PopCap Games, Inc. v. MUMBOJUMBO, LLC
350 S.W.3d 699
Tex. App.2011Background
- PopCap and MumboJumbo formed a licensed relationship in 2005; the 2005 agreement allowed termination with 120 days’ notice.
- A 2006 Game Retail Distribution Agreement replaced the 2005 agreement, with Phase I (exclusive services by MumboJumbo) and Phase II (PopCap may engage others at its discretion).
- During Transition Period (Jan 1–Apr 1, 2007), certain accounts could be taken over by PopCap while MumboJumbo continued to receive fees for those accounts.
- In 2007 PopCap began selling directly to retailers (e.g., Walmart) with SMP’s help, without MumboJumbo’s involvement, allegedly breaching the 2006 agreement.
- MumboJumbo sued for breach of contract, tortious interference, and fraud; PopCap counterclaimed for its own breach and damages; the trial court awarded MumboJumbo substantial damages and fees.
- The Dallas Court of Appeals reversed in part, rendering and remanding for recalculation of damages and fees, and addressing cross-appeals from MumboJumbo.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2006 agreement allowed PopCap to use others during Phase II | MumboJumbo argues exclusivity persisted into Phase II. | PopCap argues exclusivity ended after Phase I; Phase II allowed engagement of others. | Contract unambiguous; Phase II allowed PopCap to use others and to deal directly. |
| Whether PopCap proved its breach-of-contract damages conclusively | PopCap contends $1,557,618.15 was conclusively proven as damages. | MumboJumbo disputes the sufficiency of evidence for that amount. | PopCap conclusively proved the amount; judgment must be rendered for PopCap on damages. |
| Whether MumboJumbo's sunk-cost fraud damages were foreseeable | MumboJumbo seeks $3.8 million for sunk costs as fraud damages. | PopCap contends sunk costs were not foreseeable; damages were not proven. | MumboJumbo failed to prove foreseeability; sunk-cost damages are not recoverable. |
| Whether MumboJumbo's cross-appeal was timely | MumboJumbo contends its cross-appeal was timely following a motion for new trial. | PopCap contends cross-appeal was untimely unless properly filed under Rule 26.1(a)(1). | Motion for new trial qualified as a timely motion for new trial; cross-appeal timely. |
| Whether PopCap’s closing argument was incurably improper | MumboJumbo claims improper argument based on Taylor's testimony about RealNetworks. | PopCap asserts arguments were within permissible inference and not incurable. | Argument not incurable; no preservation error; not improper. |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal-sufficiency review requires reasonable and fair-minded evidence)
- Dow Chem. Co. v. Francis, 46 S.W.3d 237 (Tex. 2001) (converse standard for strict evidentiary challenges)
- Formosa Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41 (Tex. 1998) (foreseeability and consequential damages in fraud actions)
- Shell Oil Prods. Co. v. Main Street Ventures, L.L.C., 90 S.W.3d 375 (Tex. App.-Dallas 2002) (consequential damages may be recoverable if foreseeable)
- King v. Cirillo, 233 S.W.3d 437 (Tex. App.-Dallas 2007) (standard for extrinsic evidence in contract interpretation)