AFFIRM; and Opinion Filed August 7, 2018.




                                             In The
                               Court of Appeals
                        Fifth District of Texas at Dallas
                                      No. 05-17-01217-CV

                         STEVEN L. KENNEDY, Appellant
                                     V.
                  LACY HARBER AND DOROTHY HARBER, Appellees

                       On Appeal from the 59th Judicial District Court
                                  Grayson County, Texas
                            Trial Court Cause No. CV-15-0431

                             MEMORANDUM OPINION
                          Before Justices Francis, Evans, and Boatright
                                  Opinion by Justice Boatright
       This lawsuit involves a number of claims between appellant Steven Kennedy and appellees

Lacy and Dorothy Harber involving construction projects they undertook together. Kennedy

appeals the trial court’s denial of his Motion to Dismiss the Harbers’ counterclaims under Chapter

27 of the Texas Civil Practice & Remedies Code and its grant of the Harbers’ motion for summary

judgment on his own affirmative claims. We affirm the trial court’s judgment.

                                          Background

       Kennedy and the Harbers were long-time friends and business associates. In 2013, when

events governing this lawsuit took place, Kennedy and the Harbers had been involved in real estate

construction projects in Nevada and California for approximately four years. Kennedy served as

the project manager for these undertakings; the Harbers provided the funding. Among the projects

they undertook was the planning and construction of a Las Vegas museum celebrating Wayne
Newton. However, after much time and money was expended on that project, personal

relationships devolved, and CSD, LLC—the company formed by these parties to operate the

project—filed bankruptcy. The Newton project ended up in litigation involving the Harbers,

Kennedy, and many more parties.

         During and after the Newton project, Kennedy had overseen other projects for the Harbers:

he had been paid for some of his work, but not for all of it. The Newton project had left the Harbers

short of funds. In March 2013, Kennedy and the Harbers met and agreed that Kennedy was due $2

million as payment for these projects. The Harbers orally agreed to transfer to him a property called

the Scenic House, which was purportedly worth $3.5 million. In return, Kennedy would sell the

property and return $1.5 million to the Harbers. Kennedy also agreed that he would support a

global settlement of the Newton dispute that would release his claims involving the Newton project

for $100,000.

         Kennedy, the Harbers, and the other parties to the Newton project litigation signed the

Settlement Agreement in April, and Kennedy was paid $100,000. However, the Harbers refused

to transfer the Scenic House to him or otherwise to pay him the $2 million negotiated in the March

oral agreement, asserting that the Settlement Agreement included a release of all claims between

them and Kennedy.

         Kennedy sued the Harbers alleging breach of contract, fraud, quantum meruit, unjust

enrichment, promissory estoppel, negligent misrepresentation, and sought a declaratory judgment

that the release in the Settlement Agreement was unconscionable. The Harbers filed counterclaims

against Kennedy, including breach of contract, fraud, breach of fiduciary duty, accounting, and

theft.

         The Harbers filed their motion for summary judgment early in the proceedings; it was heard

finally on September 25, 2017. The motion contained a traditional component based on the

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Harbers’ affirmative defenses of release and the statute of frauds, as well as no-evidence challenges

to Kennedy’s affirmative claims. That same day, Kennedy filed his motion for summary judgment

and his motion to dismiss under chapter 27 of the Texas Civil Practices and Remedies Code,

commonly known as the Texas Citizens’ Participation Act, or TCPA. We have the reporter’s

record of this hearing. The transcript contains Kennedy’s request for the trial court to wait to rule

on the Harbers’ motion until it had heard both of Kennedy’s motions that week before trial. But

the trial judge sent a letter the next day saying he had decided to grant the Harbers’ motion.

       The trial court signed orders on October 2, 2017—the date trial was scheduled to begin—

indicating that (a) Kennedy’s motion for leave and for summary judgment on the Harbers’

counterclaims was granted, and (b) his motion to dismiss under the TCPA was denied. We have

no reporter’s record of a hearing from October 2, but the parties agree that the trial court ruled on

the summary judgment motion first.

       The trial court combined these rulings in its final judgment, the result of which was that all

parties took nothing on their claims. Kennedy appeals that judgment; the Harbers do not.

                        Kennedy’s Motion to Dismiss under Chapter 27

       Kennedy’s first two issues challenge the trial court’s order denying his motion to dismiss.

Kennedy argues that the trial court had no authority to deny the motion “without notice, hearing,

or response.” And he contends that the motion was proper under the TCPA because the Harbers’

counterclaims were filed in response to his own exercise of the right to petition. The Harbers argue

that Kennedy’s motion to dismiss was untimely under the parties’ agreed scheduling order, mooted

by the granting of his summary judgment motion, and unsuccessful on the merits.

       Kennedy claims that he did not get a hearing on his motion to dismiss under chapter 27.

The Harbers dispute this. They explain that Kennedy filed a motion for continuance in which he

acknowledged that a hearing on his motion to dismiss was set for October 2, 2017. The Harbers

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also note that the trial court’s final judgment stated that the parties appeared in person on

October 2, 2017. And the Harbers point out that there is no written objection, motion for new trial,

or other evidence in our record showing that Kennedy had earlier complained about being denied

a hearing and that the trial court either ruled or refused to rule on his complaint. Kennedy has

therefore failed to preserve his complaint for our review. TEX. R. APP. P. 33.1(a).

       Kennedy also argues that he is entitled to court costs, attorney’s fees, expenses, and

sanctions under chapter 27. He would be entitled to those awards, however, only “[i]f the court

orders dismissal of a legal action under this chapter.” TEX. CIV. PRAC. & REM. CODE ANN.

§ 27.009(a) (West 2015). The trial court did not dismiss the Harbers’ counterclaims under chapter

27, but instead under Kennedy’s summary judgment motion. Consequently, Kennedy is not

entitled to costs and sanctions under section 27.009(a).

       Kennedy also argues that the trial court erred in denying his motion to dismiss, because his

motion was sufficient under chapter 27. However, Kennedy acknowledges that the court’s

summary judgment addressed the same counterclaims at issue in his motion to dismiss. He cites

no legal authority that would allow him to complain of the trial court’s failure to dismiss

counterclaims that were already defeated by summary judgment. The Harbers argue that his

chapter 27 claims are moot. A case or an issue becomes moot if a controversy ceases to exist

between the parties at any stage of the legal proceedings. Exxon Mobil Corp. v. Rincones, 520

S.W.3d 572, 586 (Tex. 2017). We are prohibited from deciding moot controversies. Klein v.

Hernandez, 315 S.W.3d 1, 3 (Tex. 2010). Consequently, we will not opine on the merits of

Kennedy’s motion to dismiss.

       We conclude that the trial court’s denial of Kennedy’s motion to dismiss was proper, that

no part of it remains pending, and that Kennedy is not entitled to an award of any kind under

chapter 27.

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            The Harbers’ Motion for Summary Judgment on Kennedy’s Claims

       Kennedy’s remaining issues challenge the trial court’s grant of summary judgment in favor

of the Harbers on the claims Kennedy pleaded for breach of contract, fraud, negligent

misrepresentation,   quantum      meruit,   promissory     estoppel,     unjust   enrichment,   and

unconscionability. The Harbers’ motion urged both traditional and no-evidence grounds. When

both no-evidence and traditional summary judgment motions are filed, we generally address the

no-evidence motion first. See Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004).

However, when the traditional motion is clearly dispositive of issues in the motion, we may look

to it first on those issues. Greenville Automatic Gas Co. v. Automatic Propane Gas & Supply, LLC,

465 S.W.3d 778, 786 (Tex. App.—Dallas 2015, no pet.). The traditional summary judgment

movant has the burden to demonstrate that no genuine issue of material fact exists and that it is

entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c). We consider the summary

judgment evidence in the light most favorable to the nonmovant, 20801, Inc. v. Parker, 249 S.W.3d

392, 399 (Tex. 2008), crediting evidence favorable to the nonmovant if reasonable jurors could,

and disregarding evidence contrary to the nonmovant unless reasonable jurors could not, Mann

Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). Within the

framework of these standards, we review the summary judgment de novo. Travelers Ins. Co. v.

Joachim, 315 S.W.3d 860, 862 (Tex. 2010).

                                            The Release

       Three of Kennedy’s summary judgment issues challenge the Harbers’ reliance on the

Settlement Agreement’s release by the “Harber Parties,” who are defined to include the Harbers

and Kennedy. The parties concede that the release is broad. It states:

       Releases by the Harber Parties. On the Effective Date, and immediately, without
       need for any further action, order, or document, each of the Harber Parties, for
       themselves, and for any person who may be able to claim derivatively or otherwise
       through any of them, hereby waive, release, and forever discharge each of the
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       Debtor, the other Harber Parties, and the Newton Parties, and all of their directors,
       officers, shareholders, employees, representatives, members, agents, attorneys,
       affiliates, successors, and predecessors, from any and all claims, obligations,
       counterclaims, offsets, demands, actions, causes of action, and liabilities, of
       whatever kind and nature, character and description, whether in law or equity,
       whether sounding in tort, contract or under other applicable Jaw, whether known or
       unknown, and whether anticipated or unanticipated, which any of them ever had,
       now has, or may ever have had, including, without limitation, any claim asserted in
       the State Court Action and the Kennedy Claim and the CSDM Claims; provided,
       however, that nothing in this Agreement releases any Party from any right or
       obligation under this Agreement; provided further, however, that nothing in this
       section or in this Agreement releases, waives, or discharges any of the DLH Claims
       or the Neva Lane Claim.

Kennedy does not dispute that he signed the Settlement Agreement containing this release.

                Claims Not Addressed in the Summary Judgment Motion

       In his third issue, Kennedy argues a trial court may not grant a summary judgment as to all

of a plaintiff’s claims when some of the claims were never addressed in the motion. He contends

that the Harbers’ summary judgment motion failed to address his pleaded “claims” of

unconscionability and unjust enrichment, prohibiting summary judgment on those grounds. (The

trial court did list these two grounds in its order granting the Harbers’ motion.) Indeed, Kennedy

argues that because unconscionability was his defense to the Settlement Agreement, the Harbers’

failure to move for judgment on that basis should preclude any judgment based on the Settlement

Agreement. It is true that summary judgment may not be granted on a claim not raised in the

motion. McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 342 (Tex. 1993). However,

we disagree that Kennedy’s pleadings allow these grounds to thwart summary judgment for the

Harbers.

       Kennedy seeks to set aside the release employing the legal theory of unconscionability.

This theory is an affirmative defense, and Kennedy has the burden of proof on it. Royston, Rayzor,

Vickery, & Williams, LLP v. Lopez, 467 S.W.3d 494, 500 (Tex. 2015). Unconscionability is not an

affirmative claim on which Kennedy could prevail and make a recovery against the Harbers.


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Likewise, unjust enrichment is not an independent cause of action on which Kennedy could

prevail: instead, unjust enrichment “characterizes the result of a failure to make restitution of

benefits either wrongfully or passively received under circumstances which give rise to an implied

or quasi-contractual obligation to repay.” Walker v. Cotter Props., Inc., 181 S.W.3d 895, 900 (Tex.

App.—Dallas 2006, no pet.). Stated differently, unjust enrichment is an equitable measure of

damages. We disagree with the trial court’s judgment insofar as it recites that it granted summary

judgment on these grounds. However, neither unconscionability nor unjust enrichment provides

Kennedy with an affirmative claim that has survived summary judgment.

                                      Defenses to the Release

       In his fourth issue, Kennedy argues that when a party pleads unconscionability and

fraudulent inducement as defenses to enforceability of a release, the trial court cannot grant

summary judgment based on the release itself. We disagree. The court can do so if the party relying

on the release proves the release as a matter of law, and the non-movant fails to raise a material

fact issue on its defense. A defendant moving for summary judgment on an affirmative defense

such as release bears the burden of proving the affirmative defense. Zale Corp. v. Rosenbaum, 520

S.W.2d 889, 891 (Tex. 1975). In this case, the Harbers’ summary judgment evidence included an

executed copy of the Settlement Agreement containing the release and Mr. Harber’s affidavit,

which stated that the release was intended to address the claims Kennedy made in this lawsuit. The

Harbers’ evidence proves the release, which is valid on its face until set aside. Id. at 201.

       As the party opposing summary judgment based on an affirmative defense, Kennedy was

required to come forward with evidence sufficient to raise an issue of fact on each element of that

defense to avoid summary judgment. Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984).

Absent that evidence, the release provides a complete bar to any later action based on matters

covered in the release. Hart v. Traders & Gen. Ins. Co., 189 S.W.2d 493, 494 (Tex. 1945).

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       Kennedy did not carry his burden to offer summary judgment evidence on these defenses.

Indeed, as to unconscionability, he continues to argue that the Harbers failed to negate the “claim.”

But our summary judgment procedure did not allow Kennedy to rely on the Harbers to disprove

his defense; it was his burden to prove that unconscionability was a viable defense to the release.

Brownlee, 665 S.W.2d at 112. He points us to no evidence that satisfies that burden, and our review

of the summary judgment record fails to identify such evidence.

       “A release attacked on the ground of fraud is not void as a matter of law simply because a

party alleges fraud.” Deer Creek Ltd. V. N. Am. Mortg. Co., 792 S.W.2d 198, 202 (Tex. App.—

Dallas 1990, no pet.). And Kennedy does attempt to identify summary judgment evidence

establishing a fact issue on his defense of fraudulent inducement. His affidavit describes the

Harbers’ representations to him concerning the $2 million payment, alleges that the representation

was false when made, and relates the Harbers’ failure to pay after Kennedy signed the Settlement

Agreement as he had promised them he would. The affidavit states that he did so in reliance on

the promise of payment—that he never would have signed the release except for the oral

agreement. But in these circumstances, Kennedy cannot establish that his reliance on the Harbers’

promise to pay was justifiable, a critical element of his fraudulent inducement defense. Grant

Thornton LLP v. Prospect High Income Fund, 314 S.W.3d 913, 923 (Tex. 2010). Although

justifiable reliance usually presents a question of fact, circumstances can exist that negate the

element as a matter of law. JPMorgan Chase Bank, N.A. v. Orca Assets G.P., L.L.C., 546 S.W.3d

648, 654 (Tex. 2018). One of those circumstances involves reliance that is in direct contradiction

to an express provision of the written agreement. Reliance on an oral representation that is directly

contradicted by the express, unambiguous terms of a written agreement between the parties is not

justified as a matter of law. Id. at 658. In this case, the release on its face unambiguously applies

to all claims Kennedy had against the Harbers at the time of its signing. In addition, the Settlement

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Agreement included an express provision superseding any earlier oral agreements between the

parties, stating:

        Entire Agreement. This Agreement constitutes the entire agreement among the
        Parties and supersedes all prior and contemporaneous agreements, representations,
        warranties, and understandings of the Parties, whether oral, written, or implied, as
        to the subject matter hereof. No supplement, modification, or amendment of this
        Agreement or waiver of rights hereunder shall be binding unless executed in writing
        by all Parties.

As a matter of law, Kennedy could not have justifiably relied on the Harbers’ promise under these

circumstances. Accordingly, Kennedy has failed to raise a fact issue on his defense of fraudulent

inducement, and that defense cannot serve to avoid summary judgment on the ground of release.

                                       Scope of the Release

        In his fifth issue, Kennedy contends that the release cannot be applied to claims that were

not mentioned in the release and that were not related to the subject matter of the Settlement

Agreement in which the release is contained. He contends further that the Settlement Agreement

is limited to the “Newton claims” against the other parties and can have no bearing on his personal

claims against the Harbers. We disagree with Kennedy’s characterization of the scope of the

release.

        Initially, the structure of the Settlement Agreement argues against Kennedy’s

interpretation. The agreement contains separately numbered and titled paragraphs in which the

Harber Parties obtain releases from the Newton Parties, the bankruptcy estate, and each other. If

the Settlement Agreement’s subject matter were limited to the Newton claims—whether

bankruptcy-related or not—there would be no need for a separately structured release for claims

between and among the Harber Parties.

        In addition, the broad language of the Harber Parties’ mutual release speaks to its scope.

The release addresses “any and all claims, obligations, counterclaims, offsets, demands, actions,

causes of action, and liabilities, of whatever kind and nature, character and description, whether in
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law or equity, whether sounding in tort, contract or under other applicable law, whether known or

unknown, and whether anticipated or unanticipated, which any of them ever had, now has, or may

ever have had, including, without limitation, any claim asserted in the State Court Action and the

Kennedy Claim and the CSDM Claims.” It is not limited to a specific claim or transaction but

rather speaks to all possible claims one of the Harber Parties could lodge against another. The law

does not forbid such a broad-form release. Keck, Mahin & Cate v. Nat’l Union Fire Ins. Co. of

Pittsburgh, Pa., 20 S.W.3d 692, 698 (Tex. 2000). And the requirement that a released claim must

be “mentioned” in the release does not demand that the parties identify every potential cause of

action relating to the release’s subject matter. Id.

        We conclude that the Settlement Agreement was intended to release—and did release—all

existing claims that Kennedy could have asserted against the Harbers on the date of that release.

Accordingly, the trial court did not err in granting a traditional summary judgment on Kennedy’s

later-filed claims for breach of contract, fraud, negligent misrepresentation, quantum meruit, and

promissory estoppel. Because we have concluded that the Harbers’ defense of release supports the

court’s traditional summary judgment, we need not address their alternative defense of the statute

of frauds or their alternative no-evidence motion.

                                             Conclusion

        We affirm the trial court’s judgment.




                                                       /Jason Boatright/
                                                       JASON BOATRIGHT
                                                       JUSTICE

171217F.P05




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                               Court of Appeals
                        Fifth District of Texas at Dallas
                                       JUDGMENT

 STEVEN L. KENNEDY, Appellant                       On Appeal from the 59th Judicial District
                                                    Court, Grayson County, Texas
 No. 05-17-01217-CV          V.                     Trial Court Cause No. CV-15-0431.
                                                    Opinion delivered by Justice Boatright.
 LACY HARBER AND DOROTHY                            Justices Myers and O’Neill participating.
 HARBER, Appellees

     In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED.

        It is ORDERED that appellees LACY HARBER and DOROTHY HARBER recover
their costs of this appeal from appellant STEVEN L. KENNEDY.


Judgment entered this 7th day of August, 2018.




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