PopCap Games, Inc. v. MUMBOJUMBO, LLC

350 S.W.3d 699, 2011 WL 3833091
CourtCourt of Appeals of Texas
DecidedNovember 3, 2011
Docket05-10-00301-CV
StatusPublished
Cited by101 cases

This text of 350 S.W.3d 699 (PopCap Games, Inc. v. MUMBOJUMBO, LLC) 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
PopCap Games, Inc. v. MUMBOJUMBO, LLC, 350 S.W.3d 699, 2011 WL 3833091 (Tex. Ct. App. 2011).

Opinion

OPINION

Opinion By

Justice FITZGERALD.

This appeal arises from commercial litigation in which the parties asserted several claims and counterclaims against each other. After a jury trial on the merits and a hearing before the trial judge on attorneys’ fees, the trial judge signed a judgment awarding MumboJumbo, LLC (“MumboJumbo”) roughly $6.7 million in damages and fees against PopCap Games, Inc. (“PopCap”). The judgment also ordered PopCap to take nothing on its claims. PopCap appealed, and four other parties later filed a cross-notice of appeal. We reverse, render judgment that Mum-boJumbo take nothing, render judgment that PopCap recover $1,557,618.15 from MumboJumbo, and remand for determination of PopCap’s attorneys’ fees, interest, and costs of court.

I. Background

A. Facts

PopCap is a developer of computer-game software. MumboJumbo both develops computer-game software itself and distributes computer games developed by others. Some evidence indicates the two companies started a business relationship in 2002.

In 2005, PopCap and MumboJumbo executed a written retail license agreement in which PopCap granted MumboJumbo, among other things, an exclusive North American license to manufacture, market, and distribute specified computer games. The 2005 agreement went into effect July 1, 2005. The 2005 agreement had a three-year term, but it also provided that either party could terminate the agreement without cause upon 120 days’ written notice.

On May 23, 2006, PopCap sent Mumbo-Jumbo a notice terminating the 2005 *704 agreement, effective 120 days later. In the summer of 2006, the parties executed a new written agreement, entitled “Game Retail Distribution Agreement,” with an effective date of July 1, 2006 and an expiration date of March 31, 2008. This 2006 agreement expressly terminated the 2005 agreement effective June 30, 2006. Under the 2006 agreement, MumboJumbo was to provide certain services to PopCap with respect to the manufacture, sale, distribution, and invoicing of specified PopCap computer games. The 2006 agreement specified the fees that PopCap was to pay MumboJumbo for the various services. The 2006 agreement also required Mumbo-Jumbo to pay PopCap on a monthly basis, in an amount based on the revenues Mum-boJumbo collected for the sale of PopCap games.

The parties’ relationship soured in mid-2007. PopCap began meeting directly with computer-game retailers with the assistance of another company, Strategic Marketing Partners, Inc. (“SMP”). Pop-Cap also started distributing its games to at least one retailer, Walmart, without MumboJumbo’s involvement. Mumbo-Jumbo contends that PopCap’s actions breached the 2006 agreement. Mumbo-Jumbo also contends that PopCap committed fraud from about December 2006 through March 2007, both by telling Mum-boJumbo that PopCap was not going to start selling its products directly to retailers and by failing to disclose its true intentions to MumboJumbo. PopCap contends that MumboJumbo breached its payment obligations under the 2006 agreement by making some payments late and by failing to pay some amounts entirely.

B. Procedural history

In October 2007, MumboJumbo and Texas United Distribution, LLC sued Pop-Cap, PopCap Games International, Ltd., and SMP in Dallas County district court for tortious interference with contractual relations and business disparagement. MumboJumbo also sought a declaratory judgment as to the parties’ duties under the 2006 agreement. Two weeks later, PopCap and PopCap Games International, Ltd. filed their own breach-of-contraet lawsuit against MumboJumbo in a different Dallas County district court. Soon thereafter, the PopCap case was transferred by agreement to the district court in which the MumboJumbo case was pending. The district judge then signed an order consolidating the PopCap case into the Mumbo-Jumbo case and aligning the parties as follows: (1) PopCap and PopCap Games International, Ltd. were aligned as plaintiffs/counterdefendants, (2) MumboJumbo was aligned as defendant/counterplaintiff, (3) Texas United Distribution, LLC was aligned as counterclaim intervenor, and (4) SMP was aligned as counterclaim defendant.

PopCap added two more defendants, MumboJumbo executives Jay DiNucci and Mark Cottam, during the pretrial phase of the case. The parties amended their pleadings several times. At the time of trial, the live pleadings raised the following claims. PopCap and PopCap Games International, Inc. sued MumboJumbo for breach of contract, conversion, quantum meruit, and unjust enrichment. They also sued MumboJumbo, DiNucci, and Cottam for fraud. MumboJumbo and Mumbo-Jumbo Distribution, LLC (formerly known as Texas United Distribution, LLC) sued PopCap, PopCap Games International, Inc., and SMP for breach of contract, tor-tious interference with existing and prospective contractual relations, business disparagement, and fraud. They also sought a declaratory judgment concerning the parties’ rights and duties under the 2006 agreement. Both sides sought compensatory damages, punitive damages, and *705 attorneys’ fees. MumboJumbo and Mum-boJumbo Distribution, LLC eventually nonsuited their claims against SMP.

The case was tried to a jury, except that the parties agreed to try attorneys’ fees to the court after the jury verdict. No jury questions were submitted as to PopCap Games International, Ltd., MumboJumbo Distribution, LLC f/k/a Texas United Distribution, LLC, DiNucci, or Cottam. The jury found that MumboJumbo breached the 2006 agreement, but it found that MumboJumbo’s breach was excused by PopCap’s prior breach. Accordingly, the jury made no finding of PopCap’s breach-of-contract damages. The jury next found that PopCap breached the 2006 agreement, that PopCap’s breach was not excused, and that MumboJumbo’s breach-of-contract damages were $776,648. The jury found that PopCap intentionally interfered with MumboJumbo’s contract with Walmart, but it awarded MumboJumbo zero damages on that claim. Finally, the jury found that PopCap committed fraud by misrepresentation and fraud by nondisclosure against MumboJumbo, and it awarded MumboJumbo $3.8 million in damages as “sunk costs,” defined as the amount MumboJumbo expended that it would not have expended if the fraud had not occurred. No other claims were submitted to the jury. The trial judge then held a hearing at which MumboJumbo presented additional evidence in support of its claim for attorneys’ fees.

PopCap filed a motion to disregard and for judgment notwithstanding certain jury findings. On March 1, 2010, the trial judge denied PopCap’s motion and signed a final judgment awarding MumboJumbo the following sums to be recovered from PopCap: (1) $4,576,648 in damages, (2) $2,148,948 in attorneys’ fees for preparation and trial, (3) prejudgment interest of $515,343.10, and (4) postjudgment interest and costs of court. The judgment also awarded MumboJumbo conditional attorneys’ fees in various amounts in the event of specified postjudgment actions by Pop-Cap. The judgment ordered PopCap to take nothing on its claims.

PopCap filed a notice of appeal on March 12, 2010. On March 29, 2010, MumboJumbo filed a “Motion for New Trial on Damages.” The trial judge denied that motion by written order signed April 20, 2010.

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Bluebook (online)
350 S.W.3d 699, 2011 WL 3833091, Counsel Stack Legal Research, https://law.counselstack.com/opinion/popcap-games-inc-v-mumbojumbo-llc-texapp-2011.