Angelo Broadcasting, Inc. v. Satellite Music Network, Inc., KTEO-AM

Citation836 S.W.2d 726
Decision Date22 July 1992
Docket NumberNo. 05-91-00451-CV,KTEO-AM,O,KTEO-F,05-91-00451-CV
CourtCourt of Appeals of Texas
PartiesANGELO BROADCASTING, INC., d/b/a/ Radio Stations&P. Bobbitt, and Philip Bobbitt, Appellants, v. SATELLITE MUSIC NETWORK, INC., d/b/a/ Satellite Music Network, Appellee.

R. James George, Jr., Eric G. Behrens, Austin, for appellants.

Dan S. Boyd, Lewis T. LeClair, Stephen Cormac Carlin, Dallas, for appellee.

Before THOMAS, KINKEADE and ROSENBERG, JJ.

OPINION

KINKEADE, Justice.

Angelo Broadcasting, Inc., d/b/a/ Radio Stations KTEO-AM & KTEO-FM, O.P. Bobbitt, and Philip Bobbitt (collectively Angelo) appeal the portion of the trial court's judgment rendered in favor of Satellite Music Network, Inc., d/b/a Satellite Music Network (SMN). SMN cross-appeals the portion of the trial court's judgment rendered in favor of Angelo. In four points of error, Angelo argues that the trial court erred in (1) awarding SMN recovery for unjust enrichment, (2) granting SMN a judgment notwithstanding the verdict on Angelo's fraud claim, and (3) awarding SMN attorneys' fees. In fourteen cross-points, SMN argues that the trial court erred in (1) realigning the parties, (2) awarding Angelo damages pursuant to the Deceptive Trade Practices Act (DTPA), (3) permitting Angelo to amend its pleadings the morning of trial without granting SMN a continuance to conduct additional discovery, and (4) submitting jury questions three and five. Because the trial court erred in awarding SMN recovery for unjust enrichment and in awarding SMN its attorneys' fees, we reverse and render a take-nothing judgment in Angelo's favor on SMN's claim for the fees. Because Angelo failed to give the requisite DTPA notice and because the trial court erred in abating the case post-trial and in allowing Angelo to file a post-trial amendment concerning notice, we reverse the trial court's award of DTPA damages to Angelo and instruct the trial court to abate this cause of action for sixty days to afford Angelo the opportunity to give the requisite notice. Because there is some evidence to support the jury's finding of fraud and evidence to support a "puffery" instruction to the jury, we reverse the trial court's judgment notwithstanding the verdict on Angelo's fraud claim and remand for further proceedings.

FACTUAL AND PROCEDURAL HISTORY

In 1975, O.P. Bobbitt and a partner formed Angelo Broadcasting and bought an AM station, KTEO, in San Angelo, Texas, for $350,000. In 1976, Angelo Broadcasting bought an FM station, KWLW (now KTEO-FM), in the same city for $146,000. After Bobbitt's partner and wife both died in 1978, Bobbitt's son, Philip, acquired their share of the business. From 1975 to 1982, Angelo Broadcasting operated both KTEO-AM and KWLW-FM as country and western music stations serving San Angelo and a limited surrounding area.

In 1981, a trend away from AM stations began. In 1982, Angelo Broadcasting's profits increased, but its ratings and gross receipts declined. In response, Angelo Broadcasting built a new, taller FM tower, purchased new studio equipment, and began thinking about changing its programming.

In 1981, John Tyler and a group of investors formed Satellite Music Network. The idea behind SMN was to transmit high-quality, around-the-clock, live, market-tested programming to radio stations via satellite. SMN provided three music formats--classic rock, adult contemporary, and country and western. Through the use of satellite programming, a station could reduce its personnel and equipment costs. SMN charged each affiliated radio station a monthly service fee. Additionally, each radio station gave SMN two minutes per hour of commercial time, which SMN then sold to national advertisers. Tyler announced SMN's new services at a broadcaster's convention in March 1981 and started an advertising campaign in Broadcasting magazine, the weekly trade journal. SMN went on the air on August 31, 1981, with three affiliates.

O.P. Bobbitt and Joe Rushing, Angelo Broadcasting's general manager at the time, read about SMN in several advertisements appearing in Broadcasting magazine in 1981 and 1982. Rushing contacted SMN to obtain additional information. During Fall 1982, SMN's representative, David Garrity, met with the Bobbitts and Rushing to discuss SMN's services. They discussed some ads that Garrity had brought to the meeting and changing the FM station's format from country and western to adult contemporary. Several days later, on November 10, 1982, Angelo entered into a two-year contract with SMN to provide its adult contemporary format for the FM station and its country and western format for the AM station beginning January 1983.

Angelo Broadcasting used SMN's services for most of the contract period. It used the country music format on the AM station for the entire two years, and it used the adult contemporary format on the FM station for eighteen months. During this time, the stations' ratings continued to fall. Beginning in May 1984, Angelo Broadcasting refused to pay the monthly service fee. The Bobbitts eventually sold the radio stations in 1988.

On February 11, 1985, SMN sued Angelo Broadcasting in Dallas for approximately $15,000 in past-due monthly license fees, alleging breach of contract or, alternatively, unjust enrichment. Later that same day, Angelo sued SMN in Austin alleging DTPA violations. SMN specifically excepted to Angelo's failure to give the required statutory DTPA notice and moved to transfer venue to Dallas. The Austin court ordered the transfer on June 22, 1987. On February 15, 1989, Angelo filed a counterclaim, and on February 22, 1989, the cases were consolidated. On March 20, 1990, Angelo moved to realign the parties. The Dallas court ordered the parties realigned on April 12, 1990. It designated Angelo as the plaintiff and SMN as the defendant. After realignment, Angelo pleaded DTPA violations, breach of contract, breach of the duty of good faith and fair dealing, and negligent misrepresentation. Alternatively, Angelo pleaded for rescission of the contracts either because of failure of consideration, fraud in the inducement, or negligent misrepresentation. SMN once again specifically excepted to Angelo's failure to give the required statutory DTPA notice and moved to abate the case. The court denied SMN's motion.

On August 22, 1990, thirteen days before trial, Angelo sought to amend its pleadings to assert the discovery rule as a defense to SMN's limitations defense to Angelo's DTPA claim. Six days later, a visiting judge overruled Angelo's motion. On the day before trial, Angelo asked the court to reconsider its motion. After reconsideration, the court granted Angelo's motion and permitted the "discovery rule" amendment. SMN then sought a continuance on the grounds that it was not prepared to try the discovery rule issue. The court denied the request. Trial began on September 4, 1990. The jury returned a verdict in favor of Angelo on its DTPA and fraud claims and in favor of SMN on its unjust enrichment claim and Angelo's negligence claim, finding Angelo sixty percent negligent. In connection with the DTPA violation, the jury found that Angelo suffered damages in the amount of $200,000 for loss of the benefit of the bargain, $500,000 for damage to the radio stations' value, and $200,000 for out-of-pocket loss. The jury also found that SMN committed its false, misleading, or deceptive acts or practices knowingly and assessed additional damages of $1,000,000.

On November 20, 1990, SMN moved for a judgment notwithstanding the verdict for several reasons, including Angelo's failure to give SMN the requisite statutory DTPA notice. On November 26, 1990, the court abated the case to permit Angelo to give notice. The next day Angelo gave notice and made demand on SMN for $3.25 million, which represented recovery under the jury findings including fraud. In response, SMN offered to settle with Angelo for the actual damages found by the jury on its DTPA claim ($700,000) plus Angelo's attorneys' fees of $170,249. Angelo rejected the offer. Subsequently, the trial court reduced the judgment to reflect SMN's rejected settlement offer. On February 27, 1991, the trial court entered judgment for Angelo on its DTPA claim, awarding it $700,000 as actual damages, plus $1,000,000 as additional damages, and $2000 as statutory damages, plus $819,357.27 as prejudgment interest, and $170,249 as reasonable and necessary attorneys' fees. It also granted SMN judgment for unjust enrichment in the amount of $15,100, plus reasonable and necessary attorneys' fees in the amount of $109,000, and entered a judgment notwithstanding the verdict on Angelo's fraud claim.

UNJUST ENRICHMENT

In its second and third points of error, Angelo contends that the trial court erred in awarding SMN recovery for unjust enrichment. Angelo argues that the parties' entry into written contracts bars recovery on the basis of the equitable doctrine of unjust enrichment. Angelo further argues that a party guilty of fraud may not recover for unjust enrichment. SMN argues that, because Angelo pleaded for rescission of the contracts under one of its causes of action, it cannot now argue that the contracts are enforceable.

Quantum meruit is founded on unjust enrichment. Vortt Exploration v. Chevron U.S.A., 787 S.W.2d 942, 945 (Tex.1990). Although the presence of a valid contract governing the rendered services may defeat a recovery in quantum meruit, the finding of an agreement does not defeat all restitution remedies grounded in the principle of unjust enrichment. City of Harker Heights v. Sun Meadows Land, Ltd., 830 S.W.2d 313 (Tex.App.--Austin, n.w.h.); see Truly v. Austin, 744 S.W.2d 934, 936 (Tex.1988). Quantum meruit is allowed when a plaintiff has partially performed an express contract but, because of the defendant's breach, the plaintiff is prevented from completing the contract. Truly, 744 S.W.2d at 936; Coon v....

To continue reading

Request your trial
19 cases
  • C & H Nationwide, Inc. v. Thompson, D-1326
    • United States
    • Supreme Court of Texas
    • 22 Junio 1994
    ...("judgment against Appellants in the amount of $43,151.27, plus interest and costs"); Angelo Broadcasting, Inc. v. Satellite Music Network, Inc., 836 S.W.2d 726, 731 (Tex.App.--Dallas 1992, writ denied) ("judgment for unjust enrichment in the amount of $15,100, plus reasonable and necessary......
  • Dawson v. New York Life Ins. Co., 94 C 1423.
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • 19 Julio 1996
    ...the notice requirement is "to afford the opportunity for presuit negotiations and settlement." Angelo Broadcasting, Inc. v. Satellite Music Network, Inc., 836 S.W.2d 726, 736 (Tex.Ct.App.1992). Defendants have not suggested, nor has this Court found, that the demand letter required by § 17.......
  • IT Corp. v. Motco Site Trust Fund, Civ. A. No. H-91-3532.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • 13 Diciembre 1994
    ...n.r.e.). Restitution is normally pursued as an action for quantum meruit. Id.; see also, Angelo Broadcasting v. Satellite Music Network, Inc., 836 S.W.2d 726, 731 (Tex.App. — Dallas 1992, writ denied). A plaintiff may pursue both expectation damages and restitution by alternative pleadings ......
  • Transport Ins. Co. v. Faircloth, D-4059
    • United States
    • Supreme Court of Texas
    • 15 Junio 1995
    ...646 S.W.2d at 930; Safety Cas. Co. v. McGee, 133 Tex. 233, 127 S.W.2d 176, 178 (1939); Angelo Broadcasting, Inc. v. Satellite Music Network, Inc., 836 S.W.2d 726, 733 (Tex.App.--Dallas 1992, writ denied), disapproved on other grounds by Hines v. Hash, 843 S.W.2d 464, 469-70 (Tex.1992). A st......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT