Lead Opinion
OPINION ON APPELLANT’S MOTION FOR REHEARING
INTRODUCTION
Appellant’s Motion for Rehearing is granted in part. This court’s original opinion and judgment, issued February 27, 1998, are withdrawn and this opinion and judgment are substituted. In our original opinion, we affirmed the trial court’s judgment on all points except the assessment of interest on appellate attorneys’ fees. Specifically, with regard to the legal and factual sufficiency of the evidence to support the award of attorneys’ fees, we held that appellant’s points of error were waived. Because preservation of sufficiency points of error is not required in non-jury trials, we modify our opinion on rehearing to consider the merits of those claims relating to attorneys’ fees.
This is an appeal from a breach of contract case. The trial judge found that appellant, Jos Antonio O’Farrill Avila (O’Farrill), had breached two contracts with appellee, Louisa González-Chacon (Gonzalez). The court awarded González $200,000 on the contract claims, plus attorneys’ fees and fees for ap
FACTS
This lawsuit arises from a three-year domestic relationship between the parties, a relationship that has produced a daughter, a corporation, and a tangle of litigation, including a paternity suit, tort claims, contract claims, alter ego claims, and child support claims. Many of the issues have been resolved; some are still pending.
In the ease before us, the trial judge was asked to consider the validity and effect of two agreements between the parties: a promise, written and signed by O’Farrill on July 5, 1994, to pay González $5,000 per month, and an agreement between the two regarding the purchase of the home they shared in San Antonio. The trial court determined that both agreements reflected enforceable contracts.
The July 5 document, written and signed by O’Farrill in Mexico City, is a bare promise to make monthly payments to González. The document makes no mention of duration of these payments or of any return promise made by González. The trial court allowed extrinsic evidence on both issues. González testified that, in exchange for the money, she had promised to live with the child in San Antonio and to remain home with her rather than seek employment. As for the duration of the agreement, González admitted that the agreement was silent on the matter, but she testified that her understanding was that O’Farrill did not want his child raised by strangers, and the money therefore was a guarantee that González would remain with the child throughout the formative years, until the child was settled in school. O’Far-rill did not appear at trial to controvert this testimony.
The second agreement between the parties was to purchase a home in San Antonio. According to González, she agreed to contribute $60,000 up front for the home, and O’Far-rill agreed to make monthly payments on the remaining debt. As proof of this agreement, González offered her own testimony and the loan documents for the home. These papers reflected only the agreement between the purchasers and the loan company. González testified that she performed her part of the agreement fully, but that O’Farrill ceased making mortgage payments after less than two years, when González initiated legal action against him. The bank holding the mortgage on the home has foreclosed on the property. Again, O’Farrill was not present at trial to present controverting testimony.
In eleven points of error, O’Farrill appeals the judgment against him, claiming that (1) there is legally or factually insufficient evidence to support the existence of the two contracts; (2) there is legally or factually insufficient evidence to support the finding that O’Farrill breached the agreements; (3) the trial court erred in admitting parol evidence to prove the contracts and their terms; (4) the trial court erred in upholding the Mexico City agreement despite want of consideration; (5) the evidence is legally or factually insufficient to support the award of $200,000; (6) the trial court erred in failing to make separate findings on each contract claim; (7) the evidence is legally or factually insufficient to support the amount of attorneys’ fees awarded; (8) the evidence is legally or factually insufficient to support the amount of attorneys’ fees awarded for appeals to this and the supreme court; (9) the trial court erred in awarding attorneys’ fees when the plaintiff had not segregated fees for the contract claims from fees incurred on other, unsuccessful, claims between the parties; (10) the trial court erred in assessing interest on appellate attorneys’ fees from the date of judgment rather than the date of perfection of the appeal or the date on which application for writ of error is filed; and (11) the trial court abused its discretion in granting the plaintiff judgment against the defendant.
POINTS OF ERROR ONE-SIX: THE CONTRACT CLAIMS
O’Farrill’s first six points of error address the existence and breach of the agreements between the parties. Points of error one and two allege that the evidence is legally or factually insufficient to support a finding that the contracts existed or that they were breached. Points of error three and four
Sufficiency Standards of Review
We will review fact findings in a bench trial for legal and factual sufficiency of the evidence by the same standards used in reviewing the evidence supporting a jury’s verdict. See W. Wendell Hall, Revisiting Standards of Review in Civil Appeals, 24 St. Mary’s L.J. 1045, 1145 (1993).
Conclusions of law are not binding on an appellate court, which is free to make its own legal conclusions. Muller v. Nelson Sherrod & Carter,
To test the legal sufficiency of evidence supporting a fact finding, this court must view only the evidence supporting the finding and all inferences to be drawn from that evidence. All contrary evidence and inferences must be disregarded. Stafford v. Stafford,
To test the factual sufficiency of the evidence supporting a fact finding, this court must view and weigh all the evidence and will reverse only if the evidence supporting the finding is so weak that the finding is manifestly wrong and unjust. Cain v. Bain,
It is clear, then, that the absence of O’Far-rill’s testimony on the contracts does not guarantee success for González on appeal. To be legally sufficient, the evidence presented by her must be competent and admissible and support a viable legal theory. The evidence presented, even if uncontroverted, could conceivably fail a factual sufficiency review if sufficiently weak.
Consideration
O’Farrill claims that the promise to pay González $5,000 per month cannot be enforced because it has not been proven as a contract. A contract, O’Farrill correctly asserts, must be supported by consideration, and this agreement recites no consideration. González testified at tidal that she gave consideration for O’FarriH’s promise: her promise to remain in San Antonio and to stay at home with the couple’s daughter. Gonzalez’s testimony, coupled with the fact that she did remain in San Antonio with the child, provides some evidence to support this claim. O’Farrill did not offer any contrary evidence. We do not find González’s evidence so weak as to render the result wrong or manifestly unjust result.
O’Farrill counters that this evidence is legally insufficient, because González is barred by the parol evidence rule from introducing extrinsic evidence regarding consideration.
When parties have entered a valid agreement that embodies all the terms of that agreement, parol evidence may not be used to show inconsistent prior or contemporaneous agreements. Hubacek v. Ennis State Bank,
The document presented to the trial court is, on its face, no more than a unilateral promise to pay, which is not an enforceable contract. See Federal Sign v. Texas Southern Univ.,
Even if the promises were not mutual at the time of contracting, the parties’ performance on the agreement renders the contracts enforceable. The Texas Supreme Court stated in Hutchings v. Slemons,
Though a contract be void for lack of mutuality at the time it is made, and while it remains wholly executory, yet, when there has been even a part performance by the party seeking to enforce the same, and in such part performance such party has rendered services or incurred expense contemplated by the parties at the time such contract was made, which confers even a remote benefit on the other party thereto, such benefit will constitute an equitable consideration, and render the entire contract valid and enforceable.
Hutchings,
O’Farrill next argues that González’s promise is illusory, because she can remain in the United States only at the mercy of the U.S. government. An illusory promise is a promise that fails to bind the promisor, who retains the option of discontinuing performance. See CRC-Evans Pipeline Int’l, Inc. v. Myers,
González’s promise to O’Farrill was twofold: she promised to remain in the States and she promised to forego pursuing her career to stay home with the couple’s daughter. Even if the first promise were illusory, the second is not. She has, so far, performed her part of the agreement, arguably to her detriment.
Duration
O’Farrill argues that the agreement between himself and González is too uncertain to be enforceable. Specifically, O’Farrill complains that the agreement itself contains no specific term of duration for the monthly payments -and that González’s testimony on this issue was inconsistent: her pleadings suggested that the payments were to be for life; at trial she claimed they were to be for ten or fifteen years, or until the child was not so dependent on a parent being at home. O’Farrill asserts that a contract cannot be enforced when one of the parties is unclear on its duration.
The law on certainty of contract terms is anything but certain. It is difficult to derive clear guidelines from the case law. Courts at least pay lip service to the notion that a contract must be reasonably certain to be enforceable. See Bendalin v. Delgado,
Courts have also been willing to supply missing terms when necessary to effectuate the purposes of the parties under the agreement. Lake LBJ Mun. Utility Dist. v. Coulson,
The reasonableness of the implied duration term is determined by “the circumstances in evidence surrounding the situation of the parties and the subject matter under which the contract was executed.” Cheek v. Metzer,
Here, the trial court had sufficient evidence that an agreement had been made, especially in light of the parties’ performance, full or partial, of that agreement. This agreement is sufficiently certain to be enforced, and the parties’ duties are sufficiently detañed, as described by González’s testimony.
We find that the trial court had evidence of the circumstances at the time this agreement was made. The couple had a baby. Gonzá-lez testified that O’Farrill was concerned that the chüd have a full-time mother. González had a career, and staying home with the chüd would entaü sacrificing that career, at least for awhüe. González also testified that the concern about having a full-time mother would naturally lessen when the chüd entered school. We find that, based on this uncontroverted testimony, the trial court could have arrived at a reasonable duration term.
That González testified and pleaded, inconsistently, that the agreement was meant to last for a longer period of time or for her lifetime does not change this outcome. Upon finding an essential term missing, the trial judge, in implying that term, is only to consider what was reasonable to the parties in light of the circumstances at the time the agreement was made, not what the parties may believe is reasonable at the time of trial. González’s conflicting testimony on the intended duration of the agreement suggests not that there was no agreement, but that the agreement simply did not include a duration term.
There is precedent for disregarding González’s testimony on this issue. In Beago v. Ceres,
Statute of Frauds
O’Farrill next contends that both agreements fall within the Statute of Frauds because both, by necessity, could not be performed within one year.
There was sufficient evidence at trial that the Statute of Frauds did not apply or that an exception to the Statute applied. As González points out, partial performance removes the contract from the Statute of Frauds. See Central Power & Light Co. v. Del Mar Conservation Dist.,
González testified that she had fully performed her end of the agreements. She put $60,000 of her own money down on the house. In addition, she remained in San Antonio and did not pursue her career, as agreed in the Mexico City agreement. O’Farrill partly performed on both agreements. First, he made the $5,000 monthly payments for several months. Second, according to González’s uncontroverted testimony, O’Farrill paid the monthly mortgage on the Inwood home for almost two years, ceasing to make payments only when Gonzá-lez filed suit against him.
O’Farrill had the burden of pleading and proving the applicability of the Statute of Frauds. Tex.R. Crv. P. 94. Although he pleaded it, he presented no evidence in support of his pleading and thus failed to meet his burden.
Parol Evidence
González offered parol, or extrinsic, evidence on three issues: duration, the terms of the agreement concerning the cou-pie’s home, and consideration. We have already determined that parol evidence on consideration was admissible. As for duration, we find that the trial judge did not rely on González’s testimony on the specific duration of the agreement. Instead, the court implied a reasonable duration, relying on testimony regarding the circumstances at the time the agreement was made. An implied term does not need to be proven by parol evidence.
As O’Farrill points out, in Texas, employment contracts calling for continuing or successive performance have been held to be unambiguous as to duration (in other words, they may be terminated at will). Clear Lake City Water Auth.,
As for the testimony regarding the purchase of the couple’s home, we note that this agreement was oral. The parol evidence rule applies only to agreements whose final expression was made in writing and are binding contracts. Gannon v. Baker,
Sufficiency of Evidence on Damages
In his fifth point of error, O’Farrill claims that the evidence was legally, or alternatively, factually insufficient to support the trial
O’Farrill claims that there is no evidence to support an award of $60,000 on the house (assuming this is what Judge Peeples ordered) because the loan had been foreclosed, and there was no further obligation on Gon-zález to pay on the mortgage. Because the home was held in a corporate name, any debt or surplus after foreclosure would accrue to the corporation. In addition, the findings do not reflect that the value of González’s occupying the home for more than a year was accounted for.
Damages for breach of contract protect three interests: a restitution interest, a reliance interest, and an expectation interest. CalamáRI & Perillo at § 14-4. In order to put the aggrieved party in the same position he or she would occupy if the other party had fully performed, each of these interests must be protected. Id. A court must determine “what additions to the injured party’s wealth have been prevented by the breach and what subtractions to his wealth have been caused by it.” Mistletoe Exp. Serv. of Oklahoma City, Okla. v. Locke,
González requested damages of $60,000 in her pleadings; we find this to be a request to recover her reliance interests in the contract. The trial court found that the agreement had been breached, and we may infer that this finding encompasses recovery for reliance interests. See Tex.R. Civ. P. 299 (appellate court will not presume findings, no element of which has been included in the findings of fact, but where one element of a cause is found, others may be implied if there is supporting evidence); see also Brown v. Frontier Theatres, Inc.,
We find also that a measure of damages based on reliance interests was tried by consent. Tex.R. Civ. P. 67. At no time during trial did O’Farrill object that the requested $60,000 did not comport with González’s breach of contract pleading. O’Far-rill’s post-trial motions — the request for additional findings of facts and conclusions of law and the motion for a new trial — also did not raise the point. O’Farrill did lodge a no- or insufficient-evidence claim against the damages award, but this did not adequately put the trial judge on notice of any discrepancy between the pleadings, the proof, and the trial judge’s findings. See Tex.R. Civ. P. 90 (any defects in pleadings are waived in bench trial unless specifically pointed out to trial judge before judgment is signed); see also Sage Street Assoc. v. Northdale Constr. Co.,
As for the damages on the contract for González’s monthly support, evidence existed for the trial court to determine a reasonable duration and to award González damages for that period of time.
Findings of Fact and Conclusions of Law
In point of error six, O’Farrill asserts that the trial judge committed reversible error by not segregating the contract claims and awards in his findings of fact and conclusions
The relevant findings are:
Findings of Fact
a. Two valid contracts existed between the parties.
c. LOUISA GONZALEZ’S damages for JOS ANTONIO O’FARRILL AVILA’S breach of contract are $200,000.
Conclusions of Law
a. Plaintiff should have judgment against Defendant for her damages in the amount of $200,000 and her attorney fees as set forth above.
O’Farrill’s relevant requested finding of fact and conclusion of law states:
1. That two items which the Court determines to be contracts which existed between Petitioner and Respondent consisted of: (1) the July 5, 1995 document ..., which the court determines to be a contract, in which Respondent promises to pay Petitioner $5,000 per year and to see her once per year, and (2) the agreement which Petitioner alleges existed between Petitioner and Respondent whereby the two agreed to form a partnership with the purpose of realizing a profit through making investments.4
This requested finding does not comport with O’Farrill’s point of error, which is that the trial court’s failure to segregate the two contract claims makes it impossible to determine the apportionment of damages. O’Farrill’s requested finding asks the trial court to identify the two contracts but not to apportion the award between them.
The law is unequivocal: it is incumbent upon appellants to request additional findings on a contested issue if they desire such findings. See Flintkote Supply Co. v. Thompson,
POINTS OF ERROR SEVEN-NINE: FEES
In these points of error, O’Farrill claims that (1) there was legally or factually insufficient evidence to support the $25,000 award of attorneys’ fees; (2) there was legally or factually insufficient evidence to support awards for attorneys’ fees on appeal; and (3) the trial court erred in awarding attorneys’ fees when Gonzalez’s attorneys made no attempt to segregate fees incurred on other claims. González claims that O’Far-rill did not properly preserve error on the first two claims by seeking a directed verdict or relief through a motion for new trial. However, when appealing from a non-jury trial, an appellant is not required to preserve allegations of legal or factual insufficiency. Those claims may be raised for the first time on appeal. See Tex.R.App. P. 52(d) (Vernon 1996) (stating preservation not required, after nonjury trial, for factual and legal sufficiency claims) (replaced and modified by Texas Rule of Appellate Procedure 33.1); Tex. R.App. P. 33.1 comment (stating former Texas Rule of Appellate Procedure 52(d) is embodied in Texas Rule of Civil Procedure 324); Tex.R. Crv. P. 324(a)(b).
However, we find that the trial court had before it both legally and factually sufficient evidence upon which to base the award of trial and appellate legal fees. As for trial fees, two attorneys representing González testified that a forty-percent contingency fee was reasonable. One attorney specifically testified that the forty-percent figure was reasonable in light of the small amount of money paid to the attorney up front and in light of the “substantial amount of work involved in recovering the sums due to the plaintiff.” See Arthur Andersen & Co. v. Perry Equip. Corp.,
Gonzalez’s attorneys also testified as to what they believed a reasonable hourly fee was. This was credible, legally sufficient evidence. Further, it was uncontroverted by O’Farrill. It survives a factual sufficiency challenge.
The trial judge awarded González’s attorneys $25,000, or 12.5 percent of the total award. This award suggests that the court did not award fees based solely on evidence of an agreement between González and her attorneys, but instead took such factors as reasonableness, effort expended, and complexity of the case into account, as the court was mandated to do. See Arthur Andersen,
O’Farrill also challenges the award of appellate attorneys fees. After both sides rested, the trial judge invited González’s attorneys to offer proof of their appellate attorneys’ fees. One of the attorneys for González testified that, in his opinion, reasonable appellate fees ranged between $15,000 and $25,000, depending on the complexity of the issues. In this case, taking those factors into account, he stated that he believed $15,000 would be reasonable. He also testified that, should the case go on to the Texas Supreme Court, another $5,000 to $7,000 would be required. O’Farrill’s attorney cross-examined the witness regarding the witness’s experience in filing appeals. O’Farrill’s attorney then took the stand and testified that reasonable appellate fees for an appeal to this court would be $1,500, and another $1,500 for an appeal to the Texas Supreme Court.
This conflicting testimony raised a fact issue, which was resolved by the trial judge when he awarded $10,000 in appellate fees for an appeal to this court and $5,000 for an appeal to the state supreme court. This amount was somewhat less than requested and a great deal more than O’Farrill’s attorneys argued was reasonable. See id. (holding that conflicting testimony raised fact issue; fact finder was not obliged to accept one expert’s testimony over the other). Legally sufficient evidence was before the trial judge on which he could base this decision. We cannot say the award is so against the great weight of the evidence as to be manifestly unjust. We affirm the award of appellate attorneys’ fees.
The third point, that fees were not segregated, is waived. In Southern Concrete Co. v. Metrotec Fin. Inc.,
POINT OF ERROR TEN: INTEREST ON APPELLATE FEES
In this point of error, O’Farrill claims that the trial court erred in setting the date of judgment as the date on which interest on appellate attorneys’ fees should begin to run. O’Farrill argues that the appeal to this court does not begin until appeal is perfected, so interest should run from that date forward. Similarly, interest on the award for Supreme Court fees should not begin running until a writ of error is filed.
González cites two cases that support O’Farrill’s argument that the beginning date should be the date appeal is taken: Southwestern Bell Co. v. Vollmer,
Since the award of appellate fees must be conditioned on the appellant’s failure at the appellate level, Haynes & Boone v. Bowser Bouldin, Ltd.,
POINT ELEVEN and CONCLUSION:
ABUSE OF DISCRETION
In his final point of error, O’Farrill claims that the trial judge abused his discretion in entering judgment against him.
We find no abuse of discretion. When reviewing a judgment for abuse of discretion, an appellate court must determine whether the trial court acted without reference to any guiding rules and principles; i.e., if the trial court acted arbitrarily or unreasonably. Downer v. Aquamarine Operators, Inc.,
We affirm the judgment as reformed.
Concurring and dissenting opinion by DUNCAN, J.
Notes
. Of course, O'Farrill could have challenged this testimony and the very existence of a mutual agreement by appearing at trial and presenting his version of what the memorandum meant.
. O’Farrill also claims the agreement to purchase the Inwood house must have been in writing because it was an agreement to purchase real estate. See Tex. Bus. & Com.Code Ann. § 26.01(b)(4) (Vernon 1987). Because the doctrine of partial performance applies to both agreements, we need not reach this issue. However, this provision of the Statute of Frauds applies to agreements to buy and sell land between owners and purchasers. The agreement before us was simply an agreement between two buyers as to how they would delegate the duties between them when they purchased a home.
. The nature of the award makes it impossible to determine how Judge Peeples apportioned damages. He upheld the two contracts together, and awarded $200,000 on both. Assuming Judge Peeples awarded González the full $60,000 on the contract regarding the home, $140,000 remains to be accounted for. Assuming, too, that he used the $5,000-per-month figure to determine remaining damages, he awarded damages on the agreement regarding support for 28 months, or two years and four months.
. The remaining requested findings detail the consideration found for each agreement.
. We disagree with O’FarriU's contention, on motion for rehearing, that former Rule 52(d), now reflected in Texas Rule of Civil Procedure 324, allows this error to he brought on appeal for the first time. The former rule, which is the clearest expression of the rule’s substance, exempts legal and factual sufficiency complaints and complaints of the adequacy or inadequacy of damages from the general rule requiring preservation of error. Failure to segregate fees must be preserved. We reject O'Farrill’s claim that the point of error can be characterized as a sufficiency of the evidence point. O’FarriU's claim on appeal to this court was that, because some of the unsuccessful claims involved torts, for which attorneys’ fees cannot be recovered, segregation was mandated. However, even if preservation were necessary, we would reject this claim. One of González's attorneys did specifically state that she was excluding work done on a collateral case. See Bullock v. Kehoe,
Concurrence Opinion
concurring and dissenting.
I concur in the majority’s judgment (only) insofar as it affirms that part of the damages representing Gonzalez’s loss arising out of her $60,000 down payment on the house. I dissent, however, from the majority’s judgment insofar as it affirms an award for breach of the alleged agreement to pay $5,000 a month for some period of time. On the state of this record, I do not believe it is remotely possible to “understand what the promisor undertook.” T.O. Stanley Boot Co. v. Bank of El Paso,
