South Plains Lamesa Railroad, Ltd. v. Acero International, Inc. ( 2002 )

11th Court of Appeals

Eastland, Texas

            Opinion

South Plains Lamesa Railroad, Ltd.

Appellant

Vs.       No. 11-01-00133-CV - Appeal from Dawson County

Acero International, Inc.

Appellee

Acero International, Inc. brought suit against South Plains Lamesa Railroad, Ltd. (SPLR) for breach of a written contract and breach of an oral contract.  SPLR filed a counterclaim alleging that Acero breached the written contract. Acero contended that the facts showed that SPLR had repudiated the written contract.  The jury found that SPLR repudiated the written contract and that the repudiation was not excused and awarded Acero $25,000 in damages. The jury also found that SPLR breached the oral contract and that the breach was not excused and awarded $5,000 in damages. The jury further found that Acero failed to comply with its written agreement with SPLR but that its failure to comply was excused.   Based upon the jury=s findings, the trial court entered judgment that Acero recover $25,000 from SPLR for breach of the written contract and $5,000 for breach of the oral contract and that SPLR take nothing on its counterclaim.  We affirm. 

In its first and second issues on appeal, SPLR argues that there is no evidence or insufficient evidence to support the jury=s finding that SPLR repudiated the contract and that there is no evidence or insufficient evidence to support the jury=s finding that any repudiation by SPLR was not excused.  In its third and fourth issues on appeal, SPLR argues that there is no evidence or insufficient evidence to support the jury=s finding that SPLR breached the oral contract and that there is no evidence or insufficient evidence to support the jury=s finding that any failure to comply with the oral contract was not excused.

 In order to address the no‑evidence argument, we must consider only the evidence and inferences that tend to support the finding, disregarding any evidence or inferences to the contrary.  If there is any evidence of probative force to support the finding, the no evidence point must be overruled.   Juliette Fowler Homes, Inc. v. Welch Associates, Inc., 793 S.W.2d 660 (Tex.1990);   In re King's Estate, 244 S.W.2d 660 (Tex.1951); see also Merrell Dow Pharmaceuticals, Inc. v. Havner, 953 S.W.2d 706, 711 (Tex.1997), cert. den'd,  523 U.S. 1119 (1998).  In order to determine if the evidence is factually sufficient, we must review all of the evidence and determine whether the challenged finding is so against the great weight and preponderance of the evidence as to be manifestly unjust. Pool v. Ford Motor Company, 715 S.W.2d 629 (Tex.1986); In re King's Estate, supra.

Joe and Lynn Mangum are the primary owners and officers of Acero, and Larry D. Wisener is the general manager of SPLR.   SPLR acquired a line of railroad known as the ALamesa branch line@ from Atchison, Topeka, and Sante Fe. SPLR received authority  to abandon the Lamesa branch line, and Wisener made plans to remove the railroad materials.  Wisener entered into a contract with another party to remove the metal from the railroad.  In September 1997, Mangum and Wisener on behalf of Acero and SPLR entered into a contract in which Acero was to remove all cross ties and switch ties along a 44.7-mile stretch of the Lamesa branch line and clean up along the line after removing the ties.  As compensation, Acero was to receive ownership of all ties removed except A[a]ll Relay Switch Ties and Two Thousand (2,000) Number One (#1) Relay Track Ties@ which were to be returned to SPLR.

            The contract stated that Acero was to begin removing the ties as soon as possible after signing the contract and that Acero was to carry on a continuous operation completing all tie removal and relocation of the ties by May 1998.  The contract required Acero to furnish SPLR with a certificate of insurance which included proof of worker=s compensation insurance.  The contract stated that a Apredetermined site will be available for disposal for all ties not salvaged (located at or near Tahoka, Texas).@  The contract provided that Acero could not assign or subcontract any portion of the tie removal.

Joe Mangum testified at trial that he was ready to begin the tie removal in September 1997 but that the metal rail had not been removed. Mangum received a bid on another job, and he had his crew begin work on the other job.  At the end of November, Mangum went by himself to begin the tie removal for SPLR.  At that time, Mangum and SPLR entered into an oral contract in which Acero would remove the metal rail and the other track materials (OTM) for $45 a ton until SPLR could secure a crew to remove the rail and OTM.  Mangum=s crew arrived in December 1997, and they began removing the rail, OTM, and ties. Mangum stated that his crew worked removing the rail and OTM until mid-January 1998 and that they removed approximately 250 to 260 tons of OTM. 

Mangum stated that SPLR had agreed to pay for the OTM removal on a weekly basis but that, after two to three weeks, he had not been paid.  Mangum requested payment, and Wisener told Mangum to load the OTM and weigh it.  Mangum testified that the parties had agreed he would receive a percentage per mile based upon a formula that was standard in the industry to compute the weight of OTM.  Mangum testified that he has never been paid for the OTM removal. 

Mangum testified that, as they removed the ties, they separated the number one relay ties and bundled them for SPLR.  Mangum admitted that he had all new employees and that he probably did not supervise their grading and bundling of the ties for SPLR as closely as he should have.  SPLR did not approve of the 2,000 ties Acero had bundled.  Acero then rebundled the ties until they provided 2,000 number one relay ties.  However, SPLR never returned the ties they found unacceptable.

 Mangum stated that, as they were removing the ties, they began accumulating a lot of Atrash ties.@  The contract called for the Atrash ties@ to be disposed of at a location at or near Tahoka.  Mangum testified that Wisener never told him where to dispose of the trash ties.

Mangum further testified that Wisener interfered with his agreements to sell the ties to other parties.  Mangum made an agreement with another party to store the ties, and Wisener instructed Mangum to remove the ties from that property.  Mangum testified that, except for the switch ties and 2,000 relay ties, the remaining ties belonged to Acero to dispose of or sell; however, Wisener would not allow Mangum=s employees to remove ties they had bundled and stacked.  Because of these actions by Wisener, Mangum believed that SPLR blocked Acero=s performance of the agreement and that SPLR intended to abandon their agreement.

John Andrew Cunningham who worked for Acero on the tie removal job testified that there were approximately 2,000 to 2,500 ties that were stacked, bundled, and stored at the railroad yard depot in Lamesa. Cunningham went to the depot to load the ties and move them to some property rented by Acero.  Cunningham stated that he and other employees were at the depot loading the ties when Wisener arrived and told them to get off the property.  Cunningham said that Wisener was Aextremely agitated@ and that Wisener told them  to A[g]et [their] a-s back on the main line and do [their] job.@ Wisener told them to get off the property and not to come back.  

On April 10, 1998, Mangum sent a letter to Wisener that listed in detail areas in which Mangum felt Wisener was not fulfilling his obligations under both the written and oral contracts.   The letter stated:

It is obvious to me that you have neither the intention or the ability to approach this in a businesslike manner and, therefore, this letter will serve as my notice that Acero International, Inc. does not intend to remove any additional ties from the railroad between Lamesa and Slayton (sic). 

Mangum requested that Wisener release all ties Acero had removed from the railroad and placed on SPLR property and that Wisener pay Acero for removal of rail and OTM.

Wisener wrote a letter responding to each of Mangum=s allegations.  The letter stated:

It was evident by this time that you were incapable of performing according to the contract.  Any further removal of ties located on Railroad Property until this disagreement is resolved is considered theft and local authorities have been notified.

Wisener also stated that the letter would serve as notice that SPLR Awill try to resolve this matter in a professional and business-like manner, however, this letter is in no way releasing ties or any other materials remaining on Railroad Property.@  Wisener stated that he estimated the weight of the OTM removed by Acero to be 125 tons and that he would pay Acero for OTM removal upon the return of tools SPLR loaned to Acero and upon remittance by Acero for relay ties removed from railroad property and utilized in track construction in Albuquerque, New Mexico.

Wisener testified at trial that, prior to signing the contract, he took Mangum along the railroad line to discuss the job and that he showed Mangum the Astaging areas@ in which to store the removed ties. Wisener stated that, under the contract, Mangum was not authorized to enter into a contract with other parties to store the removed ties.  Wisener said that Mangum indicated he could find the land in Tahoka designated for disposal of the ties but that Mangum placed trash ties and other trash on SPLR property without ever cleaning it up.  Wisener stated that Acero=s progress in removing the ties was very slow and that they only removed approximately eight miles of ties. Wisener testified that he did not terminate the contract with Mangum but that he received a letter from Mangum terminating the contract. Wisener did not tell Cunningham that Acero could not complete the job but, rather, told him to get back to work on the main line.

SPLR first argues that there was no evidence or insufficient evidence to support the jury=s finding that SPLR repudiated the contract. A party repudiates a contract or agreement when, by  words or actions, the contracting party indicates that he is not going to perform his contract in the future. Jenkins v. Jenkins, 991 S.W.2d 440 (Tex.App. ‑ Fort Worth 1999, pet=n den=d); Chavez v. Chavez, 577 S.W.2d 306, 307 (Tex.Civ.App. ‑ El Paso 1979, writ ref'd n.r.e.).  Repudiation consists of conduct that shows a fixed intention to abandon, renounce, and refuse to perform the contract.  Jenkins v. Jenkins, supra.

  Viewing only the evidence that supports the jury=s finding, the record shows that Wisener instructed workers for Acero to get off of SPLR property and not to remove any ties from the property.  We find that the jury=s findings are supported by sufficient evidence to withstand a no-evidence challenge. The contract stated that Acero was to receive ownership of all ties removed except for 2,000 Number One relay ties and all switch ties.  There was testimony at trial that SPLR had the option to purchase any other relay ties that were available in addition to the 2,000 provided for in the contract. Although the jury heard conflicting testimony concerning Acero=s ability to remove the ties from SPLR property and sell them to third parties as well as conflicting testimony on whether Wisener ordered Acero workers off of SPLR property and instructed them not to return, we find that there is more than a scintilla of probative evidence that supports the jury=s finding that SPLR repudiated the contract and that the jury=s finding is not so against the great weight and preponderance of the evidence as to be manifestly unjust.  We hold that the jury=s finding that SPLR=s repudiation of the contract was not excused is supported by sufficient evidence to withstand both a no evidence challenge and an insufficient evidence challenge. SPLR=s first and second issues on appeal are overruled. 

SPLR next contends that there was no evidence or insufficient evidence to show that SPLR breached the oral contract in which SPLR was to pay Acero for removing rail and OTM.  The evidence is uncontradicted that SPLR agreed to pay Acero $45 per ton for removing the rail and OTM.  The evidence is also uncontradicted that SPLR has not paid Acero for removing the rail and OTM.  Therefore, the evidence supports the jury=s finding that SPLR  breached the oral contract, and the jury=s finding is not so against the great weight and preponderance of the evidence as to be manifestly unjust.

SPLR argues that any breach of the oral contract was excused because Acero did not provide SPLR with an invoice requesting payment until after Acero stopped removing ties under the written contract. SPLR also contends that payment for removing the rail and OTM was conditioned upon Acero returning tools it borrowed from SPLR.  However, the jury heard evidence that SPLR agreed to pay Acero $45 per ton for the rail and OTM.  The jury heard evidence that such payment was to be calculated by a formula accepted in the industry without requiring Acero to actually weigh the rail and OTM it removed and present SPLR with an invoice.  The record also shows that Acero requested payment for rail and OTM removal after two or three weeks of working in that capacity and that there was no request for returning borrowed tools at that time.  SPLR has not shown that the jury=s finding that SPLR=s breach of the oral contract was not excused is so against the great weight and preponderance of the evidence as to be manifestly unjust.  Appellant=s third and fourth issues on appeal are overruled. 

In its fifth issue on appeal, SPLR contends that Acero=s counsel made an improper jury argument during closing arguments.  In order to obtain a reversal for improper jury argument, the complainant must show: (1) that there is error in the argument; (2) that it was not invited or provoked; (3) that the error was preserved by an objection, motion for mistrial, or motion to instruct; (4) that the error was not curable by instruction, reprimand by the judge, or proper withdrawal of the statement; and (5) that the argument by its nature, degree, and extent constituted reversible harmful error.   Standard Fire Insurance Company v. Reese, 584 S.W.2d 835, 839 (Tex.1979).  Incurable jury argument occurs when comments are so inflammatory that their harmful nature cannot be cured by an instruction to disregard.   National Union Fire Insurance Company of Pittsburgh, Pennsylvania v. Kwiatkowski, 915 S.W.2d 662, 664 (Tex.App. ‑ Houston [14th Dist.] 1996, no writ). The appellate court must closely examine all of the evidence to determine the probable effect of the argument on a material finding.  Standard Fire Insurance Company v. Reese, supra at 840.  The complainant must show that the probability that the improper argument caused harm is greater than the probability that the verdict was grounded on the proper proceedings and evidence.  National Union Fire Insurance Company of Pittsburgh, Pennsylvania v. Kwiatkowski, supra.

During its final argument, counsel for Acero stated, AWhen you get into a contract dispute, you=re supposed to look at the contract most harshly against the person that wrote it, not just, hey, you know, this is a contract and  - - .@   Counsel for SPLR objected to the argument, and the trial court instructed the jury that what the lawyers say is not evidence.  The trial court also stated:

The evidence is what you hear from the witness stand and what you say from the witness stand and what you see in the exhibits.  The lawyers have a right to argue their interpretation of it.  What they say is not evidence.  What=s evidence is what you heard from the witness stand and what you see in the exhibits.

SPLR=s counsel then objected to the Alegal argument@ that the Acontract is to be interpreted against the drafter.@  The trial court sustained the objection and instructed the jury to Adisregard what=s not in the charge as to what the law is.@

Viewing all of the evidence, we find that the argument by Acero=s counsel was not so inflammatory as to be incurable by the trial court=s instructions to disregard the statement.  SPLR has not shown that the argument was so harmful that the verdict was not based upon proper evidence. SPLR=s fifth issue on appeal is overruled.

The judgment of the trial court is affirmed.

JIM R. WRIGHT

JUSTICE

August 15, 2002

Do not publish.  See TEX.R.APP.P. 47.3(b).

Panel consists of: Wright, J., and

McCall, J., and McCloud, J.^[1]

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^[1]Austin McCloud, Retired Chief Justice, Court of Appeals, 11th District of Texas at Eastland sitting by assignment.