Juliette Fowler Homes, Inc. v. Welch Associates, Inc.

797 S.W.2d 936, 1988 Tex. App. LEXIS 3449, 1988 WL 216294
CourtCourt of Appeals of Texas
DecidedMay 26, 1988
DocketNo. 11-87-121-CV
StatusPublished

This text of 797 S.W.2d 936 (Juliette Fowler Homes, Inc. v. Welch Associates, Inc.) 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
Juliette Fowler Homes, Inc. v. Welch Associates, Inc., 797 S.W.2d 936, 1988 Tex. App. LEXIS 3449, 1988 WL 216294 (Tex. Ct. App. 1988).

Opinion

ARNOT, Justice.

Welch Associates, Inc., a professional fund raiser, sued Juliette Fowler Homes, Inc., an affiliate of the Disciples of Christ Church, for breach of their contract and for tortious interference with its contractual relations with John W. Butler and John W. Butler Companies, Inc., Welch’s local representative in a capital fund drive it was directing for Fowler. Further, Welch sued the Butlers for breach of their contract and for tortious interference with its contractual relations with Fowler. Fowler and the Butlers appeal the judgment against them in the amount of $65,664.91 actual damages, $10,000.00 exemplary damages against Butler, $1.00 exemplary damages against Butler Companies, attorney’s fees in the amount of $92,789.79, and interest.

Fowler appeals urging in 38 points of error that: (a) there is no evidence or insufficient evidence to support the jury’s findings; (b) the non-competition clause in the Butler contract is unenforceable, therefore, Fowler did not tortiously interfere with the contract; and (c) Fowler had contractual authority to terminate its contract with Welch, therefore, as a matter of law, Fowler did not breach its contract. Butler appeals urging in 27 points of error that: (a) there is no evidence or insufficient evidence to support the jury’s findings; (b) that as a matter of law Butler could not have tor-tiously interfered with the Fowler contract because Fowler had an absolute right to terminate its contract; and (c) that they could not have breached the contract because the non-competition clause is unenforceable. For the reasons discussed, we affirm the judgment of the trial court.

A charitable non-profit corporation, Juliette Fowler Homes, Inc., operates a campus situated on a 15V2-acre tract in Dallas, Texas, and provides residences for the elderly who can live independently, a home for the aged in need of intermediate care, and residential treatment for moderately disturbed adolescents. Fowler is an agency of the National Benevolent Association (NBA), a general unit of the Disciples of Christ (Christian) Church. The NBA is responsible for the Christian Church’s work in health and social service activities throughout the United States. Several of the primary individuals running the programs of Fowler are employed by NBA on the campus of Fowler. The NBA reports to the General Board of the Christian Church.

In 1981, Fowler undertook a feasibility study to implement a fund raising cam[939]*939paign for much needed capital improvements to its campus. It contacted Welch Associates, Inc., to provide these services. Welch Associates is a professional fund raiser with two primary officers-employees: Byron Eugene Welch and his octogenarian father, Paul Welch. Byron Welch, an ordained minister in the Christian Church, entered into the fund raising business in 1962 and had completed several fund campaigns. He frequently lectures at the National Society of Fund Raising Executives seminars. After being contacted by Fowler, Welch performed an internal audit, identified potential donors, and developed a plan of action titled the Fowler Fund. Even though the goal in dollars to be raised envisioned by the plan was equal to the sum total of all outreach given by all Disciples of Christ Churches in Texas, Louisiana, and New Mexico based on the aggregate given for all causes involved in missions and outreach for 1979 and even though the goal in dollars to be raised envisioned by the plan was nearly twice the current total assets, $6.6 million, of Fowler and even though there was currently a major fund drive known as the Christian Church in the Southwest Campaign which involved essentially the same donors, Welch predicted success for the Fowler Fund in the plan. Welch received $7,500.00 for his work.

On July 1, 1981, Fowler and Welch entered into a contract to implement the Fowler Fund. Welch was to be responsible for every major decision and to provide all the personnel to run the campaign. Welch’s plan contemplated employing five positions: the General Senior Development Funds Counsel or Senior Counsel, Development Funds Co-Counsel or Co-Counsel, Senior Resident Campaign Director, Resident Office Clerk Campaign Secretary, and Field Director. Welch was to be the Senior Counsel and was to receive as a fee $717,-300.00 with an additional $250,000.00 for expenses for the full term of the contract which expired December 31, 1984. The contract contained the following cancellation provisions:

This agreement may be cancelled by either party with the cancellation to be effective sixty (60) days after the mailing or personal delivery of a written notice of cancellation.

Welch employed John Butler for the position of Senior Resident Campaign Director. Butler, an active fund raiser since 1970, had substantial experience in this field. Butler’s duties included the day-to-day management of the Fowler Fund. The employment contract was executed by Welch and John Butler Companies, Inc. John Butler was the only employee provided by Butler Companies.

The Butler Contract contained the following non-competition clause:

The employees of John W. Butler Companies, Inc., upon acceptance of this contract, agree that no disclosure of any confidential information will be given to any third party at any time; and further, that during the life of this contract, and for a period of two (2) years after conclusion of this contract, The John W. Butler Companies, Inc., will not enter into any form of contract for services, directly or indirectly, with any client of Welch Associates, Inc., past or present, including Juliette Fowler Homes, Inc., any agencies of the National Benevolent Association, St. Louis, Missouri, without the expressed written consent of Welch Associates, Inc.

The Butler Contract further provided the following cancellation clause:

The contract may be terminated as follows — with forty-five (45) days written notice by either party in the event of unforeseen or unusual circumstances such as loss of the Fowler Contract by Welch Associates, Inc.

In 1983, three events occurred. First, Jimmy Hays, the Development Director employed by the NBA and assigned to Fowler, resigned. The Development Board of Fowler had over the term of his employment expressed dissatisfaction with Hays’ performance. By mutual agreement, he [940]*940resigned; and a search committee was formed to find his replacement. The Director of Development was in charge of deferred gifts, such as wills; the annual fund, which included collecting from churches; and public relations. The Director was not directly related with the Fowler Fund.

Second, Fowler became increasingly dissatisfied with the results and direction of the Fowler Fund campaign. Welch wanted to take the campaign “public.” Officers at Fowler and members of the Board wanted to concentrate their emphasis on large gifts and tried to modify the plan. Members of the Development Board expressed their concern about the excessive amount paid to Welch as a fee in relation to the total funds raised through his efforts. Welch had expended all of the $250,000.00 expense allowance and had collected pledges and gifts totaling less than $4.4 million while a year still remained on the contract.

Third, Welch and Butler became dissatisfied with each other’s performance. Welch believed Butler was committed to other projects and not spending enough time on the Fowler Fund.

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797 S.W.2d 936, 1988 Tex. App. LEXIS 3449, 1988 WL 216294, Counsel Stack Legal Research, https://law.counselstack.com/opinion/juliette-fowler-homes-inc-v-welch-associates-inc-texapp-1988.