Texas Instruments, Inc. v. Teletron Energy Management, Inc.

• Decision Date: 02 June 1994
• Docket Number: No. D-3088,D-3088
• Citation: 877 S.W.2d 276
• Parties: TEXAS INSTRUMENTS, INCORPORATED, Petitioner, v. TELETRON ENERGY MANAGEMENT, INC., Respondent.
• Court: Texas Supreme Court

Page 276

877 S.W.2d 276

TEXAS INSTRUMENTS, INCORPORATED, Petitioner, v. TELETRON ENERGY MANAGEMENT, INC., Respondent.

No. D-3088.

Supreme Court of Texas.

Argued Oct. 12, 1993.

Decided April 20, 1994.

Rehearing Overruled June 2, 1994.

Franci N. Crane, Jesse R. Pierce, Warren W. Harris, Houston, for petitioner.

Andrew R. Harvin, James E. Doyle, Houston, for respondent.

HECHT, Justice, delivered the opinion of the Court, in which all Justices join.

Two principal questions are presented in this case. One is whether the statement of facts was timely filed; we agree with the court of appeals that it was. The other is whether lost profits were proved with sufficient certainty to allow recovery; we conclude, as the trial court did and contrary to the court of appeals, that they were not. We reverse the judgment of the court of appeals, 838 S.W.2d 305 and affirm the judgment of the district court.

I

Samir Soliman, an engineer by education and experience, incorporated Teletron Energy Management, Inc. for the purpose of developing and marketing a new, unique, voice-prompted, programmable thermostat called the T-2000, for residential and light commercial use. There was no comparable device on the market, and Soliman contacted several possible manufacturers about designing and producing the necessary state-of-the-art microprocessor, software and hardware. Soliman eventually settled on Texas Instruments, which, after some negotiations, contracted to build ten working prototypes of the T-2000 according to Teletron's specifications within eleven weeks for $32,200. Teletron paid TI $15,000 initially and proceeded to advertise the product and set up distributorships to market it. Despite repeated promises, apologies, and reassurances, TI was never able to produce a unit which worked properly, and after nearly two years of failure, it gave up trying.

Teletron sued TI for breach of contract, breach of warranty, violations of the Texas Deceptive Trade Practices--Consumer Protection Act, negligence, breach of fiduciary duty, and fraud. Teletron claimed damages of more than $1.3 million in expenses incurred in promoting the T-2000, $14 million in past lost profits, and $54 million in future lost profits. The jury found that TI had breached express warranties made to Teletron and had knowingly violated the DTPA in several particulars. ¹ The jury determined Teletron's damages to be $100,000 for expenses, $500,000 for past lost profits, and $0 for future lost profits. The trial court rendered judgment for Teletron for the $100,000 in expenses, $200,000 in additional damages under the DTPA, and $825,000 attorney fees, but refused to award Teletron the $500,000 lost profits found by the jury, granting TI's motion for judgment non obstante veredicto as to this finding. Only Teletron appealed. The court of appeals modified the judgment to include the $500,000 for lost profits. 838 S.W.2d 305.

II

We first consider TI's contention that the statement of facts was not timely filed in the court of appeals and therefore should not be considered.

The court reporter, Jacquelyn Miles, did not complete the statement of facts for more than a year after it was originally due. Teletron filed nine timely motions to extend the due date, none of which TI opposed and all of which the court of appeals granted. The deadline set by the court in response to the last motion was December 2, 1991. Teletron also petitioned the court for mandamus relief, which the court granted, ordering Miles to file the statement of facts. When Miles did not comply, the court held her in contempt and issued a writ of attachment, directing the constable to arrest her and produce her for hearing on December 18, 1991. After much difficulty, the constable found Miles and placed her in jail until she could post bond for her release. Teletron immediately filed an emergency request in the mandamus proceeding that Miles' bond be raised or that she be held without bond. The court did not grant this request, but in response, postponed the December 2 deadline for filing the statement of facts, which had not yet passed, until December 18, to coincide with the date set for Miles' appearance in the mandamus proceeding. 838 S.W.2d at 307. The court stated that it took this action "on its own motion", and that "[d]ue to a clerical error", the order of extension was issued under the caption and number of the mandamus proceeding rather than the appeal. Id. The statement of facts was filed on December 6.

TI argues that the appellate court's extension of the December 2 deadline was ineffective for two reasons. First, TI argues that the deadline for filing a statement of facts can be extended only on the motion of a party and not on the court's own motion. We have held that a court cannot grant an untimely motion to extend the time for filing the appellate record. Chojnacki v. First Court of Appeals, 699 S.W.2d 193 (Tex.1985); B.D. Click Co. v. Safari Drilling Corp., 638 S.W.2d 860 (Tex.1982). We have also held that a court cannot accept the record after the time for filing it and the time for filing a motion for extension have both expired. Meshwert v. Meshwert, 549 S.W.2d 383, 384 (Tex.1977). We have not, however, addressed the specific issue raised by TI, which is whether, before a properly granted extension for filing the record has expired, a court can further postpone the deadline on its own motion. We hold that it can. In granting a timely filed motion for extension, the court has discretion to set a new deadline. It would make little sense to allow the court discretion in setting the deadline, but none in adjusting it once it was set and before it expired. As this case illustrates, the court of appeals must have sufficient control of its own proceedings to alter scheduled deadlines to facilitate its work. The court here, having granted a timely motion and set a date for filing the statement of facts, chose to postpone the extended deadline before it expired so that the statement of facts would be due the same day the court reporter was to appear before the court. This postponement was not necessary; the court might have decided to leave the filing deadline where it was. But it was certainly within the court's discretion to move that deadline if the court, for whatever reason, wanted it to coincide with the appearance date. ²

TI's second argument is that the extension of the December 2 deadline was ordered in the wrong proceeding, the original mandamus proceeding rather than the appeal. Again, we have never addressed this specific issue. In Philbrook v. Berry, 683 S.W.2d 378 (Tex.1985) (per curiam), we held that a motion for new trial filed in a case did not extend the trial court's plenary power to set aside a judgment severed from that case. However, in City of San Antonio v. Rodriguez, 828 S.W.2d 417 (Tex.1992) (per curiam), we questioned whether Philbrook was correctly decided and held that a notice of appeal was effective even though it bore the wrong case number when there was no suggestion of confusion. We reiterated that "the decisions of the courts of appeals [should] turn on substance rather than procedural technicality." Id. at 418 (citing Crown Life Ins. Co. v. Estate of Gonzalez, 820 S.W.2d 121 (Tex.1991) (per curiam)). In the present case, the misfiling of the court's order was, according to the court, due to clerical error. TI could not have been confused; there was no statement of facts to be filed in the mandamus proceeding. The purpose of the mandamus proceeding was to compel the filing of the statement of facts in the separate appellate proceeding. The clerk's error did not render the court's order ineffective.

Accordingly, we conclude that the statement of facts was timely filed and properly considered by the court of appeals.

III

We next consider TI's contention that Teletron is not entitled to recover damages for lost profits because they were not proved with reasonable certainty.

We stated the rule for recovery of lost profits in Southwest Battery Corp. v. Owen 131 Tex. 423, 115 S.W.2d 1097, 1098-1099 (1938):

The various legal encyclopaedias and textbooks lay down certain rules applicable to an action for damages for loss of profits. [T]he rule is stated in the following language: "The generally accepted rule is that, where it is shown that a loss of profits is the natural and probable consequences of the act or omission complained of, and their amount is shown with sufficient certainty, there may be a recovery therefor; but anticipated profits cannot be recovered where they are dependent upon uncertain and changing conditions, such as market fluctuations, or the chances of business, or where there is no evidence from which they may be intelligently estimated. So evidence to establish profits must not be uncertain or speculative. It is not necessary that profits should be susceptible of exact calculation, it is sufficient that there be data from which they may be ascertained with a reasonable degree of certainty and exactness." (citation omitted).

The rule as announced by the decisions of the courts of this state is summarized ... as follows: "In order that a recovery may be had on account of loss of profits, the amount of the loss must be shown by competent evidence with reasonable certainty. Where the business is shown to have been already established and making a profit at the time when the contract was breached or the tort committed, such pre-existing profit, together with other facts and circumstances, may...