*fn4 Ramur's loan of $75,000 will not support the summary judgment if this was not the reasonably equivalent value of the property . On appeal, Ramur asserts that Land Fund failed to prove the reasonably equivalent value of the property. However, this misstates the burden of proof and raises arguments which are not contained in Ramur's motion for summary judgment. See Tex. R. Civ. P. 166a(c); McConnell, 858 S.W.2d at 341; Green, 883 S.W.2d at 300.

*fn5 Factors which may be considered in determining actual intent to hinder, delay or defraud a creditor include whether: (1) the transfer or obligation was to an insider; (2) the debtor retained possession or control of the property transferred after the transfer; (3) the transfer or obligation was concealed; (4) before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit; (5) the transfer was of substantially all the debtor's assets; (6) the debtor absconded; (7) the debtor removed or concealed assets; (8) the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred; (9) the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred; (10) the transfer occurred shortly before or shortly after a substantial debt was incurred; and (11) the debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor. See Tex. Bus. & Com. Code Ann. 24.005(b) (Vernon Supp. 2001).

*fn6 A transfer made or obligation incurred by a debtor is fraudulent as to a creditor . . . if the debtor made the transfer or incurred the obligation: (2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor: (A) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or (B) intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor's ability to pay as they became due. Tex. Bus. & Com. Code Ann. §§ 24.005(a)(2) (Vernon Supp. 2001) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation. Tex. Bus. & Com. Code Ann. §§ 24.006(a) (Vernon 1987)

*fn7 Pleadings are not summary judgment proof. See Clear Creek Basin Auth. , 589 S.W.2d at 678; Hidalgo v. Sur. Sav. & Loan Ass'n , 462 S.W.2d 540, 545 (Tex. 1971). Therefore, Ramur's arguments in the motion for summary judgment do not constitute summary judgment evidence. See Musgrave v. Lopez, 861 S.W.2d 262, 264 (Tex.App._Corpus Christi 1993, no writ).

*fn8 Although this section of Ramur's motion for summary judgment is entitled "Fraudulent Transfer - Fraud in a Real Estate Transaction - Conspiracy as relates to the transactions in 1994," it does not address the fraudulent transfer claim.

*fn9 Land Fund also contends these allegations cannot be considered as a no-evidence motion because Ramur mailed the motion to the clerk on August 28, 1997 and, pursuant to rule 5 of the Texas Rules of Civil Procedure, the motion was filed before September 1, 1997, when the rules of procedure were amended to allow a no-evidence motion for summary judgment. See Tex. Rs. Civ. P. 5, 166a(i). Therefore, Land Fund contends it did not have the burden to produce summary judgment evidence supporting the challenged elements of his cause of action. However, Land Fund presented no summary judgment evidence to the trial court to establish that Ramur's motion was mailed on August 28, 1997. Therefore, we will consider the motion as having been filed on September 2, 1997, as reflected in the clerk's record.

*fn10 A defendant's liability for conspiracy depends on participation in some underlying tort for which the plaintiff seeks to hold at least one of the named defendants liable. Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996). In its petition, Land Fund alleges conspiracy to commit fraud in a real estate transaction. Specifically, Land Fund claims the defendants agreed to participate in transactions that would achieve a common purpose of fraudulently procuring the lienholder's release of property, each defendant concealed some true facts and misrepresented other facts to obtain the release and to conceal the diversion of the proceeds, each defendant benefitted from the conspiracy, and Land Fund was damaged as a result.

*fn11 The claim for negligent misrepresentation is distinct from that of intentional misrepresentation, which was addressed in the motion for summary judgment. The elements of negligent misrepresentation are: (1) the representation is made by a defendant in the course of his business, or in a transaction in which he has a pecuniary interest; (2) the defendant supplies "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) the plaintiff suffers pecuniary loss by justifiably relying on the representation. Fed.Land Bank Ass'n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991).

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