Valeri Koukhtiev v. Hellene v. Hiner ( 2014 )

Opinion issued October 2, 2014.
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-13-00356-CV
———————————
VALERI KOUKHTIEV, Appellant
V.
HELLENE V. HINER, Appellee
On Appeal from the 270th District Court
Harris County, Texas
Trial Court Case No. 2011-13952
MEMORANDUM OPINION
Valeri Koukhtiev appeals from a judgment on a jury’s verdict that he
breached an agreement with Hellene Hiner, arguing that the jury charge incorrectly
omitted necessary legal elements from two questions over Koukhtiev’s objection.
We find no error in the charge. Accordingly, we affirm.
Background
Koukhtiev and Hiner met while they were both married to other people.
They later became romantically involved. At the time, Hiner lived in Houston,
while Koukhtiev lived in Boston. Koukhtiev subsequently moved to Houston and
began living with Hiner.
Hiner, a pianist, and Koukhtiev, a computer programmer, agreed to work
together on interactive computer software to teach children and adults how to play
the piano. Their efforts resulted in a computer program, a patent, a federally-
registered trademark, and some modest revenue from sales of the program.
Koukhtiev and Hiner signed a Work for Hire Agreement, which included various
terms governing Koukhtiev’s work on the software. Hiner, however, did not sign
in her individual capacity; she signed the agreement on behalf of “Cottage Music
Academy.” The evidence at trial conflicted as to the existence and identification of
any entity identifiable as Cottage Music Academy.
The attorney who eventually prosecuted the parties’ patent application also
drafted the Work for Hire Agreement. In the Work for Hire Agreement, Koukhtiev
agreed to provide the service of “[programming] of music learning games” and not
to compete with Cottage Music Academy in Texas for a period of five years after
termination of the contract. He further agreed to “waive[] any interest in the
ownership of [his] work product, including but not limited to copyrightable works,
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ideas, discoveries, inventions, patents, products or other information, developed in
whole or in part as a result of this agreement” and that Cottage Music Academy
would have “the exclusive ownership” of such work product. In return, he would
be paid the sum of $250 a week.
The parties ultimately had a falling out, and Hiner sued Koukhtiev for
breach of contract, misappropriation of trade secrets, conversion, partition and
equitable partition of the patent, a declaratory judgment regarding various rights of
the parties not relevant to this appeal, and assault.
At trial, the court’s charge to the jury included the following questions:
Question 3:
Did Valeri Koukhtiev agree to assign any or all of his interest in the
ownership of his work product including copyrightable works, ideas,
discoveries, programming code, software, inventions, trademarks and
patents to Hellene V. Hiner?
Answer Yes or No.
Answer: ________________
If your answer to Question Number 3 is “Yes,” then answer Question
4. Otherwise, do not answer Question 4.
Question 4:
Did Valeri Koukhtiev fail to comply with the agreement with Hellene
V. Hiner assign [sic] any or all of his interest in the ownership of his
work product including copyrightable works, ideas, discoveries,
programming code, software, inventions, trademarks and patents?
Answer Yes or No.
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Answer: ________________
During the charge conference, the following exchange occurred:
Koukhtiev’s Counsel: The defendant . . . objects to Question No. 3 in
that it does not contain the required elements of what forms a
contract, which are an offer an [sic] acceptance, mutual assent,
execution and delivery of the contract with intent that it be
mutual and binding, and consideration supporting the contract.
The Court: Overruled.
Koukhtiev’s Counsel: Defendant objects to Question 4 in that it does
not contain the necessary elements for breach of contract in
that: One, there’s a valid enforceable contract; two, that
plaintiff is the proper party to sue for breach of contract; three,
that plaintiff performed, tendered performance or was excused
from performing contractual obligations; four, the defendant
breached the contract; five, the defendant’s breach caused the
plaintiff injury.
The Court: Overruled.
Koukhtiev did not tender an alternative version of either question.
The jury returned a verdict in which it found that Koukhtiev agreed to assign
his work product to Hiner and breached that agreement, resulting in $18,257.90 in
damages to Hiner. The jury further awarded Hiner $46,650 in attorney’s fees for
preparation and trial, as well as additional fees should Koukhtiev appeal from the
trial court’s judgment. The trial court entered a judgment on the jury’s verdict,
awarding the damages and attorney’s fees found by the jury, as well as pre-
judgment and post-judgment interest and costs of court. The judgment included a
declaratory judgment that Hiner has sole ownership of the patent, the trademark,
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the software, related computer code and websites, and the trade name “Do Re Me
Fa Soft.” 1
On appeal, Koukhtiev argues that the trial court erred in submitting
Questions 3 and 4 of the jury charge because they omitted necessary elements of
the existence and breach of a contract, respectively. Thus, he argues that the
verdict does not support the judgment against him.
In response, Hiner argues that Koukhtiev invited error by requesting that the
trial court submit its questions in granulated form with separate questions for each
element of a breach of contract claim and submit questions of law to the jury.
Thus, according to Hiner, Koukhtiev failed to preserve any error.
Preservation of jury charge error
The Texas Rules of Civil Procedure require a trial court presiding over a jury
trial to charge the jury, in writing, before the jury begins its deliberations. TEX. R.
CIV. P. 271 (“[T]he trial court shall prepare and in open court deliver a written
charge to the jury”), 272 (“The charge shall be in writing . . . .”). “In all jury cases
the court shall, whenever feasible, submit the cause upon broad-form questions.”
1
The parties disputed whether Hiner or Koukhtiev owned each of these
assets; each claimed the assets for herself or himself. Although the parties
also formed an entity, Do Re Me Fa Soft, LLC, and disputed ownership of
the entity, neither party contends that the entity owns the intellectual
property or requested a jury question as to whether it does. Consistent with
the jury’s verdict, the trial court entered judgment that Koukhtiev and Hiner
jointly own the entity, with each owning an undivided one-half interest in it.
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TEX. R. CIV. P. 277; Thota v. Young, 366 S.W.3d 678, 689 (Tex. 2012) (observing
that it has “repeatedly reaffirmed [its] longstanding, fundamental commitment to
broad-form submission”).
The use of a broad-form jury question for a cause of action does not mean
that the question may omit the necessary elements of the claim. Diamond Offshore
Mgmt. Co. v. Guidry, 171 S.W.3d 840, 844 (Tex. 2005) (“Broad-form submission
does not entail omitting elements of proof from the charge.”); Keetch v. Kroger
Co., 845 S.W.2d 262, 267 (Tex. 1992) (Hecht, J., concurring) (“It should hardly
need be said that broad form submission does not entail omitting elements of proof
from the charge. Broad form involves inclusion of multiple elements within a
single question, usually by adding accompanying instructions, when it is feasible to
do so.”).
“Whether a granulated or broad-form charge is submitted, the trial court’s
duty is to submit only those questions, instructions, and definitions raised by the
pleadings and the evidence.” Harris Cnty. v. Smith, 96 S.W.3d 230, 236 (Tex.
2002); see also TEX. R. CIV. P. 278 (“Except in trespass to try title, statutory
partition proceedings, and other special proceedings [identified by statute or rule],
a party shall not be entitled to any submission of any question raised only by a
general denial and not raised by affirmative written pleading by that party.”);
Thota, 366 S.W.3d at 693; Shaw v. Lemon, 427 S.W.3d 536, 547 (Tex. App.—
6
Dallas 2014, pet. denied) (“A trial court is required to submit only those claims
raised by the pleadings and the evidence.”); Holmes v. Cooley, 308 S.W.2d 150,
154 (Tex. Civ. App.—Austin 1957, writ ref’d n.r.e.).
Trial courts have “great latitude and considerable discretion” in determining
the instructions. La.-Pac. Corp. v. Knighten, 976 S.W.2d 674, 676 (Tex. 1998);
see also Thota, 366 S.W.3d at 687. A trial court abuses its discretion if it acts
arbitrarily, unreasonably, or without regard to guiding legal principles, or if its
decision is not supported by legally or factually sufficient evidence. Bocquet v.
Herring, 972 S.W.2d 19, 20 (Tex. 1998).
A party is obligated to present its objections to the charge “before the charge
is read to the jury.” TEX. R. CIV. P. 272. The objection must be specific; “[a] party
objecting to a charge must point out distinctly the objectionable matter and the
grounds of the objection.” TEX. R. CIV. P. 274; Ford Motor Co. v. Ledesma, 242
S.W.3d 32, 43 (Tex. 2007). Moreover, the party’s objection must have “stated the
grounds for the ruling that the complaining party sought from the trial court with
sufficient specificity to make the trial court aware of the complaint, unless the
specific grounds were apparent from the context.” TEX. R. APP. P. 33.1(a). A
party must “clearly designate the alleged error and specifically explain the basis of
its complaint in its objection to the charge.” Hamid v. Lexus, 369 S.W.3d 291, 296
(Tex. App.—Houston [1st Dist.] 2011, no pet.) (quoting Carousel’s Creamery,
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L.L.C. v. Marble Slab Creamery, Inc., 134 S.W.3d 385, 404–05 (Tex. App.—
Houston [1st Dist.] 2004, pet. dism’d)).
Failure to object timely to error in a jury charge constitutes a waiver of that
error. TEX. R. CIV. P. 272. “Any complaint as to a question, definition, or
instruction, on account of any defect, omission, or fault in pleading, is waived
unless specifically included in the objections.” TEX. R. CIV. P. 274. A party also
waives an objection when it is “obscured or concealed by voluminous unfounded
objections, minute differentiations or numerous unnecessary requests.” TEX. R.
CIV. P. 274; Dallas Cnty. v. Crestview Corners Car Wash, 370 S.W.3d 25, 53
(Tex. App.—Dallas 2012, pet. denied). Further,
[f]ailure to submit a question shall not be deemed a ground for
reversal of the judgment, unless its submission, in substantially
correct wording, has been requested in writing and tendered by the
party complaining of the judgment; provided, however, that objection
to such failure shall suffice in such respect if the question is one relied
upon by the opposing party.
TEX. R. CIV. P. 278. Likewise, “[f]ailure to submit a definition or instruction shall
not be deemed a ground for reversal of the judgment unless a substantially correct
definition or instruction has been requested in writing and tendered by the party
complaining of the judgment.” Id.
Texas courts “have long favored a common sense application of our
procedural rules that serves the purpose of the rules, rather than a technical
application that rigidly promotes form over substance.” Thota, 366 S.W.3d at 690.
8
Therefore, Texas courts have adopted one basic simplified test for determining
whether a party has preserved error in the jury charge: the objecting party must
make “the trial court aware of the complaint, timely and plainly and obtain[] a
ruling.’” Id. (quoting State Dep’t of Highways & Pub. Transp. v. Payne, 838
S.W.2d 235, 241 (Tex. 1992)). When the basis of the complaint is that a question
should be presented in granulated rather than broad form, “the complaining party
[must] make a specific objection to the form of the charge to put the trial court on
notice of the alleged error and afford the court an opportunity to correct the error.”
Thota, 366 S.W.3d at 690. “On appeal, the charge error complained of must
comport with the objections made at the charge conference.” Hamid, 369 S.W.3d
at 296.
Affirmative defenses must be specifically pleaded or tried by consent. Thus,
when a party contends that his breach of a contract is excused by another party’s
prior breach or repudiation of the agreement, these affirmative defenses are waived
if they are not pleaded or tried by consent. Compass Bank v. MFP Fin. Servs.,
Inc., 152 S.W.3d 844, 852 (Tex. App.—Dallas 2005, pet. denied) (“[T]he
contention that a party to a contract is excused from performance because of a
prior material breach by the other contracting party is an affirmative defense that
must be affirmatively pleaded.”); see also RE/MAX of Tex., Inc. v. Katar Corp.,
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961 S.W.2d 324, 327 (Tex. App.—Houston [1st Dist.] 1997, writ denied) (excuse
is an affirmative defense and thus is waived if not pleaded or tried by consent).
Koukhtiev’s objections to Question 3
Koukhtiev argues, first, that Question 3 was improper because the parties
dispute the existence of a contract, so the jury should have been questioned and
instructed on the issue. However, the trial court did question and instruct the jury
on the issue.
Question 3 asked, “Did Valeri Koukhtiev agree to assign any or all of his
interest in the ownership of his work product including copyrightable works, ideas,
discoveries, programming code, software, inventions, trademarks and patents to
Hellene V. Hiner?” Question 3 was very similar to Texas Pattern Jury Charge
101.1, which “submits the issue of the existence of an agreement” and, in model
form, asks,
Did Paul Payne and Don Davis agree [insert all disputed terms]?
[Insert instructions, if appropriate.]
Answer “Yes” or “No.”
Answer: ___________________
Comm. on Pattern Jury Charges, State Bar of Tex., TEX. PATTERN JURY CHARGES,
Business Consumer Insurance Employment PJC 101.1 (2012).
At trial, Koukhtiev objected that the question did not contain five elements
of an enforceable contract: (1) an offer, (2) an acceptance, (3) mutual assent,
(4) “execution and delivery of the contract with intent that it be mutual and
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binding,” and (5) “consideration supporting the contract.” The general elements of
a contract claim are: “(1) a contract existed between the parties; (2) the contract
created duties; (3) the defendant breached a material duty under the contract; and
(4) the plaintiff sustained damages.” Cadle Co. v. Castle, 913 S.W.2d 627, 631
(Tex. App.—Dallas 1995, writ denied); see also Bayway Servs., Inc. v. Ameri-
Build Constr., L.C., 106 S.W.3d 156, 160 (Tex. App.—Houston [1st Dist.] 2003,
no pet.). When the law requires the parties’ agreement to be in writing, the
contract must be signed, and a copy must be delivered to each party with the intent
that it be mutual and binding. Winchek v. Am. Express Travel Related Servs. Co.,
Inc., 232 S.W.3d 197, 202 (Tex. App.—Houston [1st Dist.] 2007, no pet.); see also
TEX. BUS. & COM. CODE ANN. § 26.01 (2009).2
The first three parts of Koukhtiev’s objection addressed the first element: the
existence of a contract between the parties. The fourth part of Koukhtiev’s
objection was directed at the legal requirements that, when the law requires the
parties’ agreement to be in writing, the contract must be signed, and a copy must
be delivered to each party. We specifically note, however, that Koukhtiev did not
2
If a written contract is not required by law to be in writing, the parties may
orally agree to the terms of a written contract without signing it. Simmons &
Simmons Constr. Co., Inc., 286 S.W.2d 415, 417–18 (Tex. 1955); Flores v.
Schwartz, 259 S.W. 266, 267 (Tex. 1924); see also Beverick v. Koch Power,
Inc., 186 S.W.3d 145, 149–50 (Tex. App.—Houston [1st Dist.] 2005, pet.
denied); Tabrizi v. Daz-Rez Corp., 153 S.W.3d 63, 67 (Tex. App.—San
Antonio 2004, no pet.). In those circumstances, execution and delivery are
not required.
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argue that the parties did not sign an agreement or that he failed to receive delivery
of the contract. That is, while he contends that the charge did not include all
elements of a contract claim, he did not argue at trial or on appeal that the evidence
raised a question as to signature or delivery of a written contract. Accordingly, the
trial court was not required to submit a question on signature or delivery. TEX. R.
CIV. P. 278; Smith, 96 S.W.3d at 236; see also Thota, 366 S.W.3d at 693; Shaw,
427 S.W.3d at 547; Holmes, 308 S.W.2d at 154.
On appeal, Koukhtiev first argues that Question 3 did not ask if there was an
offer and acceptance and a meeting of the minds. He preserved this objection. But
Question 3 adequately addresses all three of these elements by asking whether the
parties agreed to certain terms. Koukhtiev concedes as much; he states that it is
undisputed that he (and Hiner) signed the Work for Hire Agreement, but he argues
instead that the true issue was whether that agreement “reflected the true intention
of the parties.” Question 3 adequately addresses that issue by describing the
substance of the agreement and asking whether the parties agreed to those terms.
Further, the question as submitted was supported by evidence of an offer (an
exchange of money for programming), acceptance (Koukhtiev’s performance of
the work), and mutual assent (the parties’ execution of the Work for Hire
Agreement and performance of its terms).
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Moreover, while the trial court could have given instructions on offer,
acceptance, and mutual assent, it was not necessary for it to do so. Smith, 96
S.W.3d at 236; see also TEX. R. CIV. P. 278; Thota, 366 S.W.3d at 693; Shaw, 427
S.W.3d at 547; Holmes, 308 S.W.2d at 154. Trial courts have “great latitude and
considerable discretion” in determining the instructions. La.-Pac. Corp., 976
S.W.2d at 676; see also Thota, 366 S.W.3d at 687. They abuse their discretion
only if they act arbitrarily, unreasonably, or without regard to guiding legal
principles, or if their decisions are not supported by legally or factually sufficient
evidence. Bocquet, 972 S.W.2d at 21. Under the facts of this case, we could not
hold that the trial court abused its discretion in submitting a question that expressly
asked whether Koukhtiev agreed to specific terms involving transfer of his work
product to Hiner, the very issue that Koukhtiev concedes was disputed, while
omitting questions as to matters not in dispute, such as whether the contract was
signed or delivered. See Smith, 96 S.W.3d at 236; see also Thota, 366 S.W.3d at
693; Shaw, 427 S.W.3d at 547; Holmes, 308 S.W.2d at 154. Because Question 3
presented the issue in dispute, the trial court did not err in submitting it over
Koukhtiev’s objection.
Koukhtiev’s objections to Question 4
With respect to Question 4, Koukhtiev argues that the question failed to
require proof of each element of a cause of action for breach of contract, namely
13
that (1) there was a valid, enforceable contract; (2) the plaintiff was a proper party
to sue for breach of contract; (3) the plaintiff performed, tendered performance, or
was excused from performing its contractual obligations; (4) the defendant
breached the contract; and (5) the defendant’s breach caused the plaintiff injury.
Foley v. Daniel, 346 S.W.3d 687, 690 (Tex. App.—El Paso 2009, no pet.)
(elements 1, 3–5); Mandell v. Hamman Oil & Ref. Co., 822 S.W.2d 153, 161 (Tex.
App.—Houston [1st Dist.] 1991, writ denied) (element 2), abrogated on other
grounds by Coastal Oil & Gas Corp. v. Garza Energy Trust, 268 S.W.3d 1, 18
(Tex. 2008); see also Merrimack Mut. Fire Ins. Co. v. Allied Fairbanks Bank, 678
S.W.2d 574, 576–77 (Tex. App.—Houston [14th Dist.] 1984, writ ref’d n.r.e.)
(analyzing second element as threshold standing requirement, rather than as
element of breach of contract claim). According to Koukhtiev, Question 4 failed to
require findings on elements 2, 3, and 4, each of which was disputed at trial.
We note that Question 4 matches exactly the Pattern Jury Charge for the
breach of a contract, which reads,
Did Don Davis fail to comply with the agreement?
[Insert instructions, if appropriate.]
Answer “Yes” or “No.”
Answer: ___________________
Comm. on Pattern Jury Charges, State Bar of Tex., TEX. PATTERN JURY CHARGES,
Business Consumer Insurance Employment PJC 101.2 (2012). Other than the
necessary substitutions of “Valeri Koukhtiev” for “Don Davis” and a description of
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“the agreement with Hellene V. Hiner” for the words “the agreement,” Question 4
is identical to the pattern.3
Koukhtiev first argues that Question 4 fails to address the disputed question
of fact whether Cottage Music Academy was a sole proprietorship wholly owned
by Hiner or the unofficial name of an equal partnership between Hiner and
Koukhtiev. Thus, he contends, Question 4 failed to require a finding that Hiner
was the proper party to sue for any breach of contract by Koukhtiev, and it should
have asked whether Hiner could sue for breach of an agreement between
Koukhtiev and Cottage Music Academy. But Question 4 asks about “the
agreement with Hellene V. Hiner” to assign certain rights to her. The jury could
not logically answer “yes” to Question 3 and also to this Question if it did not find
that an “agreement with Hellene V. Hiner” existed.
Koukhtiev next complains that Question 4 did not require a finding that
Hiner performed, tendered performance of, or was excused from performing her
contractual obligations. These issues go to whether Koukhtiev’s breach of contract
was excused by Hiner’s own breach or repudiation of the contract, a defense that
Koukhtiev waived if he did not affirmatively plead it or try it by consent. Compass
Bank, 152 S.W.3d at 851; see also TEX. R. CIV. P. 272, 274; RE/MAX of Tex., Inc.,
3
Question 4 asked, “Did Valeri Koukhtiev fail to comply with the agreement
with Hellene V. Hiner [to] assign any or all of his interest in the ownership
of his work product including copyrightable works, ideas, discoveries,
programming code, software, inventions, trademarks and patents?”
15
961 S.W.2d at 327. The record before us does not reflect any pleading asserting
this defense or agreement to try the issue by consent, and Koukhtiev did not submit
these issues for determination by the jury. Accordingly, we hold that Koukhtiev
waived any objection to Question 4 on the grounds that it failed to require a finding
that Hiner complied with the agreement.
Koukhtiev further asserts that Question 4 does not require a determination
whether Koukhtiev breached the contract because it did not specifically ask if he
breached the “Work for Hire Agreement.” Had it done so, Koukhtiev concedes
that it would be a proper question. Koukhtiev argues that this omission is
exacerbated by Question 4’s use of the language “any or all of his interest,” which
he argues is self-contradictory and ambiguous because “any” and “all” are different
concepts. Koukhtiev’s counsel did not mention the Work for Hire Agreement or
submit any specific language in Question 4 in his objection to the trial court, nor
did he object on grounds that the question was self-contradictory or ambiguous.
Nothing about the evidence or the context of the question would have made these
objections clear to the trial court. Thus, Koukhtiev failed to preserve any error
with respect to these arguments. TEX. R. CIV. P. 272, 274.
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Conclusion
We affirm the trial court’s judgment.
Harvey Brown
Justice
Panel consists of Justices Keyes, Bland, and Brown.
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