Rapp Collins Worldwide, Inc. v. Mohr

Decision Date31 August 1998
Docket NumberNo. 05-96-00627-CV,05-96-00627-CV
Citation982 S.W.2d 478
PartiesRAPP COLLINS WORLDWIDE, INC., Appellant, v. Robert R. MOHR, Appellee.
CourtTexas Court of Appeals

Mark M. Donheiser, Munsch, Hardt, Kopf, Harr & Dinan, P.C., Dallas, Karen Brown Willcutts, Michael Jung, Strasburger & Price, L.L.P., Dallas, Appellant.

Daniel J. Sheehan, Jr., Thomas Sheehan & Culp, L.L.P., Dallas, for Appellee.

Before KINKEADE, WHITTINGTON and JAMES, JJ.

OPINION

KINKEADE, Justice.

Rapp Collins Worldwide, Inc. (Rapp Collins) appeals a judgment awarding Robert R. Mohr $150,000 and costs following a bench trial. In seventeen points of error, Rapp Collins attacks the sufficiency of the evidence to support some of the trial court's findings of facts and conclusions of law. In a single cross-point, Mohr contends the trial court erred in failing to award his attorney's fees because attorney's fees are recoverable under Texas law and Texas law should apply. We conclude the evidence supports the relevant trial court findings and the trial court did not err in entering the conclusions of law that support the judgment. We also conclude the trial court correctly determined New York law should apply to the issue of attorney's fees, and New York law does not allow the recovery of attorney's fees in this case. Accordingly, we affirm the trial court's judgment.

Factual Background

From 1981 to August 31, 1992, Robert Mohr was president and CEO of Rapp Collins, a full-service direct marketing advertising agency with offices in Irving, Texas. Rapp Collins is wholly owned by Omnicom Group, Inc., a New York company, and is supervised by Diversified Agency Services (DAS), a division of Omnicom. During the relevant time periods, John Wren was president of DAS.

In May of 1992, Mohr informed Wren that he wished to resign as president and CEO of Rapp Collins. Mohr's employment contract with the company required that he give a twelve-month notice before terminating his employment; however, Mohr desired to be released from his twelve-month obligation. Mohr expressed this desire to Wren, and the two men negotiated a Termination Agreement (the Agreement), whereby Rapp Collins would release Mohr from his obligation provided Mohr remained available to act as a consultant for Rapp Collins through the twelve-month period. The Agreement specifically listed several tasks that Mohr might be called on to perform, including renegotiating a contract with Hyatt Hotels, negotiating another significant contract, and being available to Rapp Collins two days a month for consulting duties. The Agreement did not contain a non-compete clause; it merely stated that Mohr could continue to work in the industry as long as his work did not interfere with his consulting duties and that he observe the obligations contained in a prior employment agreement that prevented him from soliciting Rapp Collins's clients or disclosing confidential information.

The Agreement provided that Rapp Collins would pay Mohr his annual salary at the rate of $325,000 for the term of the Agreement. It also contained a discretionary bonus provision providing that if Mohr completed his "consulting duties in an acceptable manner to the Company (as determined in the sole discretion of the President of DAS)," the company would pay him a bonus of $150,000. The Agreement, revocable by either party within seven days, was signed on August 31, 1992. On September 8, 1992, Mohr advised Rapp Collins that he had purchased a small direct marketing/advertising company called DMDA and had become DMDA's chief executive officer. Several days later, Wren instructed Rapp Collins's officers not to use Mohr for any consulting tasks. Edward McNally, chief operating officer and chief financial officer at Rapp Collins, advised Mohr that because he was CEO for a competitor, Rapp Collins did not believe it could use him to perform the tasks set out in the Agreement and instructed Mohr to cease working on the specific consulting assignments outlined in the Agreement. Although Mohr subsequently requested to be assigned tasks he could do for Rapp Collins in order to earn the $150,000 bonus, Rapp Collins did not utilize his services under the Agreement. At the end of the consulting term, Wren denied Mohr the $150,000 discretionary bonus, stating that he was not satisfied with Mohr's performance as a consultant.

Mohr sued to recover the $150,000 under the Agreement. Following a five-day trial to the bench on the sole issue of whether Rapp Collins owed Mohr $150,000, the trial court entered judgment for Mohr granting him the $150,000. The court also denied Mohr's request for attorney's fees. The trial court entered findings of fact and conclusions of law.

In this appeal, Rapp Collins challenges some, but not all, of the trial court's findings of fact and conclusions of law. Rapp Collins raises both legal and factual sufficiency challenges to these findings.

Standard of Review

Findings of fact entered in a case tried to a court are of the same force and dignity as a jury's verdict upon special issues. Gregory v. Sunbelt Sav., F.S.B., 835 S.W.2d 155, 158 (Tex.App.--Dallas 1992, writ denied). We apply the same standards in reviewing the legal and factual sufficiency of the evidence supporting the trial court's fact findings as we do when reviewing the legal and factual sufficiency of the evidence supporting a jury's answer to a special issue. Zieben v. Platt, 786 S.W.2d 797, 799 (Tex.App.--Houston [14th Dist.] 1990, no writ). We do not substitute our judgment for that of the fact finder, even if we would have reached a different conclusion when reviewing the evidence. FDIC v. F & A Equip. Leasing, 854 S.W.2d 681, 684 (Tex.App.--Dallas 1993, no writ).

In addressing a legal sufficiency challenge, we view the evidence in a light most favorable to the finding, consider only the evidence and inferences that support the finding, and disregard all evidence and inferences to the contrary. Stafford v. Stafford, 726 S.W.2d 14, 16 (Tex.1987). We uphold the finding if more than a scintilla of evidence exists to support it. Id. In reviewing a factual sufficiency challenge, we examine all of the evidence and set aside a finding only if it is so against the great weight and preponderance of the evidence that it is clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986). In the absence of a statement of facts, unchallenged findings of facts are conclusive on appeal; if a statement of facts is filed, however, unchallenged findings of fact are binding on the appellate court unless the contrary is established as a matter of law, or if there is no evidence to support the finding. See McGalliard v. Kuhlmann, 722 S.W.2d 694, 696-97 (Tex.1986).

We do not review a trial court's conclusions of law for factual sufficiency. Sears, Roebuck & Co. v. Nichols, 819 S.W.2d 900, 903 (Tex.App.--Houston [14th Dist.] 1991, writ denied). When reviewing the trial court's legal conclusions, we evaluate them independently, determining whether the trial court correctly drew the legal conclusions from the facts. Dallas Morning News v. Board of Trustees, 861 S.W.2d 532, 536 (Tex.App.--Dallas 1993, writ denied). Conclusions of law will be upheld on appeal if the judgment can be sustained on any legal theory supported by the evidence. Waggoner v. Morrow, 932 S.W.2d 627, 631 (Tex.App.--Houston [14th Dist.] 1996, no writ). Incorrect conclusions of law will not require reversal if the controlling findings of fact will support a correct legal theory. Id.

Fraudulent Inducement

In points of error one and eight through ten, Rapp Collins contends the trial court erred in not finding that Rapp Collins was fraudulently induced into entering into the Agreement with Mohr. As the basis for this argument, Rapp Collins challenges the following findings of fact and conclusions of law:

Findings of Fact:

DMDA was not in direct competition with Rapp Collins;

Mohr told several officers of Rapp Collins that his future plans included remaining in the industry by buying a direct marketing company, starting one, or joining another existing company;

Mohr told Crawford, CEO of Omnicom, that his future plans included remaining in the industry by buying a direct marketing company, starting one, or joining another existing company.

Conclusion of Law

Mohr had no affirmative duty during the negotiation of the consulting agreement to disclose his negotiations to purchase DMDA, his ultimate purchase of DMDA, and his appointment as DMDA's CEO.

Rapp Collins argues that because the findings of fact are not supported by the evidence, it was entitled to judgment on its affirmative defense that Mohr fraudulently induced Rapp Collins to enter into the Agreement.

Whether a finding was established as a "matter of law" or was "against the great weight and preponderance of the evidence" are the correct challenges by the party with the burden of proof to the legal and factual sufficiency of an adverse finding. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex.1983). In reviewing for legal sufficiency, a matter of law point requires a two-pronged inquiry. First, the reviewing court must examine the record for evidence supporting the finding of fact. Second, if no evidence supports the finding, the court must determine from the record whether the contrary position is established as a matter of law. Hickey v. Couchman, 797 S.W.2d 103, 109-10 (Tex.App.--Corpus Christi 1990, writ denied) (citing Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex.1989)). In reviewing for factual sufficiency, we look to see if a finding is "against the great weight and preponderance of the evidence." The inquiry is whether the finding is so contrary to the overwhelming weight of all relevant evidence as to be clearly wrong and unjust. Id. (citing Cain, 709 S.W.2d at 176).

Rapp Collins had the burden to prove its affirmative defense of fraudulent inducement. The trial court found...

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    ...applied, the plaintiff could not recover attorneys' fees because they were not available under Pennsylvania law); Rapp Collins Worldwide, Inc. v. Mohr, 982 S.W.2d 478, 487–88 (Tex.App.-Dallas 1998, no pet.) (holding, in a breach-of-contract action, that an award of attorneys' fees is a subs......
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