Gerdes v. Kennamer

155 S.W.3d 523, 2004 WL 2786078
Court of Appeals of Texas·Decided February 3, 2005·No. 13-02-657-CV·Published·Cited by 49 cases

Opinions

OPINION

Opinion by

Justice CASTILLO.

This is a suit for breach of fiduciary duty. Appellants Roger Gerdes and Carolyn Gerdes appeal a $915,392.65 judgment in favor of appellee John Kennamer. The Gerdeses challenge the trial court’s venue ruling and assert that the evidence is legally and factually insufficient to support the jury’s liability and damages findings in Kennamer’s favor. They also complain of charge error in failing to condition a damages question as to Carolyn Gerdes on a finding of fraud. Kennamer raises a conditional cross-point challenging the sufficiency of the evidence to support an offsetting quantum meruit award to the Gerdeses. We affirm.

J. FACTUAL AND PROCEDURAL HISTORY

Roger Gerdes and Kennamer, both United States citizens, were long-time friends and business associates. The disputes on which this litigation focused arose from their joint operation of Laguna Vista, a hunting and fishing lodge and ranch in San Fernando, Tamaulipas, Mexico. Ken-namer bought the lodge and its associated improvements and assets in 1990 for a purchase price in excess of $500,000. The conveyance included a lease of the real property on which the lodge was located and an option to purchase the real property. Roger Gerdes and Kennamer structured Texas and Mexican business entities to operate the lodge. Kennamer contrib[528] uted the lodge improvements and the capital. Roger Gerdes contributed “sweat equity” by managing the business and taking care of the lodge and hunters. Carolyn Gerdes also invested in Laguna Vista, provided bookkeeping and other personal services, and helped promote and book hunting trips.

In 1991, Kennamer decided to exercise his option to purchase the real estate. The agreed purchase price was' $1,038,000. He paid $250,000 down and mortgaged the balance. At the time, Mexican law restricted title ownership to real property along the United States-Mexico border and prohibited transfer of title to non-Mexican citizens. At Roger Gerdes’s suggestion, the grantor conveyed record title to the real property to four Mexican citizens: Roger Gerdes’s son, lawyer, and employees. Kennamer did not receive record title. The transaction divided the real estate into four parcels. The son’s parcel included the land where the lodge was located. The lawyer and the son’s parcels were clear of any liens. The other two parcels were encumbered by the purchase-money lien. The four Mexican record title holders then executed purported powers of attorney “to John Kennamer and/or Roger Gerdes” to protect Kennamer’s ownership interest.1

Operating expenses for Laguna Vista mounted. Kennamer defaulted on the purchase-money loan. The holder of the purchase-money lien instituted legal proceedings. Title to the real property became the subject of extensive criminal and civil proceedings in Mexico. Roger Gerdes and Kennamer both started looking for a buyer for the Laguna Vista lodge. In 1993, at Roger Gerdes’s direction and on his instructions, the son revoked his power of attorney to Kennamer.

Roger Gerdes then formed two new business entities in 1997: Hacienda de Aves, which was a Texas corporation, and Immobiliarias Don Rogelio, a Mexican entity. Roger Gerdes and Carolyn Gerdes were the only principals of the two new business entities. Their purpose was to facilitate sale of the Laguna Vista lodge and property. The son transferred his interest in the real property, which was unencumbered by the purchase-money lien and on which the lodge improvements were located, to Immobiliarias Don Rogelio. Roger Gerdes began representing to potential buyers that he was part owner of Laguna Vista.

In December of 2000, Roger Gerdes forwarded to Kennamer at his ranch in Mata-gorda County, Texas a copy of a letter of intent that detailed a proposed transaction with a prospective buyer. He deleted references to his employment by the new entity and payment to him of bonuses and commissions. The transaction, which called for Kennamer to receive $750,000 in cash, did not close because of questions regarding title to the property. The letter of intent, however, alerted Kennamer that Roger Gerdes was claiming ownership of an interest in Laguna Vista.

As a result, Kennamer brought this lawsuit in Matagorda County. He alleged that the Gerdeses had taken monies from the lodge business without his authority. He claimed conversion, fraud, breach of fiduciary duty, and conspiracy to defraud. The Gerdeses counterclaimed for the value of their services and for attorney fees. They also sought a change of venue, which the trial court denied. A jury trial resulted in mixed liability and damages findings. The trial court entered offsetting judgments. The net result for purposes of this [529] appeal is a $915,392.65 judgment in favor of Kennamer against Roger Gerdes.2

We first analyze the venue question presented by the Gerdeses in issue three. We then address the sufficiency challenges and charge error asserted by the Gerdes-es.

II. VENUE

A. Scope and Standard of Review

Plaintiffs are accorded the right to choose venue first. Chiriboga v. State Farm Mut. Auto. Ins. Co., 96 S.W.3d 673, 677 (Tex.App.—Austin 2003, no pet.). As long as the plaintiff files suit in a county of proper venue (i.e., the county is at least a permissive venue and no mandatory provision applies), the trial court may not disturb the plaintiffs venue choice. Id. at 678 (citing Wilson v. Tex. Parks & Wildlife Dep’t, 886 S.W.2d 259, 261 (Tex.1994)). The plaintiffs venue choice stands unless the defendant challenges it by a proper motion to transfer venue. Chiriboga, 96 S.W.3d at 678 (citing In re Mo. Pac. R.R. Co., 998 S.W.2d 212, 216 (Tex.1999)). Once challenged, the plaintiff has the burden to present prima facie proof that venue is maintainable in the county of suit. Tex.R. Civ. P. 87(2)(a), (3)(a); Chiriboga, 96 S.W.3d at 678 (citing In re Masonite Corp., 997 S.W.2d 194, 197 (Tex.1999)). The plaintiffs prima facie proof is not subject to rebuttal, cross-examination, impeachment, or disproof. Chiriboga, 96 S.W.3d at 678 (citing Ruiz v. Conoco, Inc., 868 S.W.2d 752, 757 (Tex.1993) (op. on reh’g)).

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Gerdes v. Kennamer, 155 S.W.3d 523, 2004 WL 2786078 (Tex. Ct. App. 2005).

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