City of Corpus Christi v. Bayfront Associates, Ltd.
| Decision Date | 18 June 1991 |
| Docket Number | No. 13-90-101-CV,13-90-101-CV |
| Citation | 814 S.W.2d 98 |
| Parties | CITY OF CORPUS CHRISTI, Texas, Appellant, v. BAYFRONT ASSOCIATES, LIMITED, Appellee. |
| Court | Texas Court of Appeals |
James F. McKibben, Jr., Ken Fields, Hunt, Hermansen, McKibben & Barger, Corpus Christi, for appellant.
Cecil W. Casterline, Susan J. Gilbert, Ruth Ann Norton, Jennifer L. Weed, Bell, Boyd & Lloyd, Dallas, for appellee.
Susan M. Horton, Gen. Counsel, Cary L. Bovey, Asst. Gen. Counsel, Austin, Texas Municipal League and Texas Attys. Ass'n, for amicus curiae.
Before KENNEDY, DORSEY and HINOJOSA, JJ.
The City of Corpus Christi, Texas, ("the City") appeals a $2,416,176.00 judgment in favor of Bayfront Associates, Ltd., in Bayfront's suit for breach of contract and breach of fiduciary duty. The City raises nineteen points of error challenging the legal and factual sufficiency of the evidence to support the jury's verdict, the admission of certain evidence, the jury charge, and the trial court's award of pre-judgment interest. We reverse the trial court's judgment.
This suit stems from a written agreement ("Lease") between the City and Bayfront concerning the lease by Bayfront of a portion of the bottom of Corpus Christi Bay which was owned by the City. Bayfront was to build a twelve-acre landfill on the leased bay bottom, to build improvements on the resulting "Landmass" and to sub-lease the Landmass to various retail and tourist related tenants, forming a commercial development referred to as a "festival market." The proposed "anchor" tenant of the Landmass was to be a large commercial aquarium ("Aquarium"). 1 In order for the Landmass to be constructed, Bayfront needed to obtain government permits for its construction, including a permit issued by the United States Army Corps of Engineers ("Corps of Engineers"). According to the Lease between the City and Bayfront, the City was to assist in obtaining the permits. After some time, the Corps of Engineers issued a notice of intent to issue the permit but did not actually issue it. Subsequently, after a series of public controversies concerning the creation of the Landmass, including public opposition from at least one City Council member and an announcement that the Aquarium would be located elsewhere, the Corps of Engineers withdrew its notice of intent to issue the permit.
Bayfront brought suit against the City for breach of contract, contending that the City breached the express covenants contained in Articles 1.02 and 4.01(a) of the contract. Bayfront also contended its relationship with the City constituted a joint venture agreement or a partnership and that the City owed Bayfront a fiduciary duty. Bayfront brought a cause of action against the City for breach of its fiduciary duty and its duty of utmost good faith as a partner. Further, Bayfront contended that, as partners, it and the City shared a special relationship and that pursuant to that relationship, the City owed Bayfront a duty of good faith and fair dealing and that the City breached that duty. Bayfront specified which acts on the City's part constituted the breaches. Bayfront sought actual damages of $10,400,000.00, exemplary damages of $36,000,000.00, and attorneys' fees.
The City answered with general and specific denials. The City denied that it in any way breached the lease agreement between itself and Bayfront, that it repudiated the agreement, or that its conduct towards Bayfront was inconsistent in any way with the agreement. It further denied that any partnership or joint venture existed between it and Bayfront and that it therefore, did not owe a fiduciary duty or any duty of good faith. The City specifically denied each act listed by Bayfront in support of its contentions. The City also specifically denied each of Bayfront's allegations with regard to damages. The City also raised several affirmative defenses, including governmental immunity and the exceptions contained in the Texas Tort Claims Act, violations of the Texas Constitution, estoppel and waiver, contributory negligence, comparative causation and comparative responsibility.
The City contended that the unavailability of the permit resulted from a discretionary decision by an independent agency, namely, the Corps of Engineers. Additionally, the City contended that Bayfront had not exhausted its administrative remedies. The City also addressed Articles 1.02 and 4.01(a) of the agreement, outlined its interpretation of those articles, and contended that Bayfront's interpretation of them would be void and illegal.
After a jury trial, the trial court denied the City's motion for an instructed verdict, and the case went to the jury. The jury found that the City did breach the contract, that the City and Bayfront did enter into a partnership, that the City did breach its fiduciary duty, and awarded actual damages of $1,507,596.00. The jury awarded zero dollars to Bayfront for lost profits but awarded $242,657.00 in attorney's fees for trial, zero dollars in the event of appeal to the Court of Appeals and the Supreme Court, and zero dollars in exemplary damages. The trial court denied the City's motion for judgment notwithstanding the verdict and entered judgment on the jury verdict, additionally awarding statutory prejudgment interest. The City timely filed a motion for new trial which the trial court denied.
By its third point of error, the City contends that the trial court erred in submitting Jury Question No. 1, inquiring whether the City breached its contract with Bayfront, because, as a matter of law, none of the four acts which the jury was instructed to consider constituted a breach of contract. The contract which is the center of the controversy is the Lease between the City and Bayfront. Bayfront's petition specifically complained of the City's breach of Articles 1.02 and 4.01(a) of the Lease. These Articles are:
1.02 Lessee shall immediately herewith commence the preparation and filing of an application for the necessary and applicable Corps of Engineers permit, and this Lease Agreement is expressly conditioned upon receiving the express approval of all applicable federal, state and local governmental agencies of the proposed Land Mass and improvements thereon within eighteen (18) months of the date hereof. Upon request of Lessee, City agrees to promptly join in the application and use all diligence in assisting with obtaining all permits contemplated by this Lease Agreement, provided, that such applications are in conformity with the Plans and Specifications as approved in Article 7.
....
4.01 Either party hereto may terminate this Lease Agreement, and the parties thereafter shall have no further obligation to each other hereunder if any one of the following conditions precedent are not met:
(a) failure to obtain a United States Army Corps of Engineers permit(s) according to terms and conditions reasonably acceptable to City and/or Lessee. In connection therewith, Lessee shall exercise its best efforts to prepare and submit all applications necessary and required by the United States Army Corps of Engineers for said Permit(s), and City agrees, provided that such applications are in conformity with the Plans and Specifications as approved in Article 7, promptly upon request of Lessee to join, without cost to City, in the applications and assisting with obtaining said Permit(s).
Under article 1.02, upon Bayfront's request, the City had the duties (1) to join in the application and (2) to use all diligence in assisting with obtaining all permits contemplated by the Lease agreement. The Lease was signed on August 19, 1983.
In a breach of contract, the plaintiff must show the existence of a contract between the parties, that the contract created duties, that a breach of the duties occurred, and that the party sustained damages. TCI Cablevision of Texas, Inc. v. South Texas Cable Television, Inc., 791 S.W.2d 269, 271 (Tex.App.--Corpus Christi 1990, writ denied). The parties do not dispute that the contract in question is the Lease. Furthermore, the parties do not dispute that, pursuant to the contract, Bayfront had a duty to use its best efforts to procure the permits and, upon request of Bayfront, the City had the duty to "join in the application and use all diligence in assisting with obtaining all permits."
Bayfront contended at trial and contends on appeal that the City breached the Lease (1) by failing to attend key meetings with the Corps of Engineers in Galveston, (2) by failing to respond to Councilmember Mary Pat Slavik's letters written on City stationery opposing the Landmass project, (3) by failing to give Bayfront advanced notice that the Aquarium Association was considering withdrawing from the Landmass, and (4) by providing significant financial support to encourage the Aquarium Association's move to another location. These four acts were included in the instruction accompanying Jury Question No. 1 regarding breach of contract. 2 In order for any of these acts to constitute a breach of contract, the City must have had the duties to (1) attend the key meetings with the Corps of Engineers in Galveston, (2) respond to Councilmember Mary Pat Salvik's letters written on City stationery opposing the Landmass project, (3) notify Bayfront that the Aquarium Association was considering withdrawing from the Landmass, or (4) not encourage the Aquarium to move to another location.
The City argues that the "assistance" language in the Lease does not include the duties and acts recited above but required only that the City take necessary formal, procedural steps in the permit process. The City also argues that the "assistance" language is not sufficiently definite to impose a legally enforceable duty on the City. We agree.
In construing a written contract, the primary concern of the court is to ascertain the true intentions of the parties as...
To continue reading
Request your trial
-
Norris v. Housing Authority of City of Galveston
...powers as the Constitution itself or the statutes have specifically conferred upon them); Corpus Christi v. Bayfront Assocs., 814 S.W.2d 98, 105 (Tex.App. — Corpus Christi 1991, writ denied); Hill Farm, Inc. v. Hill County, 425 S.W.2d 414, 418 (Tex.Civ. App. — Waco 1968), aff'd, 436 S.W.2d ......
-
Tooke v. City of Mexia
...sued for breach of contract for damages and recovery of funds escrowed with the City); City of Corpus Christi v. Bayfront Assocs., 814 S.W.2d 98 (Tex.App.-Corpus Christi 1991, writ denied) (developer sued for breach of lease agreement and breach of fiduciary duty, and City claimed immunity ......
-
Sheffield Devel. v. City of Glenn Heights
...may act only in its official capacity"). 90. See Taub, 882 S.W.2d at 826. 91. See, e.g., City of Corpus Christi v. Bayfront Assocs., Ltd., 814 S.W.2d 98, 105 (Tex.App.-Corpus Christi 1991, writ denied) ("an individual city council member's mental process, subjective knowledge, or motive is ......
-
Shipula v. Tex. Dep't of Family Protective Serv.
...v. City of Grapevine, 218 S.W.3d 772, 779 (Tex. App.--Fort Worth 2007, pet. denied)(fraud); City of Corpus Christi v. Bayfront Assocs., 814 S.W. 2d 98 (Tex. App.--Corpus Christi 1991, writ denied)(breach of fiduciary duty); Gillum v. City of Kerrville, 3 F.3d 117, 123 (5th Cir. 1993)(intent......
-
Contracting Out of Partnership.
...a special debt of gratitude. (1.) Martin v. Peyton, 158 N.E. 77, 78 (N.Y. 1927). (2.) City of Corpus Christi v. Bayfront Assocs., Ltd., 814 S.W.2d 98, 109 n.4 (Tex. App. (3.) See infra notes 20-24 and accompanying text. (4.) See infra notes 20-24 and accompanying text. (5.) See UNIF. P'SHIP......