

 
Affirmed and Majority and Concurring Opinions filed March 8, 2011.
 
In The
 
Fourteenth Court of
Appeals
___________________
 
NO. 14-09-00974-CV
___________________
 
Robin Singh Educational Services, Inc.,
Appellant
 
V.
 
Test masters Educational Services, Inc.,
Appellee

 

 
On
Appeal from the 270th District Court
Harris County,
Texas

Trial Court Cause No. 2009-07572
 

 
 
CONCURRING OPINION
            The appellant/plaintiff, a company in the business of preparing
students for the Law School Admission Test, sued the appellee/defendant, a
company that provides the same service, asserting a conversion claim based on
the defendant’s alleged refusal to give the plaintiff emails that the defendant
received from consumers who allegedly thought they sent their emails to the
plaintiff but, in fact, sent their emails to the defendant.  The defendant
moved for a traditional summary judgment on two grounds: 
(1)      Emails
that are in electronic form cannot be converted as a matter of law; and 
(2)      Even
presuming the truth of the plaintiff’s allegations, as a matter of law, the defendant
has not wrongfully exercised dominion over these emails because they were
lawfully directed to the defendant and the plaintiff has never possessed or
owned these emails.
The
trial court granted summary judgment on both grounds, but, on appeal, the
plaintiff has not challenged the second ground.  Rather than summarily affirm
the trial court’s judgment based on the failure to challenge both grounds, the
majority affirms based on the first ground.  In affirming on this ground, the
majority holds, as a matter of first impression under Texas law, that a document
in the form of an email cannot be converted as a matter of law, even though the
same document could be converted if the email were printed or if it had been
created in hard-copy form.  In reaching today’s holding the majority fails to
address or analyze several key questions relevant to this cutting-edge legal
issue.  The better course would be to leave the resolution of this issue for
another day and affirm based on the failure to challenge the second ground.  
The Conversion Claim
            Appellant/plaintiff
Robin Singh Educational Services, Inc. (“Singh Services”) filed suit in the
trial court against appellee/defendant Test Masters Educational Services, Inc.
(“Test Masters”).  In its live petition, Singh Services asserted only a claim
for common-law conversion, for which it sought legal and equitable relief.  In
its summary-judgment motion Test Masters presumed the truth of all factual
allegations in Singh Services’s live pleading.  In that live pleading, Singh
Services alleged as follows:
·       
Singh Services began preparing students for the Law School
Admission Test (“LSAT”) in 1991 and is now one of the largest LSAT test
preparation service providers in the United States.  Singh Services operates
its business under the name “TestMasters” and has a website for its business
with the domain name “www.testmasters180.com.”
·       
Some time after July 2002, Test Masters entered the LSAT test
preparation business.  Test Masters operates its business under the name “Test
Masters” or “Testmasters”  and has a website for its business with the domain
name “www.testmasters.com.”[1]   
·       
In the course of discovery in federal trademark litigation
between the two companies, Test Masters produced “many misdirected emails from
consumers inquiring about LSAT services, even though at the time [Test Masters]
did not offer LSAT services.”  Test Masters received inquiries about LSAT
services from prospective students who mistakenly believed that they had
contacted Singh Services.  
·       
Test Masters used this confusion to pass itself off as Singh
Services’s nationally recognized “TestMasters” company.  It enrolled students
in its hastily created LSAT course knowing that the students intended to enroll
in Singh Services’s course.  
·       
Test Masters created a website that largely copied Singh Services’s
website.  As a result, countless LSAT preparation consumers searching for Singh
Services’s company on the internet have been fooled into thinking that Test
Masters website at www.testmasters.com
is actually Singh Services’s website.  Test Masters perpetuated this confusion
by deliberately failing to tell consumers that there are two different
companies offering the same services under the same name.
·       
As a result of these events, Singh Services and Test Masters are
operating under the same name, with similar domain names for their websites,
and offering similar services to a similar set of consumers.  It is not
surprising that prospective LSAT students and others intending to contact Singh
Services have contacted Test Masters by mistake.
·       
In discovery in the trademark lawsuit, Test Masters produced some
but not all “misdirected emails,” and Test Masters has not given Singh Services
any misdirected emails since January 2004.  Test Masters has not produced or
returned any emails from an actual confused customer since its production
during discovery in the trademark lawsuit.  Test Masters does not deny that
such emails exist, and Singh Services has asked Test Masters to provide these
emails to Singh Services on numerous occasions.  Test Masters has steadfastly
refused.  Therefore, Singh Services has asserted its conversion claim “to
retrieve its mail (the various emails directed at Singh Services but instead
sent to [Test Masters]) that [Test Masters] has for years wrongfully
converted.”
·       
Test Masters has received emails from Singh Services’s attorneys
who were intending to contact Robin Singh and Singh Services’s in-house counsel
but mistakenly sent the emails to the wrong addresses.  These emails contained
confidential information protected by the attorney-client privilege, work
product rule, and the right of privacy.  Singh Services requested that these
emails be returned, but Test Masters has refused.  
·       
Test Masters has received and continues to receive misdirected
emails from potential customers and others intending to contact Singh Services. 
Singh Services has a right to possess those emails.  Singh Services has
demanded that Test Masters return these misdirected emails but Test Masters has
refused.  Singh Services has suffered actual damages as a result of Test
Masters’s conversion of these emails.  Singh Services seeks to recover actual
damages as well as a court order requiring Test Masters to return to Singh
Services the converted property—emails directed at Singh Services but
inadvertently sent to Test Masters.
The
Summary Judgment Motion
            Test
Masters filed a summary-judgment motion in which Test Masters argued that, even
presuming the truth of all factual allegations in Singh Services’s petition, Singh
Services’s conversion claim fails as a matter of law.  Test Masters noted that
(1) it possesses all legal rights to its email addresses and the domain name
for its website and (2) a federal district court has permanently enjoined Singh
Services from applying for a federal trademark for the mark “testmasters.” 
Test Masters sought a traditional summary judgment based on two grounds:  (1)
because emails are intangible property, as a matter of law, they cannot be
converted and (2) as a matter of law Test Masters could not have wrongfully
exercised dominion or control over emails that third parties lawfully directed
to Test Masters at its internet domain, and Singh Services has no right of
ownership or possession regarding such emails.  The second summary-judgment
ground has its own section in the summary-judgment motion, and the heading for
this section reads: “[Test Masters] did not exercise wrongful dominion over the
allegedly misdirected emails to the exclusion of [Singh Services].”
Arguments in the Opening Appellate Brief
The trial court granted Test Masters’s
summary-judgment motion without specifying the
grounds upon which the trial court relied.  In this situation, this court must
affirm the trial court’s judgment if any of the independent summary-judgment
grounds is meritorious.  See FM Props. Operating Co. v. City of Austin,
22 S.W.3d 868, 872 (Tex. 2000); Ramco Oil & Gas Ltd. v. Anglo-Dutch
(Tenge) L.L.C., 207 S.W.3d 801, 826–27 (Tex. App.—Houston [14th Dist.]
2006, pet. denied).  Unless Singh Services has challenged both of the
summary-judgment grounds in its opening appellate brief, this court must affirm. 
See Bartee v. Baylor College of Medicine, No. 14-006-00324-CV, 2007 WL
2989614, at *5 (Tex. App.—Houston [14th Dist.] Oct. 16, 2007, no pet.) (mem.
op.); Fish v. Marsters Co., No. 06-00129-CV, 2007 WL 1438555, at *6
(Tex. App.—Houston [14th Dist.] May 17, 2007, pet. denied) (mem. op.); Ramco
Oil & Gas Ltd., 207 S.W.3d at 826–27.  But Singh Services asserts in
its opening brief that there is only one summary-judgment ground, and Singh
Services does not challenge the second ground upon which the trial court
granted summary judgment.  This is clear from Singh Services’s sole appellate
issue,[2] which reads in its entirety as follows:
[Test
Masters] asserted as its sole ground for summary judgment that “e-mail
communications are intangible property incapable of being converted as a matter
of law.”  In today’s modern age, where e-mails have replaced paper mail as the
predominant form of commercial communication, is a claim for the conversion of
e-mails cognizable under Texas Law? 
 
In its appellate
brief, Singh Services never mentions that the trial court granted summary
judgment based on the second ground in which Test Masters asserted that
it could not have wrongfully exercised dominion or control over the emails as a
matter of law.  Singh Services does not assert that the trial court erred in
granting summary judgment on this ground, nor does Singh Services provide any argument, analysis, record citations, or legal
authorities addressing this summary-judgment ground.  Even interpreting Singh
Services’s appellate brief liberally, this court cannot reasonably conclude
that Singh Services has challenged the second summary-judgment ground.  See
San Saba Energy, L.P. v. Crawford, 171 S.W.3d 323, 337 (Tex. App.—Houston
[14th Dist.] 2005, no pet.); Fish, 2007 WL 1438555, at *5–6.  Because
Singh Services was required to attack both summary-judgment grounds and Singh
Services failed to do so, this court must affirm the trial court’s summary
judgment.  And, this court need not and should not address the merits of either
of the summary-judgment grounds. See Bartee, 2007 WL 2989614, at *5; Fish,
2007 WL 1438555, at *6; Ramco Oil & Gas Ltd., 207 S.W.3d at 826–27. 

 
No
Waiver of Any Argument Regarding the Merger Doctrine
            The majority
concludes that Singh Services waived any argument based on the merger doctrine that
emails may be the subject of a conversion claim.  The majority concludes that Singh
Services may not rely on this doctrine because Singh Services did not assert
the doctrine in its summary-judgment response.  Even if Singh Services did not
mention the merger doctrine in its summary-judgment response, Singh Services
did not waive any argument based on this doctrine.  
Test Masters
sought a traditional summary judgment, and rather than take issue with the
facts alleged in Singh Services’s petition, Test Masters presumed for the sake
of argument that all of these facts were true.  Therefore, Test Masters undertook
the burden of proving, as a matter of law, that the emails described in Singh
Services’s petition are not the type of property upon which a conversion claim
can be based under Texas law.  If, under the merger doctrine, these emails
would be the type of property that could be the subject of a conversion claim,
then Test Masters had the burden to show that the merger doctrine did not apply
as a matter of law.  This court’s role is to conduct a de novo review of the
trial court’s traditional summary judgment, and Singh Services is free to make
any argument on appeal that would show that Test Masters was not entitled to
judgment as a matter of law based on the summary-judgment evidence and the
summary-judgment grounds asserted in Test Masters’s motion.  See County of
Dallas v. Wiland, 216 S.W.3d 344, 358, n. 62 (Tex. 2007); M.D. Anderson
Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000) (per
curiam); Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); City
of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979); Ward
v. Johnston, 593 S.W.2d 422, 424 (Tex. Civ. App.—Houston [14th Dist.] 1980,
no writ).  Therefore, Singh Services did not waive the right to argue on appeal
that the emails in question can be the basis of a conversion claim under the
merger doctrine.
 
No
Need to Address the Merits. 
            The parties have not
cited and research has not revealed any Texas case addressing whether an email
that has not been printed or otherwise converted into a hard copy can be the
subject of a common-law conversion claim.[3]  On appeal, Singh Services has cited eight cases from
other jurisdictions in support of its argument that such emails can be the
basis of a common-law conversion claim, yet the majority does not discuss these
cases.  
In one of
these cases, the Court of Appeals of New York held that documents that are kept
only in electronic form on the hard drive of a computer can be the subject of a
common-law conversion claim, even though, under New York law, there is a
general rule that only tangible property can be converted.  See Thyroff v.
Nationwide Mut. Ins. Co., 864 N.E.2d 1272, 1275–1278 (N.Y. 2007).  Summarizing
some of the considerations in analyzing this issue, the Thyroff court
observed: 
            A variety of arguments
have been made in support of expanding the scope of conversion. Some courts
have decided that a theft of intangible property is a violation of the criminal
law and should be civilly remediable;  that virtual documents can be made
tangible “by the mere expedient of a printing key function”; that a writing is
a document whether it is read on the computer or printed on paper; and that the
expense of creating intangible, computerized information should be
counterbalanced by the protection of an effective civil action.
 
On the other hand, the primary argument for retaining the
traditional boundaries of the tort is that it “seem[s] preferable to fashion
other remedies, such as unfair competition, to protect people from having
intangible values used and appropriated in unfair ways.”  Nonetheless,
advocates of this view readily concede that “[t]here is perhaps no very valid
and essential reason why there might not be conversion of” intangible property
and that there is “very little practical importance whether the tort is called
conversion, or a similar tort with another name” because “[i]n either case the
recovery is for the full value of the intangible right so appropriated.” The
lack of a compelling reason to prohibit conversion for redress of a
misappropriation of intangible property underscores the need for reevaluating
the appropriate application of conversion.

. . . The reasons for creating the merger
doctrine and departing from the strict common-law limitation of conversion
inform our analysis. The expansion of conversion to encompass a different class
of property, such as shares of stock, was motivated by “society’s growing
dependence on intangibles.” It cannot be seriously disputed that society’s
reliance on computers and electronic data is substantial, if not essential.
Computers and digital information are
ubiquitous and pervade all aspects of business,
financial and personal communication activities. Indeed, this opinion was
drafted in electronic form, stored in a computer’s memory and disseminated to
the Judges of this Court via e-mail. We cannot conceive of any reason in law or
logic why this process of virtual creation should be treated any differently
from production by pen on paper or quill on parchment.  A document stored on a
computer hard drive has the same value as a paper document kept in a file
cabinet.
 
            The merger rule reflected
the concept that intangible property interests could be converted only by
exercising dominion over the paper document that represented that interest.  Now,
however, it is customary that stock ownership exclusively exists in electronic
format.  Because shares of stock can be transferred by mere computer entries, a
thief can use a computer to access a person’s financial accounts and transfer
the shares to an account controlled by the thief.  Similarly, electronic
documents and records stored on a computer can also be converted by simply
pressing the delete button.
 
            Furthermore,
it generally is not the physical nature of a document that determines its
worth, it is the information memorialized in the document that has intrinsic
value.  A manuscript of a novel has the same value whether it is saved in a
computer’s memory or printed on paper. . . In the absence of a significant
difference in the value of the information, the protections of the law should
apply equally to both forms—physical and virtual.
 
Id. at 1275–1278 (citations omitted).  
            The Supreme Court of Texas has not
addressed whether an email can be the subject of a common-law conversion
claim.  But the Supreme Court of Texas has held that a lessee’s intangible
property rights under a lease can be converted if these rights are merged into
a “document” and the document is converted.  See Prewitt v. Branham, 643
S.W.2d 122, 123 (Tex. 1982) (per curiam).  The Supreme Court of Texas did not
define the scope of the term “document” in its opinion; but, in recent cases other
courts—including this one—have stated that documents can be in either
electronic or hard-copy form.  See In re Davis, 305 S.W.3d 326, 332–33
(Tex. App.—Houston [14th Dist.] 2010, orig. proceeding) (characterizing a court
order available on the Harris County District Clerk’s website in electronic
form as a “document”); see also Kremen v. Cohen, 337 F.3d 1024,
1034, n.11 (9th Cir. 2003) (stating that merger doctrine, as stated
in section 242 of the Restatement (Second) of Torts, only requires merger into
a “document” and that a document can be an electronic record).  
            Are the emails described in Singh Services’s
petition documents under opinions such as this court’s opinion in In re
Davis?  If so, are these emails subject to conversion under the Supreme
Court of Texas’s opinion in Prewitt v. Branham?  If the Supreme Court of
Texas has not held that emails cannot be the basis of a conversion claim, is
this court free to hold that emails can be the basis of a conversion claim? 
These are important questions that deserve serious consideration and analysis. 
But because Singh Services has not challenged all of the summary-judgment
grounds in the case under review, this court need not and should not decide the
issue presented by Singh Services today.
 
                                                                                                                                                                                                                                    /s/        Kem
Thompson Frost
                                                                                    Justice
 
 
 
Panel consists of Justices
Anderson, Frost, and Brown (Anderson, J., majority).
 




[1]
According to Singh Services’s petition, Singh Services previously had a
trademark registration for the “TestMasters” name and sued Test Masters in
federal court alleging trademark infringement and seeking to be awarded the  “www.testmasters.com”
domain name.  Singh Services won in the trial court and was awarded the domain
name, but the court of appeals reversed, canceled Singh Services’s trademark
and gave the domain name back to Test Masters.  According to the petition, Test
Masters then entered the LSAT test preparation business.


[2]
The majority incorrectly states that Singh Services presents two appellate
issues.  


[3]
Test Masters and the majority both cite to Express One Intern., Inc. v. Steinbeck. 
See 53 S.W.3d 895, 901 (Tex. App.—Dallas 2001, no pet.).  But that case
did not address whether an email could be the subject of a conversion claim.  See
id.  In Express One, the plaintiff alleged that the defendant
converted the plaintiff’s trade name and that this property could be made the
basis of a conversion claim because the defendant used the trade name as his
screen name when he posted comments on an internet message board. See id. 
The Express One court rejected this argument and concluded that the
trade name was intangible property that could not be the basis of a conversion
claim.  See id.  


