Sewing v. Bowman

• Decision Date: 29 May 2012
• Docket Number: No. 01–10–00230–CV.,01–10–00230–CV.
• Citation: 371 S.W.3d 321
• Parties: Richard SEWING, Appellant, v. Steven Wayne BOWMAN, as Personal Representative of the Estate of William C. Bowman, Appellee.
• Court: Texas Court of Appeals

371 S.W.3d 321

Richard SEWING, Appellant,

v.Steven Wayne BOWMAN, as Personal Representative of the Estate of William C. Bowman, Appellee.

No. 01–10–00230–CV.

Court of Appeals of Texas,

Houston (1st Dist.).

March 29, 2012.

Rehearing Overruled May 29, 2012.

Latosha Terrell Razz Lewis, Tiffany Bingham Briscoe, Vorys, Sater, Seymour and Pease LLP, Houston, TX, for Appellant.

Dwaine Morris Massey, Benton Massey LLC, Martin J. Siegel, Law Offices of Martin J. Siegel, PC, Houston, TX, for Appellee.

Panel consists of Justices JENNINGS, HIGLEY, and BROWN.

OPINION

TERRY JENNINGS, Justice.

Appellant, Richard Sewing, challenges the trial court's judgment, entered after a jury trial, in favor of appellee, Steven Wayne Bowman, as Personal Representative of the Estate of William C. Bowman (“Bowman”), in Bowman's suit against Sewing for redemption of partnership interest ¹, breach of contract, unjust enrichment, and breach of fiduciary duty. ² In thirteen issues, Sewing contends that the statute of frauds ³ precludes Bowman's claim for recovering a redemption of partnership interest; the trial court erred in considering Sewing's previously-owned property as partnership assets; the evidence is legally and factually insufficient to support the jury's finding that the parties formed a partnership; the evidence is insufficient to establish the necessary elements of an enforceable contract or agreement; Bowman failed to present competent evidence of the market value of the partnership; the evidence is insufficient to support the jury's damage award; the jury's damage award is excessive and against the great weight of the competent evidence presented at trial; and the trial court erred in not providing set-offs to the jury's calculation of Bowman's partnership redemption interest, awarding Bowman attorney's fees, and not submitting Sewing's requested jury instructions.

We affirm.

Background

Bowman sued Sewing, seeking redemption of a partnership interest and damages for breach of contract, unjust enrichment, and breach of fiduciary duty. In his petition, Bowman alleged that he and Sewing “entered into [a]n agreement in or around 2003 wherein Bowman provided in excess of $260,000 to [Sewing] between 2003 and 2005 as capital for the purpose of acquiring and rehabilitating real property located at 1718 Wentworth ... and 4810 Chenevert” in Houston, Texas. Bowman and Sewing were to each own 50 percent of the two properties, which were held in the name of Sewing and his wife, Patricia Sewing, and the money sent from Bowman was deposited into the Sewings' checking account. Bowman asserted that the goal “was to create a partnership and combine their resources and make a profit on the appreciation in the value of the properties and share in rental income until the properties were later sold.” Although Bowman died on June 8, 2005, Sewing did not contact Bowman's estate regarding the property or “make an offer to redeem Bowman's interest.”

In regard to Bowman's claim for “Redemption of [Partnership] Interest,” Bowman asserted that the parties had formed a partnership “to carry on a business for profit,” Sewing is the “only remaining partner of the Partnership,” Bowman, “[u]pon his death[,] ... became a withdrawn partner and is entitled to ... buyout rights and remedies,” and, because “Sewing has not offered to the Estate to purchase Bowman's interest nor tendered any payment to the Estate,” the Estate is entitled to the “fair market value of the partnership as of the date of Bowman's death.”

In regard to Bowman's separate breach-of-contract claim, Bowman asserted that the parties “had an agreement that they would each contribute to the purchase of [certain] properties and in turn, would each own 50% of the properties and share in the rents and profits generated,” Bowman “provided over $260,000 to [Sewing] to be used for the purchase and rehabilitation of the properties,” Sewing “kept that money” and “refused to share with Bowmanthe revenues from the rental and sale of the properties,” and “[s]uch conduct is a breach of the agreement between the parties, causing damage to Bowman in an amount in excess of $500,000.00.”

In regard to Bowman's unjust-enrichment claim, Bowman asserted that “the parties understood and agreed that they would each own 50% of the properties and would share equally in the rents and profits,” Sewing's “receipt of over $260,000.00 from Bowman” and his “retention of all rents and revenues from the properties is unjust and immoral,” Sewing has been unjustly enriched “by keeping the more than $260,000.00 provided by Bowman and in keeping the revenues from Bowman,” and Bowman “is entitled the reasonable value of the benefit conferred ... which is in excess of $500,000.00.”

Sewing testified by deposition that he had met Bowman in the early 1950's and, in October 2003, he and Bowman each invested $50,000 in “Rescue Properties.” On February 6, 2004, Sewing received on their investment from Rescue Properties a payment of $136,550, which included the $50,000 that each had invested and a profit of $18,275 each for Bowman and Sewing. Sewing explained that he and Bowman wanted to continue to invest in Rescue Properties, and Bowman sent Sewing another $50,000 to invest; however, Rescue Properties stated that it did not “need [their] money.” Sewing and Bowman then decided to reinvest the money into a similar endeavor, so Sewing held Bowman's $118,275. Sewing later “proposed” that Bowman “might be interested in” developing two properties owned by Sewing. The purpose of the development, according to Sewing, was to build townhouses and sell them for a profit. Sewing and Bowman had a “conversation” about developing the two properties, and Sewing “put [a] document together per [their] conversation.”

Sewing explained that the agreement required Bowman to first pay Sewing $300,000 to receive “50 percent” of the two properties. Sewing, in explaining his valuation of the properties, stated, “[Bowman was] buying into something that's worth $600,000. And so if you've got half interest in it—it's worth $600,000 from what I'm seeing here—then we entered equally.” Sewing further explained, “I'm selling him half of something I already own. That $300,000 goes in my pocket.... Now we're equal partners.... If I sell him half interest ... in something I own, that belongs to me.” Sewing was then asked, “So you were going to take this $300,000, put it in your pocket; is that right?” To which he responded, “If he had accepted it.”

Sewing stated that he and Bowman were to develop townhomes on the two pieces of property, which were to be investment properties. He noted that although the Chenevert property was to be strictly an investment property, Bowman, in February 2004, told Sewing that he might want to live on the property. Sewing explained that at that time, he still held $118,275 of Bowman's money for investment purposes.

Sewing kept the $68,275 owing to Bowman from the Rescue Properties investment in his checking account. Two weeks before Sewing purchased the Chenevert property, he had received the additional $50,000 from Bowman, but he explained that none of this money was used toward the down payment on the Chenevert property. Bowman continued to contribute additional funds, and, at the time of his death, he had paid Sewing $223,275, leaving a remaining balance of $76,725 to reach his $300,000 total contribution. Sewing prepared two documents, which Bowman introduced into evidence at trial, recording the payments. The first document, entitled, “BOWMAN–SEWING TRANSACTIONS,” and the second document, entitled,“BOWMAN–SEWING PROPERTY TRANSACTIONS As of 12/2/2004,” tracked the various payments that Bowman had made to Sewing in connection with their investment in Rescue Properties and the subsequent investment plan.

Approximately one year after Bowman's death, Sewing put the Chenevert property, which was appraised for $700,000, on the market. Sewing originally had purchased the Chenevert property for $170,000. Although the Wentworth property at one time had had an abandoned building on it, Sewing tore it down and left the property vacant. Sewing eventually sold both of the properties, and townhomes are now built on the properties.

At trial, Sewing testified that after he and Bowman had received the money back from their investment with Rescue Properties, Bowman came to visit him in Houston in February 2004. Although Bowman had sent more money to Sewing to reinvest in Rescue Properties, Bowman did not want Sewing to return the money once they found out that Rescue Properties did not want their investment. While Bowman was in Houston, he visited the properties and saw “the potential” for developing townhouses on them. Sewing drafted a proposal for Bowman “to buy half of [his] land ... but he never took the proposal.” Sewing then drafted a letter to Bowman, stating that Bowman, pursuant to their discussion, would buy 50 percent of the properties and own half of the land, and Sewing was having the legal documents prepared. Sewing noted that he informed Bowman of the legal documents because in “real estate dealings, any time you're selling land you go to a title company.”

Sewing explained that after they were unable to reinvest in Rescue Properties, Bowman wanted to make a similar investment. Then, Sewing offered to let Bowman buy one-half of his properties. Sewing “needed [Bowman's] financial statement” because they would need to borrow “probably $3 million for interim financing.” According to their plan, the men were to build nine condominiums on the two pieces of property. However, they did not “go forward with that plan” because Bowman “just sat on the letter” as he was “looking for something fast, where you double your money.”

After Bowman left Houston and returned to Minnesota, he began “talking about” moving to Houston, and he recommended that the two repair the “old tear-down house” located on the Chenevert property. Bowman wanted to ...