MEMORANDUM OPINION No. 04-11-00252-CV
Armando BENAVIDES, Appellant
v.
Anselmo BENAVIDES, Antonio Benavides and A.T. Trucking, L.L.P., Appellees
From the 79th Judicial District Court, Jim Wells County, Texas Trial Court No. 06-03-44411 Honorable Richard C. Terrell, Judge Presiding
Opinion by: Catherine Stone, Chief Justice
Sitting: Catherine Stone, Chief Justice Karen Angelini, Justice Rebecca Simmons, Justice
Delivered and Filed: November 9, 2011
REVERSED AND REMANDED
The underlying cause, which has a tortured and protracted procedural history, involves a
dispute among three brothers over a business partnership. Ultimately, the three brothers entered
into a Settlement Agreement to resolve their dispute. This appeal arises from a judgment entered
by the trial court when one brother, Armando, sued the other two brothers, Anselmo and
Antonio, asserting a breach of the Settlement Agreement, requesting a rescission of the
agreement, and requesting damages equal to the redemption price he should have received for his 04-11-00252-CV
partnership interest. After a bench trial, the trial court signed a judgment concluding Anselmo
and Antonio did not breach the Settlement Agreement and that Armando had received sufficient
payment for the redemption value of his partnership interest. On appeal, Armando asserts the
trial court erred in: (1) determining that Anselmo and Antonio did not breach the Settlement
Agreement; and (2) applying the wrong measure of damages to the recovery which Armando
was entitled to receive.
STANDARD OF REVIEW
When the facts surrounding performance of an unambiguous contract are undisputed, the
determination of whether a party has breached the contract is a question of law for the court and
not a question of fact for the jury. United Water Services, L.L.C. v. Zaffirini, No. 04-08-00211-
CV, 2009 WL 136925, at *3 (Tex. App.—San Antonio Jan. 21, 2009, pet. denied) (mem op.);
Meek v. Bishop Peterson & Sharp, P.C., 919 S.W.2d 805, 808 (Tex. App.—Houston [14th Dist.]
1996, writ denied). Stated differently, while the factual determination of what actions were
taken is for the fact finder, whether those actions constitute a breach of contract is a question of
law for the court. In re Cano Petroleum, Inc., 277 S.W.3d 470, 473 (Tex. App.—Amarillo 2009,
orig. proceeding); BACM 2001–1 San Felipe Rd. Ltd. P’ship v. Trafalgar Holdings I, Ltd., 218
S.W.3d 137, 146 (Tex. App.—Houston [14th Dist.] 2007, pet. denied). “We review questions of
law de novo, without affording any particular deference to the legal conclusions of the trial
court.” BACM 2001–1 San Felipe Rd. Ltd. P’ship, 218 S.W.3d at 146; see also Tawes v. Barnes,
340 S.W.3d 419, 425 (Tex. 2011).
ANALYSIS A. Breach
Paragraph four of the Settlement Agreement provided that Anselmo and Antonio “agree
to transfer ownership and possession of all real property and equipment owned by the
-2- 04-11-00252-CV
Partnership (other than as designated below) to Armando Benavides within two weeks from the
date of this agreement.” The agreement was signed on May 27, 2009. The property required to
be transferred under paragraph four included the Partnership’s work trucks. The evidence is
undisputed that Anselmo and Antonio did not transfer possession of the work trucks within the
requisite two-week period. The attorney representing Anselmo and Antonio testified that he sent
a letter on June 19, 2009, after the two-week period for transfer had ended, stating that Anselmo
and Antonio would only give Armando access to the trucks instead of possession of the trucks as
required by the agreement. Moreover, Alfredo Benavides, an employee associated with
Anselmo and Antonio, admitted that he refused to give Armando’s son the keys to the trucks.
Because the evidence conclusively established that Anselmo and Antonio breached the
agreement by refusing to transfer possession of the work trucks within the requisite two-week
period, the trial court erred in concluding that Anselmo and Antonio did not breach the
agreement. 1
B. Remedy
Having determined that the trial court erred in concluding that Anselmo and Antonio did
not breach the agreement, the next question that arises concerns the remedy to which Armando
was entitled. “It is a fundamental principle of contract law that when one party to a contract
commits a material breach of that contract, the other party is discharged or excused from further
performance.” Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004).
However, when a breach is immaterial, the non-breaching party is not excused from future
performance and may sue only for the damages caused by the breach. Harris County Utility
Dist. No. 16 v. Harris County Mun. Dist. No. 36, No. 01-10-00042-CV, 2011 WL 3359698, at *9
1 Although Anselmo and Antonio contend that Armando waived his breach of contract claim by failing to request additional findings of fact and conclusions of law, the trial court initially sent the parties a letter containing its findings and rulings which included a determination “that the Defendants did not breach the MSA.”
-3- 04-11-00252-CV
(Tex. App.—Houston [1st Dist.] Aug. 4, 2011, no pet.) (mem. op.). Whether a party’s breach of
contract is so material as to render the contract unenforceable is a question of fact to be
determined by the trier of fact based on the evaluation of several factors, including: (1) the extent
to which the non-breaching party will be deprived of the benefit that it could have reasonably
anticipated from full performance; (2) the extent to which the injured party can be adequately
compensated for the part of that benefit of which he will be deprived; (3) the extent to which the
party failing to perform or to offer to perform will suffer forfeiture; (4) the likelihood that the
party failing to perform or to offer to perform will cure his failure, taking account of all the
circumstances including any reasonable assurances; and (5) the extent to which the behavior of
the party failing to perform or to offer to perform comports with standards of good faith and fair
dealing. See Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691, 693 & n.2 (Tex. 1994); Hudson
v. Wakefield, 645 S.W.2d 427, 430 (Tex. 1993); Henry v. Masson, 333 S.W.3d 825, 835 (Tex.
App.—Houston [1st Dist.] 2010, no pet.).
In this case, since the trial court determined that Anselmo and Antonio did not breach the
agreement, the trial court, as the trier of fact, did not consider or rule on whether the breach was
material or what remedy was available to Armando for the breach. See Kaspar-Wells v. Mowdy,
No. 03-06-00026-CV, 2007 WL 778135, at *4 (Tex. App.—Austin Mar. 16, 2007, no pet.)
(mem. op.) (holding remand necessary where trial court did not find breach so did not consider
materiality of breach or appropriate remedy).
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MEMORANDUM OPINION No. 04-11-00252-CV
Armando BENAVIDES, Appellant
v.
Anselmo BENAVIDES, Antonio Benavides and A.T. Trucking, L.L.P., Appellees
From the 79th Judicial District Court, Jim Wells County, Texas Trial Court No. 06-03-44411 Honorable Richard C. Terrell, Judge Presiding
Opinion by: Catherine Stone, Chief Justice
Sitting: Catherine Stone, Chief Justice Karen Angelini, Justice Rebecca Simmons, Justice
Delivered and Filed: November 9, 2011
REVERSED AND REMANDED
The underlying cause, which has a tortured and protracted procedural history, involves a
dispute among three brothers over a business partnership. Ultimately, the three brothers entered
into a Settlement Agreement to resolve their dispute. This appeal arises from a judgment entered
by the trial court when one brother, Armando, sued the other two brothers, Anselmo and
Antonio, asserting a breach of the Settlement Agreement, requesting a rescission of the
agreement, and requesting damages equal to the redemption price he should have received for his 04-11-00252-CV
partnership interest. After a bench trial, the trial court signed a judgment concluding Anselmo
and Antonio did not breach the Settlement Agreement and that Armando had received sufficient
payment for the redemption value of his partnership interest. On appeal, Armando asserts the
trial court erred in: (1) determining that Anselmo and Antonio did not breach the Settlement
Agreement; and (2) applying the wrong measure of damages to the recovery which Armando
was entitled to receive.
STANDARD OF REVIEW
When the facts surrounding performance of an unambiguous contract are undisputed, the
determination of whether a party has breached the contract is a question of law for the court and
not a question of fact for the jury. United Water Services, L.L.C. v. Zaffirini, No. 04-08-00211-
CV, 2009 WL 136925, at *3 (Tex. App.—San Antonio Jan. 21, 2009, pet. denied) (mem op.);
Meek v. Bishop Peterson & Sharp, P.C., 919 S.W.2d 805, 808 (Tex. App.—Houston [14th Dist.]
1996, writ denied). Stated differently, while the factual determination of what actions were
taken is for the fact finder, whether those actions constitute a breach of contract is a question of
law for the court. In re Cano Petroleum, Inc., 277 S.W.3d 470, 473 (Tex. App.—Amarillo 2009,
orig. proceeding); BACM 2001–1 San Felipe Rd. Ltd. P’ship v. Trafalgar Holdings I, Ltd., 218
S.W.3d 137, 146 (Tex. App.—Houston [14th Dist.] 2007, pet. denied). “We review questions of
law de novo, without affording any particular deference to the legal conclusions of the trial
court.” BACM 2001–1 San Felipe Rd. Ltd. P’ship, 218 S.W.3d at 146; see also Tawes v. Barnes,
340 S.W.3d 419, 425 (Tex. 2011).
ANALYSIS A. Breach
Paragraph four of the Settlement Agreement provided that Anselmo and Antonio “agree
to transfer ownership and possession of all real property and equipment owned by the
-2- 04-11-00252-CV
Partnership (other than as designated below) to Armando Benavides within two weeks from the
date of this agreement.” The agreement was signed on May 27, 2009. The property required to
be transferred under paragraph four included the Partnership’s work trucks. The evidence is
undisputed that Anselmo and Antonio did not transfer possession of the work trucks within the
requisite two-week period. The attorney representing Anselmo and Antonio testified that he sent
a letter on June 19, 2009, after the two-week period for transfer had ended, stating that Anselmo
and Antonio would only give Armando access to the trucks instead of possession of the trucks as
required by the agreement. Moreover, Alfredo Benavides, an employee associated with
Anselmo and Antonio, admitted that he refused to give Armando’s son the keys to the trucks.
Because the evidence conclusively established that Anselmo and Antonio breached the
agreement by refusing to transfer possession of the work trucks within the requisite two-week
period, the trial court erred in concluding that Anselmo and Antonio did not breach the
agreement. 1
B. Remedy
Having determined that the trial court erred in concluding that Anselmo and Antonio did
not breach the agreement, the next question that arises concerns the remedy to which Armando
was entitled. “It is a fundamental principle of contract law that when one party to a contract
commits a material breach of that contract, the other party is discharged or excused from further
performance.” Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004).
However, when a breach is immaterial, the non-breaching party is not excused from future
performance and may sue only for the damages caused by the breach. Harris County Utility
Dist. No. 16 v. Harris County Mun. Dist. No. 36, No. 01-10-00042-CV, 2011 WL 3359698, at *9
1 Although Anselmo and Antonio contend that Armando waived his breach of contract claim by failing to request additional findings of fact and conclusions of law, the trial court initially sent the parties a letter containing its findings and rulings which included a determination “that the Defendants did not breach the MSA.”
-3- 04-11-00252-CV
(Tex. App.—Houston [1st Dist.] Aug. 4, 2011, no pet.) (mem. op.). Whether a party’s breach of
contract is so material as to render the contract unenforceable is a question of fact to be
determined by the trier of fact based on the evaluation of several factors, including: (1) the extent
to which the non-breaching party will be deprived of the benefit that it could have reasonably
anticipated from full performance; (2) the extent to which the injured party can be adequately
compensated for the part of that benefit of which he will be deprived; (3) the extent to which the
party failing to perform or to offer to perform will suffer forfeiture; (4) the likelihood that the
party failing to perform or to offer to perform will cure his failure, taking account of all the
circumstances including any reasonable assurances; and (5) the extent to which the behavior of
the party failing to perform or to offer to perform comports with standards of good faith and fair
dealing. See Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691, 693 & n.2 (Tex. 1994); Hudson
v. Wakefield, 645 S.W.2d 427, 430 (Tex. 1993); Henry v. Masson, 333 S.W.3d 825, 835 (Tex.
App.—Houston [1st Dist.] 2010, no pet.).
In this case, since the trial court determined that Anselmo and Antonio did not breach the
agreement, the trial court, as the trier of fact, did not consider or rule on whether the breach was
material or what remedy was available to Armando for the breach. See Kaspar-Wells v. Mowdy,
No. 03-06-00026-CV, 2007 WL 778135, at *4 (Tex. App.—Austin Mar. 16, 2007, no pet.)
(mem. op.) (holding remand necessary where trial court did not find breach so did not consider
materiality of breach or appropriate remedy). Because the trial court’s determination regarding
the issue of breach impacted its other decisions, a remand is appropriate in the interest of justice.
See TEX. R. APP. P. 43.3(b). Although Rule 44.1(b) of the Texas Rules of Appellate Procedure
precludes us from ordering a separate trial on unliquidated damages if liability is contested,
liability in this case is now uncontested because we have held that the undisputed evidence
-4- 04-11-00252-CV
established that Anselmo and Antonio breached the Settlement Agreement as a matter of law.
See American Bankers Ins. Co. v. Caruth, 786 S.W.2d 427, 427 (Tex. App.—Dallas 1990, no
writ); see also Browning Oil Co. v. Luecke, 38 S.W.3d 625, 647 n. 31 (Tex. App.—Austin, pet.
denied) (finding good cause to suspend rule and remand for damages determination). On
remand, the trial court will need to reconsider the equitable remedy of rescission. Italian
Cowboy Partners, Ltd. v. Prudential Ins. Co. of America, 341 S.W.3d 323, 345 (Tex. 2011)
(noting rescission is an equitable remedy). Therefore, all legal and equitable issues relating to
damages or other relief that may or may not be appropriate based on the breach by Anselmo and
Antonio await further consideration on remand where the circumstances of the case, including
the materiality or immateriality of the breach, will need to be considered. 2
CONCLUSION
The trial court’s judgment is reversed, and the cause is remanded to the trial court for
further proceedings.
Catherine Stone, Chief Justice
2 Although the trial court concluded that the Settlement Agreement was not breached by Anselmo and Antonio, the trial court also addressed Armando’s claim for the redemption value of his partnership interest. Addressing this claim would appear to be inconsistent with the trial court’s decision not to rescind the Settlement Agreement since the agreement contains a broad release by which the parties agree to release any and all claims “arising from the events and transactions that [were] the subject matter of [the underlying] cause.” The parties agree in their briefs that the underlying cause involved a claim by Armando relating to the redemption of his partnership interest.
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