Cactus Utility Co. v. Larson

• Decision Date: 27 March 1986
• Docket Number: No. 13-85-139-CV,13-85-139-CV
• Citation: 709 S.W.2d 709
• Parties: CACTUS UTILITY COMPANY and Hoyte Gentry, Appellants, v. Lew G. LARSON and Larson Plumbing & Utility Company, Appellees.
• Court: Texas Court of Appeals

Page 709

709 S.W.2d 709

CACTUS UTILITY COMPANY and Hoyte Gentry, Appellants, v. Lew G. LARSON and Larson Plumbing & Utility Company, Appellees.

No. 13-85-139-CV.

Court of Appeals of Texas,

Corpus Christi.

March 27, 1986.

Rehearing Denied May 8, 1986.

Second Rehearing Overruled May 29, 1986.

Richard J. Hatch, Corpus Christi, for appellants.

James R. Harris, Corpus Christi, for appellees.

Before DORSEY and KENNEDY, JJ., and NYE, C.J.

OPINION

DORSEY, Justice.

This is a suit on a contract brought by Lew G. Larson and Larson Plumbing & Utility Company as plaintiffs against Cactus Utility Company and Hoyte Gentry, for the division of assets of Cactus Utility Company, a corporation in which both Lew G. Larson and Hoyte Gentry were stockholders. Based on the jury's verdict, judgment was entered for the plaintiffs (Larson) against both defendants (Cactus and Gentry) for $787,053.00 of the remaining assets of Cactus Utility Co., $30,000.00 accounting fees, and various sums for attorney's fees for the trial and appeal of this judgment. Defendants' Motion for New Trial was overruled by the trial court "provided the Plaintiffs file a Three Hundred Fifty Thousand ($350,000.00) Dollar remittitur." Appellants filed the remittitur and perfected this appeal.

Lew G. Larson (Larson), a plumber, began working at Gentry Company for Hoyte Gentry (Gentry), a plumber and plumbing contractor in 1963. In December, 1968, Gentry formed Cactus Utility Company, a corporation which did utility work in connection with plumbing contracts. From the time of incorporation until March 1, 1974, Gentry was the sole stockholder of Cactus Utility Company (Cactus). Larson became an employee of both Cactus and Gentry Company.

In 1968, Larson became a foreman and in 1972 Gentry elected Larson as President of Cactus. On March 1, 1974, Gentry gave 48 percent of Cactus capital stock to Larson and 4 percent to the corporation's attorney, Richard J. Hatch, retaining 48 percent for himself. The old stock certificate was cancelled and new certificates were issued.

In 1980, Larson decided to dispose of his interest in Cactus. Larson and Gentry offered to sell their shares to each other for $850,000.00 to no avail. The parties later worked out a plan whereby the assets of Cactus would be divided. The plan provided that a subsidiary corporation would be established by Cactus under the name of Larson Plumbing and Utility Company. Certain assets would then be transferred from the books of Cactus to Larson Plumbing and Utility Company, the subsidiary. Then, Lew G. Larson would transfer and assign all his shares of capital stock in Cactus (hereinafter "Old Cactus") to Cactus Utility Company (hereinafter "New Cactus") in exchange for all of the stock in the subsidiary corporation. After the exchange of assets and stock, Larson would own 100% of Larson Plumbing and Utility Company and Gentry would own 96% of New Cactus with four shares still held by Richard J. Hatch.

The implementation agreement provided that, after the exchange of stock and the division of assets, the "increase of net value of Cactus Utility Co. between March 1, 1974 and October 1, 1980 ... shall be divided equally between the two companies." The determination of net value was to be made as soon as possible by Cactus Utility Company's accountant, Wayne Rasmussen.

The exchange of stock and division of equipment was completed in 1980. The Separation Agreement was effective on October 1, 1980. On October 1, 1981, Larson met with the accountant and the attorney for Cactus and was advised that the final distribution to his interest was $26,408.36. Larson filed suit on September 24, 1982, to obtain an accounting and the remaining assets of "Old Cactus" to which he was entitled. On August 22, 1984, several days before trial, further calculations by Cactus' accountant showed Larson entitled to receive $267,439.29.

As previously noted, the jury found Larson Plumbing and Utility Company entitled to recover $787,053.00 and the trial court ordered a $350,000.00 remittitur. Gentry and Cactus Utility Company appealed, raising fourteen points of error. Larson and Larson Plumbing replied and raised two cross-points of error.

Appellants' first point of error alleges that the trial court erred in overruling his special exception to any reference or pleading based on the Stock Purchase Agreement.

The trial court is clothed with broad discretion in ruling on special exceptions. Its ruling will not be disturbed on appeal in the absence of a showing of an abuse of that discretion. Barnard v. Mecom, 650 S.W.2d 123, 125 (Tex.App.--Corpus Christi 1983, writ ref'd n.r.e.); Hubler v. City of Corpus Christi, 564 S.W.2d 816, 820 (Tex.Civ.App.--Corpus Christi 1978, writ ref'd n.r.e.).

Appellants contend that the Stock Purchase Agreement was superseded by the subsequent agreement of the parties for the division of the increase in the assets of the corporation. At a pre-trial hearing, appellants argued that, because the Stock Purchase Agreement was of no force and effect, appellees could not be permitted to refer to it or base a claim on it. Appellants then conceded that the Stock Purchase Agreement would doubtless come into evidence during the trial. Appellants have failed to show any abuse of discretion by the trial court in overruling this special exception. Appellants' first point of error is overruled.

Appellants' second point of error complains that the trial court erred in admitting the Stock Purchase Agreement into evidence. "Predicates for complaints on appeal must be preserved at the trial court by motion, exception, objection, plea in abatement, or some other vehicle." PGP Gas Products, Inc. v. Fariss, 620 S.W.2d 559, 560 (Tex.1981); O'Shea v. Coronado Transmission Co., 656 S.W.2d 557 (Tex.App.--Corpus Christi 1983, writ ref'd n.r.e.). Appellants made no objection to the admission of the Agreement into evidence at the time it was offered and admitted. Appellants did make an objection to its admission later in the trial but an objection must be made when the evidence is offered, not after it has been received, in order to be considered on appeal. Montes v. Lazzara Shipyard, 657 S.W.2d 886, 889 (Tex.App.--Corpus Christi 1983, no writ). Appellants' second point of error is overruled.

Appellants' third point of error contends that the trial court erred in allowing copies of the Stock Purchase Agreement to be distributed to the jury. The copies were distributed to the jury for the limited purpose of allowing the jury to follow Larson's testimony in reference to the specific exhibit. The copies were retrieved immediately after the jury finished reviewing the exhibit so that the jury had only one Plaintiff's Exhibit Number 4 that went into the jury room.

Texas Rule of Evidence 102, authorizes the trial court to construe the rules "to secure fairness in administration, elimination of unjustifiable expense and delay, and promotion of growth and development of the law of evidence to the end that the truth may be ascertained and the proceedings justly determined." The trial court apparently agreed with appellees that the distribution of the copies would facilitate the trial by saving time and would promote clarity of understanding for the jurors. The trial court was certainly within its discretion in allowing the distribution of the copies of Plaintiff's Exhibit Number 4. Appellants' third point of error is overruled.

Appellants' fourth through seventh points of error allege that the trial court erred in allowing appellees to ask an expert witness a hypothetical question that assumed facts not supported by the evidence, in allowing the response to that question and in granting a judgment based on that response. Appellants contend that, because the question and answer were inadmissible, there is no evidence or insufficient evidence to support the finding upon which the judgment is based. In considering a "no evidence" or "insufficient evidence" point of error, we will follow the well-established test set forth in Dyson v. Olin Corp., 692 S.W.2d 456 (Tex.1985); Glover v. Texas General Indemnity Co., 619 S.W.2d 400 (Tex.1981); Garza v. Alviar, 395 S.W.2d 821 (Tex.1965); Allied Finance Co. v. Garza, 626 S.W.2d 120 (Tex.App.--Corpus Christi 1981, writ ref'd n.r.e.); CALVERT, No Evidence and Insufficient Evidence Points of Error, 38 Tex.L.Rev. 361 (1960).

Appellees hired Dorothy Fowler, a Certified Public Accountant, to review the corporate books and determine the net value of Cactus for the purpose of effecting a division of assets of the company. Ms. Fowler, testifying as an expert witness, was asked to make seven assumptions in order to determine Larson Plumbing's distributive share of Cactus.

Hypothetical questions should be restricted to the facts in evidence or to be put into evidence in order to prevent misleading or confusing the jury. However, "it is within the province of counsel to assume, within the limits of the evidence, a state of facts which he contends the evidence justifies and which enables the witness to form an intelligent answer from the facts assumed...." Roth v. Law, 579 S.W.2d 949, 954 (Tex.Civ.App.--Corpus Christi 1979, writ ref'd n.r.e.). "It is not necessary to the propriety of such a question that it include a reference to all of the relevant facts in evidence nor that it be confined to facts proven with mathematical certainty. It may include inferences reasonably drawn from other facts proved...." Burns v. Bridge Engineering Corp., 465 S.W.2d 427, 432 (Tex.Civ.App.--Houston [14th Dist.] 1971, writ ref'd n.r.e.). Therefore, we must look at the assumptions challenged to determine whether they had a basis in the evidence.

Assumption number one states that "market value" as defined in paragraph six of the Stock Purchase Agreement should be used to calculate the division of corporate assets between the parties. The Stock Purchase Agreement, which was admitted into evidence, defines ...