Stamp-Ad, Inc. v. Barton Raben, Inc., STAMP-A

• Decision Date: 29 January 1996
• Docket Number: INC,STAMP-A,No. 01-95-00567-CV,01-95-00567-CV
• Citation: 915 S.W.2d 932
• Parties: , Appellant, v. BARTON RABEN, INC., Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 932

915 S.W.2d 932

STAMP-AD, INC., Appellant, v. BARTON RABEN, INC., Appellee.

No. 01-95-00567-CV.

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

Jan. 29, 1996.

Ronald J. Restrepo, Teresa R. Jones, Houston, for appellant.

C. Michael Black, Houston, for appellee.

On Appeal from the 190th District Court Harris County, Texas, Trial Court Cause No. 91-44976.

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

OPINION

OLIVER-PARROTT, Chief Justice.

This appeal arises from a contract dispute. It involves sufficiency of the evidence to support jury findings, and the trial court's rulings on motions for judgment notwithstanding the verdict. We affirm in part and reverse and render in part.

This breach of contract action involves two "executive search" contracts between the executive search company, Barton Raben, Inc., and its client, Stamp-Ad, Inc. Barton Raben sued Stamp-Ad for failure to pay Barton Raben for executive searches performed. Stamp-Ad responded that Barton Raben failed to perform the services required by the contracts.

Stamp-Ad is a firm that runs promotions with retail grocery chains. Barton Raben is a management consulting firm specializing in the identification and selection of key personnel for client companies. The parties had been doing business with each other since April 1989. On March 19, 1990, Barton Raben submitted an engagement letter to Stamp-Ad pertaining to Barton Raben's agreement to locate a candidate to fill the position of Vice President of Product Development for Stamp-Ad. This was the second of such engagement letters between Barton Raben and Stamp-Ad. The first letter is not a subject of this lawsuit. The March 19 engagement letter specified Barton Raben's fees for the search and required that Stamp-Ad pay Barton Raben a $36,000 estimated professional fee in three installments upon commencement of the search. Upon placement of a candidate, the estimated professional fee would be adjusted based on 30% of the candidate's actual first-year compensation. Stamp-Ad paid the $36,000 fee and all out-of-pocket expenses as billed.

The engagement letter also provided a one-year employment guarantee which obligated Barton Raben to replace the candidate at no charge, other than for out-of-pocket expenses, if the candidate left Stamp-Ad's employment of his own accord, or was terminated due to his own fault, during the first year.

Barton Raben identified Don Davidson as a possible candidate for Vice President of Product Development. Davidson was not interested in the position and the search was closed sometime between June 1990 and September 1990. In January 1991, Stamp-Ad retained Barton Raben to locate a Vice President of Sales for Stamp-Ad, a different open position. In the meantime, Stamp-Ad began negotiating directly with Don Davidson in December 1990 or January 1991 for the Vice President of Product Development position, and hired Davidson effective April 1, 1991. Barton Raben submitted a final adjusted bill on July 9, 1991 for the gross amount claimed to be due for the Vice President of Product Development search, $39,000 ($250,000 first-year compensation X 30% = $75,000 - $36,000 paid in three installments = $39,000).

As early as July 18, 1991, Stamp-Ad began experiencing problems with Davidson's placement. Davidson did not perform as promised for Stamp-Ad, and it is uncontested that due to his own fault, Davidson was terminated on October 31, 1991. Therefore, based on the engagement letter, Barton Raben was required to find a suitable replacement for Davidson; however, Barton Raben did not extend efforts to find a replacement for Davidson. Barton Raben asserted that Stamp-Ad had not paid a number of invoices sent by Barton Raben, and therefore, the contract was in breach.

Barton Raben sued Stamp-Ad for breach of contract, and sought recovery of the full $39,000 payable under the executive search contract for the position of Vice President of Product Development, as well as sums payable under outstanding invoices related to the other executive search agreement regarding the Vice President of Sales position at Stamp-Ad.

Stamp Ad filed an answer asserting as defenses:

(1) Barton Raben's breach of the search contract regarding the Vice President of Product Development position, in that (a) Barton Raben had not performed under its replacement guarantee, (b) Barton Raben had sought the additional fee before the one-year employment date of Don Davidson, contrary to the agreement of the parties, and (c) Barton Raben was seeking more than it was entitled to under the agreement;

(2) Failure of consideration and non-performance by Barton Raben of the search contract regarding the Vice President of Sales position; and

(3) Barton Raben's failure to mitigate damages with regard to the Vice President of Sales search agreement.

Additionally, Stamp-Ad counterclaimed, asserting that in January 1991, it had retained Barton Raben to assist it in locating a Vice President of Sales for Stamp-Ad, and that Barton Raben failed to comply with that agreement. Stamp-Ad had paid Barton Raben $30,000 in fees, plus out-of-pocket expenses, in connection with that separate agreement, and Stamp-Ad sought return of the fees paid.

The jury found that Stamp-Ad failed to comply with the agreement regarding the search for Vice President of Product Development, and awarded Barton Raben $39,000 in compensatory damages and $36,942.37 in attorney's fees.

The jury further found that Barton Raben failed to comply with the agreement for the search for Vice President of Sales, and awarded Stamp-Ad $24,856.68 in compensatory damages and $36,942.37 in attorney's fees.

After considering both parties' motions for judgment notwithstanding the verdict, the trial court entered its final judgment which awarded Barton Raben $39,000, prejudgment interest, and $36,942.37 in attorney's fees, and awarded Stamp-Ad $24,856.68, plus prejudgment interest, but reduced Stamp-Ad's attorney's fees to $12,000.

In its first point of error, Stamp-Ad asserts that the trial court erred in denying Stamp-Ad's motion for judgment notwithstanding the verdict and motion for new trial because there is "no evidence" or "insufficient evidence" to support the jury's finding that Barton Raben suffered $39,000 in damages for Stamp-Ad's breach of the executive search contract covering the Vice President of Product Development position. Stamp-Ad asserts that the appropriate measure of damages is a calculation of "lost profits net of savings", and Barton Raben failed to prove its damages. We disagree.

In a breach of contract action, the measure of damages is just compensation for the loss or damage actually sustained. Stewart v. Basey, 150 Tex. 666, 245 S.W.2d 484, 486 (1952); Turner v. PV Intern. Corp., 765 S.W.2d 455, 465 (Tex.App.--Dallas 1988), writ denied per curiam, 778 S.W.2d 865 (Tex.1989). Here, Barton Raben seeks breach of contract damages for Stamp-Ad's failure to pay the remaining amount owed on the Vice President of Product Development executive search contract. The agreed professional fee, $36,000, that was paid by Stamp-Ad was the search fee. The additional $39,000 that is in dispute became due only if Barton Raben placed an employee with Stamp-Ad.

Barton Raben recommended Don Davidson to Stamp-Ad as a candidate for Vice President of Product Development, and Stamp-Ad hired Davidson at a $250,000 yearly salary. At that point, Stamp-Ad became obligated to make up the $39,000 difference between 30% of Davidson's $250,000 first-year salary and the $36,000 professional fee already paid. This obligation had no condition precedent.

Barton Raben pled that "Stamp-Ad's failure to pay Barton Raben the agreed upon amount for services rendered constitutes breach of contract and [Barton Raben] sues for ... actual damages."

The jury was asked the following questions:

Question No. 1

Did Stamp-Ad fail to comply with the agreement regarding the search for a Vice-President/Product Development?

* * * * * *

ANSWER: Yes

Question No. 2

What additional sum of money, if any, paid now in cash, would fairly and reasonably compensate Barton Raben for Stamp-Ad's failure to comply with the agreement regarding the search for a Vice-President/Product Development?

ANSWER: $39,000.00

Stamp-Ad did not object to jury questions one and two or to the lack of instructions on a lost profits measure of damages. Any complaint about the form of submission or the failure to instruct is therefore waived. See Allen v. Am. Nat'l Ins. Co., 380 S.W.2d 604, 608 (TEX.1964); Johnson v. State Farm Mut. Auto. Ins., 762 S.W.2d 267, 270 (Tex.App.--San Antonio 1988, writ denied); TEX.R.CIV.P. 274, 278, 279.

In reviewing a "no evidence" point, the court considers only the evidence and inferences that tend to support the finding, and disregards all evidence and inferences to the contrary. Weirich v. Weirich, 833 S.W.2d 942, 945 (Tex.1992); Responsive Terminal Systems, Inc. v. Boy Scouts of America., 774 S.W.2d 666, 668 (Tex.1989). Testimony of both parties and the engagement letter supports the conclusion that, once Davidson was hired, Stamp-Ad owed Barton Raben an additional $39,000, and Stamp-Ad failed to pay that amount.

In reviewing an insufficiency of the evidence challenge, the court of appeals must first consider, weigh, and examine all of the evidence which supports and which is contrary to the jury's determination. Plas-Tex, Inc. v. United States Steel Corp., 772 S.W.2d 442, 445 (Tex.1989). Having done so, the court should set aside the verdict only if the evidence standing alone is so weak as to be clearly wrong and manifestly unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986) (per curiam ).

The testimony presented at trial supported the claim that Stamp-Ad became obligated to pay Barton Raben $39,000 on the contract for Vice-President of Product Development at the moment Barton Raben filled the position. The engagement letter introduced at trial supported...