2026 Tex. Bus. 50
The Business Court of Texas,
First Division
FIBERWAVE, INC., f/k/a §
SPEARHEAD CONSULTING, INC., §
Plaintiff, §
v. § Cause No. 25-BC01A-0013 AT&T ENTERPRISES, LLC, f/k/a §
AT&T CORP., §
Defendant/Counter-Plaintiff,§
v. §
FIBERWAVE, INC., f/k/a §
SPEARHEAD CONSULTING, INC., §
SPEARHEAD NETWORKS TECH, §
INC., FAISAL CHAUDHRY, and §
CHRIS PERCY, §
Counter-Defendants. §
§
═══════════════════════════════════════
Memorandum Opinion Supporting
Omnibus Order on Motions for Summary Judgment and
Order on Cross-Motions Under TRCP 166(g)
═══════════════════════════════════════
¶1 By its July 7, 2026 Omnibus Order on Motions for Summary
Judgment, the Court granted certain dispositive relief sought by movants in
various motions as follows:
• AT&T’s Combined Motion for Traditional and No-Evidence
Summary Judgment on Plaintiff’s Fraudulent Inducement Claim
(“Motion I”) filed on March 11, 2026, was GRANTED on both
traditional and no-evidence grounds.
• Fiberwave, Inc. f/k/a Spearhead Consulting, Inc.’s and Chris
Percy’s No-Evidence Motion for Summary Judgment Against
AT&T Enterprises, LLC f/k/a AT&T Corporation (“Motion II”)
filed March 20, 2026, was GRANTED IN PART on no-evidence
grounds as to AT&T’s fraud claims against Fiberwave and Percy
on all challenged elements.
• Fiberwave, Inc. f/k/a Spearhead Consulting, Inc.’s and Chris
Percy’s Traditional Motion for Summary Judgment Against AT&T
Enterprises, LLC f/k/a AT&T Corporation and Request for Oral
Hearing (“Motion III”) filed March 23, 2026, was GRANTED IN
PART on traditional grounds as to AT&T’s fraud claims against
Fiberwave and Percy with respect to the economic loss doctrine as
an affirmative defense.
• Counter-Defendants Spearhead Networks Tech, Inc. and Faisal
Chaudhry’s Combined Traditional and No-Evidence Motion for
Summary Judgment and Request for Oral Hearing (“Motion IV”)
filed March 24, 2026, was GRANTED IN PART on traditional
grounds as to AT&T’s fraud claim against Chaudhry regarding
justifiable reliance, proximate causation, and the economic loss
rule and on no-evidence grounds on all challenged elements.
• Fiberwave, Inc. f/k/a Spearhead Consulting, Inc.’s and Chris
Percy’s Motion to Adopt and Join Counter-Defendants Spearhead
Networks Tech, Inc. and Faisal Chaudhry’s Combined Traditional
and No-Evidence Motion for Summary Judgment and Request for
Oral Hearing, filed March 25, 2026, joining in Spearhead
Networks’ and Chaudhry’s hybrid motion for summary judgment,
was GRANTED IN PART on traditional grounds as to the fraud
claims against Fiberwave and Percy regarding the elements of
justifiable reliance and proximate causation.
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¶2 With the parties having requested an opinion on these dispositive
rulings, the Court issues this Memorandum Opinion in support thereof. See
TEX. R. CIV. P. 360(a)(1). The Court issues no opinion on its non-dispositive
rulings, including the denial (in whole or in part) of additional dispositive
motions presented by the parties, omitted from the above list.
¶3 First, however, the Court addresses later-heard motions and
arguments concerning construction of the 2022 Alliance Program Agreement
(“the Alliance Agreement”) and Appendix 1—the Solution Providers
Guidebook—which were the subject of pending cross-motions under Texas
Rule of Civil Procedure 166(g), ruled on herein.
PART ONE: Ambiguity in the 2022 Alliance Agreement and Guidebook
¶4 The parties’ contract interpretation disputes are governed by
Texas law. Proper construction of the 2022 Alliance Agreement and its
incorporated Guidebook means “giving the language its plain, ordinary,
generally accepted meaning, considering the context in which words are used,
avoiding constructions that render provisions meaningless, and construing
contract provisions together so as to give effect to the whole.” Rosetta Res.
Operating, LP v. Martin, 645 S.W.3d 212, 219 (Tex. 2022) (internal citations
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omitted). The Court must “also avoid constructions of contract language that
would lead to absurd results.” Id.
¶5 By cross-motions, the parties dispute the start date for calculating
the making of vested Residual Compensation payments pursuant to
Guidebook Section VI.B.4. following a Termination of the Alliance Agreement
for “cause.” Notably, “cause” is not defined in either the Alliance Agreement
or the Guidebook. The Court does not decide whether a Termination for
“cause” has occurred.
¶6 Upon a termination for cause, the Guidebook states that a Solution
Provider retains a “vested interest in earned Residual Compensation for
Orders or Renewals earning Residual Compensation for no more than 36
monthly payments remaining on an Order” with further limiting language in
certain circumstances. AT&T contends that the 36 monthly payments should
be counted from the start date of the Order. Fiberwave contends that the 36
monthly payments should be counted from the date of the termination.
¶7 Notably, paragraphs 3 and 5 of the Guidebook’s same subsection
expressly provide for a vested interest to be retained in certain Compensation
in varying circumstances “for no more than [a number of] months from the
date of Termination,” either for cause or otherwise. Where the parties
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intended a time period to run from Termination, they expressly stated as much.
Taking the difference in plain language at face value disfavors Fiberwave’s
interpretation.
¶8 But AT&T’s reading does not fully fit the text, either. The use of
“no more than” and “remaining” implies a calculation of what is left or as-yet
unpaid. Removing the concept of Termination, the number of “remaining”
monthly payments on any given Order—from the time an Order is entered into
AT&T’s ordering system and/or the time Compensation is triggered—is
unknowable. An Order does not have an inherent or discernable end date and
cannot have “remaining” monthly payments until some other event occurs. If
the meaning was as AT&T suggests, the parties could have provided for the
vesting of the first 36 monthly payments of an Order’s lifespan, with no need
for “remaining.” Such a reading might be logical if the monthly payments on
the Order originated within 36 months before Termination. But where an
Order has already generated more than 36 monthly payments, a Solution
Provider could (theoretically) be on the hook for Chargebacks or Offset for
monthly payments disbursed to the Solution Provider—perhaps for many
years—before a Termination for cause, with such payments having lost their
vested status upon the occurrence of the later cause. And even if that were not
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the case, the Guidebook, taken as a whole, does not support a reading where a
Solution Provider would be entitled to Residual Compensation for an Order
that has generated fewer than 36 monthly payments, but not for an Order that
has generated more than 36 monthly payments. These factors support
Fiberwave’s contrary interpretation.
¶9 If Section VI.B.4. of the Guidebook meant “no more than 36
monthly payments remaining on an Order from the date of Termination,” it
could have said so; it did not. However, if the Guidebook meant “no more than
36 monthly payments remaining on an Order from the date an Order was
entered into AT&T’s ordering system or the date compensation for an Order
was triggered,” it could have said that, as well; it did not. Either interpretation
could have been clearly articulated. The language actually chosen (“no more
than 36 monthly payments remaining on an Order”) regrettably was not clear,
particularly when viewed in context with neighboring provisions.
¶10 Because the parties’ opposing interpretations each have support
in the wording and context of the Guidebook and because each is arguably
reasonable for different reasons, the Court concludes the Guidebook is
ambiguous. Its meaning thus presents “a fact issue for the jury and extraneous
evidence may be admitted to help determine the language’s meaning.”
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Barrow-Shaver Res. Co. v. Carrizo Oil & Gas, Inc., 590 S.W.3d 471, 480 (Tex.
2019).
PART TWO: Memorandum Opinion in Support of Dispositive Rulings
I. Fiberwave failed to establish a genuine issue of material fact to preclude
summary judgment on its fraudulent inducement claim.
¶11 In Motion I, AT&T argued, inter alia, that Plaintiff proffered no
evidence that AT&T intended not to perform when it entered into the 2022
Alliance Program Agreement (“the Agreement”) or that Plaintiff’s purported
reliance was justified. The Court agreed.
A. Plaintiff’s evidence of AT&T’s intent not to perform at the time it
entered into the Agreement did not rise above mere surmise or
suspicion.
¶12 An actionable misrepresentation occurs when a party promises to
perform a future act with no present intent to perform it. Int’l Bus. Machs. Corp.
v. Lufkin Indus., LLC, 573 S.W.3d 224, 228 (Tex. 2019). “Because intent to
deceive or defraud is not susceptible to direct proof, it invariably must be
proven by circumstantial evidence.” IKON Off. Sols., Inc. v. Eifert, 125
S.W.3d 113, 124 (Tex. App.—Houston [14th Dist.] 2003, pet. denied). To
constitute intent to defraud (i.e. intent not to perform), the circumstantial
evidence proffered “must transcend mere suspicion.” Id. (quoting Lozano v.
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Lozano, 52 S.W.3d 141, 149 (Tex. 2001)). Evidence that does no “more than
create a mere surmise or suspicion of its existence” does not “rise above a
scintilla.” Lozano, 52 S.W.3d at 145 (Phillips, C.J., concurring in part); see
King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003) (stating that
when “the evidence offered to prove a vital fact is no more than a mere
scintilla,” no-evidence motion will be granted (quoting Merrell Dow Pharms.,
Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997))).
¶13 Here, Fiberwave claimed AT&T promised to pay Fiberwave posttermination vested Residual Compensation (“RC”) even if AT&T terminated
the Agreement for cause, based on payments characterized by AT&T as
“kickbacks” purportedly prohibited by the Agreement and the incorporated
Guidebook.1 In support, Fiberwave proffered the following evidence: AT&T’s
withholding of all post-termination Residual Compensation and AT&T’s
1
Fiberwave characterizes its allegation of misrepresentation by AT&T as follows: “AT&T’s breach by wrongfully withholding Fiberwave’s post-termination vested Residual Compensation due to Fiberwave’s alleged participation in the ‘kickback’ scheme, coupled with actual knowledge of those alleged ‘kickbacks’ in 2016-2018 constitutes a misrepresentation.” Pl.’s Resp. to Mtn. I at ¶ 50 (footnote omitted).
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knowledge of allegations of kickbacks in 2016 and 2018.2 The Court found
that this evidence was insufficient to raise a genuine issue of material fact
concerning AT&T’s alleged intent not to perform, defeating Fiberwave’s
fraudulent inducement claim as a matter of law.
¶14 To prove AT&T’s knowledge of allegations of kickbacks in 2016
and 2018, Fiberwave pointed to evidence that AT&T received reports of a
kickback scheme in 2016 and 2018, that AT&T internally investigated those
reports, and that AT&T determined the reports were unsubstantiated. On such
a record, Fiberwave argued that AT&T chose to keep its head in the sand in
order to reap the benefits of Fiberwave’s efforts under the Agreement but
simultaneously intended not to fulfill its obligations when it terminated the
Agreement—by relying on such conduct despite prior knowledge of it.
¶15 Circumstantial evidence that AT&T could have known or might
have known of conduct that would support its later denial of post-termination
Residual Compensation to Fiberwave does not constitute more than a scintilla
2
Fiberwave disputed whether AT&T could reduce Fiberwave’s post-termination Residual Compensation under Section 6.3 of the Agreement (see Pl.’s Resp. to Mtn. I Appx. at pp. 260-61) and Section VI(B)(4) of the Solution Providers Guidebook (see id. at p. 338). Pl.’s Resp. to Mtn. I at ¶ 53. But if AT&T could, Fiberwave argued, this only created “a fact question as to the amount of Fiberwave’s damages, not the existence of Fiberwave’s damages because those provisions only allowed for ‘offsets,’ ‘deductions,’ and/or ‘limitations.’” Id.
Page 9
of proof that AT&T intended not to perform its post-termination obligations
at the time it entered into the Agreement. Fiberwave’s conclusion from the
facts presented is purely speculative, as the evidence proffered does not
“transcend mere suspicion.” IKON, 125 S.W.3d at 124 (quoting Lozano, 52
S.W.3d at 149). Having failed to adduce sufficient evidence of intent not to
perform, Fiberwave failed to raise a genuine issue of material fact as to a false
representation.
B. The waiver and merger provisions in the Agreement rendered
Fiberwave’s purported reliance on the alleged misrepresentation
unjustified and Fiberwave presented no evidence that fell outside
the scope of those provisions.
¶16 Even if there was evidence of an actionable misrepresentation, the
Court found that any reliance on such misrepresentation was unjustified as a
matter of law. A party’s reliance on a misrepresentation “may be negated as a
matter of law when circumstances exist under which reliance cannot be
justified.” Mercedes-Benz USA, LLC v. Carduco, Inc., 583 S.W.3d 553, 558
(Tex. 2019). One such circumstance—raised generally by AT&T’s briefing—
is when the alleged misrepresentation is contradicted by express terms in the
agreement. Id. (citing Nat’l Prop. Holdings, L.P. v. Westergren, 453 S.W.3d
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419, 424 (Tex. 2015) (“[A] party to a written contract cannot justifiably rely
on oral misrepresentations regarding the contract’s unambiguous terms.”)).
¶17 In this case, the Agreement contains a waiver provision in Section
20.8 and a merger clause in Section 20.9, both negating any justifiable
reliance by Fiberwave on any alleged promise by AT&T to pay posttermination Residual Compensation despite alleged knowledge by AT&T of
past conduct that would permit deductions, offsets, or limitations of the same.
In pertinent part, the waiver provision reads: “No course of dealing or failure
of either Party to strictly enforce any term, right or condition of this
Agreement will be construed as a general waiver or relinquishment of such
term, right or condition.” Pl.’s Resp. to Mtn. I Appx. at p. 274. The merger
clause reads:
All prior written and oral negotiations and agreements, and all
contemporaneous oral negotiations and agreements, between the
Parties on the matters contained in this Agreement are expressly
merged into and superseded by this Agreement (including,
without limitation, any prior agreement related to the marketing
and support of any of the Services) and must not be contradicted,
explained or supplemented by any course of dealing between
AT&T or any of its Affiliates and SP or any of its Affiliates. There
are no understandings or representations, express or implied, not
expressly set forth in this Agreement.
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Id. The Agreement includes all addenda and appendices, such as the
Guidebook.
¶18 Having contractually disclaimed reliance on any past conduct
between the parties and on any failure by AT&T to strictly enforce terms of
the parties’ Agreement, Fiberwave could not now claim to have justifiably
relied on any alleged promise by AT&T to pay post-termination Residual
Compensation despite a previous course of dealing that would justify nonpayment. For this additional reason, Fiberwave’s fraudulent inducement
claim failed.
II. As a matter of law, AT&T cannot prevail on its fraud claim against
Chaudhry.
¶19 In Motion IV, Chaudhry moved for summary judgment on AT&T’s
fraud claim against him on both traditional and no-evidence grounds. 3 The
Court granted the same relief.
A. Chaudhry’s Summary Judgment Grounds
¶20 The traditional motion urged judgment based on evidence offered
to negate the elements of justifiable reliance and proximate causation.
3
Spearhead Networks Tech, Inc. moved for the same relief, but AT&T’s fraud claim against Spearhead Networks was voluntarily dismissed in AT&T’s April 3, 2026 Notices of Partial Nonsuits, making the motion moot as to that claim.
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Chaudhry pointed to evidence of a lack of reasonable diligence on the part of
AT&T and argued that AT&T should be charged with knowledge of facts
(specifically, the payment of kickbacks investigated by AT&T as early as
November 2016) that AT&T could have known, through reasonable due
diligence, before executing the relevant Alliance Agreement. See BarrowShaver Res., 590 S.W.3d at 497 (discussing duty of party claiming fraud to
use reasonable diligence in arm’s-length transactions to protect his own
interests). As to causation, Chaudhry argued that AT&T could not identify any
unearned commission payments or attribute any of its losses to the conduct of
Spearhead Networks, specifically, as opposed to similar conduct by other
Solution Providers. Chaudhry contended that AT&T’s failure to articulate
damages caused by kickbacks involving Spearhead Networks and/or
Chaudhry, as opposed to other Solution Providers legally foreclosed any
showing that the acts of Chaudhry or Spearhead Networks were a substantial
factor in AT&T’s injuries, without which the injuries would not have been
suffered. See Rogers v. Zanetti, 518 S.W.3d 394, 402 (Tex. 2017) (describing
cause-in-fact and foreseeability components of proximate cause).
¶21 The traditional motion further raised the defense of the economic
loss rule as a bar to the relief sought by AT&T. Chaudhry argued that the
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allegedly fraudulent conduct and the related damages theories “are subsumed”
by obligations in the contract and damages therefrom. See, e.g., Mtn. IV at ¶¶
72, 76-77. Consequently, AT&T did not advance damages not barred by the
economic loss rule.
¶22 The no-evidence motion challenged four elements of AT&T’s
fraud claim, specifically: (1) a false, material representation by the defendant;
(2) which the defendant knew was false or made recklessly without knowledge
of its truth or falsity; (3) with intent to induce the plaintiff to act upon it; and
(4) the plaintiff did actually and justifiably relied upon it and thereby suffer
injury. See JP Morgan Chase Bank, N.A. v. Orca Assets G.P., L.L.C., 546
S.W.3d 648, 653 (Tex. 2018).
B. AT&T’s Response
¶23 In response to the traditional grounds, AT&T refuted Chaudhry’s
claim that the actions of which it complained could have been discovered
through due diligence. AT&T referred to evidence that further investigation
would not have been reasonable or even possible due to its lack of subpoena
power; according to AT&T, further efforts were not anticipated to be fruitful
and it was reasonable to conclude its inquiries based on the information known
at the time. AT&T also argued that proximate cause was established by the
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link between the complained-of actions of Chaudhry and its payment of
commissions it would not otherwise have paid. Yet, in doing so, AT&T did not
specify any such particular commissions. Finally, in response to Chaudhry’s
assertion of the economic loss rule, AT&T hinged its claim on the possibility
of obtaining extra-contractual relief in one of two forms: disgorgement or
rescission.
¶24 In response to the no-evidence motion, AT&T contended that
Chaudhry’s execution of the Alliance Agreements on behalf of Fiberwave,
formerly known as Spearhead Consulting, constituted a misrepresentation
where the Agreements represented compliance with “all applicable
anticorruption laws (including commercial bribery laws)” and noninvolvement in “fraudulent practices.” AT&T further argued that Chaudhry
fraudulently withheld information about the payment of alleged kickbacks to
AT&T employees, for the purpose of ensuring continued business with AT&T.
AT&T again urged its justifiable reliance on such alleged misrepresentations
and argued for disgorgement of commissions it would not otherwise have paid,
which AT&T contended were proximately caused by the alleged fraudulent
representations and omissions.
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C. Conclusions
¶25 The Court first addresses the no-evidence grounds raised by
Chaudhry. As to the first element, AT&T has yet to identify any particular law,
state or federal, that was violated by the alleged conduct of Chaudhry. 4
Accordingly, the Court cannot conclude that AT&T has raised a fact issue as
to whether Chaudhry’s alleged representation of compliance with the same
was false in the first instance. Moreover, AT&T did not make a single
reference to any exhibit or testimony in its argument concerning Chaudhry’s
alleged intent to induce reliance by AT&T. On either element, Chaudhry’s
motion merited granting. AT&T’s response as to justifiable reliance and injury
was similarly thin and failed to raise a fact issue that would save its fraud
claim from summary judgment.
¶26 Those same issues were also presented for traditional summary
judgment. While the traditional grounds need not be reached due to the claim
failing on no-evidence grounds, the Court nevertheless determined that
4
The Court notes that, in some instances, “kickbacks” are wholly barred (such as where public funds are involved), see 42 U.S.C. § 1320a-7b (prohibiting acceptance of remuneration for facilitating payments under a “Federal health care program”), while in other instances, “kickbacks” are merely regulated, see TEX. R. PROF. COND. Rule 1.04 (setting conditions for fee sharing between attorneys from different firms, while silent on fee sharing between attorneys from the same firm).
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Chaudhry has established his right to traditional summary judgment on the
basis of his affirmative defense of the economic loss rule.
¶27 Even accepting as true that Chaudhry owed the duty allegedly
breached—“the duty to refrain from misrepresentations and omissions of
material information” (see Resp. to Mtn. IV at p. 12; see also Formosa Plastics
Corp. USA v. Presidio Eng’rs. & Contractors, Inc., 960 S.W.2d 41, 46 (Tex.
1998))—and viewing the same as being “independent of the contractual
undertaking” (Chapman Custom Homes, Inc. v. Dallas Plumbing Co., 445
S.W.3d 716, 718 (Tex. 2014); see also Sharyland Water Supply Corp. v. City of
Alton, 354 S.W.3d 407, 418 (Tex. 2011)), the question of independent injury
remained. See Chapman Custom Homes, 445 S.W.3d at 718 (stating that “a
party states a tort claim when the duty allegedly breached is independent of
the contractual undertaking and the harm suffered is not merely the economic
loss of a contractual benefit” (emphasis supplied)).
¶28 To the extent AT&T sought disgorgement of commissions it
allegedly would not otherwise have paid, such relief is not an available remedy
for fraud. See McCullough v. Scarbrough, Medlin & Assocs., Inc., 435 S.W.3d
871, 905 (Tex. App.—Dallas 2014, pet. denied) (distinguishing disgorgement
as an equitable remedy from actual damage awards and explaining its purpose
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of protecting fiduciary relationships). Moreover, AT&T has not pleaded for
disgorgement, but solely for recovery of monetary damages. Cf. Med. RX Servs.
LLC v. Georgekutty, No. 02-21-00017, 2021 WL 6069102, at *4–6 (Tex.
App.—Fort Worth Dec. 23, 2021, no pet.) (affirming summary judgment
where non-movants specifically pleaded actual and exemplary damages but
“did not fairly raise [disgorgement] in their pleadings”). In this case, an arm’slength transaction between sophisticated parties with no fiduciary
entanglements or other relationship of trust or confidence, the Court found
disgorgement was not an available remedy for AT&T’s fraud claim.
¶29 To the extent AT&T sought rescission, AT&T’s arguments again
fell short. Rescission, like disgorgement, is an equitable remedy—one that is
available only when money damages are not adequate. Hrdy v. Second St.
Props. LLC, 649 S.W.3d 522, 553 (Tex. App.—Houston [1st Dist.] 2022, pet.
denied). Here, AT&T pleaded specifically for recovery of money damages, not
for rescission. And in its summary judgment response, AT&T offered no
argument or evidence that money damages would be in any way inadequate.
Accordingly, there was no evidence and no record supporting the recovery of
equitable relief by AT&T in this case.
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¶30 For all of these reasons, and as further supported by movants’
arguments and the record before the Court, the Court granted summary
judgment in favor of Chaudhry on both traditional and no-evidence grounds
with respect to AT&T’s fraud claim against him.
III. As a matter of law, AT&T cannot prevail on its fraud claims against
Fiberwave and Percy.
¶31 AT&T’s April 3, 2026 Notices of Partial Nonsuits did not
expressly nonsuit a fraud claim against Fiberwave, nor did they list a fraud
claim against Fiberwave as a remaining claim. Fiberwave and Percy both
moved for no-evidence and traditional summary judgment, via separate
motions, on AT&T’s fraud claims against both of them, and AT&T’s responses
(filed after its nonsuits) sought to establish genuine issues of material fact as
to fraud by Fiberwave and Percy. The Court therefore proceeded on the same
understanding as that reflected in the parties’ submissions: that the fraud
claim against Fiberwave was still pending.
A. Fiberwave and Percy’s Summary Judgment Grounds
¶32 In their earlier-filed motion (Motion II), Fiberwave and Percy
challenged AT&T’s fraud claims on no-evidence grounds. Days later, they
moved for summary judgment on traditional grounds, which the Court granted
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with respect to the assertion of the economic loss rule as an affirmative
defense. Fiberwave and Percy later incorporated Spearhead Networks’ and
Chaudhry’s traditional summary judgment arguments as to justifiable
reliance and causation via joinder.
B. AT&T’s Responses
¶33 In response to Fiberwave and Percy’s no-evidence motion, AT&T
sought to establish the elements of fraud by relying on representations in the
Alliance Agreement and incorporated Guidebook signed on behalf of
Fiberwave (under its previous name, Spearhead Consulting) via its agent—at
the time, Chaudhry. No mention was made of any representation by Percy, nor
did AT&T make any effort to attribute any misrepresentation to Percy. Instead,
AT&T argued that Percy’s fraud occurred via omission by failing to disclose
payments he was receiving from a Solution Provider, at a time when Percy was
still an employee of AT&T. According to AT&T, Percy accepted kickbacks
from Fiberwave and then created documentation to make the kickback appear
to be a loan; Percy refutes such allegations. Relying on its allegations of these
representations and omissions, AT&T contended it entered into the Alliance
Agreement and thereby was injured in the form of unspecified commissions
paid to Fiberwave that would otherwise have been withheld.
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¶34 As to the traditional motion, AT&T advanced essentially the same
arguments with respect to justifiable reliance, proximate cause, and—of the
greatest relevance—the economic loss rule that it presented in response to the
motion of Spearhead Networks and Chaudhry.
C. Conclusions
¶35 Addressing the no-evidence grounds first, the Court found that
judgment was warranted on all of the challenged elements, specifically: (1) a
false, material representation by the defendant; (2) which the defendant knew
was false or made recklessly without knowledge of its truth or falsity; (3) with
intent to induce the plaintiff to act upon it; and (4) the plaintiff did actually
and justifiably relied upon it and thereby suffer injury. See JP Morgan Chase
Bank, 546 S.W.3d at 653.
¶36 With the Court having found no evidence of a misrepresentation
by Chaudhry that would support AT&T’s fraud claim against Chaudhry, no
different outcome could be reached on the same facts as to Fiberwave on
whose behalf Chaudhry was acting. Again, AT&T failed to specify any
particular Law violated by Fiberwave (or Chaudhry) in the payment of
kickbacks and therefore did not establish that any representation of
compliance with applicable Laws was false. AT&T failed to show that the
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Alliance Agreement or its incorporated Guidebook either expressly prohibited
the payment of kickbacks or referral fees, or that such payments violated a
specific Law.
¶37 Separately, as noted earlier, AT&T did not identify any
affirmative representation by Percy that would support a fraud claim against
him, individually. With respect to the theory of fraud by omission, AT&T
offered no legal basis for imposing any duty on Percy to disclose to his
employer that he has received, personally, any payment from a Solution
Provider. AT&T did not allege or pursue a breach of fiduciary duty claim
against Percy. Nor could it in the absence of evidence that Percy owed AT&T
said duty. Accordingly, any duty to disclose would have to arise from some
other legal or contractual obligation, and AT&T did not argue for or offer
evidence of one.
¶38 Even if the Court assumed there was an actionable
misrepresentation or omission by Fiberwave or Percy, the record does not
contain a scintilla of evidence in support of the remaining elements of fraud—
only conclusory arguments by AT&T. The Court finds that AT&T has failed to
establish a genuine issue of material fact that Fiberwave or Percy made a false,
material representation (or omission), that Fiberwave or Percy knew to be
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false or made recklessly without knowledge of its truth, with intent to induce
AT&T to act on the same, and that AT&T did justifiably rely on the same and
suffered injury as a result. For these reasons, the Court granted summary
judgment on AT&T’s fraud claims against Fiberwave and Percy on noevidence grounds.
¶39 The Court further incorporates here its reasoning for granting
summary judgment on traditional grounds with respect to AT&T’s fraud claim
against Chaudhry as discussed above and adopts the same with respect to
AT&T’s fraud claims against Fiberwave and Percy. AT&T failed to create a
fact issue showing entitlement to any relief. As a matter of law, disgorgement
is not an available remedy here because AT&T did not sue for breach of any
relationship of trust or confidence. Instead, AT&T sued for money damages—
not rescission—the adequacy of which AT&T did not dispute.
¶40 For these reasons, and as further supported by movants’
arguments and the record before the Court, the Court determined that AT&T
could not prevail on its fraud claims against Fiberwave and Percy as a matter
of law.
¶41 In sum, the Court determined that the briefing and evidence before
it on the parties’ cross-motions for summary judgment was such that
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Fiberwave’s fraudulent inducement claim and AT&T’s fraud claims against
Chaudhry, Fiberwave, and Percy could not proceed to trial as a matter of law.
Accordingly,
IT IS ORDERED that the parties’ remaining contract claims will be
tried to a jury, and that the Court will permit the introduction of extrinsic
evidence at trial concerning resolution of contractual ambiguities.
SO ORDERED.
ANDREA K. BOURESSA
Judge of the Texas Business Court,
First Division
SIGNED ON July 24, 2026.
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