ACCEPTED 14-14-00905-CV FOURTEENTH COURT OF APPEALS HOUSTON, TEXAS 9/10/2015 3:50:09 PM CHRISTOPHER PRINE CLERK
In The Court of Appeals For The FILED IN 14th COURT OF APPEALS Fourteenth District of Texas HOUSTON, TEXAS 9/10/2015 3:50:09 PM CHRISTOPHER A. PRINE NO. 14-14-00905-CV Clerk
Colorado County Oil Company, Inc., Day & Night, Inc., and SNP Business, Inc. Appellants
v.
Star Tex Distributors, Inc., Appellee
On Appeal from the 281st District Court Harris County, Texas Trial Court Cause No. 2012-43621
APPELLANT COLORADO COUNTY OIL COMPANY, INC’S REPLY BRIEF
Donald H. Grissom don@gandtlaw.com State Bar No. 08511550 509 West 12th Street Austin, Texas 78701 (512) 478-4059 (512) 482-8410 fax
ATTORNEY FOR APPELLANT COLORADO COUNTY OIL COMPANY, INC.
ORAL ARGUMENT REQUESTED
i
TABLE OF CONTENTS
Table of Contents .......................................................................................ii
Table of Authorities ................................................................................. iii
A. No Evidence of Willful and Intentional Act of Interference ................ 2
B. Colorado County Legally Competed for the Contract .......................... 6
C. No Evidence that Colorado County Caused Damage to Star Tex......... 7
D. No Evidence to Support Award of Contractual Damages .................... 8
Conclusion ................................................................................................. 9
Prayer ....................................................................................................... 10
Certificate of Service ............................................................................... 11
Certificate of Compliance ........................................................................ 11
ii
TABLE OF AUTHORITIES
Cases
ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex.1997) .................... 2
Formosa Plastics Corporation USA v. Presidio Engineers and Contractors, Inc.,
960 S.W.2d 41 (Tex.1998) .................................................................................... 9
Holt Atherton Indus., Inc. v. Heine 835 S.W.2d 80, 85 (Tex.1992) ......................... 9
T.O. Stanley Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d 218, 220 (Tex.1992)
............................................................................................................................ 1,7
iii
In The Court of Appeals For The Fourteenth District of Texas
NO. 14-14-00905-CV
Colorado County Oil Company, Inc., Day & Night, Inc., and SNP Business, Inc. Appellants
On Appeal from the 281st District Court Harris County, Texas Trial Court Cause No. 2012-43621
TO THE HONORABLE COURT:
Star Tex asserts in its brief that Colorado County has failed to preserve error
on appeal because it did not file a Motion for New Trial. However, on a challenge
to the legal sufficiency or a no-evidence challenge, the procedure for preserving
the error is by filing a motion for judgment notwithstanding the verdict or a motion
to disregard jury answers. See T.O. Stanley Boot Co., Inc. v. Bank of El Paso, 847
S.W.2d 218, 220 (Tex.1992). On October 9, 2014, Colorado County filed its
Motion for JNOV and Motion to Disregard Jury Findings (CR,p.51). This motion
was denied by the Court on October 20, 2014 (CR,p.79).
To prevail on its cause of action for tortious interference with an existing
contract, Star Tex had the burden to prove, by a preponderance of the evidence,
each of the following elements: (1) that a contract subject to interference exists, (2)
the commission by the defendant of a willful and intentional act of interference
with the contract, (3) that the willful and intentional act proximately caused injury,
and (4) actual damages or loss occurred. ACS Investors, Inc. v. McLaughlin, 943
S.W.2d 426, 430 (Tex.1997).
A. No Evidence of Willful and Intentional Act of Interference
The element of intent is most commonly proven through circumstantial
evidence taking into account what knowledge the party possessed at the time of its
action, what its duty was, and whether it is legally allowed to take such action(s).
Star Tex relies on Chip Leach’s (Colorado County) testimony that normally,
if he saw a branded location, he would assume it was under contract and would
seek confirmation that no contract existed before pursuing the business of that
facility. Here, Leach followed his normal procedure and did seek that confirmation
by asking a direct question to SNP as to whether it had a supply contract with Star
Tex (RRV3,p.190-191; RRV4,p.75,83). The answer was, “no” (RRV3,p.190-191;
RRV4,p.75,83). Leach had no duty to inquire further, nor reason to disbelieve
SNP, especially since he had an existing business relationship with SNP’s owner’s
(Shokat Ali) relatives (RRV3,p.190; RRV4,p.17-18). While Colorado County had
no legal duty to verify SNP’s statement that there was no contract, Colorado
County went a step further and contacted Shokat Ali’s relative, who was
responsible for directing SNP to Colorado County, to inquire whether a supply
contract existed (RRV4,p.22-23). Again, the answer was, “no” (RRV4,p.23). Star
Tex’s testimony about their own practice of getting a “release” from another
supplier is not evidence of, nor does it create, any legal duty.
On both direct examination and cross-examination, the consistent and
repeated testimony of the parties in this case was that Colorado County was told by
the representatives of SNP that there was no supply contract for the facility
(RRV3,p.190-191; RRV4,p.22-23, 75, 83). Although Star Tex claims to have
called Colorado County, but did not talk to anyone, two days prior to Colorado
County making its first delivery to the facility (RRV3, p. 178), it was not until later
that Colorado County was sent a copy of the alleged contract (RRV3,p.14). Still,
when Colorado County received a copy of the contract, the parties to that contract
were not the same as the parties with whom Colorado County contracted, thus
creating further confusion (RRV3,p.216). The timeline below outlines what
knowledge Colorado County possessed as the events of this case were unfolding:
December • Shokat Ali Contacts Colorado County (RRV3, p.206; RRV4,p.80-‐81, 88) 2010
• Leach visits facility (RRV3,p.206) Shokat Ali states he has no contract
January
2011 (RRV3,p.190-‐191,207; RRV4,p.75, 83, 209)
January 25,
• SNP enters into contract with Colorado County (CCOC brief Appendix 2) 2011
• Colorado County coordinates branding incentive package with Valero
March 2011
April/May
• Star Tex notified of Shokat Ali's intent to cancel contract (RRV4,p.248-‐250) 2011
• Colorado County pays $50,000 Valero incentive (RRV3,p.222) May 2011
• Star Tex calls Colorado County (no answer/no reply)(RRV3,p.9, 178) May 6, 2011
• Colorado County begins fuel deliveries to SNP(RRV4,p.23) May 8, 2011
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ACCEPTED 14-14-00905-CV FOURTEENTH COURT OF APPEALS HOUSTON, TEXAS 9/10/2015 3:50:09 PM CHRISTOPHER PRINE CLERK
In The Court of Appeals For The FILED IN 14th COURT OF APPEALS Fourteenth District of Texas HOUSTON, TEXAS 9/10/2015 3:50:09 PM CHRISTOPHER A. PRINE NO. 14-14-00905-CV Clerk
Colorado County Oil Company, Inc., Day & Night, Inc., and SNP Business, Inc. Appellants
v.
Star Tex Distributors, Inc., Appellee
On Appeal from the 281st District Court Harris County, Texas Trial Court Cause No. 2012-43621
APPELLANT COLORADO COUNTY OIL COMPANY, INC’S REPLY BRIEF
Donald H. Grissom don@gandtlaw.com State Bar No. 08511550 509 West 12th Street Austin, Texas 78701 (512) 478-4059 (512) 482-8410 fax
ATTORNEY FOR APPELLANT COLORADO COUNTY OIL COMPANY, INC.
ORAL ARGUMENT REQUESTED
i
TABLE OF CONTENTS
Table of Contents .......................................................................................ii
Table of Authorities ................................................................................. iii
A. No Evidence of Willful and Intentional Act of Interference ................ 2
B. Colorado County Legally Competed for the Contract .......................... 6
C. No Evidence that Colorado County Caused Damage to Star Tex......... 7
D. No Evidence to Support Award of Contractual Damages .................... 8
Conclusion ................................................................................................. 9
Prayer ....................................................................................................... 10
Certificate of Service ............................................................................... 11
Certificate of Compliance ........................................................................ 11
ii
TABLE OF AUTHORITIES
Cases
ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex.1997) .................... 2
Formosa Plastics Corporation USA v. Presidio Engineers and Contractors, Inc.,
960 S.W.2d 41 (Tex.1998) .................................................................................... 9
Holt Atherton Indus., Inc. v. Heine 835 S.W.2d 80, 85 (Tex.1992) ......................... 9
T.O. Stanley Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d 218, 220 (Tex.1992)
............................................................................................................................ 1,7
iii
In The Court of Appeals For The Fourteenth District of Texas
NO. 14-14-00905-CV
Colorado County Oil Company, Inc., Day & Night, Inc., and SNP Business, Inc. Appellants
On Appeal from the 281st District Court Harris County, Texas Trial Court Cause No. 2012-43621
TO THE HONORABLE COURT:
Star Tex asserts in its brief that Colorado County has failed to preserve error
on appeal because it did not file a Motion for New Trial. However, on a challenge
to the legal sufficiency or a no-evidence challenge, the procedure for preserving
the error is by filing a motion for judgment notwithstanding the verdict or a motion
to disregard jury answers. See T.O. Stanley Boot Co., Inc. v. Bank of El Paso, 847
S.W.2d 218, 220 (Tex.1992). On October 9, 2014, Colorado County filed its
Motion for JNOV and Motion to Disregard Jury Findings (CR,p.51). This motion
was denied by the Court on October 20, 2014 (CR,p.79).
To prevail on its cause of action for tortious interference with an existing
contract, Star Tex had the burden to prove, by a preponderance of the evidence,
each of the following elements: (1) that a contract subject to interference exists, (2)
the commission by the defendant of a willful and intentional act of interference
with the contract, (3) that the willful and intentional act proximately caused injury,
and (4) actual damages or loss occurred. ACS Investors, Inc. v. McLaughlin, 943
S.W.2d 426, 430 (Tex.1997).
A. No Evidence of Willful and Intentional Act of Interference
The element of intent is most commonly proven through circumstantial
evidence taking into account what knowledge the party possessed at the time of its
action, what its duty was, and whether it is legally allowed to take such action(s).
Star Tex relies on Chip Leach’s (Colorado County) testimony that normally,
if he saw a branded location, he would assume it was under contract and would
seek confirmation that no contract existed before pursuing the business of that
facility. Here, Leach followed his normal procedure and did seek that confirmation
by asking a direct question to SNP as to whether it had a supply contract with Star
Tex (RRV3,p.190-191; RRV4,p.75,83). The answer was, “no” (RRV3,p.190-191;
RRV4,p.75,83). Leach had no duty to inquire further, nor reason to disbelieve
SNP, especially since he had an existing business relationship with SNP’s owner’s
(Shokat Ali) relatives (RRV3,p.190; RRV4,p.17-18). While Colorado County had
no legal duty to verify SNP’s statement that there was no contract, Colorado
County went a step further and contacted Shokat Ali’s relative, who was
responsible for directing SNP to Colorado County, to inquire whether a supply
contract existed (RRV4,p.22-23). Again, the answer was, “no” (RRV4,p.23). Star
Tex’s testimony about their own practice of getting a “release” from another
supplier is not evidence of, nor does it create, any legal duty.
On both direct examination and cross-examination, the consistent and
repeated testimony of the parties in this case was that Colorado County was told by
the representatives of SNP that there was no supply contract for the facility
(RRV3,p.190-191; RRV4,p.22-23, 75, 83). Although Star Tex claims to have
called Colorado County, but did not talk to anyone, two days prior to Colorado
County making its first delivery to the facility (RRV3, p. 178), it was not until later
that Colorado County was sent a copy of the alleged contract (RRV3,p.14). Still,
when Colorado County received a copy of the contract, the parties to that contract
were not the same as the parties with whom Colorado County contracted, thus
creating further confusion (RRV3,p.216). The timeline below outlines what
knowledge Colorado County possessed as the events of this case were unfolding:
December • Shokat Ali Contacts Colorado County (RRV3, p.206; RRV4,p.80-‐81, 88) 2010
• Leach visits facility (RRV3,p.206) Shokat Ali states he has no contract
January
2011 (RRV3,p.190-‐191,207; RRV4,p.75, 83, 209)
January 25,
• SNP enters into contract with Colorado County (CCOC brief Appendix 2) 2011
• Colorado County coordinates branding incentive package with Valero
March 2011
April/May
• Star Tex notified of Shokat Ali's intent to cancel contract (RRV4,p.248-‐250) 2011
• Colorado County pays $50,000 Valero incentive (RRV3,p.222) May 2011
• Star Tex calls Colorado County (no answer/no reply)(RRV3,p.9, 178) May 6, 2011
• Colorado County begins fuel deliveries to SNP(RRV4,p.23) May 8, 2011
May 12, • Star Tex emails Colorado County copy of contract (RRV3,p.14) 2011
Star Tex’s belief that Colorado County should have ceased any relationship
with the facility because, it could have/didn’t have much money in it, does not
create a legal duty nor does it constitute evidence of any material fact. It is also
without merit because Colorado County legally and fairly obtained SNP’s
business. No evidence was presented by any party to dispute Leach’s testimony
regarding his lack of knowledge of Star Tex’s claimed contractual relationship
with the facility. Therefore, if Colorado County acted under the premise that there
was no supply contract for the convenience store (RRV3,p.190-191, 207;
RRV4,p.75-78,83, 209), and no evidence was presented to contradict this, then it is
an impossibility that Colorado County could have intended to cause Day & Night
to breach its contract with Star Tex.
Star Tex asserts or insinuates that Colorado County’s agreement to pay, up
front, the $50,000 from Valero’s incentive package was the inducement for SNP to
breach its contract with Star Tex. Again, this argument is without merit and
contradicted by Star Tex’s own testimony. First, Star Tex (Feroz Momin) testified
that this was a common industry practice (RRV2,p.87-91). Second, he testified that
he offered the same amount to SNP (RRV3,p.154-155). This was obviously
refused because Shokat Ali had already decided to stop doing business with Star
Tex (RRV4,p.248-250). Moreover, no evidence was introduced to contradict the
testimony of both Shokat Ali and Chip Leach that Shokat asked Leach if Valero
would pay incentives (RRV3,p.226; RRV4,p.21,85-86). That request was
forwarded to Valero (CCOC Brief Appendix 3) who acknowledge that it would
pay branding incentives. That response was forwarded back to Shokat Ali. All of
this being common in the industry (RRV2,p.87-91; RRV4,p.21,31). This is further
illustrated by the fact that Shokat Ali knew to ask about the Valero branding
incentives.
B. Colorado County Legally Competed for the Contract
There was no evidence that Colorado County acted with the requisite intent
to interfere with the dealer franchise agreement between Star Tex and Day &
Night. All evidence shows Colorado County intended to act in a manner allowed
by law and in a manner that is completely justified. The uncontroverted evidence
was that SNP contacted, without any solicitation, Colorado County about
supplying SNP with gasoline (RRV4,p.80-81). This occurred in late 2010
(RRV4,p.80-81). SNP specifically confirmed to Colorado County that it had no
other contract for the supply of gasoline (RRV3,p.190-191; RRV4,p.75,83). A
contract was then executed on January 25, 2011 between Colorado County and
SNP (CCOC Brief Appendix 2). As a matter of law, Colorado County had a legal
right to and was justified in entering into this contract.
Star Tex’s argument that Colorado County should have relented and
terminated its contract with SNP when approached by Star Tex four months later is
contrary to law, and absurd. There is no legal basis for upholding a verdict for
tortious interference where Colorado County was simply engaging in lawful
business activity and honoring the terms if its own contract. When evidence is so
weak it constitutes no evidence, such evidence will not support a verdict. T.O.
Stanley Boot Co., Inc. at 222.
C. No Evidence that Colorado County Caused Damage to Star Tex
The jury was given the following definition in the charge:
“Proximate cause” means a cause that was a substantial factor in bringing about an event and without which cause such event would not have occurred. In order to be proximate cause, the act or omission complained of must be such that a person using the degree of care required of him would have foreseen that the event, or some similar event, might reasonably result therefrom. There may be more than one proximate cause of an event.
The act of Colorado County entering into a contract with SNP to supply fuel
to the Bammell Road store was not the act that proximately caused Star Tex’s
injury. Shokat Ali had already made the decision to discontinue business with Star
Tex (RRV4,p.91-92) prior to his contacting Colorado County. The intent was to
cease purchasing fuel from Star Tex (RRV4,p.91-92) no matter who was chosen to
be the new fuel supplier. All the evidence and testimony points to the fact that
Shokat Ali was dissatisfied with Star Tex’s services and was seeking out a new
supplier (RRV4,p.55,97-105,122,191-192). It turned out to be Colorado County.
The fact that Colorado County became the new supplier is inconsequential to this
element because Shokat Ali intended to terminate Day & Night’s relationship with
Star Tex anyway (RRV4,p.91-92). Star Tex has failed to provide evidence
supporting an alternative position relating to this element of tortious interference.
D. No Evidence to Support Award of Contractual Damages
Star Tex failed to submit the proper measure of damages and failed to meet
its burden to secure jury findings sufficient to support a judgment. The term
“contractual damages” is not a proper measure of damages. It is ambiguous and
misleading. This term failed to direct the jury’s attention to any meaningful legal
standard for awarding damages, and cannot support rendition of judgment against
Colorado County.
Star Tex is limited to “contractual damages”. Paragraph 23 of the contract
clearly provides:
Star Tex will deliver at the posted terminal price plus .0100 (One) cent per gallon plus transportation for profit (CCOC Brief Appendix 1).
The contract only speaks of a 1¢ per gallon profit (RRV3,p.150). The only
measure of contractual profit is found here. Star Tex acknowledged that
transportation was not an element for calculation of profits (RRV3,p.148-150).
These “contractual damages” awarded by the jury are not provided for in the
contract. The contract provisions provide the amount of “contracted profits” that
Star Tex could be entitled to receive. Multiplying the 521,208 gallons (12 months)
times 1¢ per gallon totals $5,212.08. That is the maximum amount of damage
recoverable by Star Tex from Colorado County.
According to Sohail Ali’s testimony, he terminated the contract with Star
Tex (RRV4,p.248-250) and therefore, Star Tex would only be entitled to damages
for the remaining 11 months of the year-to-year extension. This would make the
maximum amount recoverable by Star Tex only $4,777,74.
CONCLUSION
A motion for new trial is not a prerequisite to an appellate complaint about
the legal sufficiency of evidence. Tex. R. Civ. P. 324(a), (b). Star Tex has failed to
provide evidence to support all of the elements of its cause of action for tortious
interference with an existing contract. Specifically, there is no evidence that
Colorado County committed any act that could be construed as willful and
intentional interference to any purported agreement between Day & Night and Star
Tex.
Further, there is no evidence to support Star Tex’s calculation of damages.
Particularly, there was no complete damage calculation submitted by Star Tex as
required by law. Formosa Plastics Corporation USA v. Presidio Engineers and
Contractors, Inc., 960 S.W.2d 41 (Tex.1998), and the mixed methodology
employed by Star Tex causes the opinion to lack reliability. Holt Atherton Indus.,
Inc. v. Heine 835 S.W.2d 80, 85 (Tex.1992).
PRAYER
WHEREFORE, PREMISES CONSIDERED, for these reasons, and in the
interest of justice and fairness, Colorado County asks the Court to reverse the
Jury’s findings and render judgment for Appellant, Colorado County Oil
Company, Inc.
Dated, this the 10th day of September, 2015
Respectfully submitted,
/s/ Donald H. Grissom Donald H. Grissom GRISSOM & THOMPSON, LLP TX State Bar No. 08511550 don@gandtlaw.com 509 West 12th Street Austin, Texas 78701 512/478-4059 512/482-8410 Fax
CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing document has been forwarded to all counsel of record in compliance with Texas Rules of Appellate Procedure, via facsimile, electronic case filing, or certified mail return receipt requested, on September 10, 2015
/s/DonaldHGrissom Donald H. Grissom
CERTIFICATE OF COMPLIANCE I hereby certify on this date that the foregoing document contains 2,131 words.