Oscar Taylor and Denise Taylor v. Adrienne A. Henny and Damon K. Henny

ACCEPTED
01-14-00650-cv
FIRST COURT OF APPEALS
HOUSTON, TEXAS
1/22/2015 2:02:04 PM
CHRISTOPHER PRINE
CLERK
Cause No. 01-14-00650-CV
___________________________________
FILED IN
1st COURT OF APPEALS
IN THE COURT OF APPEALS HOUSTON, TEXAS
FOR THE FIRST DISTRICT OF TEXAS 1/22/2015 2:02:04 PM
HOUSTON, TEXAS CHRISTOPHER A. PRINE
Clerk
___________________________________
OSCAR D. TAYLOR AND DENISE TAYLOR
Appellants/Cross-Appellees,
v.
ADRIENNE A. HENNY AND DAMON K. HENNY
Appellees/Cross-Appellants.
___________________________________
On Appeal from the 152nd Judicial District of Harris County, Texas
Cause No. 2008-40075
___________________________________
RESPONSE OF CROSS-APPELLEES/APPELLANTS
___________________________________
Douglas Pritchett, Jr.
State Bar No. 24007877
dpritchett@johnsontrent.com
JOHNSON, TRENT, WEST & TAYLOR, L.L.P.
919 Milam Street, Suite 1700
Houston, Texas 77002
(713) 222-2323 (Telephone)
(713) 222-2226 (Facsimile)
ATTORNEY FOR APPELLANTS
OSCAR D. TAYLOR AND
DENISE TAYLOR
STATEMENT CONCERNING ORAL ARGUMENT
Counsel for Appellants/Cross-Appellees agree that no argument is needed on
the cross appeal. Cross-Appellants have waived error on all of the alternative
grounds for affirmance on their claims for tortious interference, the application of
the statute of limitations to Damon Henny’s claims, and lost profits. There is no
need for the Court to even consider the merits of the arguments that have been
presented or of Cross-Appellees’ arguments on the merits.
i
TABLE OF CONTENTS
Page
STATEMENT CONCERNING ORAL ARGUMENT ..............................................i
INDEX OF AUTHORITIES...................................................................................... v
CROSS-POINTS .......................................................................................................ix
STATEMENT OF FACTS ........................................................................................ 1
SUMMARY OF THE ARGUMENT ........................................................................ 4
ARGUMENT ............................................................................................................. 5
I. FAILURE TO CHALLENGE ALL POSSIBLE GROUNDS FOR
AFFIRMANCE IS WAIVER, AND THE CHALLENGED RULINGS
MUST BE AFFIRMED ......................................................................................... 5
A. The Taylors Challenged the Jury Verdict for
Tortious Interference with Contract on Multiple
Grounds ................................................................................................. 7
B. Even if There Were Some Evidence of Lost
Profits, the Verdict Still Must Be Disregarded on
the Other, Unchallenged Grounds ......................................................... 8
C. The Judgment Against Damon Henny Must Be
Affirmed on the Alternative, Unchallenged
Grounds ............................................................................................... 10
II. IF THE MERITS OF THE HENNYS’ APPELLATE ISSUES ARE
CONSIDERED, THE JUDGMENT STILL MUST BE AFFIRMED .............................. 11
A. The Tortious Interference Claim Was Properly
Dismissed ............................................................................................ 11
1. There is no evidence of intentional
interference .............................................................................. 11
ii
2. Causing a person to exercise a contractual
right is not interference ............................................................. 13
3. There is no evidence that the Hennys
suffered damages as a result of the alleged
interference................................................................................ 14
B. Damon Henny’s Claims Were Not Asserted until
Trial, Long after Limitations Had Expired ......................................... 15
C. Adrienne Henny did Not Establish Lost Profits
with the Necessary Specificity ............................................................ 18
1. There is legally insufficient evidence of lost
profits ........................................................................................ 18
2. Even if the Taylors should have executed
the assignment, the Asset Purchase
Agreement still would have failed ............................................ 20
III. ALTERNATIVELY, THE JUDGMENT SHOULD BE AFFIRMED
ON THE OTHER GROUNDS SUBMITTED BY THE TAYLORS ................................ 23
A. Plaintiffs’ Tortious Interference Claims Are Not
Viable .................................................................................................. 23
1. Plaintiffs’ claims sound in contract, not in
tort ............................................................................................. 23
2. The Hennys had no standing to assert the
tortious interference claim ........................................................ 24
B. None of Damon Henny’s Claims Are Viable ..................................... 25
1. Damon Henny did not plead any claims ................................... 25
2. There was no breach; the Separation
Agreement did not require the Taylors to
sign the Weingarten documents ................................................ 26
iii
3. There is no causation when the harm would
have occurred regardless of the Taylors’
actions ....................................................................................... 28
4. Because the Bayou Cafe’s option expired
before the Taylors were asked to execute the
documents, there is no causation .............................................. 29
5. Damon Henny could not establish damages
for loss of credit or for mental anguish ..................................... 29
C. Adrienne Henny Cannot Recover the Lost Profits
Verdict ................................................................................................. 31
IV. ALTERNATIVELY, THERE IS NO FACTUALLY SUFFICIENT
EVIDENCE SUPPORTING THE JURY’S VERDICT, AND A NEW
TRIAL IS NECESSARY ...................................................................................... 32
A. There Was No Factually Sufficient Evidence that
the Taylors Tortiously Interfered with the Asset
Purchase Agreement ............................................................................ 33
B. There Was No Factually Sufficient Evidence to
Support the Jury’s Verdict of Lost Profits .......................................... 34
C. There Was No Factually Sufficient Evidence to
Support the Jury’s Verdict in Favor of Damon
Henny .................................................................................................. 35
PRAYER .................................................................................................................. 35
CERTIFICATE OF COMPLIANCE ....................................................................... 38
CERTIFICATE OF SERVICE ................................................................................ 38
iv
INDEX OF AUTHORITIES
Page(s)
Cases
$27,877.00 Current Money of U.S. v. State,
331 S.W.3d 110 (Tex. App.—Fort Worth 2010, pet. denied) ......................31, 32
ACS Investors, Inc. v. McLaughlin,
943 S.W.2d 426 (Tex. 1997) ........................................................................13, 14
Control Solutions, Inc. v. Gharda USA, Inc.,
394 S.W.3d 127 (Tex. App.—Houston [1st Dist.] 2012, pet. filed) .................. 17
Cram Roofing Co., Inc. v. Parker,
131 S.W.3d 84 (Tex. App.—San Antonio 2003, no pet.) .................................. 17
Crawford v. Ace Sign, Inc.,
917 S.W.2d 12 (Tex. 1996)................................................................................. 24
Delgado v. Methodist Hosp.,
936 S.W.2d 479 (Tex. App.—Houston [14th Dist.] 1996, no writ) ................... 30
DeWitt County Elec. Coop. v. Parks,
1 S.W.3d 96 (Tex. 1999)..................................................................................... 23
Employees Retirement Sys. of Tex. v. Putnam, LLC,
294 S.W.3d 309 (Tex. App.—Austin 2009, no pet.) ....................................21, 28
ERI Consulting Engineers, Inc. v. Swinnea,
318 S.W.3d 867 (Tex. 2010) ..................................................................19, 20, 22
Exxon Mobil Corp. v. Kinder Morgan Oper. L.P.,
192 S.W.3d 120 (Tex. App.—Houston [14th Dist.] 2006, no pet.) ................... 23
First Nat’l Bank v. Levine,
721 S.W.2d 287 (Tex. 1986) .............................................................................. 15
Holt Atherton Indus., Inc. v. Heine,
835 S.W.2d 80 (Tex. 1992)................................................................................. 19
v
Jackson v. Henderson,
2004 WL 1631394 (Tex. App.—Houston [1st Dist.]
July 22, 2003, no pet.)...................................................................................21, 28
Kenneth H. Hughes Interests, Inc. v. Westrup,
879 S.W.2d 229 (Tex. App.—Houston [1st Dist.] 1994,
writ denied) ......................................................................................................... 24
Lopez v. Muñoz, Hockema & Reed, L.L.P.,
22 S.W.3d 857 (Tex. 2000)................................................................................. 16
MasTex N. Am., Inc. v. El Paso Field Servs., L.P.,
317 S.W.3d 431 (Tex. App.—Houston [1st Dist.] 2010),
rev’d on other grounds, 389 S.W.3d 802 (Tex. 2012) ..................................6, 7, 8
Mead v. Johnson Group, Inc.,
615 S.W.2d 685 (Tex. 1981) .............................................................................. 28
Milestone Props., Inc. v. Federated Metals Corp.,
867 S.W.2d 113 (Tex. App.—Austin 1993, no writ) ......................................... 17
Moore v. Memorial Hermann Hosp. Sys.,
140 S.W.3d 870 (Tex. App.—Houston [14th Dist.] 2004, no pet.) ................... 31
Nall v. Plunkett,
404 S.W.3d 552 (Tex. 2013) ..............................................................5, 6, 8, 9, 10
Provident Am. Ins. Co. v. Casteneda,
988 S.W.2d 189 (Tex. 1998) .............................................................................. 30
Ritchie v. Rupe,
443 S.W.3d 856 (Tex. 2014) .............................................................................. 34
Saenz v. Fidelity & Guar. Ins. Underwriters,
925 S.W.2d 607 (Tex. 1996) .............................................................................. 15
Singh v. Duane Morris, L.L.P.,
338 S.W.3d 176 (Tex. App.—Houston [14th Dist.] 2011,
pet. denied) .......................................................................................................... 24
Soukup v. Sedgwick Claims Mgmt. Servs.,
2012 WL 3134223 (Tex. App.—Houston [1st Dist.] Aug. 2, 2012,
pet. denied) .......................................................................................................... 30
vi
Southwestern Bell Tel. Co. v. DeLanney,
809 S.W.2d 493 (Tex. 1991) .............................................................................. 23
Southwestern Bell Tel. Co. v. John Carlo Tex., Inc.,
843 S.W.2d 470 (Tex. 1992) .............................................................................. 12
St. Paul Surplus Lines Ins. Co. v. Dal-Worth Tank Co.,
974 S.W.2d 51 (Tex. 1998)................................................................................. 30
State Farm Fire & Cas. Co. v. Morua,
979 S.W.2d 616 (Tex. 1998) .............................................................................. 32
Stine v. Stewart,
80 S.W.3d 586 (Tex. 2002)................................................................................. 15
Texas Instruments, Inc. v. Teletron Energy Mgmt.,
877 S.W.2d 276 (Tex. 1994) .............................................................................. 19
Tiller v. McLure,
121 S.W.3d 709 (Tex. 2003) ..................................................................32, 33, 34
Univ. of Tex. Health Sci. Ctr. at San Antonio v. Bailey,
332 S.W.3d 395 (Tex. 2011) .............................................................................. 17
Voss Road Exxon LLC v. Vlahakos,
2011 WL 2623989 (Tex. App.—Houston [1st Dist.]
June 30, 2011, no pet.) ............................................................................22, 24, 29
Wingate v. Hajdik,
795 S.W.2d 717 (Tex. 1990) ........................................................................22, 24
Statutes
TEX. BUS. ORG. CODE § 2.101 ................................................................................. 25
TEX. BUS. ORG. CODE § 3.103 .................................................................................. 13
TEX. CIV. PRAC. & REM. CODE §§ 16.003(a), 16.051 .............................................. 15
Rules
TEX. R. APP. P. 38.1(f) ............................................................................................... 5
TEX. R. APP. P. 44.1(b) ............................................................................................. 34
vii
TEX. R. CIV. P. 193.6 ................................................................................................ 32
TEX. R. CIV. P. 193.6(a) ........................................................................................... 31
TEX. R. CIV. P. 194 ................................................................................................... 31
viii
CROSS-POINTS
1. The Hennys have waived consideration of the Taylors’ alternative
grounds presented in the motion for judgment notwithstanding the
verdict as to tortious interference, the claims by Damon Henny, and
the lost profits damages.
2. The judgment dismissing the tortious interference claims, all of
Damon Henny’s claims, and Adrienne Henny’s claim for lost profits
should be affirmed on the merits of the Taylors’ alternative grounds
presented in the motion for judgment notwithstanding the verdict.
3. There is factually insufficient evidence to support the jury’s verdict
finding tortious interference and damages resulting from such
interference.
4. There is factually insufficient evidence to support the jury’s verdict of
lost profits by Adrienne Henny.
5. There is factually insufficient evidence to support the jury’s verdict in
favor of Damon Henny.
ix
STATEMENT OF FACTS
The sticking point in this dispute was the lease for the Kirby location of
what became the Bayou Cafe. Cayennes Restaurant, Inc. (“Cayennes”) signed a
five year lease on the Kirby location on November 10, 2003. DX4:10RR2. It was
not a ten year lease, and it was set to expire in early 2009. Id. The ten year lease
mentioned by the Hennys in their statement of facts was the lease for the FM 1960
location. DX2:8RR2 (primary address is 4551 FM 1960 West).
There is no disagreement that in 2005, the Hennys and the Taylors fell into a
dispute about Denise Taylor’s management of Cayennes Restaurants. There was a
genuine disagreement concerning the facts of that dispute as follows. The Hennys
claim that Denise Taylor, who quit her job to manage the restaurants, gave herself
a raise without their knowledge. The Taylors pointed out that Adrienne Henny
signed the paychecks and, therefore, must have approved it either explicitly or
tacitly or, at the very least, been aware of it and had not objected. 3RR129-31.
The Hennys and Taylors resolved this dispute in the Separation Agreement.
PX2:7RR2-4.
The Hennys would divert this Court into jury argument. They attack Denise
Taylor’s reputation concerning the 2005 dispute (1) that was resolved in the
Separation Agreement; (2) that could not have been litigated in this case not only
because it had been resolved but also because it was far beyond any applicable
1
statute of limitations; and (3) about which no fact findings were made by or
presented to the jury. The facts of the 2005 dispute have no relevance here.
What is relevant here are the terms of the 2005 Separation Agreement.
Those terms are best understood by reading the actual language of the Agreement,
not the paraphrased version set out in the Hennys’ statement of facts. Thus, there
was no agreement to “work together,” and “work with all third parties to effectuate
these transfers.” Cross-Appellants’ Brief at 9. Rather, each party agreed to go
their own separate ways:
Oscar and Denise Taylor will operate, manage and own Cayenne’s
Restaurant located on Woodforest Boulevard without interference
from any other party. Damon and Adrienne Henny will operate
manage and own Cayenne’s Restaurant located on Kirby and the
Cayenne’s Restaurant located at FM 1960 without interference from
any party.
...
[A]ll administrative changes . . . will be completed by February 1,
2006.
...
After March 31, 2006 no party will use the Cayenne’s Restaurant
name, identity or logo in any form.
...
[A]ll parties will assume operation, management, administration and
ownership of the respective restaurants as indicated herein upon
approval of this document or 12:00 a.m. on January 18, 2006,
whichever is first.
PX1:7RR2.
2
Contrary to this agreement, the Bayou Cafe (and the Hennys) continued to
use the Cayennes name by operating under the original leases for the Kirby and
FM 1960 locations through 2008. 3RR89; DX2:8RR2; DX4:10RR2. Rather than
“effectuat[ing] the final separation,” see Cross-Appellants’ Brief at 11, the Hennys
proposal would have extended the use of the Cayennes’ name for five more years.
DX17:10RR69, 80. That the Hennys failed to comply with their obligation to
operate under their own leases came home to roost in 2008 when they tried to sell
their business.
The Hennys’ discussion of damages is either intentionally vague (as is the
case of the settlement of the AdvanceMe, Sysco, San Antonio Federal Credit
Union, and Weingarten claims), or it is unsupported by a record cite (as is the case
of the alleged but not proven $251,814.33 claim by JPMorgan Chase Bank).
Cross-Appellants Br. at 13. The Hennys claim that they spent money from their
retirement accounts but, again, no amount appears in the record. In short, the
Hennys said they were damaged; they talked about categories of damages, but they
never tallied up an amount that would support the jury’s verdict in the Record or in
their brief to this Court.
3
SUMMARY OF THE ARGUMENT
The Hennys challenge (1) the dismissal of their tortious interference claim;
on evidentiary grounds; (2) the dismissal of Damon Henny’s claims on limitations
grounds; and (3) the dismissal of Adrienne Henny’s claim for lost profits on
evidentiary grounds. In the trial court, the Taylors challenged these claims on
several grounds, not only on the grounds briefed by the Hennys. The Hennys have
waived error on the alternative grounds for affirmance, and the Court should affirm
on these alternative grounds without consideration of their merits.
Alternatively, the Court should affirm on the merits because there was no
evidence of tortious interference; Damon Hennys’ claims were barred by
limitations under well-established law; and there was no evidence supporting lost
profits by Adrienne Henny.
The Taylors also present cross points that would be alternative grounds to
affirm. At the very least, a new trial must be had because there is factually
insufficient evidence supporting these claims.
4
ARGUMENT
The judgment on these matters should be affirmed for the reasons stated
below.
I. FAILURE TO CHALLENGE ALL POSSIBLE GROUNDS FOR AFFIRMANCE IS
WAIVER, AND THE CHALLENGED RULINGS MUST BE AFFIRMED.
By failing to present appellate issues challenging all of the Taylors’
arguments to disregard the jury’s verdict (which the trial court granted), the
Hennys have waived error. The judgment dismissing the claim for tortious
interference, the claims against Damon Henny, and the claims for lost profits must
be affirmed without reference to the merits.
Any grounds that the trial court relied upon in rendering its judgment that
are not included in a party’s initial brief are waived. TEX. R. APP. P. 38.1(f); Nall
v. Plunkett, 404 S.W.3d 552, 556 (Tex. 2013). In Nall, the defendant obtained a no
duty summary judgment on two causes of action: negligence and negligent
undertaking. Nall, 404 S.W.3d at 554.
The plaintiff appealed and raised as the single issue that the judgment should
be reversed in part because the defendant’s no duty argument was not directed
toward the negligent undertaking theory, therefore no grounds existed for the
summary judgment on that claim. Id. at 554. The court of appeals reversed based
on this issue, and the defendant petitioned for review.
5
In the Supreme Court, the plaintiff argued that the court of appeals had
correctly decided the procedural issue and raised a new issue in the alternative that
contested the merits of the defendant’s argument. Id. at 556. The Supreme Court
held (1) that the motion contained grounds for summary judgment addressed to
both causes of action and (2) that the plaintiff waived argument on the merits of the
grounds presented because he only raised the single, procedural issue on appeal.
Id. at 556. The Court reversed the court of appeals and affirmed the judgment by
the trial court without considering whether the trial court’s rulings were correct on
their merits. Id. at 556-57. Similarly, the Hennys have appealed the trial court’s
legal rulings on limited grounds, but not on all of the grounds supporting the trial
court’s judgment.
It is anticipated that the Hennys will argue in their Reply that the trial court’s
order granting the motion for judgment notwithstanding the verdict is limited in
scope to the issues they have raised. CR253-56. However, an order that does not
specify its legal basis must be challenged as to all possible grounds. See MasTex
N. Am., Inc. v. El Paso Field Servs., L.P., 317 S.W.3d 431, 446 (Tex. App.—
Houston [1st Dist.] 2010), rev’d on other grounds, 389 S.W.3d 802 (Tex. 2012)
(when a trial court specifies the grounds for JNOV, the appellant need only
challenge those grounds). The order here did not specify the legal grounds upon
which it was based.
6
The Hennys’ argument would confuse fact findings with legal rulings. The
court made a number of fact-findings concerning the terms of the Separation
Agreement (¶¶ 1-3), the evidence supporting tortious interference (¶¶ 4-6), the
application of limitations to Damon Henny’s claims (¶ 7), and the evidence
supporting attorneys’ fees (¶¶ 8-10). CR253-55. The court then made a blanket
legal ruling disregarding the verdict as to certain questions. CR255. The trial
court did not state the basis for its legal ruling, did not limit the legal ruling to the
fact findings, and did not reject any of the Taylors’ arguments for the disregarded
responses. Id. The order, as written, was not limited in scope.
Even if the trial court’s fact findings do limit the scope of its legal ruling, the
Hennys have not challenged all of the possible grounds included within the scope
of those findings. CR169, 286. So, alternatively, if the orders disregarding various
aspects of the verdict are to be read narrowly, they still include unchallenged
grounds for affirmance and must be affirmed under the Nall decision.
In short, the Hennys have not challenged all of the possible grounds for
affirmance as to tortious interference, lost profits, and the statute of limitations.
Therefore, this Court should affirm the judgment without considering the merits.
A. The Taylors Challenged the Jury Verdict for Tortious
Interference with Contract on Multiple Grounds.
In addition to the Hennys’ evidentiary arguments concerning knowledge and
intent, causation, and damages, the Taylors’ justified refusal to execute the
7
assignments, guarantees, and lease extensions required by Weingarten meant that
Plaintiffs’ evidence was legally insufficient to support a verdict of tortious
interference. CR186. The refusal was justified based on the freedom to contract.
Id. The trial court held that the Taylors had no contractual duty to consent to the
assignments, the continuing guaranties, or to the amendment adding five years to
the lease for the Kirby location. CR253-54. Therefore, the trial court’s judgment
could be affirmed on the basis of justification. The Hennys did not challenge this
legal ground for affirmance of the judgment in their brief. Cross-Appellants Brief
at 17-23.
If the trial court order is broad in scope, the Taylors asserted many other
grounds for a judgment notwithstanding the verdict as to tortious interference.
CR180-186. The Hennys have not challenged these other grounds.
Even if the Hennys’ evidentiary arguments concerning tortious interference
had merit (and they do not, see infra, pp. 11-15), the take nothing judgment on the
claim for tortious interference could be affirmed on one or more of these
unchallenged grounds. Nall, 404 S.W.3d at 556-57. Therefore, the Court should
affirm without consideration of the merit. Id.
B. Even if There Were Some Evidence of Lost Profits, the Verdict
Still Must Be Disregarded on the Other, Unchallenged Grounds.
The Taylors challenged the lost profits verdict in favor of Adrienne Henny
on other evidentiary grounds in addition to the evidence of the actual amount of
8
lost profits, which Adrienne Henny challenges. These other evidentiary grounds
fall within the scope of the trial court’s order.
The court finds that there was legally insufficient evidence that
Adrienne Henny suffered lost profits from the operation of Cayennes
Restaurant or the failure of the sale of [the Bayou Cafe].
CR286. This order encompasses elements of both the amount of damages and
causation.
The Taylors argued at trial that (1) there was no evidence of causation,
CR189 and (2) that evidence of lost profits should be excluded for failure to
specifically plead or as a discovery sanction for failing to respond to disclosures,
CR192; 2RR7-8. All of these arguments, if accepted, would support the trial
court’s decision. CR286. Adrienne Henny has not challenged these alternative
grounds for affirmance of the take nothing judgment on lost profits by raising an
issue in her Cross-Appellants’ Brief.
Even if Adrienne Henny could establish that there is some evidence of the
amount of lost profits (and she does not, see infra, pp. 18-22), the take nothing
judgment on her claim of lost profits could be affirmed on one or both of these
alternative grounds. Nall, 404 S.W.3d at 556-57. Therefore, the Court should
affirm without considering the merits of these unchallenged legal positions. Id.
9
C. The Judgment Against Damon Henny Must Be Affirmed on the
Alternative, Unchallenged Grounds.
In addition to the issue briefed by the Hennys (the statute of limitations),
Damon Henny’s claims were also challenged on numerous other grounds,
including (1) there was no breach of the separation agreement by the Taylors,
CR172; (2) he lacked standing to bring a claim for tortious interference, CR180;
(3) his claim sounded in contract if at all, CR181; (4) the Taylors did not interfere
as a matter of law, CR182-86; (5) any interference was justified, CR 186; (6)
discovery abuse resulted in the exclusion of all damage evidence, CR187; (7) lack
of causation, CR189; (8) failure to specifically plead damages barred claims on
those damages, CR192; (9) various legal bars existed as to damages, CR193-95;
and (10) there is no evidence of loss of credit reputation, CR198. Damon Henny
has not raised an appellate issue as to any of these alternative grounds for
affirmance.
Even if Damon Henny’s argument concerning the statute of limitations had
merit (and it does not, see infra, pp. 15-17), the take nothing judgment on all of his
claims could be affirmed on these alternative grounds. Nall, 404 S.W.3d at 556-
57. Therefore, the Court should affirm without considering the merits of these
unchallenged legal positions. Id.
10
II. IFTHE MERITS OF THE HENNYS’ APPELLATE ISSUES ARE CONSIDERED,
THE JUDGMENT STILL MUST BE AFFIRMED.
If the trial court’s ruling were to be reviewed solely on the limited issues
raised by the Hennys, it must be affirmed.
A. The Tortious Interference Claim Was Properly Dismissed.
The premise of the Hennys claim is that the Taylors’ refusal to execute the
lease assignment, the continuing guaranties, and the lease extension caused
Coozans and/or the Bayou Cafe to fail in August 2008 and caused Coozans to opt
out of the February 2008 Asset Purchase Agreement. 4RR138.
1. There is no evidence of intentional interference.
The Hennys cannot show an intentional interference with the Asset Purchase
Agreement. The Hennys’ argument that there was evidence of interference is
based on the premise that the Taylors’ refusal to participate in the assignment of
the lease from Cayennes Restaurant to the Bayou Cafe “made the Hennys’
performance impossible” in the Asset Purchase Agreement. Cross-Appellant’s
Brief at 19. There are several problems with this position.
First, there is no evidence that the Taylors were notified of the existence of
the Asset Purchase Agreement, much less that they had the power to frustrated its
consummation. Indeed, the earliest that they could have been aware of the details
of the assignments, guarantees, and lease extension under the record was after
Weingarten’s offer to accept these new lease documents had expired.
11
DX17:10RR71, 89. Therefore, there is no evidence to support a finding that the
Taylors knew about the terms of the Asset Purchase Agreement, how the
assignments, continuing guarantees, and lease extension related to the Agreement,
or how they might interfere with the transaction. See Southwestern Bell Tel. Co. v.
John Carlo Tex., Inc., 843 S.W.2d 470, 472 (Tex. 1992).
In Southwestern Bell, Justice Hecht distinguished between the intent to take
(or refuse to take) action, which is not tortious, and the knowledge that “the
consequences [of his act] are substantially certain to result from it,” which may be
tortious. Id. In that case, the defendant intentionally failed to timely relocate its
facilities, but this intent was not sufficient. Id. The plaintiff must prove that the
defendant “believed that interference was substantially certain to result from its
actions.” Id.
In that case, there was apparently no evidence and certainly no finding by
the jury that the defendant was aware of terms of the plaintiff’s contract or of the
difficulties that its conduct may have caused. Id. at 471-72. The Texas Supreme
Court held “it does not follow, however, from Bell’s relocation of its facilities that
it intended to interfere with Carlo’s contract.” Id. at 472. Similarly, there is no
evidence here that the Taylors were aware of the terms of the Asset Purchase
Agreement so that they could know with substantial certainty that their failure to
12
sign the new Weingarten lease documents would allow Coozans to withdraw from
the sale.
Second, the record shows that Adrienne Henny was a vice-president and
secretary of Cayennes, and Damon Henny was a director. PX13 (7RR21, 39). As
an officer twice over, nothing prevented Adrienne Henny from executing the lease
assignment on behalf of Cayennes. TEX. BUS. ORG. CODE § 3.103 (officers “shall
perform the duties in the management of the entity and have the authority as
provided by the governing documents of the entity or the governing authority that
elects or appoints the officer.”). Thus, it was not “impossible” for Adrienne Henny
to make the assignment in her official corporate capacities without the need for
Denise Taylor’s participation.
There was no evidence presented by the Hennys that the Taylors interfered
with the Asset Purchase Agreement or that any interference would have been
intentional.
2. Causing a person to exercise a contractual right is not
interference.
Evidence that the Taylors may have caused Coozans to exercise its
contractual right to cancel its purchase of the Bayou Cafe is not evidence of
interference. ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex.
1997). The Bayou Cafe agreed in the Asset Purchase Agreement that Coozans
would not be bound in the event the purchase could not be completed. PX2
13
(9RR5, ¶ 7.02). Thus, even if the Cayennes to Bayou Cafe lease assignment were
“impossible” without Denise Taylor’s signature, her refusal merely allowed
Coozans to invoke its contract rights. Thus, it had no more effect than to give
Coozans the right to opt-out of the Asset Purchase Agreement, a right to which the
Bayou Cafe had agreed. There is no evidence that interference caused any harm to
the Hennys.
3. There is no evidence that the Hennys suffered damages as a
result of the alleged interference.
The $400,000 awarded by the jury to Adrienne Henny as the lost benefit of
the bargain has no connection to any evidence of any actual loss established in the
record.
The evidence established that Coozans paid the cash portion of the purchase
price in full and that it assumed operation of the restaurants, including taking
responsibility for servicing the liabilities of the company from the accounts for the
new company that were funded by Bruce Pollack. 5RR48; 3RR147-48. The
Hennys state that when Coozans terminated the purchase in August 2008, some
amount of debt remained. 4RR139-42. But they do not specify what that amount
was or what it cost Adrienne Henny, if anything, to retire it. Id.
Damon Henny likewise did not present legally sufficient evidence of mental
anguish. His statement that he suffered “heartache” due to the difficulties in
wrapping up the business is legally insufficient to support a mental anguish award.
14
Saenz v. Fidelity & Guar. Ins. Underwriters, 925 S.W.2d 607, 614 (Tex. 1996)
(requiring evidence of the nature, duration, and severity of mental anguish). There
was no evidence of mental anguish that was sufficient under Texas legal standards
even if it were a proper measure.
B. Damon Henny’s Claims Were Not Asserted until Trial, Long after
Limitations Had Expired.
The only attempt to plead a cause of action on behalf of Damon Henny did
not occur until May 24, 2013, a few days before trial, when his attorneys filed a
motion to adopt the pleadings of Adrienne Henny. Supp.CR91. Assuming that his
motion had the effect of making a claim (which it did not, see infra pp. 25-26), his
claims were barred by limitations.
The Hennys made their demand on May 28, 2008, almost five years before
the earliest date that Damon Henny arguably attempted to assert a cause of action.
His tortious interference and breach of contract claims were barred on that date.
TEX. CIV. PRAC. & REM. CODE §§ 16.003(a), 16.051; First Nat’l Bank v. Levine,
721 S.W.2d 287, 289 (Tex. 1986) (tortious interference is governed by a two-year
statute); Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002) (breach of contract is
governed by a four-year statute of limitations). DX17:10RR69; PX24:7RR41.
Contrary to the Hennys’ argument, this defense was not waived, it was
pleaded in Defendants’ First Supplemental Answer. CR80. Leave to file the
15
supplemental answer was granted. CR252. The defense was not waived by any
failure in the Taylors’ pleadings.
Furthermore, the Taylors did not waive the defense by seeking to join
Damon Henny as an involuntary third party plaintiff, and there is no authority cited
by the Hennys that supports waiver or estoppel. To show estoppel, Damon Henny
must present evidence that the Taylors (1) accepted a benefit under a transaction,
(2) are now taking a position that is inconsistent with the position they took in
accepting the benefit, and (3) that it is unconscionable to allow them to do so.
Lopez v. Muñoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 864 (Tex. 2000).
Damon Henny does not establish any of these elements, but the failure with regard
to the second is most obvious.
Though unconventional, the Taylors’ motion to join Damon Henny was a
calculated strategic choice that required his claims, if any, to be adjudicated at the
same time that Adrienne Henny’s claim were presented. Supp.CR62. He chose
not to pursue any claims. See infra pp. 25-26. The Taylors never took the position
that Damon Henny’s claims were not barred by limitations. Supp.CR61-63. The
purpose of the tactic was to avoid a second trial and to allow the dispute to be
finally resolved by obtaining a ruling on Damon Henny’s claims, whatever they
might be. Supp. CR62. It accomplished this purpose when the trial court agreed
that Damon Henny’s claims were barred by limitations. CR254.
16
Finally, Damon Henny’s claims did not relate back to the original filing date
by Adrienne Henny. First, his motion to adopt Adrienne Henny’s causes of action
was never granted, and his amended petition was never filed. But more
importantly, a new party does not get the benefit of the relation back rule. Univ. of
Tex. Health Sci. Ctr. at San Antonio v. Bailey, 332 S.W.3d 395, 400 (Tex. 2011).
Both of the cases cited by the Hennys involved the original party asserting a new
cause of action. Cram Roofing Co., Inc. v. Parker, 131 S.W.3d 84, 88-89 (Tex.
App.—San Antonio 2003, no pet.); Milestone Props., Inc. v. Federated Metals
Corp., 867 S.W.2d 113, 115-18 (Tex. App.—Austin 1993, no writ). Neither case
is applicable.
This Court has recognized that “[g]enerally, ‘an amended pleading adding a
new party does not relate back to the original pleading.’” Control Solutions, Inc. v.
Gharda USA, Inc., 394 S.W.3d 127, 166 (Tex. App.—Houston [1st Dist.] 2012,
pet. filed) (quoting Univ. of Tex. Health Sci. Ctr. at San Antonio, 332 S.W.3d at
400). While misnomer is an exception, Damon Henny was not misnamed as
Adrienne Henny in the original petition, and the Hennys did not propose that he be
substituted as the proper plaintiff as is the procedure in misnomer cases. Id.
Thus, the premise of Damon Henny’s relation-back argument is entirely
unsupported by any cited law, is contrary to Texas Supreme Court law, and Damon
Henny does not provide any argument for the extension, modification, or reversal
17
of this existing law. Damon Henny’s claims were properly dismissed as barred by
the applicable statutes of limitations.
C. Adrienne Henny Did Not Establish Lost Profits with the
Necessary Specificity.
Recognizing that the lost profits verdict was fatally flawed, the trial court
granted the Taylors’ motion to modify and eliminated $165,000.00 from the
judgment. The order encompasses all of the Taylors’ legal bases for elimination of
the lost profits verdict: (1) that the evidence of lost profits offered was insufficient
and (2) that there was insufficient evidence of causation. CR286. As argued
above, the Hennys raise only the first issue before this Court, but the evidence is
insufficient under either defensive theory.
1. There is legally insufficient evidence of lost profits.
The Asset Purchase Agreement alone (which is the only evidence cited by
the Hennys) is insufficient evidence of lost profits. The Asset Purchase Agreement
purchase price was $547,730.00. PX2:7RR5. The price was paid by a cash
payment ($34,160.00), assumption of debt ($505,876.76)), and 600 shares of
Coozans stock. PX2:7RR6, 8RR32. The cash and debt assumption totals
$540,036.76, leaving very little that could be attributed to establish the value of the
stock at the time of the asset purchase. In any event, loss of the value of stock is
not lost profit.
18
The Hennys do not explain where these lost profits come from or how they
are calculated. It is clear, however, that their “lost profits” could not be the loss of
income attributable to the 600 Coozans shares. PX2:7RR6. Lost profits must be
shown with reasonable certainty and by competent evidence. ERI Consulting
Engineers, Inc. v. Swinnea, 318 S.W.3d 867, 876 (Tex. 2010). Competent
evidence must be based on objective facts, figures, and data that allows one
complete calculation. Id.; see also Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d
80, 84 (Tex. 1992). The evidence may not be speculative. Texas Instruments, Inc.
v. Teletron Energy Mgmt., 877 S.W.2d 276, 279 (Tex. 1994).
The Asset Purchase Agreement does not specify the profits that Adrienne
Henny could expect to earn from her portion of the 600 shares of stock.
PX2:7RR5. The Hennys’ statement of facts discusses mitigation costs in very
general terms, but it does not attempt to show any lost profits from the loss of the
stock. Indeed, there was no testimony, expert or otherwise, as to the stock value,
the profit that was expected from Adrienne Henny’s share of the 600 shares, or as
to the Coozans’ prospects for profitability. Nonetheless, the jury gave a verdict of
lost profits in the past (i.e., lost profits between February 2008 and the day of trial)
of $165,000. CR154. The trial court properly disregarded this verdict.
Adrienne Henny did offer a loan application purportedly showing the Bayou
Cafe’s past profits of $109,000 in 2006. PX2:9RR17. But when taxes and debt
19
service are subtracted, the Bayou Cafe showed a final profit of only $19,132 for
that year. PX2:9RR17. Adrienne Henny did not provide one complete calculation
that explained how this $19,132 actual profit in 2006 would have grown after the
Asset Purchase Agreement was signed such that her interest in the 600 shares of
stock, if any, would accumulate profits of $165,000 between the February 2008
sale of the Bayou Cafe and the trial in May 2013. ERI Consulting, 318 S.W.3d at
876 (must show one complete calculation). Without such a calculation, there is no
evidence of lost profits.
For example, the Hennys cite no evidence of the ownership percentage that
the Hennys held in Coozans so that Adrienne Henny’s share of the company’s
profitability could be measured. Even if her ownership percentage could be
established, the Hennys cite no evidence that Coozans was earning a profit in 2008,
whether that profit would continue into 2009, 2010, 2011, 2012, and 2013, or
whether that profit would be distributed to the shareholders during those years, if
ever. Adrienne Henny not only did not provide a calculation or a formula, she did
not provide the evidence necessary to make a calculation.
2. Even if the Taylors should have executed the assignment,
the Asset Purchase Agreement still would have failed.
The Taylors have set this argument out in full in their Brief of Appellants.
See Brief of Appellants at 16-21. In short, Adrienne Henny cannot establish that
the Taylors’ action caused her any harm.
20
Weingarten conditioned its consent to consummation of the Asset Purchase
Agreement on Denise Taylor’s agreement to guaranty the new lease and on her
agreement to a five year lease extension at the Kirby location, not just on her
agreement to execute the assignment from Cayennes to the Bayou Cafe.
DX17:10RR71, 89. The trial court held that the Separation Agreement’s terms did
not require Denise Taylor to execute the continuing guaranty or the lease
extension. CR253-54. This holding has not been challenged on appeal.
There is no causation if a loss would have occurred even in the absence of a
breach. Employees Retirement Sys. of Tex. v. Putnam, LLC, 294 S.W.3d 309, 319
(Tex. App.—Austin 2009, no pet.); Jackson v. Henderson, 2004 WL 1631394, at
*4-5 (Tex. App.—Houston [1st Dist.] July 22, 2003, no pet.). Weingarten would
not have consented if the Taylors had executed only the assignment and nothing
more. Thus, the transaction would have failed even had Denise Taylor executed
the initial assignment (i.e., from Cayennes to the Bayou Cafe). This inevitable
failure destroyed any causal link.
Furthermore, Weingarten’s offer had lapsed before the Hennys sent the
documents to the Taylors. DX17:10RR71, 89. Even if the Taylors had the
obligation under the Separation Agreement to execute all of the Weingarten lease
documents (the assignment from Cayennes to the Bayou Cafe, the lease extension,
and the continuing guaranties), their compliance would have achieved nothing
21
because the option had already expired. See Voss Road Exxon LLC v. Vlahakos,
2011 WL 2623989, at *7 (Tex. App.—Houston [1st Dist.] June 30, 2011, no pet.).
Weingarten required the documents to be executed and returned by May 5, 2008.
DX17:10RR71, 89. Adrienne Henny did not send the documents to the Taylors
until May 28, 2008, three weeks after the option expired. DX17:10RR69;
PX24:7RR41. If the Taylors had executed the documents on the day they were
received, the transaction would still have failed.
Finally, there is no causative link between the Taylors conduct and any harm
to Adrienne Henny because she lacked standing to bring the claim. Brief of
Appellants at 19-21. The 600 shares of Coozans stock was promised to the Bayou
Cafe. 5RR15-17; PX2:7RR5. Harm to a corporate entity does not cause harm to
the shareholder that may be recovered personally. Wingate v. Hajdik, 795 S.W.2d
717, 719 (Tex. 1990). This claim, if viable, belonged to the Bayou Cafe, not to
Adrienne Henny.
Alternatively, the evidence is legally insufficient to show that she suffered
direct harm. ERI Consulting Engineers, Inc., 318 S.W.3d at 876. There is no
evidence that the restaurants failed in August 2008 for any reason other than their
abandonment by the Hennys. The lease on the Kirby location did not expire until
early 2009. PX2:9RR45. In any event, even without the Kirby location, the Bayou
22
Cafe had three other locations (FM 1960, Fondren, and Uvalde). 3RR171-72.
Adrienne Henny did not show that her harm was caused by the Taylors’ conduct.
III. ALTERNATIVELY, THE JUDGMENT SHOULD BE AFFIRMED ON THE OTHER
GROUNDS SUBMITTED BY THE TAYLORS.
Without waiving their right to insist that the Hennys challenge all of the
possible grounds for affirmance in their initial brief, the Taylors present these
cross-points supporting affirmance.
A. Plaintiffs’ Tortious Interference Claims Are Not Viable.
Neither Damon Henny nor Adrienne Henny can recover for tortious
interference even if they were able to show some evidence of intent or damages.
1. Plaintiffs’ claims sound in contract, not in tort.
A claim for tortious interference with an existing contract or with
prospective contractual relations cannot be based on the breach of a contractual
duty. In other words, if the act of interference violates a contract duty rather than a
legal (i.e., tort) duty, then only the contract claim is viable.
If the defendant’s conduct . . . would give rise to liability independent
of the fact that a contract exists between the parties, the plaintiff’s
claim may also sound in tort. Conversely, if the defendant’s conduct .
. . would give rise to liability only because it breaches the parties’
agreement, the plaintiff’s claim ordinarily only sounds in contract.
DeWitt County Elec. Coop. v. Parks, 1 S.W.3d 96, 105 (Tex. 1999); Southwestern
Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 496 (Tex. 1991); Exxon Mobil Corp.
v. Kinder Morgan Oper. L.P., 192 S.W.3d 120, 126-27 (Tex. App.—Houston [14th
23
Dist.] 2006, no pet.). In short, there is no tort liability for nonfeasance, that is, for
failing to perform under a contract. See Crawford v. Ace Sign, Inc., 917 S.W.2d
12, 13 (Tex. 1996).
The only duty that the Hennys argue that was breached by the Taylors was a
supposed contractual duty under the Separation Agreement. Assuming for the sake
of argument that a contractual duty exists in the Separation Agreement that
required the Taylors to execute the assignments, the lease extension, and the
guaranties, the very existence of such a duty under contract would foreclose the
Hennys’ tort claim for interference with contract.
2. The Hennys had no standing to assert the tortious
interference claim.
The Hennys claim that the Taylors interfered with the Asset Purchase
Agreement. But shareholders cannot recover damages personally for a wrong done
to the corporate entity. Wingate v. Hajdik, 795 S.W.2d 717, 719 (Tex. 1990);
Singh v. Duane Morris, L.L.P., 338 S.W.3d 176, 182 (Tex. App.—Houston [14th
Dist.] 2011, pet. denied); Kenneth H. Hughes Interests, Inc. v. Westrup, 879
S.W.2d 229, 235 (Tex. App.—Houston [1st Dist.] 1994, writ denied); Voss Road
Exxon LLC v. Vlahakos, 2011 WL 2623989, *5 (Tex. App.—Houston [1st Dist.]
2011, no pet.). This is true even if the shareholders suffer a loss indirectly due to
the injury to the entity. Wingate, 795 S.W.2d at 719.
24
The Asset Purchase Agreement was between the Bayou Cafe and Coozans.
DX 16. The Bayou Cafe was a distinct entity from the Hennys. TEX. BUS. ORG.
CODE § 2.101. Thus, the Hennys are not a party to the Asset Purchase Agreement
and cannot sue for tortious interference with that agreement.
B. None of Damon Henny’s Claims Are Viable.
The judgment that Damon Henny take nothing is supported by several
alternative grounds that must be considered if the Court holds that the statute of
limitations does not bar his claims.
1. Damon Henny did not plead any claims.
Damon Henny did not plead any causes of action. CR21, 43; 4RR146-47;
5RR156-59. He admitted at trial that he was not asserting any claims against the
Taylors.
Q. Okay. And you haven’t asserted any claims in this lawsuit,
correct?
A. I haven’t.
4RR149. The record bears this out.
His attorneys requested permission to file an amended petition on the eve of
trial, but the trial court never granted leave for the untimely filing. The Fifth
Amended Third Party Petition was not filed, was not accepted, and does not appear
in the Clerk’s Record. Supp.CR111.
25
His attorneys also moved to adopt Adrienne Henny’s pleadings.
Supp.CR91. The trial court considered this motion, but it never ruled, ultimately
deciding to defer the issue until after the verdict and agreeing that the issues were
not tried by consent. 5RR152-162. After the verdict, the Court did not grant either
motion and disregarded the jury’s findings in favor of Damon Henny. CR253.
Thus, this defect in Damon Henny’s claims was raised before the trial court and
constitutes an independent ground for affirmance.
2. There was no breach; the Separation Agreement did not
require the Taylors to sign the Weingarten documents.
It was not the Taylors who had the responsibility under the Separation
Agreement to establish, operate, or manage the Hennys’ restaurants (i.e., the
Bayou Cafe). Rather, the Separation Agreement required the Hennys to remove
Cayennes from the leases at Kirby and FM 1960.
It is agreed all administrative changes, including but not limited to
contacting vendors, employees and/or any necessary third parties, will
be completed by February 1, 2006.
...
It is further agreed all parties will establish new company identities by
March 31, 2006 to properly dissolve the existing corporation. After
March 31, 2006 no party will use the Cayenne Restaurant name,
identity or logo in any form.
PX 1:7RR2-3. In short, the Separation Agreement required the Hennys to take all
the steps necessary to accomplish the separation of their business from Cayennes,
including removal of Cayennes from the leases. PX1:7RR2.
26
The Hennys were responsible for administrative changes at their business.
They agreed that they would “operate, manage and own” the two restaurants that
became the Bayou Cafe. PX1:7RR2-3. They also agreed that they would “assume
operation, management, administration and ownership . . . upon approval of this
document.” PX1:7RR2-3. Coupled with the obligation to cease using the
Cayennes name, the Hennys were responsible for operating under their own leases,
not the leases in Cayennes’ name that were guaranteed by Denise Taylor.
Furthermore, the Hennys, not the Taylors, had operational and administrative
control of the Bayou Cafe at the time the administrative changes provision was to
be performed. PX24:7RR41; DX17:10RR69; PX1:7RR2.
In short, the Hennys took control of the Bayou Cafe restaurants in December
2005. By continuing to operate the restaurants for over two years under a lease in
the name of Cayennes, the Hennys failed to perform their obligations to make
administrative changes, to notify Weingarten, and to cease doing business under
the name of Cayennes. The Taylors did not breach the Separation Agreement by
failing to perform a task that was the Hennys’ responsibility to complete or in
refusing to cooperate in a scheme that would not accomplish the removal of
Cayennes from the lease. Indeed, it is the Taylors, and not the Hennys, who have a
grievance here.
27
3. There is no causation when the harm would have occurred
regardless of the Taylors’ actions.
A loss is not caused by a breach when the loss would have occurred even in
the absence of the breach. See Employees Retirement Sys. of Tex. v. Putnam, LLC,
294 S.W.3d 309, 319 (Tex. App.—Austin 2009, no pet.); Jackson v. Henderson,
2004 WL 1631394, at *4-5 (Tex. App.—Houston [1st Dist.] July 22, 2004, no
pet.); see also Mead v. Johnson Group, Inc., 615 S.W.2d 685, 687 (Tex. 1981).
Even if the Taylors’ failure to execute the assignment from Cayenne to the Bayou
Cafe was a breach, the Asset Purchase Agreement would still have failed.
Here, the asset purchase was conditioned on Coozans’ ability to assume the
leases. PX2:9RR5. Weingarten would only agree to the assumption if the Taylors
remained obligated. Thus, execution of the assignment alone was not sufficient to
ensure that the asset purchase would be completed.
According to Weingarten, the Taylors had to (1) assign Cayennes
Restaurants’ leases to the Bayou Cafe, (2) agree to a five-year lease extension for
the Kirby location, and (3) sign a continuing guarantee of both amended leases.
DX17:10RR71, 89. The trial court held that the Separation Agreement does not
require the Taylors to assume new obligations such as the extension or the
guaranty. CR253. Damon Henny does not challenge this holding.
Because Damon Henny would have suffered the loss of the bargain with
Coozans whether the Taylors executed the assignment or not, there is no causation.
28
4. Because the Bayou Cafe’s option expired before the Taylors
were asked to execute the documents, there is no causation.
There also was no causation because the option period had expired on
Weingarten’s offer before a demand was made to the Taylors. On April 14, 2008,
Weingarten made an offer to the Bayou Cafe of a new bargain on each lease (Kirby
and 1960), but specified that “time is of the essence” and warned that its offer
expired if the lease amendment, guaranties, and assignments were not executed by
May 5, 2008. DX17:10RR71, 89.
Damon Henny did not send a copy of the lease amendments, guaranties, and
assignments to the Taylors until May 28, 2008, over three weeks after the offer
expired. DX17:10RR69; PX24:7RR41. When an option has expired, another
party’s conduct occurring afterwards could not cause a loss of the opportunity. See
Voss Road Exxon LLC, 2011 WL 2623989, at *7. The Taylors’ conduct could not
have caused damages under the contract because Weingarten’s offers had expired
long before the Taylors could have even seen what they were being asked to do.
Id.
5. Damon Henny could not establish damages for loss of credit
or for mental anguish.
To establish damages for a loss of credit reputation, Damon Henny had to
present evidence (1) that he was denied a loan and that failing to obtain the loan
caused an economic loss, or (2) that he obtained a loan and paid a higher interest
29
rate because of their diminished credit. St. Paul Surplus Lines Ins. Co. v. Dal-
Worth Tank Co., 974 S.W.2d 51, 53 (Tex. 1998). Mere loss of credit reputation is
not compensable. Id.; see also Provident Am. Ins. Co. v. Casteneda, 988 S.W.2d
189, 199 (Tex. 1998).
Damon Henny gave no testimony concerning a loss in credit reputation. See
4RR121-148. But the Texas Supreme Court requires particular proof of the
elements of a claim for loss of credit. Casteneda, 988 S.W.2d at 199. He did not
testify that the inability to get a credit card caused an economic loss or that he had
paid a higher interest rate on a loan. Id. There is no evidence of damages for a
loss of credit reputation by Damon Henny, only argument. 6RR63.
As for his mental anguish verdict, Damon Henny simply cannot recover
mental anguish damages, even if he had presented evidence of such damages,
which he did not. See supra, pp. 14-15. Mental anguish damages are not available
in a tortious interference with contract claim. Delgado v. Methodist Hosp., 936
S.W.2d 479, 486 (Tex. App.—Houston [14th Dist.] 1996, no writ); Soukup v.
Sedgwick Claims Mgmt. Servs., 2012 WL 3134223, at *6 (Tex. App.—Houston
[1st Dist.] Aug. 2, 2012, pet. denied). Therefore, the jury finding of mental
anguish by Damon Henny was properly disregarded.
30
C. Adrienne Henny Cannot Recover the Lost Profits Verdict.
Even if the evidence presented at trial were some evidence of lost profits, the
evidence must be excluded and the judgment affirmed. Adrienne Henny forfeited
her right to present her damage model when she failed to provide her calculation of
damages in response to the Taylors’ timely request for disclosure. CR210, 215,
244, 247.
The rules governing requests for disclosure are intended to frustrate “legal
gamesmanship and trial by ambush.” $
27,877.00 Current Money of U.S. v. State, 331 S.W.3d 110, 120-21 (Tex.
App.—Fort Worth 2010, pet. denied). The verdict in this case is tainted by the
Adrienne Henny’s disregard for her obligations under the disclosure rules.
Disclosure is designed to afford parties basic discovery of specific
categories of information . . . . [A] failure to respond fully to a
request for disclosure would be an abuse of the discovery process.
TEX. R. CIV. P. 194 (cmt. 1).
The remedy for failing to respond in a timely manner to a discovery request,
including a request for disclosure, is automatic exclusion of the evidence. TEX. R.
CIV. P. 193.6(a); Moore v. Memorial Hermann Hosp. Sys., 140 S.W.3d 870, 875
(Tex. App.—Houston [14th Dist.] 2004, no pet.).
Adrienne Henny’s responses to the Taylors’ request for disclosures did not
specify the amount and method of calculating the economic damages, as requested.
31
CR:210, 215, 244, 247; $27,877.00 Current Money of U.S., 331 S.W.3d at 120-21
(citing State Farm Fire & Cas. Co. v. Morua, 979 S.W.2d 616, 619-20 (Tex.
1998)). The trial court agreed:
There is no way that this could be an acceptable Pleading under our
Rules of Procedure. I don’t know that you have an argument with me
on that.
3RR 9. A response lacking substance is a complete failure to respond, triggering
the automatic exclusion. TEX. R. CIV. P. 193.6.
With the testimony and exhibits offered to support Adrienne Henny’s
untimely damage model excluded automatically, there is no evidence of damages
and judgment should be rendered that Adrienne Henny take nothing. See Tiller v.
McLure, 121 S.W.3d 709, 713 (Tex. 2003).
IV. ALTERNATIVELY, THERE IS NO FACTUALLY SUFFICIENT EVIDENCE
SUPPORTING THE JURY’S VERDICT, AND A NEW TRIAL IS NECESSARY.
The Hennys’ trial strategy in this case was to overcome their lack of
evidence that the Taylors did anything wrong by creating prejudice and bias
against the Taylors in the minds of the jury. A keystone of the Hennys’ jury
argument concerned their allegation that Denise Taylor embezzled funds when she
managed Cayennes Restaurants in 2005, a claim that the Hennys did not plead and
that was resolved in the Separation Agreement. 3RR38-41, 65-85, 132-33;
4RR122-30.
32
The Hennys’ focus on the 2005 dispute had nothing to do with whether the
Separation Agreement required the Taylors to execute the lease assignment or
whether their failure to do so caused the Hennys any harm. But it did enrage the
jury against the Taylors, and it did paint them as untrustworthy. And when the
Hennys’ counsel told the jury how to answer the charge questions, the jury
complied without regard to the evidence.
A. There Was No Factually Sufficient Evidence that the Taylors
Tortiously Interfered with the Asset Purchase Agreement.
When all of the evidence is considered, the Hennys can only establish that
the Taylors were asked (at some unspecified date) to execute an assignment to
Coozans or (on May 28, 2008) to execute the Weingarten instruments and that the
Taylors refused. 4RR138; DX17:10RR69. The evidence also shows that
Weingarten offered to agree to an assignment from Cayennes to the Bayou Cafe
and to Coozans, but only if the Taylors would (1) execute the assignment from
Cayennes to the Bayou Cafe, (2) agree to a five year extension of the Kirby
location, and (3) sign a continuing guaranty. DX17:10RR71. Of course, Cayennes
was to remain obligated on the lease in violation of the Hennys’ promises in the
Separation Agreement. Id.; PX2:7RR2. Weingarten’s offer expired on May 5,
2008. Id. The Hennys delivered Weingarten’s terms and the required instruments
to the Taylors or to the Taylors’ agent on May 28, 2008. PX24:7RR41;
DX17:10RR69. The Hennys’ claim for interference is based on the Taylors’
33
refusal to alter the terms of the Separation Agreement to allow Coozans to continue
the Bayou Cafe’s practice of using Cayennes’ name.
As for the unliquidated tortious interference damages, they too are
unsupported by factually sufficient evidence.1 The only evidence in the record is
that some amount of the Bayou Cafe’s debts remained in August 2008 when
Coozans opted out of the Asset Purchase Agreement. 4RR39-42. There is no
statement in the record establishing what that amount was or what the Hennys
paid, if anything, to satisfy it. Id.
This evidence is legally insufficient to establish a claim for tortious
interference, or the claim is legally barred. See supra, pp. 11-15, 20-25. However,
if the Court is of the opinion that there is some evidence, then the Taylors argue
that it is still factually insufficient to support the verdict that the Taylors tortiously
interfered with the Asset Purchase Agreement or suffered any specific amount of
damages. The Taylors conditionally request a new trial on these questions.
B. There Was No Factually Sufficient Evidence to Support the
Jury’s Verdict of Lost Profits.
When all the evidence is considered, there is evidence that the Bayou Cafe
earned a final profit (after all expenses were deducted) of $19,132 in 2006.
PX2:9RR17. There is evidence that the Bayou Cafe was to receive 600 shares of
1
In any event, they would have to be reversed and remanded for new trial along with the
liability issue as the two elements are not separable. TEX. R. APP. P. 44.1(b); Ritchie v. Rupe,
443 S.W.3d 856, 908 (Tex. 2014).
34
Coozans stock, and that Adrienne Henny was one of the owners of the Bayou Cafe.
PX2:7RR6. There is also evidence that one of the four Bayou Cafe restaurants was
failing in February 2008. 3RR171. The jury awarded lost profits in the past (i.e.,
from approximately February 2008 until May 2013) of $165,000. CR154.
As argued above, see supra pp. 18-22, 30-31 this evidence is legally
insufficient to provide one complete calculation of lost profits for the time period
before trial or should be disregarded for other reasons. At the very least, this
evidence is factually insufficient to show that Adrienne Henny suffered lost profits
of $165,000. Therefore, the Taylors conditionally request a new trial on the
question of lost profits.
C. There Was No Factually Sufficient Evidence to Support the
Jury’s Verdict in Favor of Damon Henny.
As argued above, see supra, pp. 11-17, 23-30, there is legally insufficient
evidence to support the jury’s verdict in favor of Damon Henny or that verdict was
legally barred in whole or in part. Alternatively, the evidence was factually
insufficient, for the reasons discussed above to support the verdict in favor of
Damon Henny. Id. Therefore, the Taylors conditionally request a new trial on the
jury’s verdict in Questions Number 3, 4, 7, and 8.
PRAYER
WHERFORE, PREMISES CONSIDERED, Appellants/Cross-Appellees
Oscar D. Taylor and Denise Taylor respectfully request that this Court affirm the
35
trial court’s judgment dismissing all tortious interference claims, all of Damon
Henny’s claims, and Adrienne Henny’s claim for lost profits. The Taylors also
request all of the relief prayed for in their Brief of Appellants. Alternatively, the
Taylors conditionally request a new trial on one or all of these questions. The
Taylor also ask for all such other and further relief to which they might be entitled
at law or in equity.
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Respectfully submitted,
JOHNSON, TRENT, WEST & TAYLOR, L.L.P.
By: /s/ Douglas Pritchett, Jr.
Douglas Pritchett, Jr.
Texas Bar No. 24007877
dpritchett@johnsontrent.com
919 Milam, Suite 1700
Houston, Texas 77002
(713) 222-2323 – Telephone
(713) 222-2226 – Facsimile
ATTORNEYS FOR APPELLANTS
OSCAR D. TAYLOR AND
DENISE TAYLOR
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CERTIFICATE OF COMPLIANCE
This brief complies with the type-volume limitation of Texas Rule of
Appellate Procedure 9.4(i)(2)(B) because the brief contains 8,157 words, excluding
the parts exempted by Texas Rule of Appellate Procedure 9.4(i)(1).
This brief complies with the typeface and type style requirements of Texas
Rule of Appellate Procedure 9.4(e) because this brief has been prepared in a
proportionally spaced typeface using Microsoft Word in 14-point Times New
Roman font for text in the body and 12-point Times New Roman font for
footnotes.
/s/ Douglas Pritchett, Jr.
Douglas Pritchett, Jr.
CERTIFICATE OF SERVICE
On this the 22nd day of January 2015, the foregoing Response of Cross-
Appellees/Appellants was served on the following persons by electronic service:
Eric G. Carter
THE CARTER LAW FIRM
1811 Southmore Boulevard
Houston, Texas 77004
(713) 227-0042 (Telephone)
(713) 227-7001 (Facsimile)
Attorney for Plaintiffs
Adrienne A. Henny and Damon K. Henny
/s/ Douglas Pritchett, Jr.
Douglas Pritchett, Jr.
387398
38