Earl Hayes Rents Cars and Trucks v. City of Houston, 16901

• Decision Date: 04 August 1977
• Docket Number: No. 16901,16901
• Citation: 557 S.W.2d 316
• Parties: EARL HAYES RENTS CARS & TRUCKS, a corporation, et al., Appellants, v. CITY OF HOUSTON, Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 316

557 S.W.2d 316

EARL HAYES RENTS CARS & TRUCKS, a corporation, et al., Appellants, v. CITY OF HOUSTON, Appellee.

No. 16901.

Court of Civil Appeals of Texas, Houston (1st Dist.).

Aug. 4, 1977.

Rehearing Denied Oct. 6, 1977.

Jamail & Gano, John Gano, Houston, for appellants.

Otis H. King, City Atty., Joseph G. Rollins, Senior Asst. City Atty., Houston, for appellee.

EVANS, Justice.

This is a breach of contract case.

In 1968 the City of Houston let competitive bids for the operation of certain public parking facilities at the Houston Intercontinental Airport, which was then under construction. Earl Hayes Rents Cars & Trucks, a corporation, was the successful bidder, and a formal contract was made for a five year term beginning July 1, 1969 and ending June 30, 1974.

Under this contract, termed a Concession Agreement, the City granted Hayes the "right and privilege" to operate the parking facilities at the airport. The contract also designated various levels in each terminal building as parking areas and specified the number of parking spaces within each area. As compensation to the City, Hayes agreed to pay "a sum equal" to specified percentages of the annual gross revenues to be derived from the operation of the facilities or, alternatively, specified minimum annual guaranteed payments, whichever would be the greater. The contract provided that the City would furnish certain directional signs or graphics and would make office space available to Hayes in one of the terminal buildings.

The grand opening of the Houston Intercontinental Airport was held on June 9, 1969, and on that date Hayes commenced operation of the facilities under the business name "Interpark".

Difficulties between the parties soon developed due to the City's failure to promptly perform some of its affirmative obligations under the contract. The City was unable to make available to Hayes the specified number of parking spaces and to furnish Hayes with signs and office space as agreed. Hayes, at its own expense and with the approval of the Director of Aviation, advanced the funds necessary to construct the office and to purchase the signs. It then sought reimbursement from the City for the amount of such costs and for its claimed loss of revenue due to the City's failure to provide sufficient parking spaces. The total sum Hayes claimed was $75,384.70.

Despite continuing efforts on the part of Hayes to reach a settlement with the City, the controversy was never resolved. Finally Hayes decided to withhold the amount of its claim from the monies which it was due to pay the City under the terms of the contract. This resulted in further investigation by the City and in the passage of a resolution authorizing a settlement of the matters in dispute; however, no final settlement was reached. On May 13, 1971 the City, contending that Hayes was in arrears of its required payments, enacted an ordinance providing that at 12:01 that same night, the Director of Aviation would take over the parking facilities and operate the facilities. Pursuant to this authority, Hayes was evicted from the premises and the City thereafter operated the parking facilities for the balance of the five year term.

Hayes subsequently filed this action against the City, alleging damages as a result of the City's actions, and the City counterclaimed, alleging that Hayes was liable for the difference between the guaranteed minimum payments and the net revenues which the City had realized after its take-over of the parking facilities.

The trial court submitted four special issues to the jury. In response to Special Issue No. 1 the jury found that Hayes had expended $47,893.16 for construction of office space and $15,067.59 for signs. The parties had stipulated that Hayes' loss of revenue by reason of the City's failure to furnish the required number of parking spaces was in the sum of $12,423.95. Therefore, based on the stipulation and the jury's finding, Hayes' damages by reason of the City's failure to perform its contractual obligations was established to be in the claimed amount of $75,384.70. The jury also found that Hayes suffered a loss in the amount of $150,000.00 by reason of the City taking over its properties, and that in reasonable probability, Hayes would have made a $400,000.00 profit had it been permitted to continue its operation for the balance of the contract term.

In response to Special Issue No. 2, the jury found that prior to May 13, 1971, the date of the City's take-over of the facilities, Hayes had failed to remit to the City the total sum of $393,787.50. However, in response to Special Issue No. 3 the jury found that after deducting the City's profits from its operation after taking over the facilities, Hayes had not failed to pay to the City any amount of the money due it under the guaranteed payment provisions of the contract.

The trial court entered judgment on the jury's verdict, disregarding the jury's answer to Special Issue No. 2, and awarding Hayes the sum of $150,000.00 in damages, plus interest thereon at 9% per annum from and after May 14, 1971. All other claims for affirmative relief were denied.

On this appeal, Hayes contends the trial court erred in refusing to enter a judgment in its favor for the sum of $400,000.00, plus interest, the amount which the jury found would have been its profits had it been permitted to continue operation for the balance of the five year term. In cross-points of error, the City contends that the trial court erred in refusing to award it the sum of $610,095.42 which it contends the evidence established, as a matter of law, to be the amount which Hayes failed to remit prior to the date of the City's take-over, and, alternatively, for refusing to award it the sum of $393,787.50, which is the amount found by the jury to response to Special Issue No. 2. The City further contends that the trial court erred in awarding Hayes the sum of $150,000.00 plus prejudgment interest for loss of properties resulting from the City's take-over, and prejudgment interest thereon, and that the court also erred in awarding prejudgment interest at the rate of 9% per annum prior to the effective date of the statute increasing the legal rate of interest.

Although each party claims that the other breached the contract, neither party requested an issue pertaining to the contract or as to its alleged breach. Nor did the trial court prepare written findings as authorized by Rule 279, Texas Rules of Civil Procedure. Therefore, in considering the parties obligations under the contract and whether or not there was a breach of such obligations by either party, all factual issues must be resolved in support of the trial court's judgment and any theory of the law which under the pleadings and evidence would tend to support the judgment must be adopted. Transportation League, Inc. v. Morgan Express, Inc., 436 S.W.2d 378, 387 (Tex.Civ.App. Dallas 1969, writ ref'd n. r. e.). ...