Ingram v. Deere

• Court: Texas Supreme Court
• Writing for the Court: Wainwright
• Citation: Ingram v. Deere, 288 S.W.3d 886 (Tex. 2009)
• Decision Date: 03 July 2009
• Docket Number: No. 06-0815.,06-0815.
• Parties: Jesse C. INGRAM, Ph.D. and Behavioral Psychology Clinic, P.C., Petitioners, v. Louis DEERE, D.O. and Hillvale Medical Group Association d/b/a Hillvale Medical Association, Respondents.

288 S.W.3d 886

Jesse C. INGRAM, Ph.D. and Behavioral Psychology Clinic, P.C., Petitioners, v. Louis DEERE, D.O. and Hillvale Medical Group Association d/b/a Hillvale Medical Association, Respondents.

No. 06-0815.

Supreme Court of Texas.

Argued February 16, 2008.

Decided July 3, 2009.

Craig T. Enoch, Melissa Prentice Lorber, Alejandro Sin Valdes, Winstead PC, Karen Nalle Oddo, Llano Estacado Development Co., Roxanne T.L. Wilson, Winstead Sechrest & Minick, P.C., Austin, TX, Royce B. West, West & Gooden, P.C., Dallas, TX, Richard L. Armstrong, Attorney at Law, Larry Kent Hercules, Preston Pointe Centre, Plano, TX, for Petitioner.

Georganna L. Simpson, Law Offices of Georganna L. Simpson, Jeff Forrest Smith, Jeff Forrest Smith, P.C., John V. McShane, McShane Davis & Hance, Dallas, TX, for Respondent.

Justice WAINWRIGHT delivered the opinion of the Court, in which Chief Justice JEFFERSON, Justice HECHT, Justice MEDINA, Justice GREEN, and Justice WILLETT joined, in which Justice O'NEILL and Justice BRISTER joined except as to part II.D.5.a, and in which Justice JOHNSON joined except as to part II.D.2.

In this case, we review a court of appeals judgment reinstating a jury verdict finding that Louis Deere, D.O. and Jesse C. Ingram, Ph.D. formed a partnership pursuant to the Texas Revised Partnership Act (TRPA).

TRPA lists five factors to be considered in determining whether a partnership has been formed. This determination should be made by examining the totality of the circumstances in each case, with no single factor being either necessary or sufficient to prove the existence of a partnership. Here, the evidence is legally insufficient to establish that a partnership existed between Ingram and Deere. Because the evidence of the formation of a partnership is legally insufficient, we do not address the issue raised in Ingram's cross-petition challenging the court of appeals' decision that Ingram owed Deere a fiduciary duty. Accordingly, we reinstate the trial court's take-nothing judgment in favor of Ingram and reverse the court of appeals' judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND

Ingram, a licensed psychologist, and Deere, a board certified psychiatrist, entered into an oral agreement in 1997, which provided that Deere would serve as the medical director for a multidisciplinary pain clinic. Deere contends that they agreed he would receive one-third of the clinic's revenues, Ingram would receive one-third, and the remaining one-third would be used to pay the clinic's expenses. Deere also claims that when he and Ingram began working together, Ingram told him their work "was a joint venture, or [they] were partners, or [they] were doing this together." Ingram contends that they only agreed Deere would receive one-third of the clinic's revenues and that there was no agreement as to the other two-thirds. Deere acknowledges that, during his time at the clinic, he never contributed money to the clinic, he did not participate in the hiring of any employees, he did not know any of the clinic staff's names, he never purchased any of the clinic's equipment, his name was not on the clinic's bank account, and his name was not on the lease agreement for the clinic space.

Fourteen months after Deere began working at the clinic, Ingram prepared a written agreement to memorialize their arrangement. The document was entitled "Physician Contractual Employment Agreement" and stated that Ingram was the "sole owner" of the clinic. Deere refused to sign the document, claiming that it contradicted their initial arrangement. Immediately after Deere received the document, he ceased working at the clinic.

Deere later sued Ingram, asserting claims of common law fraud, statutory fraud, fraudulent inducement, breach of contract, breach of fiduciary duty, and declaratory judgment and seeking specific performance, damages, and attorneys' fees. The jury found that Deere and Ingram entered into a partnership agreement and that Ingram breached the agreement and his fiduciary duty to Deere. The trial court entered judgment on the jury verdict awarding damages of (1) $34,249.68 for compensation owed Deere through March 1999, (2) $2,525,437.00 for Deere's share of the partnership's revenue from April 1999 through the time of trial, (3) $2,500,000.00 for Deere's share of revenue to accrue after trial, and (4) $27,500.00 in attorneys' fees for the trial stage with additional fees in the event of a motion for new trial and various appeals.

Ingram filed a motion for judgment non obstante veredicto (judgment n.o.v.). After a hearing, Judge David Evans signed a new judgment, eliminating a portion of the damages awarded by the jury and reducing the award of attorneys' fees. Following his decision, Judge Evans recused himself without explanation, and the case was assigned to Judge Merrill Hartman. Ingram then filed a second motion for judgment n.o.v. or, in the alternative, a motion for new trial. Judge Hartman signed a judgment n.o.v. and rendered a take-nothing judgment in Ingram's favor.

The court of appeals reversed the trial court's take-nothing judgment on the second motion for judgment n.o.v. and reinstated the trial court's judgment on the first motion for judgment n.o.v. The court held that Ingram waived his right to challenge the existence of a partnership because he failed to raise the issue in his second motion for judgment n.o.v. 198 S.W.3d 96, 100. Without discussing whether Deere and Ingram created a partnership, the court held that there was legally sufficient evidence to support the jury's finding that the partnership continued to exist through the time of trial. Id. at 101-02. However, the court affirmed the trial court's ruling that Ingram did not owe Deere a fiduciary duty, as there was no evidence of a confidential relationship between Deere and Ingram that would give rise to an informal fiduciary duty. Id. at 102-03. On appeal to this Court, Ingram argues that the court of appeals erred in reinstating the trial court's judgment on the first motion for judgment n.o.v. because there is no evidence that Deere and Ingram created a partnership. Deere principally contends that Ingram waived all of the alleged errors in one way or another at the trial court. Deere also filed a cross-petition appealing the court of appeals' adverse ruling on his breach of fiduciary duty claim.¹ Because we conclude there is no evidence of a partnership, we do not reach the other issues raised by Deere or Ingram.

II. LAW AND ANALYSIS

A. Preservation of Error

As an initial matter, we must address Deere's contention that Ingram failed to preserve his no evidence argument regarding the existence of a partnership. First, Deere argues Ingram failed to preserve his no evidence argument because he did not file a verified denial in response to Deere's claim that they were partners, which Texas Rule of Civil Procedure 93(5) requires. It is undisputed that Ingram did not file the requisite verified denial. However, this issue was tried by consent of the parties. When both parties present evidence on an issue and the issue is developed during trial without objection, any defects in the pleadings are cured at trial, and the defects are waived. TEX.R. CIV. P. 67; Sage St. Assocs. v. Northdale Constr. Co., 863 S.W.2d 438, 445-46 (Tex. 1993).

We addressed a similar issue in Sage Street. In that case, we discussed whether the trial court should have submitted a contract's ambiguity to the jury, although neither party pleaded it. Sage St., 863 S.W.2d at 444-46. We reiterated the long-standing rule that an issue is "not tried merely by the hearing of testimony thereon." Id. at 446 (citing Harkey v. Tex. Employers' Ins. Ass'n, 146 Tex. 504, 208 S.W.2d 919, 922 (1948)). However, because both parties presented conflicting testimony on the subject and allowed the issue to be raised in the jury charge, the contract's ambiguity was tried by consent. Id. Here, not only did both parties present evidence at trial to affirm or controvert the existence of a partnership, but Deere, the party arguing that a partnership existed, also submitted the issue in the jury charge. The issue was developed at trial, and both parties understood that it was contested. Accordingly, the failure to file a verified denial did not preclude Ingram from raising the issue on appeal.

Second, Deere argues that error was not preserved because Ingram's motion for a judgment n.o.v. did not assign a no evidence point of error regarding the jury's answer to the partnership question. However, Ingram prevailed on his motion for judgment n.o.v. Thus, as the prevailing party, he need only raise the issue of whether a partnership existed as a cross-point. TEX.R.APP. P. 38.2(b). When a trial court renders judgment n.o.v. and the losing party appeals, the prevailing party may also appeal and present points or issues on any ground that would either vitiate the verdict or preclude affirming the judgment and reinstating the verdict, including grounds not raised in the judgment n.o.v. See id. (providing that when a trial court renders a judgment n.o.v., "the appellee must bring forward by cross-point any issue or point that would have vitiated the verdict or that would have prevented an affirmance of the judgment if the trial court had rendered judgment on the verdict" (emphasis added)). This is an exception to the general rule that as a prerequisite to presenting a complaint for appellate review, the record must show that the complaint was made to the trial court and that the trial court ruled or refused to rule on the request. See TEX.R.APP. P. 33.1(a). Because Ingram properly raised the issue to the court of appeals, he did not waive the issue for review by either this Court or the court of appeals.

B. Standard of Review

When reviewing a court of appeals judgment reversing the trial court's judgment n.o.v., we conduct a legal sufficiency analysis of the evidence. Guevara v. Ferrer, 247 S.W.3d 662, 665 (...