Corporate Link, Inc.v.Fairbanks Capital Corporation

United States District Court, N.D. Texas, Dallas DivisionApr 4, 2005
Civil Action No. 3: 03-CV-0506-B (N.D. Tex. Apr. 4, 2005)

Civil Action No. 3: 03-CV-0506-B.

April 4, 2005


MEMORANDUM ORDER


JANE J. BOYLE, District Judge

Before the Court are five motions filed by the parties in this case. After review of the pleadings, arguments, and evidence, the Court DENIES Fairbanks's Motion to Dismiss (doc. 28) and also DENIES Corporate Link's Motion for Leave to Amend (doc. 40). The Court DENIES Corporate Link's Motion for Partial Summary Judgment (doc. 33). The Court GRANTS IN PART and DENIES IN PART both Fairbanks's Motion for Summary Judgment (doc. 37) and Motion to Strike Summary Judgment Evidence (doc. 45).

I. BACKGROUND FACTS

The Court takes its facts from the pleadings and appendices submitted by the parties. Unless otherwise noted, the facts are undisputed.

Plaintiff Corporate Link, Inc. ("Corporate Link") is a Texas corporation that provides services managing real estate owned assets ("REO assets"). In February 2002, Corporate Link contracted with Defendant Fairbanks Capital Corporation ("Fairbanks"), a Utah corporation, to manage and dispose of certain REO assets securing loans serviced by Fairbanks. The parties signed a written Property Management and Disposition Agreement on February 22, 2002 (the "Agreement"), detailing the duties and responsibilities of each party. (Pl.'s App. pp. 9-23)

According to the Agreement, "Fairbanks agrees to refer to [Corporate Link] certain Assets which [Corporate Link] shall manage, operate, maintain, and/or dispose of. . . ." (Agreement p. 1) Of significance to this case is the following provision of the Agreement:Section 5. Fees REO Service Fees Type of Fee Amount of Fee

The Agreement often refers to "Rasmus" instead of Corporate Link; however, the parties both agree that the Agreement should only refer to Corporate Link.

5.1 : For REO service, Corporate Link shall charge, and Fairbanks agrees to pay, the following fees: Cancellation Fee $0.00 Disposition Fee 1% or a minimum of $500 per asset due at time of closing. This fee is to be netted out of the sales commissions, and is NOT in addition to. (Agreement ¶ 5.1) Cancellation occurred when Fairbanks withdrew the referral of an asset to Corporate Link. (Agreement ¶ 1.3) Besides the above-mentioned fees, Fairbanks was also obligated to pay "Direct Expenses" to Corporate Link, which were the out-of-pocket expenses Corporate Link incurred in managing and disposing of the assets. (Agreement ¶¶ 1.4, 2.9) Finally, the Agreement provided that it could be terminated on thirty (30) days notice by either party. (Agreement ¶ 2.1)

Both parties understood that this was to be a short term arrangement that would give Fairbanks time to prepare to handle all of its REO assets in-house, at which point Fairbanks would terminate the Agreement pursuant to its terms. (Bassarear Aff. ¶ 3; French Aff. ¶ 5) As such, on May 30, 2002, Fairbanks terminated the Agreement. At that time, Corporate Link had 1,544 REO files that it was managing for Fairbanks. (Bassarear Aff. ¶ 8) According to Corporate Link, Fairbanks then asked Corporate Link to continue to work on 1,106 of the remaining files, but to return 438 of the files. ( Id. at ¶ 9) Corporate Link complied. ( Id.) Then, in September 2002, Fairbanks cancelled the rest of the referrals and asked Corporate Link to ship the 1,106 files to Fairbanks, which Corporate Link did. ( Id.) Corporate Link sent a final billing and demand letter to Fairbanks on October 3, 2002, which Fairbanks refused to pay. ( Id. at ¶ 10) Thus, this litigation followed.

II. PROCEDURAL HISTORY

Corporate Link filed suit in Texas state court on October 4, 2002, which Fairbanks removed to this Court on March 10, 2003 on the basis of diversity jurisdiction. In its Original Petition, Corporate Link asserted claims for breach of contract and theft of services under the Texas Theft Liability Act, TEX. CIV. PRAC. REM. CODE ANN. §§ 134.001, et seq. (Vernon 1997 Supp. 2004). On May 5, 2004, the Court granted Corporate Link's Motion for Leave to File First Amended Original Complaint. While continuing to bring breach of contract and theft of services claims, Corporate Link's First Amended Complaint also alleged unjust enrichment, fraud in the inducement, and negligent misrepresentation. Fairbanks filed a Motion to Dismiss Corporate Link's theft of services, unjust enrichment, and fraud in the inducement claims on May 19, 2004. In response, Corporate Link alternatively requested leave to amend. The parties also agreed to extend the discovery deadline to July 16, 2004.

Pursuant to the Court's Scheduling Order, dispositive motions were due on June 1, 2004. To that end, Corporate Link filed a Motion for Partial Summary Judgment and Fairbanks filed a Motion for Summary Judgment on June 1, 2004. Fairbanks then filed a Motion to Strike Plaintiff's Evidence in Support of Its Motion for Partial Summary Judgment on June 21, 2004. It is these five motions (Motion to Dismiss, Motion for Leave to Amend, Motion for Partial Summary Judgment, Motion for Summary Judgment, and Motion to Strike) that are before the Court today. The Court now turns to the merits of each motion.

Corporate Link also filed a Motion to Exclude the Expert Testimony of Alan J. Blocher on June 1, 2004; however, the Court will address the merits of that motion in a separate order.

III. ANALYSIS

A. Motion to Dismiss/Motion for Leave to Amend

As stated above, Fairbanks filed its Motion to Dismiss approximately two weeks before it filed its Motion for Summary Judgment. To the extent Fairbanks moves to dismiss Corporate Link's claims on substantive grounds, it has duplicated those arguments in its Motion for Summary Judgment and the Court will consider those arguments in the context of its summary judgment analysis.

Fairbanks also moves to dismiss Corporate Link's fraud, negligent misrepresentation, and Texas Theft Liability Act claims for failure to adequately plead them pursuant to Rule 9(b) of the Federal Rules of Civil Procedure. Upon review of the documents in this case, the Court notes that Fairbanks was given extra time for discovery and was able to move for summary judgment on all of these claims. Further, Corporate Link has not raised any new facts in response to Fairbanks's summary judgment motion regarding these claims. Corporate Link appears to have simply pleaded new theories of liability under the same set of facts. (Pl.'s First Am. Compl. ¶¶ 22, 25, 29) As such, while the claims may not have been pleaded in as much detail as they could have been, Fairbanks does not appear to have been prejudiced by any lack of clarity, nor was this a fishing expedition on the part of Corporate Link to uncover more facts. Frith v. Guardian Life Ins. Co. of Am., 9 F. Supp. 2d 734, 742 (S.D. Tex. 1998) (stating two of the purposes of Rule 9(b) are to enable the defendant to prepare an effective response to the charges and to eliminate complaints filed as a pretext for discovery of unknown wrongs).

The Court would prefer to address these claims in the fully developed factual record of Fairbanks's Motion for Summary Judgment. Therefore, the Court DENIES Fairbanks's Motion to Dismiss. Because the Court has denied Fairbanks's Motion to Dismiss, the Court also DENIES Corporate Link's alternative Motion for Leave to Amend.

B. Motion to Strike Summary Judgment Evidence and Objections

Fairbanks filed a Motion to Strike portions of the summary judgment evidence on which Corporate Link relies. Similarly, Corporate Link included objections to Fairbanks's summary judgment evidence in its Response to Fairbanks's summary judgment motion. The Court will address each in turn.

1. Fairbanks's Motion to Strike Summary Judgment Evidence

Fairbanks objects to Paragraph 3 of the affidavits of James Bassarear and Tommy Green where they state, "In order to induce Corporate Link to waive its normal up front fees and cancellation fees," Jerry French represented certain information to Corporate Link. Fairbanks claims the statement is speculative and made without personal knowledge. The Court agrees, sustains Fairbanks's objection, and will not consider the statement as evidence of French's actual motivation. See Brown v. City of Houston, 337 F.3d 539, 541 (5th Cir. 2003) (holding that unsubstantiated assertions and unsupported speculation are not sufficient to defeat summary judgment). The rest of the sentence, however, may be used as evidence.

Fairbanks objects to portions of the affidavits of Bassarear and Green that discuss conversations surrounding the Agreement based on the parole evidence rule. The Court will address those statements at the appropriate point in its summary judgment analysis.

Finally, Fairbanks objects to Paragraph 11 of the affidavits of Bassarear and Green as legal conclusions. The Court sustains the objection and will not consider the statements as proof of what the Agreement required, but will independently interpret the Agreement.

Fairbanks's remaining objections to the affidavits of Bassarear and Green are overruled for purposes of summary judgment.

2. Corporate Link's Objections

Corporate Link objects to Fairbanks's use of the Agreement as summary judgment evidence because Fairbanks did not properly authenticate it with an affidavit. There is no question, however, that this is the Agreement on which Corporate Link bases its entire case. Indeed, Corporate Link used the same Agreement as evidence in its summary judgment motion. (Pl.'s App. pp. 9-23) The Court will not sustain Corporate Link's objection and advises Corporate Link to reserve its future objections for matters that are actually in dispute.

The remainder of Corporate Link's objections are overruled for purposes of summary judgment.

C. Motions for Summary Judgment

Summary judgment is appropriate when the pleadings and record evidence show that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). The burden is on the movant to prove that no genuine issue of material fact exists. Provident Life Accident Ins. Co. v. Goel, 274 F.3d 984, 991 (5th Cir. 2001). If the non-movant bears the burden of proof at trial, the movant may satisfy its burden by pointing to the absence of evidence to support the non-movant's case. Latimer v. Smithkline French Labs., 919 F.2d 301, 303 (5th Cir. 1990).

The non-moving party must then "come forward with `specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (emphasis in original) (quoting FED. R. CIV. P. 56(e)). To determine whether a genuine issue exists for trial, the court must view all of the evidence in the light most favorable to the non-movant, and the evidence must be sufficient such that a reasonable jury could return a verdict for the nonmovant. See Chaplin v. NationsCredit Corp., 307 F.3d 368, 371-72 (5th Cir. 2002).

1. Breach of Contract

Both parties move for summary judgment on Corporate Link's breach of contract claims. Corporate Link complains of three breaches of contract by Fairbanks. (Pl.'s Resp. Br. pp. 5-6) First, Corporate Link asserts that the Agreement required Fairbanks to pay Corporate Link a Disposition Fee for each asset referred to Corporate Link regardless of whether Corporate Link closed on the asset or Fairbanks cancelled the referral and later closed on the asset. Second, Corporate Link asserts that it did not receive any payment for the services it rendered after the termination of the written Agreement on May 30, 2002. Third, Corporate Link claims that Fairbanks refused to reimburse it for the expenses it incurred in shipping the files back to Fairbank after termination of the Agreement and cancellation of the referrals. The Court will address each breach in turn.

Fairbanks argues that these three breach of contract claims were not included in Corporate Link's First Amended Complaint. While the Complaint may not have been explicit, it did include the relevant facts and Corporate Link's interrogatory responses make it clear that it is claiming breach of contract in these three areas. (Def.'s App. p. 10)

The parties have stipulated that all the properties whose referrals were cancelled have subsequently closed.

(a) Failure to Pay Disposition Fee

As noted above, Fairbanks agreed to pay a Disposition Fee of "1% or a minimum of $500 per asset due at time of closing." (Agreement ¶ 5.1) The parties offer conflicting interpretations of this provision. According to Fairbanks, the Disposition Fee was to be paid only if Corporate Link closed the property. Therefore, if Fairbanks cancelled the referral, it was not obligated to pay the Disposition Fee to Corporate Link if the property later closed under Fairbanks's management. Corporate Link, however, argues that because the Agreement does not explicitly stated that Corporate Link must close the property, but only that the property must close before the Disposition Fee is due, that Fairbanks is obligated to pay a minimum of $500 to Corporate Link every time a property that had once been referred to Corporate Link closed, regardless of whether the referral had previously been cancelled.

The interpretation of an unambiguous contract is an issue of law for the Court to decide. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983); Philadelphia Am. Life Ins. Co. v. Turner, 131 S.W.3d 576, 587 (Tex.App.-Fort Worth 2004, no pet.). If a written contract is worded so that it can be given a definite or certain legal meaning, then it is unambiguous. Nat. Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995) (per curiam). Here, neither party is claiming that the contract is ambiguous; instead, each believes their interpretation is the only reasonable interpretation. See Gonzalez v. Denning, 394 F.3d 388, 392 (5th Cir. 2004) (per curiam) (noting that an ambiguity does not arise simply because the parties offer conflicting interpretations); DeWitt County Elec. Co-op., Inc. v. Parks, 1 S.W.3d 96, 100 (Tex. 1999) (same). Under Texas law, the primary concern of a court construing a written contract is to ascertain the true intent of the parties "as expressed in the instrument." Nat. Union, 907 S.W.2d at 520.

The parties agree, and the Agreement provides, that Texas law governs this dispute. (Agreement ¶ 6.5)

After review of the Agreement, the Court finds that, although the Agreement is not as clear as it could have been, Fairbanks's interpretation is the only reasonable interpretation. Therefore, Fairbanks is not obligated to pay a Disposition Fee to Corporate Link unless Corporate Link closed the property.

The Court begins by looking at the plain language of the Agreement. See Int'l Turbine Servs., Inc. v. VASP Brazilian Airlines, 278 F.3d 494, 497 (5th Cir. 2002) (stating that the court is to apply the plain language of the contract). In construing a contract under Texas law, courts must examine and consider the entire writing and give effect to all its provisions so that none are rendered meaningless. Id. (citing Coker, 650 S.W.2d at 393). First, as stated above, the Disposition Fee was "due at time of closing." (Agreement ¶ 5.1) Admittedly, the Agreement does not explicitly state that Corporate Link had to close the property before the Disposition Fee was due; however, Fairbanks argues that such a requirement is implicit in the Agreement when it is considered as a whole.

In the paragraph entitled Responsibilities Upon Termination, the Agreement states that Fairbanks must only pay fees and Direct Expenses incurred "through the date of Termination," indicating that fees would not be incurred after the Agreement was terminated. (Agreement ¶ 2.3) In response to this argument, Corporate Link points to Paragraph 2.9(b) of the Agreement which states, "Fairbanks's payment obligations will survive termination of this Agreement." This paragraph simply means, however, that to the extent Fairbanks owes money to Corporate Link, that debt is not extinguished by the termination of the Agreement. It does not create an entitlement to fees not otherwise due.

Corporate Link also relies on Paragraphs 2.3, 2.4, and 2.9(b) of the Agreement, which create an obligation for Fairbanks to pay "fees" in certain circumstances to Corporate Link. Corporate Link claims that "fees" refers to the Disposition Fee and, thus, requires Fairbanks to pay a Disposition Fee regardless of whether Corporate Link closes on the property. However, each of those paragraphs also refers to Corporate Link's obligation to pay "fees" to Fairbanks. See Gonzalez v. Mission Am. Ins. Co., 795 S.W.2d 734, 736 (Tex. 1990) (noting that words are deemed to have the same meaning throughout the contract). Because there is no suggestion that Corporate Link must pay a Disposition Fee to Fairbanks, it is clear that "fees," as used in those paragraphs, does not refer solely to Disposition Fees and the referenced paragraphs do not place a burden on Fairbanks to pay a Disposition Fee in circumstances other than when Corporate Link closes a property. As such, the Court can find no specific requirement in the language of the Agreement that Fairbanks must pay Corporate Link a Disposition Fee regardless of whether Corporate Link closed the property.

The Court next notes that the Agreement as a whole does not implicitly suggest that a Disposition Fee is owed when Fairbanks cancels a referral and closes the property itself. The Agreement clearly contemplates cancellation and dictates the duties and responsibilities of the parties in such a situation. (Agreement ¶¶ 1.3, 2.4) It also clearly states that the Cancellation Fee is $0. ( Id. at ¶ 5.1) On the other hand, the Agreement is noticeably void of any provisions regarding disposition of property by Fairbanks after the referral is cancelled. For example, there is no requirement that Fairbanks notify Corporate Link of any property closures following the termination of the Agreement. Without that information, Corporate Link would have no way of knowing when to charge Fairbanks a Disposition Fee. The Agreement simply does not contemplate the payment of Disposition Fees for properties that Corporate Link does not close.

Finally, Corporate Link's interpretation of the Agreement would lead to absurd results. Vincent v. Bank of Am., N.A., 109 S.W.3d 856, 867 (Tex.App.-Dallas 2003, pet. denied) (stating that a reasonable interpretation of a contract is preferred to an unreasonable one); see also Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 530 (Tex. 1987) (stating that courts are to avoid unreasonable, inequitable, and oppressive contract interpretations). Paragraph 2.9(c) states that Corporate Link is to transfer the Net Proceeds to Fairbanks within 24 hours of the closing of a property; however, similar to the paragraph regarding Disposition Fees, the paragraph does not specify that Corporate Link must close the property before it is required to transfer the Net Proceeds. Thus, under Corporate Link's interpretation, Corporate Link would be responsible for transferring the Net Proceeds of property sales to Fairbanks for properties that Corporate Link did not close and was not managing. Such a result is unreasonable and cannot be what the parties intended.

Therefore, for the foregoing reasons, the Court finds that Fairbanks is obligated to pay a Disposition Fee to Corporate Link only when Corporate Link closes the property. If the referral is cancelled before the property is closed, Fairbanks has no obligation to pay a Disposition Fee. The Court, thus, GRANTS Fairbanks's Motion for Summary Judgment on this count and DENIES Corporate Link's Motion for Partial Summary Judgment on this count.

(b) Failure to Pay for Work Following Termination of Agreement

Both parties agree that the Agreement was terminated on May 30, 2002. According to Corporate Link, however, Fairbanks requested that Corporate Link continue to work on approximately 1,106 files that had been referred. Corporate Link complied until those referrals were cancelled in September 2002. Corporate Link contends it was never paid for the work it did on those files. Fairbanks offers no factual rebuttal to this allegation, nor did it move for summary judgment on this specific breach of contract.

Because it bears the burden of proof at trial, Corporate Link has the burden to demonstrate the elements of a breach of contract claim in order to be entitled to summary judgment. See Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986). Here, Corporate Link's evidence only states that Fairbanks requested Corporate Link to work on some files. (Bassarear Aff. ¶ 9) There is no allegation that Fairbanks promised anything in return. Further, the Court cannot, without more, rely on the Agreement to provide the contractual details, since the Agreement had been terminated by this point. Without the essential terms of the contract identified, Corporate Link cannot meet its burden at the summary judgment stage. Therefore, the Court DENIES Corporate Link's Motion for Partial Summary Judgment regarding this alleged contract.

(c) Failure to Pay Shipping Costs

Finally, Corporate Link complains that it was not reimbursed for the expenses it incurred in shipping all the files back to Fairbanks upon termination of the Agreement and cancellation of the referrals. Fairbanks has since delivered a check for $13,263.19 to Corporate Link in what it believes is a full satisfaction of its obligation. (Pl.'s Resp. App. pp. 64-65) However, Corporate Link has not affirmatively stated that the check covers its damages for this breach of contract. Thus, because the Court cannot definitively state that Fairbanks has met its obligation, the Court DENIES Fairbanks's Motion for Summary Judgment and Corporate Link's Motion for Partial Summary Judgment on that count. However, if Fairbanks has satisfied its obligation on this count, the Court expects the parties to stipulate to the dismissal of this claim prior to trial.

2. Theft of Services

Fairbanks next moves for summary judgment on Corporate Link's claim under the Texas Theft Liability Act ("TTLA"). TEX. CIV. PRAC. REM. CODE ANN. §§ 134.001, et seq. (Vernon 1997 Supp. 2004). The TTLA imposes liability on anyone who commits theft and defines theft as "unlawfully appropriating property or unlawfully obtaining services" as described by a number of Texas Penal Code sections. Id. at §§ 134.002(2), 134.003(a). Corporate Link brings suit for an underlying violation of Texas Penal Code § 31.04, which prohibits theft of service. Specifically, under § 31.04 of the Penal Code,

A person commits theft of service if, with intent to avoid payment for service that he knows is provided only for compensation:
(1) he intentionally or knowingly secures performance of the service by deception, threat, or false token; . . . or
(4) he intentionally or knowingly secures the performance of the service by agreeing to provide compensation and, after the service is rendered, fails to make payment after receiving notice demanding payment.

TEX. PENAL CODE ANN. § 31.04(a) (Vernon 2003 Supp. 2004). The Penal Code also provides that "intent to avoid payment is presumed if: . . . (2) the actor failed to make payment under a service agreement within 10 days after receiving notice demanding payment." Id. at § 31.04(b). Corporate Link's claims in this regard are that Fairbanks deceived Corporate Link by falsely promising to pay Corporate Link for its services and then refusing to do so.

Fairbanks moves for summary judgment on two grounds. First, Fairbanks argues that there is no proof of the intent required for theft of services. As an initial matter, the Court notes that because it has determined that the Agreement does not require Fairbanks to pay a Disposition Fee for properties that Corporate Link did not close, there can be no theft of service regarding Fairbanks's refusal to pay a Disposition Fee, since no money was ever owed. However, the Court will consider whether Corporate Link has raised a fact issue of intent regarding Fairbanks's alleged request that Corporate Link continue to work over 1,100 properties after the Agreement was terminated and Fairbanks's obligation to pay shipping costs following the termination of the Agreement.

In response to Fairbanks's argument that Corporate Link has insufficient evidence of intent, Corporate Link relies on § 31.04(b)(2), which provides that intent to avoid payment is presumed if the actor fails to make payment under the service agreement within ten (10) days after receiving notice demanding payment. Corporate Link then points to the affidavit of James Bassarear, who states that demand for payment was made on October 3, 2002, but that payment was not made. (Bassarear Aff. ¶ 10) Taking all inferences in favor of Corporate Link, the Court must presume that Fairbanks intended to avoid payment.

Fairbanks's reliance on Roper v. State, 917 S.W.2d 128 (Tex.App.-Fort Worth 1996, writ ref'd), is misplaced, as the court in that case dealt with a different provision of the Penal Code that did not provide for the presumption of intent.

Fairbanks also argues that recovery under the TTLA is unavailable in this case because there is an express contract at issue. In support of its argument, Fairbanks cites to several cases which hold that recovery under the quasi-contract theories of quantum meruit and unjust enrichment are not available when an express contract exists. (Def.'s Br. pp. 11-13) However, those cases are inapplicable here, because the terms of the statute control. The Penal Code itself references failure to make payment under a "service agreement," indicating the legislature's intent that this remedy be available in cases where an express contract exists. TEX. PENAL CODE ANN. § 31.04(b)(2). Thus, there is no basis for this Court to find that an action under the TTLA is unavailable in cases where there is an express agreement between the parties.

Therefore, the Court DENIES Fairbanks's motion for summary judgment on Corporate Link's theft of service claims as regards (1) Corporate Link's allegation that Fairbanks failed to pay for services rendered after the termination of the Agreement and (2) Corporate Link's allegation that Fairbanks failed to pay shipping costs following termination of the Agreement. The Court GRANTS Fairbanks's motion for summary judgment on the theft of service claims as regards Corporate Link's allegation that Fairbanks was required to pay it a Disposition Fee for properties Corporate Link did not close.

3. Unjust Enrichment

Fairbanks moves for summary judgment on Corporate Link's unjust enrichment claim on the grounds that recovery under an unjust enrichment theory is unavailable when the transaction at issue is governed by an express contract. Recovery for unjust enrichment may be had when one 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). Texas law is clear, however, that unjust enrichment may not be used when an express contract governs the subject matter of the dispute. Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 684 (Tex. 2000). Therefore, to the extent Corporate Link seeks recovery for amounts due under the Agreement (disposition fees or shipping costs), the dispute is governed by the Agreement, and unjust enrichment is unavailable to Corporate Link. However, unjust enrichment is still available for the amounts claimed for work done after the May 30, 2002 termination of the Agreement, as Fairbanks has not demonstrated that an express contract governed that situation. Thus, the Court GRANTS Fairbanks's Motion for Summary Judgment on all but one of Corporate Link's unjust enrichment claims. The Court DENIES Fairbanks's Motion for Summary Judgment on Corporate Link's unjust enrichment claim regarding work done after the termination of the Agreement.

4. Negligent Misrepresentation

Corporate Link has agreed to voluntarily dismiss its negligent misrepresentation claim; therefore, the Court need not consider Fairbanks's Motion for Summary Judgment on this point.

5. Fraud in the Inducement

Fairbanks next moves for summary judgment on Corporate Link's fraud in the inducement claim. The Court will address the alleged fraudulent statements in two categories: statements made before the Agreement was signed and statements made after the Agreement was terminated.

(a) Statements Made Prior to the Agreement

According to Corporate Link, Fairbanks made two fraudulent statements before the Agreement was signed that induced it to sign the Agreement. Specifically, Corporate Link alleges that French, Fairbanks's representative, promised that (1) Fairbanks would pay Corporate Link for its services and (2) Fairbanks would allow Corporate Link to work all the property files referred under the Agreement through to closing. (Pl.'s Resp. Br. p. 16) Fairbanks moves for summary judgment on the ground that the statements were not false and that the merger clause contained in the Agreement negates reliance, an essential element of Corporate Link's fraud claim. The merger clause in the Agreement states as follows:

6.9 Entire Agreement: This Agreement and its attachments set forth the entire agreement and understanding between the Parties as to the subject matter hereof and merges and supersedes all prior discussions and agreements with respect thereto.

The elements of a fraud claim under Texas law are (1) a material misrepresentation; (2) which was false; (3) which was either known to be false when made or was recklessly asserted without knowledge of the truth as a positive assertion; (4) which was intended to be acted upon; (5) which was relied upon; and (6) which caused injury. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001). As discussed above, the Court has found that Fairbanks did not breach the Agreement by failing to pay Disposition Fees to Corporate Link for properties that Corporate Link did not close. Therefore, there is no false representation as to that statement.

Corporate Link's argument makes clear that they are pursuing a fraud claim only with respect to the failure to pay the Disposition Fee. (Pl.'s Resp. Br. p. 16) However, to the extent Corporate Link claims Fairbanks's failure to pay shipping costs constitutes fraud, the Court finds there is insufficient evidence of intent for the reasons discussed in Section III.C.5.b, infra.

The Court now turns to the arguments regarding the merger clause. The Texas Supreme Court has recognized that, in certain situations, a merger clause in a contract can operate as a bar to a claim of fraud by negating the element of reliance. Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 181 (Tex. 1997). The Fifth Circuit, in analyzing Texas cases, has recently denied a fraud claim based on a merger clause. Armstrong v. Am. Home Shield Corp., 333 F.3d 566 (5th Cir. 2003). In Armstrong, the court found that when a merger clauses evinces a party's clear intent to disclaim reliance on specific representations, it is enforceable and no fraud claim may be had. Id. at 571. While the court found that the merger clause did not specifically disclaim prior representations, the language and intent of the agreement as a whole made it clear that there was no reliance. Id.

Similarly, here, the merger clause is a clear statement of the parties' intent that no prior representations or agreements be relied upon. First, the merger clause is unambiguous and clearly states that "all prior discussions and agreements" are superseded. (Agreement ¶ 6.9) The merger clause was not buried in the middle of a complex and lengthy contract; instead it was part of a fairly simple six-page agreement. Further, there has been no suggestion that the parties were in unequal bargaining positions or that this was a contract of adhesion. See Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156, 162 (Tex. 1995) (suggesting that merger clauses that were boiler-plate or made by parties in unequal bargaining positions may not be enforceable in some cases). Finally, Corporate Link has not denied being aware of the merger clause, nor has it alleged Fairbanks deceived it into believing the merger clause was absent or unenforceable.

Therefore, the Court will enforce the merger clause and not permit Corporate Link to rely on statements made prior to entering the Agreement to establish a fraud claim. As such, Corporate Link cannot establish reliance, an essential element of its fraud claim, and the Court GRANTS Fairbanks's Motion for Summary Judgment on that count.

(b) Statements Made After Termination of the Agreement

Corporate Link also alleges that after the Agreement was terminated in May 2002 that Fairbanks promised Corporate Link would be permitted to work the files it retained through to closing (Pl.'s Resp. Br. p. 16), which alleged statement became demonstrably false when Fairbanks cancelled all the remaining referrals in September 2002. Fairbanks moves for summary judgment on the grounds that there is no evidence of fraudulent intent as to this statement.

A promise regarding a future act is actionable as fraud only if the representation was made with no intention of ever performing. Coffel v. Stryker Corp., 284 F.3d 625, 633-34 (5th Cir. 2002). A denial that the promise was made and a failure to perform, standing alone, are insufficient evidence of intent. Id. at 634; T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 222 (Tex. 1992). However, the party asserting fraud must only adduce "slight circumstantial evidence" of intent to survive summary judgment. Coffel, 284 F.3d at 634. Here, then, Corporate Link must do more than point to Fairbanks's denial of making the alleged misrepresentation and Fairbanks's failure to perform in order to survive summary judgment.

Corporate Link's evidence consists of claiming that Fairbanks's legal arguments in this case demonstrate that it never intended to perform. (Pl.'s Resp. Br. p. 18) This Court, however, will not infer Fairbanks's intent regarding a statement made in mid-2002 from arguments its attorneys made two years later in the context of litigation. As such, Corporate Link is left without evidence of fraudulent intent regarding Fairbanks's alleged statements following the termination of the Agreement. Therefore, the Court GRANTS Fairbanks's Motion for Summary Judgment on Corporate Link's claims for fraud in the inducement.

6. Lost Profits

Finally, Fairbanks moves for summary judgment on Corporate Link's claim for lost profits. At this time, the Court DENIES Fairbanks's Motion for Summary Judgment on lost profits.

IV. CONCLUSION

For the foregoing reasons, the Court DENIES Fairbanks's Motion to Dismiss, Corporate Link's Motion for Leave to Amend, and Corporate Link's Motion for Partial Summary Judgment. The Court GRANTS IN PART and DENIES IN PART Fairbanks's Motion to Strike Summary Judgment Evidence and Fairbanks's Motion for Summary Judgment. The causes of action then remaining for trial are as follows:

• Breach of contract regarding Corporate Link's work following termination of the Agreement;
• Breach of contract regarding Fairbanks's failure to pay shipping costs;
• Theft of services regarding Corporate Link's work following termination of the Agreement;
• Theft of services regarding Fairbanks's failure to pay shipping costs; and
• Unjust enrichment regarding Corporate Link's work following termination of the Agreement.

An order requesting input from the parties regarding scheduling for the remainder of the case will follow shortly.

SO ORDERED.