United Way of San Antonio, Inc. v. Helping Hands Lifeline Foundation, Inc.

• Decision Date: 15 January 1997
• Docket Number: No. 04-95-00756-CV,04-95-00756-CV
• Parties: UNITED WAY OF SAN ANTONIO, INC., Appellant, v. HELPING HANDS LIFELINE FOUNDATION, INC., Appellee.
• Court: Texas Court of Appeals

Page 707

949 S.W.2d 707

UNITED WAY OF SAN ANTONIO, INC., Appellant, v. HELPING HANDS LIFELINE FOUNDATION, INC., Appellee.

No. 04-95-00756-CV.

Court of Appeals of Texas,

San Antonio.

Jan. 15, 1997.

Opinion GrantingRehearing in Part Feb. 26, 1997.

Rehearing Overruled June 30, 1997.

Opinion Dissenting from Denial of

Rehearing En Banc June 30, 1997.

Ryan G. Anderson, William H. Ford, Grant T. McFarland, Ball & Weed, P.C., San Antonio, for Appellant.

Carl Pipoly, Law Offices of Carl Pipoly, San Antonio, for Appellee.

Before RICKHOFF, STONE, and ANTONIO G. CANTU ¹, JJ.

ON APPELLANT'S MOTION FOR REHEARING

RICKHOFF, Justice.

Appellant's motion for rehearing is granted in part. Our opinion and judgment of September 25, 1996 are withdrawn, and this opinion and judgment are substituted. We granted the motion for rehearing in part to modify and clarify our holding regarding Helping Hands' breach of contract claim and to correct our references to Helping Hands' second claim as defamation, rather than business disparagement.

United Way of San Antonio and Bexar County, Inc. ("United Way") appeals following a jury verdict awarding Helping Hands Lifeline Foundation, Inc. ("Helping Hands") $116,885.00 for breach of a contract. As to Helping Hands' breach of contract claim, we reverse and render; as to its business disparagement claim, we reverse and remand.

FACTS

Helping Hands became an affiliated United Way agency in May of 1989 and received funding for fiscal year 1990. In the process of applying for affiliation, Helping Hands was required to execute a contract with United Way consisting of two documents: a statement of agreement and a policies and procedures manual. The contract required Helping Hands to deliver effective human services programs to the community, advertise its relationship with United Way and assist United Way in its annual campaign for community funds. In return, United Way was required to allocate to Helping Hands a share of the approximately $25 million in proceeds raised from its annual campaign. The contract was to continue until either United Way terminated funding for good cause or Helping Hands voluntarily discontinued affiliation.

During the initial funding period, United Way expressed concerns about Helping Hands' provision of services and internal operations and recommended that Helping Hands: (1) expand its governing board in terms of both number of directors and experience; (2) improve its tracking of clients; (3) develop a long range plan for expanding its operations as funding increased; and (4) develop a paid professional staff to work with its existing all-volunteer staff. United Way was concerned that the complete reliance on volunteers for staffing could lead to problems in continuity of services as a result of turnover and that the governing board was not sufficiently independent to provide objective supervision.

Following Helping Hands' application for funds for fiscal year 1991, United Way once again reiterated its concerns and further advised that Helping Hands needed to: (1) improve its tracking of in-kind donations; (2) clearly define its mission; and (3) focus its energies rather than trying to serve all in need. United Way warned that the failure to develop a plan for the necessary transition from an all-volunteer agency to a professional organization could adversely affect future funding. Helping Hands responded that it intended to convert to a professional organization by paying staff, but that it considered its board and system of tracking donations sufficient for its needs.

In December of 1990, Helping Hands submitted its funding request for fiscal year 1992. United Way agreed to fund Helping Hands but placed it on probation with a warning that a failure to comply with the probationary conditions set forth in the funding notification would result in termination of funding. United Way's review panel also recommended a meeting to review the progress on the panel's recommendations and held $3,225.00 of Helping Hands' funding in escrow pending such review.

Following a November 1991 meeting, United Way advised Helping Hands that its progress was unsatisfactory and the $3,225.00 in escrow would be forfeited pursuant to the contract. United Way also warned that future funding was in jeopardy for Helping Hands' failure to respond to United Way's concerns. After a January 14, 1992 meeting, United Way concluded Helping Hands failed to make adequate progress, and on January 21, 1992, United Way's executive committee voted to defund and disaffiliate Helping Hands retroactive to January 1, 1992. United Way was then holding $11,885.00 in allocated but undistributed funds for fiscal year Helping Hands sued United Way and one of its employees, Dick Brown ("Brown"), for breach of the contract and business disparagement based upon alleged statements made by Brown. The jury awarded Helpings Hands $116,885.00 in damages for breach of contract but refused to find in its favor as to the business disparagement claim. The trial court reduced the contractual damage award by $35,000.00 and entered judgment against United Way for $81,885.00.

1992. These funds were retained by United Way.

United Way concedes that there is sufficient evidence of breach; however, United Way contends the damage award was erroneous.

United Way's first two points of error assert that the trial court erred in rendering judgment that Helping Hands recover $81,885.00 for damages resulting from United Way's breach of the contract because: (1) $11,885.00 is the maximum amount recoverable under Texas law; and (2) there was no evidence or, alternatively, insufficient evidence to support any award in excess of $11,885.00. United Way's third point of error asserts the trial court erred in admitting, over objection, the testimony of Helping Hands' accountant, David Ludwig (Ludwig), because his testimony was speculative and at variance with his pretrial deposition testimony.

In two cross points, Helping Hands asserts that the trial court erred (1) in reducing the jury award of $116,885.00 by $35,000.00 and entering judgment for $81,885.00 because there is sufficient evidence to support the jury's answer of $116,885.00; ² and (2) in admitting expert testimony on a question of law relating to its business disparagement claim.

Because Helping Hands' first cross point is interrelated with United Way's points of error, we will address them jointly.

STANDARDS OF REVIEW

In reviewing "no evidence" points, the reviewing court considers only the evidence and inferences that tend to support the finding and disregards all evidence and inferences to the contrary. If there is any evidence of probative force to support the finding, the point must be overruled and the finding upheld. Weirich v. Weirich, 833 S.W.2d 942, 945 (Tex.1992); Alm v. Aluminum Co. of America, 717 S.W.2d 588, 593 (Tex.1986).

In reviewing a "matter of law" challenge, the reviewing court employs a two-prong test. The court will first examine the record for evidence that supports the finding, while ignoring all evidence to the contrary. If there is no evidence to support the finding, the reviewing court will then examine the entire record to determine if the contrary proposition is established as a matter of law. If the contrary proposition is established conclusively by the evidence, the point of error will be sustained. Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex.1989).

In reviewing an insufficient evidence challenge, the reviewing court must first consider, weigh, and examine all of the evidence that supports and that is contrary to the jury finding. The reviewing court may 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).

Admitting and excluding evidence are matters within the discretion of the trial court. To obtain a reversal of a judgment based on the erroneous admission of evidence, an appellant must show that, in light of the entire record, the trial court's ruling was in error and that the error was calculated to cause and probably did cause rendition of an improper judgment. Gee v. Liberty Mut. Fire Ins. Co., 765 S.W.2d 394, 396 (Tex.1989); McCraw v. Maris, 828 S.W.2d 756, 757 (Tex.1992).

CONTRACTUAL DAMAGE AWARD

United Way argues that if it had not terminated the contract, Helping Hands would have received, at most, the $11,885.00 in funds that had been allocated to it for fiscal year 1992 but remained undisbursed at the time of the defunding. Moreover, United Way insists that Helping Hands could not show that it would have received funding beyond fiscal year 1992 because funding allocation occurred on an annual basis and nothing indicated that Helping Hands would be entitled to automatically receive funding each year.

Under the terms of the contract between United Way and Helping Hands, United Way agreed to provide financial support as determined by United Way through an annual allocations process. Although affiliated agencies generally were required to reapply each year for continued funding, an agency desiring allocation of funding for a period greater than one year could apply for multi-year funding provided it met additional requirements. Helping Hands never applied for multi-year funding. Furthermore, Helping Hands admitted that the United Way funding had to be renewed each year, that funding was entirely within United Way's discretion, and that there were no guarantees it would receive funding each year. Therefore, the burden was on Helping Hands to establish that it would receive funding beyond fiscal year 1992 to support the jury finding for that period. The only evidence offered by Helping Hands to meet this burden was the testimony of Ludwig, its accountant.

Prior to Ludwig testifying, United Way's attorney voir dired him regarding the bases for his opinions. Ludwig admitted giving deposition...