Eloise Bauer & Associates, Inc. v. Electronic Realty Associates, Inc.

• Decision Date: 18 August 1981
• Docket Number: No. 8874,8874
• Citation: 621 S.W.2d 200
• Court: Texas Court of Appeals
• Parties: ELOISE BAUER & ASSOCIATES, INC., Appellant, v. ELECTRONIC REALTY ASSOCIATES, INC. and Mike Gaston, Appellees.

Page 200

621 S.W.2d 200

ELOISE BAUER & ASSOCIATES, INC., Appellant, v. ELECTRONIC REALTY ASSOCIATES, INC. and Mike Gaston, Appellees.

No. 8874.

Court of Civil Appeals of Texas, Texarkana.

Aug. 18, 1981.

Rehearing Denied Aug. 18, 1981.

David C. Kent, M. David Bryant, Jr., Hughes & Hill, Dallas, for appellant.

John H. Marks, Jr., Royal H. Brin, Jr., Strasburger & Price, Dallas, for appellees.

BLEIL, Justice.

This is an appeal from a take nothing judgment in an action to recover damages for wrongful cancellation of a real estate broker franchise contract.

Eloise Bauer & Associates, Inc. filed suit for damages for wrongful cancellation of the franchise agreement it had with Electronic Realty Associates, Inc., a real estate franchise company, against that company, and Mike Gaston, one of ERA's regional managers. Recovery was also sought for related torts. In addition, Bauer sought punitive damages and attorney's fees. ERA denied Bauer's claims and counter-claimed for breach of contract asserting that Bauer had failed to comply with the performance standards in the agreement. Market Realty, Inc., a real estate firm, intervened and claimed damages against all other parties to the suit based upon Bauer's conduct. Market Realty has not appealed from the take nothing judgment rendered against it and is not a party to this appeal.

The questions on appeal concern whether the trial court erred, (1) in entering a judgment against Bauer in light of the verdict and the evidence; (2) in the manner of submitting the case to the jury; (3) in the excluding of an exhibit from evidence; (4) in refusing to strike a petition in intervention; and, (5) in failing to render a judgment in favor of Appellant Bauer. We hold that various errors committed by the trial court require that the case be reversed, and, in the interest of justice, remanded for a new trial.

Eloise Bauer & Associates, Inc. is a Texas corporation owned by Eloise and Bob Bauer with its home office in Arlington, Texas. In 1974, Bauer decided that it would be advantageous to affiliate with a national network of real estate brokers and investigated a number of firms. Ultimately, it chose to become a member broker of ERA, of Kansas City, and signed a membership agreement in January of 1975.

At that time ERA was itself a relatively new organization with only two other member brokers in the Dallas-Fort Worth area. In the latter half of 1975 ERA sought to increase its penetration of the market place by selecting certain real estate brokers as master brokers. Master brokers were to provide leadership and services to ERA member brokers within their assigned territories and to market ERA memberships to other real estate brokers within their territory. ERA selected Eloise Bauer & Associates to serve as master broker for Tarrant County and five adjacent counties. The parties entered into ERA's form "Master Broker Membership Agreement" on January 15, 1976. By this agreement Bauer became a participant in the ERA marketing program and gained rights to certain revenues received by ERA from ERA member brokers in Bauer's territory. The agreement was of an indefinite duration, but was cancelable by ERA in the event that Bauer (1) failed to meet the agreed performance standards, (2) violated the agreement or any agreement with an ERA affiliated company, or (3) entered into bankruptcy. The only ground for cancellation urged by ERA was Bauer's failure to meet the agreed performance standards.

On the basis of the agreement, Bauer undertook its duties as a master broker and sold ERA memberships to various real estate brokers in its territory from 1976 to 1978. ERA supervised its master brokers through regional directors with responsibility for several territories. Bauer's performance as a master broker was considered above average until it began having some conflict with Mike Gaston, after he became regional director of ERA. This period of time was one of great expansion for ERA and attempts to negotiate a new agreement between Bauer and ERA were not successful. In October of 1978 ERA first complained to Bauer that it had failed to meet the $6,000.00 aggregate monthly billings performance standard as stated in the agreement. In November 1978, Bauer advised ERA that it had achieved an aggregate monthly billing of $6,300.00.

On March 8, 1979, ERA gave notice of cancellation to Eloise Bauer & Associates, Inc., stating that unless, by April 24, 1979, it complied with the performance standards The issues presented principally pertain to (a) compliance with the performance standards, (b) submission of the case, (c) exclusion of evidence, and (d) failure to strike the petition in intervention. It is the question of Bauer's compliance with the performance standards that is the primary issue in the case.

of the agreement, ERA would cancel. The performance standard referred to in the agreement was the provision regarding the $6,000.00 in aggregate monthly billings.

PERFORMANCE STANDARDS

Bauer asserts that the trial court erred in failing to render judgment on the verdict in its favor and against ERA for wrongful termination since the jury's verdict established that Bauer had met the performance standards of the contract. We agree that the jury's verdict established that Bauer met its performance standards.

ERA's sole basis of termination of this agreement was that Bauer failed to use its best efforts to sell ERA memberships in its territory. The jury, in response to a special issue, found that Bauer did fail to use its best efforts. On the basis of this answer, the trial court entered a take nothing judgment. However, the jury also found that the aggregate monthly billing of ERA memberships in Eloise Bauer & Associates' territory totaled $6,000.00 or more after January 15, 1977. This factual determination finds ample support in the evidence and by the very terms of the contract the jury's response with regard to the best efforts issues is immaterial. 4 McDonald's, Texas Civil Practice § 17.31 (1971); 57 Tex.Jur.2d Trial § 547 (1964).

The pertinent provision of the contract is that Eloise Bauer & Associates, as ERA master broker, agreed to,

"4. Actively promote and use his best efforts to sell ERA Memberships in his designated area to achieve one agency office for each 30,000 segment of the area's population. ERA will consider that ERA Master Broker will have satisfactorily performed when the aggregate monthly billing of all ERA Membership Agreements in ERA Master Broker's territory totals not less than $6,000.00 at any time after one year of the date of Master Broker's appointment...."

The fulfillment of this $6,000.00 monthly billing requirement established that Bauer's performance was satisfactory to ERA. We give the clear language of the agreement its plain, grammatical meaning. Fox v. Thoreson, 398 S.W.2d 88 (Tex.1966); General American Indemnity Company v. Pepper, 161 Tex. 263, 339 S.W.2d 660 (1960). Furthermore, if there were doubts as to the meaning of this paragraph proper construction would require that it be strictly construed against ERA since it was the author of the printed agreement. Republic National Bank v. Northwest National Bank, 578 S.W.2d 109 (Tex.1979).

SUBMISSION OF THE CASE

Several points of error urged on appeal relate to the manner of the trial court's submission of the case to the jury. We review these points separately.

The case was submitted by forty special issues. Under the evidence the only manner in which ERA claimed that Bauer failed to use its best effort was in failing to meet the agreed monthly aggregate billing of $6,000.00. Nevertheless, the trial court asked the jury whether Bauer had used its best efforts and also asked in a separate issue whether it had met its $6,000.00 billing standard. The conflicting response of the jury, that Bauer failed to use its best efforts while doing all required of it to achieve best efforts, demonstrates the pitfall of submitting a single question by multiple issues. The practice of asking one question by two sets of issues should be discouraged; it is likely to cause confusion and result in conflicting findings. Thate v. Texas & P. Ry. Co., 595 S.W.2d 591 (Tex.Civ.App. Dallas 1980, no writ). Although the jury's finding that Bauer met its monthly billing performance standard the only standard in question makes immaterial Eloise Bauer & Associates, Inc. further claims that the trial court failed to submit issues on waiver and estoppel. It says that the evidence, at the least, raised a fact issue of whether ERA waived the contract provision that Bauer used its best efforts, or was estopped to assert it, if Bauer met the $6,000.00 monthly performance standard. Because we have already held that the jury's answers to the best efforts issues are immaterial, disregarding these answers eliminates any harm which might have occurred by the error alleged in this point.

the findings with regard to the failure to use best efforts, this confusing double submission should be avoided upon another trial of the case.

Appellant also alleges that the trial court erred in failing to submit its requested special issue regarding damages for loss of marketing fees. This point is unmeritorious because the trial court adequately submitted issues concerning this theory of recovery to the jury. In response to those issues, the jury found both that Bauer was not entitled to recover for, and that it did not suffer any loss of, marketing fees. Although the manner of submission was not exactly that sought by appellant, it was a fair submission of this theory of recovery and the trial court's failure to submit the issue requested by appellant was not error. Pace Corporation v. Jackson, 155 Tex. 179, 284 S.W.2d 340 (1955). The failure of the court to submit a requested issue cannot be assigned as error when the subject matter of that issue was submitted in other issues. Goolsbee v. Texas &...