D.F.W. Christian Television, Inc. v. Thornton
| Decision Date | 10 May 1996 |
| Docket Number | No. 94-1210,94-1210 |
| Citation | 933 S.W.2d 488 |
| Parties | 39 Tex. Sup. Ct. J. 598 D.F.W. CHRISTIAN TELEVISION, INC. and Robert R. D'Andrea, Individually, Petitioners, v. Opal THORNTON, Respondent. |
| Court | Texas Supreme Court |
William L. Latham, Stuart B. Lumpkins, Jr., Fort Worth, for petitioners.
Jerome H. Ferguson, III, Joseph E. Burns, Dallas, Carol A. Faulkner, Bedford, Joe B. Abbey, Dallas, for respondent.
In this case, we must interpret an agreement that provided for the purchase of stock in a corporation and for the construction of a television station. Because we hold that the seller breached the agreement and that the buyer is therefore entitled to recover prejudgment interest and attorney's fees, we reverse the judgment of the court of appeals, 925 S.W.2d 17.
Opal Thornton obtained a construction permit from the Federal Communications Commission to build a television station. Robert D'Andrea, individually and as president of DFW Christian Television ("DFW"), signed an agreement with Thornton in which Thornton agreed to form a corporation ("TV-55"), obtain consent from the FCC to assign the construction permit to the corporation, and sell 49% of the newly-formed corporation's stock to DFW. DFW agreed to pay $600,000 into an escrow account pending Thornton's performance of her obligations, and DFW agreed to construct the physical facilities required to operate the station. D'Andrea personally guaranteed DFW's performance.
The agreement provided that the $600,000 would be released to Thornton upon her delivery of 49% of TV-55 stock to the escrow agent. If Thornton failed to deliver the stock within 90 days of execution of the agreement, the escrow agent was to return the $600,000 to DFW. In another section of the contract, the parties agreed that DFW's 49% share of the stock would be returned to Thornton if DFW failed to build the facilities and that Thornton would not be required to return the escrow money if the failure to construct the television station was due to DFW's breach of the agreement. 1
DFW deposited the $600,000 into escrow. Thornton incorporated TV-55 and deposited all of the company's stock into the escrow account. The escrow agent duly dispersed the $600,000 to Thornton. However, a site was not procured and the station was not constructed by DFW. Thornton refused to return the $600,000. Thornton sued DFW and D'Andrea for breach of contract and fraud based on DFW's failure to build the station, and DFW and D'Andrea counterclaimed, alleging that Thornton breached the purchase agreement by failing to obtain a construction site for the station and by failing to return the $600,000. DFW also claimed that Thornton fraudulently induced DFW into signing the purchase agreement by representing that she had obtained a site for the television station and its broadcast tower.
After a bench trial, the trial court concluded as a matter of law that Thornton was entitled to retain the $600,000 only in the event DFW's failure to construct the facilities was due to its breach of contract. The trial court further found that TV-55 was obligated to provide a site for a tower and other physical facilities for the station and that this obligation was a condition precedent to DFW's obligation to build the station. It concluded that DFW's failure to build the station was not a breach of the parties' agreement and that Thornton breached the agreement by failing to return DFW's $600,000. With regard to DFW's fraud claim, the trial court found that Thornton made material, false representations to induce DFW into the agreement and that DFW relied on those representations, causing it damage. The trial court rendered judgment in favor of DFW for actual damages in the amount of $600,000, attorney's fees of $105,000 through the trial plus additional amounts in the event of appeal, and prejudgment interest of $127,528. 2
Thornton appealed, and the court of appeals held that the trial court's interpretation of the agreement to require the return of DFW's $600,000 if Thornton failed to obtain a valid construction permit was in error. 925 S.W.2d at 21. The court reversed the award of attorney's fees and prejudgment interest on DFW's contract claim. However, it affirmed the trial court's award of $600,000 in actual damages based on the trial court's fraud findings. The court of appeals did not address Thornton's challenge to the trial court's findings that Thornton was obligated to find a site for the station and that her...
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