Opinion
Civil Action No. 3:99-CV-0751-G.
March 6, 2000.
MEMORANDUM ORDER
Before the court is the motion for partial summary judgment of the plaintiff, Elliott's Hallmark Travel, Inc. d/b/a Sharon Carr Travel ("Carr Travel"), on its claims against the defendant Laker Airways, Inc. ("Laker"). For the reasons discussed below, the motion is denied.
I. BACKGROUND
Carr Travel is a retail travel agency that purchases group tours from vendors around the world. Plaintiff's Motion for Partial Summary Judgment Against Laker Airways, Inc. ¶¶ 5-6 ("Motion"). Carr Travel in turn sells these tours, along with other related services, to its own customers. Id. ¶ 6. In early 1997, Gill Murray, an employee for a tour vendor known as the Grayson Group, contacted Carr Travel and offered it access to a 6-night Thanksgiving rail tour through the Heritage Rail Company of Great Britain, Inc. ("Heritage"). Id. ¶¶ 7, 10. Carr Travel accepted, signed a contract with Heritage, and promoted the tour, selling places on it to 297 individuals. Id. ¶¶ 8-11. On October 10, 1997, Heritage requested and received a $50,000 deposit from Carr Travel to be transferred to the various vendors providing the tour's airfare, hotel, and train transportation. Id. ¶ 15. Twelve days later, Carr Travel paid the remaining balance to Heritage. Id. ¶ 16.
In the original agreement between Carr Travel and Heritage, Caledonian Airways was to be the chartered aircraft used to transport the tour participants. Id. ¶ 17. On October 30, 1997, however, Carr Travel was informed that the tour was substituting Laker for Caledonian. Id. Heritage signed a contract with Laker, returned it, and wired $50,000 to Laker's bank. Id. ¶¶ 18, 20; Appendix to Plaintiff's Motion for Partial Summary Judgment Against Laker Airways, Inc., Exhibits 9-11. Laker received the money but never signed the contract. Motion ¶¶ 21-22. A week before the tour was to begin, Heritage informed Carr Travel that it would be unable to provide the tour and assigned to Carr Travel its interest in the $50,000 it had deposited with Laker. Id. ¶ 23, 25. Carr Travel then demanded that Laker return the deposit, but Laker has refused. Id. ¶¶ 26-27.
II. ANALYSIS A. Evidentiary Burdens on Motion for Summary Judgment
Summary judgment is proper when the pleadings and evidence on file show that no genuine issue exists as to any material fact and that the moving party is entitled to judgment as a matter of law. F.R. CIV. P. 56(c). "[T]he substantive law will identify which facts are material." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.
A movant for summary judgment makes such a showing by informing the court of the basis of its motion and by identifying the portions of the record which reveal there are no genuine issues of material fact. See Celotex Corporation v. Catrett, 477 U.S. 317, 323 (1986). The pleadings, depositions, admissions, and affidavits, if any, must demonstrate that no genuine issue of material fact exists. F.R. CIV. P. 56(c).
Once the movant makes this showing, the nonmovant may not rest on the allegations in its pleadings. See Isquith for and on behalf of Isquith v. Middle South Utilities, Inc., 847 F.2d 186, 199 (5th Cir.), cert. denied, 488 U.S. 926 (1988). Rather, it must direct the court's attention to evidence in the record sufficient to establish that there is a genuine issue of material fact for trial. See Celotex, 477 U.S. at 324. To carry this burden, the "opponent must do more than simply show . . . some metaphysical doubt as to the material facts." Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corporation, 475 U.S. 574, 586 (1986). Instead, the nonmovant must present evidence sufficient to support a resolution of the factual issue in its favor. See Anderson, 477 U.S. at 257.
While all of the evidence must be viewed in a light most favorable to Laker as the motion's opponent, Anderson, 477 U.S. at 255 (citing Adickes v. S.H. Kress Company, 398 U.S. 144, 158-59 (1970)), neither conclusory allegations nor unsubstantiated assertions will satisfy its summary judgment burden. Little v. Liquid Air Corporation, 37 F.3d 1069, 1075 (5th Cir. 1994) ( en banc); Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir.), cert. denied, 506 U.S. 825 (1992). Summary judgment in favor of Carr Travel is proper if, after adequate time for discovery, Laker fails to make a showing that there is evidence in the record which, if believed by a jury, would support a verdict in its favor.
B. Unjust Enrichment/Money Had and Received
First, Carr Travel argues that summary judgment should be entered on its state law claim of unjust enrichment. Under Texas law, "[a] party may recover under the unjust enrichment theory when one person has obtained a benefit from another by fraud, duress, or the taking of an undue advantage." Heldenfels Brothers, Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992) (citing Pope v. Garrett, 211 S.W.2d 559, 560, 562 (1948), and Austin v. Duval, 735 S.W.2d 647, 649 (Tex.App.-Austin 1987, writ denied)). "Unjust enrichment [, however,] is not a proper remedy merely because it `might appear expedient or generally fair that some recompense be afforded for an unfortunate loss' to the claimant. . . ." Heldenfels Brothers, 832 S.W.2d at 42. Here, Carr Travel has failed to submit competent summary judgment evidence that would establish that Laker acted fraudulently, employed duress, or took undue advantage of Can Travel. Thus, because it has failed to meet its evidentiary burden with respect to a basic element of an unjust enrichment claim, Carr Travel is not entitled to summary judgment on that claim.
C. Unenforceable Penalty
Next, Carr Travel argues that it — as the assignee of Heritage — is entitled to summary judgment because the contractual provision allowing Laker to retain Heritage's deposit constitutes an unenforceable penalty. See Phillips v. Phillips, 820 S.W.2d 785, 788-89 (Tex. 1991). However, even if it is assumed that Carr Travel can establish that (1) a contract between Laker and Heritage existed; (2) Carr Travel has the right to enforce that contract; and (3) that the contract provision at issue was an unenforceable penalty, it has nevertheless failed to produce competent summary judgment evidence to establish that Carr Travel has a right to the money it seeks.
To establish that Heritage sent Laker $50,000 on its behalf, Carr Travel relies on letters that Heritage sent to Laker asking that Carr Travel be refunded directly, as well as on a bank deposit of $50,000 from Heritage to Laker. This evidence is an insufficient basis to support summary judgment. First, the letters from Heritage are hearsay and, therefore, would be inadmissible. See Rule 56(e), F.R. Civ. P. ("Supporting and opposing affidavits . . . shall set forth such facts as would be admissible in evidence . . ."). Second, while the deposit confirmations do establish that Heritage made a $50,000 deposit to Laker, they do not establish that the deposit was made on behalf of Carr Travel's tour. Nowhere in any of them is there a reference to Carr Travel. Thus, material issues remain concerning whether Carr Travel was the source of the $50,000 deposit Heritage made to Laker. Accordingly, Carr Travel is not entitled to summary judgment on this claim.
D. Violations of 14 C.F.R. § 208.40
Carr Travel's remaining claims are based on its position that Laker violated 14 C.F.R. § 208.40, a regulation promulgated by the U.S. Department of Transportation. However, even if it is posited that the evidence Carr Travel has submitted is admissible — an issue this court does not reach — Carr Travel has still failed to produce sufficient evidence to warrant summary judgment.
Section 208.40 was effective at the time that the parties entered into the charter agreements. It has since been superseded by 14 C.F.R. § 212.8, which has the same requirements as § 208.40.
14 C.F.R. § 208.40 required a charter provider to hold all deposits in escrow with a depositor bank until completion of the charter. Carr Travel's evidence that Laker violated § 208.40 consists of: (1) letters from counsel for Carr Travel and Heritage to Laker's depository bank demanding the return of Carr Travel's $50,000 deposit and (2) letters from Laker's banks refusing to release funds demanded by Carr Travel. Carr Travel concludes from these letters that Laker did not enter into the agreement required by § 208.40. However, this is not the only reasonable conclusion that can be drawn from the evidence submitted by Carr Travel. For example, the letters may simply exhibit a bank's reluctance to transfer money out of a customer's account without that customer's permission. Thus, because issues of material fact exist concerning whether Laker violated the DOT regulations, Carr Travel is not entitled to summary judgment on the claims that these regulations were violated.
III. CONCLUSION
Because Carr Travel has failed to produce evidence sufficient to dispel all issues of material fact with respect to its claims, its motion for partial summary judgment is DENIED.
SO ORDERED.
March 6, 2000.