Lone Star Ford, Inc. v. McCormick

• Citation: 838 S.W.2d 734
• Decision Date: 26 August 1992
• Docket Number: No. 01-91-00861-CV,01-91-00861-CV
• Parties: LONE STAR FORD, INC., Appellant, v. George E. McCORMICK, Jr. and James Drury, Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 734

838 S.W.2d 734

LONE STAR FORD, INC., Appellant, v. George E. McCORMICK, Jr. and James Drury, Appellees.

No. 01-91-00861-CV.

Court of Appeals of Texas Houston (1st Dist.).

Aug. 26, 1992.

Rehearing Denied Oct. 1, 1992.

Dale M. Tingleaf, Johnson, Wurzer & Tingleaf, P.C., Houston, for appellant.

Vern J. Thrower & Assoc., P.C., Vern J. Thrower, Greg W. Thrower, Houston, for appellees.

Before OLIVER-PARROTT, C.J., and DUNN and WILSON, JJ.

OPINION

DUNN, Justice.

This appeal involves two lawsuits that were consolidated by the trial court, Drury v. Lone Star Ford, Inc., No. 90-008209 and McCormick v. Lone Star Ford, Inc., No. 90-008208. Each lawsuit involved an alleged tortious interference with and breach of an agreement by appellant, Lone Star Ford, Inc. (Lone Star). McCormick and Drury also named Bruton Smith and Sonic Financial Corporation (Sonic) as defendants. Smith was the president and a principal shareholder of Sonic. Sonic owned all appellant's corporate stock at the time appellant terminated Drury's and McCormick's agreements.

McCormick's agreement with appellant provided for his employment as Lone Star's general manager, and Drury's agreement with appellant provided for his employment as Lone Star's advertising spokesperson.

Trial was to a jury, which found in favor of appellees, as follows:

(1) Lone Star failed to comply with the agreement between it and each of the appellees;

(2) Smith knowingly interfered with the agreements between Lone Star and each of the appellees;

(3) Lone Star's failure to comply with the agreement between it and McCormick was not excused, and no good cause existed for Drury's discharge.

The jury awarded compensatory damages of $31,000 to McCormick and $40,000 to Drury and attorney's fees of $29,000 to McCormick and $24,000 to Drury. The jury also awarded punitive damages of $50,000 to McCormick and $25,000 to Drury, each against Smith. The trial court granted appellant's motion for judgment notwithstanding the verdict as to Smith, but entered judgment in favor of appellees on the jury's findings of breach of contract and attorney's fees.

Basis of the Appeal

In seven points of error, Lone Star complains that the trial court erred in granting appellees' motion for consolidation; in denying Lone Star's motion for judgment notwithstanding the verdict and in rendering judgment for McCormick, because Lone Star was justified in terminating McCormick's employment and was excused from continuing to employ McCormick; in denying Lone Star's motion for new trial and in entering a judgment for McCormick because the jury's finding that Lone Star's failure to comply with the agreement was not excused was against the great weight and preponderance of the evidence; in refusing to submit to the jury Lone Star's tendered instruction with regard to mitigation of damages; in denying Lone Star's motion for judgment notwithstanding the verdict and in rendering judgment for Drury, because there was no evidence to support the jury's award; and in denying Lone Star's motion for new trial, because the evidence was insufficient to support the amount found by the jury as Drury's actual damages.

Consolidation of McCormick's and Drury's Causes of Action

In its first two points of error, appellant complains that the trial court committed reversible error in consolidating McCormick's and Drury's causes of action. Appellant contends that the suits did not involve a common question of law or fact and that, as a result, Lone Star was prejudiced and denied a fair trial.

A trial court has broad discretion to consolidate cases pursuant to Texas Rules of Civil Procedure 41 and 174, and its action will not be disturbed on appeal, except for abuse of discretion. Ruthart v. First State Bank, 431 S.W.2d 366, 367-68 (Tex.Civ.App.--Amarillo 1968, writ ref'd). Under rule 174, a trial court has "authority to order a joint trial when actions involving a common question of law or fact are pending before the Court." TEX.R.CIV.P. 174(a). The actions should relate to substantially the same transaction, occurrence, subject matter, or question. They should be so related that evidence presented will be material, relevant, and admissible in each case. See Alice Nat'l Bank v. Corpus Christi Bank & Trust, 431 S.W.2d 611, 624 (Tex.Civ.App.--Corpus Christi 1968), aff'd, 444 S.W.2d 632 (Tex.1969).

Abuse of discretion may be found if consolidation results in prejudice to the complaining party. The prejudice, however, may not be presumed, but must be demonstrated. Parker v. Potts, 342 S.W.2d 634, 636 (Tex.Civ.App.--Fort Worth 1961, writ ref'd n.r.e.). The complaining party must show that it exercised reasonable diligence to avoid or prevent the harm by opposing the order for consolidation. Scott v. Farmers' & Merchants' Nat'l Bank, 66 S.W. 485, 491, rehearing overruled by 67 S.W. 343 (Tex.Civ.App.--Austin 1902), rev'd on other grounds, 97 Tex. 31, 75 S.W. 7 (Tex.1903).

This Court must, therefore, examine McCormick's and Drury's causes of action to ascertain whether they have common questions of law and fact; whether the actions relate to the same or substantially the same transaction, occurrence, subject matter, or question; whether the evidence presented at trial was material, relevant, and admissible in each case; and whether appellant opposed the motion for consolidation.

Appellees urge us to consider that the events surrounding the termination, cancellation, and interference with the employment contracts between McCormick and Lone Star and between Drury and Lone Star are "inextricably intertwined." They state that defendant Smith, "acting on his own and without any legal or official authority," undertook a series of transactions to terminate management and employees, including McCormick and Drury. Appellees note that McCormick's authority as vice-president and general manager of Lone Star is also common to both lawsuits, as Smith alleged that the contract between Lone Star and Drury was not binding on Lone Star because McCormick had no authority to contractually bind Lone Star to Drury.

We find that there were common questions of law and fact between the two lawsuits. The actual damages determined by the jury on the breach of contract claims were not at variance with amounts allegedly owed the litigants under the contracts. Further, the trial court granted appellant's motion for judgment notwithstanding the verdict on the punitive damages claims against Smith for tortious interference. Appellant failed to demonstrate how it was prejudiced as a result of consolidation.

We overrule points of error one and two.

McCormick's Damages

In point of error three, appellant contends that the trial court committed reversible error in denying its motion for judgment notwithstanding the verdict and in rendering judgment for McCormick because, as a matter of law, Lone Star was justified in terminating McCormick's employment or was, as a matter of law, excused from continuing to employ McCormick as its general manager. In point of error four, appellant maintains that the trial court committed reversible error in denying its motion for new trial and in entering judgment for McCormick based on the jury's failure to find that Lone Star's failure to comply with the agreement was not excused because the jury's answer is against the great weight and preponderance of the evidence.

In order for a trial court to disregard a jury's findings and to grant a motion for judgment notwithstanding the verdict, it must determine that there is no evidence upon which the jury could have relied for its findings. Exxon Corp. v. Quinn, 726 S.W.2d 17, 19 (Tex.1987); Navarette v. Temple Indep. School Dist., 706 S.W.2d 308, 309 (Tex.1986). A trial court has wide discretion in denying a motion for new trial, and its action will not be disturbed on appeal absent a showing of an abuse of discretion. Jackson v. Van Winkle, 660 S.W.2d 807, 809 (Tex.1983); Balias v. Balias, Inc., 748 S.W.2d 253, 257 (Tex.App.--Houston [14th Dist.] 1988, writ denied).

Lone Star argues that McCormick began work in November of 1988 and that, by the end of the year, Lone Star's books showed an operating loss of $964,050. Lone Star contends that the general manager of an automobile dealership is "akin to the captain of a ship. The whole dealership operation is his responsibility and it is his job to see that it is profitable." By December of 1989, the total losses that the dealership incurred during the year it was managed by McCormick were $2,161,286. Smith testified that he took steps to work with McCormick and train him to "try to get the dealership back on course," but to no avail. McCormick's employment was terminated on December 28, 1989. Lone Star's position is that it was excused in discharging McCormick, based on McCormick's "uncontested failure to run the dealership and make it profitable."

John Noble, corporate liaison between Lone Star and its parent company during the time in question, testified that McCormick made tremendous strides in certain areas of the dealership and re-established relationships with Ford Motor Credit and Ford Motor Company that had deteriorated over the years. Noble also testified that other factors were present at the time McCormick was general manager that were not in McCormick's control, including the fact that the dealership was short on money and under siege from lenders, that 1989 was a bad year in the automobile market, and that Lone Star's president, Chuck West, died that year. Noble stated that the dealership was not properly capitalized when McCormick first became general manager and that, given the right set of circumstances, McCormick would have been a capable manager.

McCormick testified about circumstances beyond his control that confronted the dealership in 1989 and caused the financial losses of the company.

The following question and instructions were submitted to the jury:

Question Number Three

Was Lone Star Ford,...