MBM Financial Corp. Woodlands Operating Co., L.P.

251 S.W.3d 174, 2008 Tex. App. LEXIS 2535, 2008 WL 961578
CourtCourt of Appeals of Texas
DecidedApril 10, 2008
Docket09-07-060 CV
StatusPublished
Cited by8 cases

This text of 251 S.W.3d 174 (MBM Financial Corp. Woodlands Operating Co., L.P.) 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
MBM Financial Corp. Woodlands Operating Co., L.P., 251 S.W.3d 174, 2008 Tex. App. LEXIS 2535, 2008 WL 961578 (Tex. Ct. App. 2008).

Opinion

OPINION

STEVE McKEITHEN, Chief Justice.

The Woodlands Operating Company, L.P. (“TWOC”) sued MBM Financial Corporation and Marimon Business Systems, Inc. 1 seeking declaratory relief, as well as damages for breach of contract and fraud with respect to TWOC’s lease and maintenance agreements with MBM for office equipment. After a bench trial, the trial court entered findings of fact and conclusions of law, issued five declarations in favor of TWOC, awarded TWOC “actual damages” of $1,000, 2 and awarded TWOC attorney’s fees in the amount of $145,091.59. 3 MBM filed this appeal, in which it raises ten issues for our consideration. We affirm in part, reverse and render in part, and reverse and remand in part.

*177 The Evidence

TWOC leased approximately twenty-two pieces of office equipment from MBM and entered into a maintenance agreement with MBM for the equipment. The agreements provided that TWOC had a period of 180 days to 90 days before the lease was to terminate to give notice of intent not to renew. In addition, the contracts provided that the lease term would automatically renew for another year if MBM did not receive timely notice of TWOC’s intent not to renew. Furthermore, the agreements directed that if the customer elected not to renew, the customer was responsible for transporting the equipment to a location designated by MBM. The parties also added an addendum to the agreements. The addendum provided that if TWOC was dissatisfied with MBM’s equipment or services, TWOC would give MBM thirty days’ notice, and if TWOC was still dissatisfied, TWOC could terminate the agreement “without penalty or question[,]” and MBM would pick up the equipment within ten days. When TWOC executed the contracts, the contracts were not signed by Anthony Marimon, and they did not contain a date of commencement; rather, the only date shown on the documents was the date TWOC signed them. MBM typically did not send fully executed and signed copies of the maintenance agreements to its customers, so MBM’s customers had to inquire about the termination dates. When TWOC decided not to renew the agreements, TWOC contacted MBM to obtain the termination dates for the leases.

In response to TWOC’s request for the termination dates, one of MBM’s employees sent TWOC an e-mail that listed the equipment and the termination dates. In determining the date for providing notice that TWOC did not intend to renew the agreements, TWOC relied upon the information MBM provided. TWOC sent a draft of the termination letter to MBM, and MBM’s representative told TWOC the draft was sufficient and the notice would be timely. TWOC then finalized the notice letter and sent it to MBM on October 25, 2004.

Nancy Young Zeitler, a former employee of MBM, testified by deposition that when she received the termination letter from-TWOC, she believed the notice was timely, but Anthony Marimon later told her that TWOC’s notice was untimely. Zeitler testified that she was surprised by Anthony Marimon’s assertion that TWOC’s notice was untimely. Crystal Wallace, another former employee of MBM, testified by deposition that MBM calculated the end of the lease term by the billing cycle; that is, the forty-eight month term began when MBM first billed the customer for the equipment. Wallace testified that Anthony Marimon frequently changed the rules for calculating the termination dates of maintenance agreements, and he proposed using the signature date to calculate the termination date for the MBM agreements. According to Wallace, Anthony Marimon changed the rules to put himself in a better bargaining position with the customer.

Randy Davis, the chief financial officer of TWOC, testified by deposition. Davis explained that he provided various affidavits in the litigation with MBM, and the affidavits do not describe any of TWOC’s damages. When asked whether TWOC suffered any actual damages, he responded, “That’s something that our attorney will have to respond to, or our chief legal counsel.” Davis testified that “at least a half dozen people” were involved in dealing with the situation with MBM, but “I was not asked nor have I calculated any numbers.” Davis further testified, “At some point, I would assume we have to give you the number. Again, it has not been calcu *178 lated.” Davis testified that MBM breached the contract because TWOC “didn’t get a satisfactory answer from [MBM] on where to send the copiers back to.” Davis testified that TWOC’s fraud allegation against MBM was based upon “the signing of the actual lease agreements and inserting the commencement date after the fact.” Davis further explained, “subsequently those dates were inserted.... No documents had been signed. So, my understanding of the fraud was they were signed after the fact, even after the lawsuit was filed.” Davis testified that TWOC’s only damages were attorney’s fees, litigation expenses, and the “nominal costs” of “time spent by employees at the company.” Davis also added that an independent contractor of TWOC worked on the issue with MBM, which “was taking away from [his] normal responsibilities.”

Anthony Marimon testified by deposition that in calculating the commencement date, “[w]e generally pick a billing date that we start from.” Marimon explained that the date of commencement could differ from the billing date, and that “[i]n this case, it did.” He testified that “[t]he commencement date was when we felt the equipment would be installed.... ” According to Marimon, the commencement date for the TWOC agreements was not when the equipment was installed; rather, because TWOC had equipment installed in December, January, and February, TWOC “had a common billing date that we needed to meet which was the cycle billed from their previous vendor that was the last day of their billing, and they wanted our billing to start at the same time.” Marimon testified that he selected the billing date in accordance with TWOC’s request. He then further explained, “[t]he commencement dates are the dates that were on the contracts. There was not any discussion of a commencement date other than the date that the contract was signed.” Mari-mon also testified that it is reasonable for a customer to rely on the information given by MBM’s employees concerning the termination dates. Marimon further testified that on multiple occasions, TWOC asked MBM to designate a carrier for return of the equipment. Marimon also testified live at trial. He explained that he determined that TWOC’s notice letter was untimely “[b]y pulling the contracts[,]” most of which listed January 9 as the commencement date.

Karen West, TWOC’s vice president and general counsel, testified that an independent contractor for TWOC was assigned to deal with the problem with the nonrenewal notice. According to West, during a meeting, Marimon stated that “the nonrenewal notice was not timely and that he wanted to try to settle with us by giving us an upgrade on equipment and he would give us a deal on the equipment.” West testified that she gave Marimon a copy of the e-mails between representatives of TWOC and MBM, and Marimon did not attempt to explain the e-mails.

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251 S.W.3d 174, 2008 Tex. App. LEXIS 2535, 2008 WL 961578, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mbm-financial-corp-woodlands-operating-co-lp-texapp-2008.