Electronic Bankcard Systems, Inc., and Glenn Francis, Individually and D/B/A EBS v. Retriever Industries, Inc., D/B/A Retriever Payment Systems, And, Retriever Sales, Inc., First National Bank of Omaha, D/B/A First of Omaha Merchant Processing (FNBO) and Walt L. Raines

• Court: Court of Appeals of Texas
• Decided: December 15, 2005
• Docket: 14-04-00452-CV
• Status: Published

Opinion

Affirmed and Memorandum Opinion filed December 15, 2005

Affirmed and Memorandum Opinion filed December 15, 2005.

In The

Fourteenth Court of Appeals

_______________

NO. 14-04-00452-CV

ELECTRONIC BANKCARD SYSTEMS, INC., AND GLENN FRANCIS, INDIVIDUALLY AND D/B/A EBS, Appellants

V.

RETRIEVER INDUSTRIES, INC. D/B/A

RETRIEVER PAYMENT SYSTEMS AND RETRIEVER SALES, INC.,

FIRST NATIONAL BANK OF OMAHA, D/B/A FIRST OF OMAHA MERCHANT PROCESSING (FNBO) AND WALT L. RAINES, Appellees

__________________________________________________________________

On Appeal from the 61st District Court

Harris County, Texas

Trial Court Cause No. 99‑06816

__________________________________________________________________

M E M O R A N D U M   O P I N I O N

Appellants, Electronic Bankcard Systems, Inc. and Glenn Francis, Individually and d/b/a EBS (collectively AEBS@),^[1] appeal from a take nothing judgment in their breach of contract suit against appellees, Retriever Industries, Inc. d/b/a Retriever Payment Systems and Retriever Sales, Inc. (collectively ARetriever@).^[2]  EBS contends (1) the trial court erred by giving a coercive jury charge during deliberations, and (2) the evidence is factually insufficient to support one of the jury=s findings.  We affirm.

I.  Background

Retriever sells credit card processing to merchants.  Retriever and EBS entered into an AEmployee Finders Agreement@ whereby EBS would locate persons to become employees of Retriever and sell the credit card processing to merchants.  EBS=s fees were called Aresiduals@ and were, in essence, commissions based on credit card processing sold to merchants and their subsequent credit card transactions.  In addition, Francis individually became a salesperson and executed a separate AEmployment Agreement@ with Retriever.  The parties operated under these agreements for several years, but Retriever ultimately terminated both agreements and refused to pay any more residuals.

Subsequently, Retriever sent EBS a ALetter of Intent@ attempting to settle the disputes arising from termination of the agreements.  Retriever offered to pay EBS certain residuals over a five-year period.  In return, among other matters, EBS would not interfere with Retriever=s business and would provide a full accounting.  EBS signed the Letter of Intent but later refuted that it was a binding agreement.  In contrast, Retriever believed it had settled all disputes because it paid EBS the amounts outlined in the Letter of Intent.

EBS later sued Retriever claiming it breached the Employee Finders Agreement and the Employment Agreement.^[3]  Retriever asserted accord and satisfaction, novation, estoppel, waiver, and modification as affirmative defenses based on the Letter of Intent.  Retriever also filed a counterclaim alleging EBS breached the Letter of Intent.  With respect to EBS=s claims, a jury found that Retriever did not breach the Employee Finders Agreement or the Employment Agreement.  With respect to Retriever=s counterclaim, the jury found that EBS agreed to be bound by the Letter of Intent and breached the Letter of Intent.  However, the jury found that Retriever unreasonably delayed in enforcement of the Letter of Intent.  Therefore, the trial court entered a take-nothing judgment against all parties.  Only EBS appeals the judgment.

II.  Discussion

Although EBS=s issues are confusing, it apparently presents two issues: (1) the trial court erred by giving a coercive jury charge during deliberations, and (2) the evidence is factually insufficient to support the jury=s finding that Retriever did not breach the Employee Finders Agreement.^[4]

A.        Coercive Jury Charge

First, EBS contends the trial court gave a coercive jury charge during deliberations.  There is no reporter=s record of any such charge or the surrounding circumstances, but EBS asserts that the following occurred.  The jury began deliberating at mid-day on a ThursdayCa week before ChristmasCand continued deliberating on Friday.  At some point on Friday, several jurors expressed concerns about their upcoming holiday plans.  Late Friday afternoon, the trial court sent a verbal message via the bailiff that the jury Aneeded to reach a verdict even if they had to stay until midnight (Friday); that if they couldn=t reach a verdict that day, they would be returning Monday (December 22) and deliberating until they reached a verdict.@  The jury then returned its verdict at 5:00 p.m. on Friday.  According to EBS, the trial court=s message was a Adynamite charge@^[5] that coerced the jury to reach a verdict which Apoured out@ EBS.

In response, Retriever contends EBS has waived its complaint because there is no reporter=s record of any coercive charge, and EBS was required to request that the reporter make a record.^[6]  Further, Retriever contends that EBS waived its complaint by failing to object to the lack of a record.  In contrast, EBS maintains it has not waived its complaint because the reporter was required to record all proceedings even without a request.  Thus, as a sub-issue, EBS contends it is entitled to a new trial based on the lack of a record.

There is a conflict of authority on whether the court reporter or the complaining party bears the obligation to ensure that trial proceedings are recorded.^[7]  We need not resolve this conflict here because even if the reporter bears the obligation to record all proceedings, the complaining party must still object to the lack of a record to preserve error.  See, e.g., Valle v. State, 109 S.W.3d 500, 508B09 (Tex. Crim. App. 2003); Rittenhouse v. Sabine Valley Ctr. Found., Inc., 161 S.W.3d 157, 162 (Tex. App.CTexarkana 2005, no pet.); Brossette v. State, 99 S.W.3d 277, 284B85 (Tex. App.CTexarkana 2003, pet. dism=d, untimely filed); see also Tex. R. App. P. 33.1(a).^[8]  Here, there is no indication that EBS objected to the court reporter=s failure to record the charge at issue.  Therefore, EBS has waived its complaint that the reporter failed to record the charge.  In turn, without a reporter=s record, EBS has waived its complaint that the trial court gave a coercive charge.

Moreover, even if EBS had not waived its complaints, it was not harmed by the reporter=s failure to record any coercive charge or by the charge itself.  See Tex. R. App. P. 44.1(a); Palmer v. Espey Huston & Assocs., Inc., 84 S.W.3d 345, 351 (Tex. App.CCorpus Christi 2002, pet. denied) (recognizing appellant must show reporter=s error in failing to record certain proceedings was reversible).  The record we do have demonstrates that if the trial court gave a charge as claimed by EBS, it could not have coerced the jury to Apour out@ EBS.

The record shows that late Friday morning, the jury returned with what it thought was a verdict.  However, the jury had not answered two questions, so the trial court instructed the jury to continue deliberating.  Significantly, at that point, the jury had answered all questions concerning Retriever=s liability to EBS.  Specifically, the jury had found that Retriever did not breach the Employee Finders Agreement or the Employment Agreement.  The verdict reflects there were no subsequent changes to those answers.

The remaining questions to be answered concerned Retriever=s counterclaim for breach of the Letter of Intent.  In particular, the jury had not answered questions seven and eight.  In question seven, the jury was asked whether Retriever unreasonably delayed in enforcing the Letter of Intent.  Question eight concerned Retriever=s damages resulting from EBS=s breach of the Letter of Intent.

According to EBS, the trial court gave the coercive charge later that afternoon.  Therefore, when the trial court gave the charge, if any, the jury had already determined that Retriever had no liability to EBS.  Consequently, the charge could not have coerced the jury to Apour out@ EBS.  Instead, the only answer given by the jury after the charge, if any,  Apoured out@ Retriever on its counterclaim.^[9]  Accordingly, we overrule EBS=s issue concerning a coercive jury charge and its sub-issue concerning the reporter=s failure to record the charge.

B.        Factual Insufficiency

Next, EBS contends the evidence is factually insufficient to support the jury=s finding that Retriever did not breach the Employee Finders Agreement.  However, EBS did not preserve error on this complaint.  A party challenging the factual sufficiency of the evidence to support a jury finding must file a motion for new trial in order to preserve error.  Tex. R. Civ. P. 324(b)(2), (3); Cecil v. Smith, 804 S.W.2d 509, 510 (Tex. 1991); Burke v. Union Pac. Res. Co., 138 S.W.3d 46, 62 (Tex. App.CTexarkana 2004, pet. denied).  In the motion for new trial, the party must specifically point out the deficiencies in a manner that adequately apprises the trial court of those deficiencies.  Arroyo Shrimp Farm, Inc. v. Hung Shrimp Farm, Inc., 927 S.W.2d 146, 150 (Tex. App.CCorpus Christi 1996, no writ). 

On appeal, EBS challenges the factual sufficiency of the evidence to support the jury=s answer to question oneCits finding that Retriever did not breach the Employee Finders Agreement.  In its motion for new trial, EBS challenged the factual sufficiency of the evidence to support only the jury=s answer to question fourCits finding that Retriever and EBS agreed to be bound by the Letter of Intent.  Therefore, in its motion for new trial, EBS did not apprise the trial court that it was challenging the jury=s finding that Retriever did not breach the Employee Finders Agreement.  Consequently, EBS has waived this factual sufficiency complaint.  See Wirtz v. Mass. Mut. Life Ins. Co., 898 S.W.2d 414, 419B20 (Tex. App.CAmarillo 1995, no writ) (holding appellant waived factual sufficiency challenge to some jury findings where motion for new trial addressed only other jury findings); see also Knox v. Taylor, 992 S.W.2d 40, 65 (Tex. App.CHouston [14th Dist.] 1999, no pet.) (recognizing complaint on appeal must comport with objection at trial).

Accordingly, the judgment of the trial court is affirmed.

/s/        Charles W. Seymore

Justice

Judgment rendered and Memorandum Opinion filed December 15, 2005.

Panel consists of Justices Hudson, Edelman, and Seymore.

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^[1]  Francis is the owner of EBS, but we will refer to them collectively as AEBS@ except when necessary to refer to them separately.

^[2]  Through various purchases and assignments, several ARetriever@ entities have been parties to the transactions at issue, but we will refer to them collectively as ARetriever.@  EBS also sued First National Bank of Omaha d/b/a First Omaha Merchant Processing and Walt L. Raines, but the trial court refused to submit jury questions concerning their liability.  EBS does not appeal that ruling; thus, only Retriever is an appellee.

^[3]  EBS asserted other claims, but only breach of contract claims remained when the case was submitted to the jury.

^[4]  In its ATable of Contents,@ EBS lists one numbered issue contending the trial court gave a coercive jury charge.  Under this one issue, EBS lists several sub-issues including a complaint that there is no reporter=s record of the coercive charge and a factual insufficiency challenge.  Later, under AIssues Presented,@ EBS lists three numbered issues contending the trial court gave a coercive jury charge, the outcome should reflect justice, not Aexpediting dockets,@ and the court reporter was required to record the charge.  Regardless, we discern two complaints from the body of the brief and will address them by subject, rather than numbered issues.

^[5]  An Allen or Adynamite@ charge encourages the jury to reach a verdict and is usually given in response to a specific communication from the jury indicating it is deadlocked.  Moore v. Mem=l Hermann Hosp. Sys., Inc., 140 S.W.3d 870, 877 n.6 (Tex. App.CHouston [14th Dist.] 2004, no pet.) (citing Allen v. United States, 164 U.S. 492 (1896)).

^[6]  Retriever seems to acknowledge that the trial court made some communication to the jury in response to the jurors= concerns regarding holiday plans.  Although Retriever=s counsel cannot recall the exact communication, Retriever disputes EBS=s recitation of the communication.

^[7]  Texas Rule of Appellate Procedure 13.1(a) provides that the court reporter must make a full record of the proceedings Aunless excused by agreement of the parties.@  Tex. R. App. P. 13.1(a).  Some courts have held that Rule 13.1 requires the reporter to record all trial proceedings unless a record is waived by the parties.  See, e.g., Valle v. State, 109 S.W.3d 500, 508 (Tex. Crim. App. 2003); Rittenhouse v. Sabine Valley Ctr. Found., Inc., 161 S.W.3d 157, 161B62 (Tex. App.CTexarkana 2005, no pet.); Smith v. State, 114 S.W.3d 66, 70 (Tex. App.CEastland 2003, pet. ref=d); Palmer v. Espey Huston & Assocs., Inc., 84 S.W.3d 345, 350B51 (Tex. App.CCorpus Christi 2002, pet. denied).  However, section 52.046(a) of the Texas Government Code provides that the court reporter shall record certain proceedings A[o]n request.@  See Tex. Gov=t Code Ann. ' 52.046(a) (Vernon 2005).  Thus, some courts have held that Rule 13.1 conflicts with  section 52.046, and a party is required to request a record.  See e.g., Langford v. State, 129 S.W.3d 138, 139 (Tex. App.C Dallas 2003, no pet.); Washington v. State, 127 S.W.3d 111, 113B15 (Tex. App.CHouston [1st Dist.] 2003, no pet.); Polasek v. State, 16 S.W.3d 82, 88B89 (Tex. App.CHouston [1st Dist] 2000, pet. denied) (en banc); see also Nabelek v. District Attorney of Harris County, __ S.W.3d __, No. 14‑03‑00965‑CV, 2005 WL 2148999, at *5 (Tex. App.CHouston [14th Dist.] Sept. 8, 2005, no pet. h.).

^[8]  The Corpus Christi Court of Appeals has explicitly held that a party is not required to object to the court reporter=s failure to make a record to preserve error.  See Tanguma v. State, 47 S.W.3d 663, 674 (Tex. App.CCorpus Christi 2001, pet. ref=d).  However, the Court of Criminal Appeals has disapproved of Tanguma to the extent it held that no objection is required.  See Valle, 109 S.W.3d at 508B09; see also State v. Herndon, 115 S.W.3d 231, 234 (Tex. App.CCorpus Christi 2003, pet. granted) (recognizing that in light of Valle, party must object to court reporter=s failure to record trial proceedings).

^[9]  In answer to question seven, the jury found Retriever unreasonably delayed in enforcing the Letter of Intent, thereby precluding Retriever from recovery for EBS=s breach of the Letter of Intent.  Thus, the  jury was not required to answer question eight concerning Retriever=s damages.