Gerdes v. Kennamer

• Decision Date: 06 December 2004
• Docket Number: No. 13-02-657-CV.,13-02-657-CV.
• Citation: 155 S.W.3d 523
• Parties: Roger GERDES, Jr. and Carolyn Gerdes, Appellants, v. John KENNAMER, Appellee.
• Court: Texas Court of Appeals

155 S.W.3d 523

Roger GERDES, Jr. and Carolyn Gerdes, Appellants, v. John KENNAMER, Appellee.

No. 13-02-657-CV.

Court of Appeals of Texas, Corpus Christi-Edinburg.

December 6, 2004.

Rehearing En Banc Overruled February 3, 2005.

Cynthia T. Sheppard, Cuero, for appellants.

Murray Fogler, McDade Fogler Maines, L.L.P., Houston, for appellee.

Before Justices HINOJOSA, YAÑEZ, and CASTILLO.

OPINION

Opinion by Justice CASTILLO.

This is a suit for breach of fiduciary duty. Appellants Roger Gerdes and Carolyn Gerdes appeal a $915,392.65 judgment in favor of appellee John Kennamer. The Gerdeses challenge the trial court's venue ruling and assert that the evidence is legally and factually insufficient to support the jury's liability and damages findings in Kennamer's favor. They also complain of charge error in failing to condition a damages question as to Carolyn Gerdes on a finding of fraud. Kennamer raises a conditional cross-point challenging the sufficiency of the evidence to support an offsetting quantum meruit award to the Gerdeses. We affirm.

I. FACTUAL AND PROCEDURAL HISTORY

Roger Gerdes and Kennamer, both United States citizens, were long-time friends and business associates. The disputes on which this litigation focused arose from their joint operation of Laguna Vista, a hunting and fishing lodge and ranch in San Fernando, Tamaulipas, Mexico. Kennamer bought the lodge and its associated improvements and assets in 1990 for a purchase price in excess of $500,000. The conveyance included a lease of the real property on which the lodge was located and an option to purchase the real property. Roger Gerdes and Kennamer structured Texas and Mexican business entities to operate the lodge. Kennamer contributed the lodge improvements and the capital. Roger Gerdes contributed "sweat equity" by managing the business and taking care of the lodge and hunters. Carolyn Gerdes also invested in Laguna Vista, provided bookkeeping and other personal services, and helped promote and book hunting trips.

In 1991, Kennamer decided to exercise his option to purchase the real estate. The agreed purchase price was $1,038,000. He paid $250,000 down and mortgaged the balance. At the time, Mexican law restricted title ownership to real property along the United States-Mexico border and prohibited transfer of title to non-Mexican citizens. At Roger Gerdes's suggestion, the grantor conveyed record title to the real property to four Mexican citizens: Roger Gerdes's son, lawyer, and employees. Kennamer did not receive record title. The transaction divided the real estate into four parcels. The son's parcel included the land where the lodge was located. The lawyer and the son's parcels were clear of any liens. The other two parcels were encumbered by the purchase-money lien. The four Mexican record title holders then executed purported powers of attorney "to John Kennamer and/or Roger Gerdes" to protect Kennamer's ownership interest.¹

Operating expenses for Laguna Vista mounted. Kennamer defaulted on the purchase-money loan. The holder of the purchase-money lien instituted legal proceedings. Title to the real property became the subject of extensive criminal and civil proceedings in Mexico. Roger Gerdes and Kennamer both started looking for a buyer for the Laguna Vista lodge. In 1993, at Roger Gerdes's direction and on his instructions, the son revoked his power of attorney to Kennamer.

Roger Gerdes then formed two new business entities in 1997: Hacienda de Aves, which was a Texas corporation, and Immobiliarias Don Rogelio, a Mexican entity. Roger Gerdes and Carolyn Gerdes were the only principals of the two new business entities. Their purpose was to facilitate sale of the Laguna Vista lodge and property. The son transferred his interest in the real property, which was unencumbered by the purchase-money lien and on which the lodge improvements were located, to Immobiliarias Don Rogelio. Roger Gerdes began representing to potential buyers that he was part owner of Laguna Vista.

In December of 2000, Roger Gerdes forwarded to Kennamer at his ranch in Matagorda County, Texas a copy of a letter of intent that detailed a proposed transaction with a prospective buyer. He deleted references to his employment by the new entity and payment to him of bonuses and commissions. The transaction, which called for Kennamer to receive $750,000 in cash, did not close because of questions regarding title to the property. The letter of intent, however, alerted Kennamer that Roger Gerdes was claiming ownership of an interest in Laguna Vista.

As a result, Kennamer brought this lawsuit in Matagorda County. He alleged that the Gerdeses had taken monies from the lodge business without his authority. He claimed conversion, fraud, breach of fiduciary duty, and conspiracy to defraud. The Gerdeses counterclaimed for the value of their services and for attorney fees. They also sought a change of venue, which the trial court denied. A jury trial resulted in mixed liability and damages findings. The trial court entered offsetting judgments. The net result for purposes of this appeal is a $915,392.65 judgment in favor of Kennamer against Roger Gerdes.²

We first analyze the venue question presented by the Gerdeses in issue three. We then address the sufficiency challenges and charge error asserted by the Gerdeses.

II. VENUE

A. Scope and Standard of Review

Plaintiffs are accorded the right to choose venue first. Chiriboga v. State Farm Mut. Auto. Ins. Co., 96 S.W.3d 673, 677 (Tex.App. — Austin 2003, no pet.). As long as the plaintiff files suit in a county of proper venue (i.e., the county is at least a permissive venue and no mandatory provision applies), the trial court may not disturb the plaintiff's venue choice. Id. at 678 (citing Wilson v. Tex. Parks & Wildlife Dep't, 886 S.W.2d 259, 261 (Tex.1994)). The plaintiff's venue choice stands unless the defendant challenges it by a proper motion to transfer venue. Chiriboga, 96 S.W.3d at 678 (citing In re Mo. Pac. R.R. Co., 998 S.W.2d 212, 216 (Tex.1999)). Once challenged, the plaintiff has the burden to present prima facie proof that venue is maintainable in the county of suit. Tex.R. Civ. P. 87(2)(a), (3)(a); Chiriboga, 96 S.W.3d at 678 (citing In re Masonite Corp., 997 S.W.2d 194, 197 (Tex.1999)). The plaintiff's prima facie proof is not subject to rebuttal, cross-examination, impeachment, or disproof. Chiriboga, 96 S.W.3d at 678 (citing Ruiz v. Conoco, Inc., 868 S.W.2d 752, 757 (Tex.1993) (op. on reh'g)).

Nonetheless, we conduct an independent review of the entire record, including any trial on the merits, to determine whether any probative evidence supports the trial court's venue decision. Chiriboga, 96 S.W.3d at 677 (citing Ruiz, 868 S.W.2d at 757); Southern County Mut. Ins. Co. v. Ochoa, 19 S.W.3d 452, 457 (Tex.App. — Corpus Christi 2000, no pet.). We consider not only the prima facie proof presented by the plaintiff to support venue but also "other evidence" that "destroys the prima facie proof." Excel Corp. v. Porras, 14 S.W.3d 307, 311 (Tex.App. — Corpus Christi 1999, pet. denied) (quoting Ruiz, 868 S.W.2d at 757); see Tex.R. Civ. P. 87.3. If there is any probative evidence supporting venue in the county of suit, we affirm the trial court's venue decision even if the evidence preponderates to the contrary. Chiriboga, 96 S.W.3d at 678 (citing Bonham State Bank v. Beadle, 907 S.W.2d 465, 471 (Tex.1995)). However, conclusive evidence to the contrary can "destroy the prima facie proof." Chiriboga, 96 S.W.3d at 678 (citing Ruiz, 868 S.W.2d at 757; Rosales v. H.E. Butt Grocery Co., 905 S.W.2d 745, 750 (Tex.App. — San Antonio 1995, writ denied)).

We review the evidentiary record in the light most favorable to the venue ruling. Chiriboga, 96 S.W.3d at 677-78. Our review is similar to that we employ when reviewing a trial court's fact findings and legal rulings in other contexts. Ochoa, 19 S.W.3d at 457. However, we do not review the trial court's venue ruling for factual sufficiency. Id. (citing Ruiz, 868 S.W.2d at 758). Here, the venue facts are generally uncontested, leaving only the legal question of whether venue was proper in Matagorda County. See Ochoa, 19 S.W.3d at 457.

We review de novo a trial court's application of the law to the facts. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.2002); Jackson v Kincaid, 122 S.W.3d 440, 444-45 (Tex.App. — Corpus Christi 2003, pet. filed). In other words, we determine the correctness of the trial court's legal conclusions. BMC Software, 83 S.W.3d at 794. We are not obligated to give any particular deference to those conclusions. Pegasus Energy Group v. Cheyenne Petroleum Co., 3 S.W.3d 112, 121 (Tex.App. — Corpus Christi 1999, pet. denied). As the final arbiter of the law, we have the power and the duty to evaluate legal determinations of the trial court independently. Id.

Thus, if any probative evidence supports the trial court's venue decision, we must affirm it. Chiriboga, 96 S.W.3d at 678 (citing Beadle, 907 S.W.2d at 471). If no such evidence appears in the record, we must reverse the judgment and remand. Tex. Civ. Prac. & Rem.Code Ann. § 15.064(a) (Vernon 2002); Chiriboga, 96 S.W.3d at 678 (citing Ruiz, 868 S.W.2d at 758).

The parties agree that the general permissive venue statute is applicable here. See Tex. Civ. Prac. & Rem.Code Ann. § 15.002 (Vernon 2002). Section 15.002(a)(1) provides that venue is permissive in the county where "all or a substantial part of the events or omissions giving rise to the claim occurred." Ciriboga, 96 S.W.3d at 678 (quoting Tex. Civ. Prac. & Rem.Code Ann. § 15.002(a)(1), (2) (Vernon 2002)). In this case, we must determine whether there is any probative evidence to support the district court's implied ruling that "all or a substantial part of" the events giving rise to this lawsuit occurred in Matagorda County. Chiriboga, 96 S.W.3d at 678.

B. The Venue Facts

The Kennamers alleged in their original...