Richard Kreway v. John Chilton Calhoun

• Court: Court of Appeals of Texas
• Decided: March 18, 2009
• Docket: 04-08-00690-CV
• Status: Published

Opinion

i i i i i i

MEMORANDUM OPINION

No. 04-08-00690-CV

Richard KREWAY, Appellant

v.

John Chilton CALHOUN, Appellee

From the 288th Judicial District Court, Bexar County, Texas Trial Court No. 2006-CI-00396 Honorable Larry Noll, Judge Presiding

Opinion by: Sandee Bryan Marion, Justice

Sitting: Sandee Bryan Marion, Justice Phylis J. Speedlin, Justice Marialyn Barnard, Justice

Delivered and Filed: March 18, 2009

AFFIRMED

In 2004, Richard Kreway and John Calhoun entered into an agreement to develop an oil and

gas project, pursuant to which Kreway made an initial investment of $85,000. Calhoun deposited

the money into a bank and then used the money to write checks payable to himself. When a dispute

later arose over Calhoun’s paying the money to himself, Kreway sued Calhoun for breach of

contract, common-law fraud, and conversion. Calhoun counter-claimed, suing for damages he

allegedly incurred as a result of Kreway’s actions. Following a bench trial, the court rendered a take- 04-08-00690-CV

nothing judgment against both Kreway and Calhoun, and offset Kreway’s payment of $85,000

against the damages asserted by Calhoun. This appeal by Kreway ensued. We affirm.

DISCUSSION

The trial court entered several findings of fact, including that (1) Calhoun was to develop the

project and Kreway was to pay Calhoun $226,000 in installments, (2) Calhoun subsequently

performed extensive work developing the project, (3) Kreway failed to pay the second installment

required by the contract, (4) Kreway demanded the return of the $85,000, (5) the contract provided

that all amounts tendered are not refundable, (6) the project was not completed because Kreway

refused to make further installments, and (7) Calhoun’s work in developing the project fully offset

Kreway’s payment of $85,000. The trial court also entered conclusions of law, including that

Calhoun fully performed his obligations under the contract and was excused from further

performance, and Kreway committed a material breach of the contract. On appeal, Kreway concedes

some evidentiary support exists for each of the trial court’s findings and he raises no issues on appeal

challenging the legal or factual sufficiency of the evidence in support of any findings. Instead,

Kreway challenges the trial court’s application of those findings to the relevant law.

When, as here, findings of fact are unchallenged, they occupy the same position and are

entitled to the same weight as the verdict of a jury, and they are binding on an appellate court unless

the contrary is established as a matter of law or there is no evidence to support the finding.

McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex. 1986). We review a trial court’s conclusions

of law to determine their correctness based upon the facts. Citizens Nat’l Bank v. City of Rhome,

201 S.W.3d 254, 256 (Tex. App.—Fort Worth 2006, no pet.). A trial court’s conclusions of law will

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be upheld on appeal if the judgment can be sustained on any legal theory supported by the evidence,

and they will not be reversed unless they are erroneous as a matter of law. See Spiller v. Spiller,

901 S.W.2d 553, 556 (Tex. App.—San Antonio 1995, writ denied).

Underlying each of Kreway’s challenges to the trial court’s conclusions is his contention that

the evidence demonstrates Calhoun breached the contract by paying himself the $85,000 instead of

using the money to develop the project. According to Kreway, the contract did not provide that

Calhoun would be compensated by the installment payments made by Kreway, but instead, Calhoun

would be compensated by his twenty-five percent interest in the project. Based on this interpretation

of the contract, Kreway concludes he was justified in refusing to make any further installment

payments. Kreway also asserts the court erred in concluding Calhoun’s work in developing the

project fully offset Kreway’s payment of $85,000. Kreway argues the court’s conclusion is

“presumably” based on theories of quantum meruit and unjust enrichment. We disagree with

Kreway’s argument.

The trial court’s judgment appears to be based on the theory that “[a] setoff brings together

the obligations of opposing parties to each other and, by judicial action of the court, makes each

obligation extinguish the other.” CPS Int’l, Inc. v. Harris & Westmoreland, 784 S.W.2d 538, 544

(Tex. App.—Texarkana 1990, no writ). “The object of setoff is to adjust the indebtedness between

the parties and allow recovery of only the balance that is due.” Id. It is clear from the trial court’s

findings and conclusions that the court based its judgment on a determination that Kreway breached

the agreement by refusing to make any further payments, thus excusing Calhoun from further work

on the project; that any damages suffered by Calhoun would be satisfied by Kreway’s payment of

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$85,000; and any further damages suffered by either party would be satisfied by a take-nothing

judgment against both parties.

On appeal, Kreway concedes he was to “act as financier” of the project and he does not

challenge the trial court’s findings that Calhoun was to develop the project and that Calhoun

performed extensive work developing the project. These unchallenged findings support the court’s

conclusion that Calhoun “fully performed his obligations under the contract.” Kreway also does not

challenge the court’s findings that the contract required him to pay Calhoun $226,000 in installments

and he refused to make any further installments after the initial payment of $85,000. These

unchallenged findings support the court’s conclusion that Kreway “committed a material breach of

the parties’ contract.” Thus, we conclude the trial court’s unchallenged findings support the court’s

offsetting Kreway’s and Calhoun’s obligations to each other.

CONCLUSION

We overrule Kreway’s issues on appeal and affirm the trial court’s judgment.

Sandee Bryan Marion, Justice

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