G. D. Holdings, Inc. v. H.D.H. Land and Timber, LP
407 S.W.3d 856
| Tex. App. | 2013Background
- GDH (buyer) and HDH (seller) negotiated a $300,000 contract for 9 acres in Shelby County; Griffin (attorney) prepared the written contract.
- The draft included a clause making Buyer responsible for dozer/cleanup costs if the transaction did not close; Babaria (GDH president) struck that clause out and initialed the change.
- Harvey (HDH general partner) refused to initial the change; Babaria deposited $30,000 earnest money with Griffin but later failed to obtain financing and did not close.
- HDH cleared and leveled the property (costs testified about) and obtained a survey; HDH refused to return the earnest money when Babaria demanded it.
- GDH sued for return of earnest money; HDH counterclaimed for contract damages or, alternatively, promissory estoppel; after bench trial the court awarded HDH damages and attorney’s fees; appeal followed.
Issues
| Issue | Plaintiff's Argument (GDH) | Defendant's Argument (HDH) | Held |
|---|---|---|---|
| Existence of binding written contract for sale of 9 acres | No contract because parties never agreed on essential term (what happens to earnest money); Babaria’s deletion of the cleanup/earnest-money clause rejected by Harvey, so no meeting of the minds | There was a valid written contract prepared and signed; earnest-money arrangement reflected parties’ intent | Court: No enforceable contract — Babaria’s strike of the clause changed a material term (earnest money), Harvey did not accept the change, so no contract formed |
| Promissory estoppel for costs (survey, clearing, leveling) | HDH cannot recover under promissory estoppel because requisites not met | HDH relied on GDH’s representations that clearing/surveying were required and would be reimbursed; HDH incurred costs in reasonable and foreseeable reliance | Court: HDH proved promissory estoppel elements (promise, foreseeable reliance, substantial detrimental reliance) and may recover amounts expended; judgment affirmed on this theory |
Key Cases Cited
- Argo Data Resource Corp. v. Shagrithaya, 380 S.W.3d 249 (Tex. App.—Dallas 2012) (meeting of the minds required for contract formation)
- Potcinske v. McDonald Prop. Inv., Ltd., 245 S.W.3d 526 (Tex. App.—Houston [1st Dist.] 2007) (meeting of the minds and contract interpretation principles)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal and factual sufficiency/no-evidence standard for appellate review)
- English v. Fischer, 660 S.W.2d 521 (Tex. 1983) (elements of promissory estoppel)
- In re Weekley Homes, L.P., 180 S.W.3d 127 (Tex. 2005) (promissory estoppel prevents enforcing strict legal rights when injustice would result)