Hycel, Inc. v. Wittstruck

690 S.W.2d 914
CourtCourt of Appeals of Texas
DecidedFebruary 28, 1985
Docket10-83-157-CV
StatusPublished
Cited by44 cases

This text of 690 S.W.2d 914 (Hycel, Inc. v. Wittstruck) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hycel, Inc. v. Wittstruck, 690 S.W.2d 914 (Tex. Ct. App. 1985).

Opinion

*918 OPINION

THOMAS, Justice.

This is a Deceptive Trade Practices Act (DTPA) case. 1 Dr. Wittstruck, Dr. Krohn and Dr. Walter, three physicians who operated the Waco Clinical Pathology Laboratory (Laboratory) as a partnership, recovered a joint and several judgment in excess of $4.7 million against Hycel, Inc. (Hycel) and Boehringer Mannheim Diagnostics, Inc. (BMD). (Judgment was entered against BMD as Hycel’s corporate successor.) The jury found that Hycel had violated several provisions of the DTPA when it sold an automated blood chemistry analyzer to the Laboratory in 1976, and that the Laboratory had suffered over $1.8 million in lost profits from 1978 through 1984 as a result of Hycel’s violations. On its own motion the court disregarded the jury’s finding of lost profits for 1984. Hycel and BMD, Appellants, appeal on twenty-two points of error, while the doctors, Appel-lees, complain in a cross-point that the court erred when it disregarded on its own motion the jury’s finding of lost profits for 1984. We sustain the cross-point, reform the judgment, and conditionally affirm the reformed judgment on suggestion of a re-mittitur.

FACTUAL BACKGROUND

To understand this litigation, one must understand the nature and background of the businesses involved. At the time of the transaction upon which this suit is based, Hycel was in the business of manufacturing and selling automated blood chemistry analyzers and chemicals used in their operation. Hycel sold these analyzers to businesses such as the Laboratory. The Laboratory, at the time of the transaction, was furnishing a broad range of services to physicians and hospitals in Central Texas, which included performing blood chemis-tries.

Blood chemistries are chemical tests performed on samples of blood serum at a physician’s request. Physicians often request that a laboratory perform blood chemistries in a profile. A profile is a group of blood chemistries which assess the function of a particular organ or system, such as the heart, liver or renal system, or the general health of a person. The results of the profile are used by the requesting physician for the purposes of diagnosis and treatment. At one time blood chemistries had to be performed manually; however, improvements in technology have enabled many blood chemis-tries to be performed on automated blood chemistry analyzers.

In 1968 the Laboratory purchased a Technicon 12/60 automated blood chemistry analyzer which could perform twelve different chemical tests on a blood sample at the rate of sixty samples an hour. This machine was known in the trade as a “continuous flow analyzer” because all twelve tests had to be performed on each blood sample, even though the physician may have ordered fewer than twelve tests.

To avoid performing all of these tests, Hycel began developing a “selective analyzer” which would perform only the tests selected by the operator. By 1975 Hycel had developed the “Super 17” and was selling it for $98,500. Based on the operator’s instructions, the Super 17 could selectively perform any number of seventeen different chemical tests on a blood sample at the rate of 120 samples an hour.

In 1975 Hycel also began research and development of the “M”, a selective analyzer designed to perform more tests than the Super 17, and began distributing promotional brochures on the M. Potential customers were told that the M’s initial price would be $125,000 but that the price would increase at a later date. Hycel, however, gave prospective customers two *919 means of guaranteeing that the M could be purchased for $125,000: (1) a customer could pay a 10% deposit ($12,500) which would be deducted from the M’s $125,000 purchase price when it was delivered; or (2) a customer could purchase a Super 17 for $98,500 and then trade the Super 17 in on the M’s $125,000 purchase price at the time of delivery. Under the second option, the trade-in value of the Super 17 would be determined by depreciating it at the rate of IV2% per month.

In the latter part of 1975, the Laboratory decided to replace the Technicon 12/60 with another machine, and Dr. Walter was assigned the responsibility of recommending which analyzer should be purchased as a replacement. Walter testified that he became interested in the M when he obtained a brochure on the M in January or February of 1976. He contended the brochure represented that the M would be capable of selectively performing up to thirty chemical tests on a blood sample at the rate of 120 samples an hour. (The parties referred to this brochure during trial as the “missing brochure” because the doctors claimed that it had been lost. Hycel and BMD denied that a brochure containing this representation ever existed.) After Walter contacted Hycel to inquire about the M, Jay Armstrong, one of Hycel’s salesmen, met with him in Waco on February 6. According to Walter, he and Armstrong reviewed and discussed the M brochure, the M’s expected delivery date, and a brochure on the Super 17. Walter stated that Armstrong told him the M could be delivered in the fall of 1977.

Walter also testified that, after brushing aside Armstrong’s efforts to sell a Super 17, he made the following four-point proposal to Armstrong: (1) the Laboratory would purchase the M and pay Hycel $125,-000 when the purchase order was approved; (2) Hycel would furnish a Super 17 for the Laboratory’s use until the M was delivered (the interim use of the Super 17 was to be without cost to the Laboratory, either for rental or maintenance charges); (3) Hycel would, without cost to the Laboratory, replace three chemical tests then on the Super 17 with three chemical tests which the Laboratory preferred; and (4) Hycel would accept the Technicon 12/60 as a trade-in.

Because Walter considered the M’s delivery date to be important, he tried to include a definite delivery date as the fifth point in his proposal. He admitted, however, that Armstrong refused to agree to a definite delivery date or to write any delivery date into any contract. Furthermore, Walter did not press Armstrong to agree to a delivery date because he was concerned that Hycel might refuse to approve his proposal. Walter insisted, nevertheless, that Armstrong knew the Laboratory wanted an agreement with Hycel on the M’s delivery date. Walter understood that Armstrong would have to obtain approval of this proposal, and once approved, that Hycel would have the agreement embodied in a written contract to be signed by the parties.

Armstrong returned to Waco on February 9 where he met again with Walter at Providence Hospital. Walter understood that Armstrong had obtained Hycel’s approval of the four-point proposal. Walter and Armstrong later drove to the Laboratory where the doctors met privately to discuss the options available to them and Walter’s final recommendation. After their meeting, Walter told Armstrong that the Laboratory had decided to pay Hycel $125,000, and he returned to Providence Hospital while Armstrong, Dr. Krohn and Dr. Wittstruck completed the necessary paper work. On February 9, Krohn signed a standard Hycel purchase order on behalf of the Laboratory which described the equipment purchased as follows:

Quantity Description of Equipment Price
1 ea. Super Seventeen Chemis- $125,000 try Analyzer with upgrade to Hycel “M” with earliest possible delivery date.

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690 S.W.2d 914, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hycel-inc-v-wittstruck-texapp-1985.