Opinion
NO. 01-10-01073-CV
04-26-2012
MARY GRET MCKENZIE D/B/A GEN'S ANTIQUES AND MARY GRET MCKENZIE, Appellants v. POSITIVE ACTION INTERNATIONAL, INC. D/B/A GRACE HART & COMPANY, Appellee
On Appeal from the 80th District Court
Harris County, Texas
Trial Court Case No. 2008-16738
MEMORANDUM OPINION
This case arises from a dispute between a lessee and its commercial landlord. Appellants, Mary Gret McKenzie d/b/a Gen's Antiques and Mary Gret McKenzie (collectively, "Gen's Antiques"), leased retail spaces in an antiques mall from appellee, Positive Action International, Inc. d/b/a Grace Hart & Co. ("Hart & Co."). Gen's Antiques alleged multiple causes of action, including constructive eviction and breach of contract, and Hart & Co. alleged a counterclaim for breach of contract. The jury returned a verdict in favor of Hart & Co. Following a series of post-trial rulings, the trial court entered a final modified judgment ordering that both parties take nothing. In eight points of error, Gen's Antiques argues that: (1) the jury's findings that Hart & Co. did not constructively evict it and did not breach the leases were erroneous because "there was overwhelming and uncontroverted evidence" against those findings; (2) the trial court erred in denying its motion for judgment notwithstanding the verdict on its constructive eviction and breach of contract claims; (3) the jury's adverse finding on its breach of contract claim was also improper because Hart & Co.'s failure to pay Gen's Antiques its sales proceeds constituted a breach of the leases; (4) the jury's finding that Hart & Co. did not breach an oral agreement was incorrect because Hart & Co. failed to pay Gen's Antiques its sales proceeds; (5) the jury erred in failing to award damages on its constructive eviction, breach of lease, and breach of oral agreement claims; (6) the trial court erred in refusing a jury question on its breach of trust claim; (7) the jury erred in failing to award it attorney's fees based on its claims of breach of written and oral contracts; and (8) the trial court erred in denying its motion for new trial based on improper jury argument.
Hart & Co. asserts five cross-points, arguing that the trial court: (1) erred in entering judgment that it take nothing based on the argument that "no live pleading" supported its recovery for breach of contract and attorney's fees; (2) abused its discretion in finding "no live pleadings"; (3) erred in modifying the judgment based on an issue not objected to at trial and therefore waived by Gen's Antiques; (4) erred in modifying the judgment based on an issue not presented in a motion for new trial and therefore waived by Gen's Antiques; and (5) abused its discretion in exercising plenary power to modify the judgment based on an issue not presented in a motion for new trial.
We affirm in part and reverse and remand in part for the trial court to render judgment on the jury's verdict.
Background
A. Relationship of Parties
Hart & Co. operated an antiques mall and leased spaces to various merchants for the sale of antiques and collectibles. Gen's Antiques leased space consisting of four booths and two window spaces and paid the related security deposits consisting of one month's rent. Gen's Antiques also signed a lease and paid a security deposit for two more desirable window spaces that it planned to move into in February 2008.
In addition to providing the terms of booth location, rent, and permissible uses of the premises, the leases included the following terms relevant to this case:
• TERM . . . This lease shall be month-to-month.(Emphasis in original).
• Lessee [Gen's Antiques] has deposited with Lessor [Hart & Co.] [an amount equal to one month's rent] as security for the prompt performance by Lessee of each and every duty of Lessee under this Lease. Under the circumstances of any default by Lessee, Lessor may apply or retain all or any part of such security to remedy the default or to reimburse Lessor for any amount which Lessor may spend as a result of the default. . . .
• Any of the following occurrences or acts shall constitute an event of default under this lease:A. If Lessee, at any time during the Term, shall . . . fail to make any payment of rent, late fees or other sum herein required to be paid by Lessee . . . or fails to observe or perform any other provisions hereof for thirty days after Lessor shall have delivered to Lessee written notice of such failure, or• In the event [a] default shall have occurred, Lessor shall have the right at its election, then or at any time thereafter, to give [L]essee written notice of Lessor's election to terminate this Lease on a date specified in such notice. Upon the giving of such notice, this Lease and the estate hereby granted shall expire and terminate on such date as fully and completely and with the same effect as if such date were the date hereinbefore fixed for the expiration of the Term, and all rights of Lessee hereunder shall expire and terminate and Lessor shall forfeit Lessee's deposit.
. . . .
B. If the premises shall have been abandoned, provided that the premises shall be deemed to have been abandoned if Lessee transfers a substantial part of Lessee's operations, business and personnel from the premises to another location or fails to carry on its business at the premises for a period of two consecutive weeks.
• This agreement shall be deemed to include the Positive Action International Inc., dba Grace Hart & Co., policy (a copy of which has been provided to Lessee) and Exhibits A attached hereto and made a part hereof. In the event of a conflict between this lease and the Positive Action International Inc., dba Grace Hart & Co., policy, this lease will prevail.
• Unless otherwise provided herein, any notice, tender, or delivery to be given hereunder by either party to the other may be effected by placing such notice, tender or delivery in the party's mail slot at Positive Action International Inc., dba Grace Hart & Co., by personal delivery in writing or by registered or certified mail, postage prepaid, return receipt requested, and shall be deemed received as of mailing.
• Lessor expressly grants Lessee the right to terminate this lease before the end of the lease period. If Lessee elects to exercise this right, Lessee must:1. Provide written notice to Lessor on or before the first of the month prior to the month Lessee intends to vacate the premises.
2. Pay Lessor all sums for rent, advertising, work days, etc. as due.
3. Vacate the premises as otherwise described in this lease. Lessor agrees to refund Lessee's deposit (subject to the conditions of Section 3.2 [providing the Lessor may keep all or any part of deposit in event of any default by Lessee]) if Lessee elects to exercise his right to terminate as described above.
Exhibit A, attached to the lease and expressly incorporated into the terms of the lease, provided general policies regarding specific deadlines and late fees for paying rent, the number of days the lessee is required to work at the antique mall and related policies, guidelines for proper maintenance of the space, and store hours. It also provided that lessees like Gen's Antiques were required to conduct all sales through the "front desk at Grace Hart & Co.," but it did not provide specific procedures for the reimbursement of payments made to Hart & Co. for the lessee's merchandise.
This suit arose from a dispute that occurred on December 11, 2007. Gen's Antiques argues that Grace Hart, president of Hart & Co., became irrational and told McKenzie and her business partner, Gregory Nolte, to leave the premises and never come back. Hart & Co. argues that McKenzie is the one who became angry and chose to leave the mall without giving notice as required by the leases.
Hart & Co. sent Gen's Antiques a letter dated December 12, 2007 to the address "805 Sandman, Houston, TX." This letter stated,
This is to inform you that since you defaulted on the contract and moved out on your own volition, you automatically forfeit all your deposits. Please refer to [the section of the lease describing acts constituting default].
Effective with this letter, neither you, Gret Morgan McKenzie or your associate Gregory Joseph Nolte are permitted on or in the premises of Grace Hart and Company. . . .
All further communications are to be presented to attorney Walter Wright . . . and not to us. Any checks that you may have coming will be mailed within 5 days of our normal processing date.
We are sorry that you have elected to take this action and we wish you success in whatever plans you have for the future.
Hart & Co.'s attorney sent a second letter to both McKenzie and Nolte dated December 17, 2007. The letter stated that it was in reference to
your trespass upon and around the premises of Grace Hart & Company at 313 West 19th Street; your slander and/or libel of Ms. Hart and Grace Hart & Co. directed toward the dealers in the shop andThe December 17, 2007 letter went on to inform McKenzie and Nolte that "your inappropriate and uncalled for actions . . . will no longer be tolerated." They were advised not to enter the premises under any circumstances or confront, make comment to, or interfere with any employees, dealers, or patrons. The letter concluded:
more especially toward prospective shop patrons; your terroristic threats upon Ms. Grace Hart and your disorderly conduct and drunkenness in and around the premises of Grace Hart & Company.
Your recent conduct and acts of slander and/or libel have already resulted in an actionable cause of action against you for monetary and punitive damages. Your theft and misuse of the confidential business records of Grace Hart & Co. will result in criminal charges being filed against you personally under all applicable criminal statutes and laws that apply in Harris County, in the City of Houston, in the State of Texas or in the United States.
B. Pleadings of Parties
On March 31, 2008, Gen's Antiques filed suit against Hart & Co., alleging breach of contract for Hart & Co.'s "forceful and unlawful eviction without notice," breach of lease for failing to comply with the terms of the leases, breach of trust and money had and received for Hart & Co.'s alleged failure to tender payment of funds from the sales of Gen's Antiques' merchandise, defamation and business disparagement, conversion, theft, intentional infliction of emotional distress, and attorney's fees. Gen's Antiques subsequently amended its petition, dropping its claims for defamation, business disparagement, civil theft, and intentional infliction of emotional distress and adding a claim for constructive termination of the lease.
On July 1, 2009, Hart & Co. filed its "First Amended Original Answer and Counter Claim." It included general and verified denials of Gen's Antiques' claims and also asserted counterclaims for interference with contract rights and business relations. Hart & Co. subsequently filed a second amended answer and counterclaim, adding a claim for breach of contract for Gen's Antiques' alleged breach of the lease agreements. Specifically, Hart & Co. alleged that it had "performed all of the promises and covenants of this agreement for which it was promisor. In the alternative, if need there be, [Hart & Co.] has substantially performed all of the promises and convenants concurrent or conditions precedent have occurred or been excused for which [it] was the obligor." Hart & Co. alleged that Gen's Antiques breached the lease by failing "to pay all rent[,] late fees[,] and charges due" under the lease, by failing to provide the "required written notice thirty days prior to terminating the month to month tenancy and vacating the property," and by behaving "in a manner which is abusive toward customers, other dealers, or Lessor or their guests." Hart & Co. also claimed it was entitled to attorney's fees on its breach of contract claim.
On March 29, 2010, Hart & Co. filed its third amended answer and counterclaim. This document again alleged various verified denials and affirmative defenses, and it again included Hart & Co.'s claim of interference with contract rights and business relations. This counterclaim was related in paragraphs fourteen and fifteen. In language identical to that used in Hart & Co.'s second amended answer and counterclaim, paragraph sixteen alleged that Hart & Co. and Gen's Antiques entered into several lease agreements. Again tracking the same language as in its second amended counterclaim, paragraph seventeen began, "Counter-Plaintiff has totally performed all of the promises and covenants of this agreement for which it was the promisor." However, paragraph seventeen cut off after stating, "In the alternative, if need there be, Counter-Plaintiff[. . . .]" The next page begins with paragraph twenty-two, stating, "Further pleading Counter-Plaintiff avers that Counter-Defendants, Mary Gret McKenzie d/b/a Gen's Antiques and Mary Gret McKenzie [have] withheld the last month's rent on grounds that the security deposit is security for unpaid rent. Counter-Plaintiff avers that Counter-Defendants, Mary Gret McKenzie d/b/a Gen's Antiques and Mary Gret McKenzie [have] acted in bad faith and the Counter-Plaintiff is entitled to relief pursuant to [section] 93.010 of the Property Code."
C. Trial on Merits and Jury's Findings
The jury trial occurred in April 2010. Greg Nolte, one-time partner and current employee of McKenzie and Gen's Antiques, testified about the general structure of an antique mall. He stated that Hart & Co. leased spaces to various antique and collectibles dealers, that they all "worked collectively" to operate the mall, and that "all the sales are collected at a single source at the front door and then the sales are distributed on a weekly basis." He testified that each dealer would get a "settlement report" or record of its sales and was then "issued a check for that total amount." He testified that, as of December 2007, Gen's Antiques leased four booths and two window spaces from Hart & Co. and that Gen's Antiques had paid security deposits totaling $1,421.75 on the four booths and $150 for the window spaces. He further testified that Gen's Antiques had paid a $160 deposit for two more desirable window spaces because it anticipated moving into those spaces in February 2008.
Nolte testified that the dispute with Hart & Co. involved a special event called "Mistletoe Madness," which was a holiday event that many businesses in the Heights area, where Hart & Co. is located, participated in. Nolte and McKenzie agreed to provide wine and seafood étouffée, as they had on previous occasions, in exchange for Hart & Co. paying half the estimated cost "a couple of weeks" in advance and the other half "a few days before" the event. Nolte testified that, on this occasion, Hart & Co. did not pay him in a timely manner. He later acknowledged on cross-examination that a Hart & Co. employee brought him an envelope that he refused to accept on Friday, December 7, 2007, the day of the event, testifying that he was too busy at that time—"the product was already purchased and I was cooking rice for a thousand people at that point." Hart & Co. argued that the envelope contained the cash payment owed to Nolte, and Nolte agreed that it "probably" did.
He stated that he and McKenzie arrived to work their scheduled day at the antiques mall on December 11, 2007, and were summoned to Grace Hart's office. Hart paid them for their expenses related to the Mistletoe Madness event. On cross-examination, Nolte further stated that he and McKenzie were upset at not having received the money sooner, because they needed it to purchase wine and food prior to the day of the event. He testified that, in response to Hart's saying "here's your money" and "throwing [the envelope] down on the desk," McKenzie said, "[I]t's the principle of the thing, Grace." Following this brief exchange, Hart then "started hitting the desk" and claiming, "[Y]ou are saying I have no principles." Nolte testified that
Ms. Hart said get out, get out of my store now. I raised my hand, I said excuse me. Are you saying get out of your office or get out of your store, and she said get out of the store now. Then she got on her phone and she was screaming, they're blocking the door, they're killing me, they are assaulting me. I quickly thought, we need to get out on the public floor, we do not need to raise this volatile situation any further. We need to retreat quickly. It was irrational behavior.Nolte testified that Hart's irrational behavior continued once they left Hart's office, as Hart followed him and "continu[ed] to harass" him. He testified that Hart pointed at McKenzie and said, "[Y]ou're an alcoholic," then pointed at him and screamed, "[Y]ou are mean people." He testified that McKenzie asked about the return of their deposits, and Hart indicated that her husband, Grant Hart, would be at the antiques mall that afternoon to return the deposits. Nolte stated that he and McKenzie then left the premises and that they never received the deposits.
Nolte testified that Hart & Co. did not give Gen's Antiques any notice that it needed to leave the store prior to that incident and that he and McKenzie had expected to continue working with Hart & Co. through the busy Christmas season and in the future. He pointed out that Gen's Antiques had just had business cards printed with the address at Hart & Co.
Nolte also testified regarding his and McKenzie's receipt of the December 12, 2007 letter and stated that he was "stunned" to read that Hart & Co. claimed that Gen's Antiques moved out of its own volition. He testified that Gen's Antiques did not take any legal action at that time, however, because he and McKenzie "still thought we were going to get paid for our sales and that was the big deal." Nolte further related that Gen's Antiques was expecting its "weekly sales previous to December 11th when we were kicked out, plus several thousand dollars, 3,000 or whatever plus in layaway sales at that time that we had due to be collected over the next several months." He testified that Gen's Antiques received one check for approximately $2,100 "shortly after we received this letter." He testified that, after receiving that check via certified mail at the address on Sandman, Gen's Antiques did not receive any further checks.
Nolte testified that McKenzie and her cousin owned the property at 805 Sandman, the address where they received the December 12, 2007 letter and one check, and that he lived at a different property located on Sandman. He further testified that no one lived at 805 Sandman in January 2008 or throughout that year. McKenzie testified that she lived at 805 Sandman at the time of trial, but she did not live there from spring of 2006 through spring of 2008.
He also testified regarding his impressions upon receiving, on February 20, 2008, the letter dated December 17, 2007. He testified that he was, "[a]gain, shocked, I couldn't believe the terroristic threats et cetera that I was accused of in this letter." He stated that he could not recall any event or occurrence that precipitated the writing of that letter and that the "only reason I had re-entered or approached to enter the premises . . . was to deliver furniture" within the week after Gen's Antiques was evicted from the property. He testified that he advised Hart on December 12, 2007, as Gen's Antiques was moving out of the property, that he would need to return with furniture that was on layaway. He also testified that after Gen's Antiques moved out of Hart & Co.'s premises on December 12, it put all of the merchandise into storage. Following the receipt of the letter dated December 17, 2007, Gen's Antiques contacted Hart & Co.'s lawyer to request its deposits, rents, and costs of moving and storing its merchandise. Nolte testified that Gen's Antiques discovered the existence of other correspondence sent by Hart & Co. and the remaining settlement statements only after suit was filed, during Grace Hart's deposition. Based on that information, Gen's Antiques calculated that Hart & Co. owed it $3,109.09 for sales of Gen's Antiques' merchandise that had been previously collected by Hart & Co..
On cross-examination, Nolte acknowledge that Gen's Antiques received one letter and one check from Hart & Co. at 805 Sandman, but he denied ever seeing the four other certified mail envelopes containing the settlement statements and checks that Hart & Co. had mailed to that address. He testified that "all of our business mail goes to P.O. Box 980217." However, Nolte also acknowledged that the address listed for Gen's Antiques with the State Comptroller of Accounts for sales tax purposes in February 2008, around the same time Hart mailed some of the remaining checks, was the address at 805 Sandman.
McKenzie also testified. She confirmed that Gen's Antiques leased space from Hart & Co. and that she listed a post office box address on each of the leases with the intent that it be used for purposes of business correspondence. She testified that, although she owned the property at 805 Sandman, she did not live there during the time in question because the house needed "a lot more construction to then get move-in ready. . . ."
Regarding the events of December 11, 2007, McKenzie testified that, after Grace Hart handed over the envelope containing Nolte's reimbursement for expenses related to Mistletoe Madness, Hart said to McKenzie, "[Y]ou don't like me, do you?" McKenzie testified that she responded, "[W]hether I like you or not has nothing to do with the fact that you didn't give us our money when you said you were. I said it's about the principle." McKenzie testified that Hart then began pounding her fists on the desk and screaming and eventually told her "get out, get out now." McKenzie testified that Nolte asked, "[D]o you mean get out of your office or do you want us to get out of this store?" Hart "screamed again, get out ofthis store. Get out of this store now." McKenzie further testified that Hart called her husband and told him, "[T]hey are trying to kill me, they are assaulting me, they will not let me out of my office, they're blocking the door," in spite of the fact that she and Nolte were not blocking the door or assaulting or threatening her in any manner.
McKenzie testified that she and Nolte decided they needed get out to the front of the store and that Hart followed behind them and yelled, "[Y]ou're an alcoholic. And then she yelled at Greg, you're a mean person." McKenzie then crossed to the other side of the store and asked the dealer who was working at the desk on that side to come "[b]e a witness that this woman has just thrown us out." She also asked the bookkeeper to witness Hart's remarks that she was throwing Gen's Antiques out of the antique mall and that she had called McKenzie an alcoholic. McKenzie testified that she made these statements to the two witnesses in front of Hart and that "Hart never denied any of it." She then told Hart that she expected to get her deposits back that afternoon, and Hart responded that her husband, Grant Hart, would bring them that afternoon. McKenzie testified that she and Nolte left at that time, purchased packing materials, and returned to begin packing up. Grant Hart never arrived with the deposit money. She acknowledged that "[t]here were no dealers on the 11th or 12th moving their items in" to Gen's Antiques' booths and window spaces. She further testified that Gen's Antiques moved out of Hart & Co. because "[Hart] threw us out. And we would not stay there because the lady . . . acted very crazy." She testified that Gen's Antiques vacated the property involuntarily.
These individuals did not testify at the trial.
Regarding the letter dated December 12, 2007, McKenzie further testified that when she received it she thought, "[Y]ou must be kidding me. She knows we know she threw us out." She was similarly shocked upon receiving the letter dated December 17, 2007 and thought that Hart was lying about the events referenced in that letter. McKenzie also testified that she did not receive the four letters that Hart & Co. sent by certified mail with the remaining settlement statements and checks.
McKenzie further testified regarding Gen's Antiques' damages resulting from the events of December 11, 2007 and the amount of the deposits Gen's Antiques had paid in accordance with the terms of the leases. This testimony was consistent with the damages and amounts related by Nolte.
On cross-examination, McKenzie testified that she had some personal experience with the eviction process as a result of her ownership of rental property, and she acknowledged that Gen's Antiques was not removed from Hart & Co.'s premises through any formal or legal process. She "was just told to get out and get out now." She also testified again that she never saw the envelopes containing the checks sent by Hart & Co. and that she did not recall receiving any slips from the post office attempting to deliver them. She opened the envelopes in court and confirmed that they contained settlement statements and checks from Hart & Co. to Gen's Antiques. McKenzie also confirmed that the address registered with the Texas Comptroller's Office in February 2008 and her voter registration address was 805 Sandman.
Grace Hart testified, consistent with Nolte's testimony, that Hart & Co. and Gen's Antiques entered into leases for four floor spaces and two window spaces that were in effect in December 2007 and that Gen's Antiques had paid the deposits associated with those leases. She acknowledged that the address McKenzie listed on the leases was a post office box and not the address on Sandman.
Hart testified that she did not "kick out" Gen's Antiques. She testified that, following the incident on December 11, when Gen's Antiques began packing up its merchandise, she asked another dealer, Cathy Merrill, to call other dealers and invite them to display merchandise in Gen's Antiques' spaces. She testified that she did not begin this process until December 12, the day that Gen's Antiques removed all of its merchandise. She stated that she did this because "I had half my shop empty practically, all that whole side and all the windows and it was the holidays. And I was terrified, of course. So I told Cathy . . . [that] every dealer that can [could] bring stuff to fill that side up and you get all the money that you make from those places so that I wouldn't have an empty store."
Regarding the letter dated December 17, 2007, Hart testified that she and her husband asked their attorney to send it because "[w]e wanted them to stay away from us totally and completely. We wanted to make a statement that they needed to just leave us alone." She was concerned that McKenzie "was going to be contacting our dealers and starting more trouble than there was already," and she did not want McKenzie and Nolte "to hang around in the front [of the property] smoking cigarettes and talking to our dealers." She further testified that she believed the letter conveyed her intent that if McKenzie or Nolte returned to the premises or attempted to contact her dealers, she would pursue further action, and that she and her husband "felt we had to be strong because they were pretty powerful and we felt like we had to be strong."
Hart testified that she attempted to distribute to Gen's Antiques its sales proceeds following the incident on December 11, 2007, and she acknowledged that Hart & Co. continued to send the checks and settlement statements by certified mail, requiring the recipient's signature, to the Sandman address in spite of the fact that previous letters were returned undelivered. Hart testified that she believed that they were delivered but that McKenzie refused to sign for them or accept them. She testified that she used the certified mail procedure that she did because she was concerned about security, and she testified that she was not familiar with the procedure for a recipient to sign for a delivery to some location where the recipient would not be physically present, like a post office box.
Attorneys for both parties testified regarding their attorney's fees. Gen's Antiques' attorney testified that his firm had billed Gen's Antiques for $74,618.45 in connection with this case, not including the trial or "billable expenses," and he provided detailed testimony about his qualifications and other information about the firm's representation of Gen's Antiques. He also testified that expenses from trial would be approximately $12,000, and he provided specific testimony regarding the factors he considered in reaching the total amount of attorney's fees.
Hart & Co.'s attorney, Jeffrey Gillespie, testified regarding his own attorney's fees. Gen's Antiques did not object to his testifying on this topic. He testified regarding his qualifications and that he has been paid a total of $5,000 by Hart & Co., but that he believed the total value for the work performed on the breach of contract claims was $15,000. He testified that he did not keep time records of the work he performed for Hart & Co., as he usually billed his clients on a flat-rate basis. He also testified that the amount of $15,000 represented only work he did on the breach of contract claim because "the only matter which I'm entitled to attorney's fees is on a claim for breach of contract." Gillespie acknowledged that he began representing Hart & Co. in April 2009, a little more than a year after Gen's Antiques' counsel became involved.
After the close of evidence, Hart & Co. moved to nonsuit its tortious interference claim and its claim that McKenzie conspired with Gen's Antiques to tortiously interfere with Hart & Co.'s contractual and business relations, which the trial court granted. Gen's Antiques amended its pleadings, with leave of the trial court, to assert a claim that Hart & Co. breached an oral agreement with Gen's Antiques by failing to turn over sales proceeds and layaway funds collected by Hart & Co.
The proposed charge contained questions regarding (1) whether Hart & Co. constructively evicted Gen's Antiques, (2) whether Hart & Co. complied with the terms of the lease agreements, (3) if it found Gen's Antiques was not constructively evicted, whether Gen's Antiques complied with the terms of the lease agreements, (4) whether Hart & Co. complied with an oral agreement with Gen's Antiques regarding distribution of sales proceeds, (5) if it found in favor of Gen's Antiques, the damages suffered by Gen's Antiques related to lost rent, moving costs, storage costs, lost profits, and lost deposits, (6) if it found in favor of Hart & Co., the amount of damages related to Gen's Antiques' breach of the leases, (7) whether Hart & Co. converted property from Gen's Antiques, (8) the amount of damages for conversion, if any, (9) if it found in favor of Gen's Antiques on the issue of conversion, whether any harm to Gen's Antiques was caused by malice, (10) if it found malice, the amount of exemplary damages to be assessed in favor of Gen's Antiques, (11) if it found in favor of Gen's Antiques on the issues of breach of the lease or oral agreement, the amount of reasonable and necessary attorney's fees to be awarded to Gen's Antiques, and (12) if it found in favor of Hart & Co. on the issue of breach of the lease, the amount of Hart & Co.'s reasonable and necessary attorney's fees.
At the charge conference, Gen's Antiques requested that the trial court include jury questions on the issues of breach of trust, breach of lease, money had a received and civil theft. The trial court refused to include questions on these issues. Gen's Antiques did not present any objection to the presence of a jury question on Hart & Co.'s counterclaims for breach of contract and attorney's fees. Hart & Co. objected to the form of jury question number eleven on attorney's fees, which the trial court overruled. Hart & Co. also sought to have a question included asking the jury if it found that Hart & Co. had tendered payment to Gen's Antiques, which the trial court also rejected.
The record does not contain written proposed jury questions on these issues or other detailed explanation of the language Gen's Antiques sought to have submitted in these charges.
Following the parties' closing arguments, the jury found that: (1) Hart & Co. did not constructively evict Gen's Antiques from the premises; (2) Hart & Co. did not fail to comply with the terms of the lease agreements in effect in December 2007; (3) Gen's Antiques failed to comply with the terms of the lease agreements; and (4) Hart & Co. did not fail to comply with an oral agreement with Gen's Antiques regarding distribution of sales proceeds. It found $1 in damages for Hart & Co. based on Gen's Antiques' failure to comply with the terms of the leases and $15,000 as Hart & Co.'s reasonable and necessary attorney's fees incurred on this claim. Finally, the jury found that Hart & Co. did not convert property from Gen's Antiques. The jury did not answer questions five, eight, nine, ten, or eleven regarding damages for Gen's Antiques because the need to provide an answer to those questions was expressly contingent on a finding in favor of Gen's Antiques on the issues of breach of lease, breach of oral agreement, or conversion.
D. Post-Trial Motions and Entry of Judgment
Gen's Antiques moved for judgment notwithstanding the verdict ("JNOV"), arguing that it had presented evidence supporting its claims that Hart & Co. breached the oral and written contracts and constructively evicted it. This motion also argued that Hart & Co. was not entitled to damages for breach of contract or for attorney's fees, but it did not argue that these claims were not supported by the pleadings. On August 6, 2010, the trial court denied Gen's Antiques motion for JNOV.
Hart & Co. moved to disregard the jury's answer to question six, regarding damages that resulted from Gen's Antiques' failure to comply with the terms of the lease. Hart & Co. argued that the jury's answer of $1 was not supported by the record because it had presented evidence of a much greater amount of damages in the form of January rent payments. Gen's Antiques responded by arguing that, while several witnesses testified regarding the amount of rent that Gen's Antiques paid to Hart & Co., Grace Hart did not testify that Hart & Co. was owed rent for the month of January or about the amount of rent due.
Hart & Co.'s motion to disregard the jury's answer to the question of its damages for breach of contract does not appear in the record. The information regarding its motion is taken from Gen's Antiques' response to the motion.
On August 31, 2010, the trial court entered judgment reciting the findings of the jury and finding "that the jury answer to Question Number Six should be disregarded since it is against the great weight and preponderance of the evidence and is inconsistent with recoverable damages under Texas law, and that [Hart & Co.] should have judgment against [Gen's Antiques] for its damages from breach of the lease in the amount of $1571.75, comprised of the rent due for January 2008, together [with] prejudgment interest and reasonable and necessary attorney's fees in the amount of $15,000." It also ordered that Gen's Antiques take nothing from Hart & Co.
Finally, it ordered, "in equity, that [Hart & Co.] pay the amount of $3,109.09 to [Gen's Antiques], which represents the money collected by [Hart & Co.] for the benefit of [Gen's Antiques] for sales proceeds from [Gen's Antiques'] merchandise which the Court finds was held under a constructive trust."
On September 10, 2010, Gen's Antiques moved for a new trial, arguing that it was entitled to judgment in its favor on the issues of constructive eviction, breach of lease, breach of contract, breach of oral contract, conversion, and attorney's fees. It also argued that Hart & Co. was not entitled to attorney's fees because the award of attorney's fees was based on the allegedly erroneous finding that Gen's Antiques breached the leases, because Hart & Co. failed to "present its claim for breach of lease to Gen's prior to the filing of same as required by [Texas Civil Practice and Remedies Code section] 38.002(2)," and because it failed to present legally and factually sufficient evidence of its attorney's fees. Finally, Gen's Antiques argued that a new trial was appropriate based on improper jury argument made by Hart & Co.'s attorney. Gen's Antiques did not argue in this motion for new trial that Hart & Co. failed to plead a breach of contract claim or a claim for attorney's fees.
On September 30, 2010, Gen's Antiques moved for remittitur of the $15,000 in attorney's fees that the trial court's judgment had awarded to Hart & Co., arguing that the evidence was insufficient to support that award. The motion for remittitur again argued that the trial court erred in awarding attorney's fees under Civil Practice and Remedies Code section 38.001 because Hart & Co. failed to present its claim to Gen's Antiques or its agent as required by section 38.002.
On December 8, 2010, Hart & Co. argued in a letter brief that it presented its claim to Gen's Antiques in its December 12, 2007 and December 17, 2007 letters. It argued in the alternative that Gen's Antiques waived this issue by failing to plead a verified denial or object to the admission of evidence of Hart & Co.'s attorney's fees.
In a letter dated December 9, 2010, Gen's Antiques' counsel argued for the first time that the trial court's award of damages to Hart & Co. for breach of contract and the resulting attorney's fees was improper because it "has not pled breach of contract, breach of lease or any fact pattern which might constitute reasonable notice of such causes of action in Hart & Co.'s Third Amended Petition filed on March 29, 2010. . . ." Gen's Antiques also argued that the December 12 and December 17, 2007 letters did not make a demand for any payment or otherwise provide notice of Hart & Co.'s breach of contract claim. Gen's Antiques supplemented this letter on December 10, 2010, addressing the fact that Hart & Co.'s third amended petition and counterclaim skipped from paragraph seventeen to paragraph twenty-two. It stated that "it was not uncommon for Hart & Co. to file mis-numbered pleadings. We assumed that was the case with Hart & Co.'s Third Amended Answer and Counter-Claim; which, of note, also has two paragraphs elevens (11's)."
On December 13, 2010, the trial court signed a modification of the final judgment. This judgment recited the findings of the jury and the fact that the trial court had previously granted a "partial JNOV" on Hart & Co.'s behalf "to award $1,571.75 based on the uncontroverted evidence that such sum was the amount of one-month's rent." It went on to state, "The court now finds that there was no live pleading on file at the time of trial that asserted breach of contract allegations and no leave to file a trial amendment was timely filed by [Hart & Co.] to support the award of actual damages and attorney's fees for breach of contract. The court now vacates that Judgment and Orders that [Hart & Co.] take nothing on [its] breach of contract claim."
The trial court then recited that its previous judgment had found that a constructive trust existed with regard to sales proceeds from Gen's Antiques' merchandise in the amount of $3,109. It stated,
The Court granted leave of court for [Gen's Antiques] to file a trial amendment alleging Constructive Trust. The Court further found that [Hart & Co.] attempted tender of those funds prior to the lawsuit being filed and re-tendered those funds and [Gen's Antiques] accepted those funds, prior to entry of judgment.The trial court concluded that both parties take nothing by their claims against the other, stating,
It is therefore, ORDERED, ADJUDGED, and DECREED that Plaintiff, Mary Gret McKenzie d/b/a Gen's Antiques and Mary Gret McKenzie, individually, take nothing from Defendant, Positive Action International, Inc. d/b/a Grace Hart & Co. and that Counter Plaintiff, Positive Action International, Inc. d/b/a Grace Hart & Co. take nothing from Counter Defendant, Mary Gret McKenzie d/b/a Gen's Antiques and Mary Gret McKenzie. IT IS FURTHER ORDERED, ADJUDGED, and DECREED that Costs of Court are assessed against the party incurring same.
On January 12, 2011, Gen's Antiques requested modification of this judgment, arguing that the trial court's December 13, 2010 judgment erroneously stated that the trial court allowed it to file a trial amendment pleading a constructive trust. Gen's Antiques stated that it did not amend its pleadings with respect to that cause of action, and it argued that the trial court erred in concluding that a constructive trust existed with regard to the money Hart & Co. collected from the sale of its merchandise. Gen's Antiques also moved again for a new trial on its claims of constructive eviction, breach of written and oral contracts, conversion, and attorney's fees, and it again argued that a new trial was required because of the allegedly improper jury argument of Hart & Co.'s attorney.
Both parties filed notices of appeal.
Sufficiency of Evidence on Jury's Findings
In its first point of error, Gen's Antiques argues that "there was overwhelming and uncontroverted evidence" against the jury's answers to questions number one and two—whether Hart & Co. constructively evicted it from the premises and whether Hart & Co. breached the terms of the leases. In its third point of error, Gen's Antiques argues that, because Hart & Co. failed to pay Gen's Antiques its sales proceeds, Hart & Co. breached the written leases, and the jury's finding that Hart & Co. did not breach the leases was incorrect. In its fourth point of error, Gen's Antiques argues that the jury's finding on question number four was incorrect because Hart & Co. failed to pay Gen's Antiques its sales proceeds. In its fifth point of error, Gen's Antiques argues that the jury erred in failing to award damages on its constructive eviction, breach of lease, and breach of oral agreement claims. Finally, in its seventh point of error, Gen's Antiques argues that the jury erred in failing to award it attorney's fees based on its claims of breach of written and oral contracts. We construe these points as arguments that the evidence supporting the jury's verdict was legally and factually insufficient.
A. Standard of Review
In conducting a legal-sufficiency review, we credit favorable evidence if a reasonable factfinder could and disregard contrary evidence unless a reasonable factfinder could not. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005); Brown v. Brown, 236 S.W.3d 343, 348 (Tex. App.—Houston [1st Dist.] 2007, no pet.). We consider the evidence in the light most favorable to the finding under review and indulge every reasonable inference that would support it. City of Keller, 168 S.W.3d at 822. We sustain a no-evidence contention only if: (1) the record reveals a complete absence of evidence of a vital fact; (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence conclusively establishes the opposite of the vital fact. Id. at 810; Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997).
When an appellant complains of the legal sufficiency of the evidence supporting an adverse finding on which it had the burden of proof, it must show that the evidence establishes, as a matter of law, all vital facts in support of the issue. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001) (per curiam). We must first examine the record for evidence supporting the finding, and we then examine the entire record to determine if the contrary proposition is established as a matter of law. Id. We sustain the issue only if the contrary position is conclusively established. Id.
In reviewing a challenge to the factual sufficiency of the evidence, we must consider and weigh all the evidence and should set aside the judgment only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Arias v. Brookstone, L.P., 265 S.W.3d 459, 468 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) (citing Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986)). When an appellant attacks the factual sufficiency of an adverse finding, he must demonstrate that the finding is against the great weight and preponderance of the evidence. Francis, 46 S.W.3d at 242.
Whether reviewing the evidence for legal or factual sufficiency, we assume that jurors decided questions of credibility or conflicting evidence in favor of the finding if they reasonably could do so. See City of Keller, 168 S.W.3d at 819. We do not substitute our judgment for that of the factfinder if the evidence falls within this zone of reasonable disagreement. Id. at 822.
B. Jury Finding that Hart Did Not Constructively Evict Gen's Antiques and Related Damages and Attorney's Fees
Question one asked the jury, "Did Grace Hart & Co. constructively evict Gen's Antiques from the premises that are the subject of the lease agreements in effect in December 2007?" The jury was instructed:
A mere notice to quit, followed by vacation of the premises by the tenant, does not constitute constructive eviction[.] In order to prove its claim of constructive eviction a tenant must establish the following four elements[:]Gen's Antiques did not object to this jury question. Thus, the sufficiency of the evidence must be measured by the jury charge. See Romero v. KPH Consol., Inc., 166 S.W.3d 212, 221 (Tex. 2005).
1) an intention of the landlord that the tenant no longer enjoy the premises;
2) a material act by the landlord that substantially interferes with the intended use and enjoyment of the premises;
3) the act permanently deprives the tenant of the use and enjoyment of the premises; and
4) the tenant abandons the premises within a reasonable time after the commission of the act.
See Lazell v. Stone, 123 S.W.3d 6, 11-12 (Tex. App.—Houston [1st Dist.] 2003, pet. denied) (providing elements of constructive eviction claim); Quitta v. Fossati, 808 S.W.2d 636, 643 (Tex. App.—Corpus Christi 1991, writ denied) ("[O]ur courts have repeatedly held that a mere notice to quit, followed by vacation of the premises by the tenant, does not constitute a constructive eviction, for there must be some additional feature, such as harassing incidents disturbing to the tenant's peaceful possession and occurring on the property; and, that if the tenant moves out without protest, there is no eviction.") (citing Michaux v. Koebig, 555 S.W.2d 171, 177 (Tex. Civ. App.—Austin 1977, no writ) and Rust v. Eastex Oil Co., 511 S.W.2d 358, 361 (Tex. Civ. App.—Texarkana 1974, no writ)); Fabrique, Inc. v. Corman, 796 S.W.2d 790, 792 (Tex. App.—Dallas 1990, no writ) (holding same).
The jury answered that Hart & Co. did not constructively evict Gen's Antiques. Gen's Antiques argues that the evidence demonstrated that Grace Hart engaged in several acts "which permanently deprived Gen's [Antiques] from the use and enjoyment of its lease space." Specifically, Gen's Antiques argues that the evidence established that: (1) Grace Hart "engaged in irrational verbal and physical behavior on December 11, 2007 which caused" McKenzie and Nolte "to fear for their physical safety"; (2) Hart encouraged other dealers to move into "Gen's Antiques' space on December 12, 2007 which substantially interfered with Gen's use and enjoyment of the Premises and precluded Gen's from moving back into the space during the two week window of time before Gen's would have been liable for abandonment"; (3) Hart & Co.'s December 12, 2007 letter "banned" Gen's Antiques from entering the premises; and (4) Hart & Co.'s December 17, 2007 letter also banned Gen's Antiques from the premises and "threatened Gen's principals with criminal prosecution if they merely entered the Premises." Gen's Antiques argues that these acts "show a pattern of harassing behavior by [Grace Hart] toward Gen's, which confirm Hart & Co.'s intent to evict Gen's and to permanently and swiftly deprive Gen's of its lease space."
Conflicting evidence was presented at trial. Both Nolte and McKenzie testified that Grace Hart became confrontational and irrational on December 11, 2007, told them both to "get out, get out now," called McKenzie an alcoholic, and told both of them that they were "mean people."
Hart, however, testified that she did not "kick out" McKenzie and Nolte. The letter dated December 12, 2007 expressed her belief that McKenzie and Nolte moved out of their own volition, in addition to stating that neither McKenzie nor Nolte was permitted on the premises in the future. Hart further testified that she asked someone to begin calling other dealers on December 12, 2007 to move their merchandise into the spaces being vacated by Gen's Antiques so that she would not have an "empty" store for the busy Christmas season. Nolte's and McKenzie's testimony also indicated that when they were removing their merchandise from the premises on December 12, 2007, no other dealers had placed merchandise in their spaces at that time.
Gen's Antiques bore the burden to establish that Hart & Co. constructively evicted it from the premises; therefore, we first examine the record for evidence supporting the jury's finding. See Francis, 46 S.W.3d at 241. Hart testified that she did not "kick out" Gen's Antiques, and the letter Hart & Co. sent to Gen's Antiques dated December 12, 2007 stated that Gen's Antiques moved out of its own volition. Hart also testified that she did not begin asking other dealers to move their merchandise into Gen's Antiques' spaces until December 12, 2007, the day that Gen's Antiques packed and removed its own merchandise. McKenzie and Nolte both testified that they removed Gen's Antiques' merchandise themselves and that no other dealers had placed any merchandise in Gen's Antiques' space at the time it vacated the premises, and McKenzie acknowledged that Hart & Co. did not remove Gen's Antiques through any formal means.
Hart testified that she sent the December 17, 2007 letter in an effort to prevent McKenzie and Nolte from "hanging out" in front of the store and contacting the other dealers after they had made the previous decision to leave. Given this evidence, McKenzie's and Nolte's testimony that the only reason Gen's Antiques vacated its leased spaces was because they were told to "get out" by Hart and because her irrational behavior made it impossible for Gen's Antiques to carry out its business on the premises cannot conclusively establish a constructive eviction. See id. (holding that reviewing court may sustain legal sufficiency challenge to issue on which appellant had burden of proof only if contrary position is conclusively established).
Considering and weighing all the evidence, we further conclude that the jury's finding that Hart & Co. did not constructively evict Gen's Antiques is not against the great weight and preponderance of the evidence. See id. at 242; Arias, 265 S.W.3d at 468. The jury's finding on this question indicates that it found Hart's testimony and evidence credible and that it found McKenzie's and Nolte's testimony and evidence not credible. See City of Keller, 168 S.W.3d at 819 (stating, "Jurors are the sole judges of the credibility of the witnesses and the weight to give their testimony. They may choose to believe one witness and disbelieve another," and holding that reviewing courts must assume jurors decided all credibility questions in favor of verdict if reasonable human beings could do so). We will not substitute our judgment for that of the factfinder. See id. at 822.
The evidence supporting the jury's finding on the issue of constructive eviction is supported by legally and factually sufficient evidence. Because the jury found that Hart & Co. did not constructively evict Gen's Antiques, Gen's Antiques cannot establish that it was entitled to damages or attorney's fees based on this claim.
We overrule Gen's Antiques' first, fifth, and seventh points of error as they relate to the jury's finding on the constructive eviction claim.
C. Jury Finding that Hart & Co. did not Breach the Leases and Related Damages and Attorney's Fees
In question number two, the jury was asked, "Did Grace Hart & Co. fail to comply with the terms of the lease agreements in effect in December 2007?" The jury answered, "No." As we have already discussed, the evidence was legally and factually sufficient to show that Hart & Co. did not constructively evict Gen's Antiques. Gen's Antiques also argues that it could not have been deemed to abandon the spaces until two weeks after December 11, 2007 under the terms of the leases and that Hart & Co. breached the leases by failing to pay Gen's Antiques its sales proceeds.
Gen's Antiques argues that, under the terms of the leases, it could not have been deemed to have abandoned the premises until the expiration of two weeks after the complete removal of all inventory or the failure to do business, and, thus, "[w]ithin those two weeks, but for Hart & Co.'s causing other dealers to fill Gen's space with merchandise, Gen's had the option of returning the same or other inventory into its space at Hart & Co." The relevant portion of leases provides various acts constituting "events of default," such as a lessee failing to pay rent, and it also provided that default occurs:
[i]f the premises shall have been abandoned, provided that the premises shall be deemed to have been abandoned if Lessee transfers a substantial part of Lessee's operations, business and personnel from the premises to another location or fails to carry on its business at the premises for a period of two consecutive weeks.
The plain language of this provision indicates that a default occurs when a premises is abandoned. It further provides a space will be "deemed" to have been abandoned if a lessee transfers a substantial part of its operations to another location or fails to carry on its business at the premises "for a period of two consecutive weeks." It does not provide an unequivocal right to a two-week period in which a lessee like Gen's Antiques may opt to return merchandise following its decision to remove all of its business from the premises. Thus, as a matter of law, Gen's Antiques cannot demonstrate that Hart & Co. violated the terms of the leases by encouraging other dealers to move merchandise into the empty spaces following Gen's Antiques' removal of its items. See Francis, 46 S.W.3d at 241.
Gen's Antiques also argues that Hart & Co. breached the leases by failing to pay its sales proceeds. We first observe that the leases and incorporated documents contain no provisions regarding the nature of this obligation or the method for reimbursing Gen's Antiques for sales of its merchandise completed at Hart & Co.'s central cash register. Thus, as a matter of law, Gen's Antiques cannot demonstrate that any act of Hart & Co. relating to the payment of sales proceeds violated the terms of the leases. See id.
Gen's Antiques further argues that the leases provide the address to which Hart & Co. was obligated to send all business communications—namely, the post office box address provided on the bottom of each lease. However, the terms of the leases provided that
any notice, tender, or delivery to be given hereunder by either party to the other may be effected by placing such notice, tender or delivery in the party's mail slot at Positive Action International Inc., dba Grace Hart & Co., by personal delivery in writing or by registered or certified mail, postage prepaid, return receipt requested, and shall be deemed received as of mailing.The leases contain no provision requiring delivery of any "notice, tender, or delivery" to a particular address, and they provide for multiple methods for delivery, including personal delivery or delivery by registered or certified mail. As a matter of law, Gen's Antiques cannot establish that Hart & Co.'s attempt to mail the settlement statements and checks to the address on Sandman, rather than the post office box, violated the terms of the lease. See id.
Thus, the jury's finding that Hart & Co. did not fail to comply with the terms of the leases is supported by sufficient evidence. Because the jury found that Hart & Co. did not breach the leases, Gen's Antiques cannot establish that it was entitled to damages or attorney's fees based on this claim.
We overrule Gen's Antiques' first, fifth, and seventh points of error as they relate to the jury's finding on the breach of lease claim.
D. Jury Finding that Hart & Co. Did Not Breach an Oral Agreement and Did Not Convert Gen's Antiques' Property by Failure to Pay Sales Proceeds
Question four asked, "Did Grace Hart & Co. fail to comply with an oral agreement with Gen's Antiques regarding distribution of sales proceeds from sale of Gen's Antiques' merchandise?" The jury was instructed on the formation of an agreement: "In deciding whether the parties reached an agreement, you may consider what they said and did in light of the surrounding circumstances, including any earlier course of dealing. You may not consider the parties' unexpressed thoughts or intentions." The jury answered, "No," finding that Hart & Co. did not fail to comply with an oral agreement with Gen's Antiques.
In question number seven, the jury was asked, "Did Grace Hart & Co. convert property from Gen's Antiques?" The jury was instructed:
"Conversion" is the unauthorized and unlawful assumption and exercise of dominion and control over the personal property of another to the exclusion of, or inconsistent with, the owner's rights.The jury answered, "No."
"Owner" means a person who:
(1) acquired the property through purchase or other means;
(2) had legal possession of the property; or
(3) had a right to immediate possession of the property.
"Property" includes money.
1. Breach of oral agreement
To prevail on its cause of action for breach of an oral agreement, Gen's Antiques was required to prove: (1) the existence of a valid contract; (2) its own performance or tender of performance; (3) Hart & Co.'s breach of contract; and (4) its damages as a result of the breach. See Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex. App.—Houston [1st Dist.] 2002, pet. denied). The elements of a valid contract are (1) an offer, (2) an acceptance, (3) a meeting of the minds, (4) each party's consent to the terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding. Id. The elements of written and oral contracts are the same and must be present for a contract to be binding. Wal-Mart Stores, Inc. v. Lopez, 93 S.W.3d 548, 555 (Tex. App.—Houston [14th Dist.] 2002, no pet.). For an agreement to be enforceable, there must be a meeting of the minds with respect to its subject matter and essential terms. Id. at 556. The determination of a meeting of the minds, and thus offer and acceptance, is based on the objective standard of what the parties said and did. Id.
The question of whether a contract contains all the essential terms for it to be enforceable is a question of law. Beal Banks, S.S.B. v. Schleider, 124 S.W.3d 640, 654 n.8 (Tex. App.—Houston [14th Dist.] 2003, pet. denied). What terms are material or essential to a contract are determined on a contract-by-contract basis, depending on the subject matter of the contract at issue. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992) ("Each contract should be considered separately to determine its material terms.").
Nolte testified that "all the sales are collected at a single source at the front door and then the sales are distributed on a weekly basis." He testified that each dealer gets a "settlement report" or record of its sales and is then "issued a check for that total amount." Nolte also testified generally that "all of our business mail goes to P.O. Box 980217," and his testimony seemed to indicate that, in the regular course of dealing, settlement statements and checks were distributed in person or left at Hart & Co.'s premises for pick up. However, he did not provide any testimony regarding a specific agreement as to how the settlement reports and checks were to be distributed, especially in light of Gen's Antiques' vacation of the premises. Nolte also acknowledged that the address listed for Gen's Antiques with the State Comptroller of Accounts for sales tax purposes in February 2008, around the same time Hart & Co. mailed some of the remaining checks, was the address at 805 Sandman.
McKenzie also confirmed that the address Gen's Antiques registered with the Texas Comptroller's Office in February 2008 and her own voter registration address was at 805 Sandman. McKenzie did not provide any testimony regarding the terms by which Hart & Co. was to distribute sales proceeds collected on behalf of Gen's Antiques.
Hart testified that she attempted to distribute to Gen's Antiques its sales proceeds following the incident on December 11, 2007, and she acknowledged that Hart & Co. continued to send the checks and settlement statements by certified mail, requiring the recipient's signature, to the Sandman address in spite of the fact that previous letters were returned undelivered. Hart testified that she believed that they were delivered but that McKenzie refused to sign for them or accept them. She testified that she used the certified mail procedure that she did because she was concerned about security, and she testified that she was not familiar with the procedure for a recipient to sign for a delivery to some location where she would not be physically present, like a post office box.
It is undisputed that Hart & Co. was obligated to pay sales proceeds to Gen's Antiques for its merchandise that was sold through Hart & Co.'s central cash register. However, the parties presented no testimony of the specific terms of how these payments were to be delivered. While Nolte's testimony implied that Gen's Antiques and the other dealers typically received their settlement statements and checks at the premises and that Gen's Antiques used the post office box for its business correspondence, this does not establish that other reasonable methods of delivery were not also contemplated by the parties. Thus, Gen's Antiques failed to establish the specific terms of the meeting of the minds between itself and Hart & Co. on the issue of method of paying sales proceeds. See Lopez, 93 S.W.3d at 556 (holding that for agreement to be enforceable, there must be meeting of minds with respect to its subject matter and essential terms).
Assuming, without deciding, that these terms were not essential and, thus, that the agreement to pay sales proceeds was enforceable, the evidence that Hart & Co. tendered performance was legally and factually sufficient. See T.O. Stanley Boot Co., 847 S.W.2d at 221 (stating that courts must determine what terms are material or essential to contract on contract-by-contract basis, depending on subject matter of contract at issue). Hart testified that she sent the settlement statements and checks to the address on Sandman via certified mail requiring the recipient's signature for security reasons. She knew that McKenzie had received mail sent to that address on previous occasions, and it was the address where McKenzie was registered to vote and the address that Gen's Antiques had registered with the comptroller for sales tax purposes. The envelopes containing the settlement statements and checks were returned unclaimed, and Hart sent them to her attorney.
Although McKenzie and Nolte testified that Gen's Antiques never received the unclaimed envelopes containing the settlement statements and checks, this testimony cannot conclusively establish that Hart & Co. failed to tender performance or that it breached an oral agreement. See Francis, 46 S.W.3d at 241 (holding that reviewing court may sustain legal sufficiency challenge to issue on which appellant had burden of proof only if contrary position is conclusively established).
Furthermore, considering and weighing all the evidence, we conclude that the jury's finding that Hart & Co. did not breach any alleged oral agreement regarding sales proceeds is not against the great weight and preponderance of the evidence. See id. at 242; Arias, 265 S.W.3d at 468. It was solely within the province of the jury to weigh Hart's testimony and postal records demonstrating that Hart & Co. attempted to distribute to Gen's Antiques its sales proceeds against McKenzie's and Nolte's testimony that Gen's Antiques never received those envelopes. See City of Keller, 168 S.W.3d at 819 (stating, "Jurors are the sole judges of the credibility of the witnesses and the weight to give their testimony. They may choose to believe one witness and disbelieve another," and holding that reviewing courts must assume jurors decided all credibility questions in favor of the verdict if reasonable human beings could do so). We will not substitute our judgment for that of the factfinder. See id. at 822.
Thus, the evidence supporting the jury's finding that Hart & Co. did not fail to comply with the terms of an oral agreement regarding payment of sales proceeds is supported by legally and factually sufficient evidence. Because the jury found that Hart & Co. did not breach an oral agreement, Gen's Antiques cannot establish that it was entitled to damages or attorney's fees based on this claim.
In its second point of error, Gen's Antiques also argues that the trial court erred in denying its motion for JNOV on its claims for breach of written and oral contract with respect to Hart's failure to pay economic damages. We review the grant or denial of a motion for JNOV under a legal-sufficiency standard. See Tanner v. Nationwide Mut. Fire Ins. Co., 289 S.W.3d 828, 830 (Tex. 2009) (citing City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005)). Because we have already concluded that the evidence was legally sufficient that Hart & Co. did not breach its written or oral agreements with Gen's Antiques, we likewise conclude that the trial court did not err in denying the motion for JNOV based on these claims. We overrule Gen's Antiques' second point of error.
2. Conversion
Regarding Gen's Antiques' claim that Hart & Co. converted its property by failing to pay the sales proceeds, we likewise conclude that the evidence was legally and factually sufficient to support the jury's adverse answer.
The charge instructed the jury that conversion is "[t]he unauthorized and wrongful assumption and exercise of dominion and control over the personal property of another, to the exclusion of or inconsistent with the owner's rights." See Waisath v. Lack's Stores, Inc., 474 S.W.2d 444, 447 (Tex. 1971). To establish conversion of personal property, a plaintiff must prove (1) the plaintiff owned, had legal possession of, or was entitled to possession of the property; (2) the defendant, unlawfully and without authorization, assumed and exercised dominion and control over the property to the exclusion of, or inconsistent with, the plaintiff's rights; (3) the plaintiff made a demand for the return of the property; and (4) the defendant refused to return the property. Tex. Integrated Conveyor Sys., Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 365-66 (Tex. App.—Dallas 2009, pet. denied).
As discussed above, Hart testified that Hart & Co. attempted to mail the sales proceeds to Gen's Antiques. Thus, Gen's Antiques cannot conclusively establish that Hart & Co. exercised dominion and control over the payments inconsistent with Gen's Antiques' rights or that Hart & Co. refused to return the property. See Francis, 46 S.W.3d at 241 (holding that reviewing court may sustain legal sufficiency challenge to issue on which appellant had burden of proof only if contrary position is conclusively established). Furthermore, as we have previously held that the evidence was legally and factually sufficient that Hart & Co. attempted to tender payment, the jury's adverse finding on the issue of conversion was not against the great weight and preponderance of the evidence. See id. at 242; Arias, 265 S.W.3d at 468. Because the jury found that Hart & Co. did not convert Gen's Antiques' property, Gen's Antiques cannot establish that it was entitled to damages or attorney's fees based on this claim.
We overrule Gen's Antiques' third, fourth, and fifth points of error as they relate to Gen's Antiques' claims concerning payment of the sales proceeds.
E. Jury Finding that Gen's Antiques Breached the Leases
Hart & Co. asserts several cross-points on appeal, including a challenge to the trial court's modified judgment that ordered that it take nothing on its breach of contract claim and related attorney's fees. Hart & Co. asks this Court to reinstate the trial court's award of $1,571.75 as damages on its breach of contract claim. Gen's Antiques argues that Hart & Co. failed to properly plead the issues of breach of contract and related attorney's fees. Alternatively, it challenges the legal and factual sufficiency of the jury's finding that it breached the terms of the leases.
1. Sufficiency of pleadings
In its first and second cross-points on appeal, Hart & Co. argues that the trial court erred in finding "no live pleadings" from it alleging breach of contract and attorney's fees and in modifying the judgment to order that it take nothing on those claims. In its third and fourth cross-points, it argues that Gen's Antiques waived its complaint on this issue because it did not object at trial and did not present this issue in its motion for new trial. Thus, we first address the argument that Hart & Co. failed to properly plead its counterclaims for breach of contract and related attorney's fees.
Hart & Co.'s second amended answer and counterclaim contained causes of action for breach of contract and related attorney's fees. Those pleadings alleged that Hart & Co. had "performed all of the promises and covenants of [the leases] for which it was promisor. In the alternative, if need there be, [Hart & Co.] has substantially performed all of the promises and convenants concurrent or conditions precedent have occurred or been excused for which [it] was the obligor." Hart & Co. alleged that Gen's Antiques breached the lease by failing "to pay all rent[,] late fees[,] and charges due" under the lease, by failing to provide the required written notice thirty days prior to terminating the month-to-month tenancy and vacating the property, and by behaving "in a manner which is abusive toward customers, other dealers, or Lessor or their guests." Hart & Co. also alleged that it was entitled to attorney's fees on the breach of contract claim.
However, Hart & Co.'s third amended petition, filed for the purpose of adding an affirmative defense to Gen's Antiques' defamation claim, cut off after the beginning of paragraph seventeen, stating, "In the alternative, if need there be, Counter-Plaintiff[. . . .]" The next page began with paragraph twenty-two, stating, "Further pleading Counter-Plaintiff avers that Counter-Defendants, Mary Gret McKenzie d/b/a Gen's Antiques and Mary Gret McKenzie [have] withheld the last month's rent on grounds that the security deposit is security for unpaid rent." Thus, any paragraphs containing its breach of contract and related attorney's fees counterclaim are missing from the third amended petition, which was the live pleading at the time of trial.
However, Grace Hart testified regarding Gen's Antiques' failure to comply with the terms of the leases, and counsel for Hart & Co. advanced arguments that Gen's Antiques breached its leases without objection by Gen's Antiques that such evidence and argument was not supported by the pleadings. Furthermore, the jury charge contained questions asking whether Gen's Antiques breached the leases and what constituted reasonable and necessary attorney's fees for Hart & Co. arising from Gen's Antiques' breach. Again, Gen's Antiques presented no objections to these questions.
We agree with Gen's Antiques that Hart & Co.'s third amended petition did not state a cause of action for breach of contract and related attorney's fees. However, issues not raised by the pleadings may be tried by the express or implied consent of the parties. See TEX. R. CIV. P. 67; Moore v. Altra Energy Techs., Inc., 321 S.W.3d 727, 733 (Tex. App.—Houston [14th Dist.] 2010, pet. denied). Rule of Civil Procedure 67 provides that "[w]hen issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings." TEX. R. CIV. P. 67. Furthermore, Rule of Civil Procedure 90 provides that "[e]very defect, omission or fault in a pleading . . . [that] is not specifically pointed out . . . before the instruction or charge to the jury . . . shall be deemed to have been waived by the party seeking reversal on such account." TEX. R. CIV. P. 90.
We conclude that Gen's Antiques waived its right to complain that the charge to the jury was not supported by the pleadings by failing to object before the instruction or charge to the jury. See id.; see also Murray v. O & A Exp., Inc., 630 S.W.2d 633, 637 (Tex. 1982) (holding that party waived argument that pleadings did not support charge submission by failing to make timely objection to charge on that ground). Thus, we conclude that Hart & Co.'s counterclaims that Gen's Antiques breached the terms of the lease and that it was entitled to related attorney's fees were tried by consent. See TEX. R. CIV. P. 67; Moore, 321 S.W.3d at 733. Thus, the trial court erred in modifying the judgment post-verdict to disregard the jury's findings on these claims.
We sustain Hart & Co.'s first, second, third, and fourth counter-points arguing that the trial court erred in modifying the judgment to order that it take nothing based on Gen's Antiques' arguments that "no live pleading" supported Hart & Co.'s claims.
Because of our holdings on these points, we do not address Hart & Co.'s fifth counter-point, arguing that the trial court abused its discretion in exercising its plenary power to modify a judgment based on an issue not presented in Gen's Antiques' motion for new trial.
2. Sufficiency of jury finding
Having determined that the issue of Hart & Co.'s counterclaim was properly before the jury, we examine the sufficiency of the jury's finding. In question three, the jury was instructed, "If you answered "No" to Question No. 1 then answer Question No. 3. Otherwise, do not answer Question No. 3." Question three asked, "Did Gen's Antiques fail to comply with the terms of the lease agreements in effect in December 2007?" The jury answered, "Yes."
Regarding Gen's Antiques' right to terminate the lease before the end of the lease period, the leases provided:
Lessor expressly grants Lessee the right to terminate this lease before the end of the lease period. If Lessee elects to exercise this right, Lessee must:(Emphasis in original). The leases also provided that the term of the leases was "month-to-month."
3. Provide written notice to Lessor on or before the first of the month prior to the month Lessee intends to vacate the premises.
4. Pay Lessor all sums for rent, advertising, work days, etc. as due.
5. Vacate the premises as otherwise described in this lease. Lessor agrees to refund Lessee's deposit (subject to the conditions of Section 3.2 [providing the Lessor may keep all or any part of deposit in event of any default by Lessee]) if Lessee elects to exercise his right to terminate as described above.
Thus, under the terms of the lease, if Gen's Antiques moved out of its own volition before the end of the month of December, Gen's Antiques was required to provide written notice by the first of November.
As we have discussed above, there was conflicting evidence regarding the circumstances under which Gen's Antiques vacated the premises. While Nolte and McKenzie both testified that they were evicted by Hart when she told them to "get out" and because of her irrational behavior, Hart testified that she did not "kick out" Gen's Antiques and the letter she sent dated December 12, 2007 stated that Gen's Antiques moved out of its own volition. It is undisputed that Gen's Antiques did not give written notice prior to vacating the premises. We concluded that the evidence was legally and factually sufficient to support the jury's findings that Gen's Antiques was not constructively evicted and that Hart & Co. did not breach the terms of the leases. Under the same reasoning, we conclude that the evidence was likewise sufficient to support the jury's conclusion that Gen's Antiques breached the terms of the lease when it moved out on December 12, 2007 without giving prior written notice. See Francis, 46 S.W.3d at 241-42.
We overrule Gen's Antiques' challenge to this jury finding.
F. Jury Finding on Hart & Co.'s Damages for Breach of Contract
Having concluded that the jury properly considered the issue of Gen's Antiques' breach of the leases and that the evidence supporting the jury's finding of breach was supported by legally and factually sufficiency evidence, we turn to the issue of Hart & Co.'s damages on this claim.
1. Sufficiency of jury finding
Gen's Antiques argues that Hart & Co. was not entitled to any damages resulting from Gen's Antiques' breach of the leases because Hart & Co. did not present any evidence of damages.
The jury was instructed, "If you have answered "Yes" to Question No. 3, then answer Question No. 6. Otherwise, do not answer Question No. 6." Question six asked, "What sum of money, if any, if paid now in cash, would fairly and reasonably compensate Grace Hart & Co. for its damages, if any, that resulted from the failure to comply with the terms of the lease agreements?" The jury answered, "$1.00."
At trial, the parties introduced the terms of the leases and Nolte testified regarding the rent that Gen's Antiques paid. According to Nolte's testimony and the leases in effect at the time Gen's Antiques moved out of Hart & Co.'s premises, Gen's Antiques paid $1,571.75 per month in rent for four booth spaces and two window spaces. Hart testified that Gen's Antiques had paid its December 2007 rent and was in compliance with the terms of the leases as of December 11, 2007. Hart further testified that, following Gen's Antiques' vacation of the premises without notice, she was required to allow other dealers to use that space without charging rent or other expenses in order to avoid having an "empty" store during the busy Christmas shopping season. Hart & Co. also sent several letters and other mailings containing settlement statements and checks following Gen's Antiques' departure. McKenzie and Nolte also testified that they worked a portion of the required days for the first two weeks of December, but that they did not work the total number of days they were required to work under the lease.
Thus, the record contained some evidence of Hart & Co.'s damages and expenses related to Gen's Antiques' removal from the property. The jury's finding that these damages totaled $1 is supported by legally and factually sufficient evidence. See Francis, 46 S.W.3d at 241-42.
We overrule Gen's Antiques' challenge to this jury finding.
2. Trial court's partial JNOV disregarding jury's answer
Hart & Co. asks that we reinstate the trial court's August 31, 2010 judgment awarding it $1,571.75 as rent that Gen's Antiques was obligated to pay as a result of its failure to comply with the terms of the leases. We review the grant or denial of a motion for JNOV or a motion to disregard jury findings as a legal-sufficiency challenge. See City of Keller, 168 S.W.3d at 823.
As we discussed above, under the terms of the lease, if Gen's Antiques moved out of its own volition before the end of the month of December, it was required to provide written notice by the first of November to vacate the premises and it must pay all sums for rent as due. We have already concluded that the jury's finding that Gen's Antiques breached the leases by vacating the premises without prior written notice was supported by legally and factually sufficient evidence.
However, the terms of the lease do not contain any provisions granting payment of the next month's rent if a lessee, such as Gen's Antiques, breaches the terms of the lease by moving out prior to the expiration of the term without notice. Rather, the leases allow Hart & Co. to retain the deposits in the event of any default. The leases provided: "Under the circumstances of any default by Lessee, Lessor may apply or retain all or any part of such security to remedy the default or to reimburse Lessor for any amount which Lessor may spend as a result of the default. . . ." It is undisputed that Hart & Co. retained the full amount of the deposits paid by Gen's Antiques. Thus, the terms of the leases themselves do not support Hart & Co.'s claim that it was entitled to payment of January rent, and Hart & Co. cannot, as a matter of law, establish that it was entitled to damages on those grounds.
We overrule Hart & Co.'s argument that it was entitled to $1,571.75 in damages representing January rent owed by Gen's Antiques following its breach of the leases.
G. Hart & Co.'s Attorney's Fees
We have already concluded that Hart & Co.'s counterclaims for breach of contract and the resulting attorney's fees were properly before the jury. We now address Gen's Antiques' argument that the evidence supporting the jury's finding that Hart & Co. was entitled to $15,000 as its reasonable and necessary attorney's fees was legally insufficient.
Gen's Antiques makes this argument in passing in its reply brief, stating, "[E]ven if Hart & Co. had properly pled, there is no evidence to support a jury finding of breach of contract or an award of attorney's fees to Hart & Co." Gen's Antiques does not assert any specific arguments regarding the reasonableness of the fees or cite any authority on this issue. We also note that Gen's Antiques does not assert on appeal its argument from its motion for new trial that Hart & Co. failed to present its claim for breach of lease prior to the filing of suit as required by Texas Civil Practices and Remedies Code section 38.002(2).
Hart & Co.'s attorney, Jeffrey Gillespie, testified regarding his own fees. He testified that he has been licensed since 1981 and has extensive experience trying cases in the Houston area. He believed the value for the work performed on the breach of contract claim from the time he started working on the case in April 2009 through trial in April 2010 was $15,000, and based on his knowledge and experience, this amount was reasonable and necessary. He testified that he did not keep time records of the work he performed for Hart & Co., as he usually billed his clients on a flat-rate basis. He also testified that the amount of $15,000 represented work he had done on the breach of contract claim and that he would value the total time he spent on the case much higher.
Gillespie also stated that he has been paid a total of $5,000 by Hart & Co., and he testified that he did not intend to invoice Hart & Co. for any additional fees beyond the $5,000 it had already paid. He testified, "I think my clients have a sense that they owe me money. And if they have the ability to pay, I'll consider it at that time. But I'm not going to send them an invoice or charge them any more monies."
Gillespie acknowledged that he began representing Hart & Co. in April 2009, a little more than a year after Gen's Antiques' counsel became involved. Gen's Antiques' attorney testified that his firm had billed Gen's Antiques for $74,618.45 in connection with this case, not including the trial, and that the fees from trial would be approximately $12,000.
We review a jury's finding of the amount of reasonable and necessary attorney's fees incurred for sufficiency of the evidence. See C.M. Asfahl Agency v. Tensor, Inc., 135 S.W.3d 768, 801-02 (Tex. App.—Houston [1st Dist.] 2004, no pet.). The reasonableness of attorney's fees is a question of fact, and "[w]e must be mindful . . . that we are reviewing a jury's verdict and may not substitute our judgment for that of the factfinder." Id. at 802 (citing Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406 (Tex. 1998) and Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 882 (Tex. 1990)); see also GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d 305, 311 (Tex. 2006) (holding that reasonableness and necessity of attorney's fees is question of fact). Furthermore, "we may draw upon our common knowledge as justices of the court and our experience as lawyers and judges." C.M. Asfahl Agency, 135 S.W.3d at 802.
In reviewing the reasonableness of an award of attorney's fees, the reviewing court should consider: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly; (2) the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered. Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997); C.M. Asfahl Agency, 135 S.W.3d at 802. The factfinder is not required to consider all of the factors in every case because the factors are guidelines for the factfinder to consider, not elements of proof. Petco Animal Supplies, Inc. v. Schuster, 144 S.W.3d 554, 567 (Tex. App.—Austin 2004, no pet.); see Academy Corp. v. Interior Buildout & Turnkey Constr., Inc., 21 S.W.3d 732, 742 (Tex. App.—Houston [14th Dist.] 2000, no pet.). Thus, it is not necessary that the record include evidence on each of these factors. See Burnside Air Conditioning & Heating, Inc. v. T.S. Young Corp., 113 S.W.3d 889, 897-98 (Tex. App.—Dallas 2003, no pet.); Academy Corp., 21 S.W.3d at 742.
Although the nature and extent of the attorney's services generally are expressed in terms of the number of hours and the hourly rate, there is no rigid requirement that these facts must be introduced into evidence to support a finding that attorney's fees are reasonable and necessary. Hays & Martin, L.L.P. v. Ubinas-Brache, M.D., 192 S.W.3d 631, 636 (Tex. App.—Dallas 2006, pet. denied) (citing Burnside Air Conditioning, 113 S.W.3d at 897). When, as here, a claim for attorney's fees is based on Chapter 38 of the Texas Civil Practice and Remedies Code, "[i]t is presumed that the usual and customary attorney's fees . . . are reasonable," although the presumption may be rebutted. See TEX. CIV. PRAC. & REM. CODE ANN. § 38.003 (Vernon 2008).
In conducting our legal-sufficiency review, we consider the evidence in the light most favorable to the finding under review and indulge every reasonable inference that would support it. City of Keller, 168 S.W.3d at 822. Gillespie's expert opinion, based on his experience performing similar legal services in the same locality, was that $15,000 was reasonable and necessary. The jury also received evidence on the nature and length of the professional relationship between Gillespie and Hart & Co., Gillespie's experience, reputation, and ability, and the nature of his fee arrangement with Hart & Co. Although Gen's Antiques' attorney testified that his own services resulted in $74,618.45 in fees plus approximately $12,000 incurred during trial, and he cross-examined Gillespie regarding Gillespie's testimony on attorney's fees, he did not offer any evidence controverting or rebutting Hart & Co.'s evidence that the fees were reasonable and necessary. Thus, we conclude that there is more than a scintilla of evidence supporting the jury's award of $15,000 as reasonable and necessary attorney's fees. See id. at 810.
We overrule Gen's Antiques' challenge to the legal sufficiency of the evidence supporting the amount of reasonable and necessary attorney's fees awarded to Hart & Co. by the jury.
Charge Error
In its sixth point of error, Gen's Antiques argues that the trial court erred in refusing to submit a jury question on breach of trust. Gen's Antiques argues that "Hart & Co. owed a duty to Gen's to place sales proceeds in trust pending disbursement, and then to disburse the funds to Gen's. The holding and use of Gen's money in an unauthorized manner constitutes a breach of trust and Gen's suffered damages as a direct result."
The standard of review for alleged error in the jury charge is abuse of discretion. See Shupe v. Lingafelter, 192 S.W.3d 577, 579 (Tex. 2006) (per curiam). "When a trial court refuses to submit a requested instruction on an issue raised by the pleadings and evidence, the question on appeal is whether the request was reasonably necessary to enable the jury to render a proper verdict." Id. Therefore, we will not reverse a jury verdict for the trial court's refusal to submit a question unless the refusal probably caused the rendition of an improper judgment or probably prevented the complaining party from presenting the case on appeal. Columbia Rio Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 856 (Tex. 2009); Shupe, 192 S.W.3d at 579. "Error in the omission of an issue is harmless 'when the findings of the jury in answer to other issues are sufficient to support the judgment.'" Shupe, 192 S.W.3d at 579 (quoting Boatland of Houston, Inc. v. Bailey, 609 S.W.2d 743, 750 (Tex. 1980)).
Gen's Antiques argues that "Nolte, McKenzie and Ms. Hart all testified that funds collected by Hart & Co., to be held by Hart & Co. for Gen's and then paid to Gen's according to a set schedule (10 days in arrears) were intentionally never sent to Gen's." Gen's further argues that "[t]he affirmative refusal of the court to include a question to the jury regarding Hart & Co.'s breach of trust affected the outcome of the jury's verdict, to the detriment of Gen's [Antiques] (Gen's could have also recovered exemplary damages for Hart & Co.['s] breach of fiduciary duty.)"
We have already concluded that Gen's Antiques failed to establish the particular terms of any agreement with Hart & Co. regarding the method for payment of the sales proceeds. Likewise, the record contains no evidence that these monies were to be held in trust, and it contains no evidence of the existence of a formal trust between Hart & Co. and Gen's Antiques. See Stauffacher v. Coadum Capital Fund 1, LLC, 344 S.W.3d 584, 588 (Tex. App.—Houston [14th Dist.] 2011, pet. denied) (holding that "[a] trust is created only if the settlor manifests an intention to create a trust"; "[a] court has no authority to impose a trust unless the prerequisites of a trust are satisfied"; and "a court cannot impose a trust when the parties contemplated another relationship"). Thus, the issue of breach of trust was not raised by the evidence. See Shupe, 192 S.W.3d at 579.
Furthermore, as we have already discussed, the jury found, relative to another jury question, that Hart & Co. did not breach any oral agreement regarding the payment of the sales proceeds. We concluded that the evidence was legally and factually sufficient to support the conclusion that Hart & Co. attempted to tender payment of the sales proceeds prior to trial. It is undisputed by the parties that, prior to entry of the final modified judgment in this case, Gen's Antiques accepted Hart & Co.'s tender of the sales proceeds. Thus, we cannot conclude that the trial court's refusal to submit a question on breach of trust resulted in the rendition of an improper judgment or that the trial court abused its discretion. See Hawley, 284 S.W.3d at 856; Shupe, 192 S.W.3d at 579.
We overrule Gen's Antiques' sixth point of error.
Gen's Antiques argues in its reply brief that its acceptance of the "past-due" sales proceeds does not estop it from appealing the issue of its right to attorney's fees. However, Gen's Antiques is precluded from receiving an award of attorney's fees due to its failure to prevail on any claim for which attorney's fees are recoverable.
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Motion for New Trial
In its eighth point of error, Gen's Antiques argues that the trial court erred in refusing to grant a new trial based on improper jury argument of Hart & Co.'s counsel. Specifically, Gen's Antiques complains of specific instances of improper personal criticisms. It argues that Gillespie "repeatedly refer[red] to Mr. Nolte and Ms. McKenzie as liars, hiding behind paper and lawyers," that he improperly referred to Gen's Antiques' counsel "as a baseball bat used to assault" and "as dogs sicced on" Hart & Co., that Gillespie argued that "Ms. McKenzie refused to accept funds and filed a lawsuit out of spite," that Gillespie improperly "paint[ed] his client, a corporation, as being tormented and living in fear of" Gen's Antiques, and that Gillespie improperly questioned counsel's respect for the court and the jury by "bring[ing] this crap down" to the trial court.
We review a trial court's denial of a motion for new trial for an abuse of discretion. In re R.R., 209 S.W.3d 112, 114 (Tex. 2006). A trial court abuses its discretion when it acts in an arbitrary or unreasonable manner, or if it acts without reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985).
To obtain a reversal of a judgment on the basis of improper jury argument, a party must prove (1) an error (2) that was not invited or provoked, (3) that was preserved at trial by a proper objection, motion to instruct, or motion for mistrial, and (4) that was not curable by an instruction, a prompt withdrawal of the statement, or a reprimand by the trial court. Standard Fire Ins. Co. v. Reese, 584 S.W.2d 835, 839 (Tex. 1979); see also Phillips v. Bramlett, 288 S.W.3d 876, 883 (Tex. 2009) ("Appellate complaints of improper jury argument must ordinarily be preserved by timely objection and request for an instruction that the jury disregard the improper remark.") (citing TEX. R. APP. P. 33.1). Typically, retraction of the argument or instruction from the court can cure any probable harm, but in rare instances the probable harm or prejudice cannot be cured. Living Ctrs. of Tex., Inc. v. Penalver, 256 S.W.3d 678, 680 (Tex. 2008) (per curiam).
A complaint of incurable argument may be asserted and preserved in a motion for new trial, even without a complaint and ruling during the trial. Phillips, 288 S.W.3d at 883 (citing TEX. R. CIV. P. 324(b)(5)). A party claiming incurable harm must persuade the court that, based on the record as a whole, the offensive argument was so extreme that a "juror of ordinary intelligence could have been persuaded by that argument to agree to a verdict contrary to that to which he would have agreed but for such argument." Id. (quoting Goforth v. Alvey, 271 S.W.2d 404, 404 (Tex. 1954)). Incurable argument is "that which strikes at the very core of the judicial process," such as "unsubstantiated attacks on the integrity or veracity of a party or counsel, appeals to racial prejudice, or the like." Id. To prevail on a claim that improper argument was incurable, the complaining party generally must show that the argument by its nature, degree, and extent constituted such error that an instruction from the court or retraction of the argument could not remove its effects. Penalver, 256 S.W.3d at 680-81.
It is well-established that counsel should refrain from using pejorative terms and inflammatory epithets. See Sw. Greyhound Lines v. Dickson, 236 S.W.2d 115, 119 (Tex. 1951); Zurita v. Lombana, 322 S.W.3d 463, 482 (Tex. App.—Houston [14th Dist.] 2010, pet. denied). However, counsel have always been entitled to argue the facts of the case, including the reasonableness of the evidence and any inferences made from the evidence. Zurita, 322 S.W.3d at 482-83. Furthermore, counsel are given wide latitude when commenting on the state of the evidence. Id.
Gen's Antiques objected to two of the specific instances about which it now complains on appeal. Gillespie argued, "Doesn't [Gen's Antiques' attorney] have any respect for this Court and you as the ladies and gentlemen of this jury not to bring this crap down here?" Gen's Antiques objected, arguing that personal attacks are inappropriate. The trial court sustained the objected and stated, "[L]et's watch the language during closing argument please." Gillespie then apologized for the inappropriate remark. The trial court's ruling and reprimand and Gillespie's apology cured any probable harm from this remark. See Penalver, 256 S.W.3d at 680; Reese, 584 S.W.2d at 839.
Gillespie also stated that McKenzie "sicced her dogs on us through attorney's fees" and that "[h]e deposed Grace Hart for six hours. You look through his time records. Six hours he deposed my client. Over what? Just to keep her there and to grill her and to embarrass her and to frustrate her and to get her mad. Six hours at—." Gen's Antiques objected, arguing, "It's argumentative, it's outside the evidence, it's not for the jury to consider." The trial court stated, "It's closing argument. I'll overrule the objection. Proceed." At this point in Gillespie's closing argument, the trial court had, in addressing multiple objections made by Gen's Antiques', admonished the jury on at least six occasions that it was to consider only the evidence admitted during trial in the form of testimony or documents and that the arguments of the attorneys did not constitute evidence. The trial court had properly admonished the jury on multiple occasions regarding what constituted evidence that it was allowed to consider, and although the trial court should have sustained the objection here as well, any error is harmless given its numerous other admonishments. See Penalver, 256 S.W.3d at 680-81; Zurita, 322 S.W.3d at 482-83.
Gen's Antiques failed to object during trial to the remaining complaints it raises on appeal. Thus, Gen's Antiques' must persuade this Court that, based on the record as a whole, the offensive argument was so extreme that a "juror of ordinary intelligence could have been persuaded by that argument to agree to a verdict contrary to that to which he would have agreed but for such argument." See Phillips, 288 S.W.3d at 883; see also Penalver, 256 S.W.3d at 680-81 (holding that complaining party must show that argument "by its nature, degree, and extent constituted such error that an instruction from the court or retraction of the argument could not remove its effects").
Gen's Antiques' complains about various statements made in the following argument:
[McKenzie and Nolte] can hide behind their paper, they can hide behind their boxes, they can hide behind their lawyers, and they can hide behind their lie, but what they can't hide from is the truth. And the truth is this is a case that [McKenzie] created of her own volition. We did nothing to breach this lease agreement. She got mad and walked out and now she's turning around and suing. We've been tormented by this case for two years. For two years she's used these attorneys like a baseball bat. She's built a baseball bat made up out of attorney's fees. $90,000. And she's been hitting us over the head with that baseball bat for two years. We've been living under a cloud of fear, under concern, worry what's going to happen with our business and our lives because of some fabrication of this lady. But we stole her money. That's what she would have you believe. I'd ask you to put an entry of zero [for Gen's Antiques' damages]. When she
got the first check for [$]2,187, she knew the other checks were in the other envelopes, but she didn't pick them up. She'd rather go around saying we're thieves than take the money we offered her. Just like with the festival, she didn't take the money, she'd rather complain we owed her the money. That's her M-O and that's what she's done here.
We cannot conclude that these statements by Gillespie are the types of incurable arguments that "strike[] at the very core of the judicial process," as they do not constitute "unsupported, extreme, and personal attacks" on parties or witnesses or arguments not based on evidence. See Phillips, 288 S.W.3d at 883; see also Zurita, 322 S.W.3d at 482-83 (holding that counsel is entitled to argue facts of case, including reasonableness of the evidence and any inferences made from evidence). Rather, Gillespie's arguments contain his characterization of the evidence presented at trial in support of Hart & Co.'s theory of the case. In light of the evidence presented at trial and the trial court's repeated admonishments that the jury was to consider only the evidence admitted during trial in the form of testimony or documents and that the arguments of the attorneys did not constitute evidence, we cannot conclude that this argument is one of the rare instances of such error that an instruction from the court or retraction of the argument could not have removed its effects. See Penalver, 256 S.W.3d at 680-81.
We conclude that the trial court did not abuse its discretion in denying Gen's Antique's motion for new trial on this ground. See In re R.R., 209 S.W.3d at 114. We overrule Gen's Antiques' eighth point of error.
Conclusion
We affirm the portion of the trial court's judgment rendering judgment that Gen's Antiques take nothing, and we reverse the portion of the trial court's judgment that Hart & Co. take nothing and remand for rendition of judgment on the jury's verdict.
Evelyn V. Keyes
Justice
Panel consists of Justices Keyes, Bland, and Sharp.