Mansour Al-Saud v. Youtoo Media,L.P. ( 2018 )

Case: 17-10622 Document: 00514692248 Page: 1 Date Filed: 10/22/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 17-10622 United States Court of Appeals
Fifth Circuit
FILED
October 22, 2018
MANSOUR BIN ABDULLAH AL-SAUD,
Lyle W. Cayce
Plaintiff - Appellee Cross-Appellant Clerk
v.
YOUTOO MEDIA, L.P.; CHRISTOPHER WYATT,
Defendants - Appellants Cross-Appellees
Appeals from the United States District Court
for the Northern District of Texas
USDC No. 3:15-CV-3074
Before HIGGINBOTHAM, DENNIS, and COSTA, Circuit Judges.
GREGG COSTA, Circuit Judge:*
Mansour Bin Abdullah Al-Saud made a $3 million reimbursable down
payment to Youtoo Media, L.P. while he considered whether to purchase a
stake in the technology company. When Youtoo’s prospects dimmed and
creditors forced the sale of its intellectual property, Al-Saud wanted his $3
million back. Youtoo declined, Al-Saud sued, and a jury found that Youtoo
breached the parties’ agreement. The jury also determined that Youtoo’s CEO
Chris Wyatt had breached the contract. We affirm that judgment, but remand
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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for further consideration of attorneys’ fees under a loan agreement between
the parties.
I.
Youtoo’s technology blended social media and television by allowing
viewers to actively participate in broadcasts by sending texts, pictures, and
videos that networks could insert into programs. The company also developed
a “sweepstakes platform” that would let viewers compete for cash and prizes
while watching game shows and sporting events. But to sell the platform to
American broadcasters (its ultimate goal), Youtoo felt it had to demonstrate
success in other markets, and to do that it needed capital. That search for
markets and money brought these parties together.
Wyatt discussed initiating Youtoo operations in the Middle East and
selling a stake in the company with Al-Saud, who is a member of the Saudi
royal family, and his advisor. The parties signed a Letter of Intent (LOI) in
October 2013. Al-Saud gave Youtoo $3 million as a down payment to cover its
short-term costs and had three months to decide “in his sole discretion”
whether to buy a stake in the company. If he declined that option, Youtoo
would reimburse the down payment. The LOI also created Youtoo Middle
East, a joint venture that would market the company’s interactive platform in
the region.
The LOI provides that Youtoo’s “general partner is Chris Wyatt (the
‘General Partner’).” And Wyatt signed the agreement on behalf of both Youtoo
and “Chris Wyatt as the General Partner”
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But registration documents filed with the Texas Secretary of State
indicate that Youtoo Management, LLC, not Wyatt, is the General Partner.
Though drafts of the LOI mention Youtoo Management as Youtoo’s General
Partner, the signed contract does not.
Al-Saud ultimately opted against purchasing an interest in the company.
But because Wyatt made clear that it needed cash to continue operations—
operations that would presumably redound to the benefit of Youtoo Middle
East—Al-Saud gave Youtoo an additional $310,000. A March 2014 Facility
Agreement memorialized that loan.
Despite this move to shore up its finances, Youtoo’s primary lender
eventually forced the company to sell its intellectual property and assets to
cover outstanding debts. In light of Youtoo’s wind down, Al-Saud asked for his
money back. But Youtoo rejected his request for repayment of both the down
payment and the loan. For the down payment, it asserted that Al-Saud had
agreed to be “reimbursed in full” through the first $3 million in profit
distributions from Youtoo’s share in the Middle East entity. As to the loan, the
company contended that Al-Saud had agreed to be repaid in services Youtoo
performed for Youtoo Middle East.
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Unsatisfied, Al-Saud sued for breach of contract. Youtoo counterclaimed
for breach of contract, breach of fiduciary duty, and fraud. At trial, the district
court dismissed Youtoo’s counterclaims as a matter of law. The jury then found
Youtoo and Wyatt liable for breaching the LOI and awarded Al-Saud $3 million
in damages for the down payment that was not returned. It also found Youtoo
liable for breaching the Facility Agreement but awarded Al-Saud only $6,820
for that claim, which was the interest associated with the loan. Al-Saud sought
attorneys’ fees for his success on both claims. The district court allowed him
to recover them against Wyatt (but not Youtoo) for the claim that recovered
the $3 million down payment, but denied the request for work relating to the
Facility Agreement claim.
II.
Youtoo does not appeal the judgement entered against it for breaching
the LOI. Wyatt does, arguing that the agreement did not make him directly
liable for the down payment and that he cannot be derivatively liable as
Youtoo’s General Partner because the contract is mistaken in saying he held
that position.
A.
The district court entered judgment against Wyatt based on the jury’s
finding that he was individually liable for breaching the letter of intent. Al-
Saud’s primary defense of Wyatt’s liability is on this ground. He contends that
Wyatt’s signing of the contract as General Partner rendered him liable for the
failure to return the down payment.
Whether Wyatt could be directly liable under the LOI is a matter of
contract interpretation that we review de novo. 1 Fort Worth 4th Street
1 Al-Saud argues that Wyatt failed to preserve a challenge to his direct liability by not
filing a postverdict motion for judgment as a matter of law. Admittedly, it is not entirely
clear from Wyatt’s briefing whether he argues there was insufficient evidence to find him
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Partners, L.P. v. Chesapeake Energy Corp., 882 F.3d 574, 577 (5th Cir. 2018);
cf. Janvey v. Dillon Gage, Inc. of Dallas, 856 F.3d 377, 388 (5th Cir. 2017)
(noting that instructions hinging on questions of statutory construction are
reviewed de novo).
The LOI “intended to create legally binding and enforceable obligations
between the Parties.” Those parties included Youtoo and Al-Saud, not the
General Partner (whether that be Wyatt or another entity), although the
agreement did specify some obligations of the General Partner. But the LOI
placed the burden on Youtoo alone to reimburse Al-Saud’s down payment in
the event he decided against purchasing a stake in the company: “Youtoo
Media shall reimburse the Down Payment to HRH Prince Mansour through a
mechanism which is to be agreed between the Parties at such time and with
such mechanism to have the economic effect of the Down Payment being
reimbursed in full to HRH Prince Mansour.”
The absence of the General Partner from the reimbursement
requirement contrasts with other provisions that mention or obligate both
Youtoo and “the General Partner.” For example, the General Partner agreed
directly liable or whether he challenges as a legal matter the trial court’s rejection of his
argument that the jury should not have been asked about his liability. Our best reading is
that he does both. That means at least the appeal of the jury question was sufficiently
preserved in the trial court when he objected to it at the charge conference. Jimenez v. Wood
Cty., Tex., 660 F.3d 841, 844–45 (5th Cir. 2011) (en banc) (citing Federal Rule of Civil
Procedure 51(c)(1) for the proposition that objections to jury instructions preserve claims of
error for appeal when they are specific, formal, and on the record); see also NewCSI, Inc. v.
Staffing 360 Sols., Inc., 865 F.3d 251, 263–64 (5th Cir. 2017) (mentioning no renewal
requirement for the preservation of objections to jury instructions). We thus need not decide
whether a party that fails to renew a motion for judgment as a matter of law under Federal
Rule of Civil Procedure 50(b), bars an appeal on factual sufficiency grounds or gets plain error
review. Compare McLendon v. Big Lot Stores, Inc., 749 F.3d 373, 375 n.2 (5th Cir. 2014)
(holding that absent a Rule 50(b) motion an appellate court is powerless to compel a district
court to enter a different judgment), with Shepherd v. Dallas Cty., 591 F.3d 445, 456 (5th Cir.
2009) (reviewing an unpreserved sufficiency challenge for plain error).
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to deal exclusively with Al-Saud during the term of the LOI and not solicit
other investors. That shows the parties knew how to make the General
Partner liable for the reimbursement. But they did not. They also could have
signed a separate agreement making Wyatt a guarantor for Youtoo’s
reimbursement obligation. But again, they did not. The contract does not
make Wyatt directly liable for the breach.
Wyatt’s signing the LOI does not alter that dynamic. In contrast to Al-
Saud and his advisor who signed the LOI on their own behalf, Wyatt did so
only in a representative capacity for both Youtoo and the General Partner. Al-
Saud relies on the principle that when an agent signs a contract he must
disclose the principal’s identity and note that he is acting in a representative
capacity in order to avoid personal liability. See Wright Grp. Architects-
Planners, P.L.L.C. v. Pierce, 343 S.W.3d 196, 200–01 (Tex. App.—Dallas 2011,
no pet.) (holding signatory personally liable because the signature line just
listed him individually without an accompanying corporate name and the
contract nowhere mentioned the company he controlled). But Wyatt did make
those required disclosures to avoid personal liability attaching to his act of
signing the contract. He signed “[f]or and on behalf of: YOUTOO MEDIA,
L.P.,” much like a CEO might sign a contract on behalf of the corporation. And
as long as the CEO makes clear that she is only signing as a representative of
the corporation, then she is not directly liable. That is the situation here.
Wyatt signed for Youtoo in a representative capacity. His second signature on
behalf of himself as General Partner makes him liable for that entities
obligations. But as we have explained, the reimbursement provision only
attaches to Youtoo.
The district court therefore should have granted Wyatt’s objection to the
question allowing the jury to find him directly liable under the contract.
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B.
But there was nothing wrong with the jury’s finding that the contract
required Youtoo to return the $3 million (or at least Youtoo does not appeal
that finding). And in Texas as elsewhere, the general partner in a limited
partnership is liable for the debts and obligations of the partnership. See TEX.
BUS. ORGS. CODE § 153.152(b); Doctors Hosp. at Renaissance, Ltd. v. Andrade,
493 S.W.3d 545, 551 (Tex. 2016). So even if Wyatt was not independently liable
for the down payment, we will consider whether this principle of derivative
liability provides an alternative basis for affirming the judgment. See Lincoln
General Ins. Co. v. U.S. Auto Ins. Servs., Inc., 787 F.3d 716, 723–24 (5th Cir.
2015) (affirming verdict on alternative grounds when additional factual
development is unnecessary); see also Wallerstein v. Spirit, 8 S.W.3d 774, 778,
780 (Tex. App.—Austin 1999, no pet.) (holding general partner liable as matter
of law for judgment issued by court against limited partner).
The first page of the LOI says that Wyatt is the General Partner of
Youtoo Media, as does the signature block (reproduced above). Despite this
language, Wyatt contends it was “undisputed and undeniable” that he was not
the General Partner. He wants to submit extrinsic evidence to prove this. We
have no reason to doubt that the state records would show what Wyatt claims
they would. But that alone is not enough to allow its consideration. Courts,
when interpreting contracts, are generally limited to the four corners of the
document. This restraint, termed the parol evidence rule, reflects the
preference for fully integrated written agreements and the certainty they
provide. See 11 WILLISTON ON CONTRACTS § 33:1, 2 (4th ed. 2018).
As is usually the case with common law rules, there are exceptions to the
bar on extrinsic evidence that can account for some situations when its
application seems inequitable. One of those exceptions, mutual mistake,
seems to cover the problem Wyatt raises. A mistake claim allows for the
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introduction of extrinsic evidence to demonstrate that a written agreement
does not reflect the parties’ true agreement. For instance, mutual mistake
applies when a typist makes an error while finalizing the contract. See
Simpson v. Curtis, 351 S.W.3d 374, 379 (Tex. App.—Tyler 2010, no pet.). The
remedy is reformation of the contract to fit the parties’ intentions. See Estes
Republic Nat. Bank of Dallas, 462 S.W.2d 273, 275 (Tex. 1970). Wyatt
appeared to recognize that his concern fit into this doctrine, but the district
court found that he did not timely raise mutual mistake. He does not challenge
that procedural ruling.
Because the exception of mutual mistake is off the table, Wyatt must
show that the parol evidence rule does not apply in the first place. His
argument goes down two tracks. First, he says that derivative liability is
imposed by law and not by the contract. According to him, the partnership
records go to a matter of law, not to the interpretation of the contract, and thus
are admissible. Second, Wyatt seems to argue that it’s impossible to impose
derivative liability on someone who is not, in fact, the entity legally registered
as the General Partner. We reject both of these arguments.
The divide Wyatt tries to establish between liability that arises from
contract (no parol evidence) and that arising from law (parol evidence allowed)
proves too much. The enforcement of any contractual term depends on the
application of “law.” So if the parol evidence rule went by the wayside anytime
legal principles are being applied, there would be little if anything left of the
rule.
Among the many background legal principles against which parties
negotiate is derivative liability for general partners. See Sunbelt Serv. Corp.
v. Vandenburg, 774 S.W.2d 815, 817 (Tex. App.—El Paso 1989, writ denied)
(“General partners of a limited partnership are personally liable to creditors
for the limited partnership’s debts the same as a partner in a general
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partnership.”); TEX. JUR. 3D PARTNERSHIP § 190 (same). When a contract
describes a limited partner-general partner relationship, it assumes a
derivative liability arrangement. A counterparty who deals with a limited
partner takes into account the financial status of the general partner when
determining the terms it will accept. Without the general partner, the terms
of the contract might be different. And a limited partner and counterparty
have the ability to alter the contract to eliminate derivative liability. See
TEXAS BUS. ORGS. CODE § 152.304(a)(1) (allowing partners and claimants to
agree to modify default rule for general partnership liability); 2 § 153.003(a)
(making section 152.304(a)(1) applicable to limited partnerships). 3 The
contract’s listing of Wyatt as General Partner carried the default rule of
derivative liability with the designation. As opposed to being some purely
external force, derivative liability of a general partner is as much a part of the
contract as other types of liability. It is the contract and not the operation of
law acting in isolation that imposes the obligations of a general partner. As a
result, Wyatt’s purported contract/law distinction fails to avoid the ordinary
rule that external documents cannot prevent enforcement of what the parties
agreed to in writing.
The other part of Wyatt’s argument appears to be that derivative liability
cannot hold when someone else is the legally registered general partner. But
2 Wyatt argues that Delaware law applies, but does not press the point. Delaware law
identically allows partners to agree with claimants to adjust the default rules for liability.
See 6 DEL. CODE § 15-306(a).
3 Section 153.152(b) allows only other provisions the Business Organizations Code to
alter the liability of general partners to third-parties. But the subchapter deals with the
relationship between general and limited partners and does not alter the types of contracts
a limited partner could form. The distinction is meaningful. A limited partnership in which
the general partner could remove its liability for limited partner activity undercuts the
foundation of limited partnerships. But a limited partner could choose to alter its liability
without harm to the concept of limited partnerships, though it would probably never choose
to do so.
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this is just another way to try and avoid the ban on extrinsic evidence.
Although the core focus of the parol evidence rule is excluding the negotiation
history of a contract, it also bars other extrinsic evidence such as government
records that are inconsistent with the terms of the contract. See Wilson v.
Fisher, 188 S.W.2d 150, 152 (Tex. 1945) (prohibiting parol evidence to identify
the location of land in a contract, though such evidence would typically be in
public records); see also Boyert v. Tauber, 834 S.W.2d 60, 63 (Tex. 1992)
(rejecting use of extrinsic evidence to identify the proper broker in real estate
contract). To the extent the parties knew the identity of the actual General
Partner but mistakenly listed Wyatt, a claim of mutual mistake was the way
to correct this error.
Absent a claim of mutual mistake, there is nothing unusual about
holding Wyatt to the agreement he signed. Indeed, a person could
contractually agree to take on the legal obligations of a general partner, even
if not legally registered as such. The contract here did just that. A different
doctrine—partnership by estoppel—demonstrates the point that official
documents do not always control. Under partnership by estoppel, a person who
falsely represents herself as a member of a partnership can still be liable as if
she were a partner. See Kondos Entertainment, Inc. v. Quinney Elec., Inc., 948
S.W.2d 820, 823 (Tex. App.—San Antonio), rev’d on other grounds, 988 S.W.2d
212 (Tex. 1999); 57 TEX. JUR. 3d Partnership § 27 (2018). Just as failing to
legally form a partnership will not always prevent the imposition of liability,
failing to legally register as the general partner will not always do so either.
And the reliance interests that underlie estoppel also support enforcing the
contract the parties signed.
Of course, our holding might be different if Wyatt had no notice that the
contract designated him General Partner. But Wyatt was on notice because
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he signed the LOI directly to the right of the words “Signed for and on behalf
of: Chris Wyatt as the General Partner.”
The contract says Wyatt was the General Partner. The parol evidence
rule prevents Wyatt from now trying to change that. He thus is derivatively
liable for the Youtoo’s obligations under the contract.
III.
Because we uphold the liability finding as to Wyatt, we must also decide
whether the district court erred in awarding attorneys’ fees against him. We
review that decision de novo. Brinson Benefits, Inc. v. Hooper, 501 S.W.3d 637,
641 (Tex. App.—Dallas 2016, no pet.).
The LOI does not discuss attorneys’ fees, so Al-Saud sought them under
Texas law. A party prevailing on a breach of contract claim may recover fees
“from an individual or corporation.” TEX. CIV. PRAC. & REM. CODE § 38.001(8).
Courts have interpreted “individual” and “corporation” strictly, meaning
partnerships like Youtoo are not liable for fees. See Hoffman v. L&M Arts, 838
F.3d 568, 583 n.14 (5th Cir. 2016) (citing Choice! Power, LP v. Feeley, 501
S.W.3d 199, 214 (Tex. App.—Houston [1st Dist.] 2016, no pet.)).
The district court found Wyatt directly liable for breach. In light of that,
the attorneys’ fees question was straightforward: Wyatt is an individual and
therefore falls within the statute’s ambit.
Does our reliance on his derivative liability as Youtoo’s general partner
change the analysis? Youtoo, a limited partnership, is not answerable for fees.
It might seem anomalous if Wyatt were on the hook for fees when the party
with the underlying liability is not. And Texas courts have not addressed this
situation.
But it is a “cardinal law” in Texas that courts construe a statute by first
looking to the plain meaning of its words. See Fitzgerald v. Advanced Spine
Fixation Sys., Inc., 996 S.W.2d 864, 865 (Tex. 1999). That text here is sparse
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but clear: “A person may recover reasonable attorney[s’] fees from an
individual or corporation.” TEX. CIV. PRAC. & REM. CODE § 38.001. It does not
make the recovery of such fees dependent on the theory of liability imposed.
Instead it looks solely to whether that party is an individual or corporation.
Whether Wyatt is derivatively or directly liable, he is still an individual. We
will therefore affirm the judgment requiring Wyatt to pay fees for the breach
of the LOI.
IV.
We next address whether the district court wrongly entered judgment as
a matter of law on Youtoo’s counterclaims. Youtoo alleged that Al-Saud
breached the LOI and his fiduciary duties by failing to manage Youtoo Middle
East’s operations and fraudulently inducing Youtoo to sign the LOI so Al-Saud
could gain control of the joint venture.
The district court rejected the counterclaims on the ground that the
testimony of Youtoo’s damages expert was too speculative. We review that
evidentiary question for abuse of discretion. GIC Servs., L.L.C. v. Freightplus
USA, Inc., 866 F.3d 649, 660 (5th Cir. 2017).
The Middle East entity never earned a profit. Parties cannot recover
anticipated profits when “there is no evidence from which they may be
intelligently estimated.” Tex. Instruments, Inc. v. Teletron Energy Mgmt., Inc.,
877 S.W.2d 276, 279 (Tex. 1994) (quoting Sw. Battery Corp. v. Owen, 115
S.W.2d 1097, 1098–99 (Tex. 1938)). Those profits must be ascertainable with
a reasonable degree of certainty based on objective facts, figures, or data.
Meaux Surface Prot., Inc. v. Fogleman, 607 F.3d 161, 170–71 (5th Cir. 2010).
That a business is new and unestablished is a consideration in applying the
reasonable certainty standard but is not conclusive. Hiller v. Mfrs. Prod.
Research Grp. of N. Am., Inc., 59 F.3d 1514, 1518 (5th Cir. 1995); see also
Helena Chem Co. v. Wilkins, 47 S.W.3d 486, 505 (Tex. 2001) (holding a lack of
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profit history does not preclude a business from recovering lost future profits).
Yet the “mere hope of success of an untried enterprise, even when that hope is
realistic, is not enough for recovery of lost profits.” Texas Instruments, 877
S.W.2d at 279–80 (mentioning other important factors as well, including the
experience of those involved, the nature of the activity, and the relevant
market); see also Burkhart Grob Luft und Raumfahrt GmbH & Co. v. E-
Systems, Inc., 257 F.3d 461, 467 (5th Cir. 2001) (noting courts have required
evidence that a new venture “had a good chance of succeeding” to allow
recovery of future profits). The Supreme Court of Texas thus found a lack of
reasonable certainty to project damages for a new venture when no working
model of the product existed, its viability was in doubt, and the company that
was supposed to produce it had never operated at a profit. Texas Instruments,
877 S.W.2d at 280.
Many of these problems also characterize Youtoo Middle East. It was a
new venture with no history of profitability. The joint venture had few signed
agreements with regional broadcasters or governments. Defendants’ damages
estimates had to rely in large part on hoped for partnerships, and speculation
about the profits those agreements would generate. The profit calculations
defendants would have presented at trial were “projections that were
presented to investors,” calculations which Texas courts have held insufficient
when not supported with more reliable indicators of profitability. See
Hernandez v. Sovereign Cherokee Nation Tejas, 343 S.W.3d 162, 174 (Tex.
App.—Dallas 2011, pet. denied) (finding lost profit projections based on an
investor prospectus insufficient to support a damages award). And though
members of Youtoo’s executive team had extensive experience in media and
technology, it was not them but Al-Saud who managed Youtoo Middle East.
The “evidence” of lost profits was speculative. As such the trial court did
not abuse its discretion in excluding it and thus dismissing the counterclaims.
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V.
Lastly, we consider the district court’s ruling that Al-Saud was not
entitled to attorneys’ fees under the Facility Agreement. Unlike the LOI, the
Facility Agreement contains an attorneys’ fees provision (section 10): “The
Borrower must pay the Lender the amount of all costs and expenses (including
legal fees) incurred by it in connection with the enforcement of, or the
preservation of any rights under, this Agreement.” Yet the court rejected Al-
Saud’s fee request because he did not refer to that provision in the complaint.
We review that decision for abuse of discretion. United Indus., Inc. v. Simon-
Hartley, Ltd., 91 F.3d 762, 765 (5th Cir. 1996).
The boundary separating sufficient and insufficient pleading of requests
for fees is ill-defined. See, e.g., id. (holding that merely requesting “costs” is
inadequate). A party must at a minimum “put its adversaries on notice that
attorneys’ fees are at issue.” Id. Other circuits require specific pleading under
Rule 9(g), id. at 764 (collecting cases), which “is designed to inform defending
parties as to the nature of the damages claimed in order to avoid surprise; and
to inform the court of the substance of the complaint,” Great Am. Indem. Co. v.
Brown, 307 F.2d 306, 308 (5th Cir. 1962). In our court, satisfying Rule 9(g)
appears to be sufficient but not necessary. United Industries, 91 F.3d at 765(noting “exceptions to this general rule” of specific pleading). And a pleading
defect may be cured by amendment or later notice. See Crosby v. Old Republic
Ins. Co., 978 F.2d 210, 211 n.1 (5th Cir. 1992) (finding no error when the court
considered a claim for attorneys’ fees, despite the company’s failure to plead
special damages, because it advanced that claim during pretrial conferences);
5 CHARLES A. WRIGHT & ARTHUR R. MILLER, FEDERAL PRAC. & PROC. § 1312 &
n.3 (noting that the failure to plead special damages bars recovery unless the
defect is cured by amendment under Rule 15(b)); see also Henderson v.
Montgomery Cty., 1993 WL 560302, at *3–4 (5th Cir. Dec. 30, 1993) (finding
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the district court abused its discretion in failing to consider Henderson’s
postcomplaint “memorandum” as a motion to amend and not allowing
amendment of his claims); Sherman v. Hallbauer, 455 F.2d 1236, 1242 (5th
Cir. 1972) (reversing the district court because it did not construe an opposition
to summary judgment as a motion to amend the pleadings with respect to
Sherman’s theory of the case).
It is debatable whether the complaint put Youtoo on notice that Al-Saud
was seeking fees if he showed a breach of the Facility Agreement. Its “Breach
of Contract” section says that as a “result of Defendants’ breach of the LOI and
Facility Agreement, Plaintiff is incurring damages, plus attorneys’ fees” and “all
conditions precedent to Plaintiff’s right to recover under the agreements have
. . . occurred.” (emphases added). But in the “Attorneys’ Fees” section, Al-Saud
requests fees only under the Texas statute. Asking for fees under the statute
without also invoking section 10 of the Facility Agreement could be interpreted
as a conscious decision to forego them under the latter. As a result, the
complaint is not on its own enough for us to find that the court below abused
its discretion.
But that calculus changes when other filings giving notice are
considered. Al-Saud’s motion for summary judgment asserts that he was
entitled to recover fees incurred “pursuant to the parties’ contracts and Texas
law. App. 18 (§ 10); Tex. Civ. Prac. & Rem. Code. § 38.001.” (emphasis added).
Moreover, the Joint Pretrial Order says, “Plaintiff is also entitled to recover
his reasonable and necessary attorneys’ fees . . . for breach of the Facility
Agreement.”
This subsequent material, particularly when considered in combination
with language from the complaint, provides sufficient notice. By ignoring these
later filings, and our caselaw indicating that they may cure a fee-related
pleading defect, the court below abused its discretion.
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***
The judgment of the district court is AFFIRMED as to Wyatt’s liability
for breach and attorneys’ fees under section 38.001, AFFIRMED as to the
dismissal of the defendants’ counterclaims, and REVERSED and REMANDED
as to the denial of attorneys’ fees under the Facility Agreement.
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