Sjw Prop. Commerce Inc. N/K/A Leasing Holding Inc. v. Sw. Pinnacle Properties Inc.

• Decision Date: 23 September 2010
• Docket Number: No. 13-08-00268-CV.,13-08-00268-CV.
• Parties: SJW PROPERTY COMMERCE, INC. n/k/a Leasing Holding, Inc., and Property Commerce Development Company n/k/a Development Holding, Inc., Appellants, v. SOUTHWEST PINNACLE PROPERTIES, INC., Jackson I, Corp., Palmer Enterprise Inc., and G.J. Palmer, Jr., Individually, Appellees.
• Court: Texas Court of Appeals

328 S.W.3d 121 SJW PROPERTY COMMERCE, INC. n/k/a Leasing Holding, Inc., and Property Commerce Development Company n/k/a Development Holding, Inc., Appellants, v. SOUTHWEST PINNACLE PROPERTIES, INC., Jackson I, Corp., Palmer Enterprise Inc., and G.J. Palmer, Jr., Individually, Appellees. No. 13-08-00268-CV. Court of Appeals of Texas, Corpus Christi-Edinburg. Sept. 23, 2010.

Daniel (Dan) G. Rios, David H. Jones, Raymond L. Thomas, Kittleman, Thomas & Gonzales, McAllen, Darrell L. Barger, David W. Green, Hartline, Dacus, Barger, Dreyer, Kathryn F. Green, Corpus Christi, for Appellants.

Craig S. Smith, Corpus Christi, Gilberto Hinojosa, Magallanes & Hinojosa, Brownsville, John R. Griffith, Griffith & Garza, L.L.P., Sarah Pierce Cowen, McAllen, for Appellees.

Before Chief Justice VALDEZ and Justices BENAVIDES and VELA.

OPINION ON REHEARING

Opinion on Rehearing by Chief Justice VALDEZ.

On May 28, 2010, appellants, SJW Property Commerce, Inc. ("SJW") and Property Commerce Development Company ("PCDC"), moved this Court to rehear its original opinion issued in this matter on April 28, 2010. No response has been filed by appellees, Southwest Pinnacle Properties, Inc. ("SPP"), Jackson I Corp ("Jackson"), Palmer Enterprises ("PE"), and G.J. Palmer Jr., individually. After considering SJW and PCDC's motion for rehearing, we deny the motion; however, we vacate and withdraw our April 28, 2010 opinion and judgment, and issue this opinion on rehearing in its place.

This case pertains to agreements between several parties for the development of property at Jackson Palmer Crossing located near the intersection of Business Highway 83 and Jackson Road in McAllen, Texas, and at the northeast corner of 10th Street and Trenton Road, also in McAllen. Appellants, SJW and PCDC, and appellees, SPP, Jackson, PE, and Palmer, complain about a jury verdict in which: (1) SJW was awarded $126,903.73 against SPP and PE and $38,400 against SPP and Jackson for damages associated with appellees' alleged failure to pay commissions owed for bringing tenants to the Jackson Palmer Crossing shopping center; (2) Palmer, individually, was awarded $709,587 in actual damages against SJW and PCDC, $376,397 and $2,000,000 in punitive damages against PCDC and SJW, respectively, associated with Palmer's breach of fiduciary duty and fraud claims; (3) SJW was awarded $55,767.91 in attorney's fees; and (4) appellees were awarded $390,152.23 in attorney's fees for work done at the trial court level, $30,000 for an appeal to this Court, and $30,000 for an appeal to the Texas Supreme Court and $100,570.23 in expenses.

By four issues, SJW and PCDC argue that: (1) SPP had no standing to bring suit and, therefore, its inclusion in the suit did not toll the applicable limitations period; (2) the evidence supporting the jury's finding that SJW and PCDC intentionally interfered with Palmer's alleged contracts is legally and factually insufficient; (3) the trial court erred in assessing exemplary damages against SJW and PCDC; and (4) the trial court erred in awarding Palmer his attorney's fees. By one cross-issue, appellees assert that the evidence supporting the jury's award for damages associated with the commissions is legally and factually insufficient. We affirm, in part, and we reverse and render, in part.

I. Factual Background

A. The Jackson Palmer Crossing Location

In the early 1990's, Palmer first met Stanley J. Williams and Stanley JayWilliams Jr. ("Jay Williams"), both of SJW.¹ Over the course of a couple of years, Palmer and SJW discussed the development of land that Palmer had acquired from his family near the intersection of Jackson Road and Business Highway 83 in McAllen. Palmer and his companies are involved in the development of various properties in the Rio Grande Valley, while SJW facilitates the development of properties nationwide by acting as a broker and liaison with "big box" retailers, such as Target, Best Buy, and Home Depot, which often serve as anchor tenants for shopping centers.² Palmer contracted with SJW to develop the property near the intersection of Jackson Road and Business Highway 83, later named Jackson Palmer Crossing, whereby SJW served as Palmer's broker "in connection with the leasing and sale of the Property." The parties signed an "Exclusive Leasing and Sales Listing Agreement" (the "Listing Agreement") to memorialize the relationship. The Listing Agreement provided that: (1) the commencement of the agreement was June 30, 1999; (2) the agreement expired on June 30, 2000; and (3) Palmer was to pay SJW a 6% sales commission, a 4% commission for "total lease rental for the primary term (years 1-10)" and a 2% commission "of the total rental for the primary term (years 11-20) of each lease if Broker is the sole source of tenant."

During the original term of the Listing Agreement, SJW allegedly secured Fashion Bug and Staples as tenants in the shopping center at Jackson Palmer Crossing.³ The record reflects that, on July 3, 2000, a couple days after the Listing Agreement supposedly expired, SJW secured Factory 2-U as a tenant in the Jackson Palmer Crossing shopping center. The record also includes a letter sent by Palmer to SJW on July 6, 2000, requesting that the term of the Listing Agreement be extended an additional thirty days from the June 30, 2000 expiration date. In response to Palmer's July 6, 2000 request, SJW sent another Listing Agreement to Palmer extending the term from June 30, 2000 to June 30, 2001; however, this agreement was signed by Jay Williams, as president of SJW, but it was not signed by Palmer.

B. The 10th Street and Trenton Location

1. Palmer's Allegations

At some point during the transactions pertaining to the Jackson Palmer Crossing shopping center, Palmer alleges that he began discussing a second development project with Stanley and Jay Williams. The second development project was located at the northeast corner of 10th Street and Trenton Road in McAllen (the "Trenton Project"). At the beginning of the project, the property was primarily farmland; however, a small portion of the land already had a gas station and a McDonald's restaurant situated on it. Palmerfurther alleges that, when he began discussing the second development project with Stanley and Jay Williams, he asked them to continue to act as his broker and they agreed to do so. No contract was signed to memorialize the purported brokerage agreement.

In any event, Palmer asked his friend, Butch Schwarz, a local realtor, to begin assembling the property at the northeast corner of 10th Street and Trenton. Schwarz was familiar with the property because he sold portions of the tracts to the existing owners, and he was listing the tracts for sale. Among the tract owners were B.R. Whisenant; Wayne and Gelee Allen; Bill and Opal Baldwin; Yvonne Robinson; Harlon and Mary Robinson; and Michael Kilgore, M.D. Most of the tract owners were descendants of the Robinson family.

Palmer states that, in 1998, SJW began providing "key services" for him in the development of the Trenton Project. According to Palmer, SJW contacted several of the same "big box" retailers that it had previously contacted for the Jackson Palmer Crossing development. Among the retailers contacted by SJW on Palmer's behalf was Albertson's grocery store; however, Albertson's initially declined to participate.

Palmer notes that he regularly attends an annual convention in Las Vegas conducted by the International Counsel of Shopping Centers ("ICSC"). Palmer recalled that, in 1999, he was invited to the ICSC convention by Stanley and Jay Williams to discuss the Trenton Project at Le Montrachet, a restaurant located in the Las Vegas Hilton Hotel. Whisenant and his wife accompanied Palmer and his wife to the 1999 ICSC convention to meet with Stanley and Jay Williams at Le Montrachet to discuss the Trenton Project.

Palmer also recalls that Jay Williams and Clay Trozzo, a broker for PCDC and SJW and Jay Williams's brother-in-law, invited Palmer to go hunting in Encino, Texas, so that the parties could discuss progress on the Trenton Project. Jay Williams and Trozzo allegedly explained to Palmer that Albertson's was again interested in being the anchor tenant for the Trenton Project, so Steve Jarvios, an Albertson's representative, was invited to hunt as well. However, upon arriving, Jarvios explained to the parties that he had just resigned from Albertson's and that he was now working for Lowe's Home Improvement Centers. Despite this disclosure, the parties allowed Jarvios to stay and hunt with them.

Later, the parties discovered that Albertson's was no longer interested in the site, so Jay Williams and Trozzo began searching for a new anchor tenant for the property. Eventually, Jay Williams and Trozzo were able to interest Target, a long-time client of SJW, in the location. On March 15, 2000, Trozzo allegedly sent Schwarz and Palmer a letter of intent, indicating that PCDC intended to purchase, on Palmer's behalf, 13.34 acres at the northeast corner of 10th Street and Trenton from the landowners for $2.3 million and that Palmer would be responsible for paying SJW a 6% commission from the total sales price. Essentially, the purchase of the tracts of land for $2.3 million would create one large tract of land with one owner, Palmer, who would then sell the land to Target for development of a store and possibly an attached shopping center.

On March 17, 2000, Palmer sent Trozzo a letter of intent to sell approximately 18.85 acres of land located at the northeast corner of 10th Street and Trenton to SJW for $4.9 million, plus a 6% broker's commission for SJW. At this time, Palmer didnot have any of the land under contract; however, he apparently intended to assemble the land via earnest money contracts to sell the land to SJW who would, in turn, sell the land to Target for development. On March 21, 2000, Trozzo, acting as a representative of PCDC, countered Palmer's offer with a letter of intent to...