Studio Works v. Larry A. Bruce

Affirmed and Memorandum Opinion filed December 20, 2011.
In The
Fourteenth Court of Appeals
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NO. 14-11-00054-CV
___________________
STUDIO WORKS, Appellant
V.
LARRY BRUCE, Appellee
On Appeal from the 157th District Court
Harris County, Texas
Trial Court Cause No. 2006-79908
MEMORANDUM OPINION
In this breach-of-contract action, Studio Works sued two defendants for failing to
pay for its work, and appeals the trial court’s judgment imposing liability on only one
defendant. Because the judgment is based on factual findings that are supported by the
record and on correct conclusions of law, we affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
Studio Works created materials promoting the services of a company identified in
those materials as ―AIMData.‖1 That is virtually the only uncontested fact in this case.
Studio Works maintains that it was hired by Larry Bruce and performed all of the
work at issue for Bruce in his individual capacity. Studio Works’s only witness, Jack
Erdeljac, testified that Bruce contacted Studio Works about preparing promotional
materials on an expedited basis. According to Erdeljac, Studio Works performed the
work and had it delivered to Bruce at a convention. Erdeljac testified that after the
convention, Studio Works created and revised additional promotional materials at Bruce’s
request. Bruce’s own photograph appears in some of the material. According to
Erdeljac, Bruce spent hours in Studio Works’s office working with the company’s staff in
revising and editing the material. The company also produced employee timesheets in
which employees identified their work by client and project. In the timesheets, Bruce was
identified as the client. Although Studio Works sent repeated invoices for the work, it was
never paid.
Bruce, on the other hand, denied calling or visiting Studio Works, receiving
material or demand letters from them, or ever meeting Erdeljac. He acknowledged that he
attended the convention Erdeljac mentioned and testified that he was employed by
AIMData, Inc. at that time, but he maintained that Studio Works could have learned that
information from the internet.
1
Two companies with names similar to this were discussed at trial. AIM Data, LLC was a
defendant in the case. AIMData Inc. was the employer of defendant Larry Bruce. Because trial
testimony is transcribed according to the way that words sound, all references in the transcript to ―AIM
Data‖ or ―AIMData‖ appear simply as ―Aim Data.‖
2
Studio Works sued Bruce and AIM Data, LLC for its unpaid bills. Both defendants
were served, but AIM Data, LLC did not answer the suit. The case was tried without a
jury, and the trial court granted judgment against AIM Data, LLC.
In response to Studio Works’s request, the trial court also made the following
findings of fact and conclusions of law:
Findings of Fact
1. Defendant Aim Data contracted with plaintiff Studio Works to
perform certain work.
2. Defendant Larry Bruce did not engage or contract with Studio Works
for himself or in his individual capacity.
3. Plaintiff Studio Works was aware that it was doing business with Aim
Data and not for Larry Bruce personally.
4. Plaintiff Studio Works incurred reasonable and necessary attorneys’
fees in the amount of $5,000.
Conclusions of Law
1. Defendant Aim Data is obligated to pay to plaintiff Studio Works the
sum of $24,535 plus $5,000 in attorneys’ fees.
2. Defendant Larry Bruce did not enter into an agreement with Studio
Works to be personally responsible for Studio Works’s bill.
After the trial court denied its motion for new trial, Studio Works brought this appeal.
II. ISSUES PRESENTED
In its first three issues, Studio Works challenges the trial court’s first three findings
of fact, and in its fourth and fifth issues, it challenges the trial court’s two conclusions of
law.
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III. STANDARD OF REVIEW
In cases tried without a jury, the trial court’s findings of fact have the same force and
dignity as a jury’s verdict, and when a complete reporter’s record is filed, we review the
trial court’s findings for evidentiary sufficiency under the same standards we apply to jury
verdicts. Green v. Alford, 274 S.W.3d 5, 23 (Tex. App.—Houston [14th Dist.] 2008, pet.
denied) (en banc). To analyze the legal sufficiency of the evidence supporting a finding,
we review the record in the light most favorable to the factual findings, crediting favorable
evidence if a reasonable factfinder could and disregarding contrary evidence unless a
reasonable factfinder could not. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.
2005). A party attacking the legal sufficiency of an adverse finding on an issue on which
he bore the burden of proof must demonstrate 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).
In evaluating a factual sufficiency challenge, we consider and weigh all the
evidence in a neutral light and will set aside the finding only if the evidence is so weak or
the finding is so against the great weight and preponderance of the evidence that it is
clearly wrong and unjust. Id. at 242. We defer to a trial court’s factual findings if they
are supported by evidence. Perry Homes v. Cull, 258 S.W.3d 580, 598 (Tex. 2008).
We review the legal conclusions that the trial court drew from the facts to determine
their correctness. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.
2002). Incorrect conclusions of law will not require a reversal if the controlling findings
of fact will support the judgment under a correct legal theory. BACM 2001–1 San Felipe
Road L.P. v. Trafalgar Holdings I, Ltd., 218 S.W.3d 137, 143 (Tex. App.—Houston [14th
Dist.] 2007, pet. denied).
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IV. ANALYSIS
A. The record supports the finding that AIM Data, LLC contracted with Studio
Works.
In its first finding of fact, the trial court found that AIM Data, LLC ―contracted with
Studio Works to perform certain work.‖ The trial court further stated in its first
conclusion of law that AIM Data, LLC ―is obligated to pay to plaintiff Studio Works the
sum of $24,535, plus $5,000 in attorneys’ fees.‖ Although Studio Works states in its first
and fourth issues that this factual finding and legal conclusion are erroneous, both actually
favor Studio Works. Moreover, Studio Works does not contend that the amount of
damages awarded is incorrect. As we understand it, Studio Works instead contends that
the record does not support the finding that the entity that contracted with Studio Works
was AIM Data, LLC.
The factual finding is supported by the record because this defendant was served but
did not answer. A defendant that fails to answer a suit admits all of the plaintiff’s factual
allegations against it except for the amount of unliquidated damages. Dolgencorp of Tex.,
Inc. v. Lerma, 288 S.W.3d 922, 930 (Tex. 2009) (per curiam); Hufco-Beaumont, LLC v.
Johnson, No. 14-10-01011-CV, 2011 WL 2462195, at *1 (Tex. App.—Houston [14th
Dist.] June 21, 2011, no pet.) (mem. op.). Studio Works alleged in its petition that it
performed services for AIM Data, LLC or delivered goods to it at the company’s ―special
instance and request,‖ and the company received the benefit and value of these goods or
services. This is sufficient to support the trial court’s finding that AIM Data, LLC
contracted with Studio Works, and based on that finding, the trial court correctly concluded
that AIM Data, LLC is liable to pay for Studio Works’s services. We therefore overrule
Studio Works’s first and fourth issues.
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B. The record also supports the finding that Larry Bruce did not contract with
Studio Works in his individual capacity.
Studio Works addresses its remaining issues together. In its second issue, Studio
Works asserts that the evidence is legally and factually insufficient to support the trial
court’s finding that Bruce ―did not engage or contract with Studio Works for himself or in
his individual capacity.‖ Studio Works argues in its third issue that there is insufficient
evidence to support the trial court’s finding that ―Studio Works was aware that it was doing
business with Aim Data and not for Larry Bruce personally.‖ In its fifth issue, Studio
Works challenges the trial court’s related finding that Bruce did not agree to be personally
responsible for Studio Works’s bill.2 Studio Works does not differentiate among these
issues, but has presented a single argument that it contends applies to them all. According
to Studio Works, the evidence shows that Bruce arranged for Studio Works’s services
without disclosing that he was acting on behalf of a company, and thus, Bruce is liable in
his individual capacity. Cf. Latch v. Gratty, Inc., 107 S.W.3d 543, 546 (Tex. 2003) (―[A]n
agent who signs a contract on behalf of an undisclosed principal is liable on the contract.‖)
(citing Heinrichs v. Evins Personnel Consultants, Inc., No. One, 486 S.W.2d 935, 937
(Tex. 1972)).
The evidence, however, is conflicting. On one hand, Erdeljac testified that Studio
Works’s employees noted on their timesheets that Larry Bruce was the client for whom the
work was performed. Erdeljac also testified that when he met with Bruce to discuss the
work, Bruce did not mention ―Aim Data,‖ and Bruce testified that to his knowledge,
AIMData, Inc. did not engage Studio Works to do anything. On the other hand, the work
consisted of the preparation of promotional and marketing material for ―AIMData.‖ One
invoice was directed to ―Larry Bruce, Aim Data Inc.‖ but another contained no mention of
Bruce and was directed simply to ―Aim Data Inc.‖ At trial, Erdeljac was asked if Bruce
2
Although it is listed as a conclusion of law, this instead appears to be a factual finding.
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had said, ―We’re doing this work for my company,‖ and Erdeljac answered, ―He said for
his company.‖
Faced with conflicting evidence, the factfinder ―may choose which witnesses to
believe and may resolve inconsistencies in any witness’s testimony.‖ Spring Creek Vill.
Apartments Phase V v. Gen. Star Indem. Co., 261 S.W.3d 206, 216–17 (Tex.
App.—Houston [14th Dist.] no pet.) (citing McGalliard v. Kuhlmann, 722 S.W.2d 694,
697 (Tex. 1986)). On this record, a reasonable factfinder could have resolved the
inconsistencies by attaching little weight to Studio Works’s internal references to Bruce as
a client or to Erdeljac’s statements that Bruce did not claim to be acting on Aim Data’s
behalf. The remaining evidence—which includes Erdeljac’s testimony that Bruce said
Studio Works was working ―for his company,‖ the nature of the work itself, and an invoice
addressed solely to ―Aim Data Inc.‖—is legally sufficient to support the trial court’s
findings. Moreover, this evidence is not so weak, and the controverting evidence is not so
strong, as to make the trial court’s findings clearly wrong and unjust; thus, the evidence
also is factually sufficient to support the trial court’s findings. We therefore overrule
Studio Works’s second, third, and fifth issues.
V. CONCLUSION
Having found no error, we affirm the trial court’s judgment.
/s/ Tracy Christopher
Justice
Panel consists of Chief Justice Hedges and Justices Christopher and Jamison.
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