Musa ('Moses') N. Musallam v. Amar B. Ali
560 S.W.3d 295
Tex. App.2017Background
- Musallam owned Fanci Candy, a wholesale distributor with valuable direct-distribution agreements with Altria and Lorillard that allowed purchase of tobacco products at manufacturer prices.
- Ali ran A to Z Wholesalers, which lacked some direct-distribution agreements and paid a middleman higher prices; acquiring Fanci would let Ali capture the middleman margin.
- Musallam and Ali executed a letter of intent (Jan 21, 2013) and then a Stock Transfer and Asset Purchase Agreement (signed June 18, 2013) with a $500,000 stock price plus value for purchased assets; clause reduced purchase price to $250,000 if either Altria or Lorillard did not provide written approval.
- Altria approved Ali’s purchase before closing; Lorillard’s formal approval arrived only in October 2013 (after the July 1, 2013 closing date). Musallam refused to close July 1 and sued; Ali counterclaimed for breach.
- A jury found Musallam breached the June 18 agreement and awarded Ali $904,924 (past and future lost profits); trial court awarded attorney’s fees; Musallam appealed arguing (1) no enforceable contract (price not agreed) and (2) lost-profits award legally insufficient.
Issues
| Issue | Plaintiff's Argument (Musallam) | Defendant's Argument (Ali) | Held |
|---|---|---|---|
| Whether June 18, 2013 agreement is enforceable or an unenforceable agreement to agree because FF&E and vehicle values were not agreed | Agreement is unenforceable because material price term (value of FF&E/vehicles) was not agreed and left to future mutual agreement | Trial submission of contract-formation question was proper; parties had agreed on essential terms and price could be supplied by presumption of reasonable price; Musallam waived charge complaint by not objecting at trial | Court: Overruled; Musallam waived challenge to jury deciding contract formation and judgment affirmed |
| Whether lost-profits award lacks legal sufficiency | Calculation speculative: used July 1, 2013 per-carton prices for a 31-month period; did not deduct purchase price; tax deduction not shown; relied on continued Altria contract which could be cancelled; used gross rather than net profit | Lost-profits based on business records and Fanci pricing data; margins were stable and passed through; damages sought were lost profits (not business value); Ali accounted for expenses and taxes (33%); Altria approval and business practice made continuation reasonably certain | Court: Overruled; evidence legally sufficient to support past and future lost-profits award |
Key Cases Cited
- Spencer v. Eagle Star Ins. Co. of Am., 876 S.W.2d 154 (Tex. 1994) (jury finding may be disregarded if immaterial)
- City of The Colony v. N. Tex. Mun. Water Dist., 272 S.W.3d 699 (Tex. App.—Fort Worth 2008) (jury questions rendering and immateriality principles)
- Ford Motor Co. v. Ledesma, 242 S.W.3d 32 (Tex. 2007) (preservation of jury-charge complaints requires timely objection)
- Helena Chem. Co. v. Wilkins, 47 S.W.3d 486 (Tex. 2001) (lost-profits recovery requires reasonable certainty and objective data)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal-sufficiency standard: consider evidence favorable to verdict)