Fuentes v. McFadden

• Decision Date: 26 February 1992
• Docket Number: No. 08-91-00280-CV,08-91-00280-CV
• Citation: 825 S.W.2d 772
• Parties: Pedro Zaragosa FUENTES, Appellant, v. David L. McFADDEN, Appellee.
• Court: Texas Court of Appeals

Page 772

825 S.W.2d 772

Pedro Zaragosa FUENTES, Appellant, v. David L. McFADDEN, Appellee.

No. 08-91-00280-CV.

Court of Appeals of Texas El Paso.

Feb. 26, 1992.

Rehearing Overruled March 25, 1992.

Royal Furgeson, Kemp, Smith, Duncan & Hammond, El Paso, for appellant.

Ralph E. Harris, El Paso, for appellee.

Before WOODARD, KOEHLER and BARAJAS, JJ.

OPINION

BARAJAS, Justice.

This lawsuit involves a breach of contract for the sale of goods. The Appellant, Pedro Zaragosa Fuentes, is before this Court complaining of an adverse jury verdict rendered in the court below. We reverse the judgment and remand this cause to the trial court for further proceedings consistent with this opinion.

Appellee, David McFadden (McFadden), sued Appellant, Pedro Zaragosa Fuentes (Fuentes), in the 34th Judicial District Court of El Paso County, seeking damages for breach of contract. The trial court granted, in part, a directed verdict as to the existence of a breach of contract, and a jury subsequently found that the breach was not legally excused. On appeal, Fuentes complains of the adverse jury award of $186,033.88 in damages in favor of McFadden.

In April 1985, McFadden was the owner and manager of the Red Rooster Lanes, a bowling alley located in El Paso, Texas. At that time, McFadden received an inquiry concerning the possible sale of the bowling equipment located in the Red Rooster. The inquiry was made by Romeo Lizarraga, a past acquaintance of McFadden's, who was seeking a finder's fee as a broker for the sale of the bowling equipment. An agreement was reached between McFadden and Lizarraga whereby McFadden would receive the sum of $165,000 for the sale of the equipment. Pursuant to the agreement, Lizarraga, as the broker, would receive a $20,000 finder's fee which would be added to the $165,000 sale price.

The record below indicates that Lizarraga knew that Fuentes was interested in opening a bowling alley in Juarez, Mexico. As a consequence, Lizarraga contacted Fuentes concerning the sale of the bowling alley equipment, advising him that the equipment could be purchased for the sum of $185,000.

In May 1985, Fuentes executed a contract for the purchase of the equipment. The terms of the agreement required Fuentes to: (1) deposit $20,000 in escrow upon execution of the agreement; (2) pay $30,000 on or before March 1, 1986; and (3) pay the remaining balance of $135,000 on or before May 1, 1986. In addition to Fuentes' signature, the agreement contained McFadden's signature, as seller, as well as the signature of Lizarraga who was listed as a buyer. The contract, however, was silent as to the $20,000 finder's fee to be paid to Lizarraga.

In March of 1986, Fuentes discovered that he would not be able to timely perform the terms of the contract. As a result, Fuentes requested McFadden to extend the time for performance. The requested extension was refused by McFadden. According to Fuentes, McFadden stated that the $20,000 earnest money would be forfeited and "everything would be off" if the payments were not made on time. Ultimately, the payments were not made according to the terms of the contract and consequently, the earnest money was forfeited.

In September 1986, McFadden filed suit against Fuentes for breach of contract. Fuentes answered by filing a general denial. In addition, Fuentes filed a motion for summary judgment based on the default clause contained in the contract. ¹ In particular, he argued that forfeiture of the $20,000 earnest money constituted the sole remedy available to McFadden in the case of a breach of contract. After a hearing on the motion, the trial court granted summary judgment in favor of Fuentes. On appeal, this Court reversed the summary judgment and remanded the case for a trial on the merits. See McFadden v. Fuentes, 790 S.W.2d 736 (Tex.App.--El Paso 1990, no writ).

On remand, Fuentes filed an Amended Answer and Counterclaim. On February 19, 1991, Fuentes filed his Supplement to Defendant's Amended Original Answer and Counterclaim, alleging fraud and violations of the Texas Deceptive Trade Practices-Consumer Protection Act. In his answer, Fuentes raised the issues of mistake, ambiguity, estoppel, fraud in the inducement, unconscionability and illegality--all of which were premised on the undisclosed finder's fee. Additionally, Fuentes once again argued that the forfeiture of the earnest money was the sole remedy available to McFadden.

McFadden filed special exceptions to the affirmative defenses and counterclaim. After reviewing the pleadings and hearing argument from counsel, the trial court granted most of McFadden's special exceptions relating to the affirmative defenses. In regard to the counterclaim, on March 5, 1991, the trial court ordered that it be severed from the main cause of action. Trial by jury also commenced on March 5, 1991. At the close of trial, a jury awarded McFadden damages in the amount of $186,033.88 based on Fuentes' failure to perform pursuant to the terms of the contract.

Fuentes is before this Court urging four points of error. First, he argues that the trial court erred in severing his compulsory counterclaim from the trial on the merits. Second, Fuentes alleges the trial court erred in granting McFadden's special exception regarding "sole remedy." In Point of Error No. Three, he asserts that the trial court erred in combining his affirmative defenses in the charge to the jury without the benefit of legal terms. Finally, in his fourth point of error, he claims there was either no evidence or insufficient evidence to support the jury's findings on excuse from performance and damages.

Appellant's points of error will be addressed in reverse order.

In Appellant's Point of Error No. Four, he asserts that the trial court erred in entering judgment in favor of McFadden because there was either no evidence or insufficient evidence to support the jury's findings on excuse from performance and damages. ²

Since this point of error concerns both legal and factual insufficiency assertions, we set forth here the standards of review we apply to such claims in order to avoid repetition. In considering a "no evidence" legal insufficiency point, we consider only the evidence which tends to support the jury's findings and disregard all evidence and inferences to the contrary. Garza v. Alviar, 395 S.W.2d 821 (Tex.1965).

A factual insufficiency point, however, requires us to examine all of the evidence in determining whether the finding in question is so against the great weight and preponderance of the evidence as to be manifestly unjust. In re King's Estate, 150 Tex. 662, 244 S.W.2d 660 (Tex.1951). When assessing a factual insufficiency point, the reviewing court cannot substitute its conclusions for those of the jury. Benoit v. Wilson, 150 Tex. 273, 239 S.W.2d 792 (1951). Indeed, if there is sufficient competent evidence of probative force to support the finding, it must be sustained. Carrasco v. Goatcher, 623 S.W.2d 769 (Tex.App.--El Paso 1981, no writ); Montgomery Ward & Co. v. Scharrenbeck, 204 S.W.2d 508 (Tex.1947); Clark v. National Life & Accident Ins. Co., 145 Tex. 575, 200 S.W.2d 820 (1947).

Fuentes first argues that there was no evidence or insufficient evidence to support the jury's finding that his performance of the contract was not legally excused. His argument is based on the fact, as disclosed in the record, that he would not have entered into the contract had he known about the $20,000 finder's fee.

We have carefully reviewed the evidence that supports the jury's verdict and find that it contains more than a scintilla of evidence to support the jury's finding that Fuentes was not excused from performing on the contract in question. Moreover, a review of the entire record reveals that the jury's finding is not against the great weight and preponderance of the evidence.

The facts contained in the record reveal that: (1) there was no dispute over the fact that Fuentes was contractually required to perform the terms of the agreement on a specific date; (2) Fuentes failed to perform as required by the contract; (3) the reasons for Fuentes' nonperformance were the fact that he was having difficulties obtaining a location for the bowling alley and he was also "running a little bit short of money." Based on such facts, it is clear that there is some evidence to support the jury's findings. Appellant's assertion that there was no evidence or factually insufficient evidence to support the jury's finding is without merit.

Additionally, Fuentes contends that there was no evidence or, in the alternative, insufficient evidence to support the jury's award of damages in the amount of $186,033.88 in favor of McFadden. ³

Fuentes complains that the jury's award of $186,033.88 in actual damages was excessive insofar as the contract was never performed and the value of the bowling equipment in question was $165,000. Fuentes further argues that the jury erred in using the $185,000 contract price as a starting point in determining damages since the $20,000 finder's fee was never paid by McFadden due to nonperformance of the contract.

Generally, the measure of damages for breach of contract is the amount necessary to place the injured party in a financial position equal to that which he would have occupied had the defaulting party performed the contract. Thomas C. Cook, Inc. v. Rowhanian, 774 S.W.2d 679, 686 (Tex.App.--El Paso 1989, writ denied); Stewart v. Basey, 150 Tex. 666, 245 S.W.2d 484, 486 (1952); LaChance v. Hollenbeck, 695 S.W.2d 618, 621-622 (Tex.App.--Austin 1985, writ ref'd n.r.e.). Under this standard, the injured party is compensated only for the damages or loss actually sustained. Community Development Service, Inc. v. Replacement Parts Manufacturing, Inc., 679 S.W.2d 721 (Tex.App.--Houston [1st Dist.] 1984, no writ); North American Corp. v. Allen, 636 S.W.2d 797 (Tex.App.--Corpus Christi 1982, no writ).

A careful review of the record...