Jeffrey D. Clinton D/B/A Marathon Energy Management v. Charles Gallup

Reversed in Part and Remanded and Majority and Dissenting Opinions filed
March 30, 2021.
In The
Fourteenth Court of Appeals
NO. 14-19-00202-CV
JEFFREY D. CLINTON D/B/A MARATHON ENERGY MANAGEMENT,
Appellant
V.
CHARLES GALLUP, Appellee
On Appeal from the County Civil Court at Law No. 2
Harris County, Texas
Trial Court Cause No. 1099256
DISSENTING OPINION
Appellee Charles Gallup asserted four claims against appellant Jeffrey
Clinton d/b/a Marathon Energy Management.1 Following a bench trial, the trial
court rendered judgment for Gallup in the amount of $13,861 plus court costs and
attorneys’ fees. The court signed findings of fact and conclusions of law the same
1
The parties refer to Clinton and “Marathon Energy” interchangeably.
day it signed the judgment. Although Clinton timely requested additional or
amended findings, the court signed none.
Clinton asserts five issue on appeal. The majority reverses the judgment and
remands the case because it sustains Clinton’s third issue, in which he argues that
the judgment is error because the court’s findings of fact do not address any of
Gallup’s claims against Clinton. The majority bases its judgment on its
interpretation of Texas Rule of Civil Procedure 299 as applied to this case.
Regrettably, I do not join that analysis; rather, I would sustain Clinton’s first issue,
in which he contends the trial court erred in failing to issue additional findings of
fact showing the basis of the judgment. Accordingly, I would abate the appeal and
instruct the presiding judge to sign additional findings of fact.
A. Relevant Background
The trial testimony took less than one day to present. Gallup and Clinton
were the only witnesses to testify on the substantive claims. Gallup testified that
he sold energy or electricity contracts for a company called Hudson Energy. In
2010 or 2011, he and other representatives were “shuffled” to a broker called Aldar
Marketing. From that point forward, commissions that Gallup formerly received
directly from Hudson Energy were first paid to Aldar Marketing and then to
Gallup. Generally, Gallup and other salespersons would receive commissions on
the accounts they developed.
Like Gallup, Clinton also sold energy contracts for Hudson Energy and
received commission payments through Aldar Marketing. Eventually, Clinton and
others began to operate as Marathon Energy to “basically do the same thing that
Aldar was doing,” in that Marathon Energy entered into a sales partnership with
Hudson Energy. Gallup’s key contention here is that Hudson Energy paid
commissions to Marathon Energy relating to accounts Gallup developed, but
2
Marathon Energy did not pass along those commissions to Gallup, as Aldar
Marketing did. According to Gallup, he had an oral agreement with Clinton that
Gallup would receive those commissions after they were paid to Marathon Energy.
The parties stipulated that Marathon Energy received from Hudson Energy
commissions on accounts Gallup developed in the amount of $13,861.
Gallup asserted claims against Clinton for fraud, breach of an oral contract,
quantum meruit, and sworn account. All of Gallup’s claims are based on his
assertion that all or part of the commissions Clinton received from Hudson Energy
were owed to Gallup under his oral agreement or understanding with Clinton, but
Clinton did not pay them. Clinton testified that he paid a portion of the
commissions to Gallup as a “finder’s fee.”
The trial court awarded judgment to Gallup against Clinton in the amount of
$13,861 and signed a conclusion of law that Gallup is entitled to judgment against
Clinton for $13,861. Additionally, the court made one fact finding of relevance:
“The records of Hudson Energy on file reflect payment of commissions to
[Clinton] on the Plaintiff’s accounts in the total amount of $13,062.”2 Clinton filed
a timely request for additional or amended findings of fact, requesting the court to
“issue additional Findings of Fact and Conclusions of Law that states the finding of
facts upon which the Judgment was founded . . . and how those facts are applied to
the elements of the Plaintiffs claims against Defendant Clinton and Marathon for
fraud, quantum meruit, suit on a sworn account, breach of contract and for attorney
fees.” No further findings of fact appear in our record.
2
The $13,062 figure stated for the commissions paid may or may not be a typographical
error. The court awarded attorneys’ fees of $13,062; the stipulated amount of commissions
Clinton received from Hudson Energy was $13,861.
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B. Discussion
The majority says that the trial court must have committed an error of law
because it made no fact findings on any element of any of Gallup’s claims. Based
on rule 299, the majority states that the trial court’s sole fact finding “does not
resolve any disputed fact concerning any element of any claim asserted by Gallup.”
Ante at 3-4. Thus, the court cannot presume any findings relating to any claims at
issue. Instead, the majority continues, we can “only conclude that the ‘basis of the
trial court’s judgment’ was its apparent conclusion that the sole fact that Hudson
paid money to Clinton, on its own, somehow entitled Gallup to relief.” Id. at 4.
I respectfully disagree with the majority’s premise. Viewed in the context of
the very limited trial testimony, I would hold that the court’s fact finding
constitutes a finding on the element of damages. There is no other reasonable way
to construe it in light of the evidence. Gallup’s only point in support of his claim
for damages was that Clinton received commissions on Gallup’s accounts from
Hudson Energy but failed to pay those commissions to Gallup. The trial court’s
fact finding that Clinton received commissions on Gallup’s accounts in the amount
of $13,062 goes directly to Gallup’s sole damages theory. Admittedly, the finding
is not as specific or definite as it could or should be, and it may be erroneous in
amount,3 but it is nonetheless a finding as contemplated by rule 299 on a required
element for each of Gallup’s claims. I believe the court errs in holding that the
trial court made no findings on any element of Gallup’s claims.
As Clinton correctly noted below and asserts in our court, the trial court
failed to issue findings on any other elements of Gallup’s claims. The Texas Rules
3
Notably, the final judgment contains a statement that: “[t]he Court finds that Plaintiff
and Defendant Clinton stipulated that the commissions paid on the accounts of the Plaintiff was
$13,861.00.”
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of Civil Procedure provide a party with the procedural right to request that,
following a bench trial, the trial court prepare written findings of fact and
conclusions of law. See Tex. R. Civ. P. 296. The trial court has a mandatory duty
to issue such findings in response to a timely request. See Tex. R. Civ. P. 297;
Cherne Indus., Inc. v. Magallanes, 763 S.W.2d 768, 772 (Tex. 1989). Clinton
having properly requested findings of fact following a bench trial, the trial court
was required to issue them. Failing to do so is error.
Because Clinton properly requested findings on the omitted elements, we
may not presume on appeal that the omitted findings support the judgment. See
Man Indus. (India), Ltd. v. Midcontinent Express Pipeline, LLC, 407 S.W.3d 342,
370 (Tex. App.—Houston [14th Dist.] 2013, pet. denied). Moreover, a trial court’s
failure to respond to a timely request for additional findings is presumptively
harmful error, unless the appellate record affirmatively shows that the complaining
party has suffered no harm. See Cherne Indus., Inc., 763 S.W.2d at 772; Watts v.
Oliver, 396 S.W.3d 124, 130 (Tex. App.—Houston [14th Dist.] 2013, no pet.).
The general rule is that an appellant has been harmed if, under the circumstances of
the case, he is forced to guess the reason(s) why the trial court ruled against him.
Larry F. Smith, Inc. v. Weber Co., Inc., 110 S.W.3d 611, 614 (Tex. App.—Dallas
2003, pet. denied). If only a single ground of recovery or defense is at issue, the
record typically would not show harm because the appellant is not forced to guess
the reasons underlying the trial court’s judgment. See id.; Nevada Gold & Silver,
Inc. v. Andrews Indep. Sch. Dist., 225 S.W.3d 68, 77 (Tex. App.—El Paso 2005,
no pet.). On the other hand, when multiple grounds for recovery or multiple
defenses are in play, as here, an appellant is forced to guess the trial court’s
findings, unless they are provided to him. Larry F. Smith, 110 S.W.3d at 614;
Nevada Gold & Silver, 225 S.W.3d at 77. Our court has stated that, generally, the
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inference of harm cannot be overcome in cases with disputed facts and two or
more grounds for recovery or defense. See Randall v. Jennings, 788 S.W.2d 931,
932 (Tex. App.—Houston [14th Dist.] 1990, no writ), overruled on other grounds
as recognized in Zieba v. Martin, 928 S.W.2d 782, 786 n.2 (Tex. App.—Houston
[14th Dist.] 1996, no writ). Placing an appellant in the position of having to guess
the trial court’s reasons for rendering judgment against him defeats the inherent
purpose of rules 296 and 297. Larry F. Smith, 110 S.W.3d at 614. The purpose of
a request under the rules is to “narrow the bases of the judgment to only a portion
of [the multiple] claims and defenses, thereby reducing the number of contentions
that the appellant must raise on appeal.” Id. Without findings of fact and
conclusions of law on all elements of Gallup’s claims, Clinton is forced to guess at
the underlying basis for the trial court’s judgment.
Thus, I would hold that the trial court committed reversible error in failing to
file additional findings of fact. The remaining question is the proper disposition.
The preferable remedy in this type of situation is for the appellate court to abate the
appeal and remand the case to the trial court to cure the error by issuing additional
findings and conclusions. See Liberty Mut. Fire Ins. Co. v. Laca, 243 S.W.3d 791,
794 (Tex. App.—El Paso 2007, no pet.). The judge presiding over this trial was
the Honorable John T. Wooldridge, who was not the elected judge of the County
Court at Law Number Two of Harris County in December 2018 when this case
was tried, but who sat by assignment. Judge Wooldridge heard the evidence and
signed the findings of fact. In this instance, I would abate the appeal and remand
with instructions for the Honorable John T. Wooldridge to issue additional findings
of fact. See City of Los Fresnos v. Gonzalez, 830 S.W.2d 627, 630 (Tex. App.—
Corpus Christi 1992, no writ) (op. on reh’g) (abating appeal for visiting judge who
presided over trial to issue findings of fact and conclusions of law).
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The majority remands the case for further proceedings, but it does so by
holding that the judge signed no findings on any element of any claim. This
erroneous conclusion leads to an ill-advised determination that the trial court must
have “committed an error of law.” Ante at 5. I prefer to avoid that sort of
conjecture in favor of abating the appeal and seeking express findings showing the
basis of the judgment. Once additional findings of fact are signed, it may become
readily apparent that the trial court committed no error of law, contrary to the
majority’s statement.
/s/ Kevin Jewell
Justice
Panel consists of Justices Jewell, Spain, and Wilson (Spain, J., majority).
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