Comment on Lujan v Navistar, Inc. (Tex. 2018) Texas Supreme Court adopts federal SHAM AFFIDAVIT DOCTRINE, but opens can of worms regarding future application by trial courts

Texas Supreme Court Sham Affidavit Opinion (Tex. April 27, 2018)

In an opinion issued last Friday (4/27/2018) the Texas Supreme Court adopted the federal sham-affidavit doctrine as part of Texas summary judgment practice, and established abuse of discretion as the applicable standard of review on appeal.  See Lujan v Navistar, Inc. No. 16-0588 (Tex. Feb. 27, 2018)

Justice Blacklock, the Court's newest member, wrote the opinion for the unanimous court.

In doing so, the Texas High Court drew analogies between the federal and the state summary judgment rules (FRCP 56 and TRCP 166a respectively), highlighting in particular the requirement that fact issues capable of defeating a motion for summary judgment must be "genuine," but failed to give clear guidance as to how the sham affidavit rule is to be applied in future cases.

As in many other instances, the Texas Supreme Court did not establish a bright-line rule, conceding that whether to apply the sham affidavit rule to disregard sworn testimony "is a case-specific inquiry not easily amendable to the rote application of a multi-part test." It thereby invited inconsistent application by the courts below. It remains to be seen how the new high court precedent will change routine summary judgment practice in the trial courts around the state. It will surely spur more appeals and more appellate opinions second-guessing trial judges' exercise of discretion under the new precedent; opinions that will not necessarily be consistent across districts.

DELVING INTO DISCREPANCIES  

Under the new statewide sham affidavit rule, a trial court may not disregard a summary judgment affidavit filed in opposition to a motion merely because it conflicts with prior sworn testimony; the trial court must instead examine the nature and extent of the difference in the facts asserted to determine what effects a conflict should be given in a particular case. Additionally, the Court's opinion did not limit the qualifying discrepancies to prior deposition testimony and affidavits, but included documents executed or filed under penalties of perjury as well (such as a tax return, though apparently the one in the case sub judice was not even signed). The opinion instructs trial court judges to take into account any explanations that might be offered for the detected discrepancies.

All of this is, of course, consistent with trial court discretion and with the abuse-of-discretion standard of review on appeal, but it unnecessarily complicates the summary judgment procedure for several reasons.

HOW IS THE SHAM AFFIDAVIT RULE TO BE INVOKED, AND ITS APPLICABILITY ESTABLISHED IN A PARTICULAR CASE? 

The first problem concerns timing. Under the Texas rules of civil procedure, any opposing affidavit (and therefore any affidavit that may meet the definition of a sham) may be filed a mere seven days before the summary judgment hearing (or submission) and they are often filed no sooner, leaving the movant for summary judgment little time to object to a nonmovant's affidavit as a sham, and no clear right to submit any evidence to establish the sham nature of the affidavit at that point of the summary judgment process, if it is not otherwise obvious.

In most instances, the prior inconsistent deposition testimony (or other form of representations made under oath) would not yet be part of the summary judgment record, or even on file in the case at all. This would then force the movant for summary judgment to either move for a continuance of the hearing, or for leave to have impeachment evidence considered late, in order to avail itself of the benefit of the new rule.

WHAT MAKES AN AFFIDAVIT BAD-FAITH? 

Second, as a "flexible concept" the new rule--as much as the underlying concept of "a sham"--requires judgments as to credibility, probing of motives and intent, and calls for inquiries into the such malleable matters as the current and past state of a witness's awareness, memory, and recollection; all of which is inconsistent with summary judgment procedure and resolution of issues as a matter of law without fact-finding on credibility issues and resolution of conflicts, contradictions, and incongruities in the evidence.

Which raises the question whether the requisite weeding-out of non-genuine fact issues based on inconsistencies in affidavit testimony and distinctions to be made between lying and dissembling versus innocent confusion, human inaccuracy, and foggy recollection does not transform summary judgment into a mini trial of sorts.

THE LIMITED IMPORT OF A PMSJ DENIAL 

Third, as long as the sham affidavit rule is not extended to cover affidavits offered in support a motion for summary judgment seeking affirmative relief (in addition to those designed to defeat an opponent's bid for summary judgment by creating a fact issue), the worst detrimental effect of a sham affidavit would be that the motion for summary judgment is denied on account of a fact issue created by it, and that the same issue that was the subject of the motion must therefore be resolved in the trial on the merits. In the vast majority of cases, the trial will be to the bench and not to the jury, wherefore judicial economy reasons are unpersuasive in that large category of cases. And if the sham-issue requires an oral hearing and probing of good or bad faith and truthfulness (including truthfulness of attorneys arguing their client's position in open court), the cost-savings of having summary judgment motions resolved upon submission dissipate in any event. 

Furthermore, the denial of a traditional motion for summary judgment would not preclude the movant from filing a second or amended motion, which may attack the previously-filed sham affidavit at that time, assuming a basis in case law or amended rules of procedure or evidence exist (or is created) for having such an already-on-file affidavit struck with preclusive effect for the next summary judgment round.

THE CASE FOR WRITING THE SHAM AFFIDAVIT RULE INTO THE TRCP OR RULES OF EVIDENCE 

Considering the great diversity and vagaries of the circumstances in which the sham-affidavit rule will come into play in the trial courts based on the new Supreme Court precedent, it would seem to make more sense if the Texas Supreme Court were to amend and re-promulgate the Texas summary judgment rule to accommodate the sham affidavit rule with appropriate time-frames for its assertion, and opportunity to adduce the evidence to establish the existence of a sufficient material conflict to warrant its application.

Short of amending the summary judgment rule, the High Court could and should address the matter of whether the sham affidavit rule may be invoked at an oral hearing on a motion for summary judgment for the first time (rather than in writing within the 7-days preceding it, in a reply); whether the oral hearing on the summary judgment motion will be evidentiary with respect to the "sham" issue once it is raised; and whether (if so), findings of facts and conclusions of law would be appropriate in the event a Defendant's affidavit is struck under the sham affidavit rule, and a final summary judgment is granted based on the movant's prima-facie case. Even now, it is somehow unclear whether a reporter's record is mandatory to establish preservation of admissibility objections to summary judgment evidence for purposes of appeal.

Not to mention that the Court's opinion suggests that multiple hearings may be necessary for the trial court to look into the "likelihood of a sham rather than legitimate conflicting inferences" and to probe whether there is a "sufficient explanation" for discrepancies in prior testimony.

The sham affidavit rule only provides that where the circumstances point to the likelihood of a sham rather than legitimate conflicting inferences, the trial court may insist on a sufficient explanation and may grant summary judgment if none is forthcoming. 

If only the affidavits themselves were to be considered as they existed at the time of summary judgment submission, there would be no need to consider anything "forthcoming" in the nature of explanation or excuse. Under standard summary judgment procedure, the trial-court judge would have no occasion to "insist" on anything, and would just makes a ruling based on the summary judgment record as presented. The new sham affidavit rule, imposed by a case-deciding opinion, rather than through the rule-revision process, changes that. Arguably, the adoption of the sham affidavit doctrine undermines the proper operation of the summary judgment procedure because it implicates credibility determinations. It will result in more summary judgments being granted after controverting affidavits are struck that would not otherwise have been, and will result in more appeals of such judgments because all other avenues for relief will be foreclosed. That may be good news for appellate practitioners, but not so much for attorneys practicing solely in trial courts.

IN THE SUPREME COURT OF TEXAS

══════════

No. 16-0588

══════════

ALBERT LUJAN D/B/A TEXAS WHOLESALE FLOWER CO., PETITIONER,

v.

NAVISTAR, INC., NAVISTAR INTERNATIONAL CORPORATION, NAVISTAR

INTERNATIONAL TRANSPORTATION CORP., INTERNATIONAL TRUCK AND

ENGINE CORPORATION, AND SANTEX TRUCK CENTERS, LTD., RESPONDENTS

══════════════════════════════════════════

ON PETITION FOR REVIEW FROM THE

COURT OF APPEALS FOR THE FOURTEENTH DISTRICT OF TEXAS

════════════════════════════════════

Argued February 6, 2018

JUSTICE BLACKLOCK delivered the opinion of the Court.

In this commercial dispute, the trial court granted partial summary judgment based on the so-called “sham affidavit rule.” Under the rule, if a party submits an affidavit that conflicts with the affiant’s prior sworn testimony and does not provide a sufficient explanation for the conflict, a trial court may disregard the affidavit when deciding whether the party has raised a genuine fact issue to avoid summary judgment.

Most Texas courts of appeals have recognized the sham affidavit rule as a legitimate component of a trial judge’s authority under Rule 166a to grant summary judgment when no genuine issue as to any material fact exists. The rule has long been applied throughout the federal court system under Rule 56, which contains language nearly identical to Rule 166a.

We agree with the majority view that a trial court’s authority to distinguish between genuine and non-genuine fact issues includes the authority to apply the sham affidavit  rule when confronted with evidence that appears to be a sham designed to avoid summary judgment. We affirm the court of appeals’ judgment in part, reverse in part, and remand to the court of appeals for further proceedings.

[...]

Conclusion

We conclude that the sham affidavit rule is a valid component of a trial court’s authority under Rule 166a to distinguish genuine fact issues from non-genuine fact issues. In the case before us, the trial court did not abuse its discretion by concluding that the affidavit in question did not raise a genuine fact issue sufficient to survive summary judgment. Therefore, we affirm the court
of appeals’ decision as to the partial summary judgment grant.

Case: 16-0588
Date Filed: 08/08/2016
Case Type: Petition for Review/Cause under Rule 53.1
Style: ALBERT LUJAN D/B/A TEXAS WHOLESALE FLOWER CO.
v.: NAVISTAR, INC., NAVISTAR INTERNATIONAL CORPORATION, NAVISTAR INTERNATIONAL TRANSPORTATION CORP., INTERNATIONAL TRUCK AND ENGINE CORPORATION AND SANTEX TRUCK CENTERS, LTD.

LUJAN V NAVISTAR CASE COVERAGE BY OTHERS

By Emma Cueto, Texas Justices Embrace 'Sham Affidavit Rule' In Truck Row LAW360 (4/30/2018 4:28 PM EDT) (registration required)

Kelli Hinson, Texas Supreme Court Adops "Sham Affidavit Rule" Reverse & Render (law firm blog) (undated post)

TEXAS SUPREME COURT ADOPTS “SHAM-AFFIDAVIT” DOCTRINE (short news item on issuance of opinion on law firm website) (4/27/2018).

COMMENTARY ON SHAM AFFIDAVIT DOCTRINE PRIOR TO ISSUANCE OF SCOTX OPINION:

By Kelly Hunsaker Leonard. On the Horizon: A Sham Affidavit Doctrine? | Strasburger & Price (12/4/2017)

By Mike Northrup, Does Texas follow the "sham affidavit" doctrine? - Reverse & Render (law firm blawg) (11/6/2017)(posted prior to hand-down of Texas Supreme Court opinion)

Also see 2003 Texas Bar Journal article by Judge Randy Wilson (Harris County) that everyone cites on the topic: The Sham Affidavit Doctrine in Texas, 66 Tex. B.J. 962, and

Judge Bonnie Sudderth. Admissibility of Interested Witness Evidence in Summary Judgment Proceedings. Law Blog on the Texas Rules of Evidence (January 14, 2012)

JUSTICE SHARON MCCALLY'S DISSENTING OPINION IN THE COA BELOW

DISSENTING OPINION

SHARON McCALLY, Justice.

The Sham Affidavit Doctrine, as the Majority expands it here, permits trial judges to disbelieve and strike summary judgment affidavits alleged to conflict with "the weight" of other summary judgment evidence. I.

Summary of the Dissent

The trial court granted Navistar's motion for partial summary judgment on standing, holding that after June 2006 Lujan no longer owned the trucks he was suing over. But Lujan swore in an affidavit that he did not transfer his ownership.^[1] It is undisputed that Lujan's affidavit would have defeated Navistar's motion for summary judgment on standing. However, the trial court disregarded Lujan's ownership affidavit as a sham affidavit.^[2]

The Majority affirms the striking of the affidavit and the resulting summary judgment not only by adopting the sham affidavit doctrine in this Court for the first time, but also by expanding that doctrine well beyond any prior application in any Texas court. I respectfully dissent because:

• We should reject the sham affidavit doctrine as it is contrary to Texas Supreme Court precedent and without support in the Texas Rules of Civil Procedure; and

• Even if we adopt the sham affidavit doctrine, as the Majority does, the doctrine does not—by its terms—apply to the evidence in this case.

II.

We should reject the sham affidavit doctrine as contrary to Texas Supreme Court precedent and the Texas Rules of Civil Procedure.

A. Inception of the Sham Affidavit Doctrine

The sham affidavit doctrine first emerged in a Texas Court of Appeals in 1997,^[3]borrowed from a federal court.^[4] Nearly twenty years later, there remains a split among Texas courts of appeals over the adoption of the sham affidavit doctrine, as the Majority acknowledges. But the Fourteenth Court of Appeals has never adopted it. And the Texas Supreme Court has never mentioned it.

On the surface, the doctrine sounds perfectly reasonable: A party cannot file a summary judgment affidavit to contradict his own prior deposition testimony without explaining the change in the testimony; otherwise, the trial court may disregard it as a sham affidavit, filed solely for the purpose of manufacturing a fact issue to avoid summary judgment. See Farroux v. Denny's Rests., Inc., 962 S.W.2d 108, 111 (Tex. App.-Houston [1st Dist.] 1997, no pet.). The doctrine is enticing, of course, because courts do not like to reward parties who lie to perpetuate litigation. On closer scrutiny, however, the doctrine is both unnecessary and useless.

The doctrine is unnecessary to accomplish its stated purpose. Where a party makes a testimonial declaration that meets the five-factor test set forth by the Texas Supreme Court in Mendoza v. Fidelity & Guaranty Insurance Underwriters,Inc., it is treated as a quasi-admission, "conclusive upon the admitter." 606 S.W.2d 692, 694 (Tex. 1980).^[5] In contrast to our court's silence on the sham affidavit doctrine, we have applied the Mendoza quasi-admission doctrine. See, e.g., Aguirre v. Vasquez, 225 S.W.3d 744, 756 (Tex. App.-Houston [14th Dist. 2007, no pet.).

Moreover, the sham affidavit doctrine is useless for deterring anything but the most incompetent liar because it has no application to a litigant who:

• lies from the outset of the litigation, see St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 522 (1993) ("[P]erjury may purchase the defendant a chance at the factfinder [but] it also carries substantial risk.");

• lies in a deposition after telling the truth in that same deposition, see Duffield v. Periman, No. 01-98-01131-CV, 1999 WL 1018180, at *3-4 (Tex. App.-Houston [1st Dist.] Nov. 10, 1999, no pet.) (not designated for publication) (contradictions within the false-imprisonment plaintiff's deposition about whether she was voluntarily or involuntarily detained created a fact question);

• lies on an errata sheet within twenty days after telling the truth in a deposition, see Tex. R. Civ. P. 203.1(b);

• lies in the post-deposition summary judgment affidavit, explaining that he was "confused" in his deposition when he provided the contradictory, truthful testimony, see Farroux, 962 S.W.2d at 111 n.1.

But no matter the equitable appeal of punishing at least the inept liar, we cannot adopt the sham affidavit doctrine because (1) it is completely at odds with binding Texas Supreme Court precedent; and (2) it is not authorized by the Texas Rules of Civil Procedure.

B. Stare decisis demands that we reject the sham affidavit doctrine

In Randall v. Dallas Power & Light Co., the Texas Supreme Court unequivocally stated the established rule that "a deposition does not have controlling effect over an affidavit in determining whether a motion for summary judgment should be granted." 752 S.W.2d 4, 5 (Tex. 1988) (citing Gaines v. Hamman, 358 S.W.2d 557 (1962)). The Randall court then reversed the summary judgment granted in the face of conflicting deposition and affidavit testimony. The Randall court could not have made it any clearer. A deposition does not control over an affidavit.

The sham affidavit doctrine is squarely in conflict with Randall. There is certainly no reconciling the doctrine with Randall's dictate. See Wilson, supra, at 967 ("Not only are the various Texas courts of appeals split on sham affidavits, but at least six of the courts of appeals seem to conflict with prior Supreme Court authority.").

The courts of appeals that reject the doctrine do so because of Randall. See, e.g., Davis v. City of Grapevine, 188 S.W.3d 748, 756 (Tex. App.-Fort Worth 2006, pet denied) (holding that, notwithstanding other courts' adoption of the doctrine, "[w]e will adhere to our precedent and continue to apply the rule set forth by the Texas Supreme Court in Randall that when conflicting inferences may be drawn between a party's summary judgment affidavit and his deposition on matters of material fact, a fact issue is presented"); see also Sosebee v. Hillcrest Baptist Med. Ctr., 8 S.W.3d 427, 435 (Tex. App.-Waco 1999, pet. denied) (per curiam).

One appellate court has attempted to reconcile the sham affidavit doctrine with the Randall precedent. In Cantu v. Peacher, 53 S.W.3d 5, 10-11 (Tex. App.-San Antonio 2001, pet. denied), the court described Randall as "[t]he most tolerant view of conflicting statements between the same witness's testimony in a deposition and affidavit." Id. at 9. And, then, the court adopts a "shades and phases" test for conflicting testimony as a middle ground between Randall and Farroux:

Having reviewed the different line of cases, we conclude that a court must examine the nature and extent of the differences in the facts asserted in the deposition and the affidavit. If the differences fall into the category of variations on a theme, consistent in the major allegations but with some variances for detail, this is grounds for impeachment, and not a vitiation of a later filed document. If, on the other hand, the subsequent affidavit clearly contradicts the witness's earlier testimony involving the suit's material points, without explanation,[^[6]] the affidavit must be disregarded and will not defeat the motion for summary judgment.

Id. at 10-11.

Yet the Cantu court's attempt to reconcile the doctrine with binding precedent wholly fails. Such a test is still at complete odds with the Randall command that a deposition does not control over an affidavit. Such a test still impermissibly permits a trial court to disbelieve and therefore disregard affidavit testimony as false because it is in conflict with an earlier deposition.

Our court simply does not have the authority to ignore Randall. See Swilley v. McCain, 374 S.W.2d 871, 875 (Tex. 1964) ("After a principle, rule or proposition of law has been squarely decided by the Supreme Court . . . the decision is accepted as a binding precedent by the same court or other courts of lower rank when the very point is again presented in a subsequent suit between different parties."). Randall is, indeed, a more tolerant view of conflicting summary judgment evidence than the courts of appeals following Farroux,^[7] and we are bound by it, even though it means the occasional lying litigant will get a trial.

C. Rule 166a does not authorize striking a sham affidavit.

We cannot look to the Texas Rules of Civil Procedure for authority to adopt the sham affidavit doctrine because our summary judgment rules are in accord with Randall. Texas Rule of Civil Procedure 166a does not authorize a trial court to disregard or strike an affidavit that contradicts the affiant's prior testimony. Tex. R. Civ. P 166a(h). Specifically, Rule 166a(h), regarding the treatment of summary judgment affidavits filed in bad faith provides in its entirety:

Should it appear to the satisfaction of the court at any time that any of the affidavits presented pursuant to this rule are presented in bad faith or solely for the purpose of delay, the court shall forthwith order the party employing them to pay to the other party the amount of the reasonable expenses which the filing of the affidavits caused him to incur, including reasonable attorney's fees, and any offending party or attorney may be adjudged guilty of contempt.

Thus, the plain language of the rule sets forth both a mandatory remedy for filing a bad-faith affidavit and a discretionary remedy for filing a bad-faith affidavit. Money is the mandatory remedy. Contempt is the permissive remedy. Neither striking nor disregarding a summary judgment affidavit is a remedy provided. And although the Texas Supreme Court has revised the Rules, and Rule 166a in particular, numerous times since Randall and since the genesis of the sham affidavit doctrine in a few courts of appeals, the Court has never revised Rule 166a(h) to enlarge the trial court's discretion to strike or disregard an affidavit on the belief that it was made in bad faith or that it contains a lie. Adjudicating the facts by disregarding sworn evidence is simply not in the trial judge's summary-judgment tool kit, not even where the affiant appears to be unequivocally lying.

The sham affidavit doctrine likewise finds no support in Rule 166a(c) though it addresses the credibility of interested witnesses. See Tex. R. Civ. P. 166a(c) ("A summary judgment may be based on uncontroverted testimonial evidence of an interested witness or of an expert witness as to subject matter concerning which the trier of fact must be guided solely by the opinion testimony of experts, if the evidence is clear, positive and direct, otherwise credible and free from contradictions and inconsistencies and could have been readily controverted."). Rule 166a(c) vests a trial court with authority to reject interested-witness testimony only when such evidence is offered to support a motion for summary judgment. See Casso v. Brand, 776 S.W.2d 551, 558 (Tex. 1989) ("Our summary judgment rule permits the granting of a summary judgment on the basis of uncontroverted testimonial evidence of an interested witness if that evidence is clear, positive and direct, otherwise credible and free from contradictions and inconsistencies, and could have been readily controverted." (quotation omitted)). In other words, a trial court faced with the uncontroverted affidavit of an interested witness may decline to grant a summary judgment on that affidavit if the trial court determines that the issue turns on credibility or such affidavit is, inter alia, not "otherwise credible." See, e.g., Wohlstein v. Aliezer, 321 S.W.3d 765, 771-72 (Tex. App.-Houston [14th Dist.], no pet.).

Rule 166a(c) fully reflects Texas policy on summary judgment evidence to err on the side of finding a fact question. Preserving the role of the fact finder to determine credibility is so important that even where the movant's uncontroverted summary judgment evidence supports judgment, Rule 166a(c) permits the trial court to deny the motion. See, e.g., Frias v. Atl. Richfield Co., 999 S.W.2d 97, 106 (Tex. App.-Houston [14th Dist.] 1999, pet. denied) (holding that defendant's stated absence of intent to injure the plaintiff, a material issue in the case, should not form the foundation of a summary judgment because credibility on that point is likely to be dispositive).

The Texas Rules of Civil Procedure governing summary judgment practice provide two remedies for bad faith affidavits filed to avoid a summary judgment: money and contempt. The Rules do not permit striking affidavits and adjudicating the facts as a punishment for lying in a summary judgment affidavit.^[8] The Majority offers no explanation for its disregard of the plain language of Texas Rule of Civil Procedure 166a.

III.

The sham affidavit doctrine does not apply here because Lujan's affidavit is not contradicted by Lujan's prior sworn deposition.

Lujan filed an affidavit in which he testified that he owned the subject trucks. The sham affidavit doctrine permits the trial court to strike the Lujan ownership affidavit if (1) it conflicts with his prior deposition testimony; and (2) it fails to supply an explanation for the contradiction. See Farroux, 962 S.W.2d at 111.

It is undisputed that there is no earlier Lujan deposition testimony that conflicts with the Lujan affidavit. The summary judgment record does not contain any "other types of sworn statements" from Lujan about ownership of the trucks. No interrogatory responses. No admissions. No statements under oath. In short, at no place in this summary judgment record is there a sworn statement from Lujan that he sold the trucks, transferred the trucks, or even made an IRS election regarding the trucks. The Majority points to no conflicting or contradictory statement from Lujan. And Navistar never argued that such exists. Instead, Navistar argued that "[t]he weight of the evidence clearly shows that Plaintiff did transfer his assets, including the trucks at issue, to a corporation." Even now, on appeal, Navistar does not argue that Lujan gave contradictory deposition testimony or that this case fits the Farroux pattern.^[9]

Texas courts addressing the question, such as ours, have refused to expand the doctrine beyond the Farroux pattern. In Argovitz, our court refused to consider adopting the sham affidavit doctrine because the facts of the case did not fit the pattern. See Argovitz v. Argovitz, No. 14-07-00206-CV, 2008 WL 5131843, at *20-21 (Tex. App.-Houston [14th Dist.] Dec. 9, 2008, pet. denied) (mem. op.) (noting that "the sequence of events under the sham affidavit doctrine contemplates deposition testimony followed by the filing of a contradictory sham affidavit" but "[t]his case does not fit the pattern"). The Tyler Court of Appeals similarly determined that an inconsistency in sworn interrogatory answers and an affidavit does not give rise to the sham affidavit doctrine. See Pierce v. Wash. Mut. Bank,226 S.W.3d 711, 717 (Tex. App.-Tyler 2007, pet. denied). And, the Corpus Christi Court of Appeals rejected application of the doctrine where the affidavit was taken three days prior to the deposition in a slight, but meaningful, departure from the pattern. See Smith v. Mosbacker, 94 S.W.3d 292, 295 n.1 (Tex. App.-Corpus Christi 2002, no pet.). No Texas appellate court has expanded the doctrine.^[10]

The Farroux pattern is a party's deposition testimony followed by that party filing a contradictory sham affidavit. The only evidence the Majority points to as implicating the sham affidavit doctrine is unsworn documentary evidence attributable to a nonparty. Because this case does not fit the pattern of the sham affidavit doctrine, the trial court abused its discretion by striking the Lujan ownership affidavit as a sham. IV.

The sham affidavit doctrine does not apply here because there is no contradictory summary judgment evidence on ownership (from anyone).

Moreover, even if we extend the sham affidavit doctrine to the unsworn documentary evidence of a nonparty, we must still identify a conflict or contradiction between such evidence and the Lujan ownership affidavit as part of the Farroux analysis. See, e.g., Benchmark Bank v. Am. Nat'l Bank of Tex., No. 05-14-00810-CV, 2016 WL 638095, at *9 (Tex. App.-Dallas Feb. 17, 2016, no pet. h.) (mem. op.) (reversing trial court and holding that affidavit testimony is "not so contradictory" that the "affidavit should be disregarded" (emphasis added)); see also Shaw v. Maddox Metal Works, Inc., 73 S.W.3d 472, 477-78 (Tex. App.-Dallas 2002, no pet.) (reversing and holding that difference in deposition testimony that the oral contract was supported only by past performance and affidavit testimony that the oral contract was supported by both past performance and a promise of continued employment is not "so egregious" as to support disregarding the affidavit).

The Majority applies the sham affidavit doctrine to Lujan's ownership affidavit upon finding that "it directly contradicted" the following summary judgment evidence:

(1) the Corporation's judicial admission^[11] in support of its attempted intervention that Lujan's assets, including the trucks at issue, had been transferred to the Corporation;

(2) the Corporation's reliance on the section 351 election filed with its 2006 federal income tax return as evidence that Lujan had transferred all of the assets and liabilities of his sole proprietorship to the Corporation in exchange for 100% of the stock;

(3) Lujan's counsel's representations on behalf of the Corporation that the section 351 election and corporate tax returns demonstrated that Lujan's assets were transferred "lock, stock and barrel" to the Corporation in 2006; and

(4) the tax returns and banking documents reflecting that, contrary to Lujan's affidavit, the Corporation actively conducted business and engaged in banking transactions.

Setting aside the reality that none of the recited evidence amounts to a prior sworn statement from Lujan, I disagree that anything recited is summary judgment evidence that actually conflicts with Lujan's affidavit of ownership.

A. The Corporation's attempted intervention does not contradict Lujan's ownership affidavit.

The Majority relies upon the Corporation's intervention pleadings. But those pleadings are completely consistent with Lujan's claim that he did not transfer title to the trucks. Specifically, the Corporation pled, in relevant part:

In 2005 Plaintiff, Albert Lujan d/b/a Texas Wholesale Flower Co., purchased the CF600 trucks made the basis of his warranty claims. In 2007 Plaintiff involuntarily purchased the 4300M trucks that replaced the CF600 trucks.

On June 12, 2006, at his accountant's recommendation, Plaintiff made an IRS Section 351 election transfer. Pursuant to the election, Plaintiff transferred all of the assets and liabilities of Texas Wholesale Flower Co. to Texas Wholesale Flower Co., Inc., in exchange for 100% ownership of the stock. Hereto attached is the page from Intervenor's 2006 corporate return that indicates the exchange. Although the return reflects the trucks were transferred, legal title was not transferred. Plaintiff continued to conduct business without change. Because of the Section 351 exchange, Intervenor believes that it may have an interest in this dispute.

(emphasis added).

To find a conflict, the Majority must disregard the statement that "legal title was not transferred." A trial court cannot consider statements pulled out of context to determine whether a conflict exists. Youngblood v. U.S. Silica Co., 130 S.W.3d 461, 469-70 (Tex. App.-Texarkana 2004, pet. denied) (noting that, when examined "in a vacuum," there is a contradiction, but looking at the testimony in context of the entire deposition, the deposition and affidavit "are not apposite"). When the pleadings are read, as a whole, Lujan's statement that he did not transfer ownership of the subject trucks is completely consistent with the Texas Wholesale Flower's pleadings.

B. The "Section 351 Election" form does not contradict Lujan's ownership affidavit.

The Section 351 Election is set forth here in its entirety.

As is evident from the face of the 351 document, there is no statement that Lujan does not own the subject trucks. The document does not purport to transfer title to the subject trucks. And, although the word "trucks" does appear on the 351 document, there is no way to know from the document whether the trucks referenced are the subject CF600 trucks or the replacement 4300M trucks, or some other trucks. The document cannot be read, factually, to suggest that Lujan transferred legal title to the subject trucks.

Similarly, the document cannot be read, legally, to mean that Lujan is not the owner of the subject trucks. Section 351, a provision of the Internal Revenue Code, is part of a complicated regulatory scheme to provide a tax benefit upon certain transfers of property for stock or securities. See 26 U.S.C. § 351; see also Hempt Bros., Inc. v. U.S., 490 F.2d 1172, 1177 (3d Cir. 1974) (noting that "[b]y its explicit terms Section 351 expresses the Congressional intent that transfers of property for stock or securities will not result in recognition").

The Majority references neither evidence nor citation to authority to support the implicit holding that a Section 351 exchange under the Internal Revenue Code is a transfer of legal title. Section 351 of the Internal Revenue Code simply "provides [one of the] various mechanisms where by [a] reorganization may be accomplished tax-free." Sealock v. Tex. Fed. Sav. & Loan Ass'n, 755 S.W.2d 69, 71 (Tex. 1988). But it is "[b]eneficial ownership, not legal title, [that] determines ownership for Federal Income tax purposes." Windheim v. Comm'r, 97 T.C.M. (CCH) 1783, 2009 WL 1636287, at *3 (2009); see also Regghianti v. Com'r, 71 T.C. 346, 349 (1973) (noting that a party to a transaction may be treated as an owner under the I.R.C. even though legal title has not passed), aff'd, 652 F.2d 65 (9th Cir. 1981).

By its plain language, a Section 351 statement or election, even if filed with the IRS, does not effect or accomplish a transfer of title to property. It contemplates tax treatment "if property is transferred." 26 U.S.C. § 351. There is no conflict between Texas Wholesale Flower's unsigned, unsworn "Section 351 Election" and Lujan's affidavit.^[12]

C. "Counsel's representations" on behalf of the Corporation are not summary judgment evidence at all and, thus, do not contradict Lujan's ownership affidavit.

Unsworn statements of counsel are not evidence. See Jones v. Villages of Town Ctr. Owner's Ass'n, No. 14-12-00306-CV, 2013 WL 2456873, at *5 (Tex. App.-Houston [14th Dist.] June 6, 2013, pet. denied) (mem. op.); Daugherty v. Jacobs,187 S.W.3d 607, 619 (Tex. App.-Houston [14th Dist.] 2006, no pet.).

D. The Corporation's records, indicating it is "actively conduct[ing] business and engag[ing] in banking transactions," do not contradict Lujan's ownership affidavit.

The Majority specifically references statements in the Corporation's 2006 federal tax return made "under penalty of perjury."^[13] Although the Majority identified what it perceives as conflicts in the unsigned tax returns with Lujan's testimony that the Corporation "never conducted business," the Majority identifies nothing in the corporate banking documents or corporate tax returns that addresses in any way the legal title to the trucks at issue in this case.

In summary, even if we adopt the doctrine known as the "sham affidavit doctrine," we must immediately depart from its terms to affirm the trial court's decision to strike Lujan's ownership affidavit because:

• Lujan never testified or swore, in any form, before or after he signed the ownership affidavit, to anything that contradicts his statement that he did not transfer legal title to the subject trucks; and

• even if we credit all of the other summary judgment evidence and then pretend it was spoken by Lujan himself, it still does not contradict the ownership statements in his affidavit.

We should not stretch to make this doctrine apply where it does not.

V.

Conclusion

First, for our court to indulge the judicial urge to punish inept liars through a sham affidavit doctrine, we must disregard binding precedent and unambiguous rules. Instead, we should join with the other Texas Courts of Appeal that reject the sham affidavit doctrine.

Second, the Majority "applies" the sham affidavit doctrine so far from its original boundaries that it is now unrecognizable and undefined. To uphold the trial court's evidentiary decision to strike Lujan's affidavit on these facts, the Majority must mold the sham affidavit doctrine into a license for a trial court to disbelieve an affidavit based upon other summary judgment evidence. There is no legal doctrine by which we can ignore that Lujan and the Corporation are separate legal entities. There is no authority for equating an IRS "paper" transfer for tax incentives and a State of Texas transfer of legal title.

Although I disagree with the sham affidavit doctrine, I more strongly disagree with our expanding the doctrine to reach these facts. We will create confusion about when trial courts are free to strike summary judgment affidavits they do not believe. The answer should remain, "Never."

I would hold that the trial court erred in disregarding Lujan's affidavit^[14] and, therefore, erred in granting Navistar's summary judgment.

[1] See 26 U.S.C. § 351(a) ("No gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock in such corporation and immediately after the exchange such person or persons are in control . . . of the corporation."); see also Bongiovanni v. Comm'r, 470 F.2d 921, 924 (2d Cir. 1972) (characterizing § 351 as "a relief provision to encourage tax-free business reorganizations").

[2] Lujan does not discuss the named defendants other than Navistar and Santex, and Navistar's counsel represents in its brief that on appeal it is representing only appellees Navistar, Inc. and Santex Truck Centers, Ltd.

[3] In January of 2014, after the corporation's intervention was denied and Navistar had filed its second summary judgment motion on standing, Lujan sought leave to file a fifth amended petition, which was also denied after an oral hearing shortly before the scheduled trial date.

[4] Capacity is a party's legal authority to go into court to prosecute or defend a suit. Carpaint, 2008 WL 3971559, at *3. To bring suit and recover on a cause of action, a plaintiff must have both standing and capacity. Id.

[5] Other courts of appeals have rejected or limited the sham affidavit doctrine. See Pierce v. Wash. Mut. Bank, 226 S.W.3d 711, 717-18 (Tex. App.-Tyler 2007, pet. denied); Del Mar Coll. Dist. v. Vela, 218 S.W.3d 856, 862 (Tex .App.—Corpus Christi 2007, no pet.); Davis v. City of Grapevine, 188 S.W.3d 748, 756 (Tex. App.-Fort Worth 2006, pet. denied); Thompson v. City of Corsicana Hous. Auth., 57 S.W.3d 547, 557 (Tex. App.-Waco 2001, no pet). The Supreme Court of Texas has not expressly ruled on the applicability of the doctrine.

[6] A judicial admission is a clear, deliberate, and unequivocal statement that occurs when an assertion of fact is conclusively established in live pleadings, making the introduction of other pleadings or evidence unnecessary. Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 905 (Tex. 2000). A judicial admission not only relieves an adversary from making proof of the fact admitted, it also bars the party himself from disputing it. Id. Pleadings may be used as summary judgment evidence when they contain statements rising to the level of admitting a fact or conclusion which is directly adverse to that party's theory or defense of recovery. Ehler v. LVDVD, L.C., 319 S.W.3d 817, 824 (Tex. App.-El Paso 2010, no pet.); Judwin Props., Inc. v. Griggs & Harrison, 911 S.W.2d 498, 504 (Tex. App.-Houston [1st Dist.] 1995, no writ); Lyons v. Lindsey Morden Claims Mgmt., Inc., 985 S.W.2d 86, 92 (Tex. App.-El Paso 1998, no pet.).

[7] As reflected on the signature line of the income tax forms, statements in the section 351 transfer and the federal tax returns are made subject to penalties of perjury. See 26 U.S.C. §§ 6065 (tax returns and statements filed with the IRS must be made under penalties of perjury), 7206(1) (criminal penalties for false statements made "under penalties of perjury").

[8] The dissent criticizes any application of the sham affidavit doctrine beyond "the Farroux pattern" because other Texas appellate courts have declined to extend it. However, the dissent's authorities do not support her argument. For example, in Argovitz v. Argovitz, this court concluded that the issue was not preserved, but further noted that even if the doctrine were applied to disregard the conflict between a deposition and affidavit, a fact issue precluding summary judgment remained between the deposition and an earlier hearing. See No. 14-07-00206-CV, 2008 WL 5131843, at *16-21 (Tex. App.-Houston [14th Dist.] Dec. 9, 2008, pet. denied) (mem. op.). The other two cases are from courts that have rejected the rationale behind the sham affidavit doctrine generally. See Pierce, 226 S.W.3d at 717-18(rejecting application of doctrine's rationale to contradiction between interrogatory answer and deposition based on Randall); Smith v. Mosbacher, 94 S.W.3d 292, 295-96 & n.1 (Tex. App.-Corpus Christi 2002, no pet.) (holding that complaint that affidavit filed in response to summary judgment was a sham because it contradicted subsequent deposition testimony was not preserved for appeal, but even if deposition testimony was considered as summary-judgment evidence, it merely created a fact issue, citing Randall). These cases are not similar to the present appeal.

[1] In his affidavit, Lujan swore, "At no time have I transferred my assets and liabilities of [sic] Texas Wholesale Flower Company. I did not transfer ownership of my trucks nor my business to a corporation." Inasmuch as the Majority opinion begins by describing Lujan as "a purchaser of trucks," we know that unless he sold the trucks, Lujan is the proper party plaintiff to sue for breach of the warranty.

[2] The adjective "sham" means bogus or false. New Oxford American Dictionary 1604 (3d ed. 2010).

[3] See Farroux v. Denny's Rests., Inc., 962 S.W.2d 108, 111 (Tex. App.-Houston [1st Dist.] 1997, no pet.).

[4] The sham affidavit doctrine is traced by most scholars to Perma Research & Development Co. v. Singer Co., 410 F.2d 572 (2d Cir. 1969). See, e.g., Randy Wilson, The Sham Affidavit Doctrine in Texas, 66 Tex. B. J. 962, 964 (2003). However, the Farroux court attributed the expression "sham affidavit" to Bank of Illinois v. Allied Signal Safety Restraint Systems, 75 F.3d 1162, 1168-69 (7th Cir. 1996). See Farroux, 926 S.W.2d at 111.

[5] Navistar did not point to any testimonial declaration of Lujan to support the application of the Mendoza test and none exists in this record.

[6] Although no Texas court has yet determined whether the trial court possesses the discretion to reject the "explanation," federal courts do have that discretion and require a plausible or sufficient explanation. See, e.g., Baer v. Chase, 392 F.3d 609, 623-24 (3d Cir. 2004) (noting that "a party may not create a material issue of fact to defeat summary judgment by filing an affidavit disputing his or her own sworn testimony without demonstrating a plausible explanation for the conflict"); see also Doe v. Dallas Indep. Sch. Dist., 220 F.3d 380, 386 (5th Cir. 2000) (holding that the explanation for a contradictory summary judgment affidavit must be sufficient).

[7] Randall is actually a faithful application of the Texas view of conflicting summary judgment evidence. The summary judgment standard requires that courts (a) credit any evidence favorable to the nonmovant that a jury could; and (b) disregard any contrary evidence. See Mack Trucks, Inc. v. Tamez,206 S.W.3d 572, 582 (Tex. 2006).

[8] But, the Texas Penal Code is available to punish such perjury. Section 37.02(a)(1) provides, in pertinent part, that a "person commits an offense if, with intent to deceive and with knowledge of the statement's meaning . . . he makes a false statement under oath or swears to the truth of a false statement previously made." Tex. Penal Code Ann. § 37.02(a)(1).

[9] After the trial court struck Lujan's affidavit as a sham, Lujan himself filed the entire deposition transcript as an attachment to his motion for new trial in an effort to persuade the court that there were no conflicts in his testimony. Far from contradictory, the Lujan deposition could not be more consistent on Lujan's ownership of the trucks:

Q. These vehicles were purchase by you individually, right?

A. What do you — do you mean five different contracts?

Q. No. The vehicles, the CF600's, they were purchased by Albert —

A. Me personally? Yes.

Q. They weren't purchased by the corporation; they were purchased by you?

A. No.

Q. Did you ever transfer title of those trucks to the corporation?

A. No.

Q. Did you sell or lease the trucks to the corporation?

A. No.

(emphasis supplied). Lujan even testified that Navistar sued Lujan personally to repossess the subject trucks.

[10] The Majority suggests that Herrera v. CTS Corp., 183 F. Supp. 2d 921 (S.D. Tex. 2002), expanded the doctrine under analogous facts. I disagree. The Herrra court did not extend the sham affidavit doctrine beyond the Farroux pattern. Herrera, suing for disability discrimination, gave deposition testimony about the physical requirements of his job and then filed an affidavit in opposition to a motion for summary judgment in which he attempted to vary the job duties to establish that he "could perform the essentials of his job." Id. at 928. The district court disregarded the affidavit "[b]ecause the assertions made in Herrera's affidavit impeach his prior sworn testimony without explanation of that conflict." Id. at 928-29. The Herrera court simply noted that there is also "an apparent inconsistency" in the affidavit and Herrera's Social Security questionnaire, but the court did not extend the sham affidavit doctrine to the questionnaire. Id. at 929. And even if the Herrera court had relied upon Herrera's questionnaire, the case would not be analogous because in this case none of the items relied upon are from Lujan himself.

[11] The Majority notes that Navistar argued that Lujan made a judicial admission; but the Majority does not hold that any of the Corporation's pleadings or arguments or tax returns are, in fact, Lujan judicial admissions—because they are not as a matter of law. A plaintiff can plead himself out of court. See Tex. Dep't of Corr. v. Herring, 513 S.W.2d 6, 9 (Tex. 1974). But, neither Navistar nor the Majority cite any authority for holding that an Intervenor may plead a plaintiff out of court, regardless of the relationship between the Intervenor and the Plaintiff.

[12] Though there is no conflict between the Section 351 Election form and Lujan's affidavit, the Majority nonetheless criticizes Lujan for not explaining "the myriad discrepancies between his averments and the position his solely-owned corporation and his own counsel previously took before the court on the material issue of whether Lujan or his corporation owned the assets and claims that are the basis of Lujan's suit." I disagree. Lujan did explain any surface discrepancy. First, in his response to Defendants' Second Motion for Summary Judgment, Lujan specifically explained that "the election is not recognized under Texas law as an instrument to effect nor as enforceable evidence of such a transfer." At the hearing on the motion for summary judgment, Lujan's counsel argued that the Section 351 exchange is not evidence of an actual legal transfer. And at that same hearing, counsel went further in explaining his own prior statements; he had assumed his client followed through with a legal transfer but stated that he "misunderstood the true facts."

[13] There is no summary judgment evidence that the Corporation signed and filed the referenced tax return under penalty of perjury. The record contains unsigned taxpayer copies. And there is no testimony that the unsigned taxpayer copy was signed and filed at any time. We may not indulge the inference, against the nonmovant, that the tax return was signed and filed. See Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477, 481 (Tex. 2015) (noting the well-known summary judgment standard requiring that we indulge "every reasonable inference and resolve any doubts in the nonmovant's favor"). Thus, the penalty of perjury did not attach to any statements made in the unsigned tax return. See In re Lee,186 B.R. 539, 541 (Bankr. S.D. Fla. 1995) ("The U.S. Tax Courts have consistently held that an unsigned tax return is no return at all, because an unsigned tax return would be insufficient to support a perjury charge based on a false return.").

[14] The trial court also struck Lujan's affidavit as (a) conclusory and (b) one made in bad faith. The Lujan ownership affidavit that he did not "transfer ownership of my trucks nor my business to a corporation" is not conclusory. See, e.g., Ortega v. Cash, 396 S.W.3d 622, (holding that a bank officer's testimony that an "agreement and account was, on 8/18/2009 sold, transferred and set over unto CACH, LLC" is not conclusory); see also Prudential Ins. Co. of Am., Inc. v. Black, 572 S.W.2d 379, 380(Tex. Civ. App.-Houston [14th Dist.] 1978, no writ) (allowing a partner in a partnership to testify to the sale and assignment of a lease without the underlying sale and assignment documents). The Lujan ownership affidavit could not be stricken under Rule 166a(h) as made in bad faith because striking such an affidavit is not a remedy for a bad-faith filing, as outlined above. Thus, I would find error in striking the affidavit on the alternate bases as well.

TEXAS SUPREME COURT OPINION IN 

LUJAN V NAVISTAR, INC. (TEX 2018) 

ALBERT LUJAN D/B/A TEXAS WHOLESALE FLOWER CO., Petitioner,
v.
NAVISTAR, INC., NAVISTAR INTERNATIONAL CORPORATION, NAVISTAR INTERNATIONAL TRANSPORTATION CORP., INTERNATIONAL TRUCK AND ENGINE CORPORATION, AND SANTEX TRUCK CENTERS, LTD., Respondents.

No. 16-0588.

Supreme Court of Texas.

Argued February 6, 2018. Opinion delivered: April 27, 2018.

Richard A. Sheehy, Christopher James Kronzer, William J. Collins, III, Edward Kiss, for International Truck and Engine Corporation and Santex Truck Centers, Ltd., Navistar International Transportation Corp., Santex Truck Centers, Ltd., Navistar, Inc. and Navistar International Corporation, Respondents.

Wesley S. Coddou, Sean Michael Reagan, for Texas Wholesale Flower Co. and Albert Lujan, Petitioners.

On Petition for Review from the Court of Appeals for the Fourteenth District of Texas.

JUSTICE BLACKLOCK delivered the opinion of the Court.

JAMES D. BLACKLOCK, Justice.

In this commercial dispute, the trial court granted partial summary judgment based on the so-called "sham affidavit rule." Under the rule, if a party submits an affidavit that conflicts with the affiant's prior sworn testimony and does not provide a sufficient explanation for the conflict, a trial court may disregard the affidavit when deciding whether the party has raised a genuine fact issue to avoid summary judgment. Most Texas courts of appeals have recognized the sham affidavit rule as a legitimate component of a trial judge's authority under Rule 166a to grant summary judgment when no genuine issue as to any material fact exists. The rule has long been applied throughout the federal court system under Rule 56, which contains language nearly identical to Rule 166a. We agree with the majority view that a trial court's authority to distinguish between genuine and non-genuine fact issues includes the authority to apply the sham affidavit rule when confronted with evidence that appears to be a sham designed to avoid summary judgment. We affirm the court of appeals' judgment in part, reverse in part, and remand to the court of appeals for further proceedings.

I. Background

Albert Lujan purchased Texas Wholesale Flower Company in 2005. The newly purchased company included aging flower delivery trucks, so Lujan purchased five new CF600 trucks manufactured by Navistar, Inc. Lujan testified in his deposition that in June 2006 he incorporated the business as Texas Wholesale Flower Co., Inc. (the Corporation). Later that year, Lujan transferred assets of his business to the Corporation in exchange for 100% of the Corporation's stock, pursuant to section 351 of the Internal Revenue Code. 26 U.S.C. § 351. He was the sole shareholder and was "in control of the corporation." See id. (permitting tax-free exchange if "property is transferred to a corporation by one or more persons solely in exchange for stock in such corporation and immediately after the exchange such person or persons are in control . . . of the corporation"). He also testified that after forming the Corporation he filed corporate tax returns for the Corporation.

The document reflecting the section 351 transfer indicates that Lujan transferred the five CF600 trucks to the Corporation. The Corporation's income tax returns from 2006 and 2007 list the five trucks as corporate assets and indicate that the Corporation had sales of over $4 million during that time. Lujan testified at his deposition, however, that he did not transfer ownership of the trucks to the Corporation. In 2008, the Texas Secretary of State declared the Corporation's certificate forfeited due to unpaid franchise taxes.

In 2009, Lujan sued Navistar over his dissatisfaction with the trucks, alleging breach of express and implied warranties. He claimed that the trucks had recurring mechanical problems that caused disruptions in flower deliveries and the loss of perishable products and customers. He also claimed that the trucks were unsuitable for his business despite the truck salesman's representation that they would be a good fit. Lujan sued in his individual capacity and claimed individual ownership of the vehicles.

Whether Lujan or the Corporation owned the disputed trucks eventually became a contested issue. After four years of litigation, the Corporation intervened as a plaintiff, incorporating Lujan's pleadings and adding almost $15 million to the claimed damages. Lujan's attorney also represented the Corporation. Navistar moved to strike the intervention as untimely. In response to Navistar's motion to strike, the Corporation stated equivocally that "[Lujan] made an IRS Section 351 transfer . . . [of] all of the assets and liabilities of Texas Wholesale Flower Co. to Texas Wholesale Flower Co., Inc." but that "legal title" to the trucks was not transferred to the Corporation. The Corporation attached a copy of the section 351 transfer, which included the trucks, to its response to Navistar's motion to strike. At the hearing on the motion, the Corporation's attorney, who also represented Lujan, contradicted the Corporation's previous statement regarding the transfer of the vehicles. He claimed that the section 351 election transferred all the assets "lock, stock and barrel" to the Corporation, including the trucks— "absolutely everything [was] transferred over." During this hearing, the attorney did not distinguish between statements he made on behalf of the Corporation as opposed to Lujan. The trial court struck the Corporation's intervention as untimely.

Two months later, Navistar filed a motion for partial summary judgment against Lujan. Navistar argued that Lujan in his individual capacity did not have standing to assert claims for injury arising from the trucks that occurred after June 12, 2006, the date on which Lujan allegedly transferred ownership of the trucks to the Corporation. In his opposition to summary judgment, Lujan asserted that he "did not transfer his assets and liabilities to a corporation at any time." He supported this assertion with a sworn affidavit that stated he did not transfer ownership of the trucks to the Corporation and that the Corporation had no assets or liabilities and "never conducted business."

At the summary judgment hearing, the trial court pointed out that while Lujan's affidavit denied that the Corporation conducted any business or possessed any assets and liabilities, Lujan's attorney conceded that the Corporation filed tax returns and had assets and liabilities. The attorney admitted that those portions of the affidavit were false. He stated that when he prepared the affidavit his client "didn't recall" and "[m]isunderstood the true facts." He admitted that the Corporation had liabilities and filed tax returns. But Lujan's attorney stated that other than these falsehoods, "everything in the affidavit is true." The court was not satisfied with that explanation: "Other than where it's not true, it's true right? . . . This just goes back to my point counselor. I expect everything in here to be true. . . . I would have a little better time of this if it was a thoughtful affidavit that tried to explain" the false statements, but instead it appeared that "either you're not paying attention to what the facts of the case are, or you're just saying whatever is convenient at the time." The court expressed an interest in striking Lujan's affidavit as a sham and requested briefing on that issue. Navistar's ensuing briefing identified deposition testimony wherein Lujan admitted he incorporated the business in 2006 and filed corporate tax returns for the business in 2006 and 2007. The tax returns include the trucks as assets of the Corporation.

The trial court struck the affidavit as a sham and granted partial summary judgment. That same day, the trial court also granted summary judgment on a separate issue regarding the merits of Lujan's claims. Lujan timely appealed both rulings. A divided panel of the court of appeals affirmed and "adopt[ed] the sham affidavit doctrine," which had not previously been explicitly recognized by the Fourteenth Court of Appeals. Lujan v. Navistar, Inc., 503 S.W.3d 424, 434 (Tex. App.-Houston [14th Dist.] 2016, pet. granted). The court of appeals identified several reasons supporting the trial court's conclusion that Lujan's affidavit was a sham, including Lujan's deposition testimony regarding the incorporation, his attorney's statements in the hearing on the Corporation's intervention, the section 351 transfer, and the tax returns and banking documents in the record. Id. at 436-38. The court of appeals declined to reach Lujan's appeal of the summary judgment granted on the merits of his claims. Id. at 439. The dissent argued that the sham affidavit rule conflicts with Texas law and does not apply to Lujan's affidavit. Id. at 439-50. Lujan petitioned to this Court, and we granted the petition.

II. Analysis

A. Standard of Review

We review the trial court's grant of summary judgment de novo. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). A traditional motion for summary judgment requires the moving party to show 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); Provident Life, 128 S.W.3d at 215-16. If the movant carries this burden, the burden shifts to the nonmovant to raise a genuine issue of material fact precluding summary judgment. Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995). In reviewing the grant of summary judgment, we must credit evidence favoring the non-movant, indulging every reasonable inference and resolving all doubts in his or her favor. Randall's Food Markets, Inc. v. Johnson,891 S.W.2d 640, 644 (Tex. 1995).

Although we generally review summary judgments de novo, a trial court's refusal to consider evidence under the sham affidavit rule should be reversed only if it was an abuse of discretion. See, e.g., Corner v. County of Eastland, No. 11-10-00157-CV, 2012 WL 2045949, at *3 (Tex. App.-Eastland June 7, 2012, pet. denied) (mem. op.) ("A trial court's decision to strike an affidavit under the sham affidavit doctrine is reviewed under an abuse of discretion standard."). This standard of review reflects the deference traditionally afforded a trial court's decision to exclude or admit summary judgment evidence. See Starwood Mgmt., LLC v. Swaim, 530 S.W.3d 673, 678 (Tex. 2017) ("We review the rendition of summary judgments de novo. But we review a trial court's decision to exclude evidence for an abuse of discretion.") (citations omitted). Federal courts applying the sham affidavit rule have likewise employed an abuse of discretion standard of review. See, e.g., Daubert v. NRA Grp., LLC, 861 F.3d 382, 389 (3d Cir. 2017) ("[W]e review a district court's decision to exclude materials under the sham-affidavit doctrine for abuse of discretion."); France v. Lucas, 836 F.3d 612, 622 (6th Cir. 2016) ("The district court declined to consider the affidavit by applying the `sham affidavit' doctrine. We review that decision for an abuse of discretion.") (citations omitted).

B. The Sham Affidavit Rule

The sham affidavit rule originated in the federal courts nearly fifty years ago. See Perma Research & Dev. Co. v. Singer Co., 410 F.2d 572 (2d Cir. 1969); see alsoJudge Randy Wilson, The Sham Affidavit Doctrine in Texas, 66 TEX. B.J. 962, 964 (2003) ("The sham affidavit doctrine is usually traced to the Second Circuit opinion in Perma."). Since that time, federal appellate courts "have held with virtual unanimity that a party cannot create a genuine issue of fact sufficient to survive summary judgment simply by contradicting his or her own previous sworn statement (by, say, filing a later affidavit that flatly contradicts that party's earlier sworn deposition) without explaining the contradiction or attempting to resolve the disparity." Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795, 806 (1999).

In federal practice, the sham affidavit rule provides that "the nonmovant cannot defeat a motion for summary judgment by submitting an affidavit which directly contradicts, without explanation, his previous testimony." Albertson v. T.J. Stevenson & Co., 749 F.2d 223, 228 (5th Cir. 1984). Such conflicting affidavits "indicate[] only that the affiant cannot maintain a consistent story or is willing to offer a statement solely for the purpose of defeating summary judgment." Jiminez v. All Am. Rathskeller, Inc., 503 F.3d 247, 253 (3d Cir. 2007). The basis for the rule is that allowing manufactured affidavits to defeat summary judgment would thwart the very object of summary judgment, which "is to separate real and genuine issues from those that are formal or pretended. . . ." Radobenko v. Automated Equip. Corp., 520 F.2d 540, 544 (9th Cir. 1975). Rewarding a party who seeks to defeat summary judgment by "contradicting his own prior testimony . . . would greatly diminish the utility of summary judgment as a procedure for screening out sham issues of fact." Perma Research, 410 F.2d at 578.

The sham affidavit rule does not authorize trial courts to strike every affidavit that contradicts the affiant's prior sworn testimony. "To allow every failure of memory or variation in a witness's testimony to be disregarded as a sham would require far too much from lay witnesses. . . ." Tippens v. Celotex Corp., 805 F.2d 949, 953 (11th Cir. 1986). Sometimes a contradictory affidavit is warranted. But an explanation for the contradiction is also warranted. For example, courts have acknowledged that newly discovered evidence may justify a contradictory affidavit. See Franks v. Nimmo, 796 F.2d 1230, 1237 (10th Cir. 1986). Other times, an affiant "may have been confused about what was being asked" during a deposition and therefore an affidavit, though facially inconsistent, should be considered. Pyramid Sec. Ltd. v. IB Resolution, Inc., 924 F.2d 1114, 1123 (D.C. Cir. 1991).

Most Texas courts of appeals have followed the federal courts by recognizing the sham affidavit rule as a valid application of a trial court's authority to distinguish genuine fact issues from non-genuine fact issues under Rule 166a.^[1] We agree. Like the federal rules of civil procedure, the Texas rules provide for summary judgment when no "genuine" fact issue exists. FED. R. CIV. P. 56(a); TEX. R. CIV. P. 166a(c). The operative clauses in federal Rule 56(a) and Texas Rule 166a(c) are materially indistinguishable. Accordingly, the overwhelming federal precedent applying the sham affidavit rule is persuasive, though not controlling, in our interpretation of Rule 166a(c). Compare FED. R. CIV. P 56(a) ("no genuine dispute as to any material fact"), with TEX. R. CIV. P. 166a(c) ("no genuine issue as to any material fact"). In both the federal rule and its Texas counterpart, the key word is "genuine." Not just any proffered fact issue defeats summary judgment. While a trial court must not weigh evidence, Gulbenkian v. Penn, 252 S.W.2d 929, 931 (Tex. 1952), the rules of procedure require the court to determine whether a proffered fact issue is "genuine," which means "authentic or real." Genuine,BLACK'S LAW DICTIONARY (10th ed. 2014). A "sham" is, by definition, "not genuine." Sham, WEBSTER'S NEW INT'L DICTIONARY (3rd ed. 1961). The sham affidavit rule merely recognizes the authority of a trial court charged with weeding out non-genuine fact issues to require litigants to explain conflicting testimony that appears to be a sham designed to avoid summary judgment.

The abundant federal precedent recognizing the sham affidavit rule consistently grounds its application in the procedural rule's use of the word "genuine." In Perma Research, for example, the Second Circuit concluded that inconsistent statements by the same witness did not create a genuine fact issue. "If there is any dispute as to the material facts, it is only because of inconsistent statements made by Perrino the deponent and Perrino the affiant." 410 F.2d at 578. This led to the conclusion that "neither the Perrino deposition nor the Perrino affidavit raises any issue which we can call genuine." Id. Similarly, in Radobenko, the Ninth Circuit conceded that the issues raised in Radobenko's affidavit were "both material and relevant," but the court "reject[ed] [Radobenko's] efforts to characterize them as genuine issues of fact." 520 F.2d at 544. "[W]e are convinced that the issues of fact created by Radobenko are not issues which this Court could reasonably characterize as genuine; rather, they are sham issues which should not subject the defendants to the burden of a trial." Id.

Federal courts also emphasize the genuineness inquiry even when the sham affidavit rule does not apply. In Kennett-Murray Corp. v. Bone, the Fifth Circuit framed the question on summary judgment as follows: "In order to avoid the grant of summary judgment, a party must demonstrate both the existence of a material fact and a genuine issue as to that material fact." 622 F.2d 887, 892 (5th Cir. 1980). Where it was undisputed that that the non-movant alleged a material fact dispute, "[t]he central dispute [became] whether a genuine dispute exists." Id. at 893 (emphasis added). The court cited both Perma Research and Radobenko with approval but also noted that "every discrepancy contained in an affidavit does not justify a district court's refusal to give credence to such evidence." Id. at 893-94. The court concluded that the inconsistent affidavit in that case explained rather than contradicted the prior testimony. The inconsistency sprang from the affiant's confusion at his deposition, and the affidavit was an attempt to clarify the confusing testimony rather than manufacture a sham. Id. at 894-95. The court of appeals reversed the grant of summary judgment and held that the disputed "affidavit served to create a genuine issue which. . . preclude[s] summary judgment." Id. at 894.

In Camfield Tires, Inc. v. Michelin Tire Corp., the Eighth Circuit explained that although Kennett-Murray reached a different outcome than Perma Research and Radobenko, the reasoning in all three cases derived from federal Rule 56's use of the word "genuine." 719 F.2d 1361, 1364 (8th Cir. 1983). Perma Research and Radobenko, which had already been followed by a majority of circuit courts, focused on the power of trial courts to weed out sham issues of fact, while Kennett-Murray "described certain narrow circumstances under which a party's contradictory affidavit can raise a legitimate factual issue. . . ." Id. As these decisions illustrate, the sham affidavit rule exists in service of the procedural rule's textual requirement that trial courts allow only genuine fact issues to survive summary judgment.

Like Rule 56 of the federal rules, Rule 166a obligates Texas trial courts to distinguish genuine fact issues, which must proceed toward trial, from non-genuine fact issues, which should not survive summary judgment. Application of the sham affidavit rule is merely one way in which trial courts have gone about discharging that obligation. We affirm this approach today. Under Rule 166a(c), a trial court may conclude that a party does not raise a genuine fact issue by submitting sworn testimony that materially conflicts with the same witness's prior sworn testimony, unless there is a sufficient explanation for the conflict. We emphasize that this rule does not contravene the long-standing principle that the trial court is "not to weigh the evidence or determine its credibility, and thus try the case on the affidavits." Gulbenkian, 252 S.W.2d at 931. Rather, the sham affidavit rule is a tool that may be used to distinguish genuine fact issues from non-genuine fact issues in service of the "underlying purpose of Rule 166a [to] eliminat[e] . . . patently unmeritorious claims or untenable defenses. . . ." Id.

Texas courts of appeals recognizing the sham affidavit rule have generally relied on the federal examples. Two court of appeals' decisions helpfully illustrate the contours and limitations of the rule. In Pando v. Southwest Convenience Stores, LLC, the plaintiff sued the convenience store that sold him alcohol on the night of a fatal car accident. 242 S.W.3d 76 (Tex. App.-Eastland 2007, no pet.). The store moved for summary judgment based on the plaintiff's deposition testimony that he did not know whether he exhibited signs of intoxication on the night in question. The plaintiff opposed summary judgment with an affidavit stating that he did exhibit signs of intoxication. Id. at 78-79. The plaintiff did not explain the contradiction. Id.at 79-80. The trial court granted summary judgment. The court of appeals affirmed, reasoning that the trial court was justified in concluding that the fact question allegedly created by the affidavit was not genuine but "only a sham issue." Id. at 80. The court stated the sham affidavit rule as follows: "[W]hen (1) the affidavit is executed after the deposition and (2) there is a clear contradiction on (3) a material point (4) without explanation, the `sham affidavit' doctrine may be applied. . . ." Id.at 79. We agree that a trial court does not abuse its discretion by concluding that no genuine issue of fact exists under such circumstances. We caution, however, that whether to apply the sham affidavit rule to disregard sworn testimony is a case-specific inquiry not easily amenable to the rote application of multi-part tests. We agree with the San Antonio court of appeals that a court asked to disregard a conflicting affidavit must "examine the nature and extent of the differences in the facts asserted in the documents to determine what effect a conflict should be given in a particular case." Cantu v. Peacher, 53 S.W.3d 5, 7 (Tex. App.-San Antonio 2001, pet. denied). Examination of the nature and extent of the contradiction is essential. "Most differences between a witness's affidavit and deposition are more a matter of degree and details than direct contradiction. This reflects human inaccuracy more than fraud." Id. at 10. "If the differences fall into the category of variations on a theme, consistent in the major allegations but with some variances of detail, this is grounds for impeachment. . . . If, on the other hand, the subsequent affidavit clearly contradicts the witness's earlier testimony involving the suit's material points, without explanation," then the sham affidavit rule applies. Id.The sham affidavit rule is not a free-standing rule of procedure to be mechanically applied in the same way to every case. It is a flexible concept that flows from the text of Rule 166a(c) and aids courts grappling with the ultimate case-specific inquiry on summary judgment: Are the proffered fact issues genuine or not?

Lujan argues that the sham affidavit rule is a creature of federal law that is unavailable in Texas court. As we have explained, however, the relevant portion of the summary judgment standard in Texas Rule 166a is materially identical to federal Rule 56. In both rules, the touchstone for survival of summary judgment is whether proffered fact issues are "genuine." Compare Radobenko, 520 F.2d at 544("The very object of summary judgment is to separate real and genuine issues from those that are formal or pretended. . . ."), with In re Price's Estate, 375 S.W.2d 900, 904 (Tex. 1964) ("The purpose of [Rule 166a] is to eliminate patently unmeritorious claims, or untenable defenses and to avoid delays of trial where there is no genuine issue of fact.").

In other respects, Lujan is correct that Texas's summary judgment rule differs from its federal counterpart. Compare FED. R. CIV. P. 56, with TEX. R. CIV. P. 166a. For example, Lujan emphasizes that the federal rules regarding bad-faith affidavits include a residual clause allowing the trial court to order "other appropriate sanctions," which can include striking the affidavit. FED. R. CIV. P. 56(h). The corresponding Texas rule does not contain that residual clause. TEX. R. CIV. P. 166a(h). It states only two consequences for bad-faith affidavits: sanctions and contempt. Id. (stating that if a party files a bad-faith affidavit, the trial court may "order the party . . . to pay to the other party the amount of the reasonable expenses which the filing of the affidavits caused him to incur, including reasonable attorney's fees, and any offending party or attorney may be adjudged guilty of contempt"). Lujan contends that the Texas rule's enumeration of these two consequences deprives trial courts of authority to impose other, unenumerated consequences for bad-faith affidavits.

We are not persuaded that Rule 166a(h) precludes application of the sham affidavit rule. To begin with, application of the sham affidavit rule does not require a finding of bad faith. The rule arises not from Rule 166a(h) but from Rule 166a(c), which contains the well-known standard that material fact issues must be "genuine" in order to survive summary judgment. A court granting summary judgment after applying the sham affidavit rule is not imposing penalties for bad faith. It is applying the traditional summary judgment standard. That standard does not change simply because Rule 166a(h)'s provisions regarding bad-faith affidavits may also apply. Properly understood, the two rules do not conflict. One governs when summary judgment should be granted or denied. The other governs sanctions for bad-faith affidavits. Lujan's position is that Rule 166a(h) both empowers courts to take certain actions in response to bad-faith affidavits and disempowers courts to take other actions that would otherwise be within their authority. But nothing in the text of Rule 166a(h) purports to make the rule's remedies exclusive or to divest trial courts of authority granted elsewhere in the rules. Moreover, if we agreed with Lujan that no consequences can flow from a bad-faith affidavit except those explicitly stated in Rule 166a(h), the result would be that even the most flagrantly bad-faith affidavits could be used to survive summary judgment. This would rob the word "genuine" in Rule 166a(c) of much of its meaning and require denial of summary judgment any time a litigant has the temerity to submit a self-serving affidavit that conflicts with his prior testimony.

Lujan also points to this Court's prior decisions, which he claims foreclose application of the sham affidavit rule. We disagree, as did the many Texas courts of appeals that have already recognized the rule. In Gaines v. Hamman, we held that an affidavit should not be struck because it conflicts with the affiant's prior deposition testimony. 358 S.W.2d 557, 561-62 (Tex. 1962). The plaintiff testified one way in his deposition but then filed a contradictory affidavit in response to a motion for summary judgment. Id. at 562. This Court held that if "conflicting inferences may be drawn from the deposition and from the affidavit of the same party, a fact issue is presented." Id. Gaines was decided before the sham affidavit rule developed in both federal court and Texas court, but we need not overturn it in order to recognize the rule. It may sometimes be the case, as in Gaines, that two pieces of testimony from the same witness raise legitimate conflicting inferences sufficient to defeat summary judgment. The sham affidavit rule only provides that where the circumstances point to the likelihood of a sham rather than legitimate conflicting inferences, the trial court may insist on a sufficient explanation and may grant summary judgment if none is forthcoming.

Our later decision in Randall v. Dallas Power & Light Co. involved similar circumstances. 752 S.W.2d 4 (Tex. 1988). Randall stated in an affidavit that an agent of the defendant said certain things, but then stated in his deposition that he could not remember any of it. Id. at 4-5. This Court reversed summary judgment because "[t]he court of appeals completely ignore[d] the well-established rule that a deposition does not have a controlling effect over an affidavit. . . ." Id. Like Gaines, Randall did not consider the sham affidavit rule. By recognizing the rule today, we do not hold in conflict with Randall that depositions control over affidavits. Instead, we hold that when one contradicts the other and appears to the trial court to be a sham designed to avoid summary judgment, the trial court may require a sufficient explanation and may grant summary judgment in the absence of one.

C. Application

We turn now to the circumstances of this case. As explained above, "[w]e review the rendition of summary judgments de novo. But we review a trial court's decision to exclude evidence for an abuse of discretion." Starwood, 530 S.W.3d at 678. We therefore apply the abuse of discretion standard to the trial court's decision to disregard Lujan's affidavit as a sham.

After disregarding Lujan's affidavit, the trial court granted partial summary judgment against Lujan because defects in the trucks injured the Corporation rather than Lujan in his personal capacity. Lujan argues that, even if the sham affidavit rule is viable, it does not apply to his affidavit. He points out that the statement in his affidavit that he did not transfer ownership of the trucks to the Corporation accords with his deposition testimony. This is true. Nevertheless, we find that under the particular circumstances of this case, the trial court did not abuse its discretion by disregarding Lujan's affidavit as a sham.

Although Lujan's affidavit and deposition testimony agree on the ownership of the trucks, Lujan fails to recognize that his deposition contradicts his affidavit on other material points, including the Corporation's activities. In his affidavit, Lujan made broad statements that "[a]t all times I did business as Texas Wholesale Flower Company. . . . At no time did a corporation conduct business as Texas Wholesale Flower Company. . . . [The Corporation] never conducted business." These statements contradict his deposition testimony that he incorporated the company in 2006 and filed tax returns as a corporation.

Q. I thought you filed corporate tax returns in '06 and '07?

A. Yeah. . . .

Q. Let me back up, though. But did you incorporate the business—

A. At some point.

Q. —in '07?

A. At some point, yes. . . .

Q.. . . And you filed as a corporation?

A. Yes.

Other sworn evidence also contradicts Lujan's affidavit, including the section 351 transfer documents and the Corporation's tax returns. Lujan stated in his affidavit that he never transferred ownership of the trucks to the corporation. However, the section 351 election states that he did transfer ownership. The Corporation's tax returns, which Lujan admitted in his deposition were filed, also included the trucks as corporate assets. These documents were "made under the penalties of perjury," 26 U.S.C. § 6065, and they contradict Lujan's affidavit. Lujan now argues that because the copies in the record of the section 351 election and the tax returns are unsigned, they should not be considered sworn statements under the sham affidavit rule. He did not make this argument to the trial court when asked about the discrepancy between the affidavit and the corporate tax returns. And he does not contend the tax documents are incorrect or not genuine. Further, in his deposition and before the trial court, Lujan admitted he filed the corporate tax returns that show the trucks as corporate assets. Under these circumstances, the district court did not abuse its discretion by relying on the tax documents as the equivalent of sworn statements for purposes of the sham affidavit rule.

In addition to the facial inconsistencies between the affidavit and Lujan's other sworn evidence, the particular circumstances of this case lend considerable support to the trial court's decision to disregard the affidavit as a sham. To begin with, Lujan's attorney openly admitted to the trial court that the affidavit was false. When the trial court pointed to the contradictions in Lujan's evidence, his attorney's only explanation for the false affidavit was that Lujan either did not recall or misunderstood the relevant facts. The trial court was not persuaded. The court stated, "either you're not paying attention to what the facts of the case are, or you're just saying whatever is convenient at the time."

The trial court also pointed to conflicting statements by Lujan's attorney during the hearing on the motion to intervene. At that hearing, the attorney stated that Lujan had transferred "absolutely everything"—"lock, stock and barrel"—to the Corporation in 2006. Then during the hearing on summary judgment, the attorney tried to limit the effect of his prior statement when confronted with the contradiction between his statement and his client's affidavit. He claimed that the statement was made on behalf of the Corporation and not Lujan. However, the record reflects that at the hearing on the intervention, the attorney appeared on behalf of plaintiff, Albert Lujan, and did not attempt to distinguish his statements on behalf of the Corporation from his statements on behalf of Lujan. Further, Lujan was the sole shareholder of the Corporation. His artful attempt to disown the Corporation's statements rang hollow to the trial court and the court of appeals, and we cannot disagree. When Lujan's attorney characterized the whole mess as a misunderstanding, the trial court justifiably responded:

This isn't simply a situation where you said, "I misunderstood," and then you come back and then you file an affidavit that parses out specifically what the issues are as you've stated to the court right here in oral argument. Instead, there's an affidavit that says, "Look, you know, there's just this corporation that existed for all intents and purposes on paper and I never did anything with it." But that's not true.

It should be noted that the conflict between Lujan's affidavit and his attorney's statements does not alone dictate the outcome of this case. The sham affidavit rule looks to contradictions in sworn testimony, not in attorney statements. Such conflicts in sworn testimony exist in this case. What also exists in this case are other circumstances supporting the trial court's decision to disregard Lujan's affidavit as a sham. These circumstances include the admitted falsity of the affidavit and the inconsistent statements of Lujan's attorney, both of which buttress the trial court's conclusion that the late-filed and contradictory affidavit did not raise genuine fact issues sufficient to survive summary judgment. Under these circumstances, the trial court did not abuse its discretion by disregarding Lujan's affidavit.

III. Conclusion

We conclude that the sham affidavit rule is a valid component of a trial court's authority under Rule 166a to distinguish genuine fact issues from non-genuine fact issues. In the case before us, the trial court did not abuse its discretion by concluding that the affidavit in question did not raise a genuine fact issue sufficient to survive summary judgment. Therefore, we affirm the court of appeals' decision as to the partial summary judgment grant.

Although the court of appeals found that the grant of partial summary judgment disposed of the entire case, Lujan contends that his claims may remain partly unresolved. Navistar's motion for partial summary judgment applied only to injuries sustained after the incorporation and transfer of ownership on June 12, 2006. The record is not clear on whether the court of appeals' decision affirming the grant of partial summary judgment disposes of claims for damages that arose prior to June 12, 2006. As noted above, the trial court granted a second summary judgment motion that disposed of the entire case. The merits of the second motion were briefed to the court of appeals but were not reached by that court. The merits of the second motion are not before us. Therefore, we remand to the court of appeals to consider whether any of Lujan's claims remain unresolved. The judgment of the court of appeals is affirmed in part and reversed in part, and the case is remanded to the court of appeals.

[1] Eight courts of appeals have recognized the rule. See Fred Loya Ins. Agency, Inc. v. Cohen, 446 S.W.3d 913, 927 (Tex. App.-El Paso 2014, pet. denied); Pando v. Sw. Convenience Stores, LLC, 242 S.W.3d 76, 79 (Tex. App.-Eastland 2007, no pet.); Trostle v. Trostle, 77 S.W.3d 908, 915 (Tex. App.-Amarillo 2002, no pet.); Elson Thermoplastics v. Dynamic Sys., Inc., 49 S.W.3d 891, 901 (Tex. App.-Austin 2001, no pet.); Burkett v. Welborn, 42 S.W.3d 282, 286 (Tex. App.-Texarkana 2001, no pet.); Cantu v. Peacher, 53 S.W.3d 5, 10-11 (Tex. App.-San Antonio 2001, pet. denied); Farroux v. Denny's Rests., Inc., 962 S.W.2d 108, 111 (Tex. App.-Houston [1st Dist.] 1997, no pet.); Lujan v. Navistar, Inc.,503 S.W.3d 424, 439 (Tex. App.-Houston [14th Dist.] 2016, pet. granted). Four courts of appeals have not. See Pierce v. Wash. Mut. Bank, 226 S.W.3d 711, 717-18 (Tex. App.-Tyler 2007, pet. denied); Del Mar Coll. Dist. v. Vela, 218 S.W.3d 856, 862 (Tex. App.-Corpus Christi 2007, no pet.); Davis v. City of Grapevine, 188 S.W.3d 748, 756 (Tex. App.-Fort Worth 2006, pet. denied); Thompson v. City of Corsicana Housing Auth., 57 S.W.3d 547, 557 (Tex. App.-Waco 2001, no pet.).

CASE CITE: Lujan v. Navistar, Inc., 61 Tex. Sup. Ct. J. 982, 2018 WL 1974473 (Apr. 27, 2018).