Spoljaric v. Percival Tours, Inc.

• Decision Date: 19 March 1986
• Docket Number: No. C-4271,C-4271
• Citation: 708 S.W.2d 432
• Parties: Ralph W. SPOLJARIC, Petitioner, v. PERCIVAL TOURS, INC., et al., Respondents.
• Court: Texas Supreme Court

Page 432

708 S.W.2d 432

Ralph W. SPOLJARIC, Petitioner, v. PERCIVAL TOURS, INC., et al., Respondents.

No. C-4271.

Supreme Court of Texas.

March 19, 1986.

Rehearing Denied May 21, 1986.

Timothy F. Lee, Schmidt & Matthews P.C., Houston, Roy L. Stacy, Calhoun, Gump, Spillman & Stacy, Dallas, for petitioner.

Richard L. Brown, Robert W. Blair, Thomas H. Law, Law, Snakard, Brown & Gambill, Fort Worth, for respondents.

McGEE, Justice.

This is a fraudulent misrepresentation case. Ralph Spoljaric sued his former employer for breach of a promise to implement a bonus plan. The trial court rendered judgment for Spoljaric and in an unpublished opinion the court of appeals reversed that judgment and rendered judgment for Percival Tours. The principal question before us is whether there is some evidence to support the jury's finding that the employer did not intend to implement a bonus plan at the time he promised to do so. Because we hold there is some evidence to support the jury's finding, we reverse the judgment of the court of appeals and remand the cause to that court for further consideration.

In March, 1978, Ralph W. Spoljaric negotiated with Jessie L. Upchurch, president of Percival Tours, Inc., for Spoljaric's employment with Percival. The parties entered into a written two-year employment contract. Spoljaric took the position of vice president of finance and accountancy at an annual salary of $42,000 per year.

Toward the end of the two-year contract, Spoljaric began to make plans for his future. He made contacts in New York and initiated talks with Upchurch for a new employment contract. In December, 1979, Spoljaric and Upchurch met. Upchurch offered Spoljaric a salary of $50,000 per year to remain with Percival Tours but refused to enter into a second written contract. Spoljaric declined this offer.

The two met the next day, and Spoljaric counter-offered for a salary of $70,000 without a written contract. Upchurch agreed to the higher salary. The two also discussed Spoljaric's increased responsibilities to the company due to the resignation of Mario Balestrieri, executive vice president of operations.

Approximately two weeks later, a third meeting was held between Spoljaric, Upchurch, and Balestrieri. Balestrieri agreed to stay with Percival at the same terms as Spoljaric. A bonus plan was also discussed. Under the proposed plan, Spoljaric and Balestrieri would be paid a 5 percent bonus on any improvement over Percival's net operating loss of 2 million dollars. The bonus would be paid when the company realized a profit. Upchurch instructed Spoljaric to formalize a plan in writing.

It took almost two months for Spoljaric to draft a bonus plan. He gave the draft to Upchurch for his approval. Because Upchurch objected to certain parts, he instructed his corporate secretary, G. Lisle, to draft an alternate provision dealing with the voluntary termination of executive officers. Lisle drafted the requested provision and Upchurch approved the amended bonus plan. However, the record is silent whether Spoljaric ever saw the new amended bonus plan. Spoljaric and Balestrieri made several inquiries over the next eight months about the status of the proposed bonus plan. Upchurch told them that his New York lawyers were reviewing the plan.

In October, 1980, Percival Tours purchased Jackson Travel Agency, Inc., and Jackson Tours. A press release announced that Robert Jackson would thereafter serve as the president and chief operating officer of Percival Tours. Spoljaric read the press release and believed that Jackson had taken his position.

On October 9, 1980, Spoljaric talked to Jackson concerning his position with Percival Tours and the proposed bonus arrangement. Jackson told Spoljaric that he had no knowledge of either. At Spoljaric's request, Jackson approached Upchurch with the original bonus plan draft. Upchurch read it and said that he had no intention of signing it. When Jackson related this to Spoljaric, Spoljaric walked off the job.

Spoljaric brought suit against Percival Tours, Inc., Upchurch Corporation, and Jessie L. Upchurch for breach of oral contract and fraudulent misrepresentation. In answer to issues, the jury found that (1) Upchurch promised Spoljaric that a bonus plan would be implemented to pay Spoljaric a bonus for improvements in Percival's financial condition, (2) this representation was false, (3) when this representation was made, Upchurch did not intend to keep the promise, (4) Spoljaric justifiably relied on this representation to his detriment, and (5) Upchurch breached the oral contract to pay Spoljaric a bonus. The jury awarded Spoljaric $30,000 in actual damages and $750,000 in punitive damages for fraudulent misrepresentation. The trial court directed a remittitur of $690,000 of the punitive damages. Spoljaric remitted this amount under protest, and the trial court rendered judgment on the balance of the jury findings.

Upchurch appealed. The court of appeals reversed and rendered, holding there was no evidence to support the jury's finding that Upchurch did not intend to implement a bonus plan and there was factually insufficient evidence to uphold the oral contract. The court of appeals did not reach Spoljaric's cross-point concerning remittitur.

Spoljaric contends there is legally sufficient evidence to support the jury's finding that Upchurch did not intend to keep his promise to set up a bonus plan. In reviewing a legal sufficiency point, this court will consider the record as a whole, viewing the evidence and inferences most favorable to the jury verdict and disregarding all other evidence and inferences. Garza v. Alviar, 395 S.W.2d 821 (Tex.1965).

A promise to do an act in the future is actionable fraud when made with the intention, design and purpose of deceiving, and with no intention of performing the act. Stanfield v. O'Boyle, 462 S.W.2d 270, 272 (Tex.1971); Turner v. Biscoe, 141 Tex. 197, 199, 171 S.W.2d 118, 119 (Tex.Comm'n App.1943, opinion adopted). While a party's intent is determined at the time the party made the representation, it may be inferred from the party's subsequent acts after the representation is made. Chicago, T. & M.C. Ry. Co. v. Titterington, 84 Tex. 218, 223, 19 S.W. 472, 474 (1892); see Smith v. Jungkind, 252 S.W.2d 596, 599 (Tex.Civ.App.--Austin 1952, writ ref'd). Intent is a fact question uniquely within the realm of the trier of fact because it so depends upon the credibility of the witnesses and the weight to be given to their testimony. See Benoit v. Wilson, 150 Tex. 273, 281, 239 S.W.2d 792, 796-797 (1951).

Failure to perform, standing alone, is no evidence of the promissor's intent not to perform when the promise was made. However, that fact is a circumstance to be considered with other facts to establish intent. Titterington, 19 S.W. at 474; King v. Wise, 282 S.W. 570, 573 (Tex.Comm'n App.1926, judgmt adopted). Since intent to defraud is not susceptible to direct proof, it invariably must be proven by circumstantial evidence. Maulding v. Niemeyer, 241 S.W.2d 733, 737 (Tex.Civ.App.--El Paso 1951) (orig. proceeding); Turner v. Biscoe, 171 S.W.2d at 119. "Slight circumstantial evidence" of fraud, when considered with the breach of promise to perform, is sufficient...