Medistar Corp. v. Schmidt

267 S.W.3d 150, 2008 WL 2514802
CourtCourt of Appeals of Texas
DecidedAugust 27, 2008
Docket04-07-00369-CV
StatusPublished
Cited by52 cases

This text of 267 S.W.3d 150 (Medistar Corp. v. Schmidt) 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
Medistar Corp. v. Schmidt, 267 S.W.3d 150, 2008 WL 2514802 (Tex. Ct. App. 2008).

Opinion

Opinion by

CATHERINE STONE, Justice.

Medistar Corporation (“Medistar”) filed suit against Dr. David R. Schmidt, Sports Medicine Associates of San Antonio, P.A., Sports SA Holdings, L.P., Sports SA, LLC, Don Lowell Ryan, Charles Syms III, M.D., and Christopher Pederson, M.D. (collectively “the Physicians”), alleging fraud, breach of contract, and other causes of action. Medistar’s allegations stem from a development project in which Med-istar was to develop a medical facility for the Physicians. Medistar claims to have spent more than $1 million and devoted thousands of man-hours to developing the medical facility before the Physicians excluded Medistar from the project.

The threshold issue in this case is whether a proposal letter for the development and construction of the medical facility which stated that it was a “preliminary proposal ... for discussion only” and which attached “very preliminary financial information” was unambiguously non-binding as a matter of law, or whether it presented a jury question regarding the parties’ intent to be bound. The trial court determined there was no fact issue and granted summary judgment against Medistar on its breach of contract claim, and the case proceeded to jury trial on various remaining claims. The jury found in favor of Medistar on its promissory estoppel claim against Dr. Schmidt, and *155 the trial court entered judgment for Med-istar against Dr. Schmidt for $418,069.63 in damages, plus $408,412.00 in attorney’s fees. Although the jury made several additional liability findings against Dr. Schmidt and Dr. Schmidt’s co-defendant Ryan, the jury awarded zero damages to Medistar for such claims. Both Medistar and Dr. Schmidt appeal the trial court’s final judgment.

After thoroughly considering the issues presented, the trial court’s judgment is affirmed in part and reversed and rendered in part. The trial court’s judgment is affirmed to the extent that it awards Medistar $418,069.63 in damages on its promissory estoppel claim against Dr. Schmidt. However, the trial court’s judgment is reversed to the extent that it awards Medistar its attorney’s fees and judgment is rendered that Medistar recover no attorney’s fees from Dr. Schmidt.

Background

Medistar is a real estate development company that specializes in the development of medical facilities. Dr. Schmidt, a team physician for the San Antonio Spurs basketball team, developed the idea to build a state-of-the-art integrated medical plaza (“IMP”) adjacent to the training facility Medistar had recently constructed for the Spurs. Dr. Schmidt referred to the IMP as “The Texas Center for Athletes,” and wanted Medistar to develop the project for him.

Dr. Schmidt, along with the physicians he was then affiliated with from Orthopedic Surgery Associates of San Antonio, consulted with Medistar in 2000 about developing the Texas Center for Athletes project. Dr. Schmidt and his affiliates urged Medistar to purchase the real property for the IMP project from Health-South, the owner of the property adjacent to the Spurs’s training facility, and to develop the IMP on their behalf. Medistar began negotiations with HealthSouth for the real property for the IMP project, but was unable to consummate a deal for the property.

In July 2003, Dr. Schmidt’s affiliates advised Medistar that they were no longer interested in pursuing the IMP with Med-istar. Dr. Schmidt, however, assured Medistar that he still planned to move forward with the project. In January 2004, Dr. Schmidt compiled a new group of physicians, Sports Medicine Associates of San Antonio, P.A. (“SMA”), to proceed with the IMP project with Medistar. Subsequently, on March 26, 2004, Medistar sent Dr. Schmidt and his new associates a preliminary proposal for the development of the Texas Center for Athletes. This letter outlined the responsibilities Medis-tar would undertake with respect to developing the IMP. The letter provided that Medistar would: acquire the real property adjacent to the Spurs’s training facility from HealthSouth; develop the IMP; obtain all necessary permits, approvals, and loans; and assume full financial responsibility for the project. The letter also set forth the ownership interests Medistar designated for all those involved with the IMP project. Dr. Schmidt, on behalf of the Texas Center for Athletes and the SMA physicians, signed the preliminary proposal letter from Medistar on March 30, 2004, and returned a copy of the document to Medistar. Having received a signed copy of the letter from Dr. Schmidt, Medistar initiated steps to secure the real property for the IMP from HealthSouth.

After signing Medistar’s proposal letter, Dr. Schmidt proceeded to organize a group of investors, comprised mostly of physicians, to form Sports SA Holdings, L.P. Dr. Schmidt formed this entity to own and operate the Texas Center for Athletes and to secure the real property for the IMP *156 from HealthSouth. Once Sports SA Holdings was organized, it began negotiations and entered into a contract with Health-South to purchase the property adjacent to the Spurs’s training facility on July 12, 2004. Medistar, which had been attempting to secure the real property for the IMP from HealthSouth for Dr. Schmidt and his affiliates, did not interfere with Sports SA Holdings’s pursuit of the real property even though Medistar had indicated that it would secure the real property from HealthSouth in its March 26, 2004 proposal letter.

Once Sports SA Holdings purchased the real property for the IMP from Health-South, Medistar sent several letters to Dr. Schmidt and his associates regarding its future involvement in the Texas Center for Athletes. Medistar offered several proposals for its involvement, but each was rejected by Dr. Schmidt and his associates, who determined that Medistar would no longer have any role in the IMP project. Sports SA Holdings subsequently entered into an agreement with another developer, who was given no ownership rights in the IMP project, to develop the Texas Center for Athletes.

Medistar filed suit against the Physicians for fraud, breach of contract, breach of partnership, civil conspiracy, promissory estoppel, and other causes of action. The Physicians moved for summary judgment on both traditional and no evidence grounds. The trial court granted the Physicians a partial summary judgment in their favor and dismissed Medistar’s breach of contract, ratification, breach of fiduciary duty, and negligence claims.

Medistar’s remaining claims were tried to a jury. After a 21-day trial, the jury made liability findings against Dr. Schmidt on Medistar’s breach of partnership, promissory estoppel, fraud, and civil conspiracy claims. Although the jury made several liability findings against Dr. Schmidt, it awarded Medistar damages only on its promissory estoppel claim against him. The jury found that Medistar suffered damages totaling $418,069.63 in relation to this claim. The jury also made liability findings against Ryan on Medistar’s fraud and civil conspiracy claims, but awarded Medistar zero damages for such claims. The jury made no liability findings against any of the other defendants. 1 Finally, the jury determined the reasonable fee for the necessary services of Medistar’s attorneys was $408,412.00.

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Cite This Page — Counsel Stack

Bluebook (online)
267 S.W.3d 150, 2008 WL 2514802, Counsel Stack Legal Research, https://law.counselstack.com/opinion/medistar-corp-v-schmidt-texapp-2008.