Opinion issued March 26,=20
=
2009
<=
BR>
In The
Court of=20
Appeals
For=20
The
First =
District of=20
Texas
____________
NO.=20
01-07-00481-CV
____________
SCOTT =
WASHBURN,=20
Appellant
V.
BRYAN =
SIMS AND=20
ASTOUNDING PARTY RENTALS, INC., =
Appellees
On =
Appeal from the=20
County Civil Court at Law No. 1
Harris =
County,=20
Texas
Trial =
Court Cause=20
No. 858,470
MEMORANDUM=20
OPINION
=
Appellant,=20
Scott Washburn, appeals the judgment rendered against him in a =
suit for a=20
balance due on an open account and unjust enrichment against =
appellees,=20
Bryan Sims and Astounding Party Rentals, Inc. (APR) ![3DFootnote=20](3D"http://www.1stcoa.courts.state.tx.us/opinions/070481f/footnoteicon=)
and on a counterclaim for breach of =
contract=20
brought against him by Sims. We determine whether the evidence was =
legally=20
and factually sufficient to support the jury=E2=80=99s findings =
that (1) Washburn=20
and Sims had an agreement for Washburn to purchase 51% of APR for=20
$279,795, (2) Sims was excused from performing under an agreement=20
requiring that he repay $20,000 to Washburn in the event that the =
sale of=20
51% of APR was not completed by March 15, 2005, and (3) Sims was =
entitled=20
to $36,000 in damages because of Washburn=E2=80=99s failure to =
comply with their=20
agreement.
<=
/SPAN>We=20
reverse the judgment and render judgment in favor of=20
Washburn.
Background
<=
/SPAN>In=20
2004, Sims was the owner of APR. In the fall of 2004, he was =
approached by=20
Washburn, a good friend, regarding the possibility of =
Washburn=E2=80=99s investing=20
in Sims=E2=80=99s business. APR was struggling due to increased =
competition, and=20
Sims was eager for an infusion of capital, new marketing ideas, =
and access=20
to new markets that he thought that Washburn could provide. After =
several=20
informal meetings, Sims and Washburn agreed to go forward with a =
deal in=20
which Washburn would purchase 51% of APR. Sims valued 51% of his =
business=20
at $279,795. On November 2, 2004, Sims and Washburn met with Chris =
Cammack, an attorney, regarding the intended purchase. =
Cammack=E2=80=99s invoice=20
for this meeting stated that he met with Sims and Washburn to =
discuss=20
=E2=80=9Ctheir objectives.=E2=80=9D
<=
/SPAN>Following=20
this meeting, the parties had a formal appraisal of the equipment =
owned by=20
APR conducted, and a report confirming the value of APR=E2=80=99s =
equipment at=20
$220,030 was faxed to Sims and Washburn on November 12, 2004. On =
November=20
16, 2004, Louise Brock, Sims=E2=80=99s mother and business =
associate, called=20
Cammack to inform him that the appraisal had been received and =
that Sims=20
and Washburn wanted to close on their buy-sell agreement by =
Thanksgiving.=20
Two days later, on November 18, 2004, Sims called Cammack =
regarding the=20
dollar figures that he believed were agreed upon between himself =
and=20
Washburn and the document that they wanted him to draft. Sims =
scheduled a=20
meeting with Cammack for November 22, 2004. At the November 22, =
2004=20
meeting, Washburn and Sims both met with Cammack, and =
Cammack=E2=80=99s invoice=20
reflects that he prepared documents including various corporate =
documents=20
and a buy-sell agreement between Sims and =
Washburn.
<=
/SPAN>Throughout=20
the fall of 2004, Washburn became involved in running the business =
with=20
Sims and Brock. Washburn had business cards printed, encouraged =
Sims and=20
Brock to form a new corporation, conducted sales calls, developed =
and=20
began implementing a new marketing strategy, and conducted other =
business=20
activities like looking at properties for a new warehouse =
location. Sims=20
incurred over $8,000 in expenses in October and November as a =
result of=20
contracting for new yellow pages adds and paying for appraisal =
fees and=20
attorney=E2=80=99s fees.
<=
/SPAN>On=20
January 6, 2005, Washburn and Sims received the =E2=80=9CAgreement =
for the Sale of=20
Corporate Assets and Stock=E2=80=9D that Cammack had drafted for =
them. The=20
agreement listed the total purchase price as $279,795, calculated =
as=20
follows:
=E2=88=99 $110,015=20
for an undivided 50% interest in all items of =
inventory;
=E2=88=99 $44,280=20
for an undivided 50% interest in all stocked items and prepaid=20
advertising;
=E2=88=99 $100,000=20
for goodwill; and
=E2=88=99 $25,500=20
for acquiring 51%, representing a majority =
interest.
This document was never signed by both =
parties.=20
Nevertheless, on January 6, 2005, Washburn paid $5,000 to Sims to =
be used=20
for the expenses of APR. On January 13, 2005, Washburn paid =
another $5,000=20
to Sims to be used for APR.
<=
/SPAN>On=20
January 18, 2005, Washburn had the appraisers conduct a visual =
inspection=20
of APR=E2=80=99s equipment and received another report confirming =
the value of=20
APR=E2=80=99s equipment. Washburn also began seeking more detailed =
financial=20
information on APR from Brock. On February 3, 2005, Washburn =
emailed Brock=20
asking for 2004 balance sheets, income statements, accounts =
payable and=20
receivable, ledgers, spreadsheets, bank statements, outstanding =
loans to=20
and from Sims, and a =E2=80=9Clist of all advertising contracts =
including dates of=20
renewal, pricing, prepaid, etc.=E2=80=9D Washburn also sought =
information on other=20
prepaid items such as insurance, rent, loans, a list of current =
and past=20
due bills, the estimated sales forecast and current bookings for =
2005, and=20
any other information about expenses coming up in 2005 that Brock =
felt=20
that he should know about. Brock sent a reply email to Washburn on =
February 4, 2005 and attached the requested =
information.
<=
/SPAN>On=20
February 7, 2005, Sims asked Washburn for another $10,000. =
Washburn faxed=20
him a letter of intent that was dated January 8, 2005. The cover =
letter=20
sent with the faxed letter of intent stated:
Please sign this Letter of Intent and =
fax [it]=20
back to me . . . . I=E2=80=99ll wire the $10,000 into your account =
today when I=20
get it back. Review this purchase agreement in the next few days =
and lets=20
[sic] plan to finalize it by next week with Jack and the following =
week=20
with the attorney.
Next to the sentence about the purchase =
agreement=20
was the notation =E2=80=9Csending in a
few minutes.=E2=80=9D The letter of =
intent itself=20
stated:
This letter confirms our intentions with =
respect=20
to my purchase of 51% of Astounding Party Rentals, =
Inc.
We envision that the principal terms of =
the=20
proposed transaction would be substantially as =
follows:
<=
/SPAN>a.=20
51% of all assets and inventory
<=
/SPAN>b.=20
51% of all prepaid insurance, advertising, rent, =
etc.
<=
/SPAN>c.=20
Set amount of goodwill
<=
/SPAN>d.=20
Due diligence review of all financial accounting and business =
records,=20
contracts, and other legal documents. Any information obtained =
will be=20
confidential
<=
/SPAN>e.=20
A definitive purchase agreement will be negotiated and executed =
between=20
us
<=
/SPAN>f.=20
You and I will pay our respective expenses relative to this=20
purchase.
<=
/SPAN>g.=20
$10,000 of earnest money will be paid in January 2005 and $10,000=20
additional earnest money will be paid on or before February 9, =
2005. This=20
money will be applied to the balance owed in the event the =
purchase takes=20
place or returned by July 1, 2005 if an agreed upon price cannot =
be=20
negotiated or the sale is not executed before March 15,=20
2005.
Sims added his signature to =
Washburn=E2=80=99s on the=20
bottom of the letter of intent and faxed it back to him =
immediately.=20
Approximately ten minutes later, Washburn faxed the purchase =
agreement.=20
This purchase agreement was substantially similar to the agreement =
drawn=20
up by Cammack except for the terms of price and payment schedule.=20
Washburn=E2=80=99s purchase agreement listed the purchase price as =
$113,534,=20
calculated as follows:
=E2=88=99 $99,740=20
for an undivided 50% interest in all items of =
inventory;
=E2=88=99 $6,617=20
for an undivided 50% interest in all stocked items and prepaid=20
advertising;
=E2=88=99 $5,000=20
for goodwill; and
=E2=88=99 $2,177=20
for acquiring 51%, representing a majority =
interest.
When Sims received this purchase =
agreement, he=20
immediately called Washburn to ask why the agreement had been =
changed to=20
reduce the sale price by half. Washburn purportedly told Sims not =
to worry=20
about it and that they would work something out.
<=
/SPAN>On=20
February 8, 2005, Washburn wired $10,000 to Sims=E2=80=99s =
account, and Sims wrote=20
a check for $5,000 for insurance coverage obtained at =
Washburn=E2=80=99s request.=20
On February 15, 2005, Washburn replied to Brock=E2=80=99s email of =
February 4,=20
2005 regarding the financial documents that she had sent and =
requested a=20
few additional items, including any remaining 2004 expenses, a =
copy of all=20
current advertising contracts, a copy of all current and pending =
customer=20
contracts for 2005, and a list of all current and outstanding=20
bills.
<=
/SPAN>On=20
February 16, 2005, Washburn and Sims conducted a brief conference =
call=20
with Cammack informing him that they were forming a new =
corporation=20
through their accountant, Jack Wyrick. Cammack confirmed with =
Wyrick that=20
he prepared only the articles of incorporation and obtained a new =
federal=20
tax identification number and that no by-laws or =
shareholder=E2=80=99s agreement=20
had been prepared. On February 22, 2005, Sims filed the necessary=20
paperwork to form the new corporation as envisioned by himself and =
Washburn. The articles of incorporation for APR listed Washburn =
and Sims=20
as the only two directors. No assets were ever transferred into =
this=20
corporation.
<=
/SPAN>Washburn=20
sent another email to Brock on February 23, 2005 informing her =
that he was=20
=E2=80=9C[a]lready working on the Target Markets we are going to =
hit. Should have=20
it done early next week along with some other Sales/Marketing =
plans.=E2=80=9D=20
Brock and Sims met on March 1, 2005 for a =
=E2=80=9Cbrainstorming=E2=80=9D session in which=20
they discussed marketing strategy and other aspects of the=20
business.
<=
/SPAN>During=20
this time, Sims and APR continued to incur expenses with =
Washburn=E2=80=99s=20
involvment, including an additional $7,822 for liability =
insurance,=20
$15,464 for equipment repair and maintenance, $39,278.40 for the =
purchase=20
of a new truck, and several thousand dollars for advertising. =
Eventually,=20
the March 15, 2005 deadline for completing the sale of 51% of APR =
passed,=20
and the sale was never completed.
<=
/SPAN>On=20
May 19, 2005, Washburn sent a letter requesting that the following =
sums be=20
repaid:
=E2=80=A2 $80=20
for annual dues paid to the International Special Events and =
Recreation=20
Association (ISERA),
=E2=80=A2 $5,371.86=20
for the first insurance premium payment to =
ISERA,
=E2=80=A2 $500=20
for Sims=E2=80=99s half of the Wyrick=E2=80=99s $1,000 bill, =
and
=E2=80=A2 $400=20
for expenses for a weekend sales trip to San=20
Antonio.
The letter also stated, =E2=80=9CPlease =
plan to send=20
$5,000 per week in June so you can get the $20,000 balance paid =
off before=20
the agreed upon date of July 1, 2005.=E2=80=9D
<=
/SPAN>After=20
the July 1, 2005 deadline for repayment had passed without =
Sims=E2=80=99s repaying=20
any money to Washburn, Washburn sent another letter on July 6, =
2005. This=20
letter had an attached promissory note for $27,000, and the letter =
stated,=20
=E2=80=9CPlease sign one copy of this Promissory Note and send it =
back to me with=20
the first payment of $294.10. I=E2=80=99ll have a deed of trust =
drafted up to=20
secure this note.=E2=80=9D Sims did not negotiate any of these =
terms with Washburn=20
and did not sign the note.
<=
/SPAN>On=20
December 20, 2005, Washburn=E2=80=99s attorney sent a demand =
letter informing Sims=20
that he was required to pay Washburn $26,351.86 or Washburn would =
file a=20
lawsuit. On February 14, 2006, Sims received another letter from=20
Washburn=E2=80=99s attorney requesting that Washburn be removed as =
a director of=20
APR.
<=
/SPAN>Washburn=20
filed his lawsuit against Sims and APR on February 23, 2006, =
alleging=20
causes of action for balance due on an open account and unjust =
enrichment.=20
Sims answered on April 10, 2006 with a general denial and raised =
the=20
affirmative defenses of estoppel, waiver, and breach of=20
agreement.
<=
/SPAN>On=20
October 5, 2006, Sims filed a counter-petition against Washburn =
alleging=20
breach of contract and seeking damages. Sims=E2=80=99s =
counter-petition also=20
alleged fraud and specific performance.
<=
/SPAN>The=20
trial occurred on February 22, 2007. Washburn, Sims, and Brock =
testified=20
to the story laid out above and presented their supporting =
documents.=20
Washburn characterized the money that he had paid to Sims as loans =
that=20
were never repaid. He testified that his involvement with the =
business was=20
merely his attempt to do his =E2=80=9Cdue diligence=E2=80=9D and =
that he was just =E2=80=9Cgetting=20
a feel for=E2=80=9D the business and helping out a friend at the =
same=20
time.
<=
/SPAN>Regarding=20
the letter of intent, Washburn testified that he believed that he =
and Sims=20
needed to sign a letter of intent outlining their goals for the=20
transaction before they entered into a purchase agreement. =
Washburn=20
contended that he and Sims had discussed the need to sign a letter =
of=20
intent. He testified that he had drafted the letter of intent in =
January=20
and had given it to Sims at that time, but that Sims had not =
signed it at=20
that time. Washburn believed that this was because Sims did not =
feel=20
comfortable signing the letter at that time. Washburn also =
testified that=20
he had spoken with Sims just before Sims signed the letter of =
intent on=20
February 7, 2005 and that they had said that they =
=E2=80=9Cneed[ed] to have a=20
signed letter of intent first=E2=80=9D before they could =
=E2=80=9Cput together a purchase=20
agreement.=E2=80=9D Washburn contended that he and Sims had never =
agreed on a=20
purchase price for 51% of APR and that the letter of intent =
required Sims=20
to repay Washburn the money that he had invested in APR because =
they had=20
failed to reach such an agreement.
<=
/SPAN>Sims,=20
on the other hand, testified that he and Washburn had reached a =
complete=20
agreement, including the price Washburn would pay for 51% of APR =
and that=20
they =E2=80=9Cshook on the deal=E2=80=9D and hired a lawyer to =
draft the necessary=20
documents in November 2004. He and Brock both considered Washburn =
a=20
partner in the business from that time forward. Sims believed that =
the=20
money given to him by Washburn was intended to go toward =
Washburn=E2=80=99s=20
purchase of 51% of APR and was not a loan. Sims testified that he =
did not=20
read the letter of intent carefully; rather, he signed it =
believing that=20
it was part of his agreement with Washburn to purchase 51% of APR =
for=20
$279,795 and was upset when the purchase agreement that Washburn =
sent 10=20
minutes later named a different price than the purchase agreement =
drafted=20
by Cammack. Sims represented that he immediately contacted =
Washburn to ask=20
why he used the =E2=80=9Cbait and switch=E2=80=9D tactic, and he =
testified that Washburn=20
then =E2=80=9Cbacked down=E2=80=9D from the lower purchase price =
and promised that the=20
parties would be able to work something out. Sims testified that =
he=20
realized that they had not agreed on a price for the sale of 51% =
of APR=20
only after he had signed the letter of intent and received =
Washburn=E2=80=99s=20
version of the purchase agreement listing $113,534 as the purchase =
price.=20
Sims stated that he and Washburn were not able to reach a final =
agreement,=20
and Sims refused to repay any money to Washburn.
<=
/SPAN>The=20
jury found that Sims and Washburn had agreed that Sims would =
refund the=20
amounts paid by Washburn in the event that the sale of 51% of APR =
was not=20
completed by March 15, 2005
and that Sims had failed to comply with =
this=20
agreement. However, the jury also found that Sims=E2=80=99s =
failure to comply was=20
excused because of Washburn=E2=80=99s failure to comply with the =
same agreement,=20
because Washburn had repudiated the agreement, or because Washburn =
had=20
waived his rights under the agreement. The jury found that neither =
Sims=20
nor APR was unjustly enriched at Washburn=E2=80=99s expense and =
that Washburn was=20
not entitled to any damages. Furthermore, the jury found that =
Washburn and=20
Sims had agreed that Washburn would purchase 51% of APR for =
$279,795, that=20
Washburn had failed to comply with this agreement, and that Sims =
was=20
entitled to $36,000 in damages. The jury also found that Sims had=20
substantially relied to his detriment on Washburn=E2=80=99s =
promise, but that Sims=20
was not entitled to any damages for his =
reliance.
<=
/SPAN>The=20
trial court entered the final judgment on March 6, 2007. On April =
4, 2007,=20
Washburn filed both a motion for judgment notwithstanding the =
verdict and=20
a motion for new trial. In the motion for judgment notwithstanding =
the=20
verdict, Washburn complained that there was no evidence to support =
the=20
jury=E2=80=99s finding that Sims=E2=80=99s failure to perform was =
excused or that Washburn=20
had agreed to purchase 51% of APR for $279,795. In the =
alternative, he=20
argued that the jury=E2=80=99s finding that he had agreed to the =
$279,795 purchase=20
price was against the overwhelming weight of the evidence. =
Washburn asked=20
that the trial court disregard the jury=E2=80=99s findings that he =
had agreed to=20
the $279,795 purchase price, that he had failed to comply with =
that=20
agreement, and that Sims was entitled to $36,000 in damages. He =
argued=20
that because the agreement required no performance on his part, he =
could=20
not have failed to comply with any material obligation of such =
agreement.=20
Likewise, he argued that there was no evidence to support a =
finding that=20
he had repudiated the agreement or that he had intentionally =
relinquished=20
his right to recover the amounts paid by him.
<=
/SPAN>In=20
his motion for new trial, Washburn argued that =E2=80=9C[t]here =
was no evidence to=20
support the jury=E2=80=99s affirmative finding=E2=80=9D that =
Sims=E2=80=99s failure to perform his=20
obligation to repay Washburn was excused and, =
=E2=80=9Calternatively, [that] there=20
was insufficient evidence to support such findings or the jury =
finding was=20
against the overwhelming weight of the evidence.=E2=80=9D He =
raised identical=20
complaints regarding the jury=E2=80=99s findings that Washburn had =
agreed to the=20
purchase of 51% of APR for $279,795, that his breach entitled Sims =
to=20
$36,000 in damages, and that Sims had detrimentally relied on =
Washburn=E2=80=99s=20
promises.
<=
/SPAN>The=20
trial court denied Washburn=E2=80=99s motion for judgment =
notwithstanding the=20
verdict and motion for new trial on April 17, 2007. Washburn filed =
his=20
notice of appeal on May 21, 2007.
Legal =
and Factual=20
Sufficiency
Washburn argues five issues on appeal. =
In his=20
third issue, Washburn complains that the evidence was legally and=20
factually insufficient to support the jury=E2=80=99s finding that =
Washburn had=20
agreed to purchase 51% of APR for $279,795.00. In his first issue, =
Washburn complains that the evidence was legally and factually=20
insufficient to support the jury=E2=80=99s finding that =
Sims=E2=80=99s failure to repay=20
Washburn=E2=80=99s $20,000 when the sale of 51% of APR was not =
completed by March=20
15, 2005 was excused. The unobjected-to jury charge allowed the =
jury to=20
find that Sims=E2=80=99s compliance was excused if it also found =
that Washburn=E2=80=99s=20
had failed to comply with their agreement, that Washburn had =
repudiated=20
their agreement, or that Washburn had waived his rights under the=20
agreement. In his fourth =
issue,=20
Washburns complains that the evidence was legally and factually=20
insufficient to support the jury=E2=80=99s finding that Sims was =
entitled to=20
$36,000 in damages. In his second issue, Washburn complains that =
the=20
evidence was legally and factually insufficient to support the =
jury=E2=80=99s=20
finding that neither Sims not APR was unjustly enriched. In his =
fifth=20
issue, Washburn complains that the trial court erred in not making =
the=20
award of attorney=E2=80=99s fees contingent on Sims=E2=80=99s =
winning on appeal.
A. Standard=20
of Review
<=
/SPAN>In=20
a legal sufficiency, or =E2=80=9Cno-evidence,=E2=80=9D review, we =
determine whether the=20
evidence would enable reasonable and fair-minded people to reach =
the=20
verdict under review. =
City of=20
Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). In =
conducting this=20
review, we credit favorable evidence if reasonable jurors could =
and=20
disregard contrary evidence unless reasonable jurors could not. =
Id.=20
We consider the evidence in the light most favorable to the =
finding under=20
review and indulge every reasonable inference that would support =
it.=20
Id. at 822. We must sustain a no-evidence contention only =
if (1)=20
the record reveals a complete absence of evidence of a vital fact, =
(2) the=20
court is barred by rules of law or of evidence from giving weight =
to the=20
only evidence offered to prove a vital fact, (3) the evidence =
offered to=20
prove a vital fact is no more than a mere scintilla, or (4) the =
evidence=20
establishes conclusively the opposite of the vital fact. Id. =
at=20
810; Merrell =
Dow Pharm.,=20
Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997).
<=
/SPAN>In=20
reviewing a challenge to the factual sufficiency of the evidence, =
we must=20
consider and weigh all of the evidence and should set aside the =
judgment=20
only if it is so contrary to the overwhelming weight of the =
evidence as to=20
be clearly wrong and unjust. Arias v. Brookstone, =
L.P., 265=20
S.W.3d 459, 468 (Tex. App.=E2=80=94Houston [1st Dist.] 2007, pet. =
denied) (citing=20
Cain v. Bain, 709 S.W.2d 175, 176 (Tex. =
1986)).
<=
/SPAN>The=20
jury is the sole judge of witnesses=E2=80=99 credibility; it may =
choose to believe=20
one witness over another, and a reviewing court cannot impose its =
own=20
opinion to the contrary. Wilson, 168 S.W.3d at 819;=20
Arias, 265 S.W.3d at 468. Because it is the jury=E2=80=99s =
province to=20
resolve conflicting evidence, we must assume that jurors resolved =
all=20
conflicts in accordance with their verdict if reasonable human =
beings=20
could do so. Wilson, 168 S.W.3d at 819; Arias, 265 =
S.W.3d at=20
468.
<=
/SPAN>With=20
both legal and factual sufficiency complaints, the starting point =
for our=20
analysis when, as here, there is no complaint of charge error is =
the=20
charge actually submitted to the jury. Golden Eagle Archery, =
Inc. v.=20
Jackson, 116 S.W.3d 757, 762 (Tex. 2003) (factual =
sufficiency);=20
Osterberg v. Peca, 12 S.W.3d 31, 55 (Tex. 2000) (legal=20
sufficiency).
B. Terms=20
of the Agreement
<=
/SPAN>The=20
jury found that the parties had agreed that Sims would sell =
Washburn 51%=20
of APR for $279,795 and that Sims would refund the amounts paid by =
Washburn in the event that the sale of 51% of APR was not =
completed by=20
March 15, 2005.
<=
/SPAN>Washburn=20
argues that his only obligation under the letter of intent was to =
pay the=20
$20,000 mentioned in the letter of intent and that the parties had =
no=20
other agreement. Sims, on the other hand, argues that their prior =
purchase=20
agreement was =E2=80=9Cinextricably part=E2=80=9D of the letter of =
intent agreement and=20
that the letter of intent obligated Washburn to complete the =
purchase of=20
51% of APR. We must first determine whether the evidence was =
legally and=20
factually sufficient to support the jury=E2=80=99s determinations =
that the parties=20
agreed that Washburn would purchase 51% of APR for=20
$279,795.
<=
/SPAN>The=20
elements of a valid contract are (1) an offer, (2) an acceptance, =
(3) a=20
meeting of the minds, (4) each party=E2=80=99s consent to the =
terms, and (5)=20
execution and delivery of the contract with the intent that it be =
mutual=20
and binding. Prime Prods., Inc. v. S.S.I. Plastics, Inc., =
97 S.W.3d=20
631, 636 (Tex. App.=E2=80=94Houston [1st Dist.] 2002, pet. =
denied). In order to be=20
legally binding, a contract must be sufficiently definite in its =
terms so=20
that a court can determine the respective legal obligations of the =
parties. T.O. Stanley Boot Co. v. Bank of El Paso, 847 =
S.W.2d 218,=20
221 (Tex. 1992). The material terms of the contract must be agreed =
upon=20
before a court can enforce the contract. Id. When an =
essential term=20
of a contract is left open for future negotiations, there is no =
binding=20
contract, but only an agreement to agree. See Fort Worth Indep. =
Sch.=20
Dist. v. City of Fort Worth, 22 S.W.3d 831, 846 (Tex. =
2000); T.O.=20
Stanley Boot Co., 847 S.W.2d at 221. =E2=80=9CThe rules =
regarding=20
indefiniteness of material terms of a contract are based on the =
concept=20
that a party cannot accept an offer so as to form a contract =
unless the=20
terms of that contract are reasonably certain.=E2=80=9D Fort =
Worth Indep. Sch.=20
Dist., 22 S.W.3d at 846.
<=
/SPAN>The=20
letter of intent specifically stated, =E2=80=9CA definitive =
purchase agreement=20
will be negotiated and executed between [the parties].=E2=80=9D No =
price was named=20
in the letter of intent, and it specifically mentioned repayment =
of=20
=E2=80=9Cearnest money=E2=80=9D if =E2=80=9Can agreed upon price =
cannot be negotiated . . . .=E2=80=9D The=20
letter of intent clearly left the price =
undefined.
<=
/SPAN>Sims=20
argues that the price should be implied from the alleged oral =
agreement=20
between the parties and the purchase agreement drafted by Cammack =
but=20
never signed by both parties. However, =E2=80=9C[p]arties to a =
contract are bound=20
by its plain terms and their intentions are to be ascertained from =
the=20
language of the contract itself and not from what they supposed it =
to=20
contain.=E2=80=9D Bifano v. Econo Builders, Inc., 401 =
S.W.2d 670, 676 (Tex.=20
Civ. App.=E2=80=94Dallas 1966, writ ref=E2=80=99d n.r.e.). =
Furthermore, it is=20
well-established that when parties have integrated their agreement =
into a=20
single written memorial, all prior negotiations and agreements on =
the same=20
subject matter are excluded from consideration, whether they were =
oral or=20
written. Gary E. Patterson & Assocs. v. Holub, 264 =
S.W.3d 180,=20
197 (Tex. App.=E2=80=94Houston [1st Dist.] 2008, pet. denied) =
(=E2=80=9C[A] written=20
instrument presumes that all prior agreements relating to the =
transaction=20
have been merged into it and will be enforced as written and =
cannot be=20
added to, varied, or contradicted by parol testimony.=E2=80=9D); =
see Weitzman=20
v. Steinberg, 638 S.W.2d 171, 175 (Tex. App.=E2=80=94Dallas =
1982, no writ)=20
(=E2=80=9CCourts cannot make contracts for the parties and an =
agreement to enter=20
into negotiations in the future cannot be enforced because the =
court has=20
no means to determine what sort of contract the negotiations would =
have=20
produced.=E2=80=9D); Wooten Props., Inc. v. Smith, 368 =
S.W.2d 707, 709=20
(Tex. Civ. App.=E2=80=94El Paso 1963, writ ref=E2=80=99d) (stating =
that contract =E2=80=9Cshall be=20
enforced as it is written, according to the ordinary meaning and =
usage of=20
the words or terms involved, regardless of whether one or more of =
the=20
parties contracted wisely or foolishly, or created a hardship for=20
himself=E2=80=9D). The express terms of the written, signed letter =
of intent=20
conclusively negate Sims=E2=80=99s position that an agreement to =
purchase had=20
already been made. To the contrary, the letter of intent states =
that a=20
definitive purchase agreement would be negotiated and executed =
and, if=20
such an agreement was not executed by March 15, 2005, the $20,000 =
would be=20
returned to Washburn by July 1, 2005. Therefore, we hold that the =
evidence=20
was legally insufficient for the jury to conclude that Washburn =
had agreed=20
to purchase 51% of APR for $279,795. See Wilson, 168 S.W.3d =
at 810.=20
Thus, we need not determine if the evidence was factually =
sufficient to=20
support the finding.
<=
/SPAN>We=20
sustain Washburn=E2=80=99s third issue.
C. Excuse=20
for Sims=E2=80=99s Failure to Perform
<=
/SPAN>The=20
jury also found that Sims was excused from complying with the =
agreement.=20
The unobjected-to charge allowed the jury to excuse Sims based on=20
Washburn=E2=80=99s earlier failure to comply with the same =
agreement, repudiation,=20
or waiver. Washburn complains, in his first issue, that the =
evidence=20
supporting the jury=E2=80=99s finding on this issue was legally =
and factually=20
sufficient. We have already held that the evidence does not =
support a=20
breach-of-contract finding against Washburn because no agreement =
existed=20
for him to purchase 51% of APR. Washburn could not fail to comply =
with an=20
agreement that did not exist. Accordingly, we hold that no =
evidence=20
supports the jury=E2=80=99s finding that a breach by Washburn =
excused Sims=E2=80=99s=20
failure to repay Washburn $20,000.
<=
/SPAN>Nor=20
can Sims be excused based on a finding that Washburn repudiated =
the=20
agreement. A party=E2=80=99s performance is excused if the other =
party repudiates=20
a dependent performance. See El Paso Prod. Co. v. Valence =
Operating=20
Co., 112 S.W.3d 616, 621 (Tex. App.=E2=80=94Houston [1st =
Dist.] 2003, pet.=20
denied) (=E2=80=9CUpon a party=E2=80=99s repudiation of a =
contract, the nonrepudiating=20
party may treat the repudiation as a breach . . . .=E2=80=9D). =
Repudiation=20
consists of words or actions by a contracting party that indicate =
that he=20
is not going to perform his contract in the future. Leonard v.=20
Lane, 821 S.W.2d 275, 278 (Tex. App.=E2=80=94Houston [1st =
Dist.] 1991, writ=20
denied). It is conduct that shows a fixed intention to abandon, to =
renounce, and to refuse to perform the contract.=20
Id.
<=
/SPAN>The=20
only evidence that Sims presented in support of Washburn=E2=80=99s =
alleged=20
repudiation of their agreement related to Washburn=E2=80=99s =
unwillingness to=20
purchase 51% of APR for $279,795. Sims testified that he called =
Washburn=20
immediately after having received Washburn=E2=80=99s purchase =
agreement and that=20
Washburn =E2=80=9Cbacked down=E2=80=9D from the $113,534 purchase =
price and told Sims that=20
they would work something out=E2=80=94a statement clearly related =
to their=20
disagreement over the purchase price. Sims argues that this =
comment and=20
Washburn=E2=80=99s ultimate refusal to complete the purchase for =
$279,795=20
constituted a repudiation of their agreement. As we have already =
held, the=20
evidence does not support a finding that Washburn ever agreed to =
purchase=20
51% of APR for $279,795; thus, his refusal to complete the sale of =
51% of=20
APR at that price cannot constitute repudiation. Therefore, there =
is no=20
evidence that Washburn repudiated their agreement. Accordingly, we =
also=20
hold that no evidence supports the jury=E2=80=99s finding that =
Sims was excused=20
from complying with the agreement on this basis. See =
Wilson, 168=20
S.W.3d at 810; El Paso Prod. Co., 112 S.W.3d at=20
621.
<=
/SPAN>Similarly,=20
Sims cannot be excused on the basis of waiver. Waiver is defined =
as =E2=80=9Can=20
intentional relinquishment of a known right or intentional conduct =
inconsistent with claiming that right.=E2=80=9D Jernigan v. =
Langley, 111=20
S.W.3d 153, 156 (Tex. 2003). Waiver is largely a matter of intent, =
and for=20
implied waiver to be found through a party=E2=80=99s actions, =
intent must be=20
clearly demonstrated by the surrounding facts and circumstances.=20
Id. There can be no waiver of a right if the person sought =
to be=20
charged with waiver says or does nothing inconsistent with an =
intent to=20
rely upon such a right. Id.
<=
/SPAN>Sims=20
argues that Washburn waived his right to enforce the agreement =
when=20
Washburn =E2=80=9Cbacked down=E2=80=9D from the $113,534 purchase =
price and told Sims that=20
they could work something out. Again, this is related to =
Sims=E2=80=99s and=20
Washburn=E2=80=99s disagreement over the purchase price and does =
not demonstrate=20
Washburn=E2=80=99s intent to waive his right to enforce the =
repayment provision in=20
the letter of intent. Furthermore, Washburn attempted to collect =
the money=20
that he had paid to Sims and APR on several occassions before =
filing this=20
suit.
<=
/SPAN>Sims=20
also argues that the jury could have implied waiver to prevent =
fraud or=20
inequitable consequences based on the testimony that Washburn =
waited 10=20
minutes after sending the letter of intent before he sent the =
purchase=20
agreement. =E2=80=9CWaiver by implication will be applied only to =
prevent fraud or=20
inequitable consequences and, thus, an implied waiver must be =
evidenced by=20
clear, unequivocal, and decisive acts from which can be inferred =
the=20
intention to relinquish the right.=E2=80=9D Taub v. Houston =
Pipeline Co.,=20
75 S.W.3d 606, 624 (Tex. App.=E2=80=94Texarkana 2002, pet. =
denied). The timing of=20
Washburn=E2=80=99s faxes is not a =E2=80=9Cclear, unequivocal, and =
decisive=E2=80=9D act from=20
which one can infer his intention to relinquish his right to =
enforce the=20
repayment provisions of the letter of intent. Therefore, we hold =
that=20
there is no evidence that Washburn said or did anything =
inconsistent with=20
his intent to rely on his right to enforce the repayment =
provision. We=20
thus hold that no evidence supports the jury=E2=80=99s finding =
that Sims was=20
excused from performing on this basis. See Wilson, 168 =
S.W.3d at=20
810; Jernigan, 111 S.W.3d at 156.
<=
/SPAN>Given=20
our holdings, we need not reach Washburn=E2=80=99s factual =
sufficiency challenge=20
to these findings.
D. Damages=20
and Attorney=E2=80=99s Fees
<=
/SPAN>In=20
his fourth issue, Washburn complains that the jury=E2=80=99s =
finding that Sims was=20
entitled to $36,000 in damages was not supported by legally and =
factually=20
sufficient evidence. The jury awarded Sims damages based on =
Washburn=E2=80=99s=20
failure to comply with his purported agreement with Sims to =
purchase 51%=20
of APR for $279,795. However, as we have already held, the =
evidence was=20
insufficient to support the jury=E2=80=99s finding that Sims and =
Washburn had ever=20
reached such an agreement. Therefore, we hold that the evidence is =
legally=20
insufficient to support the award of any damages for =
Washburn=E2=80=99s failure to=20
comply. See Wilson, 168 S.W.3d at 810.
<=
/SPAN>We=20
sustain Washburn=E2=80=99s fourth issue.
<=
/SPAN>In=20
his second issue, Washburn argues that the evidence was legally =
and=20
factually insufficient to support the jury=E2=80=99s finding that =
neither Sims nor=20
APR was unjustly enriched at Washburn=E2=80=99s expense. We =
overrule this issue=20
because it was not preserved.
In his fifth issue, Washburn argues that =
the trial=20
court erred in not making the award of attorney=E2=80=99s fees on =
appeal=20
contingent to Sims=E2=80=99s winning the appeal. We need not =
consider this issue=20
because its resolution would not alter our disposition of this =
appeal=E2=80=94our=20
previous holdings have already granted Washburn all of the relief =
that he=20
requested. See Tex. R. App.=20
P. 47.1.
Conclusion
<=
/SPAN>The=20
trial court erred in denying Washburn=E2=80=99s motion for =
judgment=20
notwithstanding the verdict. We reverse the judgment of the trial =
court=20
and render judgment that Sims and APR take nothing from Washburn =
and that=20
Washburn be awarded $20,000 from Sims.
Tim Taft
&=
nbsp; Justice=
Panel consists of Justices Taft, Bland, =
and=20
Sharp. |