Alan Reuber Chevrolet v. Grady Chevrolet

• Decision Date: 09 June 2009
• Docket Number: No. 05-08-00107-CV.,05-08-00107-CV.
• Citation: 287 S.W.3d 877
• Parties: ALAN REUBER CHEVROLET, INC., Appellant v. GRADY CHEVROLET, LTD., Formerly Grady Chevrolet Company, Appellee.
• Court: Texas Court of Appeals

287 S.W.3d 877

ALAN REUBER CHEVROLET, INC., Appellant v. GRADY CHEVROLET, LTD., Formerly Grady Chevrolet Company, Appellee.

No. 05-08-00107-CV.

Court of Appeals of Texas, Dallas.

June 9, 2009.

Jay Edward Ray, Glast, Phillips & Murray, PC, Dallas, for Appellant.

Joe E. Weis, Pemberton, Green, Newcomb and Weis, Greenville, for Appellee.

Before Justices MOSELEY, FITZGERALD, and LANG-MIERS.

OPINION

Opinion by Justice MOSELEY.

In this appeal, we decide whether: (1) Alan Reuber Chevrolet, Inc. (ARCI) is entitled to recover attorney's fees as the successful party to Grady Chevrolet, Ltd.'s breach of contract claim, despite pleading and procedure issues; and (2) the evidence supports the findings on the damages awarded to Grady Chevrolet on its conversion claim. Because we answer both of those questions in the affirmative, we reverse the trial court's revised final judgment to the extent it denies ARCI's claim for attorney's fees and remand this case to the trial court for further proceedings on that claim. In all other respects, we affirm the revised final judgment.

I. FACTUAL BACKGROUND

Jerry Grady was the president of Grady Chevrolet Company, which operated a Chevrolet dealership in Greenville, Texas. Alan Reuber was the president of ARCI and AMTJ, Inc. In September 2001, Grady and Reuber, as corporate officers, signed a Dealership Asset Sale and Purchase Agreement whereby AMTJ, Inc. agreed to buy Grady Chevrolet's assets under the terms and conditions in the agreement.

Four provisions of the agreement are relevant to the issues presented on appeal. First, AMTJ, Inc. agreed to buy fixed assets at a price calculated on their fair market value as appraised. Second, AMTJ, Inc. also agreed to buy all the "non-obsolete current, unused, new and returnable Chevrolet factory parts and accessories" on hand when the sale closed. These parts were to be inventoried and valued at the net cost to Grady Chevrolet as set forth in the most recent Chevrolet price book, less any discounts or rebates reflected on the parts invoices. Third, AMTJ, Inc. agreed to purchase "all non-Chevrolet factory parts and accessories" on hand at the time of closing at fair market value, but if the parties could not agree on their fair market value, they would not be subject to the agreement. Fourth, the agreement provided (in section 17) the following regarding attorney's fees and costs:

In the event of any litigation between the Parties hereto to enforce any provisions or rights hereunder, the unsuccessful Party to such litigation shall pay to the successful Party therein all costs and expenses expressly including, but not limited to, reasonable attorney's fees ..., which ... attorney's fees shall be included in and as part of any judgment rendered in such litigation.

The fixed assets were appraised by Travis R. Fralicks, who submitted an appraisal to both parties. The parts were inventoried and valued by Leighton Railsback; he referred to a nonreturnable part as a "nonconforming" part.¹ As relevant here, he valued the nonreturnable parts at just under $60,000. Before the closing, AMTJ, Inc. assigned its rights and obligations under the agreement to ARCI. The sale closed November 13, 2001, with the sale price based on the appraisals and inventories.

Four days after the closing, Grady mistakenly opened an envelope from Fralicks to Reuber; the envelope contained another appraisal—at higher values—of the fixed assets involved in the sale. Attached to the second appraisal was a handwritten note from Fralicks to Reuber: "Alan: This info for your use only." Grady believed the second appraisal was evidence that he received less at the closing than he should have received. Additionally, Grady was unsuccessful in obtaining the nonreturnable parts, which had been excepted from the sale, from ARCI.

II. PROCEDURAL BACKGROUND

Grady Chevrolet filed suit against ARCI and others. In its third amended original petition, Grady Chevrolet asserted, among other claims, claims for breach of contract and conversion. As part of its breach of contract claim, Grady Chevrolet alleged ARCI failed to pay the true market value of the fixed assets and failed to allow Grady Chevrolet to retrieve the nonreturnable parts. Grady Chevrolet alleged it was entitled to recover its reasonable and necessary attorney's fees pursuant to section 17 of the agreement and civil practice and remedies code chapter 38.

In its conversion claim, Grady Chevrolet alleged the nonreturnable parts remained the property of Grady Chevrolet, and that despite numerous efforts to make arrangements to take possession of those parts, ARCI refused to allow Grady Chevrolet to do so and thus converted the nonreturnable parts. Grady Chevrolet alleged those parts were worth $60,000, and that as a result of the conversion it suffered damages of approximately $100,000, representing the cost of the parts plus the lost profits it would have realized had on the sale of those parts.

In its first amended original answer, filed after Grady Chevrolet filed its third amended petition, ARCI generally denied Grady Chevrolet's allegations. Although the pleading did not specifically request attorney's fees under section 17 of the agreement, it did include a prayer for attorney's fees. Grady Chevrolet did not file a special exception to this pleading.

The case was tried before the court. In opening statements, counsel for ARCI asserted among other things, that if it prevailed on the breach of contract claim, it would be entitled to attorney's fees under the agreement. During trial, Grady Chevrolet abandoned all claims except its breach of contract and conversion claims (against AMTJ, Inc. and ARCI) and its fraud and civil conspiracy claims (against AMTJ, Inc., ARCI, Reuber, and Fralicks).²

After the parties rested and closed, the trial court stated that final arguments would be submitted in writing, including arguments concerning the recovery of attorney's fees. The trial court also stated that after it ruled on liability issues, the parties could submit affidavits on attorney's fees if attorney's fees were awarded. Both sides filed a "Closing Arguments and Trial Brief" directed to their theories of recovery, the evidence, and recovery of attorney's fees. In its rebuttal to Grady Chevrolet's closing argument, ARCI argued Grady Chevrolet had failed to prove its contractual claims against ARCI, and thus was an "unsuccessful party" under section 17 of the agreement and responsible for ARCI's attorney's fees. ARCI also argued that its first amended original answer gave Grady Chevrolet fair notice of its claim for attorney's fees, and, if not, it requested leave to file a trial amendment.

Subsequently, the trial court sent the parties a letter (the September 10, 2007 letter) "address[ing] the findings on the various causes of action Defendant by Defendant." Pertinent to this appeal, the trial court found in favor of ARCI on Grady Chevrolet's breach of contract claim and in favor of Grady Chevrolet on its conversion claim. The trial court also said that, although ARCI and the other defendants prevailed on the breach of contract claim and were the "successful parties," there were no specific pleadings requesting attorney's fees by any defendant. Further, it said that ARCI's request for attorney's fees in the prayer alone, not in the body of the answer, was "insufficient and too unspecific" to be the basis of an award of attorney's fees under the agreement. Therefore, the court would not award attorney's fees to any defendant. Grady Chevrolet's counsel was requested to draft an order consistent with the trial court's findings.

ARCI moved for leave to file a trial amendment "to state and clarify" that its request for attorney's fees, set forth in the prayer of its first amended original answer, sought to recover attorney's fees under section 17 of the agreement "under which [Grady Chevrolet] asserted its breach of contract claim[.]" Grady Chevrolet opposed the motion, arguing the request was untimely in light of the trial court's "judgment" (that is, the September 10, 2007 letter) and it would be surprised and prejudiced by an amended pleading. At the October 11, 2007 hearing on the trial amendment issue, Grady Chevrolet announced that it was abandoning its breach of contract causes of action.

The trial court denied ARCI's motion. In its revised final judgment, the trial court awarded Grady Chevrolet $98,949.85 in actual damages from ARCI based on its conversion claim, as well as prejudgment interest. The judgment also stated that all relief requested and not expressly granted was denied, and the judgment finally disposed of all parties and claims. The court did not award ARCI attorney's fees. ARCI requested, and the trial court filed, findings of fact and conclusions of law. This appeal followed.

III. ATTORNEY'S FEES

Pertinent to the issues on appeal as to ARCI's request for attorney's fees, trial court found that: (1) ARCI's live pleading contained a general prayer for recovery of attorney's fees without specifying any statute or other basis on which ARCI could recover attorney's fees; and (2) although Grady Chevrolet failed to meet its burden of proof on its breach of contract claim against ARCI, Grady Chevrolet abandoned its breach of contract claim against ARCI before the judgment was signed.

In its first and third issues, ARCI attacks the trial court's failure to award it attorney's fees as the successful party on Grady Chevrolet's breach of contract claim. Specifically, ARCI argues the trial court erred in denying its attorney's fees claim as the "successful party" under the agreement on the grounds that: (1) it had not sufficiently pleaded that claim; and (2) Grady Chevrolet abandoned its breach of contract claim after the trial court had already found that ARCI had not breached the contract.

A. Standard of Review

A trial court's conclusions of law are always reviewable. Spiller v. Spiller, 901 S.W.2d...