NO. 07-01-0236-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL E
DECEMBER 12, 2002
______________________________
MARION BRECHEISEN,
Appellant
v.
GREG JAMES AND KRISTA JAMES,
Appellee
_________________________________
FROM THE 84TH DISTRICT COURT OF HANSFORD COUNTY;
NO. 7067; HON. WILLIAM D. SMITH, PRESIDING
_______________________________
Before QUINN and JOHNSON, JJ. and BOYD, SJ. 1
Marion Brecheisen (Brecheisen) appeals a judgment rendered in favor of Greg and
Krista James (the James) after a trial by jury. Via five points of error, Brecheisen
complains that the trial court erred in 1) failing “to grant a ‘take nothing’ judgment . . . as
to the appellee’s cause of action for breach of contract because of their prior unexcused
failure to comply with the farm lease agreement by the James, the plaintiffs and appellees,”
2) overruling “the appellant’s motion for judgment on the verdict . . . since the jury finding
1
John T. Boyd, Chief Justice (Re t.), Seventh C ourt of Appeals, sitting by assignment. Tex. Gov’t Code
Ann. §75.00 2(a)(1) (V erno n Su pp. 2002 ).
on jury question no. 3 was an immaterial jury question and in denying the appellant’s
motion for judgment since jury findings no. 2 and no. 3 were in irreconcilable conflict and
thus ‘no evidence’ to support the judgment rendered by the court in favor of the appellees,’”
3) “overruling the appellant’s motion for judgment since there was ‘no evidence’ to support
the jury finding of ‘lost profits’ on the contract in favor of the appellants with a reasonable
certainty, only speculation and ‘hoped for profits,’” 4) “failing to give appellant’s requested
jury question on justification for rescinding the farm lease . . . for material breaches of the
contract, for fraud, conversion and sub-letting of the grassland; and, . . . to give appellant’s
requested jury question on fraud in the inducement and fraud . . .,” and 5) awarding the
James attorney’s fees while denying them to him. We affirm.
Background
In April of 1999, the James leased land from Brecheisen for seven years. The
primary purpose of the lease was to develop the land for growing alfalfa. The land
included in the lease was the southwest quarter of section 1, section 3, section 8 and
section 9 of a farm located in Hansford County (referred to as the Hansford County Lease).
However, according to the James at trial, the lease was eventually to include all of the
sections of Brecheisen’s Hansford County farm. One clause in the lease required the
James to plant one circle of alfalfa on either section 8 or 9 in the Fall of 1999 and then on
both sections in the Spring or Fall of 2000. Other terms of the lease included the use of
a tractor owned by Brecheisen, and the use of the hour tractor meter located on the farm
implement. Furthermore, the James were to keep the tractor mechanically maintained.
In June of 1999, subsequent to the enactment of the lease, hail hit the wheat crop
already planted on the aforementioned sections. The James had to wait until an insurance
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adjuster released the land before they could clear it of the wheat stubble that remained and
prepare it for planting alfalfa. However, according to the James, the land could not be
prepared in time for planting alfalfa; so, milo was planted instead. This purported to
constitute a breach of the lease, according to Brecheisen. He also believed that other
breaches had occurred. Thus, he sent a demand letter to the James on December 3,
1999, requesting that they vacate the premises immediately. The James complied with the
demand. They also filed suit for wrongful repudiation and breach of the lease.
After Brecheisen answered the petition, he counterclaimed against his ex-tenants.
The dispute was then tried to a jury. Based upon the jury’s answers to questions submitted
to it, the trial court entered judgment in favor of the James. Brecheisen moved to modify,
correct or reform the decree, which motion the trial court denied. He, then, appealed.
Point One - Motion to Modify, Correct or Reform the Judgment
As best as we can surmise from the substance of his argument, Brecheisen claims
through his first point that the trial court erred in denying his motion to set aside the
judgment in favor of the James. This was error because: 1) the James breached the
contract first; and, 2) there was no evidence to support the jury’s finding that their breaches
were not material. We overrule the point.
In short, Brecheisen attempts to escape liability by arguing that his opponents
materially breached the lease first, which breach excused him from performing. In turn,
if he was excused from performing his obligations, then they could not recover against him.
Implicit in this argument is the need to attack the jury’s answer to point three and illustrate
why it lacked evidentiary support. Through the third point, the jury was asked to decide if
“any unexcused failure to comply by the James concern[ed] a material obligation of the
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farm lease,” and it said “no.” If this answer enjoys the requisite evidentiary support, then
it matters not that the James committed the breaches. So, logic dictates that Brecheisen
had to present an issue expressly attacking the weight of the evidence supporting the jury’s
answer to point three. And, that he does not do. No such issue appears in his brief.
Rather, he quotes general rules of law, cites authority to support the quotes, and then
describes how the James breached the lease. Then he merely asserts the conclusion that
“planting . . . alfalfa for hay was the ‘essence’ of the contract” and that the “finding . . . that
the breaches by the James were not material . . . [was] against the great weight and
preponderance of the evidence and [was] simply wrong as a matter of law.” Such cursory
argument utterly lacking in substantive analysis does not constitute proper briefing and
results in waiver of the point on appeal. In re Williams, 998 S.W.2d 724, 730 (Tex. App.—
Amarillo 1999, no pet.).
Yet, even if his brief can be read as properly questioning whether the jury’s answer
to point three enjoyed both legally and factually sufficient evidentiary support, we remain
unable to address his contentions. This is so due to the wording of jury point two and the
answer to same. Through it, the jurors were asked: “[w]ere all of the James’ failures to
comply, if any, excused or made impracticable, as defined below?” (Emphasis added).
To it, they replied: “[n]o.” The point being so worded and given that response, we do not
know which “failures to comply” were contemplated by the jury or found to be excused or
unexcused.2 The answer to point two merely informs us that “all” of them were not
excused. So, all but one may have been excused or none save one may have been. In
2
Brecheisen does not complain on appeal about the manner in which point two was worded.
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other words, we are left to guess about which ones were and were not excused. And,
because of that, Brecheisen denied us a record sufficient to assess whether the jury erred
in concluding that the “failures to comply” which were not excused (whatever they may be)
were actually material. See Melendez v. Exxon Corp., 998 S.W.2d 266, 274 (Tex. App.—
Houston [14th Dist.] 1999, no writ) (holding that an appellant has the burden to present us
with a record illustrating reversible error).
Point Two - Irreconcilable Conflicts in Jury Questions Two and Three
Next, Brecheisen contends that the answer to jury points two and three are in
“irreconcilable conflict.” So too does he argue that point three was immaterial and should
not have been submitted. We overrule the contentions.
Again, through question two, the jurors were asked if all breaches allegedly
committed by the James were excused, and they answered “no.” In response to question
three, i.e. whether “any unexcused failures to comply by the James concern[ed] a material
obligation of the farm lease,” they also answered “no.” We see no irreconcilable conflict
between the two answers for the simple reason that each question addressed distinct
topics. In other words, before Brecheisen could justifiably end the lease due to a breach
by the James, there had to be 1) a breach by the James, 2) which was not excused, and
3) which was material. Again, only a material breach of the lease would have triggered
Brecheisen’s right to end the agreement. Hernandez v. Gulf Group Lloyds, 875 S.W.2d
691, 692 (Tex. 1994). Furthermore, whether the breach was excused does not dictate
whether it was material, nor vice-versa. Indeed, there could be instances of immaterial
defaults that went unexcused or material defaults that went excused; in either of those
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situations, the prerequisites for rescission would not exist. Again, to enable Brecheisen to
end the lease, not only must the James have had to breach the agreement in a material
way but also the jury would have had to find the breach material. Thus, the points were
not irreconcilable but rather elemental to Brecheisen’s right to rescind.
As to the contention that point three should not have been submitted to the jury
because it was immaterial, we refer to our discussion in the immediately preceding
paragraph. If the breach had to be material before Brecheisen could rescind (as it had to
be), then the jury had to determine whether defaults allegedly committed by the James
were of that character. See ReMax, Inc. v. Katar Corp., 961 S.W.2d 324 327 (Tex. App.—
Houston [14th Dist.] 1997, pet. denied) (holding that only a material breach of contract
excuses the opposing party from performing). So, jury point three was very relevant and
material to the dispute.
To the extent that Brecheisen suggests that no evidence supported the jury’s
answer to point three because it was undisputed that the James sub-let the property
without permission, we do not know if that was one of the defaults that the jury found he
excused.3 Moreover, there appears evidence of record from which a jury could have held
that Brecheisen excused it.
Finally, and to the extent that Brecheisen contends that point three should not have
been submitted to the jury because it was defective and a question of law, he cites no
authority for the proposition. Nor is his conclusion anything but a conclusion bereft of
3
In his second point of error, Brecheisen mentions no other breach which was allegedly undisputed
or established as a matter of law.
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analysis. Consequently, it was not briefed as required by Texas Rule of Appellate
Procedure 38.1(h) and presents nothing for review. In re Williams, 998 S.W.2d at 730.
Point Three - Lost Profits
In his third point, Brecheisen contends that the trial court gave the wrong definition
in jury question five because “lost profits must be proved with ‘reasonable certainty.’”
Specifically, according to Brecheisen, “a party must show either (1) a history of profitability
or (2) the actual existence of future contracts from which lost profits can be calculated with
reasonable certainty.” We overrule the point.
In reviewing the record, we note that the jury was asked to determine the “sum of
money, if any if now paid in cash, [that] . . . would compensate the James for the actual
damages which they sustained as a proximate cause of [] Brecheisen’s failure, if any, to
comply with, the farm lease?” Accompanying this question was the instruction that the jury
could “consider lost profits, if any, of the James over the seven year term of the lease that
[] Brecheisen should have foreseen.” Finally, while inquiring into the amount of future
damages which may have been suffered, the court informed the jury to assess the amount
which “in reasonable probability will be sustained . . . .” The jury found that the James had
suffered $10,000 in past damages and $30,000 in future damages.
To the extent that he contends that the trial court was obligated to instruct the jury
that lost profits must be established with “reasonable certainty,” Brecheisen failed to tender
to the trial court a written instruction containing that or like verbiage at the time of the
objection. Consequently, he waived the complaint. See Libhart v. Copeland, 949 S.W.2d
783, 799 (Tex. App.—Waco 1997, no writ) (holding that a party who stands to benefit from
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a limiting instruction on damages must object to the question submitted and tender a
proposed instruction in substantially correct form to preserve the complaint); National Fire
Ins. Co. v. Valero Energy Corp., 777 S.W.2d 501, 507 (Tex. App.—Corpus Christi 1989,
writ denied) (holding the same). Nor did he urge below (as he does now on appeal) that
an instruction limiting lost profits to those which were “a natural, probable, foreseeable
consequence of” the breach was appropriate. So, that contention was also waived.
Next, to the extent he contends that no evidence or factually insufficient evidence
supported the award of lost profits, we note the following rules. First, a party to a contract
who is injured by its breach may recover lost profits. Though there may be a myriad of
ways to prove such damage, the actual measure is represented by the difference between
the sum the injured party was to receive less the expenses it would have incurred had it
performed. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 n.1 (Tex. 1992); St.
Paul Surplus Lines, Ins. Co. v. Dal-Worth Tank Co., 917 S.W.2d 29, 60 (Tex.
App.—Amarillo 1995), rev’d. in part on other grounds, 974 S.W.2d 51, 53 (Tex. 1998).
Moreover, the loss need not be susceptible to exact calculation. Formosa Plastics Corp.
v. Presidio Eng. & Contr., Inc., 941 S.W.2d 138, 149 (Tex. 1995). Rather, the amount of
loss need only be shown by competent evidence with reasonable certainty. Id. And, what
constitutes such evidence is a fact intensive determination. Id. “At a minimum, opinions
or estimates of lost profits must be based on objective facts, figures, or data from which
the amount . . . may be ascertained.” Id.
Finally, that a business is new does not alone prevent the recovery of lost profits.
Helena Chemical Co. v. Wilkins, 47 S.W.3d 486, 505 (Tex. 2001). If a profit history is
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unavailable, damages may still be established through other objective data as long as that
data permits calculation of the loss with reasonable certainty. Id. With this said, we turn
to the evidence before us.
Brecheisen attacks the verdict by generally averring that the James presented no
evidence of past profitability and had no future contracts. Then, he attacks the testimony
provided by the James’ banker and refers to past income tax returns as evidence of no
profitability. Yet, absent from his argument is discussion illustrating why the testimony of
Greg James did not constitute some evidence supporting the verdict. Nor did he explain
why the spreadsheets containing profit and loss projections which were thoroughly
discussed by Greg James fell short of supporting the jury’s verdict. Furthermore, the
numbers contained in those spreadsheets were not simply manufactured. Rather, they
were derived from the expenses and profitability experienced by Greg James and others
in operating a family farm (in nearby Oklahoma) and growing crops like those he intended
to grow on the Brecheisen lease. For instance, the income and expense projections were
derived from historical data relating to 1) crop yield per acre, 2) the sales price of grains
and grasses he intended to grow, and 3) the expense of growing those particular crops as
experienced while conducting other farming operations. So, the projections offered by
Greg James regarding lost profits were actually based upon objective income and expense
figures of a comparable business in which he was involved. And, those projections yielded
an educated estimate (again exactitude is not required) of lost profits at slightly under one
million dollars. The jury awarded $30,000. Given this, we cannot say that no evidence
supported the award.
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Point Four - Requested Jury Question
In his fourth point, Brecheisen complains that the trial court erred in failing to submit
points on whether he was justified in terminating the lease and whether the James
defrauded him. We overrule the point.
Regarding the point involving justification for rescinding the lease, the argument is
premised upon the belief that the James materially breached the terms and requirements
of the document. Because he so breached the lease, Brecheisen was purportedly entitled
to rescind the agreement. However, in response to jury question three, the jury found
immaterial the breaches of the lease which Brecheisen did not excuse. Since the jury
found that they were immaterial, we see no harm arising from the failure to ask the jury to
decide if Brecheisen was entitled to end the lease because the breaches were material.
And, again, there is evidence that supports the finding of immateriality.
As to the issue about fraud and fraud in the inducement, one complaining of the
failure to submit an issue must illustrate that evidence existed warranting the submission
of the issue. See Lee-Wright, Inc. v. Hall, 840 S.W.2d 572, 577 (Tex. App.—Houston
[1st Dist.] 1992, no writ) (holding that an issue must, among other things, be raised in the
pleadings and supported by the evidence before it can be submitted to the jury). Thus, to
secure reversal, it was incumbent upon Brecheisen to illustrate that there existed some
evidence of record sufficient to raise a fact issue upon each element of his causes of
action. He does not do that. For instance, he cites us to no evidence which indicates that
the James made a promise while intending not to fulfill it. That is elemental to the claim
of fraud in the inducement. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001)
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(mentioning this to be an element of fraud in the inducement). Nor does he argue that
such evidence existed. Similarly absent is reference to any evidence illustrating that the
James made a material misrepresentation which he knew was false and upon which
Brecheisen relied. Those matters are elemental to a general claim of fraud. See Formosa
Plastics Corp. v. Presidio Engineers & Contr., Inc., 941 S.W.2d 138, 144 (Tex. 1995)
(discussing the elements of fraud). Consequently, Brecheisen has not carried his appellate
burden of proving that he was entitled to the submission of the issues in question.
Point Five - Attorney’s Fees
In his last point of error, Brecheisen argues that the trial court erred in entering
judgment upon the jury’s verdict regarding attorney’s fees. That is, the jury awarded the
James such fees while denying them to Brecheisen, and the trial court entered judgment
commensurate with that verdict. This was error, according to Brecheisen. We overrule the
point.
Concerning the award to the James, Brecheisen argues that they were not entitled
to same since they were “not entitled to judgment on the basis of breach of contract.” Yet,
the jury concluded that Brecheisen breached the lease and awarded the James $40,000
in damages to recompense the breach. Then, judgment was entered upon that verdict.
Moreover, Brecheisen failed to establish on appeal that the jury erred in finding as it did
or that the trial court erred by upholding the verdict and incorporating it into a final
judgment. Thus, Brecheisen incorrectly suggests that the James were not entitled to fees
because they were “not entitled to judgment on the basis of breach of contract.”
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As to that portion of the verdict denying him attorney’s fees, he contends that it is
against the great weight of the evidence. And, this is allegedly so because the jury found
that the James breached the lease (via its answer to point one), that not all the breaches
were excused (via its answer to point two), and that he was entitled to $7900 for the
James’ use of grasslands. Thus, he concludes, he was a prevailing party entitled to fees
under §38.01 et seq. of the Texas Civil Practice and Remedies Code. Admittedly, one
must be a prevailing party to recover fees under that provision. Green Int’l, Inc. v. Solis,
951 S.W.2d 384, 390 (Tex. 1997). Yet, that is not all. He must also show that the fees
sought were reasonable. Prairie Valley I.S.D. v. Sawyer, 665 S.W.2d 606, 611-12 (Tex.
App.—Fort Worth 1984, writ ref’d. n.r.e.). Here, Brecheisen cites us to no evidence
suggesting that his fees were reasonable. Nor does he argue that they were. And, this is
of import because the recovery awarded him by the jury, i.e. the $7900, and upon which
he bases his right to receive fees was nothing more than the sum of money tendered by
the James to him on March 28, 2000, a date approximately six months before Brecheisen
filed his “Counter-Plaintiff’s Original Petition . . .” for damages.4 In short, if the attorney’s
fees he incurred were unreasonable because he recovered nothing other than what the
James previously agreed to pay him before filing the counterclaim, we cannot say that the
jury erred in denying him same. And, a jury may well have concluded that the fees he
sought were unreasonable under that circumstance. Finally, Brecheisen does not argue
otherwise.
4
According to the record, the James not only tendered to Brecheisen the $7900 on March 28, 2000,
but also other checks allegedly representing monies they agreed were owing to him. Those checks totaled
$24,220, which sum happen s to exceed the $24,200 that Brech eisen claims (in his brief) the trial court
awa rded him throu gh the judgm ent.
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Having overruled all points raised by Brecheisen, we affirm the judgment of the trial
court.
Brian Quinn
Justice
Do not publish.
13
Marion Brecheisen v. Greg James and Krista James
Combined Opinion