UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 95-10103
Summary Calendar
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NORTH TEXAS FARMERS, INC.,
d\b\a CARDINAL EQUIPMENT COMPANY,
Plaintiff-Appellant,
versus
CASE CORPORATION,
f/k/a J.I. CASE COMPANY,
Defendant-Appellee.
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Appeal from the United States District Court for the
Northern District of Texas
(7:93 CV 043 X)
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August 21, 1995
Before DAVIS, BARKSDALE, and BENAVIDES, Circuit Judges.
BENAVIDES, Circuit Judge:*
Plaintiff-Appellant North Texas Farmers, Inc., d/b/a Cardinal
Equipment Company ("Cardinal"), appeals the district court's
granting of summary judgment in favor of Defendant-Appellee Case
*
Local Rule 47.5 provides: "The publication of opinions
that have no precedential value and merely decide particular cases
on the basis of well-settled principles of law imposes needless
expense on the public and burdens on the legal profession."
Pursuant to that Rule, the Court has determined that this opinion
should not be published.
Corporation, f/k/a J.I. Case Company ("Case"). Cardinal also
contends that the district court abused its discretion in refusing
to allow additional discovery and continue trial, striking the
affidavit of a material witness, and imposing discovery sanctions
against Cardinal. Finding no reversible error, we AFFIRM.
I. FACTS AND PROCEDURAL HISTORY
Cardinal, a farm equipment dealer in West Texas pursuant to a
dealership agreement with Case, experienced financial difficulties
and cash flow problems in the operation of its business. This
hampered Cardinal's ability to secure credit and maintain adequate
inventory. According to Cardinal, Case informed Cardinal that it
would approve new dealer benefits for Cardinal, which would open up
substantial operating credit to Cardinal, if Cardinal paid off its
debt to Case and changed ownership. Cardinal then applied for
financing from the United States Government, received a loan, and
with a portion of the loan proceeds paid off the outstanding
balance with Case. However, Cardinal claims that local
representatives of Case then indicated to Cardinal that it would
not receive new dealer benefits from Case. Cardinal then resigned
as a Case dealership. In fact, Cardinal was removed from COD
status and its application for new dealership benefits was approved
subject to a change of ownership. Nearly four years after
resigning its dealership, Cardinal brought suit which contained
allegations of actual fraud.
Specifically, Cardinal alleged that Case falsely promised to
award Cardinal new dealer benefits if Cardinal paid off its
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outstanding account with Case and underwent a change of ownership.
The district court granted Case's motion for summary judgment,
disposing of this claim and Cardinal's remaining claims.1
II. LAW AND ARGUMENT
Cardinal first argues that the district court erred in holding
that, "[f]or plaintiff to prevail on its actual fraud claims, it
must prove [them] by clear and convincing evidence." Cardinal
argues that Texas has always required a party to prove its common
law fraud claims by a preponderance of the evidence. Cardinal
asserts that such error requires reversal of the summary judgment
as a matter of law. We disagree.
This Court may affirm a grant of summary judgment on any basis
supported by the record, Texas Refrigeration Supply, Inc. v.
Federal Deposit Insurance Corporation, 953 F.2d 975, 980 (5th Cir.
1992), even when the district court applies the wrong legal
standard, International Union, United Auto., Aerospace and Agr.
Implement Workers of America, and its Locals 1093, 558 and 25 v.
National Right to Work Legal Defense and Ed. Foundation, Inc., 590
F.2d 1139, 1151 (5th Cir. 1978). We review summary judgments de
novo. Bodenheimer v. PPG Industries, Inc., 5 F.3d 955, 956 (5th
Cir. 1993). Summary judgment shall be rendered if there is no
genuine issue of material fact and if the moving party is entitled
to judgment as a matter of law. Fed.R.Civ.P. 56(c). In making our
determination, we must draw all justifiable inferences in favor of
1
Cardinal does not challenge on appeal the district court's
disposition of the remaining claims in his complaint.
3
the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 255 (1986).
The elements of fraud are as follows: "(1) a material
representation was made; (2) it was false when made; (3) the
speaker knew it was false, or made it recklessly without knowledge
of its truth and as a positive assertion; (4) the speaker made it
with the intent that it should be acted upon; and (5) the party
acted in reliance and suffered injury as a result." Beijing Metals
& Minerals Import/Export Corp. v. American Business Center, Inc.,
993 F.2d 1178, 1185 (5th Cir. 1993). Case presented undisputed
evidence showing that it had approved Cardinal as a new dealer
based on Cardinal's representation that there had been a change of
ownership. This evidence establishes that the promise of new
dealer benefits was not false and also refutes the element of
intent required under Texas law. Moreover, the evidence reveals
that Cardinal did not in fact make the change in ownership.
Cardinal points to evidence that Case did not timely notify
Cardinal about the approval and that, subsequent to Cardinal
meeting the requirements for obtaining the new dealer benefits,
several individuals working for Case suggested that Cardinal would
not receive the benefits. Such facts, however, do not establish
the elements of fraud. Failure to disclose information is not
fraudulent under Texas law "unless one has an affirmative duty to
disclose, such as where a confidential or fiduciary relationship
exists between the parties." Stephanz v. Laird, 846 S.W.2d 895,
904 (Tex.App.--Houston [1st Dist.] 1993, writ denied). Texas does
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not impose fiduciary duties on franchisors. Crim Truck & Tractor
Co. v. Navistar Intern. Transp. Corp., 823 S.W.2d 591, 593-96 (Tex.
1992). The fact that it was suggested that Cardinal would not
receive the new dealer benefits is irrelevant to whether Case
actually approved the new dealer benefits. As previously stated,
Case actually did approve the benefits subject to the change of
ownership. It is important to note that the fraudulent
representation alleged in the complaint below was a false
representation that new dealership benefits would be extended, not
a false representation that new dealership benefits would not be
extended.2 We find that whether a plaintiff's burden to establish
fraud is the clear and convincing standard or the preponderance of
the evidence standard, Cardinal has failed to create a genuine
issue with respect to the falsity of the misrepresentation alleged
and the issue of intent. Accordingly, the district court did not
err in granting summary judgment against Cardinal's fraud claim.
II
Cardinal next contends that the district court abused its
discretion when it granted Case's motion to strike the affidavit of
a previously unidentified witness, Elbert Louis Matney ("Matney"),
offered in support of Cardinal's response to Case's motion for
summary judgment. We find no abuse of discretion in denying the
use of Matney's testimony in the proceedings because the witness
2
Rule 9(b) of the Federal Rules of Civil Procedure provides
in pertinent part that "[i]n all averments of fraud or mistake, the
circumstances constituting fraud or mistake shall be stated with
particularity."
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was not timely disclosed. Additionally, the information in the
affidavit is cumulative to that considered by the district court.
III
Finally, Cardinal argues that the district court abused its
discretion in denying Cardinal's motion to continue. Cardinal
argues that the denial of this motion predisposed the court to
grant summary judgment for Case because it withdrew from the
court's consideration evidence that would have indicated the
existence of a genuine issue of material fact. Cardinal states
that Case delivered its dealership file three weeks after the
discovery deadline. Cardinal argues that, after a review of the
file, it became aware of the Matney testimony and the identity and
the need to depose members of Case's Dealership Review Board.
It is clear, however, that the reason why Cardinal did not
receive the dealership file before the second and final discovery
deadline was because Cardinal did not request the file even though
it was made available for inspection by Case prior to the first
discovery deadline. We find no abuse of discretion in the district
court's denial of Cardinal's motion to continue trial and to extend
discovery for a second time.
CONCLUSION
For the foregoing reasons, the judgment of the district court
is AFFIRMED.
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