Ishin Speed Sport, Inc. v. Rutherford

• Decision Date: 07 November 1996
• Docket Number: No. 2-95-169-CV,2-95-169-CV
• Citation: 933 S.W.2d 343
• Parties: ISHIN SPEED SPORT, INC., Appellant, v. Johnny RUTHERFORD and Johnny Rutherford, Inc., Appellees.
• Court: Texas Court of Appeals

Page 343

933 S.W.2d 343

ISHIN SPEED SPORT, INC., Appellant, v. Johnny RUTHERFORD and Johnny Rutherford, Inc., Appellees.

No. 2-95-169-CV.

Court of Appeals of Texas Fort Worth.

Nov. 7, 1996.

Neil D. Kelly, Stephen B. Schulte, Hughes & Luce, L.L.P., Houston, for appellant.

H. Allen Pennington, Jr., Law, Snakard & Gambill, Fort Worth, for appellees.

Before CAYCE, C.J., and BRIGHAM and HOLMAN, JJ.

OPINION

HOLMAN, Justice.

Johnny Rutherford individually and a corporation known as Johnny Rutherford, Inc. sued Ishin Speed Sport, Inc. for breach of contract and resulting loss of profits. The jury found for the plaintiffs and the trial court entered judgment awarding Rutherford and Rutherford, Inc. $226,388.87, plus $36,954.10 in prejudgment interest and $33,848.71 in attorney's fees. Ishin appeals, and we affirm.

Although Ishin brings fifteen points of error, its appeal presents three principal issues: (1) whether the trial court abused its discretion by erroneously refusing to submit Ishin's requested jury instructions; (2) whether there was legally or factually sufficient evidence to support the jury's answers and the court's judgment that a contract either existed or was agreed to by and between Rutherford individually or Rutherford, Inc., and Ishin; and (3) whether there was legally or factually sufficient evidence to support the jury findings and judgment awarding Rutherford and Rutherford, Inc. damages for lost profits.

The Initial Concept

Richard Respess, M.D., created and was president of Ishin Speed Sport, Inc. for the purpose of developing an automobile racetrack and driving technology center in Tarrant County. Ishin also was involved in refurbishing Texas World Speedway in College Station, Texas. Dr. Respess asked Johnny Rutherford, a Fort Worth native and a professional race car driver who is a three-time winner of the Indianapolis 500, to agree to assist the Ishin endeavors by creating the "Johnny Rutherford Performance Racing and Driving School" at the Texas World Speedway.

Ishin concedes that early in 1991 Dr. Respess and Johnny Rutherford tentatively agreed that in exchange for being allowed to use the Rutherford name in promoting Ishin's enterprises, Ishin periodically would pay Johnny Rutherford a commission on the income generated by the driving school and related merchandise sales. Johnny Rutherford insists that his commission was to be 25% of the school revenues, but in no event less than a guaranteed compensation of $100,000 for one year. By contrast, Ishin contends that the amount of commission payable to Johnny Rutherford was never agreed upon, and the only agreement was that a guaranteed minimum of $100,000 per year would be paid against commissions. Ishin also contends that although Johnny Rutherford individually would be doing the work for Ishin, only Rutherford, Inc. was the intended party to the agreement.

Nevertheless, in February 1991 Ishin began paying Johnny Rutherford installments toward the guaranteed minimum by paying him $4,166.67 every two weeks. Ishin contends that it paid no commissions to Rutherford because he wanted the commissions computed on the driving school's gross profits, while Ishin wanted commissions to be paid only on the net profits. Ishin asserts that by September 1991 Johnny Rutherford had not met his obligation to furnish a business plan and curriculum for the driving school. In August 1991, experiencing cash flow problems, Ishin needed to reduce costs and stopped paying Johnny Rutherford. However, Ishin admits that it did not notify Johnny Rutherford that his services were no longer needed.

In January 1992, Johnny Rutherford did present Ishin with a business plan for the driving school. In the plan, Rutherford estimated that he would be entitled to a 25% commission on projected revenues of $1.8 million from the school's tuition and $200,000 from merchandise sales during the first year of operation. Ishin did not pay, and Rutherford and his corporation filed suit seeking damages.

The Contract

In answer to question number 1 of the court's charge, the jury found that Johnny Rutherford and Ishin had agreed that Ishin would pay Johnny $100,000 and 25% of gross tuition, fees, and merchandise in return for his commitment to set up, develop, promote, and operate an automobile driving school. The question included the following instruction to the jury:

To form a valid agreement, the parties must have the same understanding of the subject matter of the agreement and all its essential terms.

In deciding whether the parties reached an agreement, you may consider what they said and did in light of the surrounding circumstances, including any earlier course of dealing. You may not consider the parties' unexpressed thoughts or intentions.

With an identical instruction, the jury answered "yes" to question number 4, finding that Ishin had agreed to pay Rutherford, Inc. the $100,000 and 25% commission.

By its first, third, and fourth points of error Ishin asserts either that there is no evidence to support the existence of a contract between Ishin and Johnny Rutherford individually or that the evidence of it is factually insufficient.

By its fifth, seventh, and eighth points of error Ishin asserts either that there is no evidence to support the existence of a contract between Ishin and Johnny Rutherford, Inc. as found by the jury in question 4, or that the evidence of it is legally or factually insufficient. We will address points of error one, three, four, five, seven, and eight as a group because they present related issues.

First, we note that in determining a "no evidence" point, we are to consider only the evidence and inferences that tend to support the finding and disregard all evidence and inferences to the contrary. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex.1994); In re King's Estate, 150 Tex. 662, 244 S.W.2d 660, 661-62 (1951). If there is more than a scintilla of such evidence to support the finding, the claim is sufficient as a matter of law, and any challenges go merely to the weight to be accorded the evidence. Browning-Ferris, Inc. v. Reyna, 865 S.W.2d 925, 928 (Tex.1993).

A "no evidence" point may only be sustained when the record discloses one of the following: (1) a complete absence of evidence of a vital fact; (2) the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla of evidence; or (4) the evidence establishes conclusively the opposite of a vital fact. Juliette Fowler Homes, Inc. v. Welch Assocs., 793 S.W.2d 660, 666 n. 9 (Tex.1990); Robert W. Calvert, "No Evidence" and "Insufficient Evidence" Points of Error, 38 TEX.L.REV. 361, 362-63 (1960). There is some evidence when the proof supplies a reasonable basis on which reasonable minds may reach different conclusions about the existence of the vital fact. Orozco v. Sander, 824 S.W.2d 555, 556 (Tex.1992).

Next, we note that an assertion that the evidence is "insufficient" to support a fact finding means that the evidence supporting the finding is so weak or the evidence to the contrary is so overwhelming that the answer should be set aside and a new trial ordered. Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965). We are required to consider all of the evidence in the case in making this determination and, if reversing, to detail that evidence in the opinion. Jaffe Aircraft Corp. v. Carr, 867 S.W.2d 27, 29 (Tex.1993).

There was no written contract between the parties, and Ishin argues that Rutherford presented no evidence, or at best only a scintilla, that Ishin ever agreed upon the amount of compensation that would be paid Rutherford in their business relationship. Ishin does concede in its brief that Rutherford testified that he believed that he and Dr. Respess had made an agreement, but Dr. Respess testified there was no agreement.

Clearly, an offer and its acceptance in strict compliance with the offer's terms are essential to the creation of a binding contract. American Nat'l Ins. Co. v. Warnock, 131 Tex. 457, 114 S.W.2d 1161, 1164 (1938); Smith v. Renz, 840 S.W.2d 702, 704 (Tex.App.--Corpus Christi 1992, writ denied). However, even if an offer and acceptance are not recorded on paper, dealings between parties may result in an implied contract where the facts show that the minds of the parties met on the terms of the contract without any legally expressed agreement. Smith, 840 S.W.2d at 704; City of Houston v. First City, 827 S.W.2d 462, 473 (Tex.App.--Houston [1st Dist.] 1992, writ denied). Accordingly, the parties' conduct may convey an objective assent to the terms of an agreement, and whether their conduct evidences their agreement is a question to be resolved by the finder of fact. Estate of Townes v. Townes, 867 S.W.2d 414, 419 (Tex.App.--Houston [14th Dist.] 1993, writ denied). If the finder of fact determines that one party reasonably drew the inference of a promise from the other party's conduct, then that promise will be given effect in law. E-Z Mart Stores, Inc. v. Hale, 883 S.W.2d 695, 699 (Tex.App.--Texarkana 1994, writ denied).

At the start of their relationship, Johnny Rutherford met with a racing promoter, Buddy Boren, and Dr. Respess to discuss Rutherford's participation in Ishin's proposed operation, which included the driving school. Rutherford testified that he initially asked for annual compensation of $400,000, but at a later meeting, he and Dr. Respess agreed on compensation of $100,000 and a 25% commission on the school revenues. At that meeting, Dr. Respess refused Rutherford's request for a written contract, but plaintiff's exhibit 24 is a typewritten memo dated June 24, 1991 sent from Dr. Respess to Johnny Rutherford. That exhibit states that Ishin is paying Rutherford $100,000 per year against a commission. Rutherford also testified that his work for the racing and driving school was to include using his...