America's Favorite Chicken Co. v. Samaras

• Citation: 929 S.W.2d 617
• Decision Date: 04 September 1996
• Docket Number: No. 04-95-00501-CV,04-95-00501-CV
• Parties: AMERICA'S FAVORITE CHICKEN COMPANY f/k/a Al Copeland Enterprises, Inc., Appellant, v. George SAMARAS, Appellee.
• Court: Court of Appeals of Texas

Page 617

929 S.W.2d 617

AMERICA'S FAVORITE CHICKEN COMPANY f/k/a Al Copeland Enterprises, Inc., Appellant, v. George SAMARAS, Appellee.

No. 04-95-00501-CV.

Court of Appeals of Texas San Antonio.

Sept. 4, 1996.

Rehearing Overruled Oct. 7, 1996.

Mitchell L. Weidenbach, Charles Estee, Shannon, Weidenbach & Estee, Inc., San Antonio, Jeffrey S. Levinger, Bradley J. Johnson, Carrington, Coleman, Sloman & Blumenthal, L.L.P., Dallas, for appellant.

Bernard Wm. Fischman, Franklin D. Houser, Tinsman & Houser, Inc., Sharon E. Callaway, Wallace B. Jefferson, Crofts, Callaway & Jefferson, P.C., San Antonio, for appellee.

Before RICKHOFF, GREEN and DUNCAN, JJ.

RICKHOFF, Justice.

Appellant, America's Favorite Chicken Co., formerly known as Al Copeland Enterprises, Inc. ("AFC"), appeals from a judgment rendered in favor of appellee, George Samaras ("Samaras"), in a breach of contract action. The jury found AFC failed to comply with the terms of a letter agreement between AFC and Samaras and awarded Samaras $1,522,586.00 in actual damages, $685,163.60 in attorney's fees, and post-judgment interest on such sums at the rate of ten percent. In nine points of error, AFC contends: (1) the evidence was legally and factually insufficient to support the trial court's conclusion that the contractual provision sought to be enforced was sufficiently definite to be enforceable; (2) the trial court erroneously excluded certain questions from the jury charge and also included an erroneous instruction therein; (3) the evidence was legally and factually insufficient to support the jury's actual damage award; and (4) federal bankruptcy law precludes the recovery of attorney's fees and post-judgment interest. We affirm the trial court's judgment.

FACTS

The dispute between AFC and Samaras centers on the language contained in paragraph C of a letter agreement entered into between the parties on June 15, 1988 regarding Samaras' employment as Vice-President of Operations for A. Copeland Enterprises, Inc. ¹ Paragraph C related to an additional form of compensation to be provided Samaras and reads as follows:

C. BUILD-TO-SUIT RESTAURANTS

The company will provide you with two build-to-suit restaurants (land and building) It is undisputed that Samaras accepted employment and performed his services until asked to resign from the company in January of 1990, and he received all other compensation.

one after 12 months and one after 18 months with all franchise fees waived.

After Samaras had been employed by the company for almost one year, Samaras testified that he approached Jim Flynn, the president of the company at that time, to inquire about his build-to-suit rights. Samaras testified that both Flynn and Bill Copeland, the chief operating officer, told him that the company was not in a financial position to proceed with a build-to-suit restaurant at that time. ² The testimony of Lewis "Bucky" Kilbourne, the chief financial officer, confirmed Samaras' testimony with regard to the company's financial position. Kilbourne stated that the chief executive officer, Al Copeland, would not have allowed the money to be spent on Samaras' build-to-suit restaurants because it would have been counterproductive to the company. Kilbourne recommended to Flynn that Samaras be offered something else to fulfill AFC's obligation and suggested either cash or existing restaurant franchises.

Bill Copeland, the chief operating officer, testified that although it was suggested that Samaras might want to explore the possibility of accepting existing restaurants, Samaras was never told not to submit designated sites for the build-to-suit restaurants, which was the first step in the build-to-suit process. Flynn testified, however, that the company assisted in this step of the process by providing the aid of the company's real estate representatives. Samaras testified that this aid was never offered and he did not seek such aid or pursue designating sites due to the negative response he had already received.

Upon Samaras' termination in January of 1990, AFC sent him a letter detailing its final obligations to him. The letter reserved the issue of the build-to-suit restaurants, and Samaras spoke with AFC's newly-appointed chief operating officer, Carl Hays, to confirm that his rights with regard to the company's build-to-suit obligation were not being waived. Samaras then proceeded in an effort to reach an acceptable compromise to AFC's original build-to-suit obligation by considering existing restaurants. On July 12, 1990, Samaras sent a letter to Al Copeland venting his frustration over AFC's unresponsive stance to proposed restaurant locations. Finally, when Samaras received a letter from AFC dated August 30, 1990, stating that further negotiations would be futile, Samaras filed the action from which the instant appeal is taken.

ARGUMENTS ON APPEAL

In this appeal, AFC raises nine points of error contending: (1) the evidence was legally and factually insufficient to support the trial court's conclusion that the contractual provision sought to be enforced was sufficiently definite to be enforceable; (2) the trial court erroneously excluded certain questions from the jury charge and also included an erroneous instruction therein; (3) the evidence was legally and factually insufficient to support the jury's actual damage award; and (4) federal bankruptcy law precludes the recovery of attorney's fees and post-judgment interest.

1. Enforceability of Contract

In its first point of error, AFC maintains the trial court erred in overruling its motions for judgment n.o.v. and for new trial because there was no evidence or insufficient evidence that the contractual provision Samaras sought to enforce was sufficiently definite to make it an enforceable obligation. AFC asserts that essential terms of the obligation were uncertain or left open for future negotiations.

a. Standard of Review

AFC couches its point of error in terms of an evidentiary review; however, we do not find this to be the appropriate standard A contract is not enforceable unless the court can determine the parties' legal obligations and liabilities. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex.1992); Gannon v. Baker, 830 S.W.2d 706, 709 (Tex.App.--Houston [1st Dist.] 1992, writ denied); University Nat'l Bank v. Ernst & Whinney, 773 S.W.2d 707, 710 (Tex.App.--San Antonio 1989, no writ). In order to be enforceable, therefore, the parties must have agreed on the material terms. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d at 221. If an essential term is left open for future negotiation, the contract is not binding. Id.; Cap Rock Elec. Co-op., Inc. v. Texas Utilities Elec. Co., 874 S.W.2d 92, 99 (Tex.App.--El Paso 1994, no writ).

of review. The parties do not dispute the existence of the agreement or that the letter agreement obligated AFC to provide Samaras with two build-to-suit restaurants. See Central Texas Micrographics v. Leal, 908 S.W.2d 292, 297 (Tex.App.--San Antonio 1995, no writ)(when the existence of a term is disputed, a question of fact is raised subject to sufficiency review). Rather, the issue in the instant case is whether the language expressly set forth in the letter agreement relating to this obligation was sufficiently definite to be enforceable against AFC.

"Whether an agreement is legally enforceable or binding is a question of law." Texaco, Inc. v. Pennzoil Co., 729 S.W.2d 768, 814 (Tex.App.--Houston [1st Dist.] 1987, writ ref'd n.r.e.), cert. dism'd, 485 U.S. 994, 108 S.Ct. 1305, 99 L.Ed.2d 686 (1988). The jury may not be called upon to construe the legal effect of an agreement or to supply an essential term upon which the parties did not mutually agree. Id.; see also University Nat'l Bank v. Ernst & Whinney, 773 S.W.2d at 710. Therefore, we conclude that the issue of whether an agreement fails for indefiniteness is a question of law to be determined by the court. ³

A trial court's legal conclusions are always reviewable on appeal, and the appellate court is not obligated to give any particular deference to those conclusions. Purvis Oil Corp. v. Hillin, 890 S.W.2d 931, 935 (Tex.App.--El Paso 1994, no writ). Rather, the appellate court, as final arbiter of the law, is required to independently evaluate the trial court's legal determinations. Id. A trial court's legal conclusions will not be reversed on appeal unless they are erroneous as a matter of law. Hofland v. Fireman's Fund Ins. Co., 907 S.W.2d 597, 599 (Tex.App.--Corpus Christi 1995, no writ).

In construing an agreement, the court may consider evidence of circumstances surrounding its execution. Sun Oil Co. (Delaware) v. Madeley, 626 S.W.2d 726, 731 (Tex.1981); Medical Towers, Ltd. v. St. Luke's Episcopal Hosp., 750 S.W.2d 820, 823 (Tex.App.--Houston [14th Dist.] 1988, writ denied). Furthermore, a trial court is permitted to construe words and terms in an agreement as such terms are usually understood by persons in the profession, business or industry. See KMI Continental Offshore Production Co. v. ACF Petroleum Co., 746 S.W.2d 238, 241 (Tex.App.--Houston [1st Dist.] 1987, writ denied); Dorchester Gas Producing Co. v. Harlow Corp., 743 S.W.2d 243, 249 (Tex.App.--Amarillo 1987, writ vacated); cf. Atlantic Richfield Co. v. ANR Pipeline Co., 768 S.W.2d 777, 783 (Tex.App.--Houston [14th Dist.] 1989, no writ)(discussing supplementation or explanation by usage of trade under TEX. BUS & COM.CODE § 2.202). The trial court should also consider the contractual language in light of the experience of the parties and their familiarity with the meaning of technical Where the evidence shows that the parties intended to enter into an agreement, the courts should find the contract to be definite enough to grant a remedy provided that there is a certain basis for determining the remedy. See Texas Oil Co. v. Tenneco, 917 S.W.2d 826, 830 (Tex.App.--Houston [14th Dist.] 1994, writ granted)(citing...