Creative Mfg., Inc. v. Unik, Inc.

• Decision Date: 05 February 1987
• Docket Number: No. 2-86-058-CV,2-86-058-CV
• Citation: 726 S.W.2d 207
• Parties: CREATIVE MANUFACTURING, INC., Appellant, v. UNIK, INC., Appellee.
• Court: Texas Court of Appeals

Page 207

726 S.W.2d 207

CREATIVE MANUFACTURING, INC., Appellant, v. UNIK, INC., Appellee.

No. 2-86-058-CV.

Court of Appeals of Texas Fort Worth.

Feb. 5, 1987.

Rehearing Denied March 26, 1987.

Hill, Heard, Oneal, Gilstrap & Goetz and Shane Goetz, Arlington (on appeal only), for appellant.

Richards, Harris, Medlock & Andrews and Charles S. Cotropia, Dallas, Shannon, Gracey, Ratliff & Miller and Earl Harcrow, Fort Worth, for appellee.

Before FENDER, C.J., and HILL and HOPKINS, JJ.

OPINION

HILL, Justice.

Creative Manufacturing, Inc. appeals a judgment taken against it by Unik, Inc., the appellee, as a result of the breach of a written license agreement under a patent. In a trial before the court, Unik recovered its damages in the amount of $21,799.80, attorneys' fees of $36,598.46, prejudgment and postjudgment interest, and costs. Creative presents three points of error.

We affirm.

In May, 1983, Creative, Mike Jennings (its president), and Unik entered into an agreement by which Creative was granted a license to manufacture and sell certain lap desks in return for royalty payments which it was to pay to Unik. Creative was to pay a total royalty of $1.00 for its activities prior to May 1, 1984, and a royalty of five percent (5%) of the net sales value of all the products Creative thereafter produced under the agreement. Creative was to deliver monthly accounting reports to Unik. The license agreement was entered into in connection with the settlement of litigation between the parties. Creative paid the $1.00 but paid no further royalties even though it continued to manufacture and sell the lap desks after May 1, 1984. Unik subsequently brought this suit for a declaratory judgment that Creative's acts constitute a material breach of the agreement, seeking an accounting, and for its reasonable attorneys' fees and costs. Unik's suit was filed in the 348th District Court on October 19, 1984. On December 7, 1984, Creative filed suit in federal court, seeking to declare the underlying patent invalid and void and that it had not infringed on the patent, and seeking attorneys' fees.

In point of error number one, Creative urges that the trial court erred and abused its discretion in not granting its motion to stay proceedings. Five days prior to trial, Creative filed a motion to stay these state court proceedings, generally on the grounds that the federal court would be more familiar with patent law. Creative urged, in effect, that the trial court abate this action in favor of the resolution of the validity and enforcement of the underlying patent in the federal court. Unik had a valid state court claim for breach of contract. The fact that the case involves a patent question does not mean that Creative's subsequent action in federal court operates to abate Unik's state court proceeding. See Hyde Corporation v. Huffines, 158 Tex. 566, 314 S.W.2d 763, 771 (1958). In the Hyde Corporation case, the Supreme Court held that a trade secret case brought in state court by the holder of a patent against his licensee was not abated by a pending federal court action brought by the licensee, which sought to assert the superiority of a patent which it had purchased from a third person after entering into the licensing agreement. We believe the same rule would apply to a breach of contract action brought by a patent holder against his licensee for breach of the license agreement.

One of the cases cited by Creative holds that a state court suit for breach of the licensing agreement due to the failure to pay royalties is not a suit arising under the patent laws and that such a suit may be continued at the same time as a federal suit for declaratory judgment of the invalidity of the patent. Thiokol Chemical Corp. v. Burlington Industries, Inc., 448 F.2d 1328, 1330-31 (3rd Cir.1971). The other cases cited by Creative either involve situations where the federal action preceded the state action or situations where the trial court was held not to have abused its discretion by granting such a stay. Creative cites no case which holds that the trial court in a situation such as the case at bar abuses its discretion by refusing to stay a state court proceeding pending the outcome of a subsequently-initiated federal court proceeding. We hold that the trial court did not abuse its discretion and overrule point of error number one.

In point of error number two, Creative argues that the trial court erred and abused its discretion in awarding Unik attorneys' fees of $36,598.46. Creative asserts that the attorneys' fees awarded by the trial court were unreasonable. The trial court filed findings of fact and conclusions of law. In the findings of fact, the trial court found that Unik made a proper presentment of its claim for past royalties due against Creative in a timely manner pursuant to TEX.CIV.PRAC. & REM.CODE ANN. sec. 38.001 (Vernon 1986) entitling Unik to recover a reasonable amount as attorneys' fees; that the hourly rate charged by Unik's counsel in representing Unik was reasonable; and that the time expended by Unik's counsel in representing it was reasonable and necessary, and was professionally and meticulously recorded by Unik's counsel.

Findings of fact entered in a case tried to the court are of the same force and dignity as a jury's verdict upon special issues. City of Clute v. City of Lake Jackson, 559 S.W.2d 391, 395 (Tex.Civ.App.--Houston [14th Dist.] 1977, writ ref'd n.r.e.). The trial court's findings of fact are reviewable for legal and factual sufficiency of the evidence to support them, First Nat. Bank in Dallas v. Kinabrew, 589 S.W.2d 137, 146 (Tex.Civ.App.--Tyler 1979, writ ref'd n.r.e.), by the same standards as are applied in reviewing the legal or factual sufficiency of the evidence supporting a jury's answer to a special issue. Okon v. Levy, 612 S.W.2d 938, 941 (Tex.Civ.App.--Dallas 1981, writ ref'd n.r.e.).

When the party having the burden of proof on a special issue appeals from an adverse fact finding, the point of error challenging the legal sufficiency of the evidence should be that the matter was established "as a matter of law." Id.

However, if a party without the burden of proof incorrectly phrases his point of error and contends that the finding was established "as a matter of law," he has still invoked this court's appellate jurisdiction to consider the contention that there was no evidence to support the finding. See id.

In determining a "no evidence" point, we are to consider only the evidence and inferences which tend to support the finding of the jury and disregard all evidence and inferences to the contrary. See Larson v. Cook Consultants, Inc., 690 S.W.2d 567, 568 (Tex.1985); International Armament Corp. v. King, 686 S.W.2d 595, 597 (Tex.1985); In re King's Estate, 150 Tex. 662, 244 S.W.2d 660, 661-62 (1951). If there is any evidence of probative force to support the finding of the jury, the point must be overruled and the finding upheld. In re King's Estate, 244 S.W.2d at 661-62.

A "no evidence" point of error must and may only be sustained when the record discloses one of the following: (1) a complete absence of evidence of a vital fact; (2) the court is barred by rules of law or evidence from...