Tim S. Leonard v. Stephen M. Brewer and BW Office Partners I, LP

• Court: Court of Appeals of Texas
• Decided: November 26, 2013
• Docket: 01-12-01057-CV
• Status: Published

Opinion

Opinion issued November 26, 2013.

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-12-01057-CV ——————————— TIM S. LEONARD, Appellant V. STEPHEN M. BREWER AND BW OFFICE PARTNERS I, LP, Appellees

On Appeal from the County Civil Court at Law No. 2 Harris County, Texas Trial Court Case No. 1005431

MEMORANDUM OPINION

Tim Leonard sued Stephen Brewer and BW Office Partners I, LP for an

unpaid debt. After a bench trial, the trial court entered judgment against Brewer

and BW, apportioning damages between them. Leonard appeals, contending that the trial court erred in apportioning damages. We agree. We thus modify the

award and affirm as modified.

Background

In August 2009, Brewer executed a promissory note on behalf of BW Office

Partners, payable to Leonard in the amount of $5000 plus interest. Brewer signed

the note as a “General Partner” of BW. The note stated that BW would repay the

loan upon BW’s sale of a piece of real property. In November 2009, BW sold the

property. Neither BW nor Brewer, however, repaid Leonard. In April 2010,

Brewer sent Leonard an email, stating that he was “personally commit[ted]” to

repaying [Leonard] for [his] contribution.” In December 2011, Leonard sued

Brewer and BW for the unpaid debt. In its final judgment, the trial court held that

both Brewer and BW were liable but apportioned damages between them rather

than imposing joint and several liability. Leonard moved to amend and modify the

judgment. The trial court never ruled on the motion; thus it was overruled by

operation of law. See TEX. R. CIV. PROC. 329b(c).

Discussion

As an initial matter, we note that Brewer and BW have not filed a brief to

contest Leonard’s challenge to the judgment.

2 Standard of Review

Whether the trial court erred in applying an improper measure of damages is

a question of law subject to de novo review. C.C. Carlton Indus., Ltd. v.

Blanchard, 311 S.W.3d 654, 662 (Tex. App.—Austin 2010, no pet.). When a trial

court does not issue findings of fact and conclusions of law, all facts necessary to

support the judgment and supported by the evidence are implied. BMC Software

Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002). It is the appellant’s

burden to show that the trial court’s judgment cannot be supported by any legal

theory raised by the evidence. Point Lookout W., Inc. v. Whorton, 742 S.W.2d

277, 279 (Tex. 1987); Nash v. Garden City Apts., No. 01-10-00369-CV, 2011 WL

2410205, at *2 (Tex. App.—Houston [1st Dist.] Jun. 9, 2011, no pet.) (mem. op.).

Analysis

The trial court held that both Brewer and BW were liable to Leonard for the

unpaid debt but divided the damages between them. In light of the record, the trial

court reasonably could have found that (1) Brewer was a general partner of BW,

(2) Brewer represented to Leonard that he was a general partner of BW and

Leonard relied on that representation in extending credit in good faith, or

(3) Brewer personally guaranteed BW’s loan. But the record is bereft of support

for apportioning the damages. Under any theory of recovery supported by the

record, Brewer and BW are jointly and severally liable for the unpaid debt.

3 First, if the trial court found that Brewer was a general partner of BW, then

Brewer is jointly and severally liable for BW’s obligations which he undertook as a

general partner. See TEX. BUS. ORGS. CODE ANN. § 152.304(a) (West 2012).

Second, if the trial court found that Brewer represented to Leonard that he was a

general partner of BW and Leonard relied on that representation in extending

credit in good faith, then Brewer is liable as though he were a partner under the

partnership by estoppel doctrine. See Friedman v. New Westbury Vill. Assocs., 787

S.W.2d 154, 158 (Tex. App.—Houston [1st Dist.] 1990, no writ) (“[A] person is

liable as though she were an actual member of the partnership, where she

represents herself to be a partner in an existing partnership, and another party has

extended money in good faith on the basis of the representation.”). Under this

estoppel theory, Brewer would be jointly and severally liable for the unpaid debt.

See TEX. BUS. ORGS. CODE ANN. § 152.304(a) (West 2012). Finally, if the trial

court found that Brewer personally guaranteed payment of BW’s loan in his email

to Leonard, then Brewer’s liability for the unpaid debt extends as far as BW’s

liability. See W. Bank–Downtown v. Carline, 757 S.W.2d 111, 113 (Tex. App.—

Houston [1st Dist.] 1988, writ ref’d) (“A guarantor’s liability on a debt is measured

by the principal’s liability unless a more extensive or more limited liability is

expressly set forth in the guaranty agreement.”); Estate of Todd v. Int’l Bank of

Commerce, No. 01-12-00742-CV, 2013 WL 1694937, at *4 (Tex. App.—Houston

4 [1st Dist.] Apr. 18, 2013, pet. filed) (mem. op.). As a guarantor, Brewer would be

jointly and severally liable for the unpaid debt. Under any of these three theories

of recovery supported by the record, Brewer and BW are jointly and severally

liable for the unpaid debt. Accordingly, we hold that the trial court erred in

apportioning the damages.

Conclusion

Because Brewer and BW are jointly and severally liable for the full amount

of the trial court’s award (principal, interest, attorney’s fees, and court costs), we

modify the judgment to include joint and several liability and affirm as modified.

Jane Bland Justice

Panel consists of Chief Justice Radack and Justices Bland and Huddle.