Alford, Meroney & Co. v. Rowe

• Decision Date: 29 May 1981
• Docket Number: No. 9228,9228
• Citation: 619 S.W.2d 210
• Parties: ALFORD, MERONEY & COMPANY, a Texas Partnership, Appellant, v. Don L. ROWE, Appellee.
• Court: Texas Court of Appeals

Page 210

619 S.W.2d 210

ALFORD, MERONEY & COMPANY, a Texas Partnership, Appellant, v. Don L. ROWE, Appellee.

No. 9228.

Court of Civil Appeals of Texas, Amarillo.

May 29, 1981.

Rehearing Denied July 31, 1981.

Culton, Morgan, Britain & White, Don L. Patterson and Bill R. Moss, Amarillo, for appellant.

Templeton & Garner, Robert E. Garner and Charles R. Watson, Jr., Amarillo, for appellee.

COUNTISS, Justice.

The central issue in this breach of contract suit is whether, as the jury found and the judgment decreed, appellant Alford, Meroney & Company, a Texas partnership, (hereafter "the partnership") waived its right to enforce a penalty provision against appellee Don L. Rowe (hereafter "Rowe"), when he withdrew from the partnership and entered into competition with it. We affirm.

The partnership is a public accounting firm with offices in a number of Texas and New Mexico cities. Rowe became a partner in 1971 as the result of a merger between the partnership and another accounting firm in which Rowe was a partner. For several years thereafter, Rowe was the partner in charge of the Amarillo office, a position carrying various administrative duties in addition to the usual accounting duties of the partners, and paying additional compensation for those duties. Rowe also served on the partnership's executive committee until 1975. Because of internal dissatisfaction with Rowe's administration, he was removed by the executive committee as partner in charge of the Amarillo office on July 1, 1977, and another partner was given the position. Rowe remained a partner but was not, thereafter, the "partner in charge."

At or about the time of his removal as partner in charge, Rowe apparently began to consider withdrawing from the partnership. He discussed this possibility several times with other partners between June and November of 1977. On November 22, 1977, he wrote a letter to the partnership's managing partner, in which he indicated his desire to withdraw from the partnership. The portions of the letter pertinent to this case are as follows:

After careful and thoughtful consideration and review of the past two year period, I have concluded that the best course of action for myself and for the firm is for me to resign and withdraw from the firm. In the rest of this letter I will attempt to outline as briefly as possible for our further discussion the basic terms of this resignation and withdrawal. The most important part, of course, as you and I discussed when you were in Amarillo, is that I must continue in the practice of public accounting either in my own firm or be (sic ) associating with another firm here in Amarillo.

I purpose (sic ) that it would be the same as in Hahn's withdrawal that I be permitted to withdraw under the terms of the partnership agreement with the exceptions as to the penalty provisions. In other words, that I would be permitted without penalty to enter into the practice of public accounting in competition with Alford, Meroney and Company whether by myself or in association with others. To that end, all of the clients that are currently under my number and those clients that are under other partners numbers in the Amarillo office that were originated by me and so choose upon notification by joint letter of my resignation, withdrawal and continuation of practice to become my clients would in fact become the clients of my continuing practice without penalty or payment to the firm as required by Paragraph 12(c) of the Partnership Agreement. It would be further agreed that any clients that choose to stay with Alford, Meroney and Company would continue to be the clients of Alford, Meroney and Company without consideration as to who was the originating partner of those clients.

I think that these matters on my part could be completed no later than December 31, 1977, so that I could be effectively withdrawn from Alford, Meroney and Company on or before that date.

The "Paragraph 12(c)" penalty discussed in the letter is the provision in the partnership agreement which imposes certain financial penalties on a withdrawing partner who goes into competition with, and takes clients of, the partnership. ¹

Various discussions ensued thereafter between Rowe and several members of the partnership but no express agreements were reached. Rowe left the partnership on December 31, 1977, established his own practice and took a substantial number of partnership clients with him. A few days later, on January 4, 1978, the partnership filed suit against him seeking various items of relief including enforcement of and damages under paragraph 12(c).

All matters in controversy were resolved prior to trial except the paragraph 12(c) dispute. That issue was tried before a jury, which found, in response to special issue number 6, that the partnership had waived its right to collect the paragraph 12(c) payment. The trial court rendered a take-nothing judgment against the partnership and it duly perfected this appeal.

In this court, the partnership challenges the factual and legal sufficiency of the evidence to support various jury findings and contends it was entitled to judgment because of other jury findings. Because our resolution of the first and second points of error wherein the partnership challenges the factual and legal sufficiency of the evidence to support the waiver finding is determinative of this appeal, we will discuss only those points in detail.

The partnership's first point of error, by which it contends there is no evidence to support the jury's finding of waiver, presents a question of law that requires the appellate court to consider only the evidence and inferences tending to support the finding under attack and disregard all evidence and inferences to the contrary. Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965).

The partnership's second point of error, by which it contends the evidence is insufficient to support the jury's finding of waiver, invokes a broader standard which requires this court to consider all of the evidence in order to determine whether the evidence supporting the finding is so weak, or the evidence to the contrary so overwhelming, that the finding should be set aside and a new trial ordered. Id. at 823. In considering an "insufficiency" point, however, we are particularly cognizant of the role of the trier of fact. The trier of fact has the opportunity to observe the demeanor of the witnesses on the stand and to judge their credibility. It determines the weight to be given their testimony and resolves conflicts in the testimony of one witness with another. It can believe all of a witness' testimony, none of it or part of it while disregarding other portions. Within this framework, the findings of fact made by the jury will be sustained if there is some evidence of probative value to support them, and they are not against the great weight and preponderance of the evidence. Even if the appellate court would have found facts contrary to those found by the jury after reviewing the evidence, it cannot substitute its judgment for that of the fact finder if the findings meet the evidentiary test just stated. In re King's Estate, 150 Tex. 662, 244 S.W.2d 660 (1951); Pickens v. Baker, 588 S.W.2d 406, 409 (Tex.Civ.App. Amarillo 1979, no writ).

In order to apply the foregoing evidentiary review standards, the appellate court must first ascertain the elements of the particular principle of law activated by the fact findings in question. It must then collate the elements and the evidence in order to determine whether there is any, or sufficient, evidence to support each element. The critical principle of law in this case is waiver and its nature and elements are well established in Texas. When used as an affirmative defense, as in this case, waiver must be specifically pled. Tex.R.Civ.P. 94. It is ordinarily a question of fact, dependent upon things done and said, Lewis v. Smith, 198 S.W.2d 598, 601 (Tex.Civ.App. Ft. Worth 1946, writ ref'd), and the burden of proof is on the party relying on waiver. Ford v. Culberson, 158 Tex. 124, 138, 308 S.W.2d 855, 865 (1958). In general, waiver is defined as "an intentional relinquishment of a known right or intentional conduct inconsistent with claiming it." Furr v. Hall, 553 S.W.2d 666, 674 (Tex.Civ.App. Amarillo 1977, writ ref'd n. r. e.). Stated more broadly, waiver occurs "where one...