OPINION ON REHEARING
After reviewing appellee/cross appellant, Lawrence Blackwell’s motion for rehearing and/or motion for en banc reconsideration, we deny the motions. We withdraw our December 11, 2008 opinion and judgment and substitute the following.
This is a breach of employment-contract case. The key issue is whether the oral employment contract in question is unen-forceably indefinite as a matter of law. We hold that it is, and we affirm the trial court’s take-nothing judgment notwithstanding the verdict on Lawrence Blackwell’s breach of contract claim against Playoff Corp., Donruss Playoff, L.P., Don-russ LLC, and Ann Powell (collectively, “the defendants”). We also affirm the trial court’s denial of the defendants’ motion for attorney’s fees under the Texas Commission on Human Rights Act.
Background
The jury heard six days of testimony from fourteen witnesses, and the trial court admitted approximately 1,200 pages of exhibits into evidence. The following summary reflects only the evidence essential to our resolution of this appeal.
Powell founded Playoff Corp., a sports trading-card company, in 1992. In 1997, Playoff hired Blackwell as a consultant for $1,500 per day. A few months later, Powell and Blackwell began a romantic relationship, which continued until February 2002.
In December 1999, Playoff hired Blackwell as an employee, and Powell appointed him to serve as Playoffs president. The terms of Blackwell’s employment agree
1. Playoff would employ Blackwell;
2. Playoff would not pay Blackwell $600,000 in consulting fees that it allegedly owed to him;
3. Playoff would pay Blackwell a lower salary than he would have earned as a consultant;
4. Blackwell would not engage in business opportunities with other companies or organizations in which he, in reasonable probability, would otherwise have had an opportunity to engage;
5. Blackwell would loan money to Playoff and entities contemplated to be formed by the parties; 1
6. Blackwell would sign personal guaranties for loans made to Playoff and entities contemplated to be formed by the parties;
7. Playoff and Powell would pay Blackwell 25% of the proceeds from the sale of Playoff or entities contemplated to be formed by the parties, if any, after reducing the proceeds from the sale by $5,000,000.00 (Playoffs agreed fair market value at the time of the alleged employment agreement); or 25% of the fair market value of Playoff or entities contemplated to be formed by the parties, if any, after reducing the fair market value by $5,000,000.00, on the last day of his employment if Playoff or any entity contemplated to be formed by the parties terminated Blackwell’s employment; and
8. Playoff and Powell would pay Blackwell 25% of any distributions made by Playoff or any entity contemplated to be formed by the parties after payment of taxes owed by Powell arising from the operation of Playoff or any entity contemplated to be formed by the parties, if any.
Blackwell testified that he and Powell shook hands over the deal but did not memorialize the agreement in writing. Powell denied the existence of any agreement whatsoever, calling Blackwell’s testimony regarding the handshake deal “a complete lie.”
Blackwell continued to work for Playoff and related entities until November 2002, during which time the Playoff entities greatly increased in value. The parties hotly contested whether Blackwell resigned or Powell terminated his employment.
Blackwell sued the defendants for sexual harassment under the Texas Commission on Human Rights Act (TCHRA), alleging that Powell terminated him when he refused to rekindle their romantic relationship. He later added claims for breach of contract, fraud, and breach of fiduciary duty and nonsuited his TCHRA claims. The defendants filed a motion for attorney’s fees and costs under TCHRA. The parties tried Blackwell’s claims to a jury and submitted the issue of TCHRA attorney’s fees to the court.
The trial court granted a directed verdict in favor of Donruss on Blackwell’s breach of contract claim and in favor of all the defendants on his fraud claim. The jury found that Blackwell and Powell agreed to the eight terms set forth above and that Playoff and Powell failed to comply with the agreement. It also found that Blackwell did not resign and did not engage in any misconduct that justified his termination. With regard to breach of
Twenty-five (25%) of the fair market value of Playoff Corporation, Donruss Playoff, LP and Donruss LLC (after reducing the fair market value by $5,000,000.00) on the last day of Lawrence Blackwell’s employment, if any, with Donruss, LLC, Donruss Playoff, LP, or Playoff Corporation.
The jury returned a verdict on breach of contract damages of $6,100,000.
The trial court first rendered judgment for Blackwell for $6,100,000, but then granted Powell and Playoffs motion for judgment notwithstanding the verdict and rendered a take-nothing judgment. In the order granting Powell and Playoffs motion for judgment notwithstanding the verdict, the trial court stated,
[T]he court is of the opinion that Plaintiff Blackwell should take nothing by way of his claims against any Defendant. The alleged oral agreement found by the jury in Question 1 is legally unenforceable. In particular, but not by way of limitation, the Court finds that the alleged oral agreement found by the jury in Question 1 is insufficiently definite as a matter of law. The jury’s finding in Question 1 cannot support a recovery in favor of Plaintiff Blackwell against any Defendant.
The trial court also denied the defendants’ motion for attorney’s fees under TCHRA. Blackwell appeals from the judgment not withstanding the verdict, and the defendants appeal from the trial court’s denial of their motion for TCHRA attorney’s fees.
Blackwell’s Appeal
1. Standard of review.
A trial court may disregard a jury verdict and render judgment notwithstanding the verdict (“JNOV”) if no evidence supports the jury findings on issue necessary to liability or if a directed verdict would have been proper.
See
Tex.R. Civ. P. 301;
Tiller v. McLure,
To determine whether the trial court erred by rendering a JNOV, we view the evidence in the light most favorable to the verdict under the well-settled standards that govern legal sufficiency review.
See Wal-Mart Stores, Inc. v. Miller,
2. Is the alleged employment contract unenforceably indefinite?
In his fourth issue, Blackwell argues that the trial court erred by granting judgment notwithstanding the verdict because — contrary to the trial court’s statement in the order granting Powell’s motion for JNOV — the alleged employment contract is not too indefinite to enforce. The defendants argue that eight indefinite terms in the agreement, including “fair
A contract is legally binding only if its terms are sufficiently definite to enable a court to understand the parties’ obligations.
Fort Worth ISD v. City of Fort Worth,
A contract is sufficiently definite if a court is able to determine the respective legal obligations of the parties.
T.O. Stanley Boot Co. v. Bank of El Paso,
An agreement to make a future contract is enforceable only if it is “specific as to all essential terms, and no terms of the proposed agreement may be left to future negotiations.”
Fort Worth ISD,
Whether an agreement fails for indefiniteness is a question of law to be determined by the court.
COC Servs., Ltd. v. CompUSA, Inc.,
The question here is whether the term “fair market value” as used in the alleged agreement is unenforceably indefinite; that is, whether “the fair market value of Playoff Corporation or entities contemplated to be formed by the parties, if any ... on the last day of [Blackwell’s] employment” is reasonably certain and provides a basis for giving an appropriate remedy.
2
See
Restatement (Second) of Contracts § 33(2). Several Texas courts have held that the fair market value of a company is a measure of damages to be resolved by the fact finder.
See Willis v. Donnelly,
But just because “fair market value” is an appropriate measure of damages to be determined by the jury in some cases and sufficiently definite as a contract term in some contexts does not mean that every contract containing the phrase is sufficiently definite to be enforced. In the context of this case, the only evidence of an alleged agreement containing the phrase “fair market value” came from Blackwell’s testimony.
Blackwell acknowledged that they did not have an understanding as to how market value was to be determined in 1999. And the evidence shows that even Blackwell realized the parties needed to agree on a valuation method during later negotiations. In a document dated March 27, 2002, and titled “Proposals for a Working Arrangement for Larry Blackwell and Ann Blake,” Blackwell wrote,
If company is sold or I am no longer with the company for any reason: Receive 25% of sale amount or value as determined by formula (formula or methodology still needs to be determined) on an after-tax basis, less the amount of $1,250,000.00 (which equals 25% of the $5 million threshold).
[Emphasis added.] Likewise, in an email dated October 25, 2002, Blackwell wrote, “[I] believe this is where we left off [the employment contract discussions] some time ago, with the major unresolved element being the valuation methodology at the time of my departure.” [Emphasis added]
Blackwell characterized the documents and emails in 2000 and 2002 as proposing “replacement deals,” not as describing the 1999 oral agreement. He said they “shook hands” on the 1999 oral agreement, and, although Powell had said she would put it in writing, she never did. In 2000, he explained, Powell had become more comfortable with the “equity” concept 3 and thus asked him to call Playoffs attorneys and see if they could reach a “replacement deal.” Another reason for a “replacement deal,” he said, was for potential tax advantages for Powell. In 2002, he said, Powell wanted to pull money out of the business and delay payment of his 25 percent. It wasn’t that she did not want to pay him, Blackwell said, but that she wanted to “postpone it for some time.”
Except for the provisions of the proposals that would have provided Blackwell some equity interest, nothing in the documents, emails, or Blackwell’s testimony indicates that the proposed “replacement” agreements were any different from the 1999 oral agreement with respect to valuing the entities. And the documents and emails are uncontradicted. It is inescapable that even Blackwell contemplated that fair market value of the entities would be determined by a specific formula yet to be
Though the evidence that the method of valuation remained to be determined might be considered contrary to the jury’s verdict, neither a reasonable jury nor a court could ignore it.
See Cent. Ready Mix Concrete Co.,
In other words, Blackwell’s admissions show that, at most, the alleged agreement left a material matter open for future adjustment and agreement that never occurred.
See Fort Worth ISD,
The Tennessee court of appeals held an agreement too indefinite to enforce under similar facts in
Four Eights, LLC v. Salem,
[I]f the parties had simply utilized the term “fair market value,” then the Court could have ascertained the same based on common usage. By adding the provision that “Fair Market Value must be determined by the Lessor and Lessee, negotiating in good faith” ..., the parties basically made an “agreement to agree” to something in the future, and such agreements have generally been held unenforceable, both in this jurisdiction and others.
Id.; see also Connor v. Harless,
Blackwell argues that the term “fair market value” is sufficiently definite because the term is defined by an IRS revenue ruling and because expert testi
As in
Four Eights, LLC,
had the parties simply utilized the term “fair market value” in the alleged agreement, then the court and jury could have ascertained the same based on its common meaning.
See Four Eights, LLC,
Powell, Playoff, and Donruss’s Appeal
In a single cross-issue, the defendants argue that the trial court abused its discretion by denying their motion for attorney’s fees under TCHRA.
TCHRA provides that “[i]n a proceeding under this chapter, a court
may
allow the prevailing party, other than the commission, a reasonable attorney’s fee as part of the costs.” Tex. Lab.Code Ann. § 21.259(a) (Vernon 2006) (emphasis added). When a statute states that a trial court “may” award attorney’s fees, such an award is discretionary and we review the
Texas courts of appeals that have addressed attorney’s fees under TCHRA have followed federal precedent, under which an employer may recover attorney’s fees if the plaintiffs claims were frivolous, meritless, or unreasonable or the plaintiff continued to litigate after it became clear that his claim was frivolous.
See, e.g., Elgaghil v. Tarrant County Junior College,
In Dean, the fifth circuit court of appeals, bemoaning the “small and almost infinitesimal universe of reported cases in which civil rights plaintiffs voluntarily dismiss their claims to avoid judgment on the merits,” offered the following guidance to aid federal district courts in determining whether such dismissals warrant an award of attorney’s fees:
Upon the defendant’s motion, the court must determine that the plaintiffs case was voluntarily dismissed to avoid judgment on the merits. Once this affirmative determination has been made, the defendant must then establish that the plaintiffs suit was frivolous, groundless, or without merit. Ordinarily, these inquiries can be resolved from the record developed in the case before the court, supplemented by affidavits and, only if necessary, testimonial evidence. Additional relevant evidence includes but is not limited to information concerning discovery delays and abuses, slothful prosecution, negative rulings, and sanctions against the plaintiffs. Upon reaching the above two conclusions, the district court may then in its discretion award the defendant attorney’s fees under § 1988.
Dean,
Blackwell sued the defendants under TCHRA for sexual harassment in the form of unwanted sexual advances, requests to engage in a sexual relationship, requests for sexual favors, and improper questions regarding his activities and relationships outside the office; retaliation; and sex discrimination. He nonsuited his TCHRA claims the day before a hearing on the defendants’ motion for summary judgment on his TCHRA claims. The defendants filed a motion for attorney’s fees under TCHRA some months later.
After the jury trial on Blackwell’s claims, the trial court held a hearing on the defendants’ motion for attorney’s fees. The defendants offered evidence of attorney’s fees incurred in defending against Blackwell’s TCHRA claims in the amount of $618,554. When the trial court granted JNOV as to Donruss, it also awarded $618,554 in attorney’s fees to Donruss under TCHRA and made findings of fact and conclusions of law in support of the award. But after hearing additional arguments, the trial court vacated its prior judgment and findings of fact and conclusions of law, rendered a final take-nothing JNOV in favor of all defendants, and denied the defendants’ motion for TCHRA attorney’s fees. Because the trial court vacated its findings of fact, we must assume that it found all facts necessary to support its denial of the defendants’ motion for attorney’s fees.
See Pharo v. Chambers County,
The defendants argue that the trial court abused its discretion by denying their motion for attorney’s fees because they were the prevailing parties on Blackwell’s TCHRA claims. Blackwell responds that his nonsuit of the TCHRA claims was a strategic decision, not an effort to avoid an adverse judgment on the merits.
Although this court has not previously reviewed a trial court’s denial of a defendant’s motion for attorney’s fees under TCHRA, we have previously reviewed the denial of attorney’s fees under another statute that gives a trial court the discretion to award fees to a prevailing party. In Smith v. McCarthy, the appellant argued that the trial court abused its discretion by denying the appellant’s motion for attorney’s fees under civil practice and remedies code section 16.034(a), which provides:
In a suit for the possession of real property ..., if the prevailing party recovers possession of the property from a person unlawfully in actual possession, the court may award costs and reasonable attorney’s fees to the prevailing party.
Tex. Civ. Prac. & Rem.Code Ann. § 16.034(a) (Vernon 2002) (emphasis added);
Smith,
Likewise, in this case the basis for the trial court’s denial of attorney’s fees is unclear. Under the
Dean
guidelines, the
The defendants argue that the reasoning in
Smith
is inapplicable to this case because our interpretation of TCHRA, unlike our interpretation of the civil practice and remedies code, must be guided by existing federal case law on the equivalent federal statute. But none of the federal or Texas cases cited by the defendants involved the situation presented here, namely, appellate review of a trial court’s discretionary denial of attorney’s fees when the basis for the denial is not clear from the record.
See, e.g., Butler,
We hold that the defendants have not shown that the trial court abused its discretion by denying their motion for TCHRA attorney’s fees, and we overrule their sole issue.
Conclusion
Having overruled Blackwell’s fourth issue, not having reached his remaining issues, and having overruled Powell, Playoff, and Donruss’s sole issue, we affirm the trial court’s judgment.
Notes
. The “entities contemplated to be formed" are, according to Blackwell, Donruss Playoff, L.P. and Donruss LLC (collectively, “Don-russ”).
. Blackwell suggests that the meaning of fair market value and the method of calculating same are merely ancillary aspects of the alleged agreement. We disagree because the 25% of the companies' fair market value dwarfs the other consideration due under the alleged agreement.
. From the time of his initial interview with Powell, Blackwell acknowledged, he wanted to pursue some "upside” as well as an "equity interest” in Playoff, and his discussions with Powell in that regard continued both before and after they reached the oral agreement of 1999 as found by the jury. Blackwell acknowledged that the oral agreement did not give him an equity interest. Some three months after the handshake deal as found by the jury, he was again proposing an equity deal. He emailed Playoff's lawyers on March 23, 2000, proposing a limited partnership with an equity interest for himself, with the value of Playoff to be determined "by appraisal.”
Blackwell's efforts continued through the next two years with proposals to accountants and lawyers of the companies to provide him with an equity interest in the Playoff entities as well as alternative bonus plans for payment of 25 percent of after-tax distributions on sale or termination, virtually identical to the 1999 agreement terms.
. Blackwell also argues — in two sentences— that the defendants waived any indefiniteness in fair market value because they invited error by requesting a jury question containing the term — a question identical to the one the trial court actually submitted. This argument fails because even if the jury found (as it did) that Blackwell and Powell entered into an employment agreement that referenced the fair market value of the companies, whether the agreement is unenforceably indefinite remains a question of law for the court.
See COC Sens., Ltd.,
