436 S.W.3d 402
Tex. App.2014Background
- WiseTime and TG were sold to Keiller via a stock purchase on Oct 15, 2005 for $2.3M, with SR owning the leases/licenses; the agreement identified a $440,000 debt to Spencer secured by a UCC-1.
- Representations included that the lease was in good standing with options through 2013, WiseTime had a valid SOB license and permits, and minimal TABC issues were anticipated.
- After signing, WiseTime resolved some City of Dallas nuisance and ordinance issues, resulting in a final judgment requiring removal of almost all of a 15-foot building addition to preserve licenses; landlord did not consent to the addition/removal.
- Keiller later learned the lease was terminated prior to signing and the landlord never consented to construction; SR could not obtain a new liquor license due to ongoing violations and undisclosed issues.
- SR made payments under the Agreement through April 2007 and paid portions of the Spencer debt; Wise’s nondisclosures and misrepresentations led SR to sue for breach of contract, fraud, and negligent misrepresentation; Spencer asserted conversion and third-party beneficiary breach claims.
- The trial court entered a judgment awarding SR fraud damages and excused nonperformance, while Spencer was awarded conversion damages; Wise sought new trial and the court denied; on appeal, the final judgment omitted SR’s breach-of-contract damages against Wise and controlled cross-claims on conversion
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraud elements and sufficiency | SR contends Wise made/omitted material representations to induce purchase | Wise contends evidence is legally/factually insufficient | Fraud supported; damages of $704,480.45 supported |
| Excused performance due to prior breach | SR argues Wise's pre-sale failures excuse SR’s performance | Wise argues no excused performance | SR’s performance excused; Wise breached pre-sale obligations |
| Conversion of Spencer's property; damages | Spencer seeks damages for conversion of FFE | SR argues no conversion or proper valuation | Conversion damages reversed; Spencer take nothing |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal/sufficiency standard require more than mere scintilla of evidence)
- Continental Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444 (Tex. 1996) (illustrates standard for appellate review of sufficiency of evidence)
- Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757 (Tex. 2003) (deference to jury credibility/weight in sufficiency review)