Long Trusts v. Griffin , 2004 Tex. App. LEXIS 7399 ( 2004 )

ON MOTIONS FOR REHEARING

All parties have filed motions for rehearing. We will address only the matters we believe need further discussion.

The Griffins argue in their motion that, with regard to the Tejas settlement proceeds, the trial court found the damages attributable to the Rusk County contract to be certain. Based on that assumption, the Griffins contend the trial court’s finding that such damages were indeterminable is erroneous. We disagree. The trial court did not find that the damages attributable to the Rusk County contract were certain; rather, in its finding number 27P, the trial court found that, in the Tejas lawsuit, the Trusts’ expert, Richard A. Johnston, attributed 84.61 percent of the damages to the Rusk County contract. The trial court, however, was not required to accept the expert’s opinion if it did not believe it was accurate or sufficiently definite or based on reliable evidence.

The Trusts, in their motion for rehearing,- argue that we erred in upholding the trial court’s ruling that the Trusts committed a material breach of the Tejas litigation participation letter agreement by failing to bill Robert Griffin and Robert Griffin, Jr., on a monthly basis for their shares of the litigation expenses. The Trusts contend the agreement to bill on a monthly basis is an independent covenant in the agreement, and therefore its breach could not be material. Whether a covenant in a contract is dependent or independent depends on the intention of the parties as determined from a consideration of the entire contract. Lazy M Ranch, Ltd. v. TXI Operations, LP, 978 S.W.2d 678 (Tex.App.-Austin 1998, pet. denied); Graco Robotics, Inc. v. Oaklawn Bank, 914 S.W.2d 633 (Tex.App.-Texarkana 1995, writ dism’d).

Mutual covenants will be considered dependent rather than independent unless the contrary intention clearly appears. Graco Robotics v. Oaklawn Bank, 914 S.W.2d 633. In this case, the main purpose of the letter agreement was to provide for the sharing of litigation expenses. The contemplated expenses were estimated to be very substantial and to extend over a long period of time. Robert Griffin’s and Robert Griffin, Jr.’s, primary obligation under the agreement was to pay their shares of these expenses. Thus, the spacing and the amounts of the payments were obviously major concerns with respect to their obligations, as well as the Trusts’ rights. The trial court found that the obligation to bill these expenses on a monthly basis was a material covenant of the contract, and we find the court’s ruling supported by the evidence and the law.

The principal case relied on by the Trusts on this issue, Emmord’s Inc. v. Obermiller, 526 S.W.2d 562 (Tex.Civ.App.-Corpus Christi 1975, writ ref'd n.r.e.), is inapposite. In that case, the disputed covenant was not even expressed in the contract. It was alleged to be an implied covenant, but the court found that it was not established. In our case, the obligation to bill Robert Griffin and Robert Griffin, Jr., on a monthly basis is an express provision of the contract, and the trial court found it was a material element of the contract.

We respectfully overrule the motions for rehearing.