Ha Duong Nhu and D&H Restaurant Equipment v. Hunan Ranch Corporation

Opinion

ACCEPTED

03-14-00821-CV

4319264

THIRD COURT OF APPEALS

AUSTIN, TEXAS

2/27/2015 4:19:20 PM

JEFFREY D. KYLE

CLERK

No. 03-14-00821-CV

_______________________________________________

FILED IN

3rd COURT OF APPEALS

IN THE COURT OF APPEALS AUSTIN, TEXAS FOR THE THIRD DISTRICT OF TEXAS 2/27/2015 4:19:20 PM JEFFREY D. KYLE

AUSTIN, TEXAS Clerk

____________________________________________

DUONG NHU HA AND D&H RESTAURANT EQUIPMENT Appellants,

v.

HUNAN RANCH CORPORATION

Appellee.

_______________________________________________

On Appeal from the 201st Judicial District of Travis County, Texas

_______________________________________________

BRIEF OF APPELLANTS DUONG NHU HA AND D&H RESTAURANT EQUIPMENT

_______________________________________________

VINSON & ELKINS LLP

Frank C. Brame

State Bar No. 24031874 2001 Ross Ave Suite 3700 Dallas, TX 75201-2975 Telephone: (214) 220-7818 Fax: (214) 999-7818 fbrame@velaw.com

LEAD COUNSEL FOR APPELLANTS

ORAL ARGUMENT REQUESTED

IDENTITY OF PARTIES AND COUNSEL Appellants: Duong Nhu Ha and D&H Restaurant Equipment

Appellate Counsel for VINSON & ELKINS LLP Appellants: Frank C. Brame State Bar No. 24031874 2001 Ross Ave Suite 3700 Dallas, TX 75201-2975 Telephone: (214) 220-7818 Fax: (214) 999-7818 fbrame@velaw.com

Janice L. Ta State Bar No. 24075138 Michelle Arishita State Bar No. 24092048 2801 Via Fortuna, Suite 100 Austin, Texas 78746-7568 Telephone: (512) 578-8402 Fax: (512) 236-8239 jta@velaw.com marishita@velaw.com

Appellee: Hunan Ranch Corporation

Trial and Appellate Counsel HAJJAR PETERS, LLP for Appellee: Doran D. Peters State Bar No. 24027615 Teri C. Baker State Bar No. 24053131 3144 Bee Caves Road Austin, Texas 78746 Telephone: (512) 637-4956 Fax: (512) 637-4958 dpeters@legalstrategy.com tbaker@legalstrategy.com

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TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL ........................................................... ii TABLE OF CONTENTS......................................................................................... iii INDEX OF AUTHORITIES......................................................................................v STATEMENT OF THE CASE..................................................................................1 STATEMENT ON ORAL ARGUMENT .................................................................2 STATEMENT OF ISSUES PRESENTED................................................................2 STATEMENT OF FACTS ........................................................................................3 SUMMARY OF ARGUMENT .................................................................................6 ARGUMENT .............................................................................................................7 I. Introduction......................................................................................................7 II. Mr. Ha Has Satisfied the Preliminary Requirements for a Restricted Appeal..............................................................................................................8 III. Because Hunan Ranch Failed to Enter Material Exhibits into the Record, Including the Alleged Purchase Order and Evidence to Support Its Damages, And Failed to Procure a Court Reporter’s Record at the Default Judgment Proceeding, There Is Error on the Face of the Record and The Court Should Remand for a New Trial. .............8 IV. There Is Error on the Face of the Record Because the Evidence to Support Hunan Ranch’s Unliquidated Damages Claim Is Defective. ..........12 A. Hunan Ranch used an incorrect measure for damages (lost sales) instead of the correct measure of damages (lost profits) in calculating its unliquidated damages claim.........................................13 B. Hunan Ranch failed to prove that it was even profitable....................15 C. Hunan Ranch failed to prove any damages by competent evidence and with reasonable certainty...............................................16 V. Because Hunan Ranch Failed to Prove a Causal Nexus Between the Alleged Breach of Contract and the Claimed Damages, Error Is Apparent on the Face of the Record and the Court Should Remand for a New Trial. ...................................................................................................22 VI. Because Hunan Ranch Failed to Prove Its Unliquidated Damages, It Cannot Recover Attorney’s Fees...................................................................26 CONCLUSION AND PRAYER .............................................................................27

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CERTIFICATE OF COMPLIANCE.......................................................................29 CERTIFICATE OF SERVICE ................................................................................29

iv

INDEX OF AUTHORITIES

Cases Aetna Cas. & Sur. Co. v. Hill, No. 05-91-01290-CV, 1992 WL 172384 (Tex. App.—Dallas July 21, 1992, no writ) (mem. op., not designated for publication) .................................................20 Am. Nat’l Petroleum Co. v. Transcon. Gas Pipe Line Corp., 798 S.W.2d 274 (Tex. 1990)................................................................................13 Atomic Fuel Extraction Corp. v. Slick’s Estate, 386 S.W.2d 180 (Tex. App.—San Antonio 1964, writ ref'd n.r.e.).....................16 Bain v. Bain, No. 02-06-00215-CV, 2007 WL 174463 (Tex. App.—Fort Worth Jan. 25, 2007, no pet.) (mem. op.) .......................................................................10 City of Beaumont v. Excavators & Constructors, Inc., 870 S.W.2d 123 (Tex. App.—Beaumont 1993, writ denied) ........... 22, 23, 24, 25 Cox v. Cox, 298 S.W.3d 726 (Tex. App.—Austin 2009, no pet.) .............................................8 El Paso Mktg., LP v. Wolf Hollow I, LP, 383 S.W.3d 138 (Tex. 2012)................................................................................26 ERI Consulting Eng’rs, Inc. v. Swinnea, 318 S.W.3d 867 (Tex. 2010)......................................................................... 18, 19 Exel Transp. Servs., Inc. v. Aim High Logistics Servs., LLC, 323 S.W.3d 224 (Tex. App.—Dallas 2010, pet. denied).....................................27 Frank B. Hall & Co. v. Beach, Inc., 733 S.W.2d 251 (Tex. App.—Corpus Christi 1987, writ ref’d n.r.e.).................17 Golden Bear Distrib. Sys. of Tex., Inc. v. Chase Revel, Inc., 708 F.2d 944 (5th Cir. 1983)................................................................................16 Green Int’l, Inc. v. Solis, 951 S.W.2d 384 (Tex. 1997)................................................................................27 Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80 (Tex. 1992)....................................... 12, 13, 14, 16, 17, 21, 22, 23 Hunan Ranch Corp. v. JP Morgan Chase Bank, No. D-1-GN-14-00470 (201st Dist. Ct., Travis County, Tex. Nov. 10, 2014) .....6

v

Ins. Co. of State of Pa. v. Lejeune, 297 S.W.3d 254 (Tex. 2009)..................................................................................7 Lefton v.Griffith, 136 S.W.3d 271 (Tex. App.—San Antonio 2004, no pet.)..................................18 M & A Tech., Inc. v. iValue Grp., Inc., 295 S.W.3d 356 (Tex. App.—El Paso 2009, pet. denied) ...................................19 MCI Sales & Serv., Inc. v. Hinton, 329 S.W.3d 475 (Tex. 2010)................................................................................20 Milestone Operating, Inc. v. ExxonMobil Corp., 346 S.W.3d 101 (Tex. App.—Houston [14th Dist.] 2011, pet. granted), rev'd on other grounds, 388 S.W.3d 307 (Tex. 2012) .......................................... 18, 20, 23 Morgan v. Compugraphic Corp., 675 S.W.2d 729 (Tex. 1984)......................................................................... 22, 23 Norman Commc’n v. Tex. Eastman Co., 955 S.W.2d 269 (Tex. 1997)..................................................................................8 Orchid Software, Inc. v. Prentice-Hall, Inc, 804 S.W.2d 208, 210−211 (Tex. App.—Austin 1991, writ denied)……….......16 Robinson v. Robinson, 487 S.W.2d 713 (Tex. 1972)............................................................................9, 10 Rogers v. Rogers, 561 S.W.2d 172 (Tex. 1978)..................................................................... 9, 10, 11 Sherman Acquisition II LP v. Garcia, 229 S.W.3d 802 (Tex. App—Waco 2007, no pet.) .............................................12 Simon v. York Crane & Rigging Co., Inc., 739 S.W.2d 793 (Tex. 1987)................................................................................10 State v. Harrell Ranch, Ltd., 268 S.W.3d 247 (Tex. App.—Austin 2008, no pet. ) ..........................................14 Stone v. Talbert Operations, LLC, No. 04-14-00008-CV, 2014 WL 7439931 (Tex. App.—San Antonio, Dec. 31, 2014, no pet.) (mem. op.) ..................................................................9. 10 Sw. Battery Corp. v. Owen, 115 S.W.2d 1097 (Tex. 1938)....................................................................... 16, 19 Tex. Crushed Stone Co. v. Baker, 576 S.W.2d 894 (Tex. Civ. App.—Tyler 1979, no writ).....................................10

vi

Tex. Instruments v. Teletron Energy Mgmt., Inc., 877 S.W.2d 276 (Tex. 1994)................................................................................19 Texaco, Inc. v. Phan, 137 S.W.3d 763 (Tex. App.—Houston [14th Dist.] 2004, no pet.).............. 21, 22 Thompson v. Thompson, No. 02-13-00292-CV, 2014 WL 3865951 (Tex. App.—Fort Worth Aug. 7, 2014, no pet.) (mem. op.)........................................................................10 Wunderlich Contracting Co. v. United States, 351 F.2d 956 (Ct. Cl. 1965) .................................................................................23 Zeno Digital Solutions, LLC v. K Griff Investigations, No. 14-09-00473-CV, 2010 WL 3547708 (Tex. App.—Houston [14th Dist.] Sept. 14, 2010, no pet.) ........................................................................................15 Statutes Tex. Civ. Prac. & Rem. Code Ann. § 38.001 (West 2013) .....................................26 Rules Tex. R. App. P. 13.1.................................................................................................10 Tex. R. App. P. 26.1(c) ..............................................................................................7 Tex. R. App. P. 30......................................................................................................7 Tex. R. App. P. 39.1(d) ..............................................................................................2 Tex. R. Evid. 201 .....................................................................................................19 Appendix Certified Record…………………………………………………………….Ex. 1

U.S. Census Bureau Statistics…………………………………………….. Ex. 2

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TO THE HONORABLE JUSTICES OF THE COURT OF APPEALS:

Appellants DUONG NHU HA and D&H RESTAURANT EQUIPMENT

(collectively, “Mr. Ha” or “Appellants”) respectfully submit this brief in support of

their restricted appeal asking that the Court remand this case for a new trial.

Appellants respectfully show the following:

STATEMENT OF THE CASE

Nature of the Case: This is a restricted appeal of a no-answer default judgment that was granted by the 201st District Court of Travis County, Texas. See Certified Record (“CR”) 9−11 (attached as Exhibit 1). On March 19, 2014, Appellee Hunan Ranch Corporation (“Hunan Ranch” or “Appellee”) brought a breach of contract action against Appellants arising out of Appellants’ alleged failure to install a commercial wok range. CR 1−2.

Course of Proceedings: The Honorable Suzanne Covington, 201st Judicial District, Travis County, appears to have conducted a bench trial on liability and damages.1 Appellants were not present at this hearing on final judgment, which was not transcribed, and did not participate thereafter. CR 9.

Trial Court’s Disposition: Appellee obtained a final no-answer default judgment against Appellants on June 30, 2014. CR 9−11. The trial court awarded unliquidated damages of $38,663.81; attorneys’ fees of $6,693.75; and preand post-judgment interest. Id.

1 Appellants cannot verify the events at the hearing because Hunan Ranch failed to procure a reporter’s record. See infra Part III.

2

STATEMENT ON ORAL ARGUMENT Appellants respectfully request oral argument because this case raises

significant issues related to the factual and legal sufficiency of the evidence

presented by Appellees in obtaining a default judgment. Inclusion of oral

argument will aid the decisional process2 by clarifying at least the following legal

issue: whether a new trial is proper on a restricted appeal in which material

evidence is left out of the trial court record; there is no transcript to prove such

evidence was ever considered by the trial court in its decision; and, without that

evidence, Appellants cannot properly challenge the record below.3

STATEMENT OF ISSUES PRESENTED I. Because Hunan Ranch Failed to Enter Material Exhibits into the Record, Including the Alleged Purchase Order and Evidence to Support Its Damages, and Failed to Procure a Reporter’s Record at the Default Judgment Proceeding, There Is Error on the Face of the Record and the Court Should Remand for a New Trial.

II. There is Error on the Face of the Record Because the Evidence to Support Hunan Ranch’s Unliquidated Damages Claim is Defective.

III. Because Hunan Ranch Failed to Prove a Causal Nexus Between the Alleged Breach of Contract and the Claimed Damages, Error Is Apparent on the Face of the Record and the Court Should Remand for a New Trial.

IV. Because Hunan Ranch Failed to Prove Its Unliquidated Damages, It Cannot Recover Attorneys’ Fees.

2 See Tex. R. App. P. 39.1(d). 3 In addition to the foregoing reasons, two of the attorneys representing Mr. Ha have less than 6- years of experience practicing law and would appreciate the opportunity to argue before the Court.

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STATEMENT OF FACTS4

This is a restricted appeal from a no-answer default judgment arising from a

contract dispute about the installation of a commercial wok range.5 Appellant

Duong Nhu Ha is the sole proprietor of D&H Restaurant Equipment, a plumbing

and restaurant supply servicing company, based in Garland, Texas (a suburb of

Dallas). CR 1. Appellee operates the Hunan Ranch Restaurant based in Austin,

Texas. CR 1−2, 17. One of its directors and owners is Mr. John Chen. CR 17.

On November 24, 2013, Mr. Chen sent Mr. Ha a purchase order (“Purchase

Order”) for a commercial wok range (“new wok range”) to be installed by

December 26, 2013. CR 17−18. This Purchase Order, which purportedly forms

the basis of Appellees’ lawsuit and the trial court’s judgment, was never admitted

into evidence and is not part of the record in this case. See generally CR; CR

17−19. Nonetheless, it is undisputed that this ordinary Purchase Order would not

have contained a “time is of the essence” provision.

The parties later agreed to delay delivery so that the installation of the new

wok range would coincide with some anticipated renovations at the restaurant. CR

18. Hunan Ranch purportedly expected these renovations to last three days, from

January 6−9, 2014, during which time the restaurant would be closed. Id. During

4 Though Appellants assume liability solely for the purpose of this restricted appeal, Appellants reserve the right in a future bill of equitable review and in a prospective new trial (if granted by the Court) to challenge the many misrepresentations of the facts made by Appellees. 5 A commercial wok range is a large and high-powered open-burner range for use with restaurant woks and for stir-frying. See CR 17−18.

4

these renovations, Mr. Chen asked third-party contractors to remove the still-

functioning old wok range in order to repair a wall; these contractors never

reinstalled the old wok range after the renovations were completed. See id. Hunan

Ranch purportedly kept its business closed for 8.5 days while waiting for the new

wok range. See id. Nonetheless, Mr. Ha, drove to Austin to reinstall Mr. Chen’s

old commercial wok range while the new wok range was still being refurbished.

Id.

Hunan Ranch filed its complaint on March 19, 2014. CR 1−3.

Approximately one week later, on the evening of Friday, March 28, 2014, Mr. Ha

made a trip from Dallas to Austin to deliver the new wok range. CR 18. He

worked overnight to install the new wok range so as not to interrupt Hunan

Ranch’s business. See CR 8, 18.

He completed the installation the next morning. Id. That morning, Mr.

Chen instructed his chef to serve breakfast to Mr. Ha. After Mr. Ha finished

breakfast, a service processor served Mr. Ha with the complaint. CR 1−8. Mr. Ha,

who does not speak or understand English well, did not realize he had been served.

Instead, he approached Mr. Chen and requested payment of the remaining $3,000

balance on the new wok range. Mr. Chen told him he could collect the remaining

balance by speaking with Hunan Ranch’s lawyer. Assuming this was an offer to

5

settle, Mr. Ha drove back to Dallas believing he would simply write off the

remaining balance as a loss to his business.

The trial court held a final judgment hearing on June 30, 2014. CR 9−11.

Hunan Ranch did not request a court reporter to transcribe the proceedings, nor

was a transcription made. The court entered default judgment for Hunan Ranch

and awarded unliquidated damages for lost sales of $38,663.81, an amount nearly

six times the total cost of the $6,500 new wok range. CR 9. Using “Sales

Reports” from October to December 2013, Hunan Ranch speculated that its

“average sales income per month . . . was $137,075.92 which is $4,469.86 per

day.” CR 19. These “Sales Reports” detailing Hunan Ranch’s alleged damages

were never entered into evidence and are not part of the record in this case. See

generally CR; CR 17−19. Based on these “Sales Reports,” Hunan Ranch alleges a

total of $37,993.81 of lost sales during the 8.5 days it closed its restaurant. CR 19.

In addition, Mr. Chen alleges the reinstallation of the old wok range resulted

in a gas leak that caused Hunan Ranch to issue “approximately $670 in voids and

credits.” Id. The trial court also awarded attorneys’ fees of $6,693.75, and pre-

and post-judgment interest to Hunan Ranch. See CR 9−10, 12−14.

Mr. Ha did not answer the complaint, attend the final judgment hearing, or

file any postjudgment motions because he did not know he was being sued. Mr.

Ha finally learned about the lawsuit in December 2014, after Hunan Ranch filed an

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application for writ of garnishment and had his bank account frozen. See Hunan

Ranch Corp. v. JP Morgan Chase Bank, No. D-1-GN-14-00470 (201st Dist. Ct.,

Travis County, Tex. Nov. 10, 2014). When Mr. Ha learned of the lawsuit, he

promptly secured pro bono counsel and timely filed a notice of restricted appeal on

December 30, 2014.

SUMMARY OF ARGUMENT

This Court should remand the case for a new trial for at least the following

reasons. First, there is error on the face of the record because Hunan Ranch not

only failed to submit material evidence into the record, but also failed to procure a

court reporter’s record at the default judgment proceeding, making it impossible to

confirm whether these exhibits were actually considered by the trial court in

granting its default judgment. Second, there is error on the face of the record

because Hunan Ranch calculated its unliquidated damages based on an incorrect

standard (lost sales) rather than the correct standard (lost profits). Moreover, even

were one to assume that Hunan Ranch had used the proper measure of damages,

Hunan Ranch still failed to prove its damages claim with reasonable certainty

using objective evidence. Third, Hunan Ranch failed to show a causal nexus

between the alleged breach of contract and its unliquidated damages claim for lost

sales. Finally, Hunan Ranch cannot recover its attorneys’ fees because it failed to

prove its damages claim. Because of the significant errors on the face of the record

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and the lack of sufficient evidence to support the default judgment, the Court

should remand the case for a new trial.

ARGUMENT

I. INTRODUCTION This is a restricted appeal in which Appellee obtained a default judgment

against Mr. Ha, an individual who does not speak English well and did not know

that he had been sued, in an amount that exceeds his annual income and nearly his

entire net worth, based on a hearing that was not recorded, a contract that was

never entered into evidence, and insufficient evidence of unliquidated damages.

Because of the significant errors on the face of the record and the lack of sufficient

evidence to support the default judgment, the Court should remand this case for a

new trial.

In determining whether a party can prevail in a restricted appeal, Courts

must consider the following factors:

(1) [the party] filed notice of the restricted appeal within six months after the judgment was signed; (2) it was a party to the underlying lawsuit; (3) it did not participate in the hearing that resulted in the judgment complained of and did not timely file any postjudgment motions or requests for findings of fact and conclusions of law; and (4) error is apparent on the face of the record.

Ins. Co. of State of Pa. v. Lejeune, 297 S.W.3d 254, 255 (Tex. 2009); see Tex. R.

App. P. 26.1(c), 30. For purposes of a restricted appeal, the face of the record

consists of all the papers before the trial court at the time judgment was rendered.

8

Cox v. Cox, 298 S.W.3d 726, 730 (Tex. App.—Austin 2009, no pet.). Review by

restricted appeal affords an appellant the same scope of review as an ordinary

appeal, a review of the entire case, with the limitation that error must appear on the

face of the record. Norman Commc’n v. Tex. Eastman Co., 955 S.W.2d 269, 270

(Tex. 1997).

II. MR. HA HAS SATISFIED THE PRELIMINARY REQUIREMENTS FOR A RESTRICTED APPEAL. Mr. Ha has met the initial requirements to prevail on a restricted appeal: Mr.

Ha timely filed the notice of appeal on December 30, 2014, within six months after

the trial court signed its June 30, 2014 final judgment; he was a party to the

underlying suit; and he did not participate in the summary judgment hearing or file

any post-judgment motions or requests for findings of fact and conclusions of law.

III. BECAUSE HUNAN RANCH FAILED TO ENTER MATERIAL EXHIBITS INTO THE RECORD, INCLUDING THE ALLEGED PURCHASE ORDER AND EVIDENCE TO SUPPORT ITS DAMAGES, AND FAILED TO PROCURE A COURT REPORTER’S RECORD AT THE DEFAULT JUDGMENT PROCEEDING, THERE IS ERROR ON THE FACE OF THE RECORD AND THE COURT SHOULD REMAND FOR A NEW TRIAL. Mr. Ha also satisfies the fourth requirement to prevail on a restricted appeal

because there is error on the face of the record. Here, Hunan Ranch not only failed

to enter material exhibits into the record, including the contract and the evidence to

support the calculations for its unliquidated damages, but it also failed to procure a

court reporter’s record at the default judgment proceeding, making it impossible to

9

confirm whether these exhibits were actually considered by the court in entering its

default judgment.

The Texas Supreme Court has consistently held that “if an appellant

exercises due diligence and through no fault of his own is unable to obtain a proper

record of the evidence introduced, this may require a new trial where his right to

have the case reviewed on appeal can be preserved in no other way.” Rogers v.

Rogers, 561 S.W.2d 172, 173−74 (Tex. 1978) (quoting Robinson v. Robinson, 487

S.W.2d 713, 715 (Tex. 1972)). An appellant is not required to “agree with an

adversary upon the facts adduced at the trial or to rely on the unaided memory of

the trial judge who decided the merits of the case” in order to obtain a reporter’s

record of the events at a trial court proceeding. See Rogers, 561 S.W.2d at 173.

In a recent case under similar facts, the Fourth Court of Appeals remanded a

case to the trial court because no reporter’s record was taken. Stone v. Talbert

Operations, LLC, No. 04-14-00008-CV, 2014 WL 7439931 (Tex. App.—San

Antonio, Dec. 31, 2014, no pet.) (mem. op). In Stone, the plaintiff filed a petition

alleging breach of contract, fraud, and conversion. Id. at *1. The defendant did

not file an answer and default judgment was entered against him. Id. The

defendant subsequently filed a restricted appeal. Id. The court held “error [was]

apparent on the face of the record” because “no reporter’s record was taken of the

10

trial court’s evidentiary hearing resulting in the no-answer default judgment.” Id.

at *2.

Here, Appellants diligently requested a reporter’s record of the trial court’s

evidentiary hearing resulting in the no-answer default judgment, and the official

court reporter notified Appellants that she did not make one. As in Stone, there is

error apparent on the face of the record because no reporter’s record was taken of

the default judgment proceedings. Id.; see also Rogers, 561 S.W.2d at 173–74;

Robinson, 487 S.W.2d at 715; Thompson v. Thompson, No. 02-13-00292-CV, 2014

WL 3865951, at *1 (Tex. App.—Fort Worth Aug. 7, 2014, no pet.) (mem. op.).

Though it is true that a court may ordinarily presume that the evidence on

the record is sufficient to support the trial court’s judgment, see Simon v. York

Crane & Rigging Co., Inc., 739 S.W.2d 793, 795 (Tex. 1987), this presumption

does not apply on direct review of a default judgment where no reporter’s record

was made through no fault of the appellant, see Tex. Crushed Stone Co. v. Baker,

576 S.W.2d 894, 896 (Tex. Civ. App.—Tyler 1979, no writ) (“Where the

appealing party . . . was not present and was not represented by counsel when the

testimony was taken, and later discovers that no record was made, the lack of a

record cannot reasonably be waived.”); Bain v. Bain, No. 02-06-00215-CV, 2007

WL 174463, at *3 (Tex. App.—Fort Worth Jan. 25, 2007, no pet.) (mem. op.)

(noting also that Texas Rule of Appellate Procedure 13.1 requires a court reporter

11

to attend and make a full record of the proceedings unless excused by agreement of

the parties).

This presumption should especially not apply here where the evidence on the

record is insufficient to support the trial court’s judgment. As evident from a

review of the record certified by the trial court, Hunan Ranch failed to enter into

the record the very Purchase Order forming the basis of this contract dispute. See

generally CR; CR 17−19. This Purchase Order was purportedly appended to the

Affidavit of John Chen (“Chen’s Affidavit”) as Exhibit A-1, but was never entered

into the record with that affidavit. See CR 17−19. Similarly, the “Sales Reports”

that comprise the sole evidence for Hunan Ranch’s unliquidated damages claim

were never entered into the record, even though they were purportedly attached to

Chen’s Affidavit as Exhibit A-3. Id. Both are material exhibits that should have

been considered by the trial court before entering default judgment.

Instead, Hunan Ranch’s failure to procure a reporter’s record prevents Mr.

Ha from obtaining any information regarding the actual evidence on liability and

damages considered at the hearing, without being forced to rely on his “adversary”

or on the “unaided memory of the trial judge.” Rogers, 561 S.W.2d at 173. As

such, Mr. Ha’s right to a proper appellate review, due to no fault on his part, can be

preserved only by a new trial on both liability and damages. See id.

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IV. THERE IS ERROR ON THE FACE OF THE RECORD BECAUSE THE EVIDENCE TO SUPPORT HUNAN RANCH’S UNLIQUIDATED DAMAGES CLAIM IS DEFECTIVE. The evidence on the face of the record is also insufficient to support the

judgment for unliquidated damages. On a restricted appeal for a default judgment,

“all allegations set forth in the petition are deemed admitted, except the amount of

unliquidated damages.” Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83

(Tex. 1992). Thus, even in a default judgment, the plaintiff must still prove

unliquidated damages with reasonable certainty. Id.

Whether damages are liquidated or unliquidated depends on the language of

the petition. Sherman Acquisition II LP v. Garcia, 229 S.W.3d 802, 809 (Tex.

App—Waco 2007, no pet.). If the damages can be calculated from “factual, as

opposed to conclusory allegations in the petition” and an instrument in writing,

then the damages are liquidated. Id. However, if the damages cannot be calculated

from the facts in the petition then the damages are unliquidated, and the trial court

must hear evidence of those damages. Holt Atherton Indus., Inc., 835 S.W.2d at

83. Here, only unliquidated damages are at issue because Mr. Ha did subsequently

perform under the contract and install the new wok range. Hunan Ranch is

therefore required to prove its alleged damages because the face of the petition

claims only unliquidated damages, and, as Hunan Ranch admits, these “damages

have not yet been calculated.” CR 2.

13

Nonetheless, Hunan Ranch has failed to competently prove any unliquidated

damages, as required, for at least three reasons. First, Hunan Ranch used the

incorrect standard—lost sales—instead of the correct standard—lost profits—for

calculating damages on a breach of contract claim. Second, even had Hunan

Ranch properly alleged that it should have been awarded lost profits, it failed to

show that it was even profitable and that it was entitled to such a claim for

damages. Finally, Hunan Ranch’s sole evidence of its alleged damages is

defective and fails to prove such damages with the reasonable certainty necessary

to support a default judgment.

A. Hunan Ranch used an incorrect measure for damages (lost sales) instead of the correct measure of damages (lost profits) in calculating its unliquidated damages claim.

Hunan Ranch failed to use the correct measure of damages in calculating its

unliquidated damages. The measure of actual damages for a breach of contract is

the loss of the benefit of the bargain, which should put the plaintiff in the same

economic position he would have been in had the contract been performed. See

Am. Nat’l Petroleum Co. v. Transcon. Gas Pipe Line Corp., 798 S.W.2d 274, 278

(Tex. 1990). As such, Texas courts have consistently made clear that lost profits

and not lost revenue is the correct measure of damages in a breach of contract

case. Holt Atherton Indus., Inc., 835 S.W.2d at 83 n.1, 84 (holding that the

“correct measure of damages” is the income remaining after deducting expenses

14

and that “lost income is not the correct measure of damages”); State v. Harrell

Ranch, Ltd., 268 S.W.3d 247, 257 (Tex. App.—Austin 2008, no pet. ) (holding that

“[l]ost profits must be based not on gross revenues, but on net profits”). Lost

profits are calculated based on “the difference between a business’s total receipts

and all the expenses incurred in carrying on the business.” Harrell Ranch, Ltd.,

268 S.W.3d at 257.

Here, it is undisputed that Hunan Ranch improperly calculated damages

based on sales income, instead of lost profits. As Mr. Chen states in his affidavit,

Hunan Ranch’s damages are based on the “average sales income per month prior

to the removal of the old wok [range, which] was $137,075.92, [or] $4,469.86 per

day.” CR at 19 (emphasis added). This hypothetical sales income for the month of

January was apparently calculated based on the average total sales for the months

of October, November, and December in 2013. As discussed in Part III, Hunan

Ranch failed to provide sufficient evidence to prove even these sales.

Hunan Ranch also offered no evidence of expenses, if any, that were

deducted to arrive at a net profit calculation. Id. In order for the evidence of lost

profits to be sufficient “[t]here must be some showing that expenses were deducted

in arriving at the amount of net profits lost.” Harrell Ranch, Ltd., 268 S.W.3d at

257. For example, the Fourteenth Court of Appeals has held that a plaintiff’s

evidence of lost profit damages is insufficient if it does not provide evidence that it

15

deducted expenses, even if the plaintiff “argues that expenses were, in fact, taken

into account in calculating lost profits.” Zeno Digital Solutions, LLC v. K Griff

Investigations, No. 14-09-00473-CV, 2010 WL 3547708, at * 3 (Tex. App.—

Houston [14th Dist.] Sept. 14, 2010, no pet.).

Here, Chen’s Affidavit fails to account for important expenses incurred in

running a restaurant such as employee wages and benefits, food and beverage

costs, rent or mortgage, insurance expenses, property tax, utilities, waste removal

costs, equipment repairs, marketing and promotional expenses, and other operating

expenses. Because such expenses would have been incurred in the ordinary course

of business—whether or not there were an alleged breach of contract—Hunan

Ranch would receive a windfall if Appellants had to compensate it for expenses

unrelated to the alleged breach of contract.

Because lost profits and not lost sales are the proper measure of damages on

a breach of contract claim, Appellants respectfully request that the Court remand

the case for a new trial at least with respect to damages. See, e.g., Holt Atherton,

835 S.W.2d at 83 (remanding the case because evidence of damages was

insufficient).

B. Hunan Ranch failed to prove that it was even profitable.

Even had Hunan Ranch properly shown that it should have been awarded

lost profits, it still must show that it was profitable and therefore entitled to such a

16

claim for damages. In general, businesses lacking a history of profitability or

which have operated at a loss may not recover lost profits under Texas law. See

Golden Bear Distrib. Sys. of Tex., Inc. v. Chase Revel, Inc., 708 F.2d 944, 951 (5th

Cir. 1983) (reviewing Texas state law and stating that “Texas law permits the

recovery of the expected profits of a business only if ‘there was some data and

history of profits from an established business’”) (quoting Atomic Fuel Extraction

Corp. v. Slick’s Estate, 386 S.W.2d 180, 188 (Tex. App.—San Antonio 1964, writ

ref’d n.r.e.)). Although more recent cases have held that “the absence of a history

of profits does not, by itself, preclude a new business from recovering lost future

profits,” a business must still, at least, provide “other data . . . to show anticipated

profits to a reasonable certainty.” See Orchid Software, Inc. v. Prentice-Hall, Inc.,

804 S.W.2d 208, 210−211 (Tex. App.—Austin 1991, writ denied). Because

Hunan Ranch has provided no history of profitability or any “other data” to show

its profitability with reasonable certainty, it is not entitled to an award of lost

profits.

C. Hunan Ranch failed to prove any damages by competent evidence and with reasonable certainty.

It has long been the rule in Texas that in order to recover lost profits, the

amount of the loss “must be shown by competent evidence with reasonable

certainty.” Sw. Battery Corp. v. Owen, 115 S.W.2d 1097, 1098 (Tex. 1938).

When the plaintiff in a default judgment fails to prove damages with reasonable

17

certainty, the proper remedy on appeal is to remand the case to the trial court for a

new trial. Holt Atherton Indus., 835 S.W.2d at 86. Without the objective data and

explanation of how the lost profits were calculated, a court “does not have any

basis for determining whether the damages were established with reasonable

certainty or were based on pure speculation.” Id. at 84. A court “cannot uphold an

award of damages based upon speculation.” Frank B. Hall & Co. v. Beach, Inc.,

733 S.W.2d 251, 259 (Tex. App.—Corpus Christi 1987, writ ref’d n.r.e.).

Here, Mr. Chen’s unsubstantiated and conclusory affidavit is not competent

evidence that can establish Hunan Ranch’s damages with reasonable certainty.

Even assuming that Chen’s Affidavit was intended to adduce lost profits as

opposed to average sales per month, Hunan Ranch still failed to prove any

damages with reasonable certainty because Chen’s Affidavit (1) was not based on

objective information and (2) provides no evidence of how Hunan Ranch’s lost

profits were actually calculated.

1. Hunan Ranch’s damages claim was not based on objective facts, figures, or data.

Hunan Ranch’s claim for damages is not based on competent evidence but

conclusory statements unsupported by objective facts, figures, or data. Courts

have long upheld the necessity of actual evidence to support an award of

unliquidated damages in a default judgment. See, e.g., Milestone Operating, Inc. v.

ExxonMobil Corp., 346 S.W.3d 101, 109−11 (Tex. App.—Houston [14th Dist.]

18

2011, pet. granted), rev’d on other grounds, 388 S.W.3d 307 (Tex. 2012) (finding

that conclusory assertions in an affidavit were insufficient to support awarded

damages in a default judgment); see also Lefton v.Griffith, 136 S.W.3d 271, 277

(Tex. App.—San Antonio 2004, no pet.) (reversing damage award because

affidavit testimony was conclusory). Although “[r]ecovery for lost profits does not

require that the loss be susceptible of exact calculation, . . . [a]s a minimum, [any]

opinions or estimates of lost profits must be based on objective facts, figures, or

data.” Holt Atherton Indus., 835 S.W.2d at 84. For example. in ERI Consulting

Engineers, Inc. v. Swinnea, 318 S.W.3d 867, 876−77 (Tex. 2010), the Supreme

Court of Texas held that evidence that consisted of “dozens of detailed invoices”

and testimony from the plaintiff’s in-house accountant as to the plaintiff’s net

profit margin was a “legally adequate” method for proving lost profits.

In contrast, here, Chen’s Affidavit makes a conclusory assertion that

“Plaintiff’s average sales income per month prior to the removal for the old wok

was $137,073.92, which is $4,439.86 per day. . . . Due to the delay in the delivery

of the new wok, Plaintiff suffered lost sales in the amount of $37,993.81.” CR 19.

These statements are unsubstantiated because, as discussed in Part III, the Sales

Reports that form the basis for the calculations are nowhere in the record.

Moreover, unlike the plaintiff in ERI Consulting Engineers, who offered detailed

invoices and testimony from an accountant, Hunan Ranch offers neither objective

19

documents nor factual testimony from an objective third-party. 318 S.W.3d at

876−77.

Any objective facts, figures, or data supporting an unliquidated damages

claim must also come from a “corresponding period of time not too remote” or

from “the business during the time for which recovery is sought.” Tex. Instruments

v. Teletron Energy Mgmt., Inc., 877 S.W.2d 276, 279 (Tex. 1994) (quoting Sw.

Battery Corp. v. Owen, 115 S.W.2d at 1098−99). “Normally, when conducting a

lost profit analysis you look to past profits and adjust these numbers based on the

surrounding circumstances to determine what the lost profit for a certain time

period should be.” M & A Tech., Inc. v. iValue Grp., Inc., 295 S.W.3d 356, 366

(Tex. App.—El Paso 2009, pet. denied) (emphasis added). Here, Chen’s Affidavit

does not provide evidence that the months of October, November, and December

2013 (the months used for calculating the “average sales income”) should be

considered “corresponding periods” to January 2014 (the month of the alleged lost

sales). CR 19. In particular, Hunan Ranch fails to adduce whether sales in these

three months, which overlap with the holiday season and are usually the busiest

and most profitable months for sales in the restaurant industry, are corresponding

or representative of the sales typically made by Hunan Ranch in January, a post-

holiday month that is usually one of the least profitable months in the restaurant

20

industry.6 At a minimum, Hunan Ranch failed to adjust its average sales to

account for the seasonality of sales in the restaurant industry.

Chen’s Affidavit also fails to provide any evidence of the typical profit

margin for the restaurant. CR 17−19. Without any objective information to

substantiate his testimony, Chen’s statements regarding Hunan Ranch’s purported

sales income per day are merely conclusory. See, e.g., Milestone Operating, Inc.,

346 S.W.3d at 109−11 (finding conclusory assertions in an affidavit were

insufficient to support damages awarded in a default judgment). Finally, Chen’s

Affidavit contains no objective data to corroborate the claim that it is owed

“approximately $670.00 in voids and credits.” CR at 19. The Affidavit does not

explain what any such “voids and credits” are or how they were calculated. Id.

2. Chen’s Affidavit does not indicate how damages were determined.

Even if Hunan Ranch based its estimate of lost profits on objective data, any

testimony offered to prove the lost profits must also indicate how the lost profits

6 According to the U.S. Census Bureau, average restaurant sales in 2011 to 2014 were typically lowest in January and February and highest in the months of October, November, and December. See Ex. 4, U.S. Census Bureau, Time Series/Trend Charts: Food Services and Drinking Places U.S. Total Jan-2013 to Dec-2014 (available at http://tinyurl.com/nmpky9z). Appellants request that the Court take judicial notice of these statistics from the U.S. Census Bureau because they are “capable of accurate and ready determination” by resort to a source “whose accuracy cannot reasonably be questioned.” See Tex. R. Evid. 201; see also MCI Sales & Serv., Inc. v. Hinton, 329 S.W.3d 475, 485 n. 7 (Tex. 2010) (taking judicial notice of a seatbelt usage study commissioned by the U.S. Department of Transportation); Aetna Cas. & Sur. Co. v. Hill, No. 05- 91-01290-CV, 1992 WL 172384, at *2 (Tex. App.—Dallas July 21, 1992, no writ) (mem. op., not designated for publication) (holding that judicial notice of a life table published by National Center for Health Statistics was proper).

21

were determined. For example, in Holt Atherton Industries, 835 S.W.2d at 84, the

court held that a plaintiff’s testimony of the total amount of lost profits without

explanation was “legally insufficient.”

In Texaco, Inc. v. Phan, 137 S.W.3d 763, 772 (Tex. App.—Houston [14th

Dist.] 2004, no pet.), the Fourteenth Court of Appeals held that an affidavit, which

stated that lost profits were calculated by using a profit margin from the previous

17-months, was insufficient to prove lost profit damages. The court held that the

plaintiffs failed to meet their burden to prove lost profits by submitting the

affidavit because the plaintiffs failed to define what “they meant by profit margin,”

and they did not “address expenses, whether to say that expenses were static or that

they rose and fell according to the volume of sales.” Id.

Nonetheless, the plaintiffs in Texaco at least presented some affidavit

testimony explaining that their lost profit damages were calculated based on their

profit margin from the previous 17-month period. Texaco, 137 S.W.3d at 771. In

contrast, Hunan Ranch has failed to even indicate, at a minimum, the method it

used to calculate damages. Chen’s Affidavit states simply that its average sales

income was “$137,075.92 [per month], which is $4,469.86 per day.” CR at 19.

From this affidavit, it is unclear whether expenses were deducted from total sales

or whether a percentage was multiplied to the expenses to calculate the estimated

lost profits. Given that the Texaco plaintiffs offered substantially more evidence

22

than Hunan Ranch, and yet that evidence was still held insufficient, it is clear that

Hunan Ranch’s evidence on damages is inadequate. Because Hunan Ranch failed

to prove damages with reasonable certainty, this Court should, at a minimum,

remand the case to the trial court for a new trial on damages. See Holt Atherton

Indus., 835 S.W.2d at 86 (remanding the case because evidence of damages was

insufficient).

V. BECAUSE HUNAN RANCH FAILED TO PROVE A CAUSAL NEXUS BETWEEN THE ALLEGED BREACH OF CONTRACT AND THE CLAIMED DAMAGES, ERROR IS APPARENT ON THE FACE OF THE RECORD AND THE COURT SHOULD REMAND FOR A NEW TRIAL. Hunan Ranch failed to carry its burden of proving a causal nexus between

Appellants’ conduct and its claimed damages of lost sales plus $670.00 in

purported “voids and credits.” A plaintiff must prove two causal nexuses—

(1) between the defendant’s conduct and the event sued upon and (2) between the

event sued upon and the plaintiff’s injury. Morgan v. Compugraphic Corp., 675

S.W.2d 729, 731 (Tex. 1984); see also City of Beaumont v. Excavators &

Constructors, Inc., 870 S.W.2d 123, 131−32 (Tex. App.—Beaumont 1993, writ

denied) (requiring proof of causal nexus in a breach of contract action). Although

“a default judgment admits that the defendant’s conduct caused the event upon

which the plaintiff’s suit is based” and thereby satisfies the first causal nexus, a

plaintiff in a default judgment case must still prove the second causal nexus by

“competent evidence.” Morgan, 675 S.W.2d at 732. “This is true because the

23

plaintiff is entitled to recover damages only for those injuries caused by the event

made the basis of suit; that the defendant has defaulted does not give the plaintiff

the right to recover for damages which did not arise from his cause of action.” Id.

In particular, when a plaintiff alleges that a defendant’s conduct resulted in a

delay and damages, the plaintiff must prove that the entire time period of the delay

resulted from the defendant’s conduct. See Holt Atherton Indus., 835 S.W.2d at 86

(holding the plaintiffs failed to prove they were entitled to recover lost profits for

the entire thirteen month period); see also City of Beaumont, 870 S.W.2d at 132

(quoting Wunderlich Contracting Co. v. United States, 351 F.2d 956, 969 (Ct. Cl.

1965) (holding that “[b]road generalities and inferences to the effect that

defendants must have caused some delay and damages because the contract took

. . . longer to complete than anticipated are not sufficient”).

For example, in Beaumont, the court held the plaintiffs failed to prove a

causal nexus between “the delays and hindrances (and the events connected

therewith) that were sued upon” and “the plaintiff’s money damages.” 870 S.W.2d

at 131. The court held that some of the plaintiff’s damages were caused—not by

the defendant—but by the plaintiff’s own actions. Id. at 127. For example, the

court pointed out that the plaintiff caused some of its own damages by “fail[ing] to

mitigate its costs and damages.” Id. Additionally, some of the claimed damages

were the result of “certain alleged inefficiencies,” caused by the plaintiff hiring its

24

own crew to complete work that had previously been subcontracted out. Id. at

126−27.

As in Beaumont, there is no causal nexus between Appellants’ conduct and

Hunan Ranch’s claimed damages of 8.5 days of lost sales. Hunan Ranch states

that under the purported terms of the Purchase Order, Appellants “agreed to

manufacture and install a new wok [range] . . . to replace the existing wok

[range].”7 CR at 17. Any such agreement contemplated only that Appellants

would manufacture and install a new wok range—it was unforesseable that the

contract would require appellants to reinstall an existing wok range inefficiently

removed by Hunan Ranch and its third-party contractors. CR at 17. Here, it was

clear that the old wok range was not removed because of any defects or problems

functioning (since this same wok range was subsequently reinstalled). CR at 18.

Rather, plaintiffs asked third-party contractors who were renovating the restaurant

to remove the old wok range, and these third-party contractors never reinstalled the

old wok range, partially causing the subsequent damages to plaintiff. See id.

Despite the fact that Hunan Ranch possessed a functioning old wok range,8

and despite the fact that Hunan Ranch had every opportunity to mitigate damages

7 The language of the Purchase Order cannot be verified because the Purchase Order was never submitted into evidence. See supra Part III; CR at 17−19. 8 Notably, if a new trial is granted, Appellants intend to show that Chen’s Affidavit falsely claims that on “January 16, 2014, [Appellants] delivered and installed the old wok [range].” CR 18 (emphasis added). Appellants, in fact, never “delivered” the old wok range because the old

25

by hiring a local contractor to reinstall this old wok range, Hunan Ranch chose to

wait 8.5 days—all the while losing purported sales of $4,469.86 per day—for Mr.

Ha to drive from Dallas to Austin and reinstall the old wok range that had been

inefficiently removed. See CR at 19.

Like the plaintiff in Beaumont, Hunan Ranch has only proved a causal nexus

between its own conduct and its claimed damages. 870 S.W.2d at 127, 132. Just

as the plaintiff in Beaumont caused some of its own damages through

inefficiencies and its failure to mitigate, Hunan Ranch similarly damaged itself

through its inefficient and premature removal of the still-functioning old wok range

and its failure to mitigate damages. See id. at 126−27. Hunan Ranch has therefore

not proved the required causal nexus between Appellants’ conduct and its claimed

damages.

Additionally, Hunan Ranch has not proved any causal nexus between its

claim for $670.00 in “voids and credits” and Appellants’ alleged breach of

contract. CR at 19. Chen’s Affidavit states these “voids and credits” were caused

by the “re-installation of the old wok [range which] led to a gas leak.” Id. Besides

this bare assertion, the Affidavit offers no explanation as to what such “voids and

credits” are or how they were connected to any actions by Appellants. Id. If

Hunan Ranch believed Appellants acted unreasonably and caused a gas leak that

wok range was uninstalled at the restaurant and remained in Hunan Ranch’s possession at the restaurant until Mr. Ha reinstalled it.

26

led to any alleged “voids and credits,” then it should have brought a negligence

claim and not just a breach of contract claim; it cannot seek to recover damages for

such “voids and credits” under a breach of contract claim. See El Paso Mktg., LP

v. Wolf Hollow I, LP, 383 S.W.3d 138, 142−43 (Tex. 2012) (holding that “in

determining whether an action sounds in tort or contract,” a court will look to

whether the “gist” of the claim is that defendant “failed to act as a reasonable

[person] should have, which is the liability standard for negligence,” or that

defendant violated a duty imposed by contract). As Hunan Ranch has failed to

prove any causal nexus between the terms of the contract and the unliquidated

damages it now alleges, the Court should remand for a new trial.

VI. BECAUSE HUNAN RANCH FAILED TO PROVE ITS UNLIQUIDATED DAMAGES, IT CANNOT RECOVER ATTORNEY’S FEES. Hunan Ranch is not entitled to an award of attorneys’ fees because it has

failed to prove unliquidated damages in its breach of contract claim.9 Chapter 38

of the Texas Civil Practices and Remedies Code allows for recovery of attorney’s

fees in breach of contract cases: “A person may recover reasonable attorney’s fees

from an individual or corporation, in addition to the amount of a valid claim and

costs, if the claim is for . . . an oral or written contract.” Tex. Civ. Prac. & Rem.

Code Ann. § 38.001 (West 2013). However, to recover attorneys’ fees under this

9 See supra Parts III and IV.

27

statute, a party must do two things: (1) prevail on the breach of contract claim, and

(2) recover damages. Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997).

If a court determines that a party has offered insufficient evidence to support

damages, then an award of attorneys’ fees is not proper. Exel Transp. Servs., Inc.

v. Aim High Logistics Servs., LLC, 323 S.W.3d 224, 234−35 (Tex. App.—Dallas

2010, pet. denied) (holding appellee could not recover attorneys’ fees when the

evidence of lost profit damages was insufficient to support the trial court’s damage

award). Because Hunan Ranch has offered legally and factually incompetent

evidence to support its claim for unliquidated damages, this Court should reverse

the trial court’s grant of $6,693.75 in attorneys’ fees and Appellee’s request for

prospective attorneys’ fees on appeal. See CR 9−10.

CONCLUSION AND PRAYER

WHEREFORE, PREMISES CONSIDERED, Appellants pray that this Court

reverse the trial court’s default judgment and remand this case for a new trial

consistent with the Court’s action. Appellants also request such other and further

relief to which they may be entitled.

28

Respectfully submitted,

VINSON & ELKINS LLP

By: /s/ Frank C. Brame Frank C. Brame State Bar No. 24031874 Trammell Crow Center 2001 Ross Avenue, Suite 3700 Dallas, Texas 75201-2975 Telephone: (214) 220-7817 Fax: (214) 999-7818 fbrame@velaw.com

Janice L. Ta State Bar No. 24075138 Michelle Arishita State Bar No. 24092048 2801 Via Fortuna, Suite 100 Austin, Texas 78746-7568 Telephone: (512) 542-8512 Fax: (512) 236-8239 jta@velaw.com marishita@velaw.com

ATTORNEYS FOR DEFENDANTS AND APPELLANTS DUONG NHU HA AND D&H RESTAURANT EQUIPMENT

29

CERTIFICATE OF COMPLIANCE I hereby certify that the foregoing document, excluding the contents excluded by Tex. R. App. P. 9.4(i)(1), contains approximately 6,335 words, in compliance with Tex. R. App. P. 9.4(i)(2)(B).

/s/ Janice L. Ta Janice L. Ta

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of this document was served via electronic service on this, the 27th day of February, 2015, on the following counsel:

Doran D. Peters Teresa C. Baker HAJJAR PETERS, LLP 3144 Bee Caves Road Austin, Texas 78746 Telephone: (512) 637-4956 Fax: (512) 637-4958 dpeters@legalstrategy.com tbaker@legalstrategy.com

/s/ Janice L. Ta Janice L. Ta

APPENDIX

EXHIBIT 1

3/19/2014 10:43:19 AM

Amalie Rodriguez-Mendoza

District Clerk Travis County

Cause No. D-1-GN-14-000826 D-1-GN-14-000826

HUNAN RANCH CORPORATION IN THE DISTRICT COURT Plaintiffs 201ST

v. JUDICIAL DISTRICT

HA DUONG NHU and D&H RESTAURANT EQUIPMENT Defendants TRAVIS COUNTY, TEXAS

PLAINTIFF'S ORIGINAL PETITION

TO THE HONORABLE JUDGE OF THIS COURT:

Plaintiff Hunan Ranch Corporation files this Original Petition against Ha Duong Nhu and

D&H Restaurant Equipment (Defendants), and for cause of action would show the Court:

I - DISCOVERY CONTROL PLAN

1.01 Plaintiff intends for discovery to be conducted under TEXAS RULE OF CIVIL PROCEDURE

190.3 (Level II).

II - PARTIES

2.01 Plaintiff Hunan Ranch Corporation is a Texas corporation doing business in Travis

County, Texas.

2.02 Defendant Ha Duong Nhu (Nhu) is an individual that can be served with process at

his residence located at 2313 Crystal Creek Lane, Garland, Texas 75040.

2.03 D&H Restaurant Equipment (D&H) can be served with process by serving its owner

and representative, Ha Duong Nhu, at its business address located at 2313 Crystal Creek Lane,

Garland, Texas 75040.

2.04 r nd D&H will collectively be referred to herein as Defendants.

)47

PLAINTIFF'S ORIGINAL PETITION PAGE 1 OF 3

III - FACTS

3.01 Plaintiff and Defendants entered into an agreement whereby Defendants would

manufacture and install a commercial wok at Plaintiff's restaurant. This was to replace the existing

wok. All parties knew that the wok was critical to the operation of Plaintiff's restaurant. The parties

agreed that the wok would be completed and installed no later than December 26, 2013.

3.02 Defendants failed to timely complete the manufacture and installation of the wok.

IV - CAUSES OF ACTION

4.01 Breach of Contract: Plaintiff and Defendants entered into an agreement.

Defendants' failure to comply with the material terms of that agreement constitute a breach of

contract. Defendants' breach of contact directly and proximately caused damages to Plaintiff.

4.02 Although Plaintiffs damages have not yet been calculated, Plaintiff anticipates that at

trial it will seek monetary relief of $100,000 or less, but Plaintiff reserves the right to amend this

statement as more information becomes available. In no event does Plaintiff anticipate it will seek

monetary relief of more than $1,000,000.

V - CONDITIONS PRECEDENT

5.01 All conditions precedent to maintaining this suit have been performed or have

occurred.

VI - REQUEST FOR DISCLOSURE

6.01 Plaintiff requests that Defendants disclose, within 50 days of the service of this

request, the information or material described in TEXAS RULE OF CIVIL PROCEDURE 194.2.

VII - ATTORNEY FEES

.444.

7.01 ff is entitled to recover reasonable attorney's fees against Defendants pursuant

PLAINTIFF'S ORIGINAL PETITION PAGE 2 OF 3

3

to the TEX. CIV. PRAC. & REM. CODE §38.001 et seq.

VIII - PRAYER

WHEREFORE, PREMISES CONSIDERED, Plaintiff asks that Defendants be cited to appear

and answer, and that Plaintiffs have judgment for:

a. Damages within the minimal jurisdictional limits of this Court;

b. Costs of court and attorney fees;

c. Pre-judgment and post-judgment interest as allowed by law;

d. Such other and further relief in law and in equity to which Plaintiffs may show itself to be justly entitled.

Respectfully Submitted,

HAJJAR SUTHERLAND & PETERS, LLP 1205 Rio Grande Street Austin, Texas 78701 Telephone: (512) 637-4956 Facsimile: (512) 637-4958

By: /s/ Doran D. Peters Doran D. Peters dpetersghspwlegal.com State Bar No. 24027615

ATTORNEY FOR PLAINTIFF

PLAINTIFF'S ORIGINAL PETITION PAGE 3 OF 3

CIVIL CASE INFORMATION SHEET MAY ENTER CAUSE '# i COURT # IF ALREADY ASSIGNED E.G., FAMILY MOTION, AMENDED PETITION)

CAUSE NUMBER (FOR CLERK USE ONLY): COURT (FOR CLERK USE ONLY):

STYLED Hunan Ranch Corporation v Ha Dong Nhu and D&H Restaurant Equipment A civil case information sheet must be completed and submitted when an original petition or application is filed to initiate a new civil, family law, probate, or mental health case or when a post-judgment petition for modification or motion for enforcement is filed in a family law case. The information should be the best available at the time of filing. This sheet, approved by the Texas Judicial Council, is intended to collect information that will be used for statistical purposes only. It neither replaces nor supplements the filings or service of pleading or other documents as required by law or rule. The sheet does not constitute a discovery request, response, or supplementation, and it is not admissible at trial. 1.Contact information for person completing case information sheet: Names of parties in case:

Plaintiff(s)/Petitioner(s):

le —Person or entity completing sheet is:

ttorneyfor Plaintiff/Petitioner Name: Email: 1=IPro / Se Plaintiff Petitioner Hunan Ranch Corporation Title IV-D Agency Doran D Peters dpeterq@hqplegal corn 1=10ther:

Address: Telephone:

Defendant(s)/Respondent(s):

1205 Rio Grande Street 512-637-4956 Additional Parties in Child Support Case:

Ha Duong Nhu and

City/State/Zip: Fax: Custodial Parent:

D&H Restaurant Equipment

Austin, Texas 78701 512-637-4958 Non-Custodial Parent:

State Bar No:

Attach additional page as necessary to list all parties]

24027615 Presumed Father:

on behalf of Doran D.Peters 2. Indicate case type, or identify the most important issue in the case (select only 1):

CK CASE TYPE EXCEPT OTHER) FOR CLERK TO SELECT SUIT TYPE; SE SEC. 3 ROTE BELOW Civil Family Law ost-judgment Actions

ontract Injury or Damage Real Prope arriage Relationship (non-Title IV-D)

Debt/Contract nAssault/Battery minent Domain/ lJAnnulment IFnforcement EC onsumer/DTPA DConstruction Condemnation D Declare Marriage Void DVIodification—Custody Ebebt/Contract Ebefamation ElPartition Divorce M odification—Other

a raud/Misrepresentation MaJzractice ElQuiet Title ElWith Children tro ElOther Debt/Contract: ilAccounting ElTrespass to Try Title EINo Children IFnforcement/Modification ElLegal D Other Property: a atemity

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Related to Criminal Matters O Franchise

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DEnforce Foreign

karent-Child Relationship surance Motor Vehicle Accident Expunction DAdoption/Adoption with nndlord/Tenant ElPremises a udgment Nisi Judgment Termination Non-Competition Product Liability Ek on-Disclosure ElHabeas Corpus OChild Protection

O Partnership a sbestos/Silica D Seizure/Forfeiture Ekame Change .._.

11Child Support

a ther Contract: ElOther Product Liability 0 Writ of Habeas Corpus— DProtective Order IjCustocly or Vita List Product: Pre-indictment DRemoval of Disabilities .._.

11Gestationul Parenting OPTION CK OTHER & ENTER 3-LETTER DOther: of Minority ..._.

ilGrandpareat Accesn s

SUIT TYPE FOR CLERK TO USE WHEN DOther Injury or Damage: D other: LIParentagetPah"" DOCKETING lUITemirnation s of Parental

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..... Righ t discrimination I, VELNift„, inistra 1 F1 Wryer scipme ther Parent-Child:

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OPTION C; SECTION 3 PROCEDURES/REMEDIES IN BOLD MAY BE USED AS CASE OR SUIT TYPES. YOU MAY SPECIFY THAT ONE OF THESE PROCEDURES/REMEDIES BE USED AS A SUIT TYPE BY CHECKING IT AND LEAVING THE CASE TYPE IN SECTION 2 BLANK. SELECTING A CASE TYPE IN SECTION 2 OVERRIDES ANY SELECTION IN SECTION 3. 4

CITATION

THE STATE OF TEXAS CAUSE NO. D-1-GN-14-000826

HUNAN RANCH CORPORATION tiff

vs. k°14.3 p‘stla

HA DUONG NHU AND D&H RESTAURANT EQUIPMENT .

0 1,tle 141

*.06 40000

000

TO: HA DUONG NHU 2313 CRYSTAL CREEK LANE GARLAND, TEXAS 75040 Mai n

Defendant, in the above styled and numbered cause:

YOU HAVE BEEN SUED. You may employ an attorney. If you or your attorney do not file a written answer with the clerk who issued this citation by 10:00 A.M. on the Monday next following the expiration of twenty days after you were served this citation and petition, a default judgment may be taken against you.

Attached is a copy of the ORIGINAL PETITION of the PLAINTIFF in the above styled and numbered cause, which was filed on MARCH 19, 2014 in the 201ST JUDICIAL DISTRICT COURT of Travis County, Austin, Texas.

ISSUED AND GIVEN UNDER MY HAND AND SEAL of said Court at office, March 19,_ 2014.,

REQUESTED BY: DORAN DONALD PETERS HAJJAR SUTHERLAND PETERS & WASHMON LLP 1205 RIO GRANDE STREET IA RODRIGUEZ-MENDOZ AUSTIN, TX 78701 Travis County District Clerk BUSINESS PHONE:(512)637-4956 FAX:(512)637-4958 Travis County Courthouse 1000 Guadalupe, P.O. Box 679003 (78767) Austin, TX 78701

PREPARED BY: DIANA PARSONS

-- RETURN --

Came to hand on the day of at o'clock M., and executed at within the County of on the day of , at o'clock M., by delivering to the within named , each in person, a true copy of this citation together with the LAWYER REFERAL SERVICE NOTICE accompanying pleading, having first attached such copy of such citation to such copy of pleading and endorsed on such copy of citation the date of delivery.

Service Fee: $ .„.0110000044iikff /ConstOle / Authorize rson Sworn to and subscribed before me this the By:

-° s

day of t17 Name of Server

AUSTIN PROCESS, LLC 809 NUECES County, Texas Notary Public, THE STATE OF TEXAS AUSTIN, TX 78701

D-1-GN-14-000826 SERVICE FEE NOT PAID P01 - 000018654

EPOriginal ETService Copy

AFFIDAVIT OF SERVICE

State of Texas County of Travis 201st Judicial District Court

Case Number: D-1-GN-14-000826

Plaintiff: Hunan Ranch Corporation vs. Defendant: Ha Duong Nhu and D&H Restaurant Equipment

For: Najjar Sutherland Peters & Washmon, LLP 3144 Bee Cave Road Austin, TX 78746

Received by Austin Process LLC on the 19th day of March, 2014 at 12:58 pm to be served on Ha Duong Nhu, 2313 Crystal Creek Lane, Garland, TX 75040.

I, Emmanuel F. Morales, being duly sworn, depose and say that on the 29th day of March, 2014 at 4:20 pm, I:

INDIVIDUALLY/PERSONALLY delivered a true and correct copy of the Citation and Plaintiffs Original Petition with the date of service endorsed thereon by me, to: Ha Duong Nhu at the address of: 14900 Avery Ranch Blvd, C-300, Austin, TX 78717, as an authorized agent of Austin Process, LLC, and informed said person of the contents therein, in compliance with state statutes.

certify that I am over the age of 18, of sound mind, have no interest in the above action, and am a Certified Process Server, in good standing, in the judicial circuit in which the process was delivered. The facts stated in this affadavit are within my personal knowledge and are true and correct.

Subscribed and Sworn to before me on the 31st day of Emmanuel F. Morales March, 14 by the affi o is personally known to SCH-10708, Exp, 12/31/16 Clerk Travis County,

Austin Process LLC

is a true and

15

809 Nueces

N & WitcPE.518L ppears of record in my Austin, TX 78701 office. Witness my hand and seal of office (512) 480-8071

.1.417f

Our Job Serial Number: MST-2014000964 ATE Ref: Hunan Ranch Corporation VEW-001ThilitilAug. 09, 2018

By Deputy: Copyright ®1992-2011 Database Services, Inc. - Process Servers Toolbox V6.4t

CITATION

THE STATE OF TEXAS CAUSE NO. D-1-GN-14-000826

HUNAN RANCH CORPORATION I p

vs. eDistircALC•ow.iff HA DUONG NHU AND D&H RESTAURANT EQUIPMENT i;;CeeftS O C•01.0,t4

Oedit\ okltsvis

TO: D&H RESTAURANT EQUIPMENT BY SERVING ITS OWNER AND REPRESTATIVE HA DUONG NHU 2313 CRYSTAL CREEK LANE WI'Sk

GARLAND, TEXAS 75040

Defendant, in the above styled and numbered cause:

YOU HAVE BEEN SUED. You may employ an attorney. If you or your attorney do not file a written answer with the clerk who issued this citation by 10:00 A.M. on the Monday next following the expiration of twenty days after you were served this citation and petition, a default judgment may be taken against you. Attached is a copy of the ORIGINAL PETITION of the PLAINTIFF in the above styled and numbered cause, which was filed on MARCH 19, 2014 in the 201ST JUDICIAL DISTRICT COURT of Travis County, Austin, Texas.

ISSUED AND GIVEN UNDER MY HAND AND SEAL of said Court at office, March 19. 2014.,

REQUESTED BY: DORAN DONALD PETERS HAJJAR SUTHERLAND PETERS & WASHMON LLP IA RODRIGUEZ-MENDOZ

zap

1205 RIO GRANDE STREET AUSTIN, TX 78701 Travis County District Clerk BUSINESS PHONE:(512)637-4956 FAX:(512)637-4958 Travis County Courthouse 1000 Guadalupe, P.O. Box 679003 (78767) Austin, TX 78701

PREPARED BY: DIANA PARSONS

-- RETURN --

day of at o'clock M., and Came to hand on the executed at within the County of on the day of , at o'clock M., , each

by delivering to the within named in person, a true copy of this citation together with the LAWYER REFERAL SERVICE NOTICE accompanying pleading, having first attached such copy of such citation to such copyof pleading and endorsed on such copy of citation the date of delivery.

Service Fee: $ stable / Authorized Person #C1""54S

Sworn to and subscribed before me this the By:

AUSTIN PROCESS, LIG

day of 809 NUECES Printed NanAlifirite,ft)(r 78701

County, Texas

Notary Public, THE STATE OF TEXAS

SERVICE FEE NOT PAID P01 - 000018655 D-1-GN-14-000826 0).4- FORtl- ®Service Copy 4,

- ...... .).R i ., ....z .i._,. .11/4.. ..,

AFFIDAVIT OF SERVICE

State of Texas County of Travis 201st Judicial District Court

Case Number: D-1-GN-14-000826

Plaintiff: Hunan Ranch Corporation vs. Defendant: Ha Duong Nhu and D&H Restaurant Equipment

For: Najjar Sutherland Peters & Washmon, LLP 3144 Bee Cave Road Austin, TX 78746

Received by Austin Process LLC on the 19th day of March, 2014 at 12:58 pm to be served on D&H Restaurant Equipment by serving its Owner and Representative, Ha Duong Nhu, 2313 Crystal Creek Lanai, Garland, TX 75040.

I, Emmanuel F. Morales, being duly sworn, depose and say that on the 29th day of March, 2014 at 4:20 pm, I:

delivered to REGISTERED AGENT by delivering a true copy of the Citation and Plaintiffs Origipal Petition with the date of service endorsed thereon by me, to: Ha Duong Nhu as Owner at the address of: 14900 Avery Ranch Blvd, C-300, Austin, TX 78717 on behalf of D&H Restaurant Equipment, and informed said person of the contents therein, in compliance with state statutes.

I certify that I am over the age of 18, of sound mind, have no interest in the above action, and am a Certified Process Server, in good standing, in the judicial circuit in which the process was delivered. The facts stated in this affadavit are within my personal knowledge and are true and correct.

Subscribed and Sworn to before me on the 31st day of Emmanuel F. Morales March, 201$. the affia • is personally known to SCH-10708, Exp, 12/31/16

Clerk, Travis Courity, Austin Process LLC at thisis_a_tand 809 Nueces ppears of record in my Austin, TX 78701 office (512) 480-8071

• u• Our Job Serial Number: MST-2014000965 VailAtirg: Ref: Hunan Ranch Corporation VOW DJ STRICT CLERK

Copyright 1992-2011 Database Services, Inc. - Process Server's Toolbox V6.4t By Deputy:

I er,ocutory None DC BK14182 PG1933 (Notice Disp Filled in The D° Court Disp code: T Redact pgs:_ Clerttl

Cause No. D-1-GN-14-000826 Judge

HUNAN RANCH CORPORATION INTHE DISTRWLCOMLIMei Plaintiff

v.

201ST JUDICIAL DISTRICT

HA DUONG NHU and D&H RESTAURANT EQUIPMENT Defendants TRAVIS COUNTY,TEXAS

FINAL JUDGMENT

On this day came to be heard the above-styled and numbered cause wherein Hunan Ranch Corporation is plaintiff and Ha Duong Nhu and D&H Restaurant Equipment are defendants. Defendants, although being duly and legally cited to appear and answer, failed to appear and answer, and wholly made default. Citation was served according to law and returned to the clerk where it remained on file for the time required by law.

Having considered the pleadings, evidence and arguments, the Court finds and concludes that Hunan Ranch Corporation is entitled to the relief hereinafter given.

The Court FINDS defendants Ha Duong Nhu and D&H Restaurant Equipment, jointly and severally, are liable and indebted to Flunan Ranch Corporation in the sums set forth below, and that plaintiff should recover his reasonable attorney's fee against Defendants.

IT IS, THEREFORE, ORDERED, ADJUDGED, AND DECREED that Hunan Ranch Corporation have and recover from defendants Ha Duong Nhu and D&H Restaurant Equipment, jointly and severally, damages in the total amount of $38,663.81.

IT IS FURTHER ORDERED that Hunan Ranch Corporation have and recover from defendants Ha Duong Nhu and D&H Restaurant Equipment, jointly and severally, pre-judgment interest at the rate of FIVE PERCENT (5%) simple interest on the amount of $38,663.81 since March 19, 2014 until the day before this judgment is signed.

I THER ORDERED that Hunan Ranch Corporation has judgment against defendants 1..04

Ha D D&H Restaurant Equipment, jointly and severally, for attorney's fees in the

FINAL JUDGMENT PAGE 1 OF 3

DC BK14182 PG1934

amount of $6,693.75 to compensate plaintiff for his attorney's fees in bringing this suit and obtaining this judgment, which is a reasonable and necessary charge for such services.

IT IS FURTHER ORDERED that Hunan Ranch Corporation have and recover from defendants Ha Duong Nhu and D&H Restaurant Equipment, jointly and severally, interest on the amount of this judgment, including pre-judgment interest, attorney fees, and all damages. Interest on this judgment is to be charged from the date of this judgment, in the amount of FIVE PERCENT (5%), compounded annually.

IT IS FURTHER ORDERED that all costs of court spent or incurred in this cause are adjudged and taxed against defendants Ha Duong Nhu and D&H Restaurant Equipment, jointly and severally.

IT IS FURTHER ORDERED that should defendants pursue any appeal of any money judgment rendered in this cause in favor of plaintiff, that plaintiff recover from defendants Ha Duong Nhu and D&H Restaurant Equipment, jointly and severally, the following reasonable and necessary attorney's fees and expenses for the following appellate steps and proceedings as follows:

a. Responding to and attending any hearings on any post-judgment Motions $5,000

Responding to a brief in the Court of Appeals $15,000

c. Preparation for oral argument before Court of Appeals and argument $1,750

d. Responding to Motion for Rehearing before Court of Appeals, if any $2,500

Responding to any Writ of Error to the Supreme Court $7,500

Preparation for and argument before Supreme Court, if Writ granted S 1,750

g.

Responding to any Motion for Rehearing filed with Supreme Court $2,500

finally disposes of all parties and all claims and is appealable.

FINAL JUDGMENT PAGE 2 OF 3

DC BK14182 PG1935

Plaintiff is hereby allowed such writs and processes as may be necessary in the enforcement and collection of this judgment.

All other relief not herein granted is hereby denied.

SIGNED on this the 30 day of kiN—k„ , 2014.

FINAL JUDGMENT PAGE 3 OF 3

DC BK14182 PG1936

Cause No. D-1-GN-14-000826

HUNAN RANCH CORPORATION IN THE DISTRICT COURT Plaintiff

. v 201ST JUDICIAL DISTRICT

HA DUONG NHU and D&H RESTAURANT EQUIPMENT Defendants TRAVIS COUNTY, TEXAS

STATE OF TEXAS

COUNTY OF TRAVIS

AFFIDAVIT OF DORAN D. PETERS

Before me, the undersigned notary, on this day, personally appeared Doran D. Peters, a

person whose identity is known to me. After I administered an oath to him, upon his oath, he said:

1. "My name is Doran D. Peters. I am capable of making this affidavit. The facts stated in this

affidavit are within my personal knowledge and are true and correct.

2. I am a partner at the law firm of HA J JAR SUTHERLAND & PETERS, LLP (my firm). I was hired as

legal counsel for Hunan Ranch Corporation, Plaintiff, to assist in his defense and prosecution of

claims in the above numbered and styled cause. I obtained my license to practice law in the State of

Texas in November 2000. I have continuously practiced law in Travis County, Texas, as well as

surrounding counties, in commercial and real property litigation matters.

3. I am familiar with the attorney's fees charged and expenses incurred in cases similar to this

one in Travis County, Texas. My firm charges $315.00 an hour for the time I work on Hunan Ranch

Corporation's case, which is my fee. My firm charges Hunan Ranch Corporation between $175 and

$315 per hour for the time spent by other attorney's in my firm working on this case. When a

paralegal or legal assistant performs services for clients, their time is billed at rates between S70 and

5140.00 per hour. 1 have reviewed the billing records for Hunan Ranch Corporation's account with

my fir --

4. f I- -,n by Hunan Ranch Corporation of this firm precluded me from accepting other

emp consulted with Hunan Ranch Corporation, reviewed relevant documents, 41:

AFFIDAVIT .6 D. PETERS PAGE 1 OF 3

DC BK14182 PG1937

prepared and reviewed pleadings in this case, as well as rendered various other legal services in

Hunan Ranch Corporation's prosecution of this case.

5. It is my opinion that $5,165.25 is a reasonable sum for the necessary and reasonable

attorney's fees and associated expenses Hunan Ranch Corporation has incurred for my, and my

firm's, services in this case. This amount includes approximately 11.60 hours of attorney time, and

3.4 hours of Paralegal time. This amount also includes non-court expenses of $2059.75 which

mostly comprises fees associated with locating and serving defendant with the lawsuit, as well as

about $10 in fees to research the Texas Secretary of State records. Finally, this amount includes five

hours, which is the estimated time necessary to prepare documents related to obtaining a default

judgment, and attending court to do so.

6. Hunan Ranch Corporation agreed to reimburse the attorneys in this firm for their work on

this case on an hourly fee, at the rates stated above, and also agreed to pay costs incurred by my firm

in prosecuting and defending this case.

7. The fees charged by my firm are less than those fees customarily charged in this area for the

same or similar services for an attorney with the experience, reputation, and ability of the attorney

performing the services, considering the amount and type of controversy, the time limitations

imposed, the results obtained, and the nature and length of the relationship this firm and its

attorneys have had with Hunan Ranch Corporation.

8. Additionally, should any Defendant pursue any appeal of any money judgment rendered in

this cause in favor of Hunan Ranch Corporation, it is my opinion that a reasonable sum for the

necessary attorney's fees and expenses to be rendered for the following post-judgment steps and

proceedings are as follows:

a. Responding to and attending any hearings on any post-judgment Motions $5,000

b. Responding to a brief in the Court of Appeals $15,000

c. Preparation for oral argument before Court of Appeals and argument $1,750

Responding to Motion for Rehearing before Court of Appeals, if any $2,500

PAGE 2 OF 3

DC BK14182 PG1938

e. Responding to any Writ of Error to the Supreme Court $7,500

Preparation for and argument before Supreme Court, if Writ granted $1,750

Responding to any Motion for Rehearing filed with Supreme Court g.

$2,500

FURTHER AFFIANT SAYETH NOT. "

DORAN D. PETERS

Subscribed and sworn to before me, the undersigned Notary Public, in and for the County of Travis, this 011 day of ...a ,J„..-K , 2014.

V

Notary Public State of Texas FRANCES

Notary Public, S_0 > of Texas My Commission ,

July 01 20'4

PAGE 3 OF 3

DC BK14182 PG1939

Cause No. D-1-GN-14-000826

HUNAN RANCH CORPORATION INTHE DISTRICT COURT Plaintiff

V. 201ST JUDICIAL DISTRICT

HA DUONG NHU and D&H RESTAURANT EQUIPMENT Defendants TRAVIS COUNTY,TEXAS

SOLDIERS' AND SAILORS' AFFIDAVIT

Before me, the undersigned notary, on this day, personally appeared Doran D. Peters, a person whose identity is known to me. After I administered an oath to him, upon his oath, he said:

1. "My name is Doran D. Peters. I am capable of making this affidavit. The facts stated in this affidavit are within my personal knowledge and are true and correct.

2. In compliance with the Soldiers' and Sailors' Relief Act, to my personal knowledge based upon a review of records related to this case and my involvement in this case defendant Ha Duong Nhu is not an infant, emancipated or incompetent person. Mr. Nhu operates a company that manufactures and installs commercial woks in Garland, Texas and has done so for at least the last four years. A review of the attached official printout from the United States Department of Defense Manpower Data Center, which is fully incorporated herein, HA DUONG NHU, Defendant is not a member of the Ai used Forces currently on active duty."

DORAN D. PETERS

__SWORN TO and SUBSCRIBED before me by Doran D. Peters on t the day of V /' ,2014.

I

Notary Public State of Texas =RANCES ROSALES

Notary Public, State of Texas My Commission Expires

01. 2014

SOLDIERS' AND SAILORS' AFFIDAVIT PAGE 1 OF 1

BK14182 PG1940s as of : May-02-2014 07A8:47 AM Department of Defense Manpower SCRA 3.0

Status Report Pursuant to Savicemem CivilAct

Last Name: NHU First Name: HA Middle Name: DUONG Active Duty Status As Of: May-02-2014

:410r I'V‘474t,rtiateTA7WerglirAWNIS.M 1 On Active Duty On Active Duty Status Date--"filcieVVr - -gtomir Atvt,t.

Active Duty End Date Status iii,-Ssrt1RAMii.

i Service Component Duty Start Date R

No NA NA NA This response reflects the individuals' active duty status based on the Active Duty Status Date

i.

issaWaiNISIO . h TA '4-4107Left Active Duty Within 367 Days of Active Duty Status Date 511S 5 tailltieltr AaTtttMW'yLfiaog.r.r.5r,,w,.vz.,,o§wt ,Aitt • tr,7

Wilitrrro Active Duty End Date moss it geggomi . Status wit .,9pAgtwfwv, Service Component Active Duty Start Date RigefiNdi NA No NA NA

the Active. Duty Status Date This response reflects where the individual left active duty status within 367 days preceding

.•f

The Member or His/Her Unit Was Notified of a Future Call-Up to Active Duty on Active Duty Status Date i6POPSWW m z.,iai „Ar. 114.,,. 44114'

014,41 gglx, Order Notification Start Date Order Notification End Date Status law Service Component 'fie=r1, NA

NA jipi, No NA ••

active duty

This response reflects whether the individual or hisfher unit has•received early notification to report for

Upon searching the data banks of the Department of Defense Manpower Data Center, based on the information that you provided, the above is the status of the individual on the active duty status date as to all branches of the Uniformed services (Army, Navy, Marine Corps, Air Force, NOAA, Public Health, and Coast Guard). This status includes information on a Servicemember or his/her unit receiving notification of future orders to report for Active Duty. HOWEVER, WITHOUT A SOCIAL SECURITY NUMBER, THE DEPARTMENT OF DEFENSE MANPOWER DATA CENTER CANNOT AUTHORITATIVELY ASSERT THAT THIS IS THE SAME INDIVIDUAL THAT YOUR QUERY REFERS TO. NAME AND DATE OF BIRTH ALONE DO NOT UNIQUELY

IDENTIFY AN INDIVIDUAL.

Mary M. Snavely-Dixon, Director Department of Defense - Manpower Data Center 4800 Mark Center Drive, Suite 04E25 Arlington, VA 22350

DC BK14182 PG1941

Cause No. D-1-GN-14-0008 26

IN THE DISTRICT COURT

HUNAN RANCH CORPORATION Plaintff

V, 201ST JUDICIAL DISTRICT

HA DUONG NHLI and D&H RESTAURANT EQUIPMENT TRAVIS COUNTY, TEXAS

Defendants

AFFIDAVIT OF JOHN CHEN

STATE OF TEXAS

COUNTY OF TRAVIS

Can this date, John Chen, personally appeared before me, the undersigned Notary Public, and after being duly sworn, stated the following under oath:

"My name is John Chen ("Plaintiff"). I am over the age of 18 and I am fully competent to 1 make this affida qt. The statements contained in this affidavit are made based on my

personal knowledge. The facts set forth below and contained in the attached records are

true and correct, based upon my personal knowledge formed from my inv=olvement in this

case. I am one of the directors and owners of Hunan Ranch Corporation. Hunan Ranch

Corporation is the owner of Hunan Ranch restaurant ("Plaintiff s restaurant") located at

14900 Avery Ranch Blvd. Austin, Texas 78717. Plaintiff and Defendant entered into an agreement (attached hereto as Exhibit A-1) on or 3.

of the agreement, Defendants Ha Duong Nhu about November 24, 2013, Under the and D&H Restaurant Equipment (hereinafter-collectively referred to as "Defendants")

agreed to manufacture and install a new commercial wok (hereinafter referred to as "new (hereinafter referred to

wok") at Plaintiff's restaurant. This was to replace the ex All parties knew the new wok was critical to the operation of Plaintiff's

DC BK14182 PG1942

restaurant. The parties agreed that the wok would be completed and installed no later than

December 26, 2013. On or about December 19, 2013, Plaintiff contacted Defendants to confirm the new wok 4.

would be ready for installation by December 26, 2013. During this conversation,

Defendants stated that there was a delay and the new wok would not he ready until January

8, 2014. On or about January 4, 2014, Plaintiff again spoke with Defendants to confirm that the new 5.

wok would he ready for installation on January 8, 2014. During this conversation,

Defendants confirmed that the new wok would be delivered by January 8, 2014.

On January 6, 2014, Plaintiff's restaurant was closed for renovations, including installation 6.

of the new wok. Plaintiff expected to re-open Plaintiff's restaurant on January 9, 2014.

Defendants did not show up on January 8, 2014, as previously promised. Plaintiff contacted

Defendants concerning the new wok and was told that it would be ready on January 11,

2014. Defendants did not deliver the new wok on January 11, 2014, as previously promised.

7.

Additionally, when Plaintiff attempted to contact Defendants on January 11, 2014, they did

not answer his calls. Defendants did not contact Plaintiff until. January 14, 2014, and at such

time reported that the new wok was still not ready. Due to Defendants failure to deliver \VA installed.

and install the new wok, Plaintiff was forced to have the old On January 16, 2014, Defendants delivered and installed the old wok. Plaintiff was able to 8.

reopen Plaintiff's restaurant for dinner on January 17, 2014.

correspondence requesting On or about February 18, 2014, Plaintiff' sent Defendants 9.

(attached hereto as Exhibit delivery and installation of the new wok by February 20, 2014 that Defendants' failure to A-2). In this correspondence, Plaintiff further pointed out f dollars in damages.

deliver and install the new wok caused the Plaintiff thousands o

The new wok was not delivered by Defendants until March 28, 2014,

Plaintiff' was expected to re-open the restaurant on January 9, 2014. Due to Defendants'

deliver and install the new wok, there was a delay of 8.5 days (January 9, 2014

DC BK14182 PG1943

through dinner on January 17, 2014) between the expected date of installation of the new

wok and the re-installation of the old wok, Plaintiff's average sales income per month prior to the removal of the old wok was 12.

$137,075.92, which is s4,469.86 per day. Please see Plaintiff's Sales Reports from October

2013, November 2013, and December 2013 through December 31, 2013, attached hereto

as Exhibit A-3, Due to the delay in the delivery of the new wok, Plaintiff suffered lost sales

in the amount of $37,993.81, Furthermore, the re-installation of the old wok led to a gas leak, which caused one of the 13.

woks not work properly. Due to one of the woks not working, Plaintiff was forced to give

approximately $670.00 in voids and credits. Due to Defendants failure to deliver and install the new wok, Plaintiff suffered damages in 14.

the amount of $38,663.81.

Further affiant sayeth naught."

joliTn Chen / Owner, Hunan Ranch Corporation

X-47 day of

SWORN TO and SUBSCRIBED before me by John Chen on this, the , 2014.

of Texas

Notary Public*State

JA CO3 81 or

votory

Mit w Aug 4,,07

DC BK14182 PG1944

Cause No. D-1-GN-14-000826

HUNAN RANCH CORPORATION IN THE DISTRICT COURT Plaintiff

201ST JUDICIAL DISTRICT

v.

HA DUONG NHU and D&H RESTAURANT EQUIPMENT Defendants TRAVIS COUNTY,TEXAS

CERTIFICATE OF LAST KNOWN ADDRESS

I hereby certify that the last known address of defendants Ha Duong Nhu and D&H

Restaurant Equipment is 2313 Crystal Creek Lane, Garland, Texas 75040.

Respectfully Certified and Submitted,

HAJ JAR SUTHERLAND & PETERS, LLP 3144 Bee Caves Road Austin, Texas 78746 Telephone: (512) 637-4956 Facsimile: (512) 637-4958

By:

Doran D. Peri State Bar No. 24027615 Teres.411113acer

I, VELVA L. PRICE, District Clerk, Tarilrle eg n Atrategy. corn Texas, do hereby certify that this is a6ftxue3ando. 24053131 correct copy as sarrie appears itifTrikettlY51Fri* PLAINTIFF office_ Witness my hand and seal of office On

VELVA L. PRICE DISTRICT CLERK By Deputy:

PAGE 1 OF 1

CERTIFICATE OF LAST KNOWN ADDRESS

Amalia Rodriguez-Mendoza District Clerk, Travis County Travis County Courthouse Complex P.O. Box 679003 Austin, Texas 78767

DATE: July 01, 2014

HA DUONG NHU AND D&H RESTAURANT EQUIPMENT 2313 CRYSTAL CREEK LANE GARLAND, TX 75040

In accordance with the provisions of Rule 239a of the Texas Rule of Civil Procedure, you are hereby notified that in Cause No. D-1-GN-14- 000826, in the 201ST JUDICIAL DISTRICT COURT of Travis County, Texas, styled:

HUNAN RANCH CORPORATION

VS.

HA DUONG NHU AND D&H RESTAURANT EQUIPMENT

on JUNE 30, 2014, a DEFAULT JUDGMENT was taken in favor of:

HUNAN RANCH CORPORATION

and against

HA DUONG NHU AND D&H RESTAURANT EQUIPMENT

AmALTARVEIMuLzPaltIPPAiktrict Clerk, Travis County, DistrictQerk Texas, do hereby certify that this is a true and correct copy as same appears of record in my office_ Witness my hand and seal of office On

wv

At

VELVA L. PRICE

K1I1

L61 - 00 DISTRICT CLERK D-1-GN-14-000826 By Deputy:

Amalia Rodriguez -Mendoza District Clerk, Travis County Travis County Courthouse Complex P.O. Box 679003 Austin, Texas 78767

DATE: July 01, 2014

HA DUONG NHU AND D&H RESTAURANT EQUIPMENT 2313 CRYSTAL CREEK LANE GARLAND, TX 75040

In accordance with the provisions of Rule 239a of the Texas Rule of Civil Procedure, you are hereby notified that in Cause No. D-1-GN-14- 000826, in the 201ST JUDICIAL DISTRICT COURT of Travis County, Texas, styled:

HUNAN RANCH CORPORATION

VS.

HA DUONG NHU AND D&H RESTAURANT EQUIPMENT

on JUNE 30, 2014, a DEFAULT JUDGMENT was taken in favor of:

HUNAN RANCH CORPORATION

and against

HA DUONG NHU AND D&H RESTAURANT EQUIPMENT

AmALARMIEUMUEzPIRMPPEVilstrict Clerk Travis County, District Cilga, do hereby certify that this is a true and correct copy as same appears of record in rny office. Witness my hand and seal of office On

wv

At

VELVA L. PRICE

KAI I

DISTRICT CLERK D-1-GN-14-000826 By Deputy:

Amalie Rodriguez - Mendoza District Clerk, Travis County Travis County Courthouse Complex P.O. Box 679003 Austin, Texas 78767

DATE: July 01, 2014

HUNAN RANCH CORPORATION C/O DORAN DONALD PETERS 3144 BEE CAVE ROAD AUSTIN, TX 78746

In accordance with the provisions of Rule 239a of the Texas Rule of Civil Procedure, you are hereby notified that in Cause No. D-1-GN-14- 000826, in the 201ST JUDICIAL DISTRICT COURT of Travis County, Texas, styled:

HUNAN RANCH CORPORATION

VS.

HA DUONG NHU AND D&H RESTAURANT EQUIPMENT

on JUNE 30, 2014, a DEFAULT JUDGMENT was taken in favor of:

HUNAN RANCH CORPORATION

and against

HA DUONG NHU AND D&H RESTAURANT EQUIPMENT

AmALIAIVAWAJU-PikitlE9Nstrict Clerk, Travis County, District Clerk Texas, do hereby certify that this is a true and correct copy as same appears of record in my office_ Witness my hand and seal of office On

wv VELVA L. PRICE

KALI

L61-00 DISTRICT CLERK D-1-GN-14-000826 By Deputy:

12/30/2014 6:13:36 PM

Amalie Rodriguez-Mendoza

District Clerk Travis County D-1-GN-14-000826

CAUSE NO. D-1-G-N-14-000826

HUNAN RANCH CORPORATION, § IN THE DISTRICT COURT OF Plaintiff; § §

v. § TRAVIS COUNTY, TEXAS §

HA DUONG NHU and § D&H RESTAURANT EQUIPMENT, § Defendants. § 201ST JUDICIAL DISTRICT

NOTICE OF RESTRICTED APPEAL OF DEFENDANTS HA DUONG NHU AND D&H RESTAURANT EQUIPMENT

Pursuant to TEXAS RULES OF APPELLATE PROCEDURE 25.1 and 26.1(c), Defandants Ha

Duong Nhul and D&H Restaurant Equipment (the "Defendants") desire to appeal from the final

judgment of default signed on June 30, 2014, in this case styled Hunan Ranch Corporation v. Ha

Duong Nhu and D&H Restaurant Equipment, Cause No. D-1-G-N-14-000826, in the 201st

Judicial District Court, Travis County, Texas. Appeal is taken to the Third Court of Appeals in

Austin, Texas.

Ha Duong Nhu and D&H Restaurant Equipment are Defendants in this lawsuit and are

thus affected by the trial court's judgment. Defendants, however, did not participate, either in

person or through their counsel, in the June 30, 2014, hearing that resulted in the court's final

judgment of default. Defendants have not filed any post-judgment motions, have not requested

any findings of fact or conclusions of law, and have not previously filed any notice of appeal.

1Defe ong Nhu Ha, and not Ha Duong Nhu as stated in the style of the case and throughout Plainti rporation's petition and other documents in this case.

NOTICE OF RESTRICTED APPEAL PAGE 1 OF 3

Respectfully submitted,

VINSON & ELKINS

/s/ Janice L. Ta

Frank C. Brame State Bar No. 24031874 Trammell Crow Center 2001 Ross Avenue, Suite 3700 Dallas, Texas 75201-2975 Telephone: (214) 220-7817 Fax: (214) 999-7818 fbrame(a)velawcom

Janice L. Ta State Bar No. 24075138 2801 Via Fortuna, Suite 100 Austin, Texas 78746-7568 Telephone: (512) 542-8512 Fax: (512) 236-8239 jta@velaw.corn

Attorneys for Defendants Ha Duong Nhu and D&H Restaurant Equipment

NOTICE OF RESTRICTED APPEAL PAGE 2 OF 3

CERTIFICATE OF SERVICE

I certify that on this 30th day of December 2014, a true and correct copy of the above and

foregoing Notice of Restricted Appeal of Defendants Ha Duong Nhu and D&H Restaurant

Equipment was served on Plaintiff Hunan Ranch Corporation's counsel of record via electronic

service and e-mail in accordance with the Texas Rules of Civil Procedure as follows:

Doran D. Peters HAMAR PETERS, LLP 3144 Bee Caves Road Austin, Texas 78746 Telephone: (512) 637-4956 Fax: (512) 637-4958 dpeters@lcgalstrategy.com

Attorney for Plaintiff

/s/ Janice L. Ta Janice L. Ta

I, VELVA L. PRICE, District Clerk Travis County, Texas, do hereby certify that this is a true and correct copy as sarrie appears of record in my office_ Witness my hand and seal of office On

VELVA L. PRICE

US 3220745 DISTRICT CLERK By Deputy:

NOTICE OF RESTRICTED APPEAL PAGE 3 OF 3

EXHIBIT 2

Business and Industry: Time Series / Trend Charts Page 1 of 2

You are here: Census.gov › Business & Industry › Time Series / Trend Charts

TIME SERIES / TREND CHARTS Please follow the numbers in order. 1 Select the report/survey from which you wish to retrieve data:

Monthly Retail Trade and Food Services  2 Select a date range: Start: 2011  End: 2014  3 Select Industry or Category:

722: Food Services and Drinking Places  4 Select one Item :

Sales - Monthly  5 Select Geographical Level:

U.S. Total  Select as available:

Seasonally Adjusted  Not Seasonally Adjusted Show Estimates of Sampling Variability GET DATA Download all data for this report/survey Save this search

Release Date: February 12, 2015

For the Monthly Retail Trade Survey, all current month estimates are preliminary estimates, which will be superseded in following months by revised estimates. For information on the reliability and use of the data, including important notes on estimation and sampling variance, seasonal adjustment, measures of sampling variability, and other information pertinent to this economic indicator, go to the Monthly and Annual Retail Trade website, which provides time-series Excel files for Sales [XLS, 184kb], and Inventories and Inventories/Sales Ratios [XLS, 368kb] data. Estimated measures of sampling variability for totals are expressed as coefficients of variation (CV). Standard errors (SE) are provided for month-to-month change and ratio estimates. Estimated measures of sampling variability are based on data not adjusted for seasonal variation, and should be used when drawing inferences about both adjusted and not adjusted estimates. Inventories are only available for the following industries (defined in Box 3 above): 44000, 4400A, 441, 4423X, 444, 445, 448, 452, 4521. NA = Not available. (S) = Suppressed. The Y-axis for the line charts may be truncated to prevent flattening of the lines or to present the complete range of data.

http://www.census.gov/econ/currentdata/dbsearch?program=MRTS&startYear=2011&end... 2/27/2015

Business and Industry: Time Series / Trend Charts Page 2 of 2

Source: Monthly Retail Trade and Food Services (Definitions) 722: Food Services and Drinking Places: U.S. Total — Not Seasonally Adjusted Sales - Monthly [Millions of Dollars] TXTXLS-VXLS-HBar ChartLine Chart Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2011 36,868 37,308 41,946 41,684 42,935 41,983 43,239 42,355 41,369 42,420 39,756 42,950 2012 39,740 41,054 45,792 43,915 45,616 44,988 44,586 45,002 43,069 43,572 42,428 45,130 2013 41,613 41,257 47,284 45,663 47,113 45,139 45,186 46,557 43,321 45,589 44,862 46,075 2014 42,580 42,524 48,997 47,329 50,570 47,488 48,309 49,719 46,610 49,602 47,167 50,317 [PDF] or denotes a file in Adobe’s Portable Document Format. To view the file, you will need the Adobe® Reader® available free from Adobe. [Excel] or the letters [xls] indicate a document is in the Microsoft® Excel® Spreadsheet Format (XLS). To view the file, you will need the Microsoft® Excel® Viewer available for free from Microsoft®. This symbol indicates a link to a non-government web site. Our linking to these sites does not constitute an endorsement of any products, services or the information found on them. Once you link to another site you are subject to the policies of the new site.

Source: U.S. Census Bureau | Business & Industry | sssd.econ.data@census.gov | Last Revised: March 26, 2014

http://www.census.gov/econ/currentdata/dbsearch?program=MRTS&startYear=2011&end... 2/27/2015