J. Todd Southern, Independent of the Estate of Raul "Dude" Crouse v. Kurt E. Goetting, Sr. ( 2011 )

COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
J. TODD SOUTHERN, INDEPENDENT §
EXECUTOR OF THE ESTATE OF No. 08-09-00306-CV
RAUL “DUDE” CROUSE, DECEASED, §
Appeal from the
Appellant, §
327th District Court
v. §
of El Paso County, Texas
KURT E. GOETTING, SR., §
(TC# 2008-053)
Appellee. §
OPINION
In two issues, J. Todd Southern, Appellant and Executor, challenges the legal and factual
sufficiency of the evidence to support both the jury’s finding that Raul “Dude” Crouse, deceased,
and Kurt E. Goetting, Sr., Appellee, entered into an enforceable contract for the offset of rent and
the jury’s award of rental-offset damages to Goetting. In his third issue, Southern complains that the
trial court erred in refusing to award attorney’s fees. We reverse.
BACKGROUND
In 1996, pursuant to an oral agreement, Goetting sold to Crouse a one-half interest in a
building and lot known as 1602 Olive in El Paso, Texas, for $150,000 with interest.1 At trial,
Goetting stated that Crouse paid him more than $170,000 and obtained a one-half interest in the
property. Crouse operated a successful business from the property and paid one-half of the property
taxes from 1996 to 2002. Although there is no dispute that Crouse fully paid for his one-half interest
in the property, Goetting never executed a deed to any part of the property in Crouse’s name.
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Although Goetting’s attorney prepared a letter agreement, neither Goetting nor Crouse executed the letter
agreement or any other document memorializing the terms of the oral agreement.
Thereafter, Goetting orally agreed to repurchase Crouse’s one-half share of the property and
paid Crouse $1,200 per month for several years. After Crouse died in May 2007, Goetting soon
stopped making payments for the repurchase of the property and claimed that he owed nothing more
for the repurchase.
Southern brought suit for specific performance of the conveyance of an equitable and legal
one-half interest in the Olive property, sought conveyance of the property by deed or, alternatively,
partition and sale of Crouse’s one-half interest of the Olive property and delivery of the proceeds to
Crouse’s estate. Southern also sought a declaratory judgment acknowledging one-half interest in the
Olive property. Southern pursued relief under other alternative theories including fraud, unjust
enrichment, “money wrongfully obtained,” and breach of agreement.2 Southern also prayed for
reasonable and necessary attorney fees.
At trial, Goetting admitted that he had paid Crouse $76,180 of the $150,000 repurchase
amount for the property but had not paid the remaining balance of $73,820. Although not pleaded
in his answer, Goetting asserted during trial that Crouse had agreed to pay rent during his occupancy
of the property and, because Crouse had not done so during his purchase of the property, Crouse had
agreed to offset the unpaid rent against Goetting’s repurchase obligations. Goetting admitted that
he did not make any rent calculations until after Crouse had died and said that he never discussed
any rental figures or terms with Crouse. Before closing arguments, Southern presented witness
testimony in support of his request to recover attorney fees.
The trial court granted Goetting’s motion for directed verdict as to fraud but denied the
2
Although Southern also pleaded promissory estoppel as an alternative basis of recovery, he withdrew that
cause of action during trial.
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motion on all other bases while withholding its ruling on Southern’s declaratory judgment request.
The jury found that Goetting failed to comply with the repurchase agreement and assessed damages
of $73,820, the amount which remained unpaid under the repurchase agreement absent any alleged
rent offset, in favor of Southern. However, in Question 3 of the verdict form, the jury also found that
Crouse failed to comply with an agreement to pay rent for the Olive property, and in Question 4, the
jury awarded Goetting damages for unpaid rent in the amount of $73,820.3 In Question 7, despite
having awarded damages to Southern, the jury refused to award Southern any attorney’s fees for his
services on behalf of Crouse’s estate.
The trial court entered a take-nothing judgment, did not award attorney’s fees, and denied
both Southern’s post-judgment motion to disregard the jury’s findings, wherein he challenged the
legal sufficiency of the jury’s verdict on Questions 3, 4, 5, 6, and 7, and his motion for declaratory
judgment. Southern’s motion for new trial, which was overruled by operation of law, challenged the
legal and factual sufficiency of the evidence to support the jury’s findings on Questions 3 and 4, and
alleged that because there was no evidence to support them, the jury’s answers on Questions 5, 6,
and 7 of the court’s charge were against the overwhelming weight of the evidence and were
manifestly unjust.
DISCUSSION
Because Southern objected to the trial court’s submission of Questions 3 and 4 to the jury
upon the bases of both no evidence and legally insufficient evidence, raised his legal sufficiency
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Asserting that there was no evidence of any agreement by Crouse to pay rent during his purchase of the
Olive property, that there was no evidence of any amount Crouse owed for rent, and that the amounts of rent
provided by Goetting were legally insufficient, Southern objected to the submission of Questions 3 and 4 to the jury.
The trial court overruled Southern’s objections.
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challenge in his motion to disregard the jury’s answers, and challenged the legal and factual
sufficiency of the evidence in his motion for new trial, we find his issues on appeal are properly
preserved for our consideration. Cecil v. Smith, 804 S.W.2d 509, 510-11 (Tex. 1991) (in a jury
trial, a challenge to the legal sufficiency of the evidence is preserved for appeal by raising the
specific complaint in: (1) a motion for instructed verdict; (2) a motion for judgment not
withstanding the verdict; (3) an objection to the submission of the issue to the jury; (4) a motion to
disregard the jury’s answer to a vital fact issue; or (5) a motion for new trial); accord TEX. R. CIV.
P. 301.
In Issue One, Southern contends that the jury’s finding that Crouse and Goetting entered into
an enforceable contract for the offset of rent is unsupported by legally and factually-sufficient
evidence. In Issue Two, Southern contends that the jury’s award of $73,820 to Goetting was not
supported by legally and factually sufficient evidence. In his third issue, Southern asserts that he is
entitled to recover his attorney’s fees. We agree.
Standard of Review
When a party raises both no-evidence and legal-insufficiency issues on appeal, we should
consider and rule upon the no-evidence issue first. Glover v. Texas Gen. Indem. Co., 619 S.W.2d
400, 401 (Tex. 1981); Baker v. Peace, 172 S.W.3d 82, 86-87 (Tex. App. – El Paso 2005, pet.
denied). If we find some evidence exists to support the verdict, we then review the factual-
sufficiency challenge. Baker, 172 S.W.3d at 87.
A “no evidence” or legal sufficiency issue is a question of law which challenges the legal
sufficiency of the evidence to support a particular fact finding. Serrano v. Union Planters Bank,
N.A., 162 S.W.3d 576, 579 (Tex. App. – El Paso 2004, pet. denied). There are two separate “no
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evidence” claims. In the first type of no-evidence claim, when a party having the burden of proof
suffers an unfavorable finding, the issue challenging the legal sufficiency of the evidence should
assert that the fact or issue was established as a “matter of law.” Id. In the second type of no-
evidence claim, when a party that is without the burden of proof suffers an unfavorable finding, the
challenge on appeal is one of “no evidence to support the finding.” Serrano, 162 S.W.3d at 579.
Because Southern did not bear the burden of proving a valid agreement to offset rent against
Goetting’s payments for the repurchase of the Olive property, his challenge is one of “no evidence
to support the finding.” Serrano, 162 S.W.3d at 579.
We will sustain a legal sufficiency or “no evidence” challenge on appeal if the record shows:
(1) the complete absence of a vital fact; (2) the court is barred by rules of law or 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 scintilla; or (4) the evidence establishes conclusively the opposite of the
vital fact. City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005); El Paso ISD v. Pabon, 214
S.W.3d 37, 41 (Tex. App. – El Paso 2006, no pet.). We consider the evidence in the light most
favorable to the verdict and indulge every reasonable inference that would support it. City of Keller,
168 S.W.3d at 822. Even if the evidence is undisputed, it is the province of the trier of fact to draw
from it whatever inferences it wishes, so long as more than one inference is possible. Id. at 821.
However, if the evidence allows only one inference, neither the trier of fact nor the reviewing court
may disregard it. Id. at 822.
We are also mindful that the trier of fact is the sole judge of the credibility of the witnesses
and the weight to be given their testimony. Id. at 819. It is within the province of the trier of fact
to resolve conflicting evidence. Id. at 820. In every circumstance in which a reasonable trier of fact
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could resolve conflicting evidence either way, the reviewing court must presume it did so in favor
of the prevailing party, and disregard the conflicting evidence in its sufficiency review. Id. at 821.
If the evidence at trial would enable reasonable and fair-minded people to differ in their conclusions,
then the trier of fact must be allowed to do so. Id. at 822. The ultimate test for legal sufficiency is
“whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict
under review.” Id. at 827. We cannot substitute our judgment for that of the trier of fact if the
evidence falls within the zone of reasonable disagreement. Id. at 822. Thus, legal sufficiency review
in the proper light must credit favorable evidence if reasonable jurors could, and must disregard
contrary evidence unless reasonable jurors could not. Id. at 827.
However, the Supreme Court of Texas has identified some kinds of evidence that cannot be
disregarded when reviewing a challenge to the legal sufficiency of the evidence. Id. at 811-12. For
example, we cannot disregard contextual evidence in contract cases but, instead, review the entire
contract. Id. at 811. Moreover, “when the circumstantial evidence of a vital fact is meager, . . . [we
review] all the circumstantial evidence [] and competing inferences” rather than the favorable
evidence alone. Id. at 814.
Applicable Law
A party wishing to prove an enforceable contract must establish: (1) an offer; (2) an
acceptance in strict compliance with the terms of the offer; (3) a meeting of the minds; (4) execution
and delivery of the contract with the intent that it be mutual and binding; and (5) consideration
supporting the contract. Baylor Univ. v. Sonnichsen, 221 S.W.3d 632, 635 (Tex. 2007); David J.
Sacks, P.C. v. Haden, 266 S.W.3d 447, 450 (Tex. 2008) (parties must have had a meeting of the
minds and communicated their consent to the agreement); see also Vermont Information Processing,
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Inc. v. Montana Beverage Corp., 227 S.W.3d 846, 852 (Tex. App. – El Paso 2007, no pet.);
Copeland v. Alsobrook, 3 S.W.3d 598, 604 (Tex. App. – San Antonio 1999, pet. denied). The terms
of an oral contract must be definite, certain, and clear as to all essential terms and, if they are not,
the oral contract fails for indefiniteness. Farone v. Bag’n Baggage, Ltd., 165 S.W.3d 795, 802 (Tex.
App. – Eastland 2005, no pet.); Meru v. Huerta, 136 S.W.3d 383, 390 (Tex. App. – Corpus Christi
2004, no pet.); Gannon v. Baker, 830 S.W.2d 706, 709 (Tex. App. – Houston [1st Dist.] 1992, writ
denied). A contract is not legally binding unless its terms are sufficiently definite so that a court can
understand what the promisor undertook. T.O. Stanley Boot Co., Inc. v. Bank of El Paso, 847
S.W.2d 218, 221 (Tex. 1992); Vermont Information Processing, Inc., 227 S.W.3d at 852.
Whether an agreement fails for indefiniteness is a question of law to be determined by the
court. T.O. Stanley Boot Co., Inc., 847 S.W.2d at 222; COC Servs., Ltd. v. CompUSA, Inc., 150
S.W.3d 654, 664 (Tex. App. – Dallas 2004, pet. denied). When an agreement is so indefinite as to
make it impossible for a court to determine the legal obligations of the parties, the contract is not
enforceable. Vermont Information Processing, Inc., 227 S.W.3d at 852; Mann v. Trend Expl. Co.,
934 S.W.2d 709, 713 (Tex. App. – El Paso 1996, writ denied).
While Texas courts favor validating transactions rather than voiding them, a court may not
create a contract where none exists and generally may not add, alter, or eliminate essential terms.
Kelly v. Rio Grande Computerland Group, 128 S.W.3d 759, 766 (Tex. App. – El Paso 2004, no pet.)
(internal citations omitted). Whether all essential terms have been included is a question of law. See
E. P. Towne Ctr. Partners v. Chopsticks, Inc., 242 S.W.3d 117, 122 (Tex. App. – El Paso 2007, no
pet.). A promise or term is an essential part of an agreement if, when contracting, the parties would
reasonably regard it as a vitally important element of the bargain. Domingo v. Mitchell, 257 S.W.3d
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34, 40-41 (Tex. App. – Amarillo 2008, pet. denied).
Citing this Court, the Texas Supreme Court has said that “an agreement to make a future
contract is enforceable only if it is ‘specific as to all essential terms, and no terms of the proposed
agreement may be left to future negotiations.’” Fort Worth ISD v. City of Fort Worth, 22 S.W.3d
831, 846 (Tex. 2000), citing Foster v. Wagner, 343 S.W.2d 914, 920-21 (Tex. Civ. App. – El Paso
1961, writ ref’d n.r.e.). Agreements to enter into negotiations in the future are not enforceable
because there is no way to determine the contract that would result from the negotiations. Estate of
Eberling v. Fair, 546 S.W.2d 329, 334 (Tex. Civ. App. – Dallas 1976, writ ref’d n.r.e.). Thus, where
an essential term of an agreement is open for negotiation in the future, no binding contract exists.
T.O. Stanley Boot Co., Inc., 847 S.W.2d at 221. Instead, an agreement which leaves material matters
open for future adjustment and agreement that never occur is not binding upon the parties and merely
constitutes an agreement to agree. Fort Worth ISD, 22 S.W.3d at 846. See E. P. Towne Ctr.
Partners, 242 S.W.3d at 122 (whether all essential terms have been included is a question of law).
Application
We consider each contract separately to identify its material terms. T.O. Stanley Boot Co.,
847 S.W.2d at 221; Vermont Information Processing, Inc., 227 S.W.3d at 852 (material terms of a
contract are determined on an agreement-by-agreement basis). We have held a written lease
agreement unenforceable because it failed to identify a term for the lease and likewise failed to
provide dates for commencing and ending the lease. Vermont Information Processing, Inc., 227
S.W.3d at 853. In Farone v. Bag’n Baggage, Ltd., 165 S.W.3d 795, 802 (Tex. App. – Eastland
2005, no pet.), the Eastland Court of Appeals determined that no contract existed between Farone
and Bowen who, before his death, had allegedly informed Farone that Farone would be compensated
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for unexercised stock options. Finding there was no evidence relating to the compensation which
Farone was to receive and that the alleged contract was missing essential terms including price,
method of payment, compilation of value, and the source of equity interest, the Court ruled that the
contract lacked definite, certain, and clear essential terms and failed for its indefiniteness. Id.
Although the jury found that Crouse failed to comply with an agreement to pay rent and
awarded to Goetting rental damages totaling $73,820, after a thorough review of the record, we
conclude that no evidence was presented to prove the following essential terms of the purported
agreement to pay rent: (1) the specific area or portion of the property that the parties agreed would
be subject to rental; (2) the amount of rent Crouse agreed to pay; (3) the agreed-upon method for
calculating the rental amount; (4) the frequency and manner for making rental payments; (5) the
period or length of time for which rental payments would be made; and (6) the date on which
Crouse, as owner of one-half interest in the property, would no longer be obligated to pay the agreed-
upon rental amount. We find that reasonable parties would regard these terms to be vitally important
elements of the rental bargain in this case, and that these essential elements were missing from the
alleged agreement to pay rent. Domingo, 257 S.W.3d at 40-41; see E.P. Towne Ctr. Partners, 242
S.W.3d at 122.
Because the essential terms of the alleged rental agreement are indefinite, uncertain, and
unclear, because the evidence reflects that no less than one of the essential terms of the alleged rental
agreement was left open for negotiation in the future, and because there was no evidence of a
meeting of the minds between Crouse and Goetting regarding the essential terms of the alleged rental
agreement, we conclude as a matter of law that no binding contract to pay rent exists under these
facts. Farone, 165 S.W.3d at 802; T.O. Stanley Boot Co., Inc., 847 S.W.2d at 221; Sonnichsen, 221
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S.W.3d at 635; David J. Sacks, P.C., 266 S.W.3d at 450; Vermont Information Processing, Inc., 227
S.W.3d at 852. The trial evidence does not meet the test of enabling reasonable and fair-minded
people to reach the verdict which we review here. City of Keller, 168 S.W.3d at 827. Because there
is a complete absence of a vital fact, here the absence of an enforceable and binding rental
agreement, there could not have been an enforceable agreement to offset rent. We sustain Southern’s
first issue. Id. at 810; El Paso ISD, 214 S.W.3d at 41. Having sustained Issue One, we need not
reach Southern’s factual sufficiency challenge in Issue Two. See Baker, 172 S.W.3d at 87.
In Issue Three, Southern initially asked that we render judgment for attorney fees in the
amount proved upon prevailing on any portion of his appeal. Goetting challenges Southern’s
posture, asserting that because the underlying suit involved multiple claims, Southern was required,
but failed, to segregate his non-recoverable and recoverable fees. Stewart Title Guar. Co. v. Sterling,
822 S.W.2d 1, 11 (Tex. 1991). Goetting, therefore, asserts that Southern is not conclusively entitled
to an award of his attorney fees. In his reply, Southern now concedes that remand to the trial court
for a new trial on attorney fees is appropriate.
A party may recover attorney fees only when permitted by statute, by a contract between the
litigants, or under equity. Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. National. Dev. & Research
Corp., 299 S.W.3d 106, 120 (Tex. 2009) (recovery by statute or contract); Knebel v. Capital Nat’l
Bank, 518 S.W.2d 795, 799 (Tex. 1974) (recovery under equity). Recovery of attorney fees in
breach-of-contract cases is authorized in Texas. TEX. CIV. PRAC. & REM. CODE ANN. § 38.001(8)
(West 2008). Because Southern has conceded that a new trial on attorney fees is proper, we sustain
Issue Three and remand for a new trial on attorney fees. TEX. R. APP. P. 43.3(a); TEX. CIV. PRAC.
& REM. CODE ANN. § 38.001(8) (West 2008); Stewart Title Guar. Co., 822 S.W.2d at 11.
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CONCLUSION
Having sustained Issue One, the trial court’s take-nothing judgment is reversed and judgment
is rendered awarding Southern, as executor for the estate of Raul “Dude” Crouse, damages in the
sum of $73,820. Having sustained Issue Three, we reverse the trial court’s judgment as to attorney
fees and remand for further proceedings. Also pending before the Court is Goetting’s Motion to
Dismiss Frivolous Appeal. The motion is denied.
GUADALUPE RIVERA, Justice
November 9, 2011
Before McClure, C.J., Rivera, J., and DeHart, Judge
DeHart, Judge, sitting by assignment
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