Liberation Holdings, LLC D/B/A Soundcheck Music Complex, Brandon Stanley and Carrie Stanley v. All-Tex Roofing LLC, Gulf Warehouse Associates, LTD and Steadmont Warehouses, Inc.
CourtTexas Court of Appeals, 1st District (Houston)
Date FiledMay 28, 2026
Docket01-24-00298-CV
StatusPublished
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Full Opinion
Opinion issued May 28, 2026.
In the
Court of Appeals
for the
First District of Texas
————————————
NO. 01-24-00298-CV
———————————
LIBERATION HOLDINGS, LLC D/B/A SOUNDCHECK MUSIC
COMPLEX AND GULF WAREHOUSE ASSOCIATES, LTD, Appellants
v.
ALL-TEX ROOFING LLC, Appellee
On Appeal from the 215th District Court
Harris County, Texas
Trial Court Case No. 2020-75134
MEMORANDUM OPINION
Appellants Liberation Holdings, LLC d/b/a Soundcheck Music Complex
(Soundcheck), a plaintiff in the trial court, and Gulf Warehouse Associates, Ltd.
(GWA), a defendant, cross-plaintiff, and cross-defendant in the trial court, appeal
from summary judgment rulings in favor of appellee All-Tex Roofing LLC
(All-Tex), a defendant, cross-plaintiff, and cross-defendant in the trial court. The
parties’ dispute arises from allegations that, while replacing the roof on a
warehouse structure owned by GWA and used by tenant Soundcheck, All‑Tex
permitted water to enter the warehouse, damaging both GWA’s and Soundcheck’s
property. Soundcheck and GWA claimed further that All‑Tex did not timely
complete promised repairs to the roof. The trial court granted summary judgment
in favor of All‑Tex on all of Soundcheck’s and GWA’s claims against All‑Tex and
all of All‑Tex’s claims against GWA.
We affirm the trial court’s judgment. Tenant Soundcheck had entered into a
settlement with All-Tex’s insurer prior to the summary-judgment proceedings,
carving out any “loss of income” claims, and Soundcheck’s remaining claims were
those it argued were outside the scope of the settlement. We find the trial court
properly concluded that Soundcheck’s lost-profits and business-destruction claims
against All‑Tex failed as a matter of law and that Soundcheck presented no
evidence of damages allegedly resulting from All‑Tex’s failure to repair the roof
on a timely basis that are not within the scope of damages that Soundcheck
released as part of a settlement with All‑Tex’s insurer.
With respect to owner GWA’s claims against All-Tex, because GWA
elected to treat its contract with All‑Tex as continuing after All‑Tex’s alleged
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breach and insisted on All‑Tex’s continued performance before ultimately refusing
to pay All‑Tex for its work, the trial court properly rejected GWA’s prior-breach
defense to All‑Tex’s breach-of-contract claim against GWA and GWA’s
breach-of-contract claim against All‑Tex. The trial court also properly granted
summary judgment to All‑Tex on GWA’s breach-of-warranty claim because GWA
presented no evidence that All‑Tex did not make repairs to the roof within a
reasonable time. Finally, we affirm the summary judgment on GWA’s negligence
claims because GWA did not challenge All‑Tex’s argument that such claims are
barred by the economic-loss rule.
Background
In April 2013, Soundcheck began renting from GWA warehouse space
located on the Gulf Freeway in Houston. Soundcheck is owned by Brandon
Stanley (Brandon) and Carrie Stanley (Carrie). Soundcheck rented soundproofed
rooms to monthly tenants for music rehearsals, music recording, and instrument
storage.
A. The Roofing Contract
In November 2018, GWA hired All‑Tex, a roofing contractor, to replace the
roof of the building that included Soundcheck’s facility. GWA and All‑Tex entered
into a written contract under which GWA promised to pay All‑Tex $130,506 for
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the work. The contract did not include a deadline by which All‑Tex was required to
complete its work. The work was supervised by Joel Duran, an All‑Tex manager.
B. The Water Intrusion
On the night of November 21, 2018, when All‑Tex’s roofing work was
underway but incomplete, rainwater entered Soundcheck’s space during a storm.
The next morning, Brandon exchanged text messages with Duran regarding the
water intrusion. In that exchange, Brandon told Duran that “extensive” damage had
occurred. Brandon asked Duran: “How was roof secured?” Brandon later followed
up with the question: “Again, how was roof closed up?” Duran responded: “Our
tie-in from the new roof to the old roof failed so we had to re-do the whole area
again.”
According to Soundcheck, the water intrusion damaged multiple
Soundcheck practice rooms and common areas, as well as its office. Soundcheck
claims that some of the damaged practice rooms were rendered unusable and that
the soundproofing insulation throughout its facility was compromised even in areas
without visible water. Soundcheck alleges further that new roof leaks in different
parts of the facility continued to be discovered “over and over” through at least
July 2020. Soundcheck claims that All‑Tex’s “malfeasance destroyed
Soundcheck’s business,” including by driving away customers, forcing
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Soundcheck to sell a related facility elsewhere in Houston, and undermining plans
to expand the business to other cities.
C. Insurance Settlement and Release
On June 14, 2019, Brandon entered into a Release and Settlement of
Property Damages Claims with All‑Tex’s insurer (the Insurance Settlement and
Release) pursuant to which, in exchange for a payment of $128,253.50, Brandon
agreed on Soundcheck’s behalf to release All‑Tex from:
any and all claims and demands, actions and causes of action,
damages (not including loss of income) both known and unknown,
including future developments thereof, expense and compensation on
account of, or in any way growing out of, any and all known and
unknown property damage resulting or to result from that certain
accident on or about November 21, 2018 at or near 5001 Gulf
Freeway, Houston, TX.
The release stated further:
Brandon Stanley agrees that this settlement is a full compromise.
Brandon Stanley further agrees that the nature, extent and results
of the damages sustained are not now all known or anticipated,
but Brandon Stanley nevertheless desires to settle and compromise
said claim in full.
I/We further agree that this release and payment pursuant
thereto is not to be construed as a waiver or an estoppel of any
party released to prosecute any claim or action which such party
may have against the undersigned or others. This release does not
release the claim for loss of income claimed by Brandon Stanley.
(Emphasis in original.)
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D. The Parties’ Litigation Claims
On November 20, 2020, Soundcheck and the Stanleys filed suit against
All‑Tex and GWA. Soundcheck’s claims against All‑Tex included claims for
negligence, gross negligence, res ipsa loquitur, violation of the Texas Deceptive
Trade Practices Act (DTPA), breach of express and implied warranty, and
negligent misrepresentation.
On June 16, 2021, GWA filed cross-claims against All‑Tex for breach of
contract, breach of warranty, negligence, and contribution. On February 28, 2022,
All‑Tex filed a suit on sworn account against GWA and cross-claims for breach of
contract and quantum meruit. On January 5, 2024, All‑Tex amended its
cross-claims to include claims for unjust enrichment and unclean hands.
E. Soundcheck/GWA Settlement
On November 14, 2022, the trial court granted a partial summary judgment
against GWA on its defense of waiver and release. The trial court ruled that the
Insurance Settlement and Release between Brandon and All‑Tex’s insurer did not
release any claims against GWA. Soundcheck later settled its claims against GWA,
which were dismissed with prejudice. GWA remained in the litigation due to the
cross-claims between GWA and All‑Tex.
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F. All‑Tex’s Motions for Summary Judgment
1. Plaintiffs
On December 1, 2023, All‑Tex filed traditional and no-evidence motions for
summary judgment regarding the plaintiffs’ claims against it. All‑Tex amended
those motions on March 6, 2024. In its traditional motion for summary judgment,
as amended, All‑Tex argued that the evidence conclusively established All‑Tex’s
affirmative defense of release and negated the plaintiffs’ claims for “mental
anguish,” “loss of business income,” “lost profits,” “business destruction,” and
other economic damages. In its no-evidence motion for summary judgment, as
amended, All‑Tex argued that no evidence supported the essential elements of
plaintiffs’ claims for negligence, DTPA violations, breach of implied and express
warranty, and negligent misrepresentation.
2. GWA
On December 15, 2023, All‑Tex filed traditional and no-evidence motions
for summary judgment regarding GWA’s claims against it. All‑Tex sought a
traditional partial summary judgment against GWA on All‑Tex’s suit on sworn
account and its breach-of-contract cross-claim. All‑Tex also sought a traditional
partial summary judgment against GWA on GWA’s cross-claims for breach of
contract, breach of implied warranty, and negligence. In its no-evidence motion for
summary judgment, All‑Tex argued that no evidence supported most of the
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essential elements of GWA’s cross-claim for breach of contract, two of the
essential elements of GWA’s cross-claim for breach of warranty, and all of the
essential elements of GWA’s negligence cross-claim.
3. Hearing
At a hearing on March 28, 2024, the trial court heard motions including
All‑Tex’s amended traditional and no-evidence motions for summary judgment
regarding the plaintiffs and GWA’s claims against it.
G. Trial Court Judgment
On April 3, 2024, the trial court granted All‑Tex’s traditional and
no-evidence summary-judgment motions dismissing all of Soundcheck and the
Stanleys’ claims against All‑Tex. The trial court also granted All‑Tex’s traditional
and no-evidence summary-judgment motions dismissing all of GWA’s
cross-claims against All‑Tex and awarded All‑Tex $130,506.00 in damages against
GWA on All‑Tex’s cross-claims. On May 6, 2024, the trial court entered an
appealable final judgment that incorporated by reference its April 3, 2024 rulings.
H. Soundcheck’s Appeal
Soundcheck raises the following points of error on appeal:
1. Did the trial court err in granting All‑Tex’s traditional motion for summary
judgment based on its apparent finding that Soundcheck’s claims were
released, even though Soundcheck’s release (1) excludes claims for lost
income and is limited to claims arising from a November 21, 2018 accident
and (2) does not include claims arising from All‑Tex’s later failures to repair
the roof and misrepresentations that the roof was fixed?
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2. Did the trial court err in granting All‑Tex’s traditional motion for summary
judgment based on its apparent finding that All‑Tex “conclusively negated”
all damages, even though Soundcheck provided proof of lost profits and
business destruction damages?
3. Did the trial court err in granting All‑Tex’s no-evidence motion for summary
judgment dismissing Soundcheck’s negligence, DTPA, breach of warranty,
and misrepresentation claims even though All‑Tex owed a duty to
Soundcheck under Texas law and Soundcheck provided more than a scintilla
of evidence that All‑Tex breached its duty, causing Soundcheck damages—
especially given All‑Tex admitted that it should have “tied in” the roof
during repairs, that its tie-in failed, and that water intruded through the roof?
I. GWA’s Appeal
GWA raises the following points of error on appeal:
1. Did the trial court err in granting All‑Tex’s traditional motion for summary
judgment on All‑Tex’s claim for contract damages against GWA despite
evidence that All‑Tex breached the contract by leaving the roof of GWA’s
building open and allowing rain to pour in, and then failing to repair the roof
for more than a year, causing damage to GWA’s building?
2. Did the trial court err in granting All‑Tex’s traditional and no-evidence
motions for summary judgment dismissing GWA’s contract, breach of
warranty, and negligence claims against All‑Tex even though All‑Tex
admitted that it should have “tied in” the roof during repairs, and that its tie-
in failed, causing water to pour into GWA’s building and GWA to incur
damages?
3. Did the trial court err in granting All‑Tex’s traditional and no-evidence
motions for summary judgment against Soundcheck even though
Soundcheck provided more than a scintilla of evidence that All‑Tex
admitted it should have “tied in” the roof during repairs, and that its tie-in
failed, causing water to pour into Soundcheck’s facility, causing Soundcheck
damages?
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Standard of Review
We review de novo the trial court’s ruling on a summary‑judgment motion.
Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848
(Tex. 2009) (citing Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211,
215 (Tex. 2003)).
After an adequate time for discovery, a party may move for no-evidence
summary judgment on the ground that no evidence exists of one or more essential
elements of a claim on which the adverse party bears the burden of proof at trial.
TEX. R. CIV. P. 166a(i); Flameout Design & Fabrication, Inc. v. Pennzoil Caspian
Corp., 994 S.W.2d 830, 834 (Tex. App.—Houston [1st Dist.] 1999, no pet.). The
burden then shifts to the nonmovant to produce evidence raising a genuine issue of
material fact on the elements specified in the motion. TEX. R. CIV. P. 166a(i); Mack
Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581-82 (Tex. 2006). The trial court must
grant the motion unless the nonmovant presents more than a scintilla of evidence
raising a fact issue on the challenged elements. Flameout Design & Fabrication,
994 S.W.2d at 834; see also Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d
754, 755 (Tex. 2007) (per curiam) (“An appellate court reviewing a summary
judgment must consider whether reasonable and fair-minded jurors could differ in
their conclusions in light of all of the evidence presented.”). “More than a scintilla
of evidence exists when the evidence ‘rises to a level that would enable reasonable
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and fair-minded people to differ in their conclusions.’” King Ranch v. Chapman,
118 S.W.3d 742, 751 (Tex. 2003) (quoting Merrell Dow Pharms., Inc. v. Havner,
953 S.W.2d 706, 711 (Tex. 1997)).
Generally, when a party moves for both traditional and no evidence
summary judgment, we first review the trial court’s ruling under the no-evidence
standard of review. Lightning Oil Co. v. Anadarko E&P Onshore, LLC, 520
S.W.3d 39, 45 (Tex. 2017) (noting that, “[i]f the non-movant fails to overcome its
no-evidence burden on any claim, we need not address the traditional motion to the
extent it addresses the same claim”). However, if the movant in a traditional
motion challenges a cause of action on an independent ground, we consider that
ground first because, if the cause of action is barred as a matter of law, it is
unnecessary to address the no-evidence challenge. Hammond v. Hanser, No. 01-
22-00707-CV, 2024 WL 4628675, at *6 (Tex. App.—Houston [1st Dist.] Oct. 31,
2024, pet. denied) (mem. op.).
To prevail on a traditional summary‑judgment motion, the movant must
establish 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); Little v. Tex. Dep’t of Crim.
Just., 148 S.W.3d 374, 381 (Tex. 2004). When, as here, the trial court’s summary
judgment does not state the basis for the court’s decision, we must uphold the
judgment if any of the theories advanced in the motion is meritorious. Knott, 128
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S.W.3d at 216. If the nonmovant opposes a motion for summary judgment by
invoking an affirmative defense, the nonmovant must come forward with
summary-judgment evidence sufficient to raise an issue of fact on each element of
the defense to avoid summary judgment. Baptist Mem’l Hosp. Sys. v. Sampson,
969 S.W.2d 945, 947 (Tex. 1998); Brownlee v. Brownlee, 665 S.W.2d 111, 112
(Tex. 1984).
We review the evidence supporting a summary judgment in the light most
favorable to the nonmovant, crediting evidence favorable to the nonmovant if
reasonable jurors could and disregarding evidence contrary to the nonmovant
unless reasonable jurors could not. Zive v. Sandberg, 644 S.W.3d 169, 173 (Tex.
2022). We indulge every reasonable inference and resolve any doubts in the
nonmovant’s favor. 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008).
Soundcheck’s Claims
Soundcheck argues on appeal that the trial court erred in granting All‑Tex’s
motions for summary judgment as to claims that Soundcheck contends fall within
the “loss of income” claims carve-out in the Insurance Settlement and Release.1
1
As noted above, in the Insurance Settlement and Release, in exchange for a
payment of $128,253.50, Soundcheck’s CEO agreed on behalf of Soundcheck and
others to release All‑Tex from:
any and all claims and demands, actions and causes of action,
damages (not including loss of income) both known and unknown,
including future developments thereof, expense and compensation
on account of, or in any way growing out of, any and all known and
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Specifically, Soundcheck claims that the trial court erred in granting All‑Tex’s
motions as to Soundcheck’s claims for lost income, including its “business
destruction” claim, and for post-storm damages that Soundcheck contends are not
property damage resulting from the November 21, 2018 accident. All-Tex argues
that Soundcheck has no evidence of lost profits resulting from the accident or
post-storm damages that did not result from the accident.
A. Lost Profits
1. The parties’ positions
In its November 2020 petition, Soundcheck claimed that All‑Tex had
effectively destroyed Soundcheck’s revenue stream. Soundcheck projected that, as
a result, it was likely to lose $480,000 in net profits in the three years following the
November 2018 storm. As of April 2023, Soundcheck estimated its lost profits in
2019 through 2021 at $390,642. Soundcheck based that estimate on profit and loss
statements for periods before and after the storm. Soundcheck stated that it had
made a profit of $108,788 in 2016, $120,158 in 2017, and $94,267 in 2018.
Soundcheck’s 2019-2021 lost‑profits estimate disregarded the 2018 number as
tainted by the effects of Hurricane Harvey in August 2017, a May 2018 power
surge, and the November 2018 storm. Soundcheck reasoned that, for the period of
unknown property damage resulting or to result from that certain
accident on or about November 21, 2018 at or near 5001 Gulf
Freeway, Houston, TX.
(Emphasis added.)
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2019 through 2021, “had Defendants not destroyed its revenue stream, a
conservative estimate of Soundcheck’s expected profits for the relevant three-year
period would have been 5% annual growth from the 2017 figures - $126,060 for
2019, $132,363 for 2020, and $138,982 for 2021,” totaling $397,405. Soundcheck
reached its 2019-2021 lost‑profits estimate of $390,642 by subtracting from
$397,405 Soundcheck’s stated actual profits for 2019 through 2021 of $6,763.
In its summary‑judgment motions, All‑Tex argued that Soundcheck had no
evidence of any lost profits and that Soundcheck’s own financial records negated
any such claim. All‑Tex noted that, while Soundcheck had premised its 2019-2021
lost‑profits estimate of $390,642 on alleged profits of $108,788 in 2016 and
$120,158 in 2017, Soundcheck’s tax returns showed a loss of $76,420 in 2016 and
$19,343 in 2017. All‑Tex’s forensic accounting expert stated that the operating
expenses used in the 2016 and 2017 profit and loss statements on which
Soundcheck based its 2019-2021 lost‑profits estimate were inconsistent with those
reported in Soundcheck’s tax filings.
All‑Tex also cited to deposition testimony from Soundcheck’s owners,
Brandon and Carrie Stanley, regarding Soundcheck’s 2019-2021 lost‑profits
estimate. All‑Tex argued that the testimony showed that Soundcheck’s lost‑profits
estimate was based on financial statements prepared by Carrie, who has an
economics degree but is not an accountant, that artificially inflated revenue prior to
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the November 2018 storm and expenses after the storm. All‑Tex claimed that the
Stanleys were unable to provide objective data to back up claims that Soundcheck
lost income based on its inability to rent out water-damaged band rooms and to
collect rent from tenants whose space had been damaged. All‑Tex argued that
Carrie was unable to explain how various inputs into Soundcheck’s profit and loss
statements had been handled, such as why “rent” had been included as an ongoing
expense during periods when Soundcheck’s rent had been abated, how benefits
received by Brandon such as an airline pass had been accounted for, why in
preparing financial statements she had allocated certain expenses to some
Soundcheck properties and not others, and why Soundcheck had deducted interest
expenses on Brandon’s credit cards for 2018. All‑Tex claimed further that the
Stanleys’ testimony showed that Soundcheck’s 2019-2021 lost‑profits estimate did
not give adequate weight to the impacts that economic factors such as Hurricane
Harvey and COVID-19 had on Soundcheck’s business, or account for a small
business loan that Soundcheck received in connection with the pandemic.
In its response to All‑Tex’s motions, Soundcheck argued that All‑Tex had
not met the legal standard necessary to establish that All‑Tex was entitled to
summary judgment on Soundcheck’s lost-profits claim. Soundcheck summarized
at a high level Carrie’s methodology in calculating Soundcheck’s 2019-2021
15
lost‑profits estimate and argued that a jury should weigh All‑Tex’s attacks on that
estimate.
2. Analysis
Under Texas law, recovery for lost profits does not require that the loss be
susceptible of exact calculation. Horizon Health Corp. v. Acadia Healthcare Co.,
520 S.W.3d 848, 859 (Tex. 2017). Instead, “the general rule is that recovery of lost
profits as damages is allowed where it is shown that a loss of profits is the natural
and probable consequence of the act or omission complained of, and their amount
is shown with sufficient certainty.” Id. at 860 (quoting Tex. Instruments, Inc. v.
Teletron Energy Mgmt., Inc., 877 S.W.2d 276, 279 (Tex. 1994)).
The injured party must prove both the fact and amount of lost profits with
reasonable certainty. Id. A party’s mere assertion that a contract was lost does not
establish lost profits with reasonable certainty. Id. (citing Holt Atherton Indus., Inc.
v. Heine, 835 S.W.2d 80, 85 (Tex. 1992)). Nor does evidence that is largely
speculative. Id. (citing Tex. Instruments, 877 S.W.2d at 279). “[A]nticipated profits
cannot be recovered where they are dependent upon uncertain and changing
conditions, such as market fluctuations, or the chances of business, or where there
is no evidence from which they may be intelligently estimated.” Id. (quoting Tex.
Instruments, 877 S.W.2d at 279). While the determination of what constitutes
“reasonably certain” evidence of lost profits is a fact-intensive determination, a
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lost‑profits estimate must at a minimum be based on objective facts, figures, or
data from which the amount of lost profits can be ascertained. Id. (citing ERI
Consulting Eng’rs, Inc. v. Swinnea, 318 S.W.3d 867, 876 (Tex. 2010); Heine, 835
S.W.2d at 85)). For example, a business can prove lost profits in a reasonably
certain amount by establishing (1) lost revenue through comparative evidence of
revenue from a recent time period and (2) its profit margin on that revenue.
Swinnea, 318 S.W.3d at 877.
As Soundcheck’s co-founder and co-owner, Carrie is competent to testify as
to Soundcheck’s historic profit margin. See id. at 876 (holding that business’s
“long-time co-owner and then sole owner” was competent to testify as to estimated
profit margin based on information provided by in-house accountant). The fact that
Carrie premised that testimony on profit-and-loss statements showing profits in
years in which Soundcheck had claimed losses in its tax returns does not, on its
own, defeat Soundcheck’s lost-profits claim as a matter of law. See White v. Sw.
Bell Tel. Co., 651 S.W.2d 260, 262 (Tex. 1983) (reversing instructed verdict that
rejected lost-profits claim, reasoning in part that, even though claimant’s
accountant’s lost-profits projection conflicted with claimant’s tax returns and other
evidence, expert’s projection was some evidence to be considered by jury).
However, the Stanleys’ testimony in support of Soundcheck’s 2019-2021
lost‑profits estimate reveals that the estimate was premised on a series of
17
unsupported assumptions. For example, Carrie Stanley testified that she had never
spoken to any tenant who moved out of the warehouse after the November 2018
storm about the tenant’s reason for leaving and, since 2015, had not talked to any
tenant about why the tenant was leaving or had any firsthand contact with a tenant
about any complaint with regard to the space. She largely could not recall which
rooms had been occupied at the time of the storm and, for two of the few rooms
she recalled being occupied, she did not recall whether those tenants had left or
been moved to a different room. When asked if anyone had “identified any data
that shows that there was a ready and willing tenant who was not able to move into
one of your spaces at the Gulf Freeway location because there were not enough
rooms available at any point in time since November of 2018,” she could not
identify anyone. She stated that she believed “more than likely that there were
definitely people that wanted to move in that we couldn’t,” but that it was a
question for Brandon Stanley.
Brandon Stanley testified that he did not think that Soundcheck had been
forced to turn away any potential tenant after the November 2018 storm due to
availability. He testified that there were tenants who had to be moved from one
space to another after the November 2018 storm, but did not recall how many
times that occurred. He testified that there were tenants who had moved out of the
warehouse by the end of November 2018, or by the end of December 2018, but he
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could not identify them. He testified that at least those who left by the end of
November 2018 would have left due to water damage from the storm but also that,
most of the time, tenants who left did not give a reason. When asked what
documents would show, for each room identified as having water damage from the
November 2018 storm, if Soundcheck “had to turn away somebody or . . . lost a
tenant who was in one of these rooms,” Brandon testified again that “[m]ostly,
there was never a reason provided why people left; they just left”; and that any
documentation would require him to “guide someone through it.” When pressed on
what evidence Soundcheck would rely on at trial “in terms of proof of how you
lost tenants due to water in the building,” he answered: “The sound quality was
lower. The common areas were completely destroyed and my brand reputation was
completely annihilated along with my own. That’s how.”
Soundcheck was unable to identify which of its losses in the 2019 to 2021
period—a time period including the worst of the COVID-19 pandemic—were
attributable to water damage caused by All‑Tex. Soundcheck’s owners were unable
to identify which, if any, existing customer contracts they lost due to water damage
or which, if any, potential customer contracts they lost due to water damage. As a
result, they were unable to identify how much profit they lost as a result of the
water damage. The evidentiary record is thus comparable to that in Heine, in which
the Texas Supreme Court held that legally insufficient evidence supported a
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lost-profits claim related to the unavailability of a bulldozer belonging to the
plaintiff. 835 S.W.2d at 85. The supreme court held in Heine that the plaintiff was
unable to support its assertion that the losses on which it based its lost-profits claim
were attributable to the bulldozer’s unavailability, noting that the business owner
was “not able to specify which contracts they lost, how many they lost, how much
profit they would have had from the contracts, or who would have awarded them
contracts.” Id. The supreme court concluded that the “bare assertion that contracts
were lost does not demonstrate a reasonably certain objective determination of lost
profits.” Id.
Soundcheck did not produce summary-judgment evidence that its 2019-2021
lost‑profits estimate was based on objective facts, figures, or data from which the
amount of lost profits that were the “natural and probable consequence” of
All‑Tex’s conduct could be ascertained. See Horizon Health, 520 S.W.3d at 859-60
(noting that, generally, recovery of lost profits is allowed where it is shown that
loss of profits is natural and probable consequence of complained-of act or
omission and amount is shown with sufficient certainty). The trial court properly
concluded that Soundcheck’s lost-profits claim, including any
“business-destruction” claim,2 failed as a matter of law. See Chehab v. First Serv.
2
In the trial court, Soundcheck identified its “business-destruction” claim as a claim
for damages “flow[ing] from the lost income Soundcheck suffered as a result of
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Credit Union, No. 14-18-00969-CV, 2020 WL 5241060, at *6 (Tex. App.—
Houston [14th Dist.] Sept. 3, 2020, no pet.) (mem. op.) (affirming summary
judgment against plaintiff on lost-profits claim because plaintiff did not produce
summary-judgment evidence that its loss of profits was natural and probable
consequence of defendant’s alleged conduct); Davidson v. Tel W. Network Servs.
Corp., No. 14-13-00089-CV, 2014 WL 1713899, at *4 (Tex. App.—Houston [14th
Dist.] Apr. 29, 2014, no pet.) (mem. op.) (affirming summary judgment against
plaintiff on lost-profits claim where plaintiff stated in affidavit that business had
“lost a substantial amount of business and profits” because plaintiff failed to
provide “facts, figures, or data to support its assertion that it suffered lost business
and resulting lost profits” due to defendant’s alleged negligence); cf. Mid
Continent Lift & Equip., LLC v. J. McNeill Pilot Car Serv., 537 S.W.3d 660, 669
(Tex. App.—Austin 2017, no pet.) (reversing jury award of lost profits and
rendering take-nothing judgment where “chain of inferences required to support
any award of lost profits . . . require[d] speculation at multiple levels”).
B. Post-Storm Damages
Soundcheck also argues on appeal that the trial court erred in granting
All‑Tex’s motions for summary judgment as to claims that Soundcheck contends
fall outside the scope of the Insurance Settlement and Release because they are
All-Tex’s failure to properly fix the roof” and thus “explicitly carved out of the
release.”
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based on damages that are not property damage resulting from the November 21,
2018 accident. In its response to All‑Tex’s summary‑judgment motions,
Soundcheck argued that the release did not include “claims arising from water
intrusions that occurred after November 21, 2018 or claims arising from All-Tex’s
subsequent failures to repair the roof and . . . misrepresentations regarding the
status of the repairs.” Soundcheck cited to an affidavit in which Brandon Stanley
stated that:
• All‑Tex “repeatedly told GWA and [Brandon] that the leaks had been
fixed”;
• Soundcheck reasonably relied on those representations;
• contrary to All‑Tex’s assurances, “additional leaks occurred and new leaks
in different parts of the facility were discovered over and over,” including in
May 2019, October 2019, May 2020, and July 2020;
• Brandon reported the new leaks to GWA;
• the Stanleys took moisture readings showing that moisture persisted through
2020;
• reports prepared by a GWA consultant show that the warehouse roof was not
completely fixed until July 30, 2020, at the earliest;
• tenants continued to complain to Brandon about water damage in 2019 and
2020, including in rooms that had not been damaged in November 2018;
• most of the new interior lights that GWA installed in July 2020 were no
longer working by December 2020, presumably due to water damage;
• all of Soundcheck’s attempted repairs addressing damage from the
November 2018 storm were destroyed by ongoing leaks; and
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• Soundcheck lost goodwill and its reputation due to the ongoing water
damage.
Brandon argued that the Insurance Settlement and Release “does not cover any
damages arising from All-Tex’s failure to fix the roof after [November 21, 2018]
or damages arising from its misrepresentations after that date that the roof had been
fixed.”
All‑Tex responded that nothing in Brandon’s affidavit or its attached
exhibits evidences a claim outside the scope of the release. All‑Tex argued that
affidavit exhibits D, E, and F are “a combined 200+ pages of various text messages
and emails” that “do not show subsequent leaks outside the scope of the release,”
that exhibits H, I, and J are hearsay expert reports, and that exhibit G is “a
Stanley-created spreadsheet showing ‘moisture readings’ entirely devoid of
context.”
Soundcheck alleges that, as a result of All‑Tex’s alleged negligence on
November 21, 2018, water entered the warehouse in multiple locations.
Soundcheck alleges that, over the next 18 months, water continued to enter the
warehouse in some of those same locations and in new locations. Soundcheck does
not allege any fraud in the procurement of the release. Soundcheck does not allege
any misconduct by All‑Tex after November 21, 2018, other than promising to fix
the roof and failing to do so on a timely basis. Cf. Wolf Hollow I, L.P. v. El Paso
Mktg., L.P., 409 S.W.3d 879, 890 (Tex. App.—Houston [14th Dist.] 2013)
23
(holding that 2005 release of claims related to alleged failure to deliver gas
meeting contractual quality requirements as referenced in correspondence about
deliveries made in 2004 did not encompass similar claims related to gas deliveries
in 2006), rev’d on other grounds, 450 S.W.3d 121 (Tex. 2014). Soundcheck
alleges that the roof was not fully repaired until the end of July 2020, at the
earliest. Soundcheck does not direct us to any evidence that any water intrusion
after November 21, 2018, resulted from any post-storm conduct by All‑Tex other
than allegedly failing to fix the roof on a timely basis. Nor does Soundcheck direct
us to any evidence that All‑Tex promised to make any roof repairs other than to
address its alleged negligence on November 21, 2018.
The question before us, then, is whether the trial court erred in concluding
that Soundcheck had released any claim to damages arising from All‑Tex’s failure
to repair roof conditions allegedly caused by its negligence on November 21, 2018,
even if All‑Tex promised after the storm that it would make repairs. We conclude
that the trial court did not. Carving out its lost-profits claim, Soundcheck released
claims for “damages . . . both known and unknown, including future developments
thereof . . . resulting or to result from that certain accident on or about November
21, 2018” regardless of its expectations as to the nature, extent, and results of such
damages at the time of the release. See Keck, Mahin & Cate v. Nat’l Union Fire
Ins. Co., 20 S.W.3d 692, 698 (Tex. 2000) (“Although releases often consider
24
claims existing at the time of execution, a valid release may encompass unknown
claims and damages that develop in the future.”). While Soundcheck claims that it
relied on post-storm promises by All‑Tex to repair the roof, it has not directed us to
summary-judgment evidence of damages allegedly resulting from All‑Tex’s failure
to repair the roof on a timely basis that are not damages resulting from the
November 21, 2018 accident.
Because the trial court properly concluded that Soundcheck’s claims failed
as a matter of law, we do not need to address whether the trial court erred in
granting All‑Tex’s no-evidence motion for summary judgment as to those claims.
All‑Tex and GWA’s Cross-Claims
GWA argues on appeal that the trial court erred in (1) granting All‑Tex’s
traditional motion for summary judgment against GWA on All‑Tex’s “claim for
contract damages”; and (2) granting All‑Tex’s traditional and no-evidence motions
for summary judgment against GWA on GWA’s contract, breach of warranty, and
negligence claims against All‑Tex.3
3
In its appellate brief, GWA lists as one of its “issues presented” the question of
whether the trial court erred in granting All-Tex’s summary-judgment motions
against Soundcheck, but does not argue the point or that GWA was harmed by that
ruling. See Torrington Co. v. Stutzman, 46 S.W.3d 829, 843 (Tex. 2000) (noting
that “Texas courts have long held that an appealing party may not complain of
errors that do not injuriously affect it or that merely affect the rights of others,” but
that “a party whose own interest is prejudiced by an error has standing to appeal”).
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A. All‑Tex’s Claims
All‑Tex included in its pleading a claim for “BREACH OF WRITTEN
CONTRACT / SWORN ACCOUNT,” in which All‑Tex alleged that GWA had
failed to pay All‑Tex the parties’ agreed price of $130,506 for the roof
replacement. All‑Tex alleged further that GWA had improperly refused to pay
All‑Tex until Soundcheck’s claim against All‑Tex’s insurer had been resolved.
“A suit on a sworn account is not an independent cause of action; it is a
procedural rule with regard to evidence necessary to establish a prima facie right of
recovery of certain types of contractual claims.”4 Miller v. Maplewood Squar