John and Sally Kosmatka v. Motostalgia, LLC Antonio Brunet And Motoreum, LLC ( 2024 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-22-00447-CV
John and Sally Kosmatka, Appellants
v.
Motostalgia, LLC; Antonio Brunet; and Motoreum, LLC, Appellees
FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY
NO. D-1-GN-19-008679, THE HONORABLE MARIA CANTÚ HEXSEL, JUDGE PRESIDING
M E M O RAN D U M O PI N I O N
John and Sally Kosmatka appeal the judgment rendered after a bench trial that they
take nothing on their claims against Motostalgia, LLC; Antonio Brunet; and Motoreum, LLC. The
Kosmatkas challenge findings and conclusions underlying the judgment on their breach-of-
contract claim arising from the sales of antique vehicles. We will affirm the judgment.
BACKGROUND
The Kosmatkas’ five antique vehicles were the subject, directly or indirectly, of
three agreements or sets of agreements with Motostalgia: the First Consignment Agreement, dated
March 3, 2015; the five Second Consignment Agreements (one per car) dated March 22, 2015; and
the Final Financial Agreement, dated January 15, 2018. Other documentary evidence included
bills of sale and emails between the Kosmatkas and Brunet. Motostalgia and Motoreum are
companies owned at least in part by Brunet. Sally Kosmatka testified that Motostalgia is an auction
company and that Motoreum is a building where cars were sold.
The consignment agreements
The First Consignment Agreement is a handwritten document that lists five
vehicles, assigns them values, and sets out consignment terms. Sally Kosmatka and Brunet
testified that the page contains handwriting from each of them. The Kosmatkas listed the vehicles
and their values as:
1932 Cadillac $250,000
1938 Cadillac $50,000
1933 Cadillac $40,000
1923 Milburn Electric $50,000
1908 Reo $40,000
The latter two prices have an interlineated notation of “presold.” 1 The assigned values of the five
cars total $430,000. The agreement states that the Kosmatkas agreed with “Brunet of Motostalgia”
to offer those cars for auction on June 12, 2015, in Indianapolis with the agreement that
“Motostalgia will guarantee the minimum net amount of $410,000 for the 5 vehicles in this list
and the agreement that if the vehicles reach a total of above $451,000 all amounts above that will
be split 50% to the Kosmatkas and 50% to Motostalgia.” Sally Kosmatka agreed that Motoreum
did not appear on the document. She testified that the “Consignment Agreement” heading and the
terms for what they would receive, including the provisions for amounts that exceeded $451,000,
were in Brunet’s handwriting. Sally Kosmatka agreed that the First Consignment Agreement did
not speak of Brunet or his companies taking possession of the vehicles or the titles. The
Kosmatkas’ and Brunet’s signatures are under the date 3/3/2015. Beyond the signature lines are a
list of “amounts toward the purchase of the 1908 Reo 1938 Cadillac V16 1923 Milburn”; the list
1
Brunet testified that the presale offer was the sale price of the Reo, but that the auction
produced higher bids for the Milburn.
2
details payments of cash and checks in amounts ranging from $3,000 to $10,000 beginning in
March 2015 and continuing irregularly through August 2019.
Sally Kosmatka testified that she and her husband believed the cars to be worth
$430,000, while Brunet believed them worth $410,000, which is why the First Consignment
Agreement guaranteed the Kosmatkas $410,000. She believed that they were entitled to receive
at least $410,000 and testified that she was not told before signing this agreement that the cars
would have to sell at auction before they could collect the guaranteed $410,000. She testified that
she did not believe that the cars would have to sell before Motostalgia’s payments were due;
consistent with that, Brunet was paying the Kosmatkas before taking the cars to the auction. She
testified that he made the first payment on March 22, 2015, and may have taken the vehicles and
titles that day. She said that, when Brunet made a payment, he wrote the amount paid on the
agreement, the Kosmatkas signed acknowledgment of that payment, and Brunet took a photo of
the new writing on the agreement.
Brunet described the March 3, 2015 First Consignment Agreement as “notes to the
agreement that was signed at the time the cars were picked up” on March 22, 2015. Brunet denied
that Motostalgia agreed to pay $410,000 for the vehicles, asserting that it agreed to sell the vehicles
and would “guarantee” the $410,000 if the sales supported that amount. Brunet testified that he
explained “verbally” to John Kosmatka the possibility that they would receive less than $410,000
“in extreme detail.”
The Second Consignment Agreements are a collection of forms on Motostalgia
letterhead with the Kosmatkas’ names signed beside the date March 22, 2015. Entitled
“Consignment & Selling Agreement,” the documents provide detail on the vehicles and a page of
preprinted terms and conditions. There is one agreement per vehicle. Consistent with the list on
3
the First Consignment Agreement, the vehicles include a 1908 Reo, a 1923 Milburn Coupe Sedan,
a 1932 Cadillac convertible, a 1933 Cadillac coupe, and a 1938 Cadillac limousine. Each
agreement includes details like vehicle identification numbers, description, and history. In the
“Agreed Selling Commission” blank on each agreement there is a handwritten “10% commission
fee. 90% towards assembling and fixing cars to running and saleable condition.” In the blank for
“Reserve amount (USD)” immediately below the selling commission line, there is a handwritten
note “10% of hammer price to consignor no reserve.” The preprinted terms and conditions include
representations that the signatories agree to be bound by those provisions and that Motostalgia
“pays the seller when payment is received and confirmed from the buyer. . . . Seller checks are
then mailed within 5-7 business days.” Further, “Seller affirms that all information and
descriptions of the consigned vehicle are accurate and no misrepresentation has occurred.”
Sally Kosmatka testified that she had never seen those agreements before discovery
in this lawsuit. She said that, though the signature on each was hers, she thought they looked like
they and the printed names “came off of the original consignment agreement.” 2 Brunet said he
watched both Kosmatkas sign all five agreements. An employee of Brunet’s companies, Andrea
Hedlund, testified that she accompanied Brunet to the Kosmatkas’ property and saw them sign the
First Consignment Agreement and the Second Consignment Agreements.
Brunet testified that the Second Consignment Agreements were either given to or
discussed with the Kosmatkas when the First Consignment Agreements were signed on March 3,
2015, even though the Second Consignment Agreements were not signed until March 22, 2015.
He said that “it’s understood that we can only pay up to the amount that the cars are sold for.” He
2
While the First Consignment Agreement bears the Kosmatkas’ signatures, nowhere are
their names hand-printed as they are on the Second Consignment Agreements.
4
said that the agreements did not specify what happens when the auction price is less than the
“minimum” because “it’s an assumption that whenever you hire an agent to be sold the cars on a
consignment agreement, I can only provide the sellers up to the amount that we sell the vehicles
for.” He called it an “auction guarantee,” which is “up to the amount including our commissions.
So we were not going to take any seller commission up to that amount.” He testified that these
terms were explained in the Second Consignment Agreements “that specifically explained all the
details of a consignment before the vehicles were picked up and soon after these notes that we did
in person in handwriting” in the First Consignment Agreement. He denied agreeing to pay
$410,000 for the vehicles, saying instead that “Motostalgia agree[d] to sell the vehicles, and if the
funds are up to that point, including our seller commissions, that’s the amount that they would
receive.” Brunet testified that the Second Consignment Agreements memorialized the terms of
the agreement he had discussed on March 3 with the Kosmatkas when the First Consignment
Agreement was signed.
Brunet testified that he began making payments to the Kosmatkas when the Second
Consignment Agreements were signed. He said that providing such compensation in advance of
expected sales was “industry standard.” He “knew” that he would receive at least $5,000 for the
five vehicles, so he began paying the Kosmatkas at least $5,000 weekly after he took the cars and
before the auction. Brunet conceded that the “installment” payments to the Kosmatkas did not
conform with the provisions of the Second Consignment Agreements stating that Motostalgia
would pay the seller when payment was received and confirmed from the buyer. He testified that
Motostalgia started payments to the Kosmatkas before receiving money from even the “presold”
buyers and paid the Kosmatkas in installments as they requested for “tax benefits.”
5
The Financial Agreement
The Financial Agreement, dated January 15, 2018, is a handwritten document
memorializing a payment plan between the Kosmatkas and “Motostalgia, represented by Antonio
Brunet, regarding the sale of antique and classic cars (in particular the 1932 V12 Cadillac Victoria
Convertible) by John and/or Sally Kosmatka to Motostalgia.” The agreement states that “[i]t is
agreed that Motostalgia will make a cash payment of $6,500.00 a month during the first week of
every month to John and/or Sally Kosmatka.” These payments “will continue until the sum of
$225,750.00, currently owed by Motostalgia to John and/or Sally Kosmatka has been paid off.”
Further, “Antonio Brunet, representing Motostalgia, has agreed that, when other funds become
available, Motostalgia will make payments in addition to the $6,500.00 per month.” The
agreement is signed by the Kosmatkas and “Motostalgia (Antonio Brunet).”
Sally Kosmatka testified that Brunet’s failure to pay installments as he had been
paying prompted her to draft the Financial Agreement. She wrote “Draft Financial Agreement”
and sent it to Brunet, and he signed it, after which she scratched out “Draft” and inserted “Final.”
She concurred that the Financial Agreement does not mention providing title or delivery of
vehicles because those events had already occurred. She agreed that Motoreum did not appear on
the document.
Brunet testified that he signed the Financial Agreement because he is “an
empathetic person” and was fond of the Kosmatkas. He said Sally Kosmatka was crying and John
was sick, so he signed the document without reading it fully. Though the document states that he
would have to pay $6,500 per month until the sum of $225,750 was paid, Brunet testified that he
believed that his payments owed would be limited by the amount received for the sales; two cars—
sold in April and May 2018—were still unsold when he signed the Financial Agreement in January
6
2018. Brunet agreed that as of January 2018 he had paid $184,250 to the Kosmatkas. He testified
that he stopped making payments in 2019 because he had paid all he owed to the Kosmatkas.
Other documentary evidence
The record also contains bills of purchase and invoices for the vehicles. Three of
the vehicles sold at the Indianapolis auction and the 1932 and 1933 Cadillacs sold separately years
later. The documents bear the Motostalgia logo and list one or both Kosmatkas as the seller and
various individuals or entities other than Motostalgia as the buyer. The invoices individually list
the following hammer prices, commissions, and totals due for one of the five vehicles:
Vehicle Hammer price Buyer commission Total due
1908 Reo $ 75,000 $ 2,250 $ 77,500
1923 Milburn $ 62,000 $ 6,200 $ 68,200
1932 Cadillac $ 150,000 $ 0 $ 150,000
1933 Cadillac $ 25,000 $ 0 $ 25,000
1938 Cadillac $ 42,500 $ 4,250 $ 46,750
total $ 354,500 $ 12,700 $ 367,200
Though the Kosmatkas attended the 2015 Indianapolis auction, Sally Kosmatka testified that she
did not remember being presented bills of sale showing the purchase of the three vehicles that sold
at the auction.
Brunet said that the 1932 Cadillac did not sell at the auction in part because it had
a V12 engine though the Kosmatkas had been told that it was a V16 prototype; they also had no
documentation or other support for the claim that it was a V16 Cadillac prototype. Brunet testified
that no bids were made on the 1933 Cadillac. Brunet testified that the Kosmatkas approved
Motostalgia retaining the unsold vehicles so that he could attempt to find buyers. He said that he
held the titles to all of the cars in escrow until a transfer could be made between the Kosmatkas
7
and the buyers. He said that he had to store the vehicles indoors at a facility owned by Motoreum
and ship them in an enclosed trailer because they are delicate; he testified that the storage and
transport costs totaled about $35,000. He took both cars to two additional auctions where they did
not sell. The remaining Cadillacs sold individually via what Brunet called “private treaty” through
auction houses in April and May 2018. Brunet testified that the 1932 Cadillac sold for more than
V12s from that year, but less than a V16 prototype would have because of the lack of proof of the
prototype status. He said that the 1933 Cadillac was not running, which hurt its value. He said
that Motostalgia has made no profit from these transactions.
Sally Kosmatka testified, “The total amount out of the original $410,000 that he
still owes us is $114,750.” She testified that Brunet is not owed any offsets or credits. She said
she knew that Brunet wanted to charge them for the expenses of moving the cars to the auction but
that they never signed any documents saying that they were responsible for such because “when
he took the cars from us, he was buying them. We’re not responsible for anything.” She testified
that neither the First Consignment Agreement nor the Financial Agreement permitted Brunet to
deduct any amounts from the $410,000, and that they never otherwise agreed that he could. They
received payments from both Motostalgia and Motoreum and received checks and cash. She
believed that the last payment they received from one of the appellees was on September 26, 2019.
8
The Kosmatkas and Brunet exchanged emails in November 2019. The Kosmatkas
inquired regarding why payments had stopped and asking whether he intended to continue making
payments. They asserted, “Since March 2015, you have paid $295,250 out of the $410,000 owed,
which leaves a balance of $114,750.” Brunet responded by email explaining why the cars sold for
less than $410,000 and what amounts he was allowed to deduct from the actual sales proceeds. He
said that the car sales generated $367,200 and agreed that he had paid the Kosmatkas $295,250.
He said that the 1932 Cadillac was not a prototype V16 as the Kosmatkas had believed and
represented, so it took longer to sell with more shipping and storage costs and brought less money
than expected. He claimed $17,700 in expenses to ship the cars to Indianapolis for auction, to
return the 1932 and 1933 Cadillacs to Texas, then ship them to and from California in a failed
attempt to sell them there; he also claimed $18,600 in additional storage fees for the two slow-
selling cars. He claimed there were additional expenses in preparing the cars for sale plus
advertising and labor—expenses he did not quantify. He wrote that his family’s struggles and
medical challenges “do not impact our commitment and good faith to do what is right and fair.
After all direct expenses the math is as follow[s].
Total Amount of Sales $ 367,200.00
Amount paid up to Date $ 295,250.00
Direct expenses $ 36,300.00
Remaining Amount $ 35,650.00”
He concluded, “Hope this sounds agreeable and fair and we can conclude our dealings in good
terms . . . .“ Brunet deemed this email a “settlement offer.” He said he was offering to pay the
Kosmatkas all proceeds of the sales of the five vehicles minus the direct expenses even though he
did not believe he owed them that much. He undisputedly made no more payments.
9
The lawsuit
The Kosmatkas sued on several causes of action including breach of contract. The
parties disputed which agreement(s) were valid and which should control the transaction. Sally
Kosmatka denied signing the Second Consignment Agreements, and Brunet contended that the
Financial Agreement lacked consideration. The parties agree that the vehicles were sold to various
buyers for a total of $367,200 and that the Kosmatkas have been paid a total of $295,250. The
parties disputed how much (if any) remains due to the Kosmatkas.
The trial court concluded that the consignment agreements were not harmonizable
and that the Second Consignment Agreements controlled. The court also concluded that the
Financial Agreement was invalid because the Kosmatkas provided no consideration for it. The
trial court held that the Kosmatkas take nothing by any of their causes of action and also that
appellees were not entitled to an award of attorney’s fees.
APPLICABLE LAW
On appeal, the Kosmatkas focus their challenge of the judgment on their breach-
of-contract claim, attacking findings and conclusions underlying the trial court’s take-nothing
judgment on that claim.
To show a breach of contract, the plaintiff must prove that (1) an offer was made;
(2) the other party accepted in strict compliance with the terms of the offer; (3) the parties had a
meeting of the minds on the essential terms of the contract (mutual assent); (4) each party
consented to those terms; and (5) the parties executed and delivered the contract with the intent
that it be mutual and binding. USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479, 501 n.21 (Tex.
2018). A contract must be supported by consideration—a present exchange bargained for in return
10
for a promise. Trilogy Software, Inc. v. Callidus Software, Inc., 143 S.W.3d 452, 460 (Tex. App.—
Austin 2004, pet. denied). Consideration “consists of either a benefit to the promisor or a detriment
to the promisee.” Id. (quoting Roark v. Stallworth Oil & Gas, Inc., 813 S.W.2d 492, 496 (Tex.
1991) (internal citations omitted)). A contract modification must satisfy all the essential elements
of a contract. Hathaway v. General Mills, Inc., 711 S.W.2d 227, 228 (Tex. 1986); Pointe W. Ctr.,
LLC v. It’s Alive, Inc., 476 S.W.3d 141, 152 (Tex. App.—Houston [1st Dist.] 2015, pet. denied).
There must be both a meeting of the minds and new consideration to support the modification.
Hathaway, 711 S.W.2d at 228; It’s Alive, 476 S.W.3d at 152.
A novation occurs if a contract evidences an intention to relinquish and extinguish
pre-existing claims and rights of action. CTTI Priesmeyer, Inc. v. K & O Ltd. P’ship, 164 S.W.3d
675, 681 (Tex. App.—Austin 2005, no pet.), overruled on other grounds by Elness Swenson
Graham Architects, Inc. v. RLJ II-C Austin Air, LP, 520 S.W.3d 145, 165 n.7 (Tex. App.—Austin
2017, pet. denied) (en banc). The party claiming a novation must prove 1) the validity of the
previous obligation; (2) an agreement among all parties to accept a new contract; (3) the
extinguishment of the previous obligation; and (4) the validity of the new agreement. CTTI,
164 S.W.3d at 681 (citing Vickery v. Vickery, 999 S.W.2d 342, 356 (Tex. 1999); Fulcrum Central
v. AutoTester, Inc., 102 S.W.3d 274, 277 (Tex. App.—Dallas 2003, no pet.)). A court may infer
that a new agreement is a novation of an earlier agreement when the new agreement is so
inconsistent with the earlier agreement that the two agreements cannot subsist together. CTTI,
164 S.W.3d at 681; Fulcrum, 102 S.W.3d at 277.
We subject the trial court’s findings of fact to the same standards of review applied
to jury verdicts. See Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996); see also Anderson v. City of
Seven Points, 806 S.W.2d 791, 794 (Tex. 1991) (explaining that trial court’s findings of fact have
11
“same force and dignity as a jury’s verdict upon questions”). We “defer to the trial court’s findings
of fact—so long as they are supported by the record—and review conclusions of law de novo.”
Southwestern Elec. Power Co. v. Lynch, 595 S.W.3d 678, 683 (Tex. 2020); see Reliance Nat’l
Indem. Co. v. Advance’d Temps., Inc., 227 S.W.3d 46, 50 (Tex. 2007) (“Appellate courts review
legal determinations de novo, whereas factual determinations receive more deferential review
based on the sufficiency of the evidence.”). We will uphold the trial court’s conclusions if the
judgment can be sustained on any legal theory supported by the evidence. See BMC Software
Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002).
In conducting a legal-sufficiency review, we consider the evidence in the light most
favorable to the challenged findings and indulge every reasonable inference that supports them.
University Gen. Hosp., L.P. v. Prexus Health Consultants, LLC, 403 S.W.3d 547, 550 (Tex. App.—
Houston [14th Dist.] 2013, no pet.). The evidence is legally sufficient if it would enable reasonable
and fair-minded people to reach the decision under review. Id. at 551. We credit favorable
evidence if a reasonable factfinder could and disregard contrary evidence unless a reasonable
factfinder could not. Id. When a party attacks the legal sufficiency of an adverse finding on an
issue on which it had the burden of proof, it must demonstrate on appeal that the evidence
establishes, as a matter of law, all vital facts in support of the issue. Dow Chem. Co. v. Francis,
46 S.W.3d 237, 241 (Tex. 2001) (per curiam). When a party challenges the legal sufficiency of the
evidence on a finding on which it did not bear the burden of proof, the party must show that no
evidence supports the finding. Exxon Corp. v. Emerald Oil & Gas Co., L.C., 348 S.W.3d 194, 215
(Tex. 2011).
When a party attacks the factual sufficiency of the evidence to support an adverse
finding on which it had the burden of proof, it must demonstrate on appeal that the adverse finding
12
is against the great weight and preponderance of the evidence and that the verdict is clearly wrong,
unjust, or manifestly erroneous. Id. at 242; Nelson v. Najm, 127 S.W.3d 170, 174 (Tex. App.—
Houston [1st Dist.] 2003, pet. denied). We examine the entire record, considering both the
evidence in favor of and contrary to the challenged findings. See Maritime Overseas Corp. v. Ellis,
971 S.W.2d 402, 406-07 (Tex. 1998); Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). We consider
and weigh all the evidence in a neutral light, and we can set aside the verdict only if it is so contrary
to the overwhelming weight of the evidence as to be clearly wrong and unjust. Ellis, 971 S.W.2d
at 407; Cain, 709 S.W.2d at 176. When a party challenges the factual sufficiency of evidence
supporting an adverse fact finding for which it did not bear the burden of proof at trial, it must
show that the evidence as a whole is so weak as to make the finding clearly wrong and manifestly
unjust. In re Marriage of Thrash, 605 S.W.3d 224, 230 (Tex. App.—San Antonio 2020,
pet. denied).
DISCUSSION
The Kosmatkas contend that the Financial Agreement is the currently binding
contract between the parties under which Motostalgia owes them payments. They challenge the
evidentiary support for two findings: (1) that the parties intended the Second Consignment
Agreements to substitute for and discharge the obligations of the First Consignment Agreement
and (2) that the Financial Agreement contained no performance obligation owed by the Kosmatkas
and no benefit to be conferred on Motostalgia. They contend that the conclusion that the Financial
Agreement lacked consideration and is not enforceable is incorrect. They contend that the
Financial Agreement’s validity is shown by its statement that Motostalgia is responsible for
$225,750 and the fact that it is the last-executed of the agreements, taking precedence over the
13
previously executed consignment agreements. The Kosmatkas also contend that the record
supports each element of their breach-of-contract claim.
We note initially that, though Brunet testified that the First Consignment Agreement
was merely notes in preparation for the Second Consignment Agreements, no party challenges its
validity as a contract between the parties. The issues on appeal are different aspects of the
questions whether the Second Consignment Agreements replaced or were a novation of the First
Consignment Agreement, and whether the Financial Agreement replaced all previous agreements
between the Kosmatkas and Motostalgia. 3
The record supports the conclusion that the Second Consignment Agreements control.
The trial court found that the terms of the First Consignment Agreement and the
Second Consignment Agreements are so inconsistent that “the two agreements cannot subsist
together.” It further found that the Second Consignment Agreements “demonstrate an intention
and agreement by the Kosmatkas and Motostalgia that the obligations of the [Second]
Consignment Agreements substituted for and operated as a discharge of the obligations of the
[First] Consignment Agreement.”
The March 22, 2015 Second Consignment Agreements collectively concerned the
five cars listed in the March 3, 2015 First Consignment Agreement. Whereas in the First
Consignment Agreement, the Kosmatkas agree to offer the listed cars for auction in Indianapolis,
the Second Consignment Agreements do not specify the place or time of the sale but do
3
All of the signed agreements were expressly between the Kosmatkas and Motostalgia,
represented by Brunet. Motoreum is not party to any of the agreements even though checks were
drafted on a Motoreum account to pay the Kosmatkas. The Kosmatkas seek to impose liability on
all appellees, but on the facts and claims on appeal, imposition of any liability on Brunet or
Motoreum is dependent on a finding that Motostalgia is liable to the Kosmatkas.
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contemplate a sale at auction or otherwise arranged by Motostalgia. The March 3 and March 22
agreements diverge in the financial mechanics.
Neither party challenges the findings regarding the First Consignment Agreement.
The trial court recited that the First Consignment Agreement “expressly provided that ‘Motostalgia
will guarantee the minimum net amount of $410,000 for the 5 vehicles’ and ‘that if the vehicles
reach a total of above $451,000 all amount (sic) above that will be split 50% to the Kosmatka’s
(sic) and 50% to Motostalgia.’” The court had heard Sally Kosmatka’s testimony that she believed
the guarantee meant that Motostalgia would pay them $410,000 regardless of the sales prices. The
court also had heard Brunet’s interpretation that the Kosmatkas were guaranteed $410,000 only if
the sales prices were high enough to leave that amount after Motostalgia was paid a 10%
commission; Brunet indicated that the threshold would be reached at $451,000, after which the
proceeds would be split evenly. We note that the First Consignment Agreement does not mention
a commission. The trial court’s finding sides with the plain language of the First Consignment
Agreement as a pure guarantee of a minimum payment of $410,000 to the Kosmatkas.
By contrast, the Second Consignment Agreements do not guarantee a minimum
payment to the Kosmatkas or a split of higher profits but do set a commission.4 In a handwritten
explanation in the blank for “Agreed Selling Commission,” they each state that there is a 10%
commission fee with “90% towards assembling and fixing cars to running and saleable
4
Though Sally Kosmatka testified that she did not remember signing the Second
Consignment Agreements and asserted that the Kosmatkas’ signatures on them were copied from
other documents, Brunet and Hedlund testified that the Kosmatkas signed them. The record
contains legally and factually sufficient evidence that the Kosmatkas agreed to and signed the
Second Consignment Agreements.
15
condition.” 5 Brunet testified that this meant “the proceeds to fix the cars would come out of their
90 percent.” The preprinted forms state, “SELLER agrees that any amounts owing to the auction
company may be deducted from the proceeds due the seller.” The terms of the later agreements
are also inconsistent with the original agreement in that the original does not allocate the burden
of paying for repairs to the cars or auction-house fees, and the later agreements do not guarantee
any minimum payment to the Kosmatkas. Sally Kosmatka’s testimony that she did not remember
signing the Second Consignment Agreements is disputed by testimony from Brunet and Hedlund
that she signed them.
There were plainly conflicts between the terms of the first and second consignment
agreements and in the testimony about them. The Kosmatkas had the burden to prove their breach-
of-contract claim, but the record supplies sufficient evidence to support the trial court’s findings
so that the trial court’s resolution of the conflicts in evidence and its findings and conclusions are
not against the great weight and preponderance of the evidence and are not so contrary to the
overwhelming weight of the evidence as to be clearly wrong and unjust. Dow, 46 S.W.3d at 241-
42; Ellis, 971 S.W.2d at 407. The evidence is legally and factually sufficient to support the trial
court’s finding and conclusion that the Second Consignment Agreements novated the First
Consignment Agreement. See CTTI, 164 S.W.3d at 681. We overrule the Kosmatkas’ argument
that the trial court erred by concluding that the First Consignment Agreement did not remain a
valid, binding, and enforceable contract between the Kosmatkas and Motostalgia (or any of the
appellees) after the execution of the Second Consignment Agreements.
5
There are some minor variations in the handwritten text. One agreement says “10%
commission” without the word “fee,” while another says instead “90% for assembling and
repairing car.”
16
The record supports the conclusion that the Financial Agreement is not a valid contract.
The Kosmatkas contend that the trial court erred by concluding that the Financial
Agreement did not bind Motostalgia to pay them $225,750. The court found that the Financial
Agreement contained no performance obligation owed by the Kosmatkas and no benefit to be
conferred on Motostalgia. The court concluded that the Financial Agreement lacked consideration
and is therefore not enforceable. The court further concluded that any purported debt owed under
that agreement was not enforceable due to the novation of the First Consignment Agreement by
the Second Consignment Agreements. The Kosmatkas challenge these findings and conclusions
and contend that the Financial Agreement was the final agreement between the parties and novated
all earlier agreements.
The existence of a written contract presumes consideration for its execution;
therefore, a party alleging lack of consideration bears the burden to rebut the presumption. Plains
Builders, Inc. v. Steel Source, Inc., 408 S.W.3d 596, 602-03 (Tex. App.—Amarillo 2013, no pet.);
Doncaster v. Hernaiz, 161 S.W.3d 594, 603 (Tex. App.—San Antonio 2005, no pet.); Tex. R. Civ.
P. 94. Thus, appellees had the burden to prove the lack of consideration, and the Kosmatkas must
on appeal show that no evidence supports the judgment (Exxon, 348 S.W.3d at 215 (legal
insufficiency)) or that the evidence as a whole is so weak as to make the finding clearly wrong and
manifestly unjust (Thrash, 605 S.W.3d at 230 (factual insufficiency).
The Financial Agreement recites that it is “regarding the sale of antique and classic
cars . . . by John and/or Sally Kosmatka to Motostalgia” and that
It is agreed that Motostalgia will make a cash payment of $6,500.00 a month
during the first week of every month to John and/or Sally Kosmatka. These
payments by Motostalgia to John and/or Sally Kosmatka will continue until the
17
sum of $225,750.00, currently owed by Motostalgia to John and/or Sally
Kosmatka, has been paid off.
There are also provisions for late payments, redirection of payments if the Kosmatkas die, and
additional payments by Motostalgia “when other funds become available.” Though the Financial
Agreement states that it concerns the sale of vehicles to Motostalgia, there is no provision in the
Financial Agreement for the Kosmatkas to provide vehicles to Motostalgia. Further, that statement
is inconsistent with the consignment agreements and all other evidence in the record that the
Kosmatkas sold their vehicles listed in the consignment agreements through Motostalgia to other
buyers. 6 The agreement purports to confirm a preexisting obligation from the previous
transactions but mischaracterizes the previous transactions. More critically, a promise to fulfill a
pre-existing obligation cannot serve as new consideration. Walden v. Affiliated Computer Servs.,
Inc., 97 S.W.3d 303, 319 (Tex. App.—Houston [14th Dist.] 2003, pet. denied).
The Kosmatkas contend that their forbearance from immediately collecting on the
outstanding debt arising from their performance and Motostalgia’s partial performance of the
obligations under the consignment agreements was consideration that conferred a benefit on
Motostalgia of being allowed to pay over time. But the forbearance existed only if the debt was
collectible when the Financial Agreement was reached, and Motostalgia’s debt existed in the
amount provided only if the $410,000 guarantee was valid and binding as a minimum owed to the
6
There was testimony that Brunet found the five cars when purchasing a different item
from the Kosmatkas; that sale/purchase was not part of the consignment agreements. The only
evidence is that the Kosmatkas provided the five cars listed in the consignment agreements to
Motostalgia to sell to others through auctions or private sales. There is no evidence that the
Kosmatkas sold those five cars to Motostalgia who then kept or resold them. Rather, the bills of
purchase and invoices on Motostalgia forms for the five cars list John Kosmatka as the seller to
buyers who are not Motostalgia or any of the appellees.
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Kosmatkas and if the sales were completed. But the only evidence is that the fourth and fifth cars
had not been sold when the Financial Agreement was signed.
In addition to concluding that there was no consideration for the Financial
Agreement, the trial court also concluded that the Financial Agreement did not describe a valid
and enforceable debt: “Any purported debt owed by Motostalgia under the Final Financial
Agreement was invalid and not enforceable due to the novation of the March 3, 2015 Consignment
Agreement by the March 22, 2015 Consignment Agreements.” Legally and factually sufficient
evidence support that conclusion. The sum of $225,750 recited as owed in the January 2018
Financial Agreement was calculated based on the premise that Motostalgia had an existing
obligation to pay the Kosmatkas $410,000. The Kosmatkas’ belief that they were entitled to
$410,000 persisted into late 2019 when Sally Kosmatka wrote Brunet, “Since March 2015, you
have paid $295,250 out of the $410,000 owed, which leaves a balance of $114,750.” But the
$410,000 amount was set in the First Consignment Agreement, which the trial court found (and
we have affirmed) was novated. Further, Brunet testified that the $410,000 figure was payable
contingent on actual sales proceeds reaching that amount—sales that were not completed until
after the Financial Agreement was signed—and was set as the threshold due before the 50/50 split
of sales proceeds exceeding $451,000 ($410,000 for sales due to the Kosmatkas plus $41,000 in
commissions for Motostalgia). When he “acknowledged” a debt in January 2018 based on the
$410,000 “guarantee,” two cars remained unsold, so the $410,000 figure could theoretically have
become the baseline amount owed. But in his 2019 response to Sally Kosmatka’s email, Brunet
presented calculations based on amounts generated by the actual sales completed in 2018 after the
Financial Agreement was signed. Brunet stated that the car sales prices totaled $367,200, offset
in part by $17,700 in shipping the cars to and from auctions and $18,600 in storage fees—
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deductions that did not include the costs of repair and advertising. The calculation of a “remaining
amount” of $35,650 after deduction of the shipping and storage costs did not account for a 10%
commission on the $367,200 in sales—a commission of $36,720 that the trial court found exceeded
the “remaining amount” by $1,070. Brunet testified that he retained that commission when the
Kosmatkas did not accept that amount as settlement of their claim for the full $410,000.
As we have determined that factually and legally sufficient evidence supports the
trial court’s finding and conclusion that the First Consignment Agreement was novated by the
Second Consignment Agreements, the evidence supports the trial court’s conclusion that there was
no valid and binding agreement guaranteeing a minimum $410,000 payment from Motostalgia to
the Kosmatkas—an essential underpinning of the calculations in the Financial Agreement.
Accordingly, the Kosmatkas’ implicit “performance obligation” of agreeing to accept monthly
payments and foregoing immediate collection on the “full amount” of $410,000 was no
consideration because the sales underlying Motostalgia’s obligation to pay them were not complete
and Motostalgia did not owe them $410,000 when the Financial Agreement was signed. Thus,
although the Financial Agreement postdates the Second Consignment Agreement, the record
contains legally and factually sufficient evidence to support the trial court’s finding and conclusion
that the Financial Agreement is not supported by consideration and is not valid and binding. The
record does not support the Kosmatkas’ contention that the Financial Agreement is a valid contract
that novated or “trumped” the Second Consignment Agreements. We resolve the Kosmatkas’
appellate issues in favor of the judgment.
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CONCLUSION
Concluding that the Kosmatkas have not presented any issue requiring reversal, we
affirm the trial court’s judgment.
__________________________________________
Darlene Byrne, Chief Justice
Before Chief Justice Byrne, Justices Triana and Theofanis
Affirmed
Filed: July 25, 2024
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