Smith Protective Servces Inc. v. FedEx National LTL, Inc ( 2013 )

AFFIRM; Opinion I’ tied .Januar 23, 2013.
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No. 05-I 1-00715-CV
SMITH PROTECTIVE SERVICES, INC., Appellant
V.
FEDEX NATIONAL LTL, INC., Appellee
On Appeal from the 95th Judicial District Court
Dallas County, Texas
Trial Court Cause No. I)C-08-i3718-D
MEMORANDUM OPINION
Before Justices Bridges, Lang, and Richter
1
Opinion By Justice Lang
Smith Protective Services, inc. appeals following a bench trial based on partially stipulated
facts. The trial court awarded Feclhx National LTL, inc. breach of contract damages for losses
FedEx sustained as a result of the theft of cargo at a FedEx terminal guarded by Smith security
officers. in two issues, Smith argues the trial court erred in concluding Smith breached the contract
and failed to prove its mitigation defense. We affirm the trial court’s judgment.
I. BACKGROUND
Relevant stipulations established that in May 2005, FedEx’s corporate predecessor, Watkins
The Honorable Martin Richter. Retired Justwe. Fifth District Court oF Appeals. Dallas. Texas. sitting by assignment.
Motor Lines, Inc., contracted with Smith br guard services. Approximately one year later, Watkins
assigned the contract to FedEx. Under the contract, Smith was to provide security officers for
FedEx ‘s I ort \\orth terminal.
The theft occurred in the early morning hours ofJune 2, 2008. Thieves entered the terminal
through a hole cut in the perimeter fence and stole merchandise from several trailers. The hole had
been cut the previous night and was the second hole cut in three days. At the time of the theft, Smith
guard Joshua Suwal was on duty.
Less than a week after the theft, FedEx terminated the contract with Smith. The parties
stipulated that during the term of the contract, Smith was paid a total of $832,075.36 lbr its services.
Further, the parties stipulated that (a) the contract was valid; (b) FedEx performed its obligations;
and. (c) FedEx sustained damages in the amount of$108.308.52 as a result of the theft.
Based on the live pleadings and stipulations, the issues at trial were whether Smith breached
the contract by fiuiling to perform its obligations under the contract, including conducting regular
patrols and indemnifying Fedhx, and whether FedEx mitigated its damages.
2 Ben Sittig, a Watkins
Terminal Manager at the time the contract was executed and a FedEx Service Center Manager at the
time of the theft, testified that under the contract Smith guards were to
(1) guard against fire, theft, damage, and trespass;
(2) pen’nit only duly authorized persons to enter the premises;
(3) make regularly scheduled tours of the premises, checking all gates, doors,
windows, and lights;
(4) report any unusual incidents or hazardous conditions as soon as practicable to
FedEx-designated representatives:
(5) submit a written report covering all incidents or hazardous conditions at the
conclusion of each tour; and
2
Also tried were issues of whether Smith breached the contract by holing to carry property damage liability insurance naming Fedhx as an
addiuonal named insured and Smith’s own breach of contract counterclaim against FedEx for terminating the contract without thirtydays’ notice
and “good cause’ as required by the contract. The trial court concluded both these claims failed, and neither party challenges the judgment in that
regard. .‘\ccordinglv. we limit our recitation of facts to those that apply to the issues before us.
(6) comply with post orders which were attached to the contract.’
According to Sittig, the “unusual incidents or hazardous conditions” that the guards were to report
included “[a]larms, break-ins, unauthorized personnel, fires, [andi hazardous leaks,” and the
designated representatives who were to receive these reports were FedEx operations manager Lynn
Moore, supervisor Brandon Bode, or himself.
At the time Watkins entered into the contract with Smith, the terminal was closed on holidays
only. Although the contract provided for regular patrols or “tours of the premises,” the guards were
expected at that time to just operate the gate” and “log the trucks” when the terminal was open and
to patrol when the terminal was closed.
In 2006, around the time FedEx succeeded Watkins, the terminal operating hours changed
to a “restricted schedule,” and guards were expected to patrol not only on holidays, but on
weeknigbts and weekends as well. Sittig testified that the patrols were to occur every two hours.
This was communicated orally and in writing to Smith managers, and they agreed to the schedule.
Sittig further testified he met quarterly with Smith managers to discuss the guards’ performance and
“make sure everything was secure,” and he did not remember any manager disputing that patrols
were required. Daily officer reports (“DOW’), required by the post orders, reflected that most guards
were regularly patrolling the tenninal, and Sittig had personally observed them patrolling,
Although the terminal was protected by a perimeter fence alarm system, the first cut in the
fence did not trigger the alarm, but was discovered by the lawn maintenance crew mid-morning on
May 30. Sittig was advised that same day. He did not inform any FedEx supervisors or Smith
managers ofthe hole, but, before leaving the terminal for the weekend, instructed the guard on duty
‘me poet orders contained additional “niandatc.y”wcck tales and regulations such a the requirennit to monitor all activity at the front gate
and the iwnes of the Fedflx representatives to contact in case of an sumrgmoy.
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to monitor the area and to inform the other guards working that weekend of the need to monitor that
spec c area.
On Sunday, June 1, at around 5;0( a.m., an alarm company operator called Sittig to inlbrm
him that the fence alarm had been triggered. The operator had already contacted Suwal, the guard
on duty at the time. Because the operator did not express any concern, and other thlse alarms had
occurred in recent weeks. Sittig assumed this alarm was false. Sittig directed the operator to place
the system on “test mode” so that if the alarm was triggered again, it could be disregarded. The
following morning, Sittig learned from dock supervisor Johnny Pruitt that a second hole had been
cut in the fence and the theft at issue here had occurred. Sitting testitied he went to the terminal after
receiving the phone call and found that the thieves had stolen cargo from trucks parked along the
fence. Sittig later learned that Suwal had discovered the second hole during his overnight shift on
May 3 1 and informed Pruitt about it during his overnight shift on June 1. In Sittig’s opinion,
stronger security measures, including moving the trailers from the fence, could have been taken had
Suwal and Pruitt reported the second hole to him or Moore, the operations manager. Sittig
acknowledged that stronger security measures could also have been taken if he had reported the first
hole to Smith management or FedEx superiors. He acknowledged, too, that he was aware that not
all guards were patrolling regularly, but he did not report this to Smith managers.
Sittig’s testimony that he met with Smith managers quarterly to discuss the guards’
performance and that the guards did not make scheduled tours of the premisses prior to 2006 was
corroborated by Paul Atwell, a Smith operations manager from 1995 to 2005. Also corroborated was
Sittig’s testimony that Smith guards were required to regularly patrol the premises once the operating
hours of the terminal changed. Smith’s “post supervisor” Santos Gracia and FedEx operations
manager Moore agreed that Smith guards were required to conduct patrols when the terminal was
closed, although Gracia believed they were to patrol the dock area only and Moore believed they
were to patrol univ the tence line.
Fedhx regional securit managerNolan Burns testified he investigated the theft and prepared
a report. Sittig, Pruitt. Suwal. and two other Smith guards who were on duty the weekend the theft
occurred were interviewed as part of the investigation. Burns learned from the interviews that none
of the guards was aware of the requirement offence patrols. He also learned that Pruitt and Suwal
found several trailers from which locks were removed the night of June I. No merchandise was
missing, however, and neither Pruitt nor Suwal reported their findings to Sittig or Moore. Burns
testified that he inspected the area where the theft occurred and found no evidence that any “devices”
such as a forklift or dofly were used. Based on that. he believed the stolen cargo was removed by
hand over a period of at least three hours. He concluded the theft occurred between midnight and
4:30 a.m. and that several people were involved. He further concluded that the “security failure”
resulted fi-om several factors including the failure of the guards to regularly patrol the premises and
the failure to promptly notify proper personnel about the second cut in the fence and the trailers that
had been tampered with. In his opinion, the thieves knew the guards were not patrolling, and the
theft could have been pievented if regular patrols had occurred.
Jeffrey Greer, FedEx National’s vice president and general counsel, testified he met with
Smith personnel on June 3, 2008 and learned from them for the first time that they did not believe
the security guards were required to conduct patrols. He made the decision to terminate the contract
with Smith after a third cut in the fence was discovered June 4, 2008. F-Ic looked at the contract “to
see what we’d have to do to get paid for our losses,” and on October 1, 2008, made a written demand
to Smith for payment for the losses. Although the contract provided that Smith was to “indemnify,
defend and hold harmless [FedEx) from all losses arising out of... property damages, claims, suit,
damages. expenses or liabilities arising out otor connected in any with [Smith’s] operations. Smith
did not tender payment. After the i-eeord was closed, the trial court rendered iudgrnent for l-’edEx.
specifically finding Smith breached its obligation to provide patrol services and indemnify FedEx,
and signed findings of fact and conclusions of law.
4
[he findmgs of fact md conclusions of lass nelude, in relevant part, the Ibilowing:
FINDINGS OF FA(”F
etistire the protection 01 property at the I erntinal against thell. the Contract states and Smtth anteed that Smith’s
0
‘1tiard pcrsorttei shall itt lake regularly scltediileil tours of the prentises,’’ Sttnth agreed to reqnire its secnrttv
ntiartl ott dots to ‘‘j rleport sits- nnuisual incidents or hta,ardotis conditions as soon as practicable to represcni.itis es
desiuttated by FedExI.” Stntth also agreed to “j plermit only dnly authorized persons to enter the prentises.”
5, Diirmg rcOttlar antI irregular meetings with Smiths niattagers, Fedtx designated represetttatives that should be
contacted b’ Stntth to report utitusual incidents. In May and June 2005, those representatives were Terminal
N l,tnager lIen Sitttg, Operations Manager Lynn Ni oore. and Dock Manager Brandon Bode.
6 Duritti, mc ttnys ss tth Smith nt ttsagcrs FedLx s mitt ncrs also tnstructcd Smith s man tgcrs th it Smith 4t trd
ssere to conduct tours of the premises hChourly when the Terminal was closed and to remain at the gate logging
trucks duritig hours when the Terminal Wits open.
8. Based on the observations of its ettsployecs and ott documents it received from Smith, Fedfix reasonably believed
that Smith’s guards were pertdrming regular patrols of the Terminal pt’is’ durittg hours that the Terminal was
closed.
.\t 4:47 ,-\\h on Stutidas Jutue I. the ‘l’ertninal’s alariut ssstem sounded.
3. .-\ result itug call from the alarm mon it ritig contpans. r\l II’. to the guard shack prompted Smith security guard Josh
Sins al to look behind the trailers parked along the tiorth Idnee fr the first time. Suwal discovered durittg that
ituspect ott utt approximately 5:111.1 AM Suttdav June. I that a second hole had been cut itt the fence, lie also
obsers cil that one rteat’bv trailer had a door ajar and a shippittu pallet wtts disturbed. hut no merchandise was
ittissiig.
14. Su\val did not inform his supervisors, arty of FedEx’s designated representatives, or the police of his findings at
tins pus mum during or at the eotnplettott of his shift. Nor did tiny other Smith agent or employee inform atmy of
FedEx’s designated represetutatives ofSuwal’s findittgs.
15. Sun-al’s atid Smith’s failure to inform anyof FedEx’s designated representatives ofthe unusual incident constituted
a breach of the Cotutract by Smith.
17. Susval went off duty at 7:011 Sumiday moming, June 1
1 8. Sun al returned late itt the same evetti tug, Sundutv, June 1 for another overnight shift.
19. Suwah dtd not inspect the fetuce. patrol the dock or perimeter fetuce. or leave the guard shack at any time during his
eight—hour shift ututi I 7:00 .\M ott Monday. June 2.
20. Stuwth’s failure to patrol the terminal’s premtses during his overnight shift from 11:00 PM on June ito 7:00 AM
ott Juuie 7 cottstututcd a breach of the Contract by Smith.
21. Between midnight atud 4.30 on the morning of Monday, June 2, thieves entered the Terminal yard undetected anti
broke into fotir trtilers by cutting the locks with bolt cutters. While in the Terminal yard, the thieves were able to
steal a large quatutity of electrottics undetected.
22. Smith’s fiulure to prevent unauthorized persons from entering the ‘i’enatinal’s premises duritug Josh Suwal’s
overnight shift from 11:00 PM on June 1 to 7:00 AM on June 2 constituted a breach of the Contract.
24. Smith failed to conduct regulutrly scheduled patrols of the Terminal premises as reqtnred under the Cotutraet.
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The findings and conclusions concerning Smiths failure to (a) patrol regularly, (b) report
25. Smith’s failure to perkirm these patrols was a breach of the Contract by Smith,
26. lad Smith guards performed the patrols required under the Contract, the theft would have been prevented.
27. No acts or omissions by Fcdbx or tts employees or agents caused the theft to be successful,
29. Fcdfix first learned of Smith’s contractual breach of flu hog to conduct patrols on or about June 4. 2008. Smith
informed its on—site supervisorand guards that they were toconduct fourpatrolsduringeach eight—hourshiftdnring
hours that the ‘I’crminal was closed.
30 Dui in,, the overni,,ht shift from June 4 2008 the Smith ,,u std did not conduct ins p ittols md l’cdh x
experienced another break-in at the Terminal,
31. Smiths failure to cortduct patrols on the night of June 4—5 svas a breach of the Contract by Smith.
32. On October I, 2008, Fedbx’s general counsel prescnt[edl Fedfix’s claim to Smith and demandFcdj
... p:iylfleist
for FedEx’s losses, Smith did not tender the just amount owed withirt thirty (30) days.
33. Smith’s refusal to indemnify FedEx for its losses, despite notice and demand, constituted a breach of the Contract
nit the part of Smith.
34. Fcdfix suffered damages in the amount of $108,398.52 that were caused by Smith’s contractual breaches,
36. The Court does not find thtat FedEx failed to act reasonably to avoid the damages it incurred asa result of Smiths
breaches: instead, the Court finds FedEx acted reasonably.
CONCLUSIONS OF LAW
4. . . . Smith’s fiulure to conduct [regularly scheduled tours of the premisesi constitutes a breach of the Contract,
5. After discovering that a hole had been cut in the fence and a nearby trailer had beets opened on the morning ofJune
.2008, Smith’s security guard Josh Suwal did not notify a Fedbx designated representative of tlte fence cut, which
constituted an unusual incident, Such failure constitutes a breach of the Contract,
6. Smith’s conduct permitted unauthorized persons to enter the Terminal and thereby breached the Contract.
7. Smith agreed, under the terms of the Contract, to “indemnify, defend and hold harmless [FedEx] from all losses
irisine out of propelty dsnssges clunis sutts dim c’, expenses or Ii ibulthes unsung out of or connected tn
any way with [Smith’sI operations performed on behalf ofFedEx1.” Smith’s refusal to indetnnify FedEs,after
notice and demand, constituted a breach of the Contract.
8. As a result of Stiith’s breaches, FedEx did not receive the benefit of its bargain with Smith, and Smith’s breaches
of the Contract were the legal causes of FedEx’s damages.
18. The doctrine of mitigation of damages prevents a party from recovering for damages resulting from a breach of
contract that could be avoided by reasonable efforts on the part of the plaintiff. Where a party is entitled to benefits
of a contract and can save itself from the damages resulting from the contract’s breach with reasonable exertions,
it is that party’s duty to make such exertions. E.G., Walkers. Salt Flat WaterCo., 96 S.W.2d 231,232 (Tex. 1936).
However. whcrc the party in default was in duty bound to prevent damages, and had equal opportunity with the
person injured for performance. and equal knowledge of the consequences of nonperformance. he cannot, while
the contract is in force and effect, be heard to say that the plaintiff might have performed for him, and thus avoided
such damages. Id.
19. “The mitigation-of-damages doctrine requires an injured party, following a breach, to exercise reasonable care to
minimize his damages if it can be done svith slight expense and reasonable effort.” Montgomery v. Byrd. No. 14-
07-010l5-CV, 2009 Tex, App. LEXIS 6635, at 26 (Tea. App—Houston [14th Dist.1 Aug. 25, 2009) (not
designated for publication). Because an injured party does not incur damages that can be mitigated until after the
breach has occurred, it is onlyrequired to undertake its mitigation efforts “following a breach,” Montgomery, 2009
Tex, App. LEXIS 6635, at 26: Allen v. American Gen. Fin, Inc., 251 S.W.3d 676, 686 (Tex. App—San Antonio
2007, pet. granted).
21. FedEx did not fail to exercise reasonable care to minimize its damages. Smith was duty bound to prevent damages
to FedEx, and it had equal opportunity with FedEx for performance and equal knowledge of the consequences of
nonperformance. Smith has not established its affirmative defense of failure to mitigate damages.
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unusual incidents to dcsinated Eedhx representatives. (c) prevent unauthorized persons from
entering the premises. and (d) establish its at lirmative defense of mitigation of damages form the
basis of this appeaL Specifically, Smith challenges findings 5, 6. 8. 15. 20. 22, 24, 25, 26, 27. 29,
31, 32, 34,36 and conclusions 4, 5, 6, 8. 9, 18, 19, and 21. Smith asserts the evidence is legally and
factually insufficient to support these findings and the conclusions are incorrect.
II. STANDARD OF REVIEW
A. Findings of Fact
In an appeal from a bench trial, the trial court’s findings of fact have the same weight as jury
findings. Walker v. -1iu1ei’son, 232 S.W.3d 899. 907 (Tex. App. DaHas 2007, no pet.).
Unchallenged findings are binding on the parties and appellate court. Rich v. Olah, 274 S.W.3d 878,
884 (Tex. App.--Dallas 2008, no pet.). Challenged findings are reviewed under the same legal and
factual sufficiency standards used in reviewing jury findings. Walker, 232 S.W.3d at 907. Because
the trial court, like the jury, is the sole fudge of the credibility of the witnesses and the weight to be
given to the testimony, the trial court’s factual determinations are given deference. Rich. 274 S.W.3d
at 884.
In determining whether the evidence is legally sufficient, the appellate court views the
evidence in the light most favorable to the finding, crediting favorable evidence if a reasonable fact-
finder could and disregarding contrary evidence unless a reasonable fact-finder could not. Aland
v. Martin. 271 S.W.3d 424, 429 (Tex. App.—Dallas 2008, no pet.). If the challenged finding is on
an issue for which the appellant did not have the burden of proof the appellant must demonstrate
no evidence exists to support the adverse finding. Id. If the challenged finding is on an issue for
which the appellant had the burden of proof the appellant must demonstrate that the evidence
conclusively establishes the opposite finding. R.i Suarez Enters. Inc. v. PNYXL.P., 380 S.W.3d
238,245 (rex. App.—Dallas 2012, no pet.).
In determining whether the evidence is factually sufficient, the appellate court considers and
weighs all the evidence, both for and against the finding. kit In challenging the factual sufficiency
of the evidence to support a finding on which the appellant had the burden, the appellant must
demonstrate on appeal that the adverse finding is against the great weight and preponderance ofthe
evidence. ii In challenging the factual sufficiency of the evidence to support a finding on which
the appellant did not have the burden, the appellant must demonstrate the evidence supporting the
finding is so weak as to be clearly wrong and unjust. THiofTa at Lubbock!, LLCv. Perea, 329
S.W.3d 548, 572 (rex. App.—Amarillo 2010, pet. denied). Under both the legal and factual
sufficiency standards, when the trial court finds a single cause of action is supported by multiple
bases, an appellate court will affirm if the evidence supports any of the findings. See Main Place
Custom Homes, Inc. i’. Honaker, 192 S.W.3d 604,623 (rex. App.—Fort Worth, 2006, pet. denied).
B. Stipulated Facts
Stipulated facts are binding on the parties, the trial court, and the reviewing court. Wells
Fargo Bank Nw., N.A. v. RPK CapitalXvL LL C, 360 S.W.3d 691,698 (rex. App.—Dallas 2012,
no pet). An appellate court does not review the legal or factual sufficiency of the evidence of
stipulated facts. Id.
C. Conclusions of Law
An appellate court reviews a trial court’s conclusions of law de novo, evaluating them to
determine whether the trial court correctly drew the legal conclusions from the stipulated or
contested facts. Suarez, 380 S.W.3d at 245; RPK Capital, 360 S.W.3d 698. The trial court’s
conclusions of law will be upheld if any legal theory supported by the evidence can sustain the
judgment. Fulgham v. Fischer, 349 S.W.3d 153, 158 (rex. App.—Dallas 2011, no pet).
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HI. APPLICABLE LAW
A. Breach of Contract
A breach ot contract occurs when a party tnls to perform an act it has expressly or impliedly
promised to perform. If ark/wide Asset Pzin/usiiig, L. L. C v. ReniA-( ‘enter L. Inc. 290 S.W.3d
554. 561 (Tex. App—-Dallas 2009. no pet.). The elements ota breach of contract claim are: (a) the
existence of a valid contract; (b) the plaintiffs performance or tentative performance; (c) the
defendant’s breach: and, (d) damage to the plaintiff resulting from the breach. Id. When construing
a written contract, the appellate court’s primary duty is to ascertain and give effect to the intentions
the parties have objectively expressed in the instrument. Lexis v. Foxn’orili, 170 S.W.3d 900, 903
(Tex. App.—Dallas 2005, no pet.). The appellate court may neither rewrite the contract nor add to
its language. but must enforce it as written. Id.
B. Mitigation of I)aniagcs
The doctrine of mitigation of damages generally prevents an in)ured party from recovering
breach of contract damages that could he avoided by the injured party’s reasonable efforts upon
learning of the breach. GreatAm. ins. Co. v. N. Austin Mun. Util. Dist. No. 1, 908 S.W.2d 415, 426
(Tex. 1995); Pulaski Bank & Trust Co. v. Tex. Am. Bank/Fort Worth, I’/A., 759 S.W.2d 723, 735
(Tex. App.—-Dallas 1988, writ denied). However, when the defaulting party is duty bound to
prevent damages. and has the same opportunity to mitigate as the injured party and equal knowledge
of the consequences of not doing so, the defaulting party cannot complain of the injured party’s
failure to mitigate. Walker v. Salt Flat Water Co., 96 S.W.2d 231, 232 (Tex. 1936); Trinity
Universal ins. (‘o. v. Fuller, 524 S.W.2d 335, 338 (Tex. Civ. App.—Dallas 1975, writ refdn.r.e.).
Mitigation of damages is an affirmative defense the breaching party must plead and prove. GreatAm.
ins., 908 S.W.2d at 426; S & G Associated Developers, LLC v. Covington Oaks Condo. Owners
10—
.4ss’n. Inc. 361 S.W.3d 210. 2l7(Tex. App.-•--EI Paso 2012. no pet.).
IV. APPL1CATION OF THE LAW TO THE FACTS
A. Breach of Contract
Because ofthe parties’ stipulations, the only element ofFedEx’s breach ofcontract claim at
issue is Smith’s breach. See Worldwide Assel. 209 S.W.3d at 561. FedEx alleged at trial, and the
trial court found and concluded, that Smith breached the contract by failing to (a) conduct regular
patrols ofthe premises, (b) notify a designated FedEx representative of the June 1, 2008 knee cut,
(c) prevent unauthorized persons from entering the tenninal, and (d) indemnify FedEx. Smith
challenges the first three of these breaches found by the trial court and also asserts the contract “was
only for the protection of the property of FedEx” and thus Smith is not responsible fir FedEx’s
losses. However, Smith does not challenge the finding and conclusion pertaining to indemnification
(finding 33 and conclusion 7). Because an unchallenged finding is binding on the parties and court,
and a finding that Smith failed to perform at least one obligation under the contract is sufficient to
support the finding that Smith breached the contract. Smith’s contention that the trial court erred in
concluding a breach occurred cannot be sustained on this basis alone. See iS: Rich, 274 S.W.3d at
884; Main Place, 192 S.W.3d at 623. Additionally, as FedEx points out, Smith presents no
argument or authority in support ofits challenge to the finding and conclusion concerning its failure
to notify FedEx representatives of the fence cut (findings 5, 14 and 15 and conclusion 5).
Accordingly, Smith has waived any error with respect to this portion of the trial court’s judgment,
and the judgment can be affirmed on this basis also. See Thx. R. An. P. 38.1(i) (“The brief must
contain a clear and concise argument for the contentions made, with appropriate citations to
authorities and to the record.”); Fuigham, 349 S.W.3d at 158 (“failure to cite legal authority or
provide substantive analysis results in waiver of the complaint”). Nonetheless, we address the
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merits of Smith’s remaining arguments.
To prevail on its complaint that the trial court erred in concluding a breach occurred. Smith
must demonstrate the evidence is legally and factually insufficient to support the court’s findings that
it failed to conduct regular patrols and prevent unauthorized persons from entering the terminal, and
the trial court erred in concluding these failures constitute a breach. Because Smith challenges
issues which FedEx bore the burden of proving at trial, to establish the evidence is legally
insufficient. Smith must demonstrate no evidence exists to support these findings. See Aland, 271
S.W.3d at 429. To establish the evidence is factually insufficient. Smith must demonstrate the
evidence supporting the findings are so weak as to be clearly wrong and unjust. Perea, 329 S.W.3d
at 572.
Smith contends the evidence is insufficient to support the findings regarding patrols (findings
6,8,20,24,25,26,31) because no evidence exists that Smith agreed to bi-hourly patrols “being part
of the original contract” or that the parties modified the guards’ duties. In making this argument,
Smith does not challenge the trial court’s finding that the contract provides for regularly scheduled
patrols (finding 2). Instead, Smith argues that because, at the time the contract was executed, its
guards were expected to ‘just man the gate,” FedEx was required top1 that the contract was
modified and demonstrate the modification. Smith contends the only evidence ofa modification was
Sittig’s testimony that the guards were expected to patrol every two hours once the tenninal’s
operating hours were reduced, that he communicated this to Smith managers at the time of the
change and at quarterly meetings, and that Smith managers agreed to perform the patrols. Smith
contends Sittig’s testimony is not credible because he did not testify at his deposition about the
quarterly meetings and he did not identify the Smith managers with whom he communicated.
Because Smith does not challenge the trial court’s finding that Smith specifically agreed to
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“[mjake regularly scheduled tours of the premises,” it is binding on the parties and court and makes
pleading and evidence of modification unnecessary. See Rich, 274 S.W.3d at 884. Moreover,
although Smith discounts Sittig’s testimony, the trial court assigns the weight to be given to Sittig’s
testimony. See id, By finding Smith failed to conduct regular patrols, the trial court necessarily
believed Sittig’s testimony, a determination we will not disturb on appeal. See id. Additionally, the
record includes evidence other than Sittig’s testimony concerning the patrols and the communication
with Smith. Both Santos Gracia, a Smith “post supervisor,” and FedEx operations manager Lindsay
Moore agreed that the guards were required to conduct regular patrols when the terminal was closed,
and documentary evidence reflected bihourly patrols were conducted. Viewed under the
appropriate standards, we conclude the evidence is legally and factually sufficient to support the
findings concerning the patrols. Because those findings include a finding that Smith did not patrol
the premises regularly, we conclude the trial court correctly determined Smith breached the contract
by failing to conduct regular patrols. See Suarez, 380 S.W,3d at 245; Worldwide Asset, 290 S.W.3d
at 561.
We next address Smith’s contention that the trial court erred in concluding Smith breached
the contract by allowing unauthorized persons to enter the property. Smith argues the evidence is
legally and factually insufficient to support the findings regarding entry of the property because the
provision in the contract that Smith was to “[pjermit only authorized persons to enter the premises”
required only that Smith “insure[] that the access to the premises by visitors and employees was
monitored and restricted.” Smith further argues that the term “permit” requires an element of
knowledge on the part of the actor, and FedEx failed to present any evidence that any of Smith’s
guards knowingly permitted any unauthorized person to access the premises. However, the term
“knowingly” is not in the contract. “We may neither rewrite the contract nor add to its language.”
1 i—
,Sec I ()xworth, I 70 SW.3d at 903, Additionally. Smith does not challenge the findings that its
tuard. Joshua Suwal. worked an overnight shi It J tine 1 and that thieves entered the terminal and
broke into four trailers between midnight and 4:30 the morning of June 2 (findings 18 and 21).
These Ondings are binding and support the trial court’s conclusion that Smith breached the contract
by allowing unauthorized persons to enter the property.
Finally, we address Smith’s contention that the contract was only for the protection of
Fedhx’s property. In making this contention, Smith relies on the fact that FedEx had an alarm
system on the perimeter fence, but Smith was not responsible for monitoring it. Smith argues that
if it had “been hired to protect’ property other than that of FedEx, [iti would presumably have had
an active role in monitoring the fence alarm from the beginning.” ‘This challenge to causation and
damages cannot he sustained because Smith does not challenge the findings and conclusions
regarding indemnification. According to the language of the indemnity provision, it encompassed
“all losses arising out of... claims, ... damages, expenses or liabilities arising out ofor connected
in any way with I Smith’s] operations performed on behalf of [FedEx].” There is no limitation to
FedEx’s property. Further, Smith stipulated that FedEx’s damages were caused by the theft, and the
theft occurred while a Smith guard was on duty. This stipulation is binding. RFK Capital, 360
S.W.3d at 698.
We conclude the trial court did not err in finding a material breach occurred. Accordingly,
we resolve Smith’s first issue against it.
B. Mitigation of Damages
In its second issue, Smith asserts the evidence is legally and factually insufficient to support
the trial court’s finding and conclusions that FedEx did not fail to exercise reasonable care to
minimize its damages, Smith was duty bound to prevent damages to FedEx, Smith had the same
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opportunity with FedEx to minimize the damages, Smith had equal knowledge of the consequences
of failing to do so, and Smith failed to establish its defense of mitigation (finding 27 and 36 and
conclusions 18, 19, 21). Because it bore the burden of establishing this affirmative defense, to
establish the evidence is legally insufficient, Smith must demonstrate the evidence conclusively
establishes the opposite finding. See Aland, 271 SW.3d at 429. To establish the evidence is
factually insufficient, Smith must demonstrate that the court’s finding is against the great weight and
preponderance of the evidence. See Suarez, 380 S.W.3d at 245.
Smith asserts the evidence reflects that, at the latest, FedEx became aware of Smith’s failure
to regularly patrol on May 30 when FedEx learned of the first cut in the fence. Smith contends
FedEx should have informed Smith managers of the first cut “such that Smith could have taken any
action to insure that fence patrols were conducted the evening of the actual theft.” Smith asserts
further that Sittig’s and Burn’s testimony about “what could, and should have been done upon theY
discovery of both the first cut ... [and] second cut” demonstrates FedEx was obligated to take
reasonable steps to mitigate its damages. Finally, Smith argues that the trial court erroneously relied
on the holding in Walker v. Salt Flat Water C’o. that the defaulting party is barred from relying on
the doctrine of mitigation of damages when it could have prevented the harm. See Walker, 96
S.W.2d at 232. We disagree with Smith’s contentions.
FedEx’s duty to mitigate did not arise until it became aware that Smith guards were not
patrolling regularly. Pulaski, 759 S.W.3d at 735. Although Smith contends FedEx became aware
of this failure, at the latest, when FedEx learned of the first cut in the fence, the trial court found, and
Smith does not challenge, that FedEx first learned of the lack of regular patrols “on or about June
4, 2008.” This finding is binding. Rich, 274 S.W.3d at 884. Moreover, the record reflects Smith
was contractually obligated to guard against damage to property: had, as a provider of guard services,
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the same opportunity as, if not greater than, FedEx to minimize damages resulting from a theft; and
had the same knowledge as FedEx ofthe consequences of failing to minimize damages, as evidenced
by the indemnification provision. Smith has cited to us no evidence to the contrary and we could find
none. Given the applicable legal standards, we conclude that Smith could not complain that FedEx
was required to minimize its damages. and the trial court did not err in concluding Smith failed to
establish its defense of mitigation. See Fulgham, 349 S.W.3d at 158, We resolve Smith’s second
issue against it.
V. CONCLUSION
Having resolved both of Smith’s issues against it, weffirm the trial court’s judgment.
QôLAS.&G’7
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JUDGMENT
SMITH PROTECTIVE SERVICES. INC., Appeal from the 95th Judicial District Court
Appellant of Dallas County, Texas. (Tr.Ct.No. DC-08-
13718-D).
No. 05-1 l-00715-CV V Opinion delivered by Justice Lang, Justices
Bridges and Richter participating.
FEDEX NATIONAL LTL, INC., Appellee
In accordance with this Court’s opinion of this date, we AFFIRI’I the trial court’s judgment.
We ORDFR that appellee Fedex National LTL, Inc. recover its costs of this appeal from appellant
Smith Protective Services, Inc.
Judgment entered January 23, 2013
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