Zabihian v. Hyundai Motor Am.
| Decision Date | 02 September 2021 |
| Docket Number | 13-20-00067-CV |
| Parties | AHMAD ZABIHIAN, NEW WORLD CAR NISSAN, INC. D/B/A WORLD CAR HYUNDAI, AND NEW WORLD CAR IMPORTS - SAN ANTONIO, INC., Appellants, v. HYUNDAI MOTOR AMERICA AND ROGER BEASLEY IMPORTS, INC. D/B/A ROGER BEASLEY HYUNDAI - NEW BRAUNFELS, Appellees. |
| Court | Texas Court of Appeals |
On appeal from the 438th District Court of Bexar County, Texas.
Before Chief Justice Contreras and Justices Benavides and Silva
This is an appeal from a take-nothing judgment following a jury trial in a business dispute. Appellants Ahmad Zabihian, New World Car Nissan, Inc. d/b/a World Car Hyundai, and New World Car Imports - San Antonio, Inc. (collectively Zabihian) challenge the judgment rendered in favor of appellees, Hyundai Motor America (HMA) and Roger Beasley Imports, Inc. d/b/a Roger Beasley Hyundai - New Braunfels (Beasley). By three issues Zabihian argues: (1) the trial court erred in interpreting the phrase "first right of refusal," as used in the contract between the parties, as equivalent to the phrase "right of first refusal"; (2) the evidence was factually insufficient to support the judgment; and (3) the trial court erred in denying his motion for new trial. We affirm.[1]
I. Background
In 2013, Zabihian sued HMA and Beasley for breach of contract and tortious interference with an existing contract respectively. His original petition alleged that he purchased an existing Hyundai dealership in 1999, and at the time, the only other Hyundai dealership in the San Antonio area was owned by Red McCombs. According to the petition, HMA permitted Zabihian to open a second San Antonio-area Hyundai dealership in 2001, on condition that he obtain Red McCombs's agreement to waive its statutory right to object to the opening. See TEX. OCC. CODE ANN § 2301.652(b) (). Zabihian alleged that, in 2005, HMA awarded two new San Antonio-area dealerships to McCombs without notifying Zabihian or asking him to waive his right to protest. Zabihian complained to Rick Leuders HMA's regional manager, who agreed that, in exchange for Zabihian's agreement not to protest McCombs's new dealerships, HMA would offer Zabihian the next two new dealership opportunities in the San Antonio region.
On May 1, 2006, Leuders sent a letter to Zabihian memorializing their agreement. The letter stated that Zabihian had a "First Right of Refusal" on the next two "additional points," or new dealership opportunities, that arise in the region for seven years.[2] Zabihian alleged in his petition that HMA breached this agreement by offering a New Braunfels dealership to Beasley in 2013, after Leuders was replaced as regional manager by Tom Hetrick. Zabihian later filed an amended petition adding his companies as named plaintiffs and adding a fraudulent inducement claim against HMA. The amended petition alleged that, in addition to the dealership offered by HMA to Beasley in 2013, there were two other "open points" in the San Antonio area during the term of the agreement which HMA should have offered to Zabihian. The petition requested damages as well as injunctive and declaratory relief.
Following a two-week trial, the jury was asked in Question No. 1 of the charge: "On or before May 1, 2013, was there: (1) an offer for [Beasley] to add a [Hyundai] dealership in New Braunfels, (2) with the usual terms for adding a dealership, and (3) with intent by [HMA] to offer the dealership to [Beasley]?" The jury answered "No" to Question No. 1. Therefore, it was instructed not to answer Question No. 2, which asked whether HMA failed to comply with the terms of the agreement; Question No. 3, which asked whether HMA's breach was excused by Zabihian's prior material breach; or Question No. 6, which asked whether Beasley intentionally interfered with the agreement. The jury further found that: (1) HMA did not fraudulently induce Zabihian into making the agreement; and (2) Beasley did not know, on or before May 1, 2013, of the existence of the agreement. The trial court rendered a take-nothing judgment in accordance with the jury's findings on September 10, 2019.
Zabihian filed a motion for new trial, arguing in part that the jury "deliberated under arbitrary and unreasonable time constraints which prevented it from fully and fairly weighing the evidence" and worked to his disadvantage. The motion for new trial was denied by operation of law, see TEX. R. CIV. P. 329b(c), and this appeal followed.
II. Discussion
By his first issue, Zabihian contends that the trial court erred by construing the phrase "first right of refusal" as equivalent to the more familiar phrase "right of first refusal," which is commonly encountered in the real estate context.
A right of first refusal, also known as a preemptive or preferential right, empowers its holder with a preferential right to purchase the subject property on the same terms offered by or to a bona fide purchaser. Generally, a right of first refusal requires the grantor to notify the holder of his intent to sell and to first offer the property to the holder on the same terms and conditions offered by a third party. When the grantor communicates those terms to the holder, the right ripens into an enforceable option. The holder may then elect to purchase the property according to the terms of the instrument granting the first-refusal right and the third party's offer, or decline to purchase it and allow the owner to sell to the third party.
Archer v. Tregellas, 566 S.W.3d 281, 286-87 (Tex. 2018) (internal citations and quotations omitted); see Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 644 (Tex. 1996).
HMA filed a pre-trial "Motion to Determine That Contract Terms Are Not Ambiguous," asking the trial court to conclude as a matter of law that the terms "First Right of Refusal" and "add points," as used in Leuders' May 1, 2006 letter, were unambiguous. See TEX. R. CIV. P. 248 (). Specifically, HMA contended that "First Right of Refusal" was unambiguously equivalent to "right of first refusal," and that "add points" unambiguously referred to "new dealerships awarded by HMA to a specific dealer when HMA decides to activate a point pursuant to specific terms and conditions." HMA argued that the term "add points" does not include all "open point[s]," which is the "identification of potential future [dealership] locations." It further contended that, because these terms are unambiguous, parol evidence is inadmissible to prove the parties' intent. See Friendswood Dev. Co. v. McDade &Co., 926 S.W.2d 280, 283 (Tex. 1996) (per curiam) ().
Zabihian filed a response to the motion in which he agreed that the terms were unambiguous but disagreed as to what they meant. Zabihian contended that, according to testimony by himself and Leuders, the parties contemplated that the term "additional point" "unambiguously required [HMA] to offer points that did not previously exist when those points were identified in San Antonio, Boerne, and New Braunfels, to [Zabihian] (as opposed to existing points that may be privately sold by one dealer to another, a 'buy/sell')."[3] As to "right of first refusal," Zabihian argued that this language "unambiguously establishes [HMA]'s obligation under the contract to offer [Zabihian] two add points when they became available during the 7-year term of the contract."
After a hearing, the trial court ruled that the terms "additional points" and "add points" were ambiguous, but the term "first right of refusal" was unambiguous. On appeal, Zabihian argues that the latter ruling was erroneous. He contends that, pursuant to the court's ruling, his rights under the agreement would only be triggered if: (1) Beasley was offered a point in New Braunfels; (2) "with all necessary terms for adding the point (which [Zabihian] could not possibly match or beat)"; and (3) HMA intended to offer the point to Beasley. Zabihian argues that is an "absurd and impossible" result because "it would not have been possible for [him] to ever match the terms" which were required of Beasley under its agreement with HMA. In support of this argument, Zabihian points to a letter of intent sent by HMA to Beasley on October 14, 2013, which formally advised Beasley that it had been approved as an authorized Hyundai dealer in the New Braunfels area. The letter required Beasley to, among other things, renovate the specific property it had purchased along Interstate 35 in New Braunfels "to meet Hyundai's minimum facility standards and brand identification requirements" before the end of 2014. Zabihian argues that it would have been impossible for him to satisfy those terms because Beasley already owned the specific property mentioned in the letter. See e.g., Dewhurst v. Gulf Marine Inst. of Tech., 55 S.W.3d 91, 97 (Tex. App.-Corpus Christi-Edinburg 2001, pet. denied) ("A construction which renders performance of the contract possible will be adopted, rather than one which renders its performance impossible or meaningless, unless the latter construction is absolutely necessary ...."). He contends that, contrary to the court's ruling, the parties "clear[ly]" intended "that HMA was obligated to offer [Zabihia...
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