Oscar Taylor and Denise Taylor v. Adrienne A. Henny and Damon K. Henny

Court of Appeals of Texas·Decided April 7, 2016·No. 01-14-00650-CV·Published

Opinion

Opinion issued April 7, 2016

In The

Court of Appeals

For The

First District of Texas

negligent misrepresentation. Damon Henny was later joined as an involuntary plaintiff. After the close of evidence, the Hennys nonsuited their fraud claim against the Taylors to avoid a take-nothing directed verdict. After a jury found in favor of the Hennys, the trial court partially granted the Taylors’ motion for judgment notwithstanding the verdict and awarded Adrienne Henny breach-of- contract damages, pre- and post-judgment interest, and contingent appellate attorney’s fees. The court later granted the Taylors’ motion to modify the judgment, eliminating lost-profit breach-of-contract damages and reducing the award to $160,000 plus interest and fees. Both the Taylors and the Hennys appealed.

The Taylors bring five issues on appeal. In three rendition issues, they contend that (1) the breach-of-contract claim must fail because the separation agreement did not require them to do what Adrienne alleged they failed to do, (2) Adrienne did not establish causation because other circumstances would have caused her damages even in the absence of their alleged contractual breach, and (3) the evidence was legally insufficient to prove the amount of damages found by the jury. In the alternative, the Taylors argue that a new trial is warranted because the breach-of-contract jury question improperly combined valid and invalid theories of liability and because the evidence is factually insufficient to support the jury’s verdict as to breach of contract, causation, and damages.

The Hennys raise three issues on appeal. First, they contend that the court erred by granting JNOV as to their tortious interference claim, which they assert is supported by legally sufficient evidence. Second, they argue that the court erred by dismissing Damon’s claims as barred by the statute of limitations. They contend that the Taylors have waived this defense by joining Damon as an involuntary plaintiff in this case. Third, they contend that the trial court erred by reducing the lost-profit damages found by the jury, which they argue are supported by legally sufficient evidence.

We reverse the trial court’s judgment awarding contract damages, render a take-nothing judgment on that cause of action in favor of the Taylors, and otherwise affirm the judgment of the trial court.

Background

Damon and Adrienne Henny and Oscar and Denise Taylor jointly owned Cayenne’s Corporation, through which they operated three Cajun hot wings restaurants called “Cayenne’s Restaurant.” The restaurants were located in Houston on Woodforest Boulevard, Kirby Drive, and FM 1960, and they were operated in leased premises. The Kirby and FM 1960 restaurant premises were both leased from Weingarten Realty.1 The Kirby lease was executed on November

1 Weingarten Realty is the general partner of Main/O.S.T., Ltd, which was the landlord for the Kirby lease. Weingarten Realty Investors was listed as the

10, 2003 for a term of five years. The FM 1960 lease was executed on March 31, 2005 for a term of ten years. Both leases were signed on behalf of Cayenne’s by both Denise (as President) and Adrienne (as Secretary).

Both Denise and Adrienne were listed as guarantors on the leases, and each signed a personal guaranty as to each lease. The guarantees included identical provisions that they would remain in effect in the event of an extension or assignment by the tenant, without regard to whether the guarantor had consented to the changes.2 In December 2005, the two couples decided to divide the business. To that end, they entered into a separation agreement, which provided that thereafter the Taylors would “operate, manage, and own” the restaurant located on Woodforest Boulevard and the Hennys would “operate, manage, and own” the restaurants located on Kirby and FM 1960. They agreed to divide the corporate debt, establish new corporate identities, and cease using the name and identity of “Cayenne’s” in

landlord on the FM 1960 lease. For convenience, we refer to the landlord on both leases as “Weingarten Realty.”

2 The guarantees state:

Guarantor further covenants and agrees that this Guaranty and the full liability of Guarantor hereunder shall remain and continue in full force and effect notwithstanding the occurrence of any one or more of the following types of transactions (whether or not Guarantor shall have received any notice of or consented to any such transaction); (i) any renewal, extension, modification or amendment of said Lease Contract; . . . (iii) any assignment or transfer or subletting by Tenant . . . .

any form by a date identified in the agreement. Specifically, the agreement provided:

The terms of the following agreement shall provide for the operation of said restaurants as expressly indicated. Further, the following agreement contains the entire agreement of the parties and there are no other promises or conditions in any other agreement whether oral or written.

....

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 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.

....

It is further agreed all parties will establish new company identities by March 31, 2006 to properly dissolve the existing corporation. After March 31, 2006 no party will use the Cayenne’s Restaurant name, identity or logo in any form.

Two years later, in 2008, the Hennys decided to sell their restaurants, which by that time were operated under the name Coozan’s Hot Wings and Bayou Café LLC (“Bayou Café”). They entered into a purchase agreement with Coozan’s Inc., a corporation owned and created by Bruce and Martha Pollock for the purpose of purchasing the Hennys’ business. Bruce had worked as a stockbroker for 25 years, and he planned to “take [the business] public” and sell franchises. The agreement

provided for the sale of all of the associated business assets in exchange for a total purchase price of $547,730, to be paid as $34,160 in cash, assumption of outstanding debt, and 600 shares of Coozan’s, Inc. This agreement required Bayou Café to assign the leases.

The purchase agreement between Bayou Café and Coozan’s, Inc. was effective February 5, 2008, and the five-year lease on the Kirby location was set to expire January 31, 2009. After signing the purchase agreement but without obtaining assignment of the lease, Bruce and his business partners and employees took over business operations and ran the restaurants for approximately eight months. During this time he attempted to negotiate with Weingarten Realty regarding the lease on the Kirby location. Bruce testified that Weingarten Realty assured him that if he were “put on the lease,” the lease would be renewed. However, he also testified that Weingarten Realty’s “real problem” at that time was that it “objected to [them] being there without being on the lease itself.”

On April 14, 2008, Weingarten Realty sent Adrienne two letters regarding the proposed assignment of the Kirby and FM 1960 leases. The stated purpose of the letters was to transmit lease assignment and assumption documents showing the assignments from Cayenne’s Corporation to Bayou Café and from Bayou Café to Coozan’s, Inc. Both letters requested “execution by all of the pertinent parties”

and stated that the executed documents “must be received . . . on or before May 5, 2008.” Both letters stated:

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Oscar Taylor and Denise Taylor v. Adrienne A. Henny and Damon K. Henny, (Tex. Ct. App. 2016).

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