Frost Nat. Bank v. L. & F Distributors, Ltd.

• Decision Date: 11 December 2003
• Docket Number: No. 13-02-488-CV.,13-02-488-CV.
• Citation: 122 S.W.3d 922
• Parties: The FROST NATIONAL BANK, Appellant, v. L & F DISTRIBUTORS, LTD., Appellee.
• Court: Texas Court of Appeals

122 S.W.3d 922

The FROST NATIONAL BANK, Appellant, v. L & F DISTRIBUTORS, LTD., Appellee.

No. 13-02-488-CV.

Court of Appeals of Texas, Corpus Christi-Edinburg.

December 11, 2003.

Daniel H. Byrne, Fritz, Byrne & Head, Austin, David M. Gunn, Beck, Redden & Secrest, L.L.P., Houston, Francisco J. Enriquez, Enriquez & Cantu, McAllen, Frank

E. Weathered, Dunn & Weathered, Corpus Christi, for appellant.

Charles C. Murray, Lisa Powell, Atlas & Hall, McAllen, for appellee.

Before Justices HINOJOSA, YAÑEZ and GARZA.

OPINION ON REHEARING

Opinion by Justice GARZA.

In an order dated July 18, 2003, we granted the parties' joint motion for rehearing. We now withdraw our prior disposition of the case and issue the following opinion in its place. See Tex.R.App. P. 49.3. The Frost National Bank appeals from an order awarding final summary judgment to L & F Distributors, Ltd. on L & F's declaratory judgment action against Frost. We affirm.

Background

This is a contract dispute involving the assumption of two lease agreements. The only parties to this case are Frost and L & F. Frost (the lessor) is a bank headquartered in San Antonio, and L & F (the assignee) is a beer distributor headquartered in McAllen. Williams Distributors, Inc. (the assignor) is a now-defunct beer distributor that previously served the Corpus Christi area.

On February 12, 2001, Frost, Williams, and L & F executed two assumption agreements involving fourteen vehicles originally leased to Williams by Frost. The assumption agreements substituted L & F as the lessee and released Williams and Williams' guarantors from their contractual responsibilities to Frost. The dispute underlying this appeal arose a month after the assumption agreements were signed, when L & F notified Frost of its decision to purchase the fourteen vehicles. L & F explained that each lease agreement, which Frost had drafted, contained language allowing the lessee to purchase the vehicles on or before the end of the lease term, provided that it give at least ninety-days notice to Frost. Despite the language of the lease agreements, Frost refused to sell, contending that L & F could purchase the vehicles only on the last day of the respective lease terms, after approximately sixty months.

On March 14, 2001, L & F filed this suit in Hidalgo County asking for a declaratory judgment that it could purchase the vehicles as it previously attempted. Frost responded with a motion to transfer venue, special exceptions, and its original answer. On November 7, 2001, the trial court denied Frost's motion to transfer venue. Meanwhile, L & F continued to correspond with Frost about buying the vehicles. The record shows that attorneys for L & F sent letters to Frost on June 18, December 20, and December 26, 2001, each affirming L & F's continued desire to purchase the vehicles. The letter of December 26 included a payment of $169,874.99, which Frost promptly returned along with a letter rejecting L & F's payment.

On December 28, 2001, L & F filed an amended original petition in which it claimed entitlement to specific performance. It also filed a motion for summary judgment. On January 15, 2002, Frost responded with an amended answer, special exceptions, and counterclaims for declaratory relief and breach of contract. Frost also moved for summary judgment.

On May 29, 2002, the parties filed a Rule 11 Agreement that narrowed the scope of their dispute. See TEX.R. CIV. P. 11. L & F promised to nonsuit its claim for specific performance and instead pursue only a claim for declaratory judgment. In exchange, Frost agreed that its damages would be limited to $46,836.03 in the event that it recovered from L & F. Frost also agreed that in the event of L & F's recovery, it would tender title to the vehicles no later than ten days after receiving $156,599.53 plus interest at the rate of six percent per annum from September 16, 2001 to date.

On July 8, 2003, the trial court granted L & F's motion for partial nonsuit, declared that as a matter of law, Frost breached the leases on September 16, 2001, and denied Frost's motion for summary judgment. The court also awarded L & F attorney's fees in the amount of $41,400.61. Frost now appeals to this Court.

1. Improper Venue

In its first issue, Frost raises the jurisdictional error of improper venue. Before trial, Frost filed a motion to transfer venue, seeking to move the case either to Bexar County, where it is headquartered, or alternatively, to Nueces County, where it contends the leases were executed and performable. The trial court denied the motion without filing findings of fact and conclusions of law. Frost argues the venue ruling is reversible error.

A. Standard of Review

An appellate court must conduct an independent review of the entire record to determine whether venue was proper in the ultimate county of suit. Ruiz v. Conoco, Inc., 868 S.W.2d 752, 758 (Tex.1993); see Tex. Civ. Prac. & Rem.Code Ann. § 15.064(b) (Vernon 2002); see also Blalock Prescription Ctr., Inc. v. Lopez-Guerra, 986 S.W.2d 658, 663 (Tex.App.-Corpus Christi 1998, no pet.). This review should be conducted like any other review of a trial court's findings of fact and legal rulings, except that the evidence need not be reviewed for factual sufficiency. Ruiz, 868 S.W.2d at 758; Colonial County Mut. Ins. Co. v. Valdez, 30 S.W.3d 514, 527 (Tex. App.-Corpus Christi 2000, pet. denied). If there is probative evidence to support the trial court's determination, even if the preponderance of the evidence is to the contrary, the appellate court must uphold the trial court's venue determination. Valdez, 30 S.W.3d at 527; see also Ruiz, 868 S.W.2d at 758. Although we view the record in the light most favorable to the trial court's ruling, we do not defer to the trial court's application of the law to the facts of the case. See Ruiz, 868 S.W.2d at 758.

B. Analysis

Our permissive venue statute allows a plaintiff to bring suit in the county of the defendant's residence or principal office or in the county in which all or a substantial part of the events or omissions giving rise to the claim occurred. See Tex. Civ. Prac. & Rem.Code Ann. § 15.002(a)(1) (Vernon 2002). If a defendant objects to the plaintiff's venue choice, the plaintiff must prove that venue is proper in the county of suit. See Tex.R. Civ. P. 87(2)(a). If the plaintiff fails to establish proper venue, the trial court must transfer venue to the county specified in the defendant's motion to transfer, provided that the defendant has requested transfer to a county of proper venue. See Tex. Civ. Prac. & Rem.Code Ann. § 15.063 (Vernon 2002).

All properly plead venue facts are taken as true unless specifically denied by the adverse party. Tex.R. Civ. P. 87(3)(a); Garcia v. Garza, 70 S.W.3d 362, 368 (Tex. App.-Corpus Christi 2002, pet. granted); Blalock, 986 S.W.2d at 663. When facts are specifically denied, the venue proponent must make prima facie proof of the denied facts. Tex.R. Civ. P. 87(3)(a). As an appellate court, we do not engage in a fact-finding review by assessing the affiants' credibility. Blalock, 986 S.W.2d at 663. If the affidavits and attachments are challenged, however, we will determine whether they comply with the rules of civil procedure. Id.

L & F argues that Hidalgo County is a proper venue because all or a substantial part of the events or omissions giving rise to its claim occurred in Hidalgo County. See TEX. CRV. RRAC. & REM.CODE ANN. § 15.002(a)(1) (Vernon 2002). Frost advances several arguments to the contrary.

First, Frost argues that none of the events or omissions related to the assumption agreement should be considered in determining proper venue. Without these facts, there is no evidence that all or a substantial part of the events and omissions occurred in Hidalgo County. Frost contends that a contract relied upon for venue purposes must be the real obligation forming the basis of the cause of action. See Trans-South Hydrocarbons Co. v. Trinity Indus., Inc., 419 S.W.2d 662, 664 (Tex.Civ.App.-Dallas 1967, no writ). According to Frost, the "real obligations" sued upon in this case are the underlying lease agreements, not the assumption agreements. The events related to the assumption agreements are therefore irrelevant.

We disagree. The assumption agreements are an integral if not indispensable component of L & F's cause of action. They are the "real obligations" sued upon by L & F. Without them, L & F would not be a party to the leases and would have no right to sue Frost for breach of contract. See Major Invs., Inc. v. De Castillo, 673 S.W.2d 276, 279 (Tex.App.-Corpus Christi 1984, writ ref'd n.r.e.) ("Privity is an essential element necessary to any recovery in an action based on contract."); see also Graham v. Turcotte, 628 S.W.2d 182, 183 (Tex.App.-Corpus Christi 1982, no writ) (same).

Besides, the provisions of the original leases could not be the "real obligations," as Frost asserts, because the assumption agreements terminated the original leases and created two new contracts in their place. Both assumption agreements contain clauses that read in relevant part:

This Agreement, the other documents executed in connection herewith, and the Lease (as amended hereby) constitute the entire agreement between the parties with respect to the Lease and express, embody and supercede any previous understandings, agreements or promises (whether written or oral) with respect to the Lease. Such documents represent the final expression of the agreement between the parties hereto, the terms and conditions of which cannot hereafter be contradicted by any oral understandings (if any) not reduced to writing.

We conclude that two new contracts were formed on February 12 and that they are the "real obligations" forming the basis of L & F's declaratory judgment action. Consistent with Trans-South Hydrocarbons, we hold that the events and omissions related to the assumption agreements, their negotiation,...