Felker v. Petrolon, Inc.

• Decision Date: 02 May 1996
• Docket Number: No. 01-95-01081-CV,01-95-01081-CV
• Citation: 929 S.W.2d 460
• Parties: Ray FELKER and Felker Enterprises, Inc., Appellants, v. PETROLON, INC., Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 460

929 S.W.2d 460

Ray FELKER and Felker Enterprises, Inc., Appellants, v. PETROLON, INC., Appellee.

No. 01-95-01081-CV.

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

May 2, 1996.

Rehearing Overruled May 28, 1996.

James M. Bright, Houston, for Appellant.

Don A. Wetzel, Erik B. Walker, Woodlands, for Appellee.

Before HEDGES, DUNN and MIRABEL, JJ.

OPINION

HEDGES, Justice.

This appeal deals with a breach of contract case in which plaintiff/appellee, Petrolon, Inc. (Petrolon), claimed that defendants/appellants, Ray Felker and Felker Enterprises, Inc. (Felker), violated a confidentiality provision of a settlement agreement. Following the jury's finding that Felker breached material terms of the agreement, the trial court entered judgment awarding damages to Petrolon.

In two points of error, Felker contends that there was no evidence to support (1) the submission of the question of breach to the jury and (2) the jury finding of breach. In his third point of error, Felker contends that the trial court erred in admitting telephone records and associated testimony because they were neither material nor relevant. We affirm.

FACTS

Background

Petrolon is a corporation which manufactures and sells automotive engine products. From 1978 to 1982, Petrolon marketed its products exclusively through a distribution system using multi-level marketers (MLM "distributors"), who purchased the products from Petrolon for resale to others. Petrolon's contract with the distributors reserved its right to change the marketing plan at any time. Felker was Petrolon's representative responsible for direct sales to the military.

In the late 1980s, Petrolon decided to begin direct sales to national retail chains and offered Petrolon's distributors the first opportunity to enter into agreements with the national accounts. When this effort proved unsuccessful, Petrolon decided to sell directly to national retail accounts. At a meeting of the principal MLM distributors in February of 1990, Petrolon announced this decision. Most, if not all, of the distributors who later sued Petrolon attended the meeting and heard the announcement. Petrolon also sent letters to all distributors informing them of its direct retail sales plan. To compensate distributors adversely affected by the direct sales, Petrolon established several programs. Three years after the February 1990 meeting, none of the distributors except appellants had voiced any opposition to the direct sales program or threatened to sue Petrolon.

Even before the announcement of the retail sales decision, the relationship between Petrolon and Felker had been difficult. Petrolon received numerous complaints from the military about Felker's performance. Felker failed to service the military stores as agreed. Felker threatened to sue both Petrolon and the military and complained to the state attorney general about the direct retail sales program. Ultimately, Felker sued Petrolon for causes of action relating to the direct sales program, whereupon Petrolon sued Felker for breach of the military contract. The lawsuits were consolidated in the trial court.

The Settlement Agreement and Final Judgment

On September 9, 1992, which was to be the first day of trial, Felker and Petrolon entered into a settlement agreement. The agreement specified that Petrolon would pay Felker $450,000 in five equal annual installments of $90,000, but prohibited Felker "from disclosing in any manner the price, terms, or conditions or substance of the settlement agreement." The settlement agreement also specified that Felker was to "confine any disclosure as to the outcome of this litigation or as to any settlement of this litigation by referring the party to the [district court] ... to obtain whatever judgment might be obtained from the court records."

Shortly after the settlement agreement was reached, the trial court entered a final judgment which contained findings of fact and conclusions of law that absolved Petrolon of any wrongdoing, concluded that Felker had no cause of action against Petrolon, and found that Felker had materially breached the terms of their distributor contract with Petrolon. Incorporating the nondisclosure language of the agreement, the judgment also enjoined Felker from disclosing in any manner the resolution of the parties' claims other than to refer an inquiring party to the judgment. There was no reference in the judgment of any payment by Petrolon to Felker.

On September 16, 1992, Petrolon paid the first installment of $90,000 to Felker. Soon after the settlement was reached with Felker and the first payment was made, nine other distributors filed suit against Petrolon alleging claims almost identical to Felker's. Petrolon did not make the second installment on September 16, 1993, but instead filed this cause, alleging that Felker had breached the settlement confidentiality provision and that as a consequence, no further sums were owed. Felker counterclaimed to collect the remaining $360,000. At trial, a jury concluded that Felker breached the terms of the settlement agreement by disclosing the contents or substance of the agreement. The trial court entered judgment in favor of Petrolon on the jury's finding, and awarded damages to Petrolon in the amount of $90,000 for breach of contract, plus interest and attorney's fees.

LEGAL SUFFICIENCY

Standard of Review--No Evidence

Felker complains that the trial court erred in overruling his motion for directed verdict and submitting the question of breach to the jury because the evidence was legally insufficient to support its submission. He further complains that the trial court erred in overruling his motion for judgment n.o.v. because there was no evidence to support the jury's finding of breach. We analyze both points of error under a "no evidence" standard of review.

In reviewing "no evidence," either in the context of evidence in support of a jury finding or proper submission of a jury question, we consider only the evidence and inferences that tend to support the finding, and disregard all evidence and inferences to the contrary. Weirich v. Weirich, 833 S.W.2d 942, 945 (Tex.1992); Neese v. Dietz, 845 S.W.2d 311, 312 (Tex.App.--Houston [1st Dist.] 1992, writ denied). ¹ If there is more than a scintilla of probative evidence to support the finding, a no evidence challenge fails. Stafford v. Stafford, 726 S.W.2d 14, 16 (Tex.1987); Mai v. Mai, 853 S.W.2d 615, 618 (Tex.App.--Houston [1st Dist.] 1993, writ denied). When the evidence furnishes some reasonable basis for differing conclusions by reasonable minds about the existence of the vital fact, it amounts to more than a scintilla of evidence, and the no evidence challenge must be overruled. Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.1983). ²

Circumstantial Evidence

An ultimate fact may be established by circumstantial evidence. State v. $11,014.00, 820 S.W.2d 783, 785 (Tex.1991) (per curiam). "Circumstantial evidence is the proof of collateral facts and circumstances from which the mind arrives at the conclusion that the main facts sought to be established in fact existed." Glover v. Davis, 360 S.W.2d 924, 928 (Tex.Civ.App.--Amarillo 1962), aff'd, 366 S.W.2d 227 (Tex.1963). An ultimate fact may be established by circumstantial evidence when the circumstances relied on are of such a character as to be reasonably satisfactory and convincing, and are not equally consistent with the nonexistence of the ultimate fact. See Marshall Field Stores, Inc., v. Gardiner, 859 S.W.2d 391, 401 (Tex.App.--Houston [1st Dist.] 1993, writ dism'd w.o.j.).

DISCUSSION

The central fact issue was whether Felker breached the confidentiality provision of the settlement agreement between Felker and Petrolon. Only one liability issue was submitted to the jury:

Did any of the parties named below disclose contents or substance of the settlement agreement to any individual?

Answer "yes" or "no" as to each Defendant.

Ray Felker: Yes

Felker Enterprises, Inc. Yes

In points of error one and two, Felker argues that the "data" Petrolon introduced "did not reach the level of being evidence" and therefore was "no evidence."

Totality of the Circumstances

Felker's first argument is that the circumstantial evidence presented by Petrolon was just as consistent with an inference of non-breach as with an inference of breach. Felker argues that each piece of data, standing alone, could lead to other equally plausible inferences or conclusions than a breach of the agreement. Felker also claims that the evidence amounts to only "suspicion" or "surmise" of a breach, citing Browning-Ferris, Inc. v. Reyna for the proposition that suspicion linked to other suspicion is not the same as evidence. 865 S.W.2d 925, 927 (Tex.1993).

Initially, we disagree with Felker's methodology. In reviewing circumstantial evidence, we must look at the totality of the known circumstances rather than reviewing each piece of evidence in isolation. Brinegar v. Porterfield, 705 S.W.2d 236, 238 (Tex.App.--Texarkana), aff'd, 719 S.W.2d 558 (Tex.1986). Any evidence has probative value if it contributes to the proof of an issue. Id. at 239. A single factor standing alone may be insufficient, but when joined by other factors constituting a significant whole, the combination can justify a conclusion. Id. To sustain a finding of fact based upon circumstantial evidence, it is not necessary to exclude beyond suspicion every other possible inference that could be drawn from the facts shown. Green Light Co. v. Moore, 485 S.W.2d 360, 363 (Tex.Civ.App.--Houston [14th Dist.] 1972, no writ). It is necessary to show only that one conclusion or inference is more probable than any other. See $56,700 in U.S. Currency v. State, 730 S.W.2d 659, 660 (Tex.1987); Marshall Field Stores, Inc., 859 S.W.2d at 400.

In Marshall Field, the appellant's action for slander was based only on circumstantial evidence and inferences drawn from that evidence. 859...