Oscar Taylor and Denise Taylor v. Adrienne A. Henny and Damon K. Henny
Opinion
ACCEPTED 01-14-00650-cv FIRST COURT OF APPEALS HOUSTON, TEXAS 1/28/2015 8:09:20 PM CHRISTOPHER PRINE CLERK
NO. 01-14-00650-CV __________________________________________________________________ FILED IN 1st COURT OF APPEALS IN THE COURT OF APPEALS HOUSTON, TEXAS FOR THE FIRST DISTRICT OF TEXAS 1/28/2015 8:09:20 PM HOUSTON, TEXAS CHRISTOPHER A. PRINE _________________________________________________________________ Clerk
OSCAR D. TAYLOR AND DENISE TAYLOR, Appellants, V. ADRIENNE A. HENNY AND DAMON K. HENNY Appellees. __________________________________________________________________ Appealed from the 152nd Judicial District of Harris County, Texas Cause No.: 2008-40075 __________________________________________________________________ APPELLEES’ RESPONSE TO BRIEF OF APPELLANTS __________________________________________________________________ THE CARTER LAW FIRM Eric G. Carter SBN: 03914500 1811 Southmore Boulevard Houston, Texas 77004 ecarter@carter-lawfirm.com Tel: (713) 227-0042 Fax: (713) 227-7001 ATTORNEYS FOR APPELLEES: ADRIENNE A. HENNY and DAMON K. HENNY
APPELLEES DO NOT REQUEST ORAL ARGUMENT
1 STATEMENT REGARDING THE BRIEFS
On November 26, 2014, Oscar and Denise Taylor (the “Taylors”),
Appellants/Cross-Appellees filed their Appellant’s Brief.
On December 29, 2014, Adrienne A. and Damon K. Henny (the “Hennys”)
moved for extension of time to file their Response to the Appellant’s Brief. This
request was granted by this Honorable Court, and the time to respond was extended
until January 28, 2015.
On January 5, 2015, prior to the deadline to respond to Appellant’s Brief,
Hennys filed their Cross-Appellant’s Brief, wherein they asserted the specific
arguments covered by their own Notice of Appeal.
On January 22, 2015, Taylors filed their Response to the Cross-Appellee’s
Brief. Taylors’ Response makes numerous arguments related to waiver and states that
Hennys failed to include numerous grounds in Hennys’ Cross-Appellant’s brief.
However, many if not all of the points argued as “waived” in Taylors’ Response to
Cross-Appellant’s Brief are addressed herein, in response to many of the Taylors’ own
arguments. It may be that Cross-Appellant’s method of briefing may be unorthodox
but Hennys did not intend to waive any arguments by reserving them for Hennys’
Response to the Taylors’ Appellant’s Brief.
Any confusion regarding Hennys’ points and cross-points on appeal was not
intentional, and permitting Hennys to raise them herein does not operate as an
2 injustice on Taylors. To the extent that Taylors argue waiver, Hennys hereby request
that this Honorable Court consider its argument herein.
As a matter of course, Hennys intend to file a timely reply to the Taylors’
Response to Cross-Appellant’s Brief, wherein developed argument regarding waiver
will be contained.
3 TABLE OF CONTENTS
STATEMENT REGARDING THE BRIEFS………………………………. 2
TABLE OF CONTENTS…………………………………………………… 4
INDEX OF AUTHORITIES….………………………………………...….. 5
ISSUES PRESENTED FOR REVIEW…………………………………….. 7
STATEMENT OF FACTS…………………………………………………. 8-16
SUMMARY OF THE ARGUMENT……………………………….………. 16
ARGUMENT……………………………………………………………….. 16-36
ISSUE NUMBER ONE………………………………………………....... 17 ARGUMENT AND AUTHORITIES FOR ISSUE ONE.....……………….. 17-24
ISSUE NUMBER TWO………………………………………………...… 24 ARGUMENT AND AUTHORITIES FOR ISSUE TWO....………………... 24-29
ISSUE NUMBER THREE ……………………………………………… 29 ARGUMENT AND AUTHORITIES FOR ISSUE THREE..….…………... 29-34
ISSUE NUMBER FOUR ……………………………………………….. 35 ARGUMENT AND AUTHORITIES FOR ISSUE FOUR..….…………... 35-36
PRAYER…………………………………………...…………..…………… 36-37
CERTIFICATE OF COMPLIANCE……………………………………..... 38
CERTIFICATE OF SERVICE……………………….…………………….. 39
4 INDEX OF AUTHORITIES
Cases
Covered Bridge Condominium Ass'n, Inc. v. Chambliss, 705 S.W.2d 211 (Tex. App. Houston 14th Dist. 1985), writ refused n.r.e., (June 4, 1986)…………………… 18
Entzminger v. Provident Life & Acc. Ins. Co., 652 S.W.2d 533 (Tex. App. Houston 1st Dist. 1983)…………………………………………………………… 18
Gulf & Basco Co. v. Buchanan, 707 S.W.2d 655 (Tex. App. Houston 1st Dist. 1986), writ refused n.r.e., (June 4, 1986)…………………………………………... 18
Huffines v. Swor Sand & Gravel Co., 750 S.W.2d 38, 40 (Tex.App.—Fort Worth 1988, no writ)……………………………………………………………….. 22
Alamo Clay Prods v. Gunn Tile Co., 597 S.W.2d 388, 392 (Tex.App.—San Antonio 1980, writ ref’d n.r.e.)……………………………………………………….. 22
Northern Nat. Gas. Co. v. Chisos Jt. V. I,, 142 S.W.3d 447, 458 (Tex.App.—El2Paso 2004, no pet.)………………………………………………………… 21
International Shelters, Inc. v. Corpus Christi State National Bank, 475 S.W.2d 334, 336 (Tex.Civ.App. Corpus Christi 1971, no writ)………………………… 24
Texas State Board of Registration for Professional Engineers v. Trimble, 366 S.W.2d 124 (Tex.Civ.App.—El Paso, 1963, writ ref'd n.r.e.)………………………. 24
Fisher v. Howard, 389 S.W.2d 482, 486 (Tex.Civ.App.—Dallas 1965, n.w.h.)…. 24
Mead v. Johnson Grp., Inc., 615 S.W.2d 685, 687–88 (Tex.1981)……………….. 24
Tidwell Props., Inc. v. Am. First Nat'l Bank, No. 14–04–00120–CV, 2006 WL 176862, at *3 (Tex.App.-Houston [14th Dist.] Jan. 26, 2006, no pet.)…………… 24
S. Elec. Servs., Inc. v. City of Houston, 355 S.W.3d 319, 324 (Tex.App.-Houston [14th Dist.] 2011, pet. denied)……………………………………………… 25
Abraxas Petroleum Corp. v. Hornburg, 20 S.W.3d 741, 758 (Tex.App.-El Paso 2000, no pet.)………………………………………………………………….. 25
5 Jackson v. Henderson, 2004 WL 1631394 at *4-5 (Tex.App.—Houston [1st Dist] July 22, 2004, no pet.)………………………………………………………… 26, 28
Voss Road Exxon, LLC v. Vlahakos, 2011 W.L 2623989, at *7 (Tex.App.—Houston [1st Dist.] June 30, 2011, no pet.)……………………………………… 26-27
Wingate v. Hajdik, 795 S.W.717, 719 (Tex. 1990)……………………………… 27-28
Commonwealth of Massechusetts v. Davis, 140 Tex. 398 (1942)…………………….. 27
ERI Consulting Engineers, Inc. v. Swinnea, 318 S.W.3d 867, 876 (Tex. 2010) …… 28
Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 84 (Tex.1992)……………….. 29
St. Paul Surplus Lines Ins. Co. v. Dal-Worth Tank Co., 974 S.W.2d 51, 53 (Tex. 1998) ………………………………………………………………………………. 35
Provident Am. Ins. Co. v.
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ACCEPTED 01-14-00650-cv FIRST COURT OF APPEALS HOUSTON, TEXAS 1/28/2015 8:09:20 PM CHRISTOPHER PRINE CLERK
NO. 01-14-00650-CV __________________________________________________________________ FILED IN 1st COURT OF APPEALS IN THE COURT OF APPEALS HOUSTON, TEXAS FOR THE FIRST DISTRICT OF TEXAS 1/28/2015 8:09:20 PM HOUSTON, TEXAS CHRISTOPHER A. PRINE _________________________________________________________________ Clerk
OSCAR D. TAYLOR AND DENISE TAYLOR, Appellants, V. ADRIENNE A. HENNY AND DAMON K. HENNY Appellees. __________________________________________________________________ Appealed from the 152nd Judicial District of Harris County, Texas Cause No.: 2008-40075 __________________________________________________________________ APPELLEES’ RESPONSE TO BRIEF OF APPELLANTS __________________________________________________________________ THE CARTER LAW FIRM Eric G. Carter SBN: 03914500 1811 Southmore Boulevard Houston, Texas 77004 ecarter@carter-lawfirm.com Tel: (713) 227-0042 Fax: (713) 227-7001 ATTORNEYS FOR APPELLEES: ADRIENNE A. HENNY and DAMON K. HENNY
APPELLEES DO NOT REQUEST ORAL ARGUMENT
1 STATEMENT REGARDING THE BRIEFS
On November 26, 2014, Oscar and Denise Taylor (the “Taylors”),
Appellants/Cross-Appellees filed their Appellant’s Brief.
On December 29, 2014, Adrienne A. and Damon K. Henny (the “Hennys”)
moved for extension of time to file their Response to the Appellant’s Brief. This
request was granted by this Honorable Court, and the time to respond was extended
until January 28, 2015.
On January 5, 2015, prior to the deadline to respond to Appellant’s Brief,
Hennys filed their Cross-Appellant’s Brief, wherein they asserted the specific
arguments covered by their own Notice of Appeal.
On January 22, 2015, Taylors filed their Response to the Cross-Appellee’s
Brief. Taylors’ Response makes numerous arguments related to waiver and states that
Hennys failed to include numerous grounds in Hennys’ Cross-Appellant’s brief.
However, many if not all of the points argued as “waived” in Taylors’ Response to
Cross-Appellant’s Brief are addressed herein, in response to many of the Taylors’ own
arguments. It may be that Cross-Appellant’s method of briefing may be unorthodox
but Hennys did not intend to waive any arguments by reserving them for Hennys’
Response to the Taylors’ Appellant’s Brief.
Any confusion regarding Hennys’ points and cross-points on appeal was not
intentional, and permitting Hennys to raise them herein does not operate as an
2 injustice on Taylors. To the extent that Taylors argue waiver, Hennys hereby request
that this Honorable Court consider its argument herein.
As a matter of course, Hennys intend to file a timely reply to the Taylors’
Response to Cross-Appellant’s Brief, wherein developed argument regarding waiver
will be contained.
3 TABLE OF CONTENTS
STATEMENT REGARDING THE BRIEFS………………………………. 2
TABLE OF CONTENTS…………………………………………………… 4
INDEX OF AUTHORITIES….………………………………………...….. 5
ISSUES PRESENTED FOR REVIEW…………………………………….. 7
STATEMENT OF FACTS…………………………………………………. 8-16
SUMMARY OF THE ARGUMENT……………………………….………. 16
ARGUMENT……………………………………………………………….. 16-36
ISSUE NUMBER ONE………………………………………………....... 17 ARGUMENT AND AUTHORITIES FOR ISSUE ONE.....……………….. 17-24
ISSUE NUMBER TWO………………………………………………...… 24 ARGUMENT AND AUTHORITIES FOR ISSUE TWO....………………... 24-29
ISSUE NUMBER THREE ……………………………………………… 29 ARGUMENT AND AUTHORITIES FOR ISSUE THREE..….…………... 29-34
ISSUE NUMBER FOUR ……………………………………………….. 35 ARGUMENT AND AUTHORITIES FOR ISSUE FOUR..….…………... 35-36
PRAYER…………………………………………...…………..…………… 36-37
CERTIFICATE OF COMPLIANCE……………………………………..... 38
CERTIFICATE OF SERVICE……………………….…………………….. 39
4 INDEX OF AUTHORITIES
Cases
Covered Bridge Condominium Ass'n, Inc. v. Chambliss, 705 S.W.2d 211 (Tex. App. Houston 14th Dist. 1985), writ refused n.r.e., (June 4, 1986)…………………… 18
Entzminger v. Provident Life & Acc. Ins. Co., 652 S.W.2d 533 (Tex. App. Houston 1st Dist. 1983)…………………………………………………………… 18
Gulf & Basco Co. v. Buchanan, 707 S.W.2d 655 (Tex. App. Houston 1st Dist. 1986), writ refused n.r.e., (June 4, 1986)…………………………………………... 18
Huffines v. Swor Sand & Gravel Co., 750 S.W.2d 38, 40 (Tex.App.—Fort Worth 1988, no writ)……………………………………………………………….. 22
Alamo Clay Prods v. Gunn Tile Co., 597 S.W.2d 388, 392 (Tex.App.—San Antonio 1980, writ ref’d n.r.e.)……………………………………………………….. 22
Northern Nat. Gas. Co. v. Chisos Jt. V. I,, 142 S.W.3d 447, 458 (Tex.App.—El2Paso 2004, no pet.)………………………………………………………… 21
International Shelters, Inc. v. Corpus Christi State National Bank, 475 S.W.2d 334, 336 (Tex.Civ.App. Corpus Christi 1971, no writ)………………………… 24
Texas State Board of Registration for Professional Engineers v. Trimble, 366 S.W.2d 124 (Tex.Civ.App.—El Paso, 1963, writ ref'd n.r.e.)………………………. 24
Fisher v. Howard, 389 S.W.2d 482, 486 (Tex.Civ.App.—Dallas 1965, n.w.h.)…. 24
Mead v. Johnson Grp., Inc., 615 S.W.2d 685, 687–88 (Tex.1981)……………….. 24
Tidwell Props., Inc. v. Am. First Nat'l Bank, No. 14–04–00120–CV, 2006 WL 176862, at *3 (Tex.App.-Houston [14th Dist.] Jan. 26, 2006, no pet.)…………… 24
S. Elec. Servs., Inc. v. City of Houston, 355 S.W.3d 319, 324 (Tex.App.-Houston [14th Dist.] 2011, pet. denied)……………………………………………… 25
Abraxas Petroleum Corp. v. Hornburg, 20 S.W.3d 741, 758 (Tex.App.-El Paso 2000, no pet.)………………………………………………………………….. 25
5 Jackson v. Henderson, 2004 WL 1631394 at *4-5 (Tex.App.—Houston [1st Dist] July 22, 2004, no pet.)………………………………………………………… 26, 28
Voss Road Exxon, LLC v. Vlahakos, 2011 W.L 2623989, at *7 (Tex.App.—Houston [1st Dist.] June 30, 2011, no pet.)……………………………………… 26-27
Wingate v. Hajdik, 795 S.W.717, 719 (Tex. 1990)……………………………… 27-28
Commonwealth of Massechusetts v. Davis, 140 Tex. 398 (1942)…………………….. 27
ERI Consulting Engineers, Inc. v. Swinnea, 318 S.W.3d 867, 876 (Tex. 2010) …… 28
Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 84 (Tex.1992)……………….. 29
St. Paul Surplus Lines Ins. Co. v. Dal-Worth Tank Co., 974 S.W.2d 51, 53 (Tex. 1998) ………………………………………………………………………………. 35
Provident Am. Ins. Co. v. Casteneda, 988 S.W.2d 189, 199 (Tex. 1998)…………… 35
Donnelley Marketing v. Lionel Sosa, Inc., 716 S.W.2d 598 at 602 (Tex.App.—Corpus Christi 1986)…………………………………………………………… 35
Ryan Mortg. Investors v. Fleming-Wood, 650 S.W.2d 928 at 933 (Tex.App.—Fort Worth, 1983)………………………………………………………………….. 35
Cameron v. Terrell & Garrett, Inc., 618 S.W.2d 535, 538 n. 4 (Tex.1981)………... 35
Texas Cookie Co. v. Hendricks & Peralta, Inc., 747 S.W.2d 873, 878 (Tex.App.—Corpus Christi 1988, writ denied)………………………… 35-36
Statutes Tex. Bus. Org. Code § 21.563(a), (c) ……………..…………………. 28
Tex. R. Civ. P. 193.6.………………………………………………… 29-30, 32-33
Tex. R. Civ. P. 90-91………………………………………………… 32
Tex.R.Civ.P. 278 ……………………………………………………. 35-36
6 ISSUES PRESENTED FOR REVIEW (Restated)
1. The Taylors breached the Separation Agreement when they refused to fully remove themselves from the lease agreement.
2. The Taylors’ breach caused the Hennys’ damages.
3. The Hennys are legally entitled to damages for both mitigation and loss of credit reputation, and presented legally sufficient evidence of both theories of recovery.
a. The Hennys’ evidence of damages should not be excluded as contended by Appellants.
4. The Hennys did not combine valid and invalid theories of recovery which require a new trial on breach of contract.
a. A new trial is not required on breach, causation, or damages.
7 STATEMENT OF FACTS
In 2001, Adrienne A. Henny and Damon K. Henny (the “Hennys”) joined with
Oscar D. Taylor and Denise Taylor (the “Taylors”) to open a restaurant business
called Cayenne’s. The two families owned the stock in Cayenne’s Restaurant, Inc. and
operated many of the day-to-day operations as the business continued. The business
flourished through the first few years of operation, and the Hennys and Taylors
continued to expand to as many as three locations in 2005. 4RR29-60, 73.
Two of the Cayenne’s locations, which are at the center of this dispute, were
leased with Weingarten Realty Investors, and located on Kirby and FM 1960,
respectively. DX2:8RR2; DX4:10RR2. Cayenne’s entered into a 10-year lease
agreement with Weingarten Realty Investors for the Kirby location on March 31,
2005. DX2 Denise Taylor executed the lease on behalf of Cayenne’s, Inc. as
President. Id. Both Denise Taylor and Adrienne A. Henny signed a personal guarantee
on the lease agreement. Id.
Things continued to progress smoothly, until the Hennys uncovered, through a
meeting between the Cayenne’s bookkeeper and Mrs. Henny, that Denise Taylor had
unilaterally, and without notice or permission, decided to give herself an increase in
wages. 3RR70-71; 5RR57. Naturally, this upset the Hennys, who continued to
investigate the possibility of any other improprieties of the Taylors in their business
dealings. When confronted with the findings, Mrs. Taylor confirmed that she had
indeed committed these actions. 5RR57-58. The Hennys later discovered through an 8 independent investigation by Mrs. Henny, that Mrs. Taylor’s misdeeds and/or
mismanagement ultimately led to an outstanding IRS debt, and that Mrs. Taylor hid
that information from the Hennys. 5RR60. This IRS debt in the amount of
$63,536.45 is referenced in the Separation Agreement. PX1.
Tensions grew between the families, and the four could not reconcile after the
discovery of the Taylors’ actions. 5RR58. Ultimately, the Hennys and Taylors decided
to divide the business and entered into the 2005 Separation Agreement for that
purpose. PX1; 5RR58. The Separation Agreement was signed on December 20, 2005.
PX1.
Under the Separation Agreement, the Hennys were to own and operate the
Kirby and 1960 locations, while the Taylors were to retain the Woodforest Boulevard
location of Cayennes. PX1. The parties agreed that they would work together to
effectuate the clean division of the business and agreed to let each couple run their
respective parts “without interference”. Id. The two couples decided to end the
Cayenne’s business, and each was to conduct business under a new name of their
choosing. Id. The Taylors elected to change the name of their business to “Bonfire”
and formed a company for that purpose. 3RR121, 124. Likewise, the Hennys elected
to name their business Coozan’s Hot Wings and Bayou Café, and formed a limited
liability company under the same name for that purpose (“Bayou Café”). 3RR81.
Among other things, the parties agreed to work with all third parties to
effectuate these transfers of ownership. PX1. Many of the respective transfers, name 9 changes, etc. were done without issue. Mr. Taylor contended that, for every item
needed to get Bonfire up and running, he “knocked it out of the park.” 3RR212. But,
when it came to performing in a manner which would directly benefit the Hennys, the
Taylors sat on their hands. This inaction, as it turned out, cost the Hennys dearly.
The Taylors failed when their cooperation was needed in transferring or
assigning the leases of the Kirby and 1960 location from Cayenne’s to Bayou Café.
3RR86-88; 3RR221-222. The Taylors knew of this failure, but did not give meaningful
effort to effectuate the full assignment to the Hennys’ new business. The Taylors
testified that they made a few phone calls to Weingarten to determine what was
needed to remove themselves from the Weingarten Lease. 3RR88; 3RR221-222. This
inaction continued for over two years. But the Hennys, having a business to run,
continued to run the Bayou Café locations under the original lease.
Both Bonfire and the Hennys’ Bayou Café continued successfully. In
approximately 2006, Mr. Henny was promoted in his primary career, and relocated to
the Washington, D.C. area for work. 5RR9. Mr. Henny commuted to and from the
Washington, D.C. area for work, and Mrs. Henny operated the Bayou Café locations.
After approximately a year of this practice, the Hennys ultimately decided to sell their
successful restaurant business. 4RR133-134; 5RR10.
Experienced businessman, Bruce Pollock, expressed interest in purchasing the
business in 2007, and formed Coozan’s, Inc. to purchase the Bayou Café restaurants.
PX2. The parties entered into an Asset Purchase Agreement on February 05, 2008. 10 PX2. At or about this time, the operations of the Bayou Café business were taken
over by Coozan’s, Inc. 3RR175. As consideration for the purchase of Bayou Café,
Coozan’s, Inc. was to pay $34,160.00, issue shares of Coozan’s Inc. to the Hennys,
and assume approximately $500,000.00 in outstanding liabilities. PX2; 4RR145;
4RR147-148; 3RR156-169. The Asset Purchase Agreement was contingent on the
assignment of the leases to Coozan’s, Inc. PX2; 9RR5.
The Hennys could not assign or otherwise convey the Kirby or 1960 leases to
Coozan’s, Inc. because the Taylors had never permitted the assignment from
Cayenne’s to Bayou Café, LLC. 3RR158-159. The Hennys again reached out to the
Taylors, pleading that they help to get this administrative change accomplished.
3RR96. Mr. Pollock himself met with Mr. Taylor and explained the urgency of the
matter, and the necessity of the Taylors’ cooperation. 3RR115; 3RR204-212. The
Taylors, knowing that their collaboration was required to assign the lease from
Cayenne’s, sat idly by and refused to effectuate the final separation of the Cayenne’s
business. 3RR158-160. The Taylors heard the demand from the Hennys and heard the
importance of their cooperation from Mr. Pollock. Nevertheless, the Taylors refused
to make a serious effort to assist in the transfer or assign the lease away from
Cayenne’s.
The Taylors refusal led to catastrophic financial damage to the Henny family.
Because the Cayenne’s lease could not be assigned to Bayou Café, Bayou Café could
not legally assign the lease to Coozan’s, Inc. 3RR158-160. This interference from the 11 Taylors ultimately led to the failure of the Asset Purchase Agreement between Bayou
Café and Coozan’s, Inc. 3RR158-160; 5RR10. Bruce Pollock, the purchaser of the
Hennys’ business even described the Taylors’ inaction as the “kill stroke” to the Asset
Purchase Agreement. 3RR160. This loss cost the Hennys approximately one million
dollars. 4RR142-143.
Coozan’s, Inc. had been operating the Bayou Café businesses during the
finalization of the Asset Purchase Agreement and necessary leases. 3RR175. When the
Asset Purchase Agreement locked up and fell apart as a result of the Taylors’
interference, Pollock and Coozan’s, Inc. moved on. By the time Hennys regained
operations of the Bayou Café, the locations were closed, the staff had dispersed, and
the Hennys could not reestablish the business to salvage itself. The bank had begun
the process of collecting on their loans and seized the equipment and inventory.
4RR145. The Bayou Café business was simply too far gone and was completely
overrun by creditors’ attacks. A business that steadily grew, earning as much as
$996,000.00 in revenue and $109,000.00 in net profit in 2006, could not recover. PX2;
9RR17.
Then the lawsuits came. Creditor after creditor called, demanded, and sued the
Hennys relentlessly. This cause was originally one such case and was originally styled
Advanceme, Inc. v. Coozan’s Hot Wings & Bayou Café, LLC and Adrienne A. Henny. On or
about July 1, 2008, AdvanceMe, Inc. filed its Original Petition against Bayou Café and
Henny seeking to recover certain amounts allegedly owed to AdvanceMe, Inc. under 12 three individual Merchant Agreements. 1CR5. On or about June 19, 2009, Henny filed
her Third-Party Petition (erroneously titled “Cross-Claim Petition”), joining the
Taylors as Third-Party Defendants that were responsible to Henny or AdvanceMe,
Inc. for all or part of AdvanceMe, Inc.’s claims. 1CR21. After several years of
litigation with AdvanceMe, Inc., Henny, was finally able to buy her peace through a
confidential settlement agreement with AdvanceMe, Inc. 1 Unfortunately, AdvanceMe,
Inc. was only one of the creditors lining up to attack the Hennys.
JPMorgan Chase Bank, N.A. achieved summary judgment against Bayou Café
in 2008, under Cause No. 2008-06676, then pending before the 51st Judicial District
Court of Harris County, Texas, in the amount of $251,814.33. The business loans
originally made with Cayenne’s, Inc., which were then divided amongst the Taylors
and Hennys pursuant to the Separation Agreement, formed the subject matter of this
litigation. The Hennys ultimately litigated and settled with JPMorgan Chase Bank,
N.A. 4RR145; 5RR117-118. The Hennys testified that after the collapse of the Bayou
Café business, to buy their peace from the bank, they had to start borrowing from Mr.
Henny’s retirement fund. 4RR145; 4RR147-148.
Sysco Food Services of Houston, Inc. also achieved a default judgment against
Bayou Café in 2007, under cause No. 904,325, then pending before the County Civil
Court at Law No. 2 of Harris County, Texas. DX6:10RR36. The judgment was in the
1 The style of this case was changed to its current status prior to trial so as to avoid confusion and reflect the correct parties involved at the time of trial. 1CR76.
13 amount of $83,792.84. This litigation centered on the food and other inventory items
charged on account to Bayou Café. 4RR115-117. This matter was litigated, and
ultimately settled, leading to a release of judgment filed on June 10, 2011.
San Antonio Federal Credit Union (“SAFCU”) sued Adrienne A. Henny under
Cause Nos. 11C1102248 and 11C1102258, before the Precinct 1, Place 1 Justice Court
of Bexar County, Texas. 2 SAFCU sued Mrs. Henny for failure to pay the credit cards
she used for the Bayou Café business. These cases were litigated, and ultimately
settled.
Finally, the landlord in this transaction, Weingarten Realty Investors brought
suit against Cayenne’s, Denise Taylor and Adrienne A. Henny in relation to the very
lease which is the subject of this litigation. 3 This case was pending before the 157th
Judicial District Court of Harris County, Texas under Cause No. 2011-15295 for
approximately three years. After three years of litigation, and after the trial which is
the subject of this appeal, all parties and claims ultimately settled.
The evidence at trial established that the Taylors were bitter as a result of the
Hennys’ insistence on separation following the discovery of Mrs. Taylor’s wrongful
conduct. In violation of the Separation Agreement, the Taylors refused to cooperate
2 These cases were ultimately transferred to the Precinct 7, Place 1 Justice Court in Harris County, Texas under Cause Nos. CV-71-C-0055490 and CV-71-C-0055493, respectively. 3 Hennys also attempted to bring Weingarten in as a Third-Party Defendant in this case. Consolidation under one case was not successful.
14 or sufficiently investigate the steps necessary to assign or otherwise transfer the
relevant leases to the Hennys’ business.
The evidence at trial showed that Taylors knew of the importance of the leases
to the Asset Purchase Agreement and Coozan, Inc., yet still refused to make a
concerted effort to effectuate their removal from the lease. The Taylors’ outright
refusal to even make the first lease assignment to Hennys’ Bayou Café, LLC serves as
more than a scintilla of evidence of Taylors’ intentional interference.
After trial, the jury unanimously found (1) that the Taylors had breached the
Separation Agreement and (2) that the Taylors’ actions also tortiously interfered with,
and ultimately triggered the failure of, the sale of the Hennys’ business to a third
party. The jury rendered verdict in favor of the Hennys, awarding damages in the
amount of $1,035,000.00, plus attorneys’ fees (including conditional amounts on
appeal) in the amount of $56,000.00. 1CR94.
The Trial Court granted, in part, the Taylors’ Motion for Judgment
Notwithstanding the Verdict, invalidating the Hennys’ tortious interference claim, and
barring Damon K. Henny’s claims by limitations. 1CR 252, 257. The Trial Court
rendered judgment for Adrienne Henny for $325,000.00, plus interest and a portion
of her attorneys’ fees. Granting, in part, Taylors’ Motion for Modify, the Trial Court
15 further reduced the Hennys’ judgment to $160,000.00, plus interest and a portion of
her attorneys’ fees. 4 1CR286.
For the reasons herein stated, the Taylors’ requests for relief should be denied.
SUMMARY OF THE ARGUMENT
The Separation Agreement imposed multiple obligations on all the parties
thereto. The Hennys were successful at trial because they were able to show that the
Taylors breached their obligations to: 1) cooperate in the full separation of the
Cayenne’s business; and, 2) not interfere with the Hennys’ operation of the Bayou
Café business thereafter. Specifically, the Taylors breached these requirements by not
removing themselves from the pertinent leases with a third-party, Weingarten. Their
continued presence and interference with the Hennys’ business ultimately cost the
Hennys dearly.
For the reasons outlined here, the Taylors caused the damages that resulted
from their breach. The Hennys presented ample evidence in support of their damages,
and are legally entitled to the same.
ARGUMENT AND AUTHORITIES
Appellants seek to avoid the last portions of the jury’s answers against them for
the bad acts, which was once represented by a 1.1 million dollar jury verdict. In a
novel argument, the Taylors now attempt to shift responsibility back to the Hennys,
4 The calculation of interest was not reflected in the Order of Remittitur.
16 though no legally of factually sufficient evidence of comparative responsibility was
presented at trial.
Though reduced through various post-trial motions, the unanimous jury verdict
returned in favor of the Henny family remains based on ample evidence and reliable
legal precedent. As outlined below: (1) the Taylors had obligations under the
Separation Agreement to separate themselves from the Hennys’ business; (2) the
Taylors refused to fully perform those obligations; (3) the Taylors’ acts and omissions
harmed the Hennys; and, (4) the Hennys are entitled to recover their proven damages.
I. The Taylors’ obligations under the Settlement Agreement:
The Taylors’ have mischaracterized the Hennys’ argument regarding the
Separation Agreement, and the obligations imposed thereunder. The Taylors look to
shift the interpretation of the Separation Agreement to assign all obligations on the
Hennys. This argument amounts to a claim of ambiguity, as the Taylors wish to
provide competing interpretations of the same provisions of the Separation
Agreement. Nevertheless, a clear interpretation of the Separation Agreement assigns
obligations on the Taylors, which they failed to perform.
A. Contract Construction of the Separation Agreement:
By arguing their own interpretation of the Separation Agreement, the Taylors
are essentially making an argument of ambiguity. Generally, one seeking to
establish ambiguity under a written contract must specifically plead such ambiguity by
setting out the portion claimed to be ambiguous, and then definitely pleading the 17 correct meaning or construction thereof as relied on by the party so claiming. Covered
Bridge Condominium Ass'n, Inc. v. Chambliss, 705 S.W.2d 211 (Tex. App. Houston 14th
Dist. 1985), writ refused n.r.e., (June 4, 1986); Entzminger v. Provident Life & Acc. Ins.
Co., 652 S.W.2d 533 (Tex. App. Houston 1st Dist. 1983); Gulf & Basco Co. v. Buchanan,
707 S.W.2d 655 (Tex. App. Houston 1st Dist. 1986), writ refused n.r.e., (June 4,
1986). The Taylors have never pled ambiguity of the Separation Agreement. CR30,
CR80. The Taylors’ competing interpretation claims to establish that they had no
obligations to the Hennys under the Separation Agreement, and therefore, the
Hennys themselves failed under the Separation Agreement, resulting in their own
damages.
It is clear from the plain language of the Separation Agreement that there are
continued obligations thereunder. The parties are obligated to effectuate a clean
division of the Separation Agreement and must continue their own operations
without interfering with one another. PX1.
B. The Administrative Changes Provision and the Taylors’ Obligations:
The two main provisions of the Separation Agreement at issue were:
“ It is agreed Oscar and Denise Taylor will operate, manage
and own Cayenne’s Restaurant located on Woodforest
Boulevard without interference from any other party.
Damon and Adrienne Henny will operate, manage and own
Cayenne’s Restaurant located on Kirby and the Cayenne’s 18 Restaurant located on FM 1960 without interference from
any party.
It is agreed all administrative changes, including but not
limited to contacting vendors, employees, and/or any
necessary third parties, will be completed by February 1,
2006.”
The Taylors interpretation of the Separation Agreement argues that the Hennys
are the only ones obligated under these provisions. Appellants’ Brief at 9. However, it
requires both parties to participate in the administrative changes, as needed, to
effectuate the division of the business.
The argument put forth by the Hennys at trial, which was supported by the
jury’s unanimous finding of breach, was that the contract provisions, when read with
the entire agreement: 1) Required the Taylors to cooperate in the full separation of
the Cayenne’s business; and, 2) Not interfere with the Hennys’ operation of the
Bayou Café business thereafter. It was then the inaction of the Taylors, described
supra, which ultimately caused the Hennys’ injuries.
Yet, throughout Appellants’ brief, they have asserted Hennys’ argument that
the provisions above necessarily required the following of Taylors:
• Guarantee the two leases for the benefit of the new owners;
19 • Obligate themselves to pay assignment fees as well as continuing to
guaranty the monthly rental and other costs for the new owners; and
• Agree to an extended five-year term of one lease with an increased
monthly rental amount for the benefit of the new owners.
The Appellants’ argument is inaccurate. Though these obligations were
discussed as possibilities, they were never determined by the parties to be an absolute
result of the Taylors’ performance under the Separation Agreement. As a result of
Taylors’ failure to adequately determine the actual steps to assign or otherwise remove
themselves from the Hennys’ future business, the parties may never know what
obligations would have been required of the Taylors, if any.
The Separation Agreement required the Taylors to cooperate in the full
separation of the Cayenne’s business by removing themselves from the Hennys’
future business. This would include seeking to remove themselves from the applicable
leases with third-parties or at least cooperating to accomplish the same. Negotiating
their removal from the lease was a contemplated interaction with a “third-party”
described in the Separation Agreement. PX1.
The evidence presented at trial, which was considered by the jury, was that the
Taylors refused to cooperate and fully discover what it would take to accomplish full
division after the Separation Agreement was signed. 3RR88; 3RR221-222; 3RR158-
160. Instead, the Taylors refused to cooperate and remove themselves from the
20 subject lease, knowing that their continued presence on the same was causing harm to
Bayou Café business. 3RR115; 3RR204-212; 3RR158-160.
The plain language of the contract required the Taylors’ cooperation, the
Taylors’ effort, and the Taylors’ removal from the Hennys’ future business. The
Taylors agreed in this contract to undertake those actions necessary to fully effectuate
the division of the Cayenne’s business. The testimony at trial on this subject was that
the Taylors did very little to determine what could be accomplished regarding the
subject leases. 3RR88; 3RR221-222. Denise and Oscar Taylor testified that they only
made a few phone calls to determine the possibilities of assignment or removal from
the subject leases. Id. As a result, the jury determined unanimously that Taylors’
actions were not sufficient to qualify as performance of their obligation under the
Separation Agreement. CR94.
i. Participation in the Sale of the Hennys’ Business
As outlined above, the Taylors contend that the Hennys interpretation of the
Separation Agreement necessarily requires them to “cosign” or agree to guarantee the
lease for an additional 5-year term. 3RR88-89, 95. However, the Hennys did not
require the Taylors’ active participation in the sale of the Hennys’ business, as is
contended in Appellants’ Brief. The Separation Agreement, however, required the
Taylors to make a meaningful effort to remove themselves from the Weingarten lease.
21 ii. The Separation Agreement contemplates continuing
responsibilities, without interference.
The refusal by the Taylors also put them in direct violation of the “without
interference” provision of the Separation Agreement. The Taylors refused to even
assign the subject lease, in the name of Cayenne’s, to Hennys’ newly formed Bayou
Café, LLC. Moreover, the Taylors’ refusal to participate in determining the necessary
steps for removal from the lease, and their refusal to assign the subject lease to the
Hennys, interfered with the Hennys’ ability to run their company, Bayou Café.
The Taylors, in essence, argue that their continuing responsibilities are more
burdensome than anticipated at the time of signing the Separation Agreement. The
Taylors’ performance, however, cannot be excused simply because it became more
economically burdensome than anticipated. Huffines v. Swor Sand & Gravel Co., 750
S.W.2d 38, 40 (Tex.App.—Fort Worth 1988, no writ); Alamo Clay Prods v. Gunn Tile
Co., 597 S.W.2d 388, 392 (Tex.App.—San Antonio 1980, writ ref’d n.r.e.); see, Northern
Nat. Gas. Co. v. Chisos Jt. V. I., 142 S.W.3d 447, 458 (Tex.App.—El Paso 2004, no
pet.). Removal from the leases may have required the Taylors to incur additional time,
responsibility or expense. The additional expense would not have justified their refusal
to perform under the Separation Agreement.
iii. The Limitations of the Separation Agreement.
The simple demands made by the Hennys were well within the limitations of
the Separation Agreement. The Taylors contend that the Hennys’ demanded the 22 Taylors to actively participate in the sale of the Hennys’ business, or the operations of
the new business after the sale. This is not accurate.
The Hennys made demands that are well within the limitations of the
Separation Agreement: 1) Taylors must cooperate in the full separation of the
Cayenne’s business; and, 2) Not interfere with the Hennys’ operation of the Bayou
Café business thereafter. The Taylors refused to contact a third-party (Weingarten) to
make a reasonable effort and participate in the removal of Cayenne’s from the
Weingarten lease. The Taylors’ act and omissions were in direct violation of the
Separation Agreement, and within the contemplated limitations thereof.
iv. Taylors are barred from asserting the defense of “Justification”
and “Impossibility to Perform”.
The Taylors assert that removal of themselves from the lease with a third-party
was impossible because Weingarten “refused to allow the Taylors to be removed from
the leases.” However, the uncontroverted evidence showed that Taylors did very little
to research the steps necessary to effectuate their removal from the lease. 3RR88;
3RR221-222. The Taylors’ refusal to pursue discussion with the Hennys and
Weingarten cannot render performance “impossible”, nor can it supply Taylors with
some sort of justification for their breach.
Moreover, “Justification” and “Impossibility to Perform” are both avoidance
defenses which must be affirmatively pled, pursuant to Tex. R. Civ. P. 94. It is well
settled law in Texas that an affirmative defense must be both pled and supported by 23 evidence to make out a fact issue. International Shelters, Inc. v. Corpus Christi State National
Bank, 475 S.W.2d 334, 336 (Tex.Civ.App. Corpus Christi 1971, no writ); Texas State
Board of Registration for Professional Engineers v. Trimble, 366 S.W.2d 124 (Tex.Civ.App.—
El Paso, 1963, writ ref'd n.r.e.); Fisher v. Howard, 389 S.W.2d 482, 486 (Tex.Civ.App.—
Dallas 1965, n.w.h.). The Taylors did not plead this matter prior to trial, did not
present legally or factually sufficient evidence to support a finding in favor of either of
these possible affirmative defenses, and did not present these special issues to the jury.
The Taylors must not be permitted to present them now.
II. THE TAYLORS’ BREACH CAUSED THE HENNYS’ DAMAGES. Causation exists to support the Hennys’ claims. The Taylors contend that their
failure to remove themselves from the leases did not cause the Hennys’ damages as a
matter of law. Taylors argue that Hennys’ damages were not a natural, probable, and
foreseeable consequence of the Taylors’ breach, and 2) the opportunity to assign the
leases had expired when the Taylors received the paperwork. The Taylors argument
fails.
A. Loss was unavoidable, according to Taylors.
To recover consequential damages in a breach of contract action, the plaintiff
must show that the damages sought were the natural, probable, and foreseeable
consequence of the defendant's conduct. Mead v. Johnson Grp., Inc., 615 S.W.2d 685,
687–88 (Tex.1981); Tidwell Props., Inc. v. Am. First Nat'l Bank, No. 14–04–00120–CV,
2006 WL 176862, at *3 (Tex.App.-Houston [14th Dist.] Jan. 26, 2006, no pet.). The
24 absence of a causal connection between the alleged breach and the alleged damages
precludes recovery. S. Elec. Servs., Inc. v. City of Houston, 355 S.W.3d 319, 324
(Tex.App.-Houston [14th Dist.] 2011, pet. denied); Abraxas Petroleum Corp. v. Hornburg,
20 S.W.3d 741, 758 (Tex.App.-El Paso 2000, no pet.).
The damages that resulted from the Taylors’ actions were foreseeable because
the Taylors were on actual notice of the consequences of their inaction. The Taylors
were aware that the Hennys required their cooperation in the handling of the third-
party Weingarten lease. 3RR96; 3RR115; 3RR204-212. The Taylors sat idly by, even
after Mr. Taylor met with Mr. Pollock, the purchaser of the Bayou Café business.
3RR158-160 The Taylors knew that their inaction would cause the failure of the
Bayou Café sale. 3RR158-160 The Taylors would not participate in serious discussion
to remove themselves from the Cayenne’s lease. The Taylors knew that without their
participation, assignment, or removal, the Hennys could not effectuate a transfer of
the lease from Bayou Café to Coozan’s, Inc. These calls, discussions, and meetings
operate as actual, reasonable notice of the damaging results of any breach of the
Separation Agreement.
B. The Taylors were aware of the need for their cooperation with the
lease before any options “expired”:
The Taylors contend that the option to permit the assumption expired three
weeks prior to their receipt of the same. In making this contention, the Taylors want
25 the Court to believe that the option to permit the assumption expired three weeks
before they had allegedly learned of the option’s existence. This simply isn’t the case.
The evidence at trial was that Mrs. Henny repeatedly contacted Mrs. Taylor in
an effort to convey the message that their effort was necessary to effectuate the full
division of the Cayenne’s company. 3RR96. It was after these repeated requests from
Mrs. Henny took place that the Hennys resorted to seeking the aid of counsel. Even
before Hennys’ counsel forwarded the lease documents on May 28, 2008, the Taylors
were aware that the Weingarten matter required their attention. 3RR88; 3RR96;
3RR115; 3RR204-212. The evidence at trial established this fact, and the jury
unanimously agreed.
The Taylors cite Jackson v. Henderson, 2004 WL 1631394 at *4-5 (Tex.App.—
Houston [1st Dist] July 22, 2004, no pet.) in support of their contention. However,
this case is distinguishable from Jackson because the Taylors knew the Weingarten
matter required their attention far before the demand letter from Hennys’ Counsel on
March 28, 2008. 3RR88; 3RR96; 3RR115; 3RR204-212. For the same reasons, the
Taylors reliance on Voss Road Exxon, LLC v. Vlahakos, 2011 W.L 2623989, at *7
(Tex.App.—Houston [1st Dist.] June 30, 2011, no pet.) is equally misguided. The
Taylors’ failure to follow up and cooperate cannot permit them to escape liability.
C. Adrienne Henny and Damon Henny have standing:
Taylors also allege that the Hennys lack standing to complain as to either of the
Taylors’ interference with the Asset Purchase Agreement or breach of the Separation 26 Agreement. The Taylors cite Wingate v. Hajdik, 795 S.W.717, 719 (Tex. 1990) and its
progeny in support of this standing contention. However, the Taylors’ reliance on
Wingate is misguided as the Hennys’ case falls under a well-established exception to
the general rule.
A corporate stockholder cannot recover damages personally for a wrong done
solely to the corporation, even though he may be injured by that wrong. Wingate, 795
S.W.2d at 719. However, in the following paragraph, the Texas Supreme Court
confirms an applicable exception to the general rule above. “This rule does not, of
course, prohibit a stockholder from recovering damages for wrongs done to him
individually “where the wrongdoer violates a duty arising from contract or otherwise,
and owing directly by him to the stockholder.” Id.
The Court sites its previous 1942 decision from Commonwealth of Massechusetts v.
Davis, 140 Tex. 398 (1942):
“There are authorities which recognize an exception to the above
rule, where the wrongdoer violates a duty arising from contract or
otherwise, and owing directly by him to the stockholder. The
exception has been applied more often in cases where there was a
fiduciary relationship which required the wrongdoer to protect the
interest of the stockholder, and this duty was violated, and full relief
to the stockholder could not be had through a recovery by the
corporation.” Davis, 140 Tex. at 408. 27 In the instant case, the Hennys’ personal financial security was destroyed as a
result of their former-partners’ actions.
Texas law also recognizes the right of the owner of a closely held corporation
to pursue claims personally or in the name of the corporation. Tex. Bus. Org. Code §
21.563(c). The testimony of Mr. and Mrs. Henny was that there were less than 35
shareholders. 5RR25-26 Bayou Café was not publicly traded. Accordingly, for
purposes of the Business Organizations Code, Bayou Café, LLC was a closely held
corporation. Tex. Bus. Org. Code § 21.563(a). For these reasons, the Hennys have
standing to bring suit in their names, personally.
The Taylors further proffered a catch-all contention that Hennys’ damages
were too remote, citing ERI Consulting Engineers, Inc. v. Swinnea, 318 S.W.3d 867, 876
(Tex. 2010). This contention is, in some regards, based on the standing issue as
described in Wingate above, as well as the foreseeability analysis from Jackson, supra.
The Hennys hereby assert the same analysis which renders Jackson inapplicable in this
case. And, Wingate establishes an exception to the rule under which the Hennys’
qualify. There is sufficient evidence to support the finding that the Taylors’ breach
caused the Hennys’ injuries.
To the extent that the Taylors are attacking the foreseeability of the Hennys’
claim for lost profits and sufficiency of evidence in support of the same, the rule
concerning adequate evidence of lost profit damages is well established: “Recovery for
lost profits does not require that the loss be susceptible of exact calculation. However, 28 the injured party must do more than show that they suffered some lost profits. The
amount of the loss must be shown by competent evidence with reasonable certainty.
What constitutes reasonably certain evidence of lost profits is a fact intensive
determination. As a minimum, opinions or estimates of lost profits must be based on
objective facts, figures, or data from which the amount of lost profits can be
ascertained. Although supporting documentation may affect the weight of the
evidence, it is not necessary to produce in court the documents supporting the
opinions or estimates”. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 84
(Tex.1992) (citations omitted). The Hennys produced legally and factually sufficient
evidence in support of their claim for lost profits through the unopposed offering of
the Asset Purchase Agreement. PX2.
III. THE HENNYS ESTABLISHED THEIR DAMAGES:
A. Hennys’ evidence of damages should not be excluded. The Taylors contend that the Hennys are barred from recovering damages
found by the jury for two reasons: 1) Exclusion pursuant to Tex. R. Civ. P. 193.6(a);
and 2) insufficient evidence of mitigation damages and damages resulting from a loss
of credit reputation.
i. Hennys’ actions led to no surprise or prejudice to Taylors,
and Good Cause Exists to preclude exclusion.
This issue falls under the exception to the rule of automatic exclusion in Rule
193.6. The exception to this Rule allows the Court to permit evidence upon a finding
29 of good cause OR an absence of unfair surprise or prejudice. Tex. R. Civ. P.
193.6(a)(1) and (a)(2). In this case, the damages claimed by the Hennys were disclosed
numerous times, in writing and verbally.
On May 28, 2008, the Hennys forwarded their demand for action to Taylors,
and included a copy of the Original Petition the Hennys intended to file. DX17.
On June 19, 2009, the Hennys filed this same Petition. CR21. In this Petition,
the Hennys disclosed the lost value of the Asset Purchase Agreement, and discussed
the varying theories by which the Hennys sought to assign liability for their injury to,
among others, the Taylors. See, Id.
On September 4, 2009, the Hennys filed their First Amended Third-Party
Petition, wherein total actual damages of $1,400,000.00 were disclosed. Supp.CR22.
These figures were again disclosed though the filing of Hennys’ Second and
Third Amended Third-Party Petition. Supp.CR35, 49.
On August 17, 2012 the Hennys filed their Fourth Amended Third-Party
Petition. CR43. At this point in the case, discovery was still ongoing, but the Hennys’
had learned far more regarding the specific actions of the Taylors, Mr. and Mrs.
Taylor. The Hennys reasserted the actions for Breach of Contract, Common-Law
Fraud, Negligent Misrepresentation, Conspiracy, and Tortious Interference against the
Taylors. The Hennys also disclosed that they sought over $1,000,000.00 in damages,
plus attorney’s fees and expenses, for the Taylors’ wrongful conduct. Id.
30 On August 24, 2010, counsel for the Taylors inspected all of the Hennys’
records at their counsel’s office.
Since the Taylors were brought in as Third-Party Defendants, they only
conducted limited discovery. The Taylors took no depositions. The Taylors sent
meager written discovery. The Taylors have not asserted any specific undue surprise
or prejudice that resulted from the inclusion of the Hennys’ damages at trial, other
than to assert that they did not receive the benefit of automatic exclusion. Appellants’
Brief at 24-25
Good Cause exists for the Hennys’ actions. For example, the Hennys learned
critical facts during post-judgment discovery (the deposition of Adrienne A. Henny)
and discussions with JPMorgan Chase, N.A.’s. The facts learned included the effect of
Taylors’ actions on the Hennys’ credit and the cost of mitigation (which could not be
accurately calculated prior to deposition and settlement with JPMorgan Chase). This
information was discovered shortly before trial in this case. 5RR181.
Further, good cause existed, as was discussed with the Trial Court, because lead
counsel for the Hennys was hospitalized for approximately two weeks at or about the
discovery deadline in the trial court, where the parties would have assessed and
supplemented discovery to avoid any of these exclusionary pitfalls. 3RR11.
Ultimately, when notified that their disclosure responses might be insufficient,
the Hennys’ immediately attempted to amend and produce a more in-depth analysis
of their damages model and calculations. 3RR6. The Taylors did not request a trial 31 continuance because the amendment only confirmed those damage models and
calculations they were already anticipating.
Furthermore, at or about this time, the Hennys elected not to pursue several of
the causes of action against Taylors, including Fraud, Negligent Misrepresentation,
and Conspiracy. The Hennys also elected not to pursue exemplary damages.
The Taylors had notice of the damages sought by the Hennys. The parties
mediated this case. The parties were in settlement negotiations in the Weingarten case,
and were intimately aware of each other’s positions, including the amount and method
for calculating the Hennys’ damages. Finally, the Hennys never sought an amount in
excess of their pleadings and only requested such damages from the jury.
When considering the information above, the information produced was of no
surprise or prejudice to the Taylors, and good cause exists for the Hennys’ actions.
For these reasons, this case falls under the exceptions to Tex. R. Civ. P. 193.6(a), and
the Hennys’ should not suffer exclusion of their evidence on damages.
To the extent that the Taylors claim the Hennys’ pleadings were insufficient,
the Taylors waived any error. Failure to file a special exception constitutes a waiver of
any error in the plaintiff's pleadings. See, Tex. R. Civ. P. 90-91. The pleadings, both in
Hennys’ previous petitions, and in their 5th Amended Petition (and discussion
regarding leave to file the same), put the Taylors on reasonable notice of the damages
which were to be sought – including lost profits. It is clear that Taylors were content
with the information provided, and elected to forgo special exception procedures. 32 Admittedly, the Taylors fought for the application for automatic exclusion
pursuant to Tex. R. Civ. P. 193.6. However, they failed to produce a reasonable
argument as to why the exception of Tex. R. Civ. P. 193.6(a)(1) and (a)(2) would not
apply. This is apparent from the record when Taylors own counsel entered the
Hennys’ pleadings as evidence, but ultimately withdrew the same. 5RR75. The Taylors
were desperately trying to preserve this automatic-exclusion argument. Id.
To the extent that evidence was submitted by the Hennys without objection, or
entered by the Taylors of their own accord, the Taylors have waived any argument
regarding the sufficiency of the Hennys’ pleadings, and tried said issues by consent.
B. The Hennys’ testimony regarding past and future cost of Mitigation.
A. Adrienne Henny’s past and future cost of mitigation:
The evidence at trial, through the testimony of Mr. and Mrs. Henny, was that
they fought to pay off the outstanding debt, even borrowing from Mr. Henny’s
retirement plan and savings, in an effort to save their business through various and
sundry settlements and legal battles. 5RR27; 4RR141-142; 4RR145; 4RR147-148. The
Taylors themselves introduced evidence regarding mitigation through the direct and
cross examination of Mr. Taylor. 4 RR 107, 114; 4RR117-118. Both parties also
testified as to the claims asserted by Weingarten Realty Investors against them, the
total amount sought by Weingarten, and ongoing settlement negotiations with the
same. It was also testified that Mrs. Henny’s expected exposure in that proceeding was
approximately $70,000.00. 5RR27. This testimony was legally and factually sufficient 33 evidence, and based on actual knowledge of the Hennys’ damages - both the past and
future exposure.
As a result of legally and factually sufficient evidence, the jury unanimously
agreed that the Hennys were entitled to receive $110,000.00 (for past and future costs)
as compensation for their cost of mitigation.
C. The Hennys’ testimony regarding damage to Credit Reputation:
The Hennys established sufficient evidence in support of their damages of loss
of credit reputation. Specifically, Mr. Henny testified that, having no other option for
paying off the mounting debt and creditors’ attacks, he was forced to borrow from his
own retirement plan. 4RR145; 4RR147-148. Mrs. Henny testified that she could not
get a loan at the bank. 5RR55-56. Then, there is Mr. Taylor’s own testimony of the
Hennys’ declining credit reputation, and the ongoing attacks of creditors on the
Hennys. 4 RR 107, 114; 4RR117-118. Due to the declining credit reputation as a result
of the Taylors’ actions, the Hennys were refused loans, and suffered the result of
having to take their own retirement funds to pay off creditors. 4RR147-148 These
undeniable facts meet the standards of St. Paul Surplus and Casteneda as cited by
Taylors. St. Paul Surplus Lines Ins. Co. v. Dal-Worth Tank Co., 974 S.W.2d 51, 53 (Tex.
1998); Provident Am. Ins. Co. v. Casteneda, 988 S.W.2d 189, 199 (Tex. 1998).
34 IV. NO NEW TRIAL IS NECESSARY
The Taylors, in the alternative to a take-nothing judgment, seek a New Trial.
However, the Taylors’ arguments in favor of this relief fail.
A. There are no mixed valid/invalid theories of liability.
The Taylors’ argument that the findings by the jury commingle valid and
invalid theories of breach is an argument that was first raised in the Taylors’ Motion
for Judgment Notwithstanding the Verdict. The Hennys’ have appealed the findings
thereof, and anticipate that many of the arguments will be contained in their own
Cross-Appellants’ Brief, and Reply to the Taylors’ Reponses thereto.
Nevertheless, the Taylors have waived this argument as a result of their failure
to properly submit this special issue to the jury. The Taylors objected to the inclusion
of a broad form question as to breach of contract, but they did not seek an
instruction, or otherwise preserve their objection before the jury began deliberations.
In order to complain of the trial court's failure to submit an explanatory
instruction, appellant must have requested a substantially correct instruction. Donnelley
Marketing v. Lionel Sosa, Inc., 716 S.W.2d 598 at 602 (Tex.App.—Corpus Christi 1986);
Ryan Mortg. Investors v. Fleming-Wood, 650 S.W.2d 928 at 933 (Tex.App.—Fort Worth,
1983); Tex.R.Civ.P. 278. Where the trial court has failed to include instructions on the
proper measure of damages, it is the complaining party's burden both to object to the
charge and to tender such instructions in substantially correct form. Cameron v. Terrell
& Garrett, Inc., 618 S.W.2d 535, 538 n. 4 (Tex.1981); Texas Cookie Co. v. Hendricks & 35 Peralta, Inc., 747 S.W.2d 873, 878 (Tex.App.—Corpus Christi 1988, writ denied). The
court should not be required to pick through appellant's own tendered issues to
construct an instruction to conform to an issue actually submitted; this is the
responsibility of the party complaining that a necessary instruction is missing from the
court's charge.
Even if this was a special issue that required its own question, the Taylors failed
to properly present this for inclusion in the Charge. The failure to submit an issue is
not ground for reversal unless its submission in substantially correct form has been
requested in writing and tendered by the party complaining of the judgment. Tex. R.
Civ. P. 278.
B. There is factually sufficient evidence of Taylors’ breach and the
Hennys’ mitigation costs and damage to credit reputation.
Legally and factually sufficient evidence has been discussed and referenced all
throughout this Response to Appellant’s Brief, and the Appellee hereby incorporates
those prior arguments and references to the records, supra, as though printed herein
verbatim. There exists extensive testimony regarding the Hennys’ costs of mitigation
that resulted from the Taylors’ breach and interference, as well as the Hennys’ loss of
credit reputation in Section III(B)-(C), supra.
PRAYER
Damon and Adrienne A. Henny respectfully request that this Honorable Court
affirm the Trial Court’s Final Judgment of May 1, 2014 as it relates to the Hennys’ 36 recovery, that this Honorable Court reverse and render relief consistent with the
original, unanimous jury verdict in this case as to those issues presented in the
Hennys’ Cross-Appellant’s Brief, including the reversal of the Order Granting
Judgment Notwithstanding the Verdict and Order Granting Remittitur. The Hennys
also pray for all other and further relief, both general and special, at law or in equity,
to which they may be justly entitled.
Respectfully submitted, THE CARTER LAW FIRM
BY: __/s/ Eric G. Carter_______ Eric G. Carter SBN: 03914500 ecarter@carter-lawfirm.com Eric William Carter SBN: 24057797 ewcarter@carter-lawfirm.com 1811 Southmore Boulevard Houston, Texas 77004 Tel: (713) 227-0042 Fax: (713) 227-7001 ATTORNEYS FOR CROSS- APPELLANTS: ADRIENNE A. HENNY and DAMON K. HENNY
37 CERTIFICATE OF COMPLIANCE
This brief complies with the type volume limitation of Texas Rule of Appellate
Procedure 9.4(i)(2)(B) because the brief contains 8,151 words, even including those
parts which are exempted by Texas Rules of Appellate Procedure 9.4(i)(1).
This brief complies with the typeface and type style requirements of Texas Rule
of Appellate Procedure 9.4(e) because this brief has been prepared in a proportionally
spaced typeface using Microsoft Word in 14-point Garamond font for text in the
body and 12-point Garamond font for footnotes.
_/s/Eric G. Carter____ Eric G. Carter
38 CERTIFICATE OF SERVICE
As required by Texas Rule of Appellate Procedure 6.3 and 9.5 (b), (d) and (e), I
hereby certify that a true and correct copy of the above and foregoing Appellees’
Response to Brief of Appellants has been forwarded to counsel for Appellants, as
listed below, by facsimile transmittal, US mail, E-Service, or hand delivery on this 28th
day of January, 2015.
_/s/Eric G. Carter____ Eric G. Carter
Attorney for Denise Taylor and Oscar Taylor: Douglas Pritchett, Jr. Johnson, Trent, West & Taylor, LLP 919 Milam, Suite 1700 Houston, Texas 77002 Telephone: (713) 222-2323 Facsimile: (713) 222-2226 Via Facsimile and Email
Oscar Taylor and Denise Taylor v. Adrienne A. Henny and Damon K. Henny (Oscar Taylor and Denise Taylor v. Adrienne A. Henny and Damon K. Henny) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.