Affirmed=20
and Memorandum =
Opinion=20
filed March 29, 2007.
In The
Fourteenth Court=20
of Appeals
____________
NO. 14-05-00845-CV
____________
NOVA=20
INFORMATION SYSTEMS, INC. AND BRIAN SOWADA, D/B/A NATIONAL BANK =
CARD=20
SYSTEMS, =
Appellants
V.
NIDHI AND=20
RONEIL, INC., =
Appellee
On Appeal from the =
County Court At Law No. 3 & Probate =
Court
Brazoria County, =
Texas
Trial Court Cause =
No. CI029160
M E M O R=20
A N D U M O P I N I O N
This is an=20
appeal of a judgment entered in favor of appellee, Nidhi and =
Roneil, Inc.,=20
following a bench trial. We affirm.
Factual=20
and Procedural Background
Appellee=20
leased a combination convenience store/gas station in December, =
2000. The=20
location had previously functioned as a convenience store, which =
had been=20
closed for approximately one year prior to appellee entering into =
the=20
lease. In addition to remodeling of the store itself, =
appellee=20
needed a credit card service for the gasoline pumps. Brian =
Sowada of=20
Nova Information Systems, Inc. (ANova@) visited=20
appellee and solicited appellee for that credit card =
business. Mr.=20
Sowada represented that, for a monthly fee, Nova would re-program =
the=20
existing credit card machines at the store so the charges made at =
the=20
store for gas and merchandise would be routed to =
appellee=3Ds bank=20
account. In essence, Nova, for a fee, would convert the =
credit card=20
charges into cash payments which would be deposited into=20
appellee=3Ds bank=20
account. Because Mr. Sowada represented he could re-program =
the=20
existing credit card machines, Nova=3Ds price=20
was lower than the competition and appellee entered into a =
contract with=20
Nova for that service. Mr. Sowada came to =
appellee=3Ds store=20
and programed the credit card machines with appellee=3Ds bank=20
routing information. Mr. Sowada checked the system and told =
appellee the=20
system was working properly and ready to go.
Appellee=3Ds store=20
opened in March 2001 operating under the name Pic N Pac. After the =
credit=20
card system was started and in use, appellee learned from its bank =
statements that while Nova was collecting its monthly fee, no cash =
payments were making their way into appellee=3Ds bank=20
account. Karnik Vyas, appellee=3Ds=20
secretary, notified Mr. Sowada of the problem. Following that=20
notification, Mr. Sowada investigated and informed Mr. Vyas that =
(1)=20
apparently the routing information had not been properly =
programed; (2)=20
appellee=3Ds money=20
was going into the bank account of Alexander Oil, the gasoline =
supplier=20
for the previous operators of the convenience store at the =
location; and=20
(3) there was nothing Mr. Sowada could do to correct the=20
problem.
By this=20
point, appellee had lost $4,938.83 in actual credit card charges =
that had=20
been made at the store and never deposited into =
appellee=3Ds bank=20
account. In addition, because the credit card machines were =
not=20
working properly, appellee had to stop accepting credit cards =
which=20
dramatically impacted the Pic N Pac=3Ds business=20
and cash flow. This decline in business forced the store to =
shut=20
down in May, 2001. Appellee had invested $120,000 in getting =
the=20
convenience store established and operating. In an =
effort to=20
minimize its loss, appellee sold the store and its inventory to a =
third=20
party for $100,000.
Asserting=20
numerous causes of action, appellee filed suit against both =
appellants on=20
February 21, 2002. =20
Nova was served and entered a special appearance in April 2002, =
which the=20
trial court denied in July 2002. Mr. Sowada filed his original =
answer in=20
June 2003. Appellants filed a joint Amended Original Answer =
and=20
Counterclaim on August 23, 2004. The case was set for trial =
on=20
September 13, 2004. Appellants requested a continuance of =
the trial=20
setting, which the trial court granted.
On October=20
13, 2004, some thirty months after Nova had filed its special =
appearance,=20
Nova (but not Sowada) filed a motion to compel arbitration. =20
Following a hearing, the trial court denied Nova=3Ds motion=20
to compel arbitration. The trial court held that Nova had =
waived the=20
issue of arbitration by unreasonably delaying the filing of its =
motion to=20
compel arbitration, by invoking the judicial process through its =
filing of=20
a counterclaim and affirmative defenses, and that these actions =
prejudiced=20
appellee.
The case=20
went to trial on April 5, 2005. Mr. Sowada, while =
represented by=20
counsel, did not appear for the trial. In addition, Nova did =
not=20
send a corporate representative to attend the trial, which lasted =
less=20
than three hours. Following the trial, the trial court =
entered=20
judgment in favor of appellee. Following the entry of the =
judgment,=20
Nova filed a motion for new trial, which the trial court =
denied. =20
This appeal followed.
Discussion
In eight=20
issues, appellants challenge the trial court=3Ds denial=20
of Nova=3Ds motion=20
for new trial based on the trial court=3Ds prior=20
denial of Nova=3Ds motion=20
to compel arbitration as well as the sufficiency of the evidence=20
supporting the causes of action asserted by appellee.
I. =20
The Standard of Review
A trial=20
court=3Ds ruling=20
on a motion for new trial will not be reversed without a showing =
of an=20
abuse of discretion. Director, State Employees=20
Workers=3D =
Comp.=20
Div. v. Evans, 889=20
S.W.2d 266, 268 (Tex. 1994). A trial court abuses its =
discretion=20
when it fails to correctly analyze or apply the law. In =
re E. I.=20
DuPont de Nemours & Co., 136 S.W.3d 218, 223 (Tex.=20
2004).
When a=20
bench trial is conducted and the court does not enter findings of =
fact and=20
conclusions of law to support its ruling, all facts necessary to =
support=20
the judgment are implied. BMC Software Belg., N. V. v.=20
Marchand, 83 S.W.3d 789, 795 Tex. 2002); Zac Smith & =
Co. v.=20
Otis Elevator Co., 734 S.W.2d 662, 666 (Tex. 1987). =
Because the=20
trial court granted judgment for appellee, but did not enter =
findings of=20
fact and conclusions of law, we review appellants=3D =
complaints with the presumption that all findings of fact and =
conclusions=20
of law were made in favor of appellee. When findings of fact =
and=20
conclusions of law are not requested and none are filed by the =
trial=20
court, the judgment of the trial court must be affirmed if it can =
be=20
upheld on any legal theory that finds support in the =
evidence. In=20
the Interest of W. E. R., 669 S.W.2d 716, 717 (Tex. =
1984). =20
When the=20
appellate record includes the reporter=3Ds and=20
clerk=3Ds records,=20
implied findings are not conclusive however, and may be challenged =
on the=20
basis of legal and factual sufficiency. BMC Software =
Belg.,=20
83 S.W.3d at 795. We review the trial =
court=3Ds decision=20
for legal and factual sufficiency of the evidence by the same =
standards=20
applied in reviewing the evidence supporting a jury=3Ds=20
finding. Catalina v. Blasdel, 881 S.W.2d 295, 297 =
(Tex.=20
1994). When reviewing the legal sufficiency of the evidence, =
we=20
review the evidence in the light most favorable to the challenged =
finding=20
and indulge every reasonable inference that would support =
it. =20
City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. =
2005). We=20
credit favorable evidence if a reasonable fact finder could and =
disregard=20
contrary evidence unless a reasonable factfinder could not. =20
Id. at 827. The evidence is legally sufficient if it =
would=20
enable fair-minded people to reach the verdict under review.=20
Id. Therefore, we must examine the record in this =
case to=20
determine whether some evidence exists to support the trial=20
court=3Ds=20
judgment.
In=20
reviewing the factual sufficiency of the evidence, we must =
consider and=20
weigh all the evidence and should set aside the judgment only if =
it is so=20
contrary to the overwhelming weight of the evidence as to be =
clearly wrong=20
and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex.=20
1986). We may not substitute our judgment for that of the =
trier of=20
fact, even if we would have reached a different conclusion. =20
Durand v. Moore, 879 S.W.2d 196, 200 (Tex. App.CHouston=20
[14th Dist.] 1994, no writ). Therefore, we will reverse only =
if the=20
overwhelming weight of the evidence indicates the trial =
court=3Ds judgment=20
for appellee was clearly wrong and unjust.
II. =20
Did the Trial Court Abuse Its Discretion When It Denied=20
Appellants=3D =
Motion=20
for New Trial?
In their=20
first issue, appellants argue the trial court abused its =
discretion when=20
it denied Nova=3Ds motion=20
for new trial based on the trial court=3Ds earlier=20
denial of Nova=3Ds motion=20
to compel arbitration, since, according to Nova, the contract in =
question=20
required that this controversy be decided by arbitration. =
However,=20
appellants=3D =
brief=20
does not mention, nor address, the trial court=3Ds basis=20
for denying Nova=3Ds=20
motion. In its order, the trial court found that Nova waived =
its=20
contractual right to compel arbitration because Nova: (1) =
unreasonably=20
delayed in filing its motion to compel arbitration; (2) invoked =
the=20
judicial process through its filing of a counterclaim and =
affirmative=20
defenses; and (3) that these actions prejudiced appellee. A=20
complaint on appeal must address specific errors and not merely =
attack the=20
trial court=3Ds order in=20
general terms. Martinez v. City of El Paso, 169 =
S.W.3d 488,=20
491 (Tex. App.CEl Paso=20
2005, pet. denied). An appellate brief must contain a =
succinct,=20
clear, accurate statement of the arguments made in the body of the =
brief. Id. citing to Tex. R. App. P. =
38.1(g). =20
Rule 38 requires an appellant to provide us with such discussion =
of both=20
the facts and the authorities relied upon as may be =
necessary to=20
maintain the point at issue. Id. By ignoring =
the=20
findings made by the trial court in support of its order denying=20
Nova=3Ds motion=20
to compel arbitration, appellants waive their first =
issue.
Even if=20
appellants had not waived their first issue, the result would be =
the=20
same. A party to an arbitration agreement can waive its =
contractual=20
right to compel arbitration of a dispute in two ways. A =
party can=20
waive arbitration if that party delays seeking to compel =
arbitration and=20
the delay results in prejudice; or if that party substantially =
invokes the=20
judicial process and the opposing party suffers prejudice as a =
result.=20
Prudential Securities, Inc. v. Marshall, 909 S.W.2d =
896,=20
898B99 (Tex.=20
1995); Associated Glass, Ltd. v. Eye Ten Oaks Investments, =
Ltd.,=20
147 S.W.3d 507, 514 (Tex. App.CSan=20
Antonio 2004, no pet.).
Here, Nova=20
filed its special appearance in April 2002. Nova then waited =
approximately thirty months before it filed its motion to compel=20
arbitration in October 2004, soon after requesting and receiving a =
continuance of the original trial setting. In the interim, =
Nova=20
filed its original answer with affirmative defenses as well as a=20
counterclaim against appellee. In addition, Mr. Sowada, as =
well as=20
the other defendants, were not parties to the arbitration =
agreement and=20
did not join the motion to compel arbitration which, if it had =
been=20
granted, would have required appellee to pursue its claims =
simultaneously=20
in two different forums. These facts support the trial=20
court=3Ds findings=20
that (1) Nova unreasonably delayed in filing its motion to compel=20
arbitration; (2) Nova substantially invoked the judicial process; =
and (3)=20
appellee was prejudiced as a result of Nova=3Ds=20
actions. Accordingly, the trial court did not abuse its =
discretion=20
when it denied appellants=3D =
motion=20
for new trial. See In re E. I. DuPont de Nemours & =
Co.,=20
136 S.W.3d at 223. We overrule appellants=3D =
first=20
issue.
III. =20
Did Appellee Comply With a Condition Precedent to Nova Assuming =
Any=20
Liability Under the Contract?
In their=20
sixth issue, the only issue in which appellants challenge=20
appellee=3Ds breach=20
of contract cause of action, appellants argue there is no evidence =
that=20
appellee complied with a condition precedent to Nova assuming =
liability=20
under the contract. Specifically, appellants assert =
there was=20
no evidence appellee gave written notice of the problem to Nova as =
required by paragraph 6(c) of the contract. =
Appellants=3D =
argument=20
is without merit.
A=20
fundamental principle of contract law is that when one party to a =
contract=20
commits a material breach of that contract, the other party is =
discharged=20
or excused from any obligation to perform. Hernandez v. =
Gulf=20
Group Lloyds, 875 S.W.2d 691, 692 (Tex. 1994); Restatement (Second) of =
Contracts=20
' =
237=20
(1981) (A[I]t is a=20
condition of each party=3Ds=20
remaining duties to render performances to be exchanged under an =
exchange=20
of promises that there be no uncured material failure by the other =
party=20
to render any such performance due at an earlier time.@). =20
Thus, when a party to a contract fails to perform its obligations =
under=20
that contract, it may not thereafter enforce the remaining terms =
of the=20
contract against the other party. Interceramic, Inc. v. =
South=20
Orient R. Co., Ltd., 999 S.W.2d 920, 924 (Tex. =
App.CTexarkana=20
1999, pet. denied). Whether a party has breached a contract =
is a=20
question of law for the court. Meek v. Bishop Peterson =
&=20
Sharp, P.C., 919 S.W.2d 805, 808 (Tex. App.CHouston=20
[14th Dist.] 1996, writ denied). The court determines what =
conduct=20
is required by the parties, and, insofar as a dispute exists =
concerning=20
the failure of a party to perform the contract, the court submits =
the=20
disputed fact questions to the fact finder. See=20
id. Here, there were no fact issues as there was=20
uncontroverted evidence that (1) appellants agreed to process the =
credit=20
card charges made at appellee=3Ds=20
convenience store, convert those charges into cash payments, and =
then=20
deposit those cash payments into appellee=3Ds bank=20
account minus Nova=3Ds fee; (2)=20
appellants programmed appellee=3Ds credit=20
card processing machines, tested them, and informed appellee they =
were=20
working properly; (3) $4,938.83 in credit card charges were made =
at=20
appellee=3Ds store in=20
March and April, 2001; (4) that amount was not deposited into=20
appellee=3Ds bank=20
account; (5) Mr. Sowada investigated, determined what the problem =
was, and=20
notified appellee there was nothing he could do to correct the =
problem;=20
and (6) Nova collected its monthly fee during both March and =
April,=20
2001. In determining the materiality of a breach, courts =
consider,=20
among other things, the extent to which the nonbreaching party =
will be=20
deprived of the benefit that it could have reasonably anticipated =
from=20
full performance. Hernandez, 875 S.W.2d 693. As a =
result of=20
appellants failure to perform their obligations under the =
contract,=20
appellee was totally deprived of the benefit it anticipated from =
the=20
contract. Since appellants materially breached the =
contract=20
they may not seek to enforce the written notification =
obligation in=20
section 6(c) of the contract against appellee. =20
Appellants=3D =
sixth=20
issue is overruled.
IV. =20
Did Legally and Factually Sufficient Evidence Support the Award of =
Damages?
In their=20
seventh issue, appellants challenge the evidence supporting the=20
judgment=3Ds award of=20
damages to appellee. In their brief, appellants state =
Ait is=20
somewhat difficult to characterize the nature of the damages =
awarded by=20
the trial court.@ =20
Appellants then go on to argue the evidence is insufficient =
as, in=20
appellants=3D =
view,=20
Athe=20
judgment must include an amount for lost profits since the award =
greatly=20
exceeds any reasonable notion of out of pocket losses.@ We=20
disagree.
The=20
ultimate goal in measuring damages for a breach of contract claim =
is to=20
provide just compensation for any loss or damage actually =
sustained as a=20
result of the breach. Mays v. Pierce, 203 S.W.3d 564, =
577=20
(Tex. App.CHouston=20
[14th Dist.] 2006, pet. denied). Here, the judgment does not =
award=20
any amount for lost profits, but instead awards appellee damages =
only for=20
its out of pocket losses. There was uncontroverted evidence =
that, as=20
a direct result of appellants=3D =
breach,=20
appellee lost $4,938.83 in credit charges from March and April =
2001. =20
There was also uncontroverted evidence that (1) appellee spent =
$120,000=20
getting the Pic N Pac ready to open for business; (2) appellee was =
forced=20
to close the Pic N Pac as a result of appellants=3D =
breach;=20
and (3) appellee had to sell the convenience store operation for =
$100,000,=20
resulting in a $20,000 loss of investment. Thus, there is legally =
and=20
factually sufficient evidence supporting the judgment. We =
overrule=20
appellants=3D =
seventh=20
issue.
V. =20
We Need Not Address Appellants=3D =
Remaining=20
Issues.
In issues=20
two, three, four, five, and eight, appellants challenge the =
sufficiency of=20
the evidence supporting appellee=3Ds=20
remaining causes of action. =20
As we have overruled appellants=3D =
issues=20
attacking the judgment based on appellee=3Ds breach=20
of contract cause of action, we need not address =
appellants=3D =
issues=20
attacking appellee=3Ds other=20
causes of action. Tex. =
R. App. P.=20
47.1.
Conclusion
Having overruled =
all of=20
appellants=3D issues on appeal =
necessary=20
for a final disposition of the appeal, we affirm the =
trial=20
court=3Ds final=20
=
judgment. &nbs=
p; =20
/s/ =20
John S. Anderson
Justice
Judgment=20
rendered and Memorandum Opinion filed March 29, 2007.
Panel=20
consists of Justices Anderson, Hudson, and =
Guzman.
Appellee also sued a two =
additional=20
defendants, Alexander Oil Company and Dennis Trigg. The trial =
court=20
entered a take nothing judgment on appellee=3Ds causes of action against these =
defendants and=20
they are not parties to this appeal.
In addition to breach of =
contract, appellee=20
also asserted causes of action for breach of implied warranty, =
breach of=20
fiduciary duty, negligence, violations of the Deceptive Trade =
Practices=20
Act, and =
fraud. |