Leon Ltd. v. Albuquerque Commons Partnership

• Decision Date: 25 August 1993
• Docket Number: No. 08-92-00002-CV,08-92-00002-CV
• Citation: 862 S.W.2d 693
• Parties: LEON LTD., Leon Development Corporation and Richard J. Leon, Appellants, v. ALBUQUERQUE COMMONS PARTNERSHIP, Albuquerque Uptown Partnership, Albuquerque Uptown Partnership II, Wagner & Brown, Cyril Wagner and Jack Brown, Appellees.
• Court: Texas Court of Appeals

Page 693

862 S.W.2d 693

LEON LTD., Leon Development Corporation and Richard J. Leon, Appellants, v. ALBUQUERQUE COMMONS PARTNERSHIP, Albuquerque Uptown

Partnership, Albuquerque Uptown Partnership II,

Wagner & Brown, Cyril Wagner and Jack

Brown, Appellees.

No. 08-92-00002-CV.

Court of Appeals of Texas,

El Paso.

Aug. 25, 1993.

Marshall M. Searcy, Margaret A. Donahue, Locke Purnell Rain Harrell, Dallas, TX, for appellants.

Harper Estes, Steve Kiser, Lynch, Chappell & Alsup, Midland, TX forappellees.

Before KOEHLER, BARAJAS and LARSEN, JJ.

CORRECTED OPINION

Theopinion dated July 21, 1993 is hereby withdrawn and the following is the opinion of this Court.

This is an appeal from a judgment notwithstanding the verdict of the jury in a suit brought by Appellees for breach of contract and fiduciary duties in which suit Appellants counterclaimed for breach of a prior oral contract. We affirm in part and reverse and render in part the judgment of the trial court.

FACTUAL BACKGROUND

Richard J. Leon (Leon) had been involved in the leasing of real estate in Albuquerque, New Mexico since 1973. In 1975, he went out on his own and formed Leon Ltd. for the general purpose of providing commercial and industrial real estate services, including leasing office buildings, retail complexes and industrial buildings, property management of those kinds of property, development services, real estate sales and brokerage, and related services. Seven or eight years later, he formed Leon Management Corporation to handle the property management functions of his business. In late 1978, Leon became the exclusive broker on a tract of land located in Uptown Albuquerque, owned by the Archdiocese of Santa Fe of the Roman Catholic Church, on which was located St. Pius X High School (St. Pius tract) and which together with another contiguous tract (the LaMesa tract) was referred to as the Commons. In August 1979, he entered into a contract with the Church to do preliminary master development services on the tract. In 1983 at a time when he was no longer exclusive agent, Leon met Mike Bray, an employee of Wagner and Brown (W & B) ¹. At some point, Bray and W & B became interested in acquiring the St. Pius tract. During much of 1984, Bray and Leon met on various occasions to negotiate a lease of that tract between the Church and W & B. On December 31, 1984, a long term lease between the parties was executed. In February 1985, Leon and Bray met regarding additional acquisitions in the Albuquerque area. What resulted from this meeting is greatly in dispute. Leon claims that an oral agreement was reached to insure Leon's continued involvement in the Commons as sole leasing and sales agent and as sole manager of the Commons. For his services, he would receive a 4 percent ownership in the value of the property above a certain amount to be agreed upon and a 4 to 5 percent development services fee ². Conversely, Bray testified that no oral contract was formed, that any such agreement would have been premature because under the lease, it would not have access to the property for four years and that he and Leon only discussed the subject of additional acquisitions.

Later in 1985, Leon assisted W & B in the purchase of the LaMesa tract. In 1986, W & B, with the local help of Leon, was attempting to acquire two additional tracts in the area: the Monroe School site and an Exxon station. They also began taking preliminary steps to develop the property ³. All necessary expenses incurred by Leon up to this date were covered by W & B pursuant to a letter agreement. On March 26, 1987, Leon wrote W & B suggesting the formation of a joint venture. After months of negotiations, the parties entered into three written agreements:

(1) An "Exclusive Agreement" (EA), dated March 22, 1988, in which W & B granted Leon the "exclusive right to negotiate real estate transactions...." ⁴ The agreement included a schedule of commissions to which Leon would be entitled for sales and leases of property in the Commons tracts. The agreement also provided that it and the schedule of commissions "contain the entire understanding and agreement of W & B and Leon and may not be amended or modified except by an instrument in writing signed by W & B and Leon."

(2) A "Development Consulting Agreement" (DCA), dated April 30, 1988, which outlined the consulting services Leon would provide on behalf of W & B to facilitate the initial phase of development on the Commons project. ⁵ For such services, W & B agreed to pay Leon a monthly fee of $8,812.50 plus necessary travel expenses.

(3) The "Albuquerque Commons Partnership Agreement" (ACPA), also dated April 30, 1988, was entered into to create Albuquerque Commons Partnership (ACP), a partnership between Albuquerque Uptown Partnership (AUP), and Albuquerque Uptown Partnership II (AUPII) (two Texas general partnerships the partners of which were Wagner, Brown, and Bray) and Leon Development Corporation. ⁶ One of the purposes (arguably the main purpose) of this partnership agreement was the development, for investment purposes, of the Commons. ⁷ This agreement also provided that it contained "the entire agreement by and among the parties and supersedes any prior understandings and agreements among them respecting the subject hereof[.]" AUP and AUPII were required to make cash contributions to their capital accounts for which they received interests of 86 percent and 10 percent, respectively. Leon was required to contribute its services for which it received a 4 percent interest. The Exclusive Agreement and the Development Consulting Agreement were assigned by W & B to ACP.

In late 1988, W & B became concerned about the market data Leon had provided in reference to the Commons. Furthermore, within five months of the execution of the written agreements, Leon approached W & B and demanded additional compensation. This resulted in an impasse and the breakdown of the relationship between Leon and W & B.

W & B, under the name of ACP, filed a lawsuit in Midland, Texas against Leon Ltd. on July 25, 1989. A second suit was filed in Midland but consolidated with the consent of the parties. Thereafter, Leon and his related entities filed two separate suits against W & B in New Mexico. Leon's claims were based on monies due under the alleged 1985 oral agreement and damages resulting from the anticipatory breach of W & B as to the written agreements. ⁸ The New Mexico lawsuit was stayed pending the outcome of the Texas lawsuits. By amended petitions, Leon Development Corporation and Richard J. Leon, individually, were added as party defendants in the Midland suit.

The case was tried to a jury over the course of several weeks. The issues submitted to the jury were those claims of W & B based on fraud, alter ego, and breach of the exclusive agreement. The jury was also allowed to consider Leon's counterclaims based on the 1985 oral agreement and quantum meruit ⁹. Attorneys' fees were also an issue submitted to the jury.

At the conclusion of the trial, the jury determined that W & B was not entitled to rescind the Exclusive Agreement because Leon had complied with all terms regarding marketing the property. Furthermore, in answer to Question Nos. 13, 14, and 16, the jury found that there was a 1985 oral agreement, that Leon fully performed under its terms, and that the parties did not intend the 1988 written agreements to replace the oral agreement. The jury also found that Leon Development Corporation was the alter ego of Richard J. Leon but the jury concluded by awarding Leon 3 percent of the hard costs of construction and reasonable attorneys' fees.

Following the trial but prior to the entry of judgment, both parties filed motions to have portions of the jury's findings set aside as not supported by the evidence. Leon sought to have jury finding no. 15 set aside on the basis that the jury's calculation of hard costs were inadequate. W & B sought to have the findings relating to the 1985 oral agreement set aside on the theories of merger and statute of frauds. Additionally, W & B requested that the court declare the Exclusive Agreement terminated based on the willful misconduct of Leon; namely the filing of the lis pendens.

The trial court's final judgment declared the Exclusive Agreement terminated based on the willful misconduct of Leon. Moreover, the court held that as a matter of law, W & B was entitled to a judgment notwithstanding the verdict (JNOV) as to the 1985 oral agreement. Finally, the court awarded W & B its attorneys' fees based on jury findings ¹⁰ on the subject against Leon Ltd., Leon Development Corporation, and Richard J. Leon.

Leon, in twenty points of error, attacks the trial court's entry of the JNOV favoring W & B.

Points of Error Nos. One through Four

Leon's first three points of error attack the trial court's entry of the JNOV in which the court disregarded the jury's findings as to question nos. 13, 14, and 16 relating to the 1985 oral agreement, and entered a final judgment rejecting Leon's claims based on that agreement. The fourth point challenges the court's disregard of the favorable jury findings on Leon's attorneys' fees.

Standard of Review

In Texas, the standard of review for the entry of a JNOV is essentially a "no evidence" standard, i.e. it is only proper if there is no evidence from which the jury could have made its findings. Baker v. Int'l Record Syndicate, Inc., 812 S.W.2d 53, 56 (Tex.App.--Dallas 1991), citing Dowling v. NADW Marketing, Inc., 631 S.W.2d 726, 728 (Tex.1982). Furthermore, the evidence must be reviewed in the light most favorable to the jury finding, only considering the evidence and inferences that support the jury finding. Id. "Where there is more than a scintilla of competent evidence to support the jury's finding, then the judgment notwithstanding the verdict should be reversed." Id.

A defense which would bar suit, if established by the evidence as a matter of law, will properly...