Lujan v. Navistar, Inc.
555 S.W.3d 79 (2018)
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Rule of Law:
A trial court has the authority to disregard a sworn affidavit filed to oppose summary judgment if it materially conflicts with the affiant's prior sworn testimony and no sufficient explanation for the contradiction is provided.
Facts:
- In 2005, Albert Lujan purchased Texas Wholesale Flower Company and subsequently bought five new trucks from Navistar, Inc. for the business.
- In June 2006, Lujan incorporated the business as Texas Wholesale Flower Co., Inc. (the Corporation).
- A document reflecting a section 351 transfer indicated that Lujan transferred the five trucks to the Corporation in exchange for 100% of its stock.
- The Corporation's income tax returns for 2006 and 2007, which Lujan acknowledged filing, listed the five trucks as corporate assets and reported millions of dollars in sales.
- In a deposition, Lujan testified that he incorporated the business and filed corporate tax returns, but also stated that he did not transfer ownership of the trucks to the Corporation.
- The Navistar trucks experienced recurring mechanical problems, causing disruptions to flower deliveries and business losses.
- In 2008, the Texas Secretary of State forfeited the Corporation's charter due to unpaid franchise taxes.
Procedural Posture:
- In 2009, Albert Lujan sued Navistar, Inc. in his individual capacity in a Texas trial court, alleging breach of warranty.
- After four years of litigation, Texas Wholesale Flower Co., Inc. (the Corporation) attempted to intervene as a plaintiff.
- The trial court granted Navistar's motion to strike the Corporation's intervention as untimely.
- Navistar filed a motion for partial summary judgment against Lujan, arguing he lacked individual standing for claims arising after the date he allegedly transferred the trucks to the Corporation.
- In opposition, Lujan submitted a sworn affidavit stating he never transferred ownership of the trucks to the Corporation.
- The trial court struck Lujan's affidavit as a sham and granted Navistar's motion for partial summary judgment.
- Lujan, as appellant, appealed the trial court's ruling to the Fourteenth Court of Appeals.
- A divided panel of the court of appeals affirmed the trial court's judgment, explicitly adopting the sham affidavit doctrine.
- Lujan, as petitioner, sought review from the Supreme Court of Texas, which granted the petition.
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Issue:
Does a trial court have the authority under Texas Rule of Civil Procedure 166a to disregard a party's affidavit as a sham when it contradicts the affiant's prior sworn testimony without a sufficient explanation, for the purpose of determining whether a genuine issue of material fact exists?
Opinions:
Majority - Justice Blacklock
Yes. A trial court has the authority to disregard an affidavit as a sham because Texas Rule of Civil Procedure 166a requires a 'genuine issue as to any material fact' to defeat summary judgment. The court reasoned that the power to distinguish between 'genuine' and non-genuine fact issues is inherent in the summary judgment standard. This 'sham affidavit rule,' widely used in federal courts under a nearly identical rule, is a tool to prevent a party from manufacturing a fact issue to survive summary judgment by contradicting their own prior sworn testimony without a legitimate explanation. The rule does not improperly require the trial court to weigh evidence or assess credibility; rather, it allows the court to determine whether a proffered fact issue is authentic or merely a sham. In this case, Lujan's affidavit contained statements that were admittedly false and contradicted not only his prior deposition testimony about the corporation's activities but also sworn tax documents. Given the contradictions and the inadequate explanation provided, the trial court did not abuse its discretion in disregarding the affidavit.
Analysis:
This decision formally adopts the 'sham affidavit rule' at the Texas Supreme Court level, providing a uniform state-wide standard and resolving a split among the Texas courts of appeals. It empowers trial courts to police summary judgment proceedings more effectively by preventing litigants from creating fact issues through contradictory, last-minute affidavits. By grounding the rule in the term 'genuine' from Rule 166a(c), the Court harmonizes Texas procedure with long-standing federal precedent and clarifies that this is a tool for assessing the authenticity of a dispute, not a sanction for bad faith. This holding will likely reduce unmeritorious litigation and strengthen the utility of summary judgment as a mechanism for resolving cases where no real factual dispute exists.
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