                             NUMBER 13-12-00763-CV

                               COURT OF APPEALS

                       THIRTEENTH DISTRICT OF TEXAS

                         CORPUS CHRISTI - EDINBURG


AJAS, INC.,                                                                  Appellant,

                                            v.

IDAHO PACIFIC LUMBER
COMPANY, INC.,                                                                 Appellee.


                    On appeal from the 267th District Court
                         of Jackson County, Texas.


                             MEMORANDUM OPINION

     Before Chief Justice Valdez and Justices Rodriguez and Wittig
                Memorandum Opinion by Justice Wittig
       Ajas, Inc. (“Ajas”), appellant, asks us to reverse the summary judgment, lien

foreclosure, and award of attorney’s fees rendered against it by the trial court. We reverse

and remand.
                                           I. BACKGROUND1

        Idaho Pacific Lumber Company, Inc. (“Idaho”), appellee, brought suit against

DaRam Companies (“DaRam”) and its guarantor Kirk Countryman based upon a credit

contract between Idaho and DaRam.                  Idaho delivered materials to DaRam on a

construction project.        Idaho was granted a summary judgment against DaRam,

Countryman, and Ajas based upon the contract plus attorney’s fees, and foreclosure of

various materialman’s liens. No responses were filed to the summary judgment motion,

and the trial court granted the motion in its entirety. Only Ajas appealed.

        In three issues, Ajas argues that there was no pleading or evidence that it owed

any duty to Idaho, there were no pleading or evidence of a contract, there was no basis

to allow foreclosure of a mechanic’s lien, and that the trial court erred in awarding

attorney’s fees.

                                         II. STANDARD OF REVIEW

        The standard for reviewing a traditional summary judgment is well-established.

Sysco Food Servs. v. Trapnell, 890 S.W.2d 796, 800 (Tex. 1994); Nixon v. Mr. Prop.

Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985); First Union Nat’l Bank v. Richmont

Capital Partners I, L.P., 168 S.W.3d 917, 923 (Tex. App.—Dallas 2005, no pet.). An

appellate court reviews a summary judgment de novo to determine whether a party’s right

to prevail is established as a matter of law. Provident Life & Acc. Ins. Co. v. Knott, 128

S.W.3d 211, 215 (Tex. 2003); First Union, 168 S.W.3d at 923. When reviewing a motion

for summary judgment, the appellate court takes the nonmovant’s evidence as true,



        1Retired Fourteenth Court of Appeals Justice Don Wittig assigned to this Court by the Chief Justice
of the Supreme Court of Texas pursuant to the government code. See TEX. GOV'T CODE ANN. § 74.003
(West, Westlaw through 2013 3d C.S.).

                                                    2
indulges every reasonable inference in favor of the nonmovant, and resolves all doubts

in favor of the nonmovant. Provident Life, 128 S.W.3d at 215; First Union, 168 S.W.3d at

923. When a trial court’s order does not specify the grounds for its summary judgment,

an appellate court must affirm the summary judgment if any of the theories presented to

the trial court and preserved for appellate review are meritorious. Provident Life, 128

S.W.3d at 216; First Union, 168 S.W.3d at 923. A summary judgment cannot be affirmed

on grounds not expressly set out in the motion or response. Stiles v. Resolution Trust

Corp., 867 S.W.2d 24, 26 (Tex. 1993).

      Because a summary judgment is a summary trial of a claim, our rules and law

require that a party may secure a summary judgment only on those grounds specifically

named and discussed in the motion. See Wright v. Sydow, 173 S.W.3d 534, 554 (Tex.

App.—Houston [14th Dist.] 2004, pet. denied) (citing McConnell v. Southside Indep. Sch.

Dist., 858 S.W.2d 337, 342 (Tex. 1993)). This is a notice requirement, intended to notify

the claimant and the trial court of those claims or elements of claims the opponent is

attacking. See id. A trial court can enter a summary judgment only against those claims

attacked in a motion for summary judgment. See id.

                           III. THE SUMMARY JUDGMENT

      Ajas argues there was no or insufficient evidence to show it owed a duty to pay

Idaho and that no pleading or evidence showed any contract between the parties. Idaho’s

petition at its core claimed a contract with DaRam and that the contract was personally

guaranteed by Countryman. The only stated claim against Ajas is for the foreclosure of

a materialman’s lien. While Idaho describes Ajas as a property owner where the materials

were alleged to have been used, there is no proof of this allegation. However, as Idaho



                                           3
points out, Ajas seems to admit at least ownership of the property in its brief at page 11.2

Ajas cites Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222-23, (Tex. 1999), holding

that “the nonmovant has no burden to respond to a summary judgment motion unless the

movant conclusively establishes its cause of action or defense.” (citing Oram v. Gen. Am.

Oil Co., 513 S.W.2d 533, 534 (Tex. 1974); Swilley v. Hughes, 488 S.W.2d 64, 67–68

(Tex. 1972)). The trial court may not grant summary judgment by default because the

nonmovant did not respond to the summary judgment motion when the movant’s

summary judgment proof is legally insufficient. Steel, 997 S.W.2d at 223 (citing City of

Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979)). “The movant

must establish its right to summary judgment on the issues expressly presented to the

trial court by conclusively proving all elements of the movant’s cause of action or defense

as a matter of law.” Steel, 997 S.W.2d at 223 (citing Walker v. Harris, 924 S.W.2d 375,

377 (Tex. 1996); Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995); City of

Houston, 589 S.W.2d at 678).

        While Ajas asked for a continuance for improper notice, it did not otherwise

respond. As Ajas points out, however, neither in Idaho’s petition nor its motion for

summary judgment did it specify a basis for legal responsibility for the debt as to Ajas.

Ajas further argues that in addition to an absence of a theory of liability, no evidence to

support liability was presented. At best, Ajas argues, Idaho is a subcontractor and

derivative claimant who must rely upon statutory lien remedies. “Because a subcontractor

is a derivative claimant and, unlike a general contractor, has no constitutional, common

law, or contractual lien on the property of the owner, a subcontractor’s lien rights are


        2 The resolution of this argument is not necessary to our disposition of this issue, and the liens offer
at least some evidence of ownership. See T.R.C.P. 47.1.

                                                       4
totally dependent on compliance with the statutes authorizing the lien.” First Nat’l Bank

in Graham v. Sledge, 653 S.W.2d 283, 285 (Tex. 1983). We agree. We find no pleading

or proof for a direct action against Ajas based upon debt.

       Idaho seeks to refute Ajas’s arguments by saying it waived all complaints. In

particular, under Texas Rule of Civil Procedure 93, Ajas did not file verified denials

regarding the legal capacity to be sued, a defect in parties, or a failure of consideration.

See TEX. R. CIV. P. 93. While we generally agree with this proposition, this does not

address Ajas’s legal sufficiency argument.

       Idaho argues that the failure of a motion for summary judgment to specify grounds

is a defect of form that is waived unless excepted to prior to rendition of judgment, citing

Westchester Fire Ins. Co. v. Alvarez, 576 S.W.2d 771, 773 (Tex. 1978) (in turn relying

upon The Life Ins. Co. of Va. v. Gar-Dal, Inc., 570 S.W.2d 378 (Tex. 1978)); see also

McConnell, 858 S.W.2d at 342. But in Westchester Fire, the record and the affidavits

attached to the motion undisputedly establish that Westchester Fire Insurance Company

had paid Mrs. Alvarez more than $10,000 in workers’ compensation benefits and was

therefore subrogated to the rights of Mrs. Alvarez for $10,000 under worker’s

compensation law. See 576 S.W.2d at 773. At the same time, the high court also

expressly stated that the underlying purpose of the requirement to specify grounds “is to

provide the opposing party with adequate information for opposing the motion, and to

define the issues for the purpose of summary judgment.” Id. at 772.

       The supreme court has addressed this issue on multiple occasions.               See

McConnell, 858 S.W.2d at 341, see also Amedisys, Inc. v. Kingwood Home Health Care,

LLC, 437 S.W.3d 507, 511 (Tex. 2014); G & H Towing Co. v. Magee, 347 S.W.3d 293,



                                             5
297 (Tex. 2011); Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 912 (Tex. 1997).

“Consistent with the precise language of Rule 166a(c), we hold that a motion for summary

judgment must itself expressly present the grounds upon which it is made. A motion must

stand or fall on the grounds expressly presented in the motion. In determining whether

grounds are expressly presented, reliance may not be placed on briefs or summary

judgment evidence.” McConnell, 858 S.W.2d at 341.

       In Timpte Indus., Inc. v. Gish, 286 S.W.3d 306 (Tex. 2009), the high court

seemingly limits or clarifies Westchester Fire by holding that “[t]he underlying purpose of

this requirement ‘is to provide the opposing party with adequate information for opposing

the motion, and to define the issues for the purpose of summary judgment.’” Id. at 311

(citing Westchester Fire, 576 S.W.2d at 772). The supreme court went on to hold: “[w]e

have analogized this purpose to that of the ‘fair notice’ pleading requirements of Rules

45(b) and 47(a). Id. at 772–73; see also TEX. R. CIV. P. 45(b) (requiring a party’s

pleadings to give “fair notice” to the opponent); Id. at 47(a) (requiring a plaintiff’s pleadings

to give “fair notice of the claim involved”).

       In both Brewer & Pritchard, P.C., 73 S.W.3d 193, 204 (Tex. 2002), and Science

Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 204 (Tex.1997), the high court held that it is

well settled that a trial court cannot grant a summary judgment motion on grounds not

presented in the motion. There, it was held that when the motion for summary judgment

clearly presents certain grounds but not others, a non-movant is not required to except.

       This distinction was recognized and correctly resolved in Roberts v.
       Southwest Texas Methodist Hospital, when the court held: When a motion
       for summary judgment asserts grounds A and B, it cannot be upheld on
       grounds C and D, which were not asserted, even if the summary judgment
       proof supports them and the responding party did not except to the motion.
       811 S.W.2d at 141, 146 (Tex.App.—San Antonio, 1991, pet. denied). Why

                                                6
        should a non-movant be required to except to a motion expressly presenting
        certain grounds and not others? The only effect of such a rule would be to
        alert the movant to additional unasserted grounds for summary judgment.
        Consequently, we conclude that Rule 166a(c) does not require a non-
        movant to except in this situation.

Id. Such is the case here where Idaho pursued summary judgment against DaRam and

Countryman on breach of contract and a personal guarantee while making no specific

allegations against Ajas other than the general claim for foreclosure of the materialman’s

lien.

        We conclude Ajas did not waive this issue by failing to except where neither Idaho’s

petition nor its motion for summary contained fair notice of a non-derivative claim for debt.

See id.

        Idaho cites State v. Lot 10, Pine Haven Estates, 900 S.W.2d 400, 401, (Tex.

App.—Texarkana 1995, no writ), for the proposition that a failure to file a response does

not authorize a summary judgment by default, but in the absence of a response expressly

presenting to the trial court reasons for avoiding the movant’s right to summary judgment,

those matters may not be raised for the first time on appeal.     However, it was precisely

because the State failed to satisfy the statutory requirements in its pleadings or otherwise

that summary judgment was granted against its attempted forfeiture. Id. at 402. “There

is no question in the present case that the State failed to meet the explicit requirements

of the statute. The State did not commence proceedings against the property seized

within thirty days of the date of its seizure.” Id.

        Idaho cites Anderson v. Varco Int’l, Inc., 905 S.W.2d 26, 28 (Tex. App.—Houston

[1st Dist.] 1995, writ denied) (citing McConnell 858 S.W.2d at 343), stating that when a

party does not file a response to a summary judgment, the only ground for reversal it may



                                               7
raise on appeal is an attack on the legal sufficiency of the movant’s summary judgment

proof.    We agree and note that the essential challenge in Ajas’s first issue is to the legal

sufficiency. In McConnell, the high court also held that an exception is required “should

a non-movant wish to complain on appeal that the grounds relied on by the movant were

unclear or ambiguous.” 858 S.W.2d at 342. While we agree, the court went on to explain:

“[h]owever, summary judgments must stand or fall on their own merits, and the non-

movant’s failure to answer or respond cannot supply by default the summary judgment

proof necessary to establish the movant’s right.” Id. at 343 (citing Clear Creek, 589

S.W.2d at 678). Furthermore, “[i]f a non-movant fails to present any issues in its response

or answer, the movant’s right is not established and the movant must still establish its

entitlement to summary judgment.” Id. Without a response, the non-movant is limited on

appeal to arguing the legal sufficiency of the grounds presented by the movant. Id.; see

also Washington v. McMillan, 898 S.W.2d 392, 395 (Tex. App.—San Antonio 1995, no

pet.) (stating that if a motion is legally sufficient, the non-movant must bring forward

sufficient controverting proof to raise a material fact issue); Scott v. Galusha, 890 S.W.2d

945, 949 (Tex. App.—Fort Worth, 1995, writ denied) (“While the nonmovant need not file

an answer or response to the summary judgment motion, on appeal he may only contend

that the movant’s motion was insufficient as a matter of law.”)

         Finally, Idaho cites Private Mini Storage Realty, L.P. v. Larry F. Smith, Inc., 304

S.W.3d 854, 861 (Tex. App.—Dallas, 2010, no pet.), demonstrating that the evidence was

legally and factually sufficient to support an award of damages. In this case, Smith

testified that the amount he was owed on a project was $593,323.38, and that he was

paid $513,331.63. Id.       Subtracting the amount paid from the amount owed leaves



                                               8
$79,991.75, which is the amount the trial court awarded. Id. The court held that Smith’s

testimony constituted some evidence in support of the damages awarded. Id. However,

in the cited case, the trial court had previously partially granted Smith’s summary

judgment, ruling that Smith established appellants’ liability as a matter of law under a

mechanic’s and materialman’s lien for unpaid work and on its claim for the retained funds

pursuant to the subcontract. Id. at 857. The trial court ordered the case set for trial to

determine only the amount of damages, if any, Smith was entitled to recover. Id. The

sufficiency finding was specifically limited, and the trial to the court was held to determine

the damages under the lien and retained funds liability already established. Thus, this

holding is inapplicable in our summary judgment context.          See id. Even assuming

evidence of damages, we find no pleading or evidence to support a direct action against

Ajas.

                                    IV. LIEN FORECLOSURE

        In its second issue, Ajas argues the trial court erred in granting Idaho’s foreclosure

on its alleged mechanic’s lien(s). According to Ajas, a derivative claimant such as Idaho

can only have protection of a mechanic’s lien if it follows the statutory scheme, citing

Lonergan v. San Antonio Loan & Trust Co., 104 S.W. 1061, 1069 (Tex. 1907). (“The

proceeding prescribed by the statute by which a materialman is permitted to fix a lien for

material furnished by him . . . does not create a debt against the owner of the property,

but operates as a writ of garnishment would, and appropriates so much of the money in

the hands of the owner as is then due and payable, or may become due and payable, to

the contractor to the extent necessary to satisfy that claim.”).        Idaho cites Stolz v.




                                              9
Honeycutt, 42 S.W.3d 305, 310 (Tex. App.—Houston [14th Dist.] 2001, no pet.)3 stating

the same principal and noting that the two main statutory schemes providing such rights

to spurned subcontractors are: (1) the “Trapping Statute,” TEX. PROP.CODE ANN. §§

53.081–.085 (West, Westlaw through 2013 3d C.S.); and (2) the “Retainage Statute,” Id.

§§ 53.101–.106.2. At the same time, “[b]ecause a subcontractor is a derivative claimant

and, unlike a general contractor, has no constitutional, common law, or contractual lien

on the property of the owner, a subcontractor’s lien rights are totally dependent on

compliance with the statutes authorizing the lien.” Sledge, 653 S.W.2d at 285 (also

holding substantial compliance may suffice.)4

        Still, Ajas maintains that Idaho failed to allege or offer any proof of statutory

compliance. The amounts claimed are not ascertainable. There is no pleading or proof

of any contract amount, what trapped funds, if any, were paid to the general contractor,

or any fact giving rise to the proper lien amount or the right to foreclose. Ajas also argues

lack of required statutory notices to the owner. We examine these matters.

        The affidavit of Eric Grandeen in support of Idaho’s summary judgment motion

addresses the credit agreement between it and DaRam, that materials were sold for

construction of the undescribed “subject property” owned by Ajas, and that the amounts

owed at the time of filing the lien affidavits were $11,877.93, $4,059.38, $33,354.45 and

$1,783.68 totaling $51,075.44. The lien affidavits were filed March 14, April 15, May 12,

and June 14, 2011, respectively. Grandeen’s affidavit states DaRam agreed to pay but

these amounts were not paid. Countryman signed a personal guarantee to the credit


       3 Stolz is also cited for the proposition that a subcontractor could bring a direct action to enforce its

mechanic’s lien where its notice complied with statutory requirements. See, 42 S.W.3d at 310.
       4 See below where the same court specifically required notices necessary for a valid lien which

were not provided by Idaho. See Sledge, 653 S.W.2d at 285.

                                                      10
agreement. The affidavits for mechanic’s and materialman’s lien indicate the material

was furnished to improve the Ganado Hotel on West York Street in Ganado, Texas and

the materials were furnished to DaRam of Houston, Texas. The only other proof provided

was an affidavit which offered some proof of attorney’s fees and copies of demand letters.

Other than the credit agreement, the summary judgment proof does not contain any terms

or amounts of any other contracts between either Idaho and DaRam or DaRam and Ajas.

       With regard to the Trapping Statute, when an owner receives proper notice that

the original contractor has failed to pay funds owed on work done on the property, the

owner may withhold payments to the contractor in an amount sufficient to cover the claim

for which he received notice. See TEX. PROP. CODE ANN. § 53.081. If the owner pays any

of the “trapped” funds to the contractor after receiving notice, the claimant may obtain a

lien on the property to the extent of the money paid. See id. § 53.084(b); Sledge, 653

S.W.2d at 286. There is no proof Ajas paid any such funds to DaRam.

       To perfect this lien, “a person must comply with this subchapter.” TEX. PROP. CODE

ANN. § 53.051. The subchapter requires that in order to authorized the owner to withhold

funds, the notice to the owner must state that if the claim remains unpaid, the owner may

be personally liable and the owner’s property may be subjected to a lien unless the owner

withholds payments from the contractor for payment of the claim or the claim is otherwise

paid or settled. Id. § (d)(1), (2); see also Sledge, 653 S.W.2d at 287 (holding that a lien

was not perfected where invoices were not attached and notices did not contain statutory

notice that “he might be held personally liable and his property subjected to a lien.”).

There is no pleading or evidence that these statutory requirements were met. Thus, this

lien foreclosure action fails for lack of legal sufficiency.



                                               11
       It should also be noted that the owner is not liable for any amount paid to the

original contractor before the owner is authorized to withhold funds under this subchapter.

TEX. PROP. CODE ANN. § 53.084. Here, there is no proof of the amount of any contract to

supply labor or materials, no invoices are attached, and there is no evidence of any

amounts retained, owed, or paid by Ajas.5

       Second, the Retainage Statute provides protection that is in some ways broader

in application, but also potentially more limited in monetary terms than the Trapping

Statute. Stolz, 42 S.W.3d at 311. Under section 53.101, an owner under an original

contract on which a mechanic’s lien may be claimed is required to retain in his possession

ten percent of the contract price, or ten percent of the value of the work, for thirty days

after the work is completed. TEX. PROP. CODE ANN. § 53.101(a). A claimant may then

secure a lien on the retained funds if he provides the owner with proper notice under the

statute and files an affidavit claiming a lien no later than the 30th day after the work was

completed. Id. § 53.103.

       Ajas points out that Idaho may have waived any retainage because in its credit

contract with DaRam it specifically states: “[u]nder no circumstances does Seller accept

retainages to be held on materials supplied.” In any event, section 53.105 limits the

owner’s liability to the amount that the owner failed to retain:

       OWNER’S LIABILITY FOR FAILURE TO RETAIN.

       (a)     If the owner fails or refuses to comply with this subchapter, the
               claimants complying with Subchapter C or this subchapter have a
               lien, at least to the extent of the amount that should have been
               retained from the original contract under which they are claiming,
               against the house, building, structure, fixture, or improvement and all

       5   We note that the credit contract between Idaho and DaRam was dated October 18, 2010. While
there is some evidence of materials supplied to DaRam in the amount of $51,075.44, there is no evidence
of the amounts paid, retained, or owed, if any, to DaRam by Ajas.

                                                  12
              of its properties and against the lot or lots of land necessarily
              connected.

       (b)    The claimants share the lien proportionately in accordance with the
              preference provided by Section 53.104.

Id. § 53.105. Neither Idaho’s petition nor summary judgment proof provide any basis for

determining the amount of this lien, the amount required to be retained, whether there

was any retainage, whether Ajas failed or refused to comply, and the amount of Idaho’s

proportional share, if any. Nor is there any evidence of an original contract between Ajas

and Idaho which serves as the basis for determining the amount, if any, of any such

retainage or lien. See id.

       Idaho argues Ajas filed only a general denial and failed to file any verified special

denials, affirmative defenses or special exceptions. It cites Occidental Nebraska Federal

Savings Bank v. East End Glass Co., 773 S.W.2d 687, 688 (Tex.App.—San Antonio,

1989, no writ), holding that under Texas Rule of Civil Procedure 54 a condition precedent

generally pled is sufficient, however, when so plead, the claimant only has to prove those

specifically denied. Here, Idaho did not plead that all conditions precedent to foreclosing

the lien had been met. In paragraph IV of Idaho’s petition, it alleged that it had a contract

with DaRam and that “[p]laintiff has fully performed all of its obligations under the contract,

and all conditions precedent to Plaintiff’s right of recovery have been perform or have

occurred.” A fair reading under the four corners test would denote that the reference is

to the breach of contract actions, not to its lien foreclosure action separately pled. See,

e.g. Ewing Const. Co. v. Amerisure Ins. Co., 420 S.W.3d 30, 37 (Tex. 2014) (stating that

“interpretations of contracts as a whole are favored so that none of the language in them




                                              13
is rendered surplusage”). This is reinforced by the fact that it is in paragraph VI, not

paragraph IV, that Idaho addresses its request to foreclose its liens.

       Similarly, Idaho argues under Wade & Sons, Inc. v. American Standard, Inc., 127

S.W.3d 814, 825 (Tex. App.—San Antonio, 2003, pet. denied), that Rule 54 provides that

in pleading the performance or occurrence of conditions precedent, it shall be sufficient

to aver generally that all conditions precedent have been performed or have occurred.

“Trane states that ‘[t]his is a suit to foreclose on a Bond to Indemnify Against Lien and a

suit on sworn account. All conditions precedent have been performed or have occurred.’”

Id. “This language sufficiently placed Consolidated on notice of Trane’s suit and of

Trane’s performance or occurrence of all conditions precedent.” Id.

       Again, Idaho lacked such a pleading and failed to give Ajas fair notice that it

claimed all conditions precedent had occurred in order to foreclose the lien. See Low v.

Henry, 221 S.W.3d 609, 612 (Tex. 2007) (stating that Texas follows a “fair notice”

standard for pleading, in which courts assess the sufficiency of pleadings by determining

whether an opposing party can ascertain from the pleading the nature, basic issues, and

the type of evidence that might be relevant to the controversy).

       Idaho also argues that the materialman’s lien statute is liberally construed for the

purpose of protecting laborers and materialmen. Wesco Distribution, Inc. v. Westport

Grp., Inc., 150 S.W.3d 553, 557 (Tex. App.—Austin 2004, no pet.). We agree. However,

this same case also holds: “[h]owever, ‘substantial compliance’ is not a license to ignore

statutory requirements.” Id. at 559; cf. Raymond v. Rahme, 78 S.W.3d 552, 560 (Tex.

App.—Austin, 2002, no pet.) (stating that if the subcontractor does not give the owner

timely notice containing the statutory warning, the lien is invalid). We find that Idaho failed



                                              14
to substantially comply with the statutory and fair notice requirements and did not supply

legally sufficient evidence to support these lien claims in the summary judgment context.

                                  V. CONCLUSION

      We sustain Ajas’s first two issues. We need not address the issue of attorney’s

fees, there being no basis for such a recovery. We reverse and remand.



                                         /s/ Don Wittig
                                         Assigned Justice


Delivered and filed the
14th day of May, 2015.




                                           15
