Affirmed and Memorandum Opinion filed March 29, 2007.
In The
Fourteenth Court of Appeals
____________
NO. 14-05-00845-CV
____________
NOVA INFORMATION SYSTEMS, INC. AND BRIAN SOWADA, D/B/A NATIONAL BANK CARD SYSTEMS, Appellants
V.
NIDHI AND RONEIL, INC., Appellee
On Appeal from the County Court At Law No. 3 & Probate Court
Brazoria County, Texas
Trial Court Cause No. CI029160
M E M O R A N D U M O P I N I O N
This is an appeal of a judgment entered in favor of appellee, Nidhi and Roneil, Inc., following a bench trial. We affirm.
Factual and Procedural Background
Appellee leased a combination convenience store/gas station in December, 2000. The location had previously functioned as a convenience store, which had been closed for approximately one year prior to appellee entering into the lease. In addition to remodeling of the store itself, appellee needed a credit card service for the gasoline pumps. Brian Sowada of Nova Information Systems, Inc. (ANova@) visited appellee and solicited appellee for that credit card business. Mr. Sowada represented that, for a monthly fee, Nova would re-program the existing credit card machines at the store so the charges made at the store for gas and merchandise would be routed to appellee=s bank account. In essence, Nova, for a fee, would convert the credit card charges into cash payments which would be deposited into appellee=s bank account. Because Mr. Sowada represented he could re-program the existing credit card machines, Nova=s price was lower than the competition and appellee entered into a contract with Nova for that service. Mr. Sowada came to appellee=s store and programed the credit card machines with appellee=s bank routing information. Mr. Sowada checked the system and told appellee the system was working properly and ready to go.
Appellee=s store opened in March 2001 operating under the name Pic N Pac. After the credit card system was started and in use, appellee learned from its bank statements that while Nova was collecting its monthly fee, no cash payments were making their way into appellee=s bank account. Karnik Vyas, appellee=s secretary, notified Mr. Sowada of the problem. Following that notification, Mr. Sowada investigated and informed Mr. Vyas that (1) apparently the routing information had not been properly programed; (2) appellee=s money was going into the bank account of Alexander Oil, the gasoline supplier for the previous operators of the convenience store at the location; and (3) there was nothing Mr. Sowada could do to correct the problem.
By this point, appellee had lost $4,938.83 in actual credit card charges that had been made at the store and never deposited into appellee=s bank account. In addition, because the credit card machines were not working properly, appellee had to stop accepting credit cards which dramatically impacted the Pic N Pac=s business and cash flow. This decline in business forced the store to shut down in May, 2001. Appellee had invested $120,000 in getting the convenience store established and operating. In an effort to minimize its loss, appellee sold the store and its inventory to a third party for $100,000.
Asserting numerous causes of action, appellee filed suit against both appellants on February 21, 2002.[1] Nova was served and entered a special appearance in April 2002, which the trial court denied in July 2002. Mr. Sowada filed his original answer in June 2003. Appellants filed a joint Amended Original Answer and Counterclaim on August 23, 2004. The case was set for trial on September 13, 2004. Appellants requested a continuance of the trial setting, which the trial court granted.
On October 13, 2004, some thirty months after Nova had filed its special appearance, Nova (but not Sowada) filed a motion to compel arbitration. Following a hearing, the trial court denied Nova=s motion to compel arbitration. The trial court held that Nova had waived the issue of arbitration by unreasonably delaying the filing of its motion to compel arbitration, by invoking the judicial process through its filing of a counterclaim and affirmative defenses, and that these actions prejudiced appellee.
The case went to trial on April 5, 2005. Mr. Sowada, while represented by counsel, did not appear for the trial. In addition, Nova did not send a corporate representative to attend the trial, which lasted less than three hours. Following the trial, the trial court entered judgment in favor of appellee. Following the entry of the judgment, Nova filed a motion for new trial, which the trial court denied. This appeal followed.
Discussion
In eight issues, appellants challenge the trial court=s denial of Nova=s motion for new trial based on the trial court=s prior denial of Nova=s motion to compel arbitration as well as the sufficiency of the evidence supporting the causes of action asserted by appellee.
I. The Standard of Review
A trial court=s ruling on a motion for new trial will not be reversed without a showing of an abuse of discretion. Director, State Employees Workers= Comp. Div. v. Evans, 889 S.W.2d 266, 268 (Tex. 1994). A trial court abuses its discretion when it fails to correctly analyze or apply the law. In re E. I. DuPont de Nemours & Co., 136 S.W.3d 218, 223 (Tex. 2004).
When a bench trial is conducted and the court does not enter findings of fact and conclusions of law to support its ruling, all facts necessary to support the judgment are implied. BMC Software Belg., N. V. v. Marchand, 83 S.W.3d 789, 795 Tex. 2002); Zac Smith & Co. v. Otis Elevator Co., 734 S.W.2d 662, 666 (Tex. 1987). Because the trial court granted judgment for appellee, but did not enter findings of fact and conclusions of law, we review appellants= complaints with the presumption that all findings of fact and conclusions of law were made in favor of appellee. When findings of fact and conclusions of law are not requested and none are filed by the trial court, the judgment of the trial court must be affirmed if it can be upheld on any legal theory that finds support in the evidence. In the Interest of W. E. R., 669 S.W.2d 716, 717 (Tex. 1984).
When the appellate record includes the reporter=s and clerk=s records, implied findings are not conclusive however, and may be challenged on the basis of legal and factual sufficiency. BMC Software Belg., 83 S.W.3d at 795. We review the trial court=s decision for legal and factual sufficiency of the evidence by the same standards applied in reviewing the evidence supporting a jury=s finding. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). When reviewing the legal sufficiency of the evidence, we review the evidence in the light most favorable to the challenged finding and indulge every reasonable inference that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). We credit favorable evidence if a reasonable fact finder could and disregard contrary evidence unless a reasonable factfinder could not. Id. at 827. The evidence is legally sufficient if it would enable fair-minded people to reach the verdict under review. Id. Therefore, we must examine the record in this case to determine whether some evidence exists to support the trial court=s judgment.
In reviewing the factual sufficiency of the evidence, we must consider and weigh all the evidence and should set aside the judgment only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). We may not substitute our judgment for that of the trier of fact, even if we would have reached a different conclusion. Durand v. Moore, 879 S.W.2d 196, 200 (Tex. App.CHouston [14th Dist.] 1994, no writ). Therefore, we will reverse only if the overwhelming weight of the evidence indicates the trial court=s judgment for appellee was clearly wrong and unjust.
II. Did the Trial Court Abuse Its Discretion When It Denied Appellants= Motion for New Trial?
In their first issue, appellants argue the trial court abused its discretion when it denied Nova=s motion for new trial based on the trial court=s earlier denial of Nova=s motion to compel arbitration, since, according to Nova, the contract in question required that this controversy be decided by arbitration. However, appellants= brief does not mention, nor address, the trial court=s basis for denying Nova=s motion. In its order, the trial court found that Nova waived its contractual right to compel arbitration because Nova: (1) unreasonably delayed in filing its motion to compel arbitration; (2) invoked the judicial process through its filing of a counterclaim and affirmative defenses; and (3) that these actions prejudiced appellee. A complaint on appeal must address specific errors and not merely attack the trial court=s order in general terms. Martinez v. City of El Paso, 169 S.W.3d 488, 491 (Tex. App.CEl Paso 2005, pet. denied). An appellate brief must contain a succinct, clear, accurate statement of the arguments made in the body of the brief. Id. citing to Tex. R. App. P. 38.1(g). Rule 38 requires an appellant to provide us with such discussion of both the facts and the authorities relied upon as may be necessary to maintain the point at issue. Id. By ignoring the findings made by the trial court in support of its order denying Nova=s motion to compel arbitration, appellants waive their first issue.
Even if appellants had not waived their first issue, the result would be the same. A party to an arbitration agreement can waive its contractual right to compel arbitration of a dispute in two ways. A party can waive arbitration if that party delays seeking to compel arbitration and the delay results in prejudice; or if that party substantially invokes the judicial process and the opposing party suffers prejudice as a result. Prudential Securities, Inc. v. Marshall, 909 S.W.2d 896, 898B99 (Tex. 1995); Associated Glass, Ltd. v. Eye Ten Oaks Investments, Ltd., 147 S.W.3d 507, 514 (Tex. App.CSan Antonio 2004, no pet.).
Here, Nova filed its special appearance in April 2002. Nova then waited approximately thirty months before it filed its motion to compel arbitration in October 2004, soon after requesting and receiving a continuance of the original trial setting. In the interim, Nova filed its original answer with affirmative defenses as well as a counterclaim against appellee. In addition, Mr. Sowada, as well as the other defendants, were not parties to the arbitration agreement and did not join the motion to compel arbitration which, if it had been granted, would have required appellee to pursue its claims simultaneously in two different forums. These facts support the trial court=s findings that (1) Nova unreasonably delayed in filing its motion to compel arbitration; (2) Nova substantially invoked the judicial process; and (3) appellee was prejudiced as a result of Nova=s actions. Accordingly, the trial court did not abuse its discretion when it denied appellants= motion for new trial. See In re E. I. DuPont de Nemours & Co., 136 S.W.3d at 223. We overrule appellants= first issue.
III. Did Appellee Comply With a Condition Precedent to Nova Assuming Any Liability Under the Contract?
In their sixth issue, the only issue in which appellants challenge appellee=s breach of contract cause of action, appellants argue there is no evidence that appellee complied with a condition precedent to Nova assuming liability under the contract. Specifically, appellants assert there was no evidence appellee gave written notice of the problem to Nova as required by paragraph 6(c) of the contract. Appellants= argument is without merit.
A fundamental principle of contract law is that when one party to a contract commits a material breach of that contract, the other party is discharged or excused from any obligation to perform. Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691, 692 (Tex. 1994); Restatement (Second) of Contracts ' 237 (1981) (A[I]t is a condition of each party=s remaining duties to render performances to be exchanged under an exchange of promises that there be no uncured material failure by the other party to render any such performance due at an earlier time.@). Thus, when a party to a contract fails to perform its obligations under that contract, it may not thereafter enforce the remaining terms of the contract against the other party. Interceramic, Inc. v. South Orient R. Co., Ltd., 999 S.W.2d 920, 924 (Tex. App.CTexarkana 1999, pet. denied). Whether a party has breached a contract is a question of law for the court. Meek v. Bishop Peterson & Sharp, P.C., 919 S.W.2d 805, 808 (Tex. App.CHouston [14th Dist.] 1996, writ denied). The court determines what conduct is required by the parties, and, insofar as a dispute exists concerning the failure of a party to perform the contract, the court submits the disputed fact questions to the fact finder. See id. Here, there were no fact issues as there was uncontroverted evidence that (1) appellants agreed to process the credit card charges made at appellee=s convenience store, convert those charges into cash payments, and then deposit those cash payments into appellee=s bank account minus Nova=s fee; (2) appellants programmed appellee=s credit card processing machines, tested them, and informed appellee they were working properly; (3) $4,938.83 in credit card charges were made at appellee=s store in March and April, 2001; (4) that amount was not deposited into appellee=s bank account; (5) Mr. Sowada investigated, determined what the problem was, and notified appellee there was nothing he could do to correct the problem; and (6) Nova collected its monthly fee during both March and April, 2001. In determining the materiality of a breach, courts consider, among other things, the extent to which the nonbreaching party will be deprived of the benefit that it could have reasonably anticipated from full performance. Hernandez, 875 S.W.2d 693. As a result of appellants failure to perform their obligations under the contract, appellee was totally deprived of the benefit it anticipated from the contract. Since appellants materially breached the contract they may not seek to enforce the written notification obligation in section 6(c) of the contract against appellee. Appellants= sixth issue is overruled.
IV. Did Legally and Factually Sufficient Evidence Support the Award of Damages?
In their seventh issue, appellants challenge the evidence supporting the judgment=s award of damages to appellee. In their brief, appellants state Ait is somewhat difficult to characterize the nature of the damages awarded by the trial court.@ Appellants then go on to argue the evidence is insufficient as, in appellants= view, Athe judgment must include an amount for lost profits since the award greatly exceeds any reasonable notion of out of pocket losses.@ We disagree.
The ultimate goal in measuring damages for a breach of contract claim is to provide just compensation for any loss or damage actually sustained as a result of the breach. Mays v. Pierce, 203 S.W.3d 564, 577 (Tex. App.CHouston [14th Dist.] 2006, pet. denied). Here, the judgment does not award any amount for lost profits, but instead awards appellee damages only for its out of pocket losses. There was uncontroverted evidence that, as a direct result of appellants= breach, appellee lost $4,938.83 in credit charges from March and April 2001. There was also uncontroverted evidence that (1) appellee spent $120,000 getting the Pic N Pac ready to open for business; (2) appellee was forced to close the Pic N Pac as a result of appellants= breach; and (3) appellee had to sell the convenience store operation for $100,000, resulting in a $20,000 loss of investment. Thus, there is legally and factually sufficient evidence supporting the judgment. We overrule appellants= seventh issue.
V. We Need Not Address Appellants= Remaining Issues.
In issues two, three, four, five, and eight, appellants challenge the sufficiency of the evidence supporting appellee=s remaining causes of action.[2] As we have overruled appellants= issues attacking the judgment based on appellee=s breach of contract cause of action, we need not address appellants= issues attacking appellee=s other causes of action. Tex. R. App. P. 47.1.
Conclusion
Having overruled all of appellants= issues on appeal necessary for a final disposition of the appeal, we affirm the trial court=s final judgment.
/s/ John S. Anderson
Justice
Judgment rendered and Memorandum Opinion filed March 29, 2007.
Panel consists of Justices Anderson, Hudson, and Guzman.
[1] Appellee also sued a two additional defendants, Alexander Oil Company and Dennis Trigg. The trial court entered a take nothing judgment on appellee=s causes of action against these defendants and they are not parties to this appeal.
[2] In addition to breach of contract, appellee also asserted causes of action for breach of implied warranty, breach of fiduciary duty, negligence, violations of the Deceptive Trade Practices Act, and fraud.