David Tubb and Superior Shooting System, Inc., Appellants/Cross-Appellees v. Aspect International, Inc. and James Sterling, Appellees/Cross-Appellants
12-14-00323-CV
| Tex. App. | Oct 8, 2015Background
- Sterling (Aspect) and Tubb (Superior) entered an oral agreement in late 2011 for Aspect to manufacture and market small-arms ammunition at a Tyler, Texas facility; parties contemplated corporate/LLC ownership and 50/50 profit sharing.
- Sterling spent ~Nov 2011–Oct 2012 designing the production line (working with FillPro), preparing the Tyler facility, procuring and installing specialized equipment that was delivered and certified in Oct 2012, and performing marketing and packaging work.
- Sterling repeatedly sought a written contract; Tubb delayed, proposed different deal terms through counsel, and resisted memorializing the oral agreement despite Sterling’s insistence.
- In Nov–Jan 2012–2013 Tubb engaged in conduct (insulting comments at a visit, saying equipment should be moved to Canadian, removing materials, and directing others to sell product) and repeatedly refused to deliver production materials or sign a written agreement; Sterling treated that conduct as a repudiation and later demanded restitution.
- At bench trial the court found Aspect substantially performed and Superior repudiated; awarded Aspect $175,000 in restitution (recovery for Sterling’s services/benefit conferred) and offset Superior’s prior $35,019 payment; trial findings were largely unchallenged on appeal.
Issues
| Issue | Plaintiff's Argument (Sterling/Aspect) | Defendant's Argument (Tubb/Superior) | Held |
|---|---|---|---|
| Completeness of record / sufficiency challenge | Appellees: Appellants failed to present a complete reporter’s record (video depo transcripts missing); therefore sufficiency complaints must be overruled | Appellants argue the evidence is insufficient on various findings | Court presumption: missing testimony supports trial court; appellees ask to overrule insufficiency complaints (procedural bar) |
| Repudiation of the Agreement | Sterling: Tubb’s words/actions (refusal to sign, removal of materials, moving equipment, changing terms) were clear repudiation | Tubb: Repudiation standard is exacting; appellee failed to accept repudiation or show clear, unequivocal repudiation | Trial court found repudiation; appellees argue record supports that finding; legal standard applied is whether words/actions indicate future nonperformance |
| Restitution (damages) | Sterling: entitled to restitution measured by reasonable value of services and benefit conferred; evidence supports $175,000 award (and higher evidence-based amount) | Tubb: damages speculative, failure to mitigate, overclaimed hourly/time charges | Court upheld restitution as appropriate equitable remedy where plaintiff substantially performed and defendant prevented completion; evidence supports award and offset of $35,019 |
| Existence of partnership (defense to restitution) | Superior argues a partnership existed, which would bar compensation for services under Bus. Orgs. Code §152.203(c) | Aspect: no partnership — conflicting evidence, intent to form corp/LLC, control and title facts show no partnership property | Trial court found no partnership; appellees emphasize unchallenged findings showing no partnership as a matter of law not proven |
| Attorney's fees entitlement | Superior claims breach entitles it to fees | Aspect: trial court found Aspect did not breach, and Superior offered no proof of reasonable/necessary fees per stipulation | Trial court concluded Superior not entitled to fees; findings unchallenged and Superior failed to prove fees were reasonable/necessary |
Key Cases Cited
- Englander Co. v. Kennedy, 428 S.W.2d 806 (Tex. 1968) (appellant must present a complete record to prevail on sufficiency complaints after bench trial)
- Murray v. Crest Const., Inc., 900 S.W.2d 342 (Tex. 1995) (anticipatory repudiation allows immediate suit; repudiation occurs when party declares it will not perform when due)
- Mar-Len of Louisiana, Inc. v. Gorman-Rupp Co., 795 S.W.2d 880 (Tex. App.—Beaumont 1990, writ denied) (repudiation may be shown by words or actions indicating future nonperformance)
- Coon v. Schoeneman, 476 S.W.2d 439 (Tex. Civ. App.—Dallas 1972, writ ref’d n.r.e.) (restitution available where plaintiff partially performed and defendant prevented completion)
- Mancorp, Inc. v. Culpepper, 802 S.W.2d 226 (Tex. 1990) (testimony and records may support reasonable-value awards; cumulative evidence rule)
- City of Harker Heights v. Sun Meadows Land, Ltd., 830 S.W.2d 313 (Tex. App.—Austin 1992, no writ) (restitution/quantum meruit principles to prevent unjust enrichment)
- Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195 (Tex. 2004) (a material breach by one party can excuse the other party’s further contractual obligations and affect remedies including fees)