Cooke v. Dykstra

• Decision Date: 25 October 1990
• Docket Number: No. B14-89-00932-CV,B14-89-00932-CV
• Citation: 800 S.W.2d 556
• Parties: Edward M. COOKE and Edward Dutko, Appellants, v. Don L. DYKSTRA, Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 556

800 S.W.2d 556

Edward M. COOKE and Edward Dutko, Appellants, v. Don L. DYKSTRA, Appellee.

No. B14-89-00932-CV.

Court of Appeals of Texas Houston (14th Dist.).

Oct. 25, 1990.

Marvin L. Rader, League City, for appellants.

S. Elwood York, Jr., Houston, for appellee.

Before ROBERTSON, SEARS and DRAUGHN, JJ.

OPINION

SEARS, Justice.

This is a breach of agreement case. It arises from a limited partnership agreement entered into by Edward M. Cooke and Edward Dutko as limited partners and Don L. Dykstra as general partner. In nine points of error, appellants claim the evidence did not support the trial court's judgment, the damages were excessive, and the trial judge improperly admitted certain evidence. We modify the judgment to remit a portion of the damages and delete the attorney's fee award. As modified, we affirm.

Appellants and appellee entered into a limited partnership agreement in which appellants were the limited partners and appellee was the general partner. The parties formed the partnership for the purpose of exporting goods. As their contribution to the partnership, appellants executed guaranty agreements to American Trade Company ("the partnership") in the amount of $25,000 each.

During the partnership, appellee accessed the $50,000 line of credit, secured by the two $25,000 guarantee agreements, as funds were needed in the partnership account. In January, 1982, appellee attempted to access the line of credit and was denied access. Around the same time, appellants attempted to terminate the partnership. Appellee then sued for breach of the partnership agreement. The only issues submitted to the jury were for breach of the limited partnership agreement. The jury returned a verdict in favor of appellee in the amount of $120,000 in damages and $30,000 in attorney's fees.

In their fifth point of error, appellants claim the trial court erred in allowing appellee's attorney to testify to attorney's fees because the attorney was not properly disclosed as an expert witness. One of appellants' requests for admission asked if there were any expert witnesses who would testify at trial. Appellee replied, "Do not know." Appellee did not later supplement the answers, nor did he designate expert witnesses in any other manner. When appellee's attorney attempted to testify to his fees, appellants objected, claiming the trial court should disallow the testimony because appellee did not designate his attorney as an expert.

Rule 166b(5) of the Texas Rules of Civil Procedure placed a duty on appellee to supplement his answers to the requests for admission and inform appellants that he intended to call his attorney, as an expert, to testify concerning attorney's fees.

Under Texas Rule of Civil Procedure 215(5), failure to supplement results in the loss of the opportunity to offer the witness's testimony. The sanction is automatic. Morrow v. H.E.B., Inc., 714 S.W.2d 297 (Tex.1986). The exception is when the party offering the testimony shows good cause why the testimony should be allowed despite the discovery sanction. Sharp v. Broadway Nat'l Bank, 784 S.W.2d 669, 671 (Tex.1990). The party offering the testimony bears the burden to show good cause to the trial court. Clark v. Trailways, Inc., 774 S.W.2d 644, 646 (Tex.1989). Because appellee made no such showing, the testimony of his attorney was inadmissible. Under these circumstances, there was no admissible evidence on attorney's fees. See E.F. Hutton & Co., Inc. v. Youngblood, 741 S.W.2d 363 (Tex.1987). We sustain point of error five.

In their first point of error, appellants claim the trial court should have entered a take nothing judgment in their favor because appellee did not establish liability or damages as a result of appellants' alleged breach of the limited partnership agreement. Appellants allege they are not liable to the general partner because they made no contribution to the limited partnership.

Appellants executed guaranty agreements to First City Bank Clear Lake, guaranteeing a $50,000 line of credit for American Trade Co. A guaranty is a promise of one person to perform an act of the same content and kind as another is contractually bound to perform. Coleman Furniture Corp. v. Lieurance, 405 S.W.2d 646, 647 (Tex.Civ.App.--Amarillo 1966, writ ref'd n.r.e). The partnership had at its disposal $50,000 in cash guaranteed by appellants. The Uniform Limited Partnership Act provides that contributions of a limited partner may be cash or other property. Tex.Rev.Civ.Stat.Ann. art. 6132a § 5 (Vernon 1964). The limited partnership agreement states that the cash contribution of the limited partners was not determined at the time the agreement was signed. The only evidence in the record of the limited partners' contribution is the guaranty agreements executed by appellants. By guaranteeing a $25,000 line of credit for the partnership, each appellant contributed or agreed to contribute, $25,000 to the limited partnership.

The partnership agreement states that appellants are liable as limited partners for the amount of the actual capital contribution made or agreed to make to the partnership. The guaranty agreements state the guarantor's liability is limited to $25,000. In his pleadings, appellee claimed appellants had taken deductions in the original line of credit and that the total amount due on the credit line totalled less than $25,000. However, appellants submitted no issue on their counterclaim; therefore, they have waived their claim to any offset. Each appellant is liable to the limited partnership for $25,000. We overrule point of error one.

In their ninth point of error, appellants claim the jury verdict of $120,000 was excessive and the trial court should have reduced the judgment. Appellants argue the verdict is excessive because it reflects an amount larger than their contributions to the limited partnership. Section 9.01 of the limited partnership agreement reads:

The liability of the General Partner arising from carrying on the business affairs or operations of the Partnership or for the debts of the Partnership is unrestricted. The liability of the Limited Partners with regard to the Partnership in all respects is restricted and limited to the amount of the actual capital contributions that they make or agree to make to the Partnership.

The partnership agreement limits appellants' liability to the amount of their contributions. Each limited partner contributed $25,000 in the way of a guaranty agreement on a line of credit at First City National Bank Clear Lake; therefore, the liability of each appellant is limited to $25,000. We hold the $120,000 damage award to be excessive. We sustain point of error nine and remit the award to the maximum liability of $25,000 for each appellant.

In their second point of error, appellants claim the trial court erred in overruling appellants' request for definitions and instructions to be included in the trial court's charge. Appellants requested two instructions that defined a limited partnership. They further requested an instruction on fiduciary duty and an instruction stating that neither Cooke, nor Dutko had any obligation to execute an extension to the original $50,000 line of credit.

To determine whether an alleged error in the jury charge is reversible, we must consider the pleadings of the parties, the evidence presented at trial, and the charge in its entirety. See Island Rec. Dev. v. Republic of Texas Sav. Ass'n, 710 S.W.2d 551, 555 (Tex.1986). We will find reversible error only if, when viewed in the light of the totality of the circumstances, the error, if any, amounted to such a denial of the rights of the complaining party as was reasonably calculated to cause and probably did cause rendition of an improper judgment. Tex.R.App.P. 81(b)(1).

Appellants first requested the following definitions of a limited partnership:

A limited partnership is a separate legal entity which has its own identity. It may contract, borrow money, engage in business, sue or be sued, or do any act which a person could do. It acts through its general partners, in this case, Don L. Dykstra. It can own property and can maintain bank deposit, which deposits do not belong to the general partner, but rather to the partnership itself.

You are instructed that a limited partnership is one wherein the limited partners have no liability nor obligation for any debts incurred by the partnership. The general partner is fully and completely responsible for any and all indebtedness incurred by the limited partnership, including trade accounts incurred by the limited partnership.

The definition given by the court reads as follows:

A "limited partnership" is a partnership formed by two or more persons under the Texas Uniform Limited Partnership Act, which has one or more general partners and one or more limited partners. A limited partnership is formed by filing with the Secretary of State of the State of Texas, a sworn certificate stating the name of the partnership, the character and location of its business, the name and place of residence of each member (both general and limited) and the term for which such limited partnership is to exist.

Definitions of terms used in the charge are proper when they would aid the jurors in their deliberations. Texas Employers' Ins. Ass'n v. Hamor, 97 S.W.2d 1041 (Tex.Civ.App.--Amarillo 1936, no writ). The sufficiency of a particular definition is a matter of discretion for the trial court. Buchanan v. American Nat'l Ins. Co., 446 S.W.2d 384, 387 (Tex.Civ.App.--El Paso 1969, writ ref'd n.r.e). We conclude the trial court did not abuse its discretion in refusing appellants' proposed definition. Appellants' definition states facts that are contrary to the partnership agreement. The trial court's definition was sufficient to aid the jurors in their deliberations.

Appellants next complain of the trial court's failure to include the following instruction in the charge:

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