South Texas Wastewater, LLC v. Valley Dewatering Services, Inc.

NUMBER 13-24-00269-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI – EDINBURG

SOUTH TEXAS WASTEWATER, LLC, Appellant,

v.

VALLEY DEWATERING SERVICES, INC., Appellee.

ON APPEAL FROM THE 476TH DISTRICT COURT
OF HIDALGO COUNTY, TEXAS

MEMORANDUM OPINION

Before Chief Justice Tijerina and Justices Peña and West
Memorandum Opinion by Justice West

The trial court granted appellee Valley Dewatering Services, Inc.’s motion for

(1) traditional summary judgment on its claim for suit on sworn account and (2) no-

evidence summary judgment on appellant South Texas Wastewater, LLC’s claims for

negligent misrepresentation and breach of contract. Appellant argues that the trial court
erred when it granted appellees’ motions because appellant established a genuine

material fact issue as to both of its claims. We affirm.

I. BACKGROUND

Appellee operates a wastewater processing facility that treats grease trap and

septic waste. The treated discharge is then released into the City of Mercedes (City)

sewer system. Appellant is a company that collects waste from commercial and

institutional facilities in the Rio Grande Valley. Appellant has discharged its waste at

appellee’s facility for a fee that appellee has increased over the years. The parties do not

purport to have a written contract.

On January 12, 2023, the City blocked appellee’s discharge line connecting to the

City’s system. On January 21, 2023, appellee informed appellant that it could no longer

accept its waste. In April 2023, appellant filed a lawsuit alleging negligent

misrepresentation and breach of contract against appellee. Appellee countersued

appellant for suit on sworn account. Several months later, appellee moved for traditional

summary judgment on its claim 1 and no-evidence summary judgment on appellant’s

claims.

Appellant responded with the following summary judgment evidence: (1) Howard

Adams’s affidavit, (2) Sergio Garcia’s affidavit, and a (3) mediated settlement

memorandum. Howard Adams attested that he is the President of appellant and a

founding shareholder of appellee. He further attested as follows:

Between on or about May 18, 2011 and January 20, 2023, [appellant] relied
upon the [appellee] Facility. [Appellant] is a party to numerous contracts
with third parties which relied on its ability to dump at the [appellee] Facility

1 Appellee attached several items of evidence in support of its traditional motion for summary
judgment.
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for the prices quoted to it by [appellee]. Approximately forty percent (40%)
of [appellant]’s business is with schools, which negotiate long-term
contracts with service providers such as [appellant].

[Appellant] was the principal client of [appellee] and accounted for a
significant amount of its business prior to January 20, 2023.

[Appellee] quoted [appellant] a price of 15 cents per gallon in
October, 2018. [appellee] raised that rate to 16 cents per gallon in May,
2022 and to 18 cents per gallon in November, 2022.

At the December 21, 2022, (sic) [] Atkinson revealed for the first time
that [appellee] had received a letter from the [City] dated July 5, 2022,
alleging issues with the discharge from the [appellee] Facility. [] Atkinson
also represented that the corporation had purchased equipment to treat the
wastewater so that there would no longer be problems with the discharge
equipment to treat the wastewater so that there would no longer be
problems with the discharge into the City’s sewer system. [] Atkinson further
represented that the City had conducted tests on samples of [appellee]’s
wastewater and that it had met requirements for discharge into the City’s
sewer system.

Atkinson assured me and the other individuals at the meeting that
the matter had been handled and that there were no additional actions that
needed to be taken by [appellee].

On or around January 21, 2023, an employee of [appellee]
telephoned me to advise that the [appellee] Facility could not accept any
grease because the [City] had capped the discharge line.

[Appellant] was left without the means to fulfill service contracts
without incurring additional travel and other expenses. The company lost its
ability to provide service to customers, incurred additional expenses, and
lost profitability. Due to these circumstances, it was necessary for
[appellant] to offset its losses against what might otherwise be owed to
[appellee].

Sergio Garcia attested to his expert credentials and the following related to appellant’s

damages:

In arriving at the opinions expressed in this Affidavit, I have reviewed the
following documents: the monthly operating financial reports for
[appellant] . . . from January 2019 through December 2023. It was not

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necessary for me to review any specific publications to arrive at the opinions
expressed in this Affidavit.

Based on my review of the above materials, and based upon my
education, training, knowledge and experience, I have concluded each of
the following:

There was an interruption in the business activities of
[appellant] during the period February – April, 2023;

The aforementioned interruption in business activities
resulted in a loss of gross revenues circa $120,000.00; and,

Marginal losses to the company were in an amount of not less
than $90,000.00.

The mediated settlement memorandum was executed in March 2023 and provides that

appellee will pay a sum of money to the City over a five-year period related to “past

industrial charges;” the City and appellee will enter another agreement related to the rates

appellee will be charged by the City for future treated industrial waste; the parties will

agree to a timeline for assessing “fines/plugging” and “submitting/reviewing” an

“exceedance report;” appellee voluntarily agrees to immediately reduce its waste

discharge levels to a particular quantity; appellee will install a flow metering system in

accordance with various requirements; and appellee will arrange for monthly composite

sampling at a City approved and accredited laboratory. The trial court granted both of

appellee’s motions. This appeal followed.

II. STANDARD OF REVIEW & APPLICABLE LAW

We review an order granting a motion for summary judgment de novo. JLB

Builders, L.L.C. v. Hernandez, 622 S.W.3d 860, 864 (Tex. 2021). In de novo review, we

exercise our own discretion and accord no deference to the trial court’s decision. Vaughn

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v. Vaughan, 710 S.W.3d 412, 418 (Tex. App.—Eastland 2025, pet. denied) (citing Quick

v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1998)).

If a claimant moves for traditional summary judgment on his claim for which the

non-movant pled an affirmative defense, the claimant is entitled to summary judgment if

he demonstrates there is no genuine material factual issue on each element of his claim,

unless the nonmovant demonstrates a genuine material fact issue regarding each

element of his affirmative defense. Fortitude Energy, LLC v. Sooner Pipe LLC, 564

S.W.3d 167, 180 (Tex. App.—Houston [1st Dist.] 2018, no pet.); Barrand, Inc. v.

Whataburger, Inc., 214 S.W.3d 122, 143 (Tex. App.—Corpus Christi–Edinburg 2006, pet.

denied). Where a genuine issue of material fact is raised by the nonmovant on each

element of his affirmative defense, traditional summary judgment is precluded. Barrand,

Inc., 214 S.W.3d at 143.

In contrast, “a party may obtain a no-evidence summary judgment when ‘there is

no evidence of one or more essential elements of a claim or defense on which an adverse

party would have the burden of proof at trial.’” Hernandez, 622 S.W.3d at 864 (citing TEX.

R. CIV. P. 166a(i)). “A properly filed no-evidence motion shifts the burden to the

nonmovant to present evidence raising a genuine issue of material fact supporting each

element contested in the motion.” Id. Where the non-movant responds with evidence

raising a genuine issue of material fact as to each element of the claim or defense,

summary judgment is precluded. Id.

To determine if a genuine issue of material fact exists, “we take as true all evidence

favorable to the non-movant, indulge every reasonable inference in favor of the non-

movant, and resolve any doubts in the non-movant’s favor.” First United Pentecostal

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Church of Beaumont v. Parker, 514 S.W.3d 214, 219 (Tex. 2017). “The evidence raises

a genuine issue of material fact if reasonable and fair-minded jurors could differ in their

conclusions in light of all of the summary judgment evidence presented.” City of

Stephenville v. Belew, 692 S.W.3d 347, 361 (Tex. App.—Eastland 2024, pet. denied)

(citing Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007)).

Evidence that merely raises surmise or suspicion fails to raise a genuine material fact

issue. Long v. Riedel, 710 S.W.3d 381, 388 (Tex. App.—Fort Worth 2025, no pet.); In re

Cobb, 714 S.W.3d 656, 666 (Tex. App.—Corpus Christi–Edinburg 2024, no pet.).

III. NO-EVIDENCE MOTION FOR SUMMARY JUDGMENT

A. Negligent Misrepresentation

To prevail on a cause of action for negligent misrepresentation, a plaintiff
must show: (1) a representation made by a defendant in the course of its
business or in a transaction in which it has a pecuniary interest; (2) the
representation conveyed false information for the guidance of others in their
business; (3) the defendant did not exercise reasonable care or
competence in obtaining or communicating the information; and (4) the
plaintiff suffers pecuniary loss by justifiably relying on the representation.

JPMorgan Chase Bank, N.A. v. Orca Assets G.P., L.L.C., 546 S.W.3d 648, 653–54 (Tex.

2018). We find appellant failed to establish a genuine issue of material fact as to the

second, third, and fourth elements.

i. False Information

Appellant complains that Atkinson made several false representations at the

December 2022 meeting. Specifically, appellant argues that Atkinson represented that

(1) appellee purchased equipment so there “would no longer be problems with the

discharge into the City’s sewer system,” (2) “the City had conducted tests on samples of

[appellee]’s wastewater, and that [appellee] had met requirements for discharge into the

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City’s sewer system,” and (3) “that the matter had been handled and that there were no

additional actions that needed to be taken by [appellee].”

Appellant failed to provide any evidence that, when the representations were

made, the City had not conducted samples yielding results that met its requirements, and

the matter was not handled. Furthermore, under the false information element, there must

be proof that the representation was a misstatement of existing fact. Rhey v. Redic, 408

S.W.3d 440, 452 (Tex. App.—El Paso 2013, no pet.). A promise of future performance is

insufficient. Id. To the extent that appellee’s representations promise future operations

and compliance with the City’s regulations, such fail to establish a misstatement of

existing fact. See AKB Hendrick, LP v. Musgrave Enters., Inc., 380 S.W.3d 221, 238 (Tex.

App.—Dallas 2012, no pet.) (holding representations from the agent of a prospective

nonprofit-purchaser that he was confident in a plan for his nonprofit to purchase the ranch

and that he would help pay any required inspection costs were not proved false when

made despite the agent’s subsequent unwillingness to pay inspection costs and the

transaction falling apart); Manon v. Solis, 142 S.W.3d 380, 389 (Tex. App.—Houston [14th

Dist.] 2004, pet. denied) (holding that an employer’s pre-employment representations to

appellant “that he was in the process of hiring additional attorneys is not proved false, as

appellant suggests, by the mere facts that (1) she was told by [the employer] after

accepting employment that he was not going to hire additional attorneys, and (2) [the

employer] did not in fact hire any additional attorneys”); Airborne Freight Corp., Inc. v.

C.R. Lee Enters., Inc., 847 S.W.2d 289, 292 (Tex. App.—El Paso 1992, writ denied)

(holding that, where an employer represented to a contractor “as long as you do your job,

you’ll have a job,” the contractor’s subsequent termination was insufficient to prove a

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misstatement of then existing fact); see also Crane v. Hanna, No. 13-18-00534-CV, 2020

WL 3478673, at *3 (Tex. App.—Corpus Christi–Edinburg June 25, 2020, no pet.) (mem.

op.) (listing several cases finding no misstatement of existing fact where the proponent of

a statement promised future conduct or opined on future expectations).

Given the foregoing, there is no evidence providing more than mere surmise or

suspicion that Atkinson’s December 2022 representations misstated an existing fact. See

Long, 710 S.W.3d at 388; Cobb, 714 S.W.3d at 666. Thus, appellant failed to present a

genuine material fact issue. See Belew, 692 S.W.3d at 361.

ii. Reasonable Care or Competence

Appellant does not directly cite any evidence for this element but avers that it

produced more than sufficient evidence and argues that (1) it “appears” appellee did not

contact the City prior to making its December 2022 representations (2) but “[s]urely, had

[it] done so, it would have been told that things were not okay;” (3) and thus, whether it

did or did not contact the City, Atkinson lied in December 2022, and appellee therefore

failed to exercise reasonable care or competence. The foregoing is mere argument and

speculation, generating at most mere surmise or suspicion and thus failing to generate a

genuine issue of material fact. See Clayton v. Wisener, 169 S.W.3d 682, 684 (Tex. App.—

Tyler 2005, no pet.) (providing argument from counsel is not evidence); Raoger Corp. v.

Myers, 711 S.W.3d 206, 213 (Tex. 2025) (reviewing testimony qualified by “would” or

“possibly” and providing “[s]peculative and conclusory testimony, by experts and lay

witnesses alike, is incompetent and cannot support or defeat summary judgment”).

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iii. Justifiable Reliance

A party’s entry into a contract prior to the complained-of misrepresentation does

not establish justifiable reliance. Van Marcontell v. Jacoby, 260 S.W.3d 686, 692 (Tex.

App.—Dallas 2008, no pet.). Here, the complained-of misrepresentations occurred on

December 21, 2022. Appellant attested that it had customer contracts based on

appellee’s quoted pricing and that some forty percent of those contracts included long-

term, fixed-pricing. Appellant argues it “had no reason to suspect that [appellee] was

being untruthful when [appellee] assured [appellant] that everything was fine with the City”

in December 2022. However, appellant’s evidence fails to establish that any of its

customer contracts were entered between December 21, 2022, (the date of the alleged

misrepresentations) and January 21, 2023 (the date appellant was informed of appellee’s

closure). As a result, the evidence generates no more than mere surmise or suspicion

that appellant justifiably relied on the December 2022 representations, thus failing to

generate a genuine issue of material fact. See Long, 710 S.W.3d at 388; Cobb, 714

S.W.3d at 666. We find appellant failed to establish a genuine issue of material fact as to

its claim for negligent misrepresentation. See Belew, 692 S.W.3d at 361.

B. Breach of Contract

A prevailing claimant on breach of contract must prove: (1) a valid contract exists;

(2) the plaintiff performed or tendered performance as contractually required; (3) the

defendant breached the contract by failing to perform or tender performance as

contractually required; and (4) the plaintiff sustained damages due to the breach.

Pathfinder Oil & Gas, Inc. v. Great W. Drilling, Ltd., 574 S.W.3d 882, 890 (Tex. 2019).

Appellee asserted appellant can present no evidence supporting elements two, three,

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and four. We find appellant failed to establish a genuine issue of material fact as to the

third and fourth elements. 2

Related to element three, Texas law provides “[a] breach of contract occurs when

a party fails to perform an act that it has expressly or impliedly promised to perform.” Tabe

v. Tex. Inpatient Consultants, LLLP, 555 S.W.3d 382, 385 (Tex. App.—Houston [1st Dist.]

2018, pet. denied); see Enron Oil & Gas Co. v. Joffrion, 116 S.W.3d 215, 221 (Tex. App.—

Tyler 2003, no pet.) (explaining “breach is determined by comparing the terms of a

contract with the actions of the alleged breaching party”); see also Beaty v. Homeowners

of Am. Ins. Co., No. 01-23-00844-CV, 2025 WL 2446008, at *6 (Tex. App.—Houston [1st

Dist.] Aug. 26, 2025, no pet.) (mem. op.) (same). 3 Even implied contract terms must be

established by proving mutual assent (or meeting of the minds); however, mutual assent

to implied terms may be inferred from evidence of the parties’ course of dealing, conduct,

communication, and the surrounding circumstances. McAllen Hosps., L.P. v. Lopez, 576

S.W.3d 389, 392 (Tex. 2019); Lindsey Constr., Inc. v. AutoNation Fin. Servs., LLC, 541

S.W.3d 355, 363 (Tex. App.—Houston [14th Dist.] 2017, no pet.); Angeles v. Brownsville

Valley Reg’l Med. Ctr., Inc., 960 S.W.2d 854, 859 (Tex. App.—Corpus Christi–Edinburg

1997, pet. denied) (“An implied contract arises from the dealings of the parties, from which

the facts show that the minds of the parties met on the terms of the contract without any

2 Again, the parties do not purport to have a written contract. However, both parties agree that

some kind of implied contractual relationship existed between them.

3 To the extent contract terms are generally first ascertained under an analysis of element one and

appellee did not move on element one, element three also requires the existence of contract terms that can
be compared to the allegedly breaching conduct. Furthermore, Texas courts may decide issues and causes
of action that are derivative or necessary to the resolution of the issue or cause of action moved upon in
summary judgment. G & H Towing Co. v. Magee, 347 S.W.3d 293, 297 (Tex. 2011); Jones v. Coppinger,
642 S.W.3d 51, 64 (Tex. App.—El Paso 2021, no pet.).
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legally expressed agreement thereto.”). Courts determine mutual assent under an

objective standard and do not analyze the parties’ subjective states of mind. Lindsey

Constr., Inc., 541 S.W.3d at 363.

Here, appellant provided no argument or evidence that the parties’ implied contract

included a promise that appellee shall indefinitely keep its facility open with no

interruption, regardless of action from third parties such as government authorities. See

id. at 362 (finding no mutual assent related to an implied contract where the claimant

asserted an auto company orally agreed to purchase a particular truck—that was already

in the possession of the auto company for mechanical issues—at the price indicated on

a trade-in appraisal generated by the auto company for the truck at issue and where the

claimant dropped off two other trucks for trade-in and accepted three new trucks on

lease); Superior Phones, Ltd. v. Cherokee Commc’ns, Inc., 964 S.W.2d 325, 331 (Tex.

App.—Corpus Christi–Edinburg 1998, pet. denied) (finding that where the former operator

of a store entered an exclusive service contract with a pay phone provider, the

subsequent operator of such store was under no exclusive contractual obligation to the

pay phone provider despite accepting and negotiating royalty checks with the provider);

see also Molina Healthcare of Tex., Inc. v. ACS Primary Care Physicians Sw., PA, No.

01-21-00727-CV, 2024 WL 3608192, at *10 (Tex. App.—Houston [1st Dist.] Aug. 1, 2024,

no pet.) (mem. op.) (finding no meeting of the minds related to an implied contract where

the evidence showed the parties never agreed to a specific price and rejecting the

claimant’s request for a finding that the parties agreed to a “reasonable” price). 4

4 While appellant relied on appellee’s agreement that the parties had an implied-in-fact contract,

appellee merely agreed the contract was as follows:

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Related to element four, appellant merely asserts that it presented evidence before

the trial court that “[appellant] sustained damages in excess of $90,000.00.” Adams’s

affidavit describes appellant’s damages in terms of its inability “to fulfill service contracts

without incurring additional travel and other expenses” and the “lost . . . ability to provide

service to customers, incurred additional expenses, and lost profitability.” Appellant

complains that it relied on service from appellee at the quoted price when entering long-

term contracts with customers. Thus, appellant premises its damages claim on lost profits

under contracts it had with its customers. Such lost profits are consequential damages.

Cherokee Cnty. Cogeneration Partners, L.P. v. Dynegy Mktg. & Trade, 305 S.W.3d 309,

314 (Tex. App.—Houston [14th Dist.] 2009, no pet.) (holding that while lost profits on the

contract at issue are direct damages, lost profits based on other contracts or relationships

are consequential damages); Cont’l Holdings, Ltd. v. Leahy, 132 S.W.3d 471, 475 (Tex.

App.—Eastland 2003, no pet.) (same); see also Harris Cnty. v. Pulice Constr., Inc., No.

14-23-00818-CV, 2024 WL 4052762, at *6 (Tex. App.—Houston [14th Dist.] Sept. 5,

2024, no pet.) (mem. op.) (same); DaimlerChrysler Motors Co., LLC v. Manuel, 362

S.W.3d 160, 181 (Tex. App.—Fort Worth 2012, no pet.) (same).

To recover consequential damages, a claimant must prove the damages (1) are

foreseeable and (2) to a degree of reasonable certainty. Signature Indus. Servs., LLC v.

[A] day-to-day agreement that if [appellant] delivered grease trap waste to [appellee]
facilities, [appellant] would pay [appellee] its agreed fee of 18 cents per gallon of
waste . . . . This agreement could be terminated at any time by either party. [Appellant]
could stop delivering waste to [appellee] or [appellee] could close it (sic) gates and refuse
to accept additional waste from [appellant] or any other grease waste hauler. That is a
terminable at will contract.

Thus, appellee did not stipulate that the parties’ contract included a term requiring appellee to
remain open, notwithstanding third-party action such as from City authorities.
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Int’l Paper Co., 638 S.W.3d 179, 186, 187 (Tex. 2022). “A foreseeable loss may either

follow predictably from the breach in the ordinary course of events or arise from special

circumstances that the party in breach had reason to know.” Id. at 186 (citation and

quotations omitted). Here, appellant’s evidence demonstrates that appellee, on occasion,

unilaterally increased its pricing throughout the parties’ business relationship. Given such,

it was not predictable or reasonably known to the parties that appellee’s failure to offer its

services at a fixed price would cause it to absorb losses borne by appellant related to

long-term, fixed-price contracts appellant entered with clients. Moreover, there is no

evidence that appellee even knew that appellant entered long-term, fixed-price contracts

with its clients. Thus, it was not predictable or reasonably known to appellee that if its

facility ever closed, appellant would be unable to adjust its pricing. Therefore, appellant

failed to present a genuine material fact issue as to foreseeability. See Belew, 692 S.W.3d

at 361.

Regarding reasonable certainty:

Proof need not be exact, but neither can it be speculative. The losses must
be susceptible of being established by proof to that degree of certainty
which the law demands. If a loss was too remote and depended upon too
many contingencies, and was too speculative in its character to have
authorized its reception as evidence of any specific and certain loss, then it
cannot be recovered . . . parties [must] provide objective facts, figures, or
data to show their lost profits and other consequential damages.

Id. (citations and quotations omitted).

Here, appellant’s expert merely attested that there was an interruption in

appellant’s business “during the period February – April, 2023” which “resulted in a loss

of gross revenues circa $120,000.00” and “[m]arginal losses in an amount of not less than

$90,000.00.” There is no evidence regarding (1) how these figures were calculated,

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(2) appellant’s profitable financial state pre-closure of appellee’s facility, or (3) how all

business losses suffered by appellant during the three-month period arose from

appellee’s closure. Thus, appellant’s damages evidence is merely conclusory and

speculative, failing to provide objective facts, figures, or data. See Parkway Dental

Assocs., P.A. v. Ho & Huang Props., L.P., 391 S.W.3d 596, 609 (Tex. App.—Houston

[14th Dist.] 2012, no pet.) (finding appellant failed to generate a fact issue as to lost profits

because, among other independent reasons, there was no testimony related to a “single

calculation of lost-profits damages based on net profits”); El Dorado Motors, Inc. v. Koch,

168 S.W.3d 360, 367 (Tex. App.—Dallas 2005, no pet.) (finding expert opinion testimony

assessing lost profits at $9 million dollars was insufficient to generate a fact issue because

there was no evidence that the business was profitable before the complained-of act, and

there was no evidence as to the basis of the opinions and conclusions such as objective

facts, figures, or data from which the amount of lost profits could be ascertained); W.

Mktg., Inc. v. AEG Petroleum, LLC, 616 S.W.3d 903, 922 (Tex. App.—Amarillo 2021),

opinion modified on reh’g, 621 S.W.3d 88 (Tex. App.—Amarillo 2021, pet. denied) (finding

appellant failed to present a prima facie case as to its $580,000 lost profits claim where

the evidence was conclusory and failed to provide objective facts, figures, or data).

Therefore, appellant failed to present a genuine material fact issue as to the reasonable

certainty of lost profits. See Belew, 692 S.W.3d at 361.

IV. TRADITIONAL MOTION FOR SUMMARY JUDGMENT

On appeal, appellant argues that appellee was not entitled to traditional summary

judgment on appellee’s claim for suit on sworn account because appellant pled the

affirmative defense of offset. Appellant asserts it is entitled to offset as an affirmative

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defense solely because it has two meritorious claims, breach of contract and negligent

misrepresentation. Because we affirm the trial court’s grant of no-evidence summary

judgment on appellant’s two claims, appellant failed to present genuine material fact issue

related to its affirmative defense of offset. See Belew, 692 S.W.3d at 361.

V. CONCLUSION

We affirm the trial court’s judgment.

JON WEST
Justice

Delivered and filed on the
18th day of December, 2025.

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