H. Frаnk FAUCETTE and J. Lawrence Schadler, Appellants/Cross-Appellees, v. Grace C. CHANTOS and A.J. Chantos & Associates, Inc. d/b/a Sarco of Texas, Appellees/Cross-Appellants.
No. 14-08-00536-CV.
Court of Appeals of Texas, Houston (14th Dist.).
Sept. 23, 2010.
322 S.W.3d 901
Under that analysis, the Brazos County Attorney and the Travis County Attorney are not “the same party” for collateral estoppel purposes when one participates in a probation-revocation hearing and the other subsequently participates in a criminal prosecution. First, and most importantly, double jeopardy is not actually a risk here because Doan was not criminally prosecuted twice for the same event. See id. Second, as Judge Womack highlighted in his Brabson concurrence, the Brazos County Attorney and the Travis County Attorney are independent entities with no control over each others’ decision-making processes. See Brabson, 976 S.W.2d at 187 (Womack, J., concurring). This means, crucially, that the Brazos County Attorney had no authority to represent the interests of the Travis County Attorney. See id. at 188 (Womack, J., concurring) (citing Sunshine Coal Co., 310 U.S. at 403, 60 S.Ct. 907).
In sum, the Travis County Attorney is not collaterally estopped from prosecuting Doan for theft because it did not рarticipate in Doan‘s Brazos County probation-revocation hearing. See Reynolds, 4 S.W.3d at 17. We overrule Doan‘s issue.
CONCLUSION
We affirm the order denying Doan‘s application for a writ of habeas corpus.
Bradley R. Walton, Peter Michael Kelly, James B. Lewis, Susan J. Taylor, Houston, for appellees.
Panel consists of Justices FROST, BROWN, and Senior Justice HUDSON.*
OPINION
JEFFREY V. BROWN, Justice.
This case involves the failed sale of a company to its employees, who instead resigned from the company, formed their own business, and obtained some of the seller‘s former lines of business. The company, A.J. Chantos & Associates, Inc., d/b/a Sarco of Texas (“Sarco“) and its principal shareholder, Grace C. Chantos, sued former employees H. Frank Faucette and J. Lawrence Schadler, alleging breach of contract, tortious interference with contract, and other claims. Both sides moved for summary judgment on the breach-of-contract claim, and the trial court granted Chantos and Sarco‘s motion for partial summary judgment on liability for breach of contract.
The case was then tried to a jury on damages for breach of contract and on the tortious-interference claim. The jury awarded Chantos $192,266.00 in damages for breach of contract. The jury found both defendants liable for tortiоus interference and awarded Sarco $201,407.21 in damages. The trial court granted Fau-
On appeal, appellants Faucette and Schadler contend the trial court erred in granting Chantos and Sarco‘s motion for partial summary judgment on the breach-of-contract claim and in not granting their motion for summary judgment. In resolving this issue, we are asked to consider the infrequent circumstance of a grantor of an option suing the holder of the option for allegedly breaching the option‘s terms. The appellants also contend that the evidence at trial was legally and factually insufficient to prove damages for breach of contract.
On cross-appeal, Chantos and Sarco contend that the trial court erred in granting Faucette and Schadler‘s motion for judgment notwithstanding the verdict because Chantos and Sarco presented legally sufficient evidence of each element of tortious interference.
For the reasons explained below, we affirm.
I
Grace Chantos and her husband, Andy, fоrmed Sarco of Texas, a representative sales agency for plumbing supplies, in 1979. In 1983, they incorporated the agency as A.J. Chantos & Associates, Inc., d/b/a Sarco of Texas. Sarco had contracts with manufacturers in the plumbing, air-conditioning, and heating industry. It was standard in the industry that the contracts with the manufacturers had thirty-day termination provisions. Despite the thirty-day cancellation provision, Sarco repre-1sented several manufacturers for twenty years or more. These manufacturers included Elkay, Vanguard, McGuire, and Precision.
Grace and Andy had two children, Linda and Andrew. Andrew worked for Sarco until 1993, when he started his own agency, Sarco Central, in New Braunfels. Linda married Faucette, who worked for Sarco for a few years in the 1980s, returned to Sarco as a salesman in 1994, and remained there until October 7, 2003. J. Lawrence Schadler worked as a salesman for Sarco from 1994 until October 7, 2003. The only other sales employee for Sarco was Lane Malmburg, who started with Sarco in 2002. Malmburg resigned the same day as Faucette and Schadler—October 7, 2003.
For many years, Andy Chantos had suffered from a serious illness. In 2001, he and Grace began to consider retiring and entered into negotiations with Chumley & Associates to sell the agency. Ultimately, Andy and Grace broke off negotiations with Chumley and offered to sell Sarco to Andrew, Faucette, and Schadler.¹ Andrew already owned 260 of Sarco‘s 1,000 shares, most of which were obtained in 2001 when Sarco acquired Andrew‘s company, Sarco Central. In the spring and summer of 2001, the parties executed the “Sale and Purchase Agreement” containing the option to purchase all the shares of stock in Sarco (the “contract“).
The contract provided that, when Faucette, Schadler, and Andrew acquired forty-nine percent of the company, they would have the option to purchase the remainder of the company from Chantos. The relevant portion of the contract provided:
At such time as Buyers have acquired a total of forty-nine percent (49%) of the
authorized and outstanding shares of the Corporation, Buyers shall have the option to purchase the remaining shares, but only in a lump sum wherein Buyers purchase all remaining shares. * * *
This Agreement shall terminate unless the Sale and Purchase contemplated is completed in its entirety within thirty-two (32) months from the date of execution of the Agreement.
Andy became gravely ill in late 2001, and after that he and Grace did not actively partiсipate in the operation of Sarco. Faucette, Schadler, and Linda operated Sarco on a day-to-day basis. On August 18, 2002, Andy died. Grace returned to work in May of 2003, and Linda resigned.
On July 22, 2003, Faucette, Schadler, Chantos, Andrew, and attorney Brad Walton met to discuss exercising the option. At the time of the meeting, Faucette owned 118 of Sarco‘s 1,000 shares; Schadler owned 116 shares, and Andrew owned 260 shares. Thus, together they owned 494 shares, or 49.4 percent of the company.2 The parties discussed a plan in which Faucette and Schadler were to purchase enough shares from Chantos to bring their ownership to 260 shares each—the same number Andrew already owned.3 The company would then purchase the remaining shares. The parties also discussed having another meeting within sixty days, apparently to finalize the agreement. But
Sometime after the July 22 meeting, Faucette and Schadler‘s business relationship with Grace deteriorated, and after one particularly heated encounter with Grace, they decided to leave Sarco and form their own representative agency. In early September, Faucette discussed leaving Sarco with Schadler and Malmburg. They all resigned on October 7, 2003. About a week or two before they resigned, Schadler went to some of the manufacturers with which Sarco had representative contracts, including Elkay, Vanguard, McGuire, and Precision, and posed a “hypothetical” question asking if he and the others left Sarco, whether they could represent those manufacturers. Also, in late September or early October, Faucette spoke with an attorney about incorporating a new manufacturer‘s representative company to be called Tri-Rep Sales, Inc. Faucette, Schadler, and Malmburg did not inform Grace of their plans or that they were going to quit. They continued to represent to Grace and Andrew that they intended to complete the purchase of shares in Sarco.
On the day Faucette, Schadler, and Malmburg resigned, Grace was in California. Consequently, the office was left without salespeople and unable to function adequately.4 That same day, Vanguard sent Sarco written notice that it was terminating its manufacturer‘s sales representa-
II
Breach of the Option Contract
Grace and Sarco moved for partial summary judgment on their breach-of-contract claim. They alleged that, after Andy passed away, Faucette and Schadler “concluded that it would be far less expensive to simply take the clients and suppliers of [Sarco] rather than to continue with the purchase.” They also alleged that Faucette and Schadler persuaded several of Sarco‘s largest manufacturers and clients to leave Sarco and to sign representation contracts with them. Grace and Sarco contended that Faucette and Schadler breached the option contract when, at the meeting on July 22, 2003, Faucette and Schadler gave notice of their intent to exercise their option to purchase all of the remaining shares of the company, but then failed to complete the purchase.
Faucettе and Schadler responded to this motion and filed their own motion for summary judgment on the breach-of-contract claim. In Faucette and Schadler‘s motion for summary judgment and response, they argued that they did not exercise the option because they did not tender the funds to purchase the shares within the time required by the contract. Consequently, they argued, their failure to timely exercise the option according to its terms legally amounted to nothing more than a rejection of the option.
On November 2, 2006, the trial court granted Grace and Sarco‘s motion for partial summary judgment. Faucette and Schadler moved for reconsideration, which the trial court denied.
In their first issue, Faucette and Schadler contend that the trial court erred in denying their motion for summary judgment on the breach-of-contract claim and in granting Grace and Sarco‘s motion.
We review the trial court‘s grant of summary judgment de novo. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 156-57 (Tex. 2004). A movant must establish its right to summary judgment by showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). We take as true all evidence favorable to the non-movant, and we indulge every reasonable inference and resolve any doubts in the non-movant‘s favor. Joe, 145 S.W.3d at 157. We review a summary judgment for evidence that would enable reasonable and fаir-minded jurors to differ in their conclusions. Wal-Mart Stores, Inc. v. Spates, 186 S.W.3d 566, 568 (Tex. 2006) (per curiam). When we review cross-motions for summary judgment, we consider both motions and render the judgment that the trial court should have rendered. Coastal Liquids Transp., L.P. v. Harris County Appraisal Dist., 46 S.W.3d 880, 884 (Tex. 2001).
It is undisputed that, under the terms of the contract, Faucette and Schadler, along with Andrew Chantos, acquired an option to compel Grace to sell the remaining shares of Sarco on the stated terms before the option expired. An option is a privilege or right which the owner of property gives another to buy certain property at a fixed price within a certain time. State v. Clevenger, 384 S.W.2d 207, 210 (Tex. Civ. App.—Houston 1964, writ ref‘d n.r.e.). An option contract has two components: (1) an underlying contract that is not binding until accepted and (2) a covenant to hold open to the optionee the opportunity to accept. Comeaux v. Suderman, 93 S.W.3d 215, 220 (Tex. App.—Houston [14th Dist.] 2002, no pet.); Hott v. Pearcy/Christon, Inc., 663 S.W.2d 851, 853 (Tex. App.—Dallas 1983, writ ref‘d n.r.e.).
In their motion for partial summary judgment, Grace and Sarco contended that in the meeting on July 22, 2003, Faucette and Schadler committed to exercise their option to purchase the remaining fifty-one percent of the Sarco shares and agreed that they would make financial arrangements to purchase the shares. Among other things, Graсe and Sarco supported their motion with the following testimony from Faucette‘s deposition:
Q. During that [July 22] meeting did you state that you were ready, willing and able to go forward with the deal to purchase the remaining 51 percent in conjunction with—
A. I believe we did.
Q. —and that would have been in conjunction with Andrew C. Chantos and Lawrence—
A. Correct.
Q. —Schadler.
And you told Grace you were going to go forward with the deal?
A. I believe I did.
Grace and Sarco also pointed to similar excerpts of both Faucette‘s and Schadler‘s testimony in which they confirmed that they agreed to exercise the option to purchase the remaining fifty-one percent of the corporation and discussed how they would finance the purchases. Based on Faucette and Schadler‘s testimony, Grace and Sarco contended that Faucette and Schadler committed to exercise the option to purchase the remaining shares of the company and specifically worked out the details of how the purchase was to be made, including seeking financing. But rather than complete the sale, Faucette and Schadler breached their contractual obligation by failing and refusing to carry through with their agreement to purchase the remaining shares of stock.
On aрpeal, Faucette and Schadler argue that the option is not enforceable because their alleged acceptance varied materially from the option described in the contract. They also contend that their alleged acceptance was, at best, a statement of intent to purchase shares sometime in the future, and the sale was not completed by the deadline specified in the contract. Generally, acceptance of an option must be unqualified, unambiguous, and strictly in accordance with the terms of the agreement. Comeaux, 93 S.W.3d at 220; Crown Const. Co. v. Huddleston, 961 S.W.2d 552, 558 (Tex. App.—San Antonio 1997, no writ). A conditional acceptance of an offer is generally considered a rejection and counteroffer. See United Concrete Pipe Corp. v. Spin-Line Co., 430 S.W.2d 360, 363-64 (Tex. 1968); Hutcherson v. Cronin, 426 S.W.2d 638, 641 (Tex. Civ. App.—Tyler 1968, no writ). But that does not mean the parties to an option cannot modify the option or the terms of the underlying sale by mutual agreement. See Humble Oil & Refining Co. v. Westside Inv. Corp., 428 S.W.2d 92, 94-95 (Tex. 1968); Wall v. Trinity Sand & Gravel Co., 369 S.W.2d 315, 317 (Tex. 1963).
Faucette and Schadler argue that their alleged acceptance varied materially from the option contained in the contract because the parties’ agreement was changed. Specifically, at the July 22 meeting, Faucette and Schadler expressed an intent only to purchase enough shares from Grace so that they would each own 260 shares, the same number as held by Andrew Chantos. Conversely, the offer contained in the contract provided that the “Buyers” shall have the option to purchase
It is undisputed that Grace owned fifty-one percent of the company‘s shares, her son Andrеw owned twenty-six percent of the shares, and Faucette and Schadler owned the rest. The summary-judgment evidence shows that at the July 22 meeting, Faucette and Schadler agreed to exercise the option to purchase Grace‘s shares. That Andrew, one of the “Buyers” defined in the contract, was not purchasing any additional shares does not raise an inference defeating summary judgment. The intended purpose of the option was to enable the majority shareholders (now Grace) to relinquish ownership of the company to the other shareholders (Andrew, Faucette, and Schadler) once they ac-
Faucette and Schadler argue, hоwever, that the alleged acceptance was not made in the manner or within the time the contract required. They point to the contract‘s provision that the option requires the buyers to “purchase” all of the remaining shares and to do so “only in a lump sum.” Therefore, they contend, the contract required them to actually tender performance, not merely to announce an intent to perform without ever tendering any money. As additional support for their interpretation of the contract, Faucette and Schadler point to the “Term of Agreement” provision, which states that the contract “shall terminate unless the Sale and Purchase contemplated in its entirety within thirty-two (32) months from the date of execution of the Agreement.” This language, they contend, requires that actual payment be made prior to the end of thirty-two months to exercise the option. Thus, their mere statements at the July 22 meeting that they were ready to purchase some of Grace‘s stock were not sufficient to accept the option.
In their motion, Grace and Sarco relied on a line of cases holding that unless an
On appeal, Faucette and Schadler argue thаt these cases stand merely for the proposition that unless the option provides otherwise, acceptance of the option does not require the optionee to tender actual payment before the option expires; they do not hold that an optionee may accept an option by mere notice without ever tendering payment. Thus, Faucette and Schadler contend, an optionee who never tenders performance cannot enforce the option. They also argue that the option in
In this case, as in all option cases, the option contract itself is an offer by the optionor to the optionee. By agreeing to purchase the remaining shares at the July 22 meeting—an arrangement that fulfilled the intended purpose of the option—Faucette and Schadler elected to accept the offer. The effect of this election is the formation of a contract that binds both the optionor and the optionee:
Election is the act of the optionee which converts the option contract into a binding promise on the part of the optionor to sell. The effect of a timely and proper election under the сontract, and of a timely and proper acceptance of an offer, is the same, in that the option contract, on the one hand, and the offer on the other, are turned into a bilateral
contract. Having exercised the option by election the optionee must then proceed to perform the conditions of the option contract in order to complete the transaction.
Ferguson v. von Seggern, 434 S.W.2d 380, 385 (Tex. Civ. App.—Dallas 1968, writ ref‘d n.r.e.) (emphasis added); see also Hott, 663 S.W.2d at 854 (“When the optionee gives notice or otherwise complies with the terms and conditions of the option... a bilateral executory contract is formed, one party having the duty to convey and the other the duty to pay.“). The cases in which an optionee exercises the option and thus binds the optionor to perform are legion. See, e.g., Sinclair Refining Co. v. Allbritton, 147 Tex. 468, 218 S.W.2d 185, 188-90 (1949); Smith v. Hues, 540 S.W.2d 485, 490 (Tex. Civ. App.—Houston [14th Dist.] 1976, writ ref‘d n.r.e.); Luccia v. Ross, 274 S.W.3d 140, 149-50 (Tex. App.—Houston [1st Dist.] 2008, pet. denied); Odum v. Sims, 609 S.W.2d 881, 882 (Tex. Civ. App.—San Antonio 1980, no writ); Kenver Corp. v. Robinson, 492 S.W.2d 317, 319-20 (Tex. Civ. App.—Beaumont 1973, writ ref‘d n.r.e.); Giblin v. Sudduth, 300 S.W.2d 330, 332-34 (Tex. Civ. App.—Austin 1957, writ ref‘d n.r.e.); see also El Paso Natural Gas Co. v. W. Bldg. Assocs., 675 F.2d 1135, 1139-41 (10th Cir. 1982) (holding optionee‘s acceptance of option without tender of purchase price created mutually binding contract entitling optionee to specific performance). But the acceptance of an option ascribes contraсtual duties to the optionee in the same way that it does the optionor. By notifying Grace and Sarco of their intent to exercise the option, Faucette and Schadler entered into a bilateral contract and became obligated to perform.
Because we affirm the trial court‘s grant of summary judgment in favor of Grace and Sarco, we do not address Faucette and Schadler‘s competing motion for summary judgment.
We overrule Faucette and Schadler‘s first issue.
Damages for Breach of Option Contract
In their second issue, Faucette and Schadler contend that the evidence is legally and factually insufficient to prove damages for breach of contract. They argue that Grace was awarded what she would have received from the sale of the remaining shares of Sarco without any evidence of the value of the shares she should have surrendered in the transaction. According to Faucette and Schadler, proper proof of damages required not only evidence of the amount Grace would have received had the sale of the shares been performed, but also evidence of the value of the shаres she would have surrendered in the transaction. See Miga v. Jensen, 96 S.W.3d 207, 215 (Tex. 2002) (holding damage award resulting from a breach of an agreement to purchase securities is the difference between the contract price and the fair market value of the asset at the time of the breach); Holt Atherton Indus. Inc. v. Heine, 835 S.W.2d 80, 84 (Tex. 1992) (evidence of lost income was legally insufficient to prove lost profits). They also argue there was undisputed evidence that she retained the shares, sold assets of the company, and kept the proceeds for herself.
When examining a factual-sufficiency challenge, we consider and weigh all the evidence, both supporting and contradicting the finding. Mar. Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex. 1998). We set aside the fact finding only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986).
Initially, we note that the jury was asked to determine Grace‘s damages for the breach of contract the court had found. The question was worded as follows:
What sum of money, if any, if paid now in cash, would fairly and reasonably compensate Grace C. Chantos for her damages, if any, that resulted from such breach of contract?
Consider the following elements of damages, if any, and none other:
The amount Grace C. Chantos would have received for the sale of her 502 shares of the business corporation if H. Frank Faucette and J. Lawrence Schadler had not breached the Sale and Purchase Agreement.
At the charge conference, Faucette‘s and Schadler‘s only objection to this question
Here, the jury was instructed that the measure of damages is the amount of money Grace “would have received for the sale of her 502 shares” of the company had Faucette and Schadler not breached the contract. Under the terms of the contract, the price per share was $383. The jury awarded $192,266, which is exactly the share price multiplied by 502. Therefore, the jury‘s answer is supported by legally sufficient evidence. And, although Faucette and Schadler com-
Having overruled Faucette and Schadler‘s second issue, we next turn to Grace and Sarco‘s cross-appeal.
III
Tortious Interference
At trial, the jury found Faucette and Schadler tortiously interfered with Sarco‘s manufacturers’ representative contracts with Elkay and Vanguard. In a single issue, Sarco contends the trial court erred in granting Faucette and Schadler‘s motion for JNOV on the tortious-interference findings because Sarco presented legally sufficient evidence of each element of that cause of action.
A trial court may disregard a jury‘s verdict and render a judgment notwithstanding the verdict if no evidence supports one or more of the jury‘s findings or if a directed verdict would have been proper. Tiller v. McLure, 121 S.W.3d 709, 713 (Tex. 2003). The final test for legal sufficiency is whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). To determine whether the trial court erred in rendering a JNOV, we review the entire record, crediting favorable evidence if reasonable jurors could and disregarding contrary evidence unless reasonable jurors could not. Id. at 807.
To prevail on a tortious-interference claim, Sarco was required to prove: (1) contracts existed which were subject to Faucette and Schadler‘s interference; (2)
Sarco argues that the evidence shows that Faucette and Schadler intentionally destroyed Sarco‘s business for their own financial gain. Specifically, Faucette and Schadler, while receiving salaries and bonuses from Sarco to enable them to purchase the company and promising they were continuing with the purchase, persuaded the manufacturers who had been with Sarco for over twenty years to terminate their contracts so they could do business with Faucette and Schadler‘s new company, Tri-Rep. Further, Faucette and Schadler planned their method of departure from Sarco—resigning without notice when Grace was out of the state and taking the only other salesman with them—knowing it would cause great harm to Sarco.
Faucette and Schadler respond that Sarco‘s claim is not one for tortious interference with existing contracts, but is actually one for tortious interference with prospective contracts. They point out that Elkay and Vanguard complied with their contracts, giving Sarco the contractually required thirty-day notice of termination, and that Sarco continued to act as manufacturer‘s representative for those thirty days. According to Faucette and Schadler, Sarco is actually seeking to recover damages for the loss of the prospect that Elkay and Vanguard would continue to renew the manufacturer‘s representative contracts indefinitely.
This distinction is significant because in Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 726 (Tex. 2001), our supreme court held that to prevail on a claim for tortious interference with prospective contracts the plaintiff must additionally prove that the defendant‘s conduct was “independently tortious or wrongful.” The Sturges court explained that conduct that is merely “sharp” or perceived as “unfair competition” is not actionable as the basis for this tort. Id. The plaintiff is not required to prove an independent tort; instead, the plaintiff need only establish that the defendant‘s conduct would be actionable under a recognized tort. Id.
Thus, after Sturges, the following formulation of thе elements of the tort has been adopted:
(1) a reasonable probability that the parties would have entered into a contractual relationship;
(2) an “independently tortious or unlawful” act by the defendant that prevented the relationship from occurring;
(3) the defendant did such act with a conscious desire to prevent the relationship from occurring or knew that the interference was certain or substantially certain to occur as a result of his conduct; and
(4) the plaintiff suffered actual harm or damage as a result of the defendant‘s interference.
See Baty v. ProTech Ins. Agency, 63 S.W.3d 841, 860 (Tex. App.—Houston [14th Dist.] 2001, pet. denied). Faucette and Schadler contend that Sarco does not even attempt to meet the burden of showing independently tortious conduct.
Sarco contends that Sturges does not apply because its claims were brought for tortious interference with existing contracts. Sarco points out that that it proved the existence of its contracts with the manufacturers and that Faucette and Schadler deprived Sarco of the benefits of those contracts. Sarco further points out that under Texas law the terminable-on-
But as to terminable-on-notice or terminable-at-will contracts, the protection Juliette Fowler Homes and Sterner provide is somewhat limited. The supreme court has also instructed that a party cannot be liable for inducing another party “to do what it had a right to do” under a contract. ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 431 (Tex. 1997). Thus, a third party is prohibited from tortiously interfering with a terminable-on-notice or terminable-at-will contract, but “merely inducing one of the parties to exercise his right to terminate contractual relations after giving the required notice does not necessarily constitute tortious interference with contract under Texas law.” Juliette Fowler Homes, Inc., 793 S.W.2d at 667. Likewise, “harm that results only from lawful competition is not compensable by the interference tort.” Sturges, 52 S.W.3d at 727.
This court has recognized that tortious interference with prospective contractual relations includes continuing business relations. See Heil-Quaker Corp. v. Mischer Corp., 863 S.W.2d 210, 214 (Tex. App.—Houston [14th Dist.] 1993), writ granted, judgm‘t vacated w.r.m., 877 S.W.2d 300 (Tex. 1994). In Heil-Quaker, the appellants argued there was no evidence to support the jury finding of tortious interference with business relations because the tortious interference alleged was directed to an existing contract rather than a prospective contractual relationship. Id. at 214. The court rejected this contention, stating that tortious interference with business or prospective contractual relations concerns not only business relations that have not yet been reduced to a сontract but also continuing business relations not amounting to a formal contract. Id. (citing
More recently, in an appeal from a summary judgment, the Fort Worth court of appeals rejected a contention that a claim for tortious interference with pro-
In the context of at-will or terminable-on-notice contracts, the Restatement provides further support for the conclusion that the loss of the contract due to another‘s tortious acts is properly considered tortious interference with prospective, or continuing, business relations:
One‘s interest in a contract terminable at will is primarily an interest in future relations between the pаrties, and he has no legal assurance of them. For this reason, an interference with this interest is closely analogous to interference with prospective contractual relations. (See § 766B).
We conclude, therefore, that under the facts of this case, Sarco‘s claim is
Because we have concluded that Sarco‘s claim is one for tortious interference with prospective contracts, Sarco was required to demonstrate that, among other things, Faucette аnd Schadler engaged in independently tortious or unlawful acts that interfered with its business relations with Elkay and Vanguard. See Sturges, 52 S.W.3d at 726.7 But Sarco does not assert that Faucette and Schadler engaged in any independently tortious conduct.8 In the absence of any evidence to support this element of the cause of action, we conclude the trial court did not err in granting the JNOV.
Sarco contends, however, that it is not required to demonstrate that a contract was breached to show actionable interference with contract relations. Instead, Sarco argues that a party may be liable for interference by actions that do not necessarily induce a breach of contract but which injure persons so that they are unable to perform a contract, destroy or damage property that is the subject matter of a contract, or make performance of a contract “more burdensome, difficult or
Sarco‘s argument fails, however, because it conflates distinct theories of tortious interference in a way that is inconsistent with the jury questions and the evidence. Sarco‘s authorities address the situation in which a plaintiff may recover for tortious interference with the plaintiff‘s performance of her own contracts, not tortious interference with the other party to the contract‘s performance. For example, in Tippett v. Hart, Hart sued Tippett for allowing his cattle to graze on her land without her permission, causing her to breach a contract she had with a governmental agency that prohibited grazing. See 497 S.W.2d at 607-11. Likewise, the Restatement (Second) of Torts section 766A, entitled “Intentional Interference with Another‘s Performance of His Own Contract,” provides as follows:
One who intentionally and improperly interferes with the performance of a contract... between another and a third person, by preventing the other from performing the contract or causing his performance to be more expensive or burdensome, is subject to liability to the other for the pecuniary loss resulting to him.
Here, the jury was asked whether Faucette and Schadler tortiously interfered with Sarco‘s contracts with Elkay and Vanguard—not whether Faucette and Schadler tortiously interfered with Sarco‘s own performance of its contracts with Elkay and Vanguard. Even if we read the jury question broadly enough to encompass this theory, there is no evidence that Faucette and Schadler tortiously interfered by preventing Sarco from performing its contracts with Elkay and Vanguard. Elkay and Vanguard notified Sarco that they were exercising their contractual rights to terminate their contracts on thirty days’ notice almost immediately after Faucette‘s and Schadler‘s resignаtions, and Sarco points to no evidence that Faucette‘s and Schadler‘s actions impaired or destroyed its ability to perform its contracts with Elkay and Vanguard during the remaining thirty days of each contract. As previously discussed, Sarco‘s real com-
Therefore, viewing the evidence in a light most favorable to the jury‘s verdict, we hold that the trial court did not err in granting Faucette and Schadler‘s motion for JNOV, and we overrule Sarco‘s issue.
* * *
Having overruled the parties’ issues on appeal and cross-appeal, we affirm the trial court‘s judgment.
(FROST, J. concurring and dissenting).
KEM THOMPSON FROST, Justice, concurring and dissenting.
To the extent this court affirms the trial court‘s judgment notwithstanding the verdict as to the tortious-interference-with-contract claims, I concur in the judgment. To the extent this court affirms the trial court‘s judgment awarding recovery on the breach-of-contract claims and dеclines to render a take-nothing judgment on these claims, I respectfully dissent.
Under the unambiguous language of the agreement in question, to exercise their option to acquire the remaining shares of the corporation, the option holders had to make the purchase by means of a lump-sum payment within a specified time from the execution date of the contract, and if this purchase did not occur within that time frame, the agreement and the option in it would terminate. It is undisputed that the option holders never purchased the remaining shares, and the plaintiffs judicially admitted that the contract upon which they base their breach-of-contract
Relevant Background
Plaintiffs/appellees/cross-appеllants Grace C. Chantos and A.J. Chantos & Associates, Inc., d/b/a Sarco of Texas (hereinafter collectively, the “Chantos Parties“)¹ sued defendants/appellants/cross-appellees H. Frank Faucette and J. Lawrence Schadler (hereinafter collectively, the “Option Holders“) for breach of a written contract entitled “Sale and Purchase Agreement” (hereinafter, the “Contract“). Grace Chantos, Grace‘s husband Andrew J. Chantos, Faucette, and Faucette‘s wife executed the Contract on May 25, 2001. Schadler and his wife executed the Contract on July 24, 2001.
In a section of the Contract entitled “Sale and Purchase,” the parties detailed the contemplated sale of the shares of A.J. Chantos & Associates, Inc., d/b/a Sarco of Texas (hereinafter, “Sarco“) by Grace and her husband to the Option Holders and Andrew J. Chantos (collectively hereinafter, the “Buyers“). The parties agreed that during the first thirty months of the Contract or until the Buyers acquired forty-nine percent of the Sarco shares, whichever occurred first, the Option Holders
It is undisputed that, by July 22, 2003, the Buyers had acquired forty-nine percent of the Sarco shares and that they had the option to purchase the remaining Sarco shares provided in the Contract (hereinafter, the “Option“). The Chantos Parties moved for partial summary judgment as to the Option Holders’ liability on the breach-of-contract claims. In their sole ground for summary judgment, the Chantos Parties asserted that the summary-judgment evidence conclusively proves that (1) the Option Holders exercised the Option by giving oral notice to Grace at the July 22, 2003 meeting of their acceptance and intent to exercise the Option; and (2) thе Option Holders breached the Contract by failing and refusing to purchase the remaining Sarco shares from Grace. The Chantos Parties agreed that acceptance of an option must be unqualified, unambiguous, and strictly in accordance with the
Both in response to the Chantos Parties’ motion and as a ground for summary judgment in their own motion for final summary judgment, the Option Holders asserted that, under the Contract, the parties specified the manner in which the Option Holders had to exercise the Option—they had to purchase Grace‘s remaining shares in a lump-sum payment by the End Date. The summary-judgment evidence conclusively proves that the Option Holders did not purchase Grace‘s remaining shares by the End Date. Therefore, the Option Holders asserted, (1) the Contract terminated by its own terms; and (2) the Option Holders had no obligation to purchase the remaining shares under the Contract and did not breach any of its terms. The Option Holders attached to their motion for summary judgment responses to requests for admissions, in which the Chantos Parties judicially admitted that the Contract terminated within thirty-two months of the Contract‘s execution date and that the Contract was currently terminated.
The trial court denied the Option Holders’ summary-judgment motion and granted the Chantos Parties’ motion, ruling
Principles of Option Law
When one acquires an option to purchase property, the holder of the option purchases the right to compel a sale of the property on the stated terms before expiration of the option. See Comeaux v. Suderman, 93 S.W.3d 215, 219–20 (Tex. App.—Houston [14th Dist.] 2002, no pet.). Option contracts have two components: (1) an underlying contract that is not binding until accepted and (2) a covenant to hold open to the option holder the opportunity to accept. See id. at 220. Before the option can ripen into an enforceable contract of sale, however, the option holder must manifest his acceptance. See id. Acceptance of an option must be unqualified, unambiguous, and strictly in accordance with the terms of the agreement. See id. For this reason, a failure to exercise an option according to its terms, including untimely or defective acceptance, is simply ineffectual, and legally amounts to nothing more than a rejection. See id. If the contract is silent regarding the method of exercising the option, the option holder may exercise the option by timely giving notice to the optionor of the option holder‘s intent to exercise the option, and the option holder also may be required to tender performance within a reasonable time.2 See English v. English, 44 S.W.3d 102, 105 (Tex. App.—Houston [14th Dist.] 2001, no pet.).
In construing contracts, this court‘s primary concern is to ascertain and give effect to the intentions of the parties as expressed in the contract. Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex. 1998). To ascertain the parties’ true intentions, this court must examine the entire agreement in an effort to harmonize and give effect to all provisions of the contract so that none will be rendered meaningless. MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 652 (Tex. 1999). Whether a contract is ambiguous is a question of law for the court. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). A contract is ambiguous when its meaning is uncertain and doubtful or is reasonably susceptible to more than one interpretаtion. Id. But, when a written contract is worded so that it can be given a certain or definite legal meaning or interpretation, it is unambiguous, and the court construes it as a matter of law. Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex. 2003). This court cannot rewrite the Contract or add to its language under the guise of interpretation. See id. at 162. Rather, this court must enforce the Contract as written. See Royal Indem. Co. v. Marshall, 388 S.W.2d 176, 181 (Tex. 1965).
Analysis of the Contract
In the Contract, the parties agreed that, if the Buyers acquired at least forty-nine percent of the outstanding Sarco shares,
In their Contract, the parties required the Option Holders to purchase Sarco stock up to the forty-nine-percent threshold. The parties could have required the Option Holders to purchase the remaining stock; however, the parties chose not to do so. Instead, they agreed to contractual
Conclusion
The sole ground asserted in the Chantos Parties’ motion for summary judgment lacks merit.4 In their crоss-motion, the Option Holders proved as a matter of law that they did not exercise the Option and that the Contract terminated by its own terms.5 Though the majority notes the Option Holders’ arguments in this regard, the majority does not address these arguments or explain why they lack merit. The court should address these arguments, sustain the Option Holders’ first issue, and hold that the trial court erred by failing to grant the Option Holders’ motion.6 Accordingly, this court should reverse the trial court‘s judgment and render judgment that the Chantos Parties take nothing.