Ty Robbins v. Payne

• Decision Date: 20 September 2001
• Docket Number: No. 07-01-0004-CV,07-01-0004-CV
• Citation: 55 S.W.3d 740
• Parties: (Tex.App.-Amarillo 2001) TY ROBBINS, APPELLANT v. THOMAS K. PAYNE AND THE DOOR, INC., APPELLEES
• Court: Texas Court of Appeals

Page 740

55 S.W.3d 740 (Tex.App.-Amarillo 2001)

TY ROBBINS, APPELLANT v. THOMAS K. PAYNE AND THE DOOR, INC., APPELLEES

No. 07-01-0004-CV

Court of Appeals of Texas, Amarillo

September 20, 2001

Rehearing Overruled October 18, 2001.

FROM THE 99TH DISTRICT COURT OF LUBBOCK COUNTY; NO. 98-502,439; HONORABLE MACKEY HANCOCK, JUDGE

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] The McClendon Law Firm, Jack McClendon, Lubbock for appellant.

Craig, Terrill & Hale, Gary M. Bellair, Lubbock, for appellee.

Before BOYD, C.J., and QUINN and REAVIS, JJ.

John T. Boyd, Chief Justice

This appeal arises from a dispute between the founders of a business who dissolved their relationship less than a year after establishing the business. Both parties filed suit against each other, alleging breach of agreements and other duties arising from their relationship. At the conclusion of a jury trial, the court directed a verdict for appellees on each of the causes of action, thus prompting this appeal. Finding no error in the judgment below, we affirm.

Proper consideration of the issues raised in this appeal necessitates a brief review of the factual and procedural history of the parties' dispute. In 1996, appellant Robbins was a student at Texas Tech University. He performed computer support and related services for appellee, Thomas K. Payne (Payne). The parties discussed establishing a business to provide internet access services to the public in the Lubbock area. These discussions culminated in a short written agreement signed on October 18, 1996.¹ As described in the agreement, the business name was "the Door," sometimes referred to as "the Door to the Internet."

Shortly after the agreement was signed the business began operating, with Robbins handling the technical aspects and some other daily operational decisions and Payne participating in financial, advertising and other business development activities. The record shows the business was successful in obtaining customers and providing service to those customers. However, even after several months of operation, the business was not producing a profit. Consequently, Robbins did not receive any financial benefit from the business during this time. Disagreements developed between Payne and Robbins about certain aspects of the business and, in the summer of 1997, Robbins explored the possibility of obtaining financing to "buy-out" Payne or establishing another business to compete in the same markets. Robbins ceased participating in the business about August 1, 1997.

Appellees Payne and the Door sued Robbins on June 15, 1998, for breach of contract and for a declaration that Robbins did not have an equity interest in The Door. The following day, Robbins filed suit against appellees Payne and the Door, asserting causes of action for breach of partnership agreement, breach of a duty of good faith, breach of agreement to form partnership, promissory estoppel, fraud, negligent misrepresentation, breach of fiduciary duty, and constructive trust.

After the denial of a motion for summary judgment filed by appellees, the case was tried to a jury on two days in October 2000. After both parties closed, appellees moved for a directed verdict as to each of Robbins's causes of action on the ground that the evidence was legally insufficient to support those claims. It also sought a directed verdict on appellees' request for a declaration that Robbins did not have an ownership interest in the Door. The trial court granted the motion, stating that it found the evidence conclusively established an enforceable contract and all prior negotiations merged into that contract. It rendered judgment for appellees, declaring that appellant had no ownership interest in the Door and that he take nothing on his claims. After filing a motion for new trial, appellant timely perfected appeal and now presents three issues for our review. They are that the trial court erred in: 1) granting a trial amendment to add a denial of the existence of a partnership, 2) granting an instructed verdict when there was evidence of a meritorious theory of recovery, and 3) granting an instructed verdict when there was some evidence of a meritorious defense.

Trial Amendment

Robbins's first challenge is to the trial court's decision to permit appellees to file a trial amendment denying the existence of a partnership. During the preliminary proceedings on the day of trial, Robbins pointed to the allegation in his petition alleging a fiduciary relationship between the parties and argued this implied the existence of a partnership. He also argued that appellees had failed to file a verified denial of partnership as required by Rule of Civil Procedure 93. In response, appellees sought leave to amend their answer to add a verified denial of partnership. After considering the request during voir dire, the trial court permitted the amendment finding that the amendment would not operate as a surprise because the issue was raised in the pleadings, even though there was no verified denial. The court offered Robbins the opportunity to present evidence of surprise but, he only sought a continuance, which was denied.

Amendments to pleadings filed less than seven days before the date of trial may only be filed with leave of the trial court. Tex. R. Civ. P. 63. The rule provides that leave shall be granted unless there is a showing the filing will operate as a surprise to the opposite party. Id. See also Tex. R. Civ. P. 66 (authorizing trial amendments unless the non-movant shows prejudice). The standard of review applicable to a trial court's decision to permit amendment is whether the court abused its discretion. Miller v. Wal-Mart Stores, Inc., 918 S.W.2d 658, 666 (Tex.App.--Amarillo 1996, writ denied). The test for abuse of discretion is whether the trial court's action was arbitrary and unreasonable or whether the trial court acted without reference to guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985), cert denied, 476 U.S. 1159, 106 S.Ct. 2279, 90 L.Ed.2d 721 (1986).

At trial, appellees relied on Kirby Forest Industries, Inc. v. Dobbs, 743 S.W.2d 348 (Tex.App. Beaumont 1987, writ denied), as supporting an amendment. In Kirby, the court permitted a trial amendment denying a partnership allegation after both parties rested. The court of appeals found no error in permitting the amendment. Id. at 353. Robbins seeks to distinguish Kirby on the basis that there, the case presented by both parties focused largely on the existence of a partnership and the issue was tried by consent.

Trial of an issue by consent is relevant to the requirement of Rule 301 that the judgment rendered must conform to the pleadings. Under Rule 63, however, the relevant issue is whether the amendment was a surprise and, under Rule 66, whether the amendment will prejudice the non-movant. The fact that the parties fully litigated the issue without objection in Kirby is relevant to that court's finding that there was no surprise to the party alleging a partnership.

Robbins cites cases such as Washburn v. Krenek, 684 S.W.2d 187 (Tex.App. Houston [14th Dist.] 1984, writ ref'd n.r.e.), and this court's opinion in Garver v. First National Bank of Canadian, 432 S.W.2d 745, 748 (Tex.Civ.App. Amarillo 1968, writ ref'd n.r.e.), for the proposition that the failure to file a verified denial of partnership is deemed admitted. While those cases support that proposition, it is not relevant to the issue of surprise.

The record does not support Robbins's claim of surprise. Appellees' motion for summary judgment, filed some ten months before trial, specifically challenged Robbins's partnership claim. Robbins's response to the motion devoted three pages to the partnership issue, but failed to challenge the lack of a verified denial of that partnership.

Robbins next cites Smith Detective Agency v. Stanley Smith Security, Inc., 938 S.W.2d 743 (Tex.App. Dallas 1996, writ denied), to support his contention that a party seeking leave to file a trial amendment must tender the written amendment for filing. Id. at 745. An examination of Smith reveals that the court made the statement cited by Robbins in the context of delineating conditions necessary to give a trial court discretion to deny a trial amendment. Id. Additionally, Smith relied on Century Rental Equipment, Inc. v. Neo-Flasher Mfg. Co., 378 S.W.2d 957 (Tex.Civ.App.--Houston 1964, no writ), which held that presenting a proposed amendment in writing would be "the better practice" because the party opposing the amendment would "not [be] in a position to show prejudice until he was acquainted with the contents of the amendment." Id. at 959. The substance of the amendment sought by appellees here was clearly set out in the oral motion before the trial court. The failure to tender a written amendment did not undermine Robbins's ability to make a meaningful response.

Robbins has failed to meet his burden to show the amendment was a surprise or prejudiced his claims or defenses. Therefore, we cannot say that the trial court abused its discretion in permitting the trial amendment and we overrule Robbins's first issue.

Directed Verdict

We next consider Robbins's challenges to the directed verdict. A directed verdict for a defendant may be proper when a plaintiff fails to present evidence raising a fact issue essential to the plaintiff's right of recovery or if the plaintiff admits, or the evidence conclusively establishes, a defense to the plaintiff's cause of action. Prudential Ins. Co. of America v. Financial Review Services, Inc., 29 S.W.3d 74, 77 (Tex. 2000). The evidence must be considered in the light most favorable to the non-movant. White v. Southwestern Bell, 651 S.W.2d 260, 262 (Tex. 1983). If there is conflicting probative evidence, the issue is one for determination by the jury. Id. The granting of an instructed verdict on a claim can be affirmed...