Opinion issued August 27, 2015
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-13-00782-CV
———————————
BANDIER REALTY PARTNERS, LLC
AND SWITCHBACK VENTURES, LLC, Appellants
V.
SSC OPPORTUNITY PARTNERS, LLC, Appellee
On Appeal from the 215th District Court
Harris County, Texas
Trial Court Case No. 2011-43194
MEMORANDUM OPINION
A jury awarded appellee SSC Opportunity Partners, LLC $15 million in
actual damages for fraud and breach of fiduciary duty in connection with a real-
estate transaction. Appellants Bandier Realty Partners, LLC and Switchback
Ventures, LLC appeal from the adverse judgment against them.
We conclude that, as in the case of HMC Hotel Properties II LP v. Keystone-
Texas Property Holding Corp., 439 S.W.3d 910 (Tex. 2014), the evidence is
legally insufficient to support the jury’s verdict with respect to its finding that any
actual damages suffered by SSC were caused by the actions of Bandier Realty and
Switchback. Since SSC did not pursue any other theory of recovery, we sustain the
appellants’ fourth issue, reverse the judgment of the trial court, and render
judgment that SSC take nothing.
Background
Douglas Britton formed SSC Opportunity Partners, LLC for the purpose of
purchasing and developing real estate in the northern suburbs of Houston, where
Exxon eventually built a corporate campus. Britton engaged the services of a real-
estate broker, Bandier Realty Partners, LLC, in connection with this transaction.
On August 2, 2010, SSC entered into an earnest-money contract to purchase
a 101-acre tract of land in Harris County for approximately $5 million. Within
three days of the contract’s execution, the buyer was required to deposit $25,000 in
earnest money, which would become non-refundable after a period of due
diligence. A down payment of $1 million was due at closing, and the sellers agreed
to finance the remaining $4 million balance if the purchaser or its assignee could
demonstrate its “financial strength” and close the transaction within the time
allotted by the contract.
2
SSC lacked the $25,000 that was needed for the initial earnest-money
payment. Robert D. Banzhaf and L.S. “Trey” Halberdier, III, who jointly owned
Bandier Realty, began working with Britton to find investors. On August 4, 2010,
Switchback Ventures, LLC—a company owned by Banzhaf and Halberdier—
deposited $25,000 as earnest money.
Halberdier then asked Britton to sign a document that he said was intended
to protect Switchback’s $25,000 investment. Halberdier had drafted this
agreement, which the parties call the “Switchback Agreement,” in the form of a
letter from Britton to Switchback, which identified Britton as “[t]rustee and agent
to assist in the acquisition and/or contractual arrangements of . . . referenced land
in Harris County.” It stated that Britton was authorized by Switchback “to
represent the interest, monetary consideration of Earnest Money in said Contracts,
and perform Contracts for Trey Halberdier or any other Managing Member of
Switchback Ventures, LLC and any other subsidiaries, partners or affiliates.” The
only land referenced was the 101 acres, and the only contract identified was the
earnest-money contract that Britton had signed on behalf of SSC. The Switchback
Agreement also stated that Britton would “take full directive from [Switchback] in
terms of duties to perform, responsibilities, and any other actions that relate to the
$25,000.00 earnest money deposit.” Without reading it, Britton signed the
document.
3
Britton, Halberdier, and Banzhaf then decided to search for a partner or
purchaser to execute the real-estate transaction, and the men concurrently began
discussions with different potential investors.
Britton began discussions with Larry Johnson, a successful Houston-area
real-estate developer, about partnering to purchase and develop the property.
Without committing to the investment, Johnson began due diligence, which
revealed several concerns, including the availability of utilities, lack of road access
to the 101 acres, and the conditions upon which sellers had predicated their offer of
financing.
Halberdier and Banzhaf began discussions with other potential investors:
Omero “Rocky” Del Papa, III, Kenneth R. Vaught, Jr., and their business entities
Kenroc Development, LLC and Kenroc, LLC (collectively “Kenroc”). Britton
encouraged Halberdier and Banzhaf’s negotiations with Kenroc, and he gave them
investment information to use in their presentations. Britton would later testify that
he had authorized Bandier Realty to engage in these negotiations. Bandier Realty
negotiated a potential deal with Kenroc. Contemporaneous emails from Britton
showed that he understood the terms of the proposed deal—assignment of the
earnest-money contract to Kenroc with both Bandier Realty and SSC later serving
as real-estate brokers for subdivided parcels of land and both sharing in the
commissions.
4
In addition, Bandier Realty negotiated its own contingent agreement with
Kenroc and the sellers’ agent. In an email dated November 28, Halberdier told the
sellers’ agent that if “Britton (SSC)” did not approve the Kenroc proposal, Bandier
Realty would withdraw the earnest money from escrow, causing a default on the
contract. At that point, Kenroc and Bandier Realty would enter into a new contract
with the sellers with the same closing date, terms, and conditions. In another email
sent later that day, Halberdier told Banzhaf, Del Papa, and Vaught that Britton had
agreed to the Kenroc deal in principle.
But the next day, Britton entered into a letter agreement with Johnson. In
exchange for a loan of $32,500, which was secured by a promissory note, Britton
agreed to obtain an extension of the inspection period in the earnest-money
contract and the deletion of its financial-strength provision. Britton further agreed
that he would “work together exclusively” with Johnson “towards a mutually
acceptable agreement for the assignment of the [earnest money] [c]ontract from
Britton’s affiliate to an affiliate of Johnson.” That day, Britton gave Johnson a
copy of the Switchback Agreement, which he referenced as “the only single
document I have executed with Bandier.”
Britton delivered to the title company a cashier’s check in the amount of
$32,500, representing the $25,000 earnest money and a payment of $7,500 to
extend the inspection period. He also delivered a letter that he termed a “release,”
5
addressed to Switchback Ventures. Britton instructed the title company that it was
“not authorized to release the Cashier’s Check contained herewith until you receive
a signed counterpart of the release and return a copy to me by email.”
The letter to Switchback stated that its purpose was to return the $25,000
earnest money in full satisfaction of any duties Britton owed by virtue of the
Switchback Agreement. It continued:
Please acknowledge your receipt and acceptance of the
foregoing in the appropriate place below, which shall in any event be
deemed upon your acceptance of the Deposit being returned to you
herewith, and which acceptance shall also be deemed an absolute
quitclaim and release of any interest you may claim to any earnest
money heretofore deposited pursuant to that certain purchase and sale
agreement by and between SSC Opportunity Partners, LLC and OU
Land Acquisition, LP and OU Land Acquisition Two, LP for a certain
100.61 acre tract of land located in Harris County, Texas (the
“Contract”).
You are hereby again advised that your offer to invest money
with Purchaser under the Contract is not accepted. The foregoing shall
not be deemed to otherwise affect any commission to which you may
be expressly entitled pursuant to the Contract.
Halberdier refused to sign the release. Rather, he asked Britton to assign the
earnest-money contract from SSC to Bandier Realty.
The next day, the seller’s agent contacted the title company to inquire about
the earnest money, which had not yet been transferred. The Switchback earnest
money was then sent to the sellers, and Johnson’s earnest money was returned.
6
By now hostility had grown among the parties. Britton, Halberdier, and
Banzhaf met at Johnson’s office to attempt to resolve their differences. Johnson
and the seller’s agent were also present, but they left the room to allow the men to
work out their problems. Two days later, Johnson informed Britton that he was no
longer interested in the investment opportunity.
By early December 2010, there had been no showing of financial strength by
SSC, Britton, Halberdier, Banzhaf, Switchback, or Bandier Realty. On
December 6, the sellers informed SSC that it had two business days to deliver a
letter of intent or an agreement among SSC, Bandier Realty, and Del Papa, the
proposed equity partner, to be signed by all parties. In addition, the sellers offered
one additional business day for Del Papa to satisfy the financial-strength provision.
On December 8, SSC, Bandier Realty, and Switchback entered into a
memorandum of agreement (“MOA”) calling for the formation of a business entity
called “Newco”—to be owned by Bandier Realty, SSC, and a majority equity
investor—that would acquire and develop the 101 acres. Bandier Realty and SSC
would own equal minority shares of the entity. The following day, the sellers
approved Del Papa’s financial statements as satisfying the financial-strength
provision.
Bandier Realty and Switchback then asked SSC to assign the earnest-money
contract to Del Papa as trustee of yet another entity to be formed in the future. The
7
document that was sent to Britton, which the parties call the “Del Papa Assignment
Agreement (DPAA),” included a provision, paragraph 8, which canceled and
nullified the MOA signed the previous day by Bandier Realty and SSC. Britton
struck out the language in paragraph 8 that canceled the MOA, signed the revised
document, and sent it to Halberdier, Banzhaf, their attorneys, and the sellers’ agent.
With Britton’s revisions, there were then two documents purporting to assign the
earnest-money contract: the MOA which assigned the contract to Newco; and the
DPAA as revised by Britton, which assigned it to Del Papa, as trustee, without
nullifying the MOA. The sellers’ agent informed Britton that unless he executed
the assignment without striking through paragraph 8, the sellers would declare the
earnest-money contract in default. Britton thereafter signed a clean copy of the
DPAA. The DPAA provided that SSC would share equally in any commission
received by Bandier Realty as a result of the earnest-money contract. But the
DPAA made no provision for any further participation by SSC in the development
of the 101 acres, and SSC did not participate further.
In July 2011, after Exxon announced its plans to build a corporate campus
adjacent to the 101 acres, SSC filed the underlying lawsuit against the Bandier
parties (Halberdier, Banzhaf, Bandier Realty Partners, LLC, Switchback Ventures,
LLC, and Bandier Management Partners, LLC), the investors who had worked
with them, and the title company that had handled the escrow. SSC alleged various
8
tort theories including breach of fiduciary duty and fraud. SSC also sought
exemplary damages.
The case was tried to a jury. Britton’s theory of the case was that SSC lost its
opportunity to partner with Johnson to purchase and develop the 101 acres because
the defendants—including Bandier Realty and Switchback—interfered and caused
Johnson to back out of the transaction. Britton testified about how he came up with
the idea for this particular development and the time and effort he spent to research
its potential viability. He also testified that he had no money to finance it and had
even borrowed money from his parents. Britton testified that Johnson had been
very interested in pursuing this opportunity. Although the sellers’ agent had
already denied Johnson’s request to extend additional time, Britton nevertheless
believed he could persuade the sellers to extend the due-diligence period. Britton
testified that when Johnson loaned him the earnest money, it was for the purpose of
moving “forward towards closing.” Britton contended that as a result of the
defendants’ actions, “SSC lost the option which it valued at $20 million.”
Johnson testified, however, that he and Britton never reached an agreement
about purchasing the 101-acre tract. He said that he had been confused about who
had the rights to the contract and “still unsettled” on due diligence. He testified that
there were numerous unresolved issues, any one of which would have been enough
to end the deal. He identified a number of specific concerns, including: “when the
9
roads would be built,” “whether Exxon was really going to go forward with their
deal,” “how the drainage would end up working,” “getting road right-of-ways to
extend some of the roads,” and “how we were going to do the MUD districts.”
Johnson also said that he was not prepared to finalize a deal without an extension
of the inspection period, and the sellers had not agreed to extend it.
The jury found in favor of SSC on its claims for fraud and breach of
fiduciary duty, awarding $15 million in actual damages, plus exemplary damages
against Bandier Realty Partners, Banzhaf, and Halberdier in the amount of
$500,000 each.
Analysis
“Generally, when a party presents multiple grounds for reversal of a
judgment on appeal, the appellate court should first address those points that would
afford the party the greatest relief.” Bradleys’ Elec., Inc. v. Cigna Lloyds Ins. Co.,
995 S.W.2d 675, 677 (Tex. 1999). Accordingly, we begin by addressing the
appellants’ sufficiency-of-the-evidence arguments because they apply to all claims
and both remaining defendants. In addition, reversal on the grounds of legal
insufficiency would result in rendition of judgment for Bandier Realty and
Switchback. See id.; see also TEX. R. APP. P. 43.3 (“When reversing a trial court’s
judgment, the court must render the judgment that the trial court should have
10
rendered, except when: (a) remand is necessary for further proceedings; or (b) the
interests of justice require a remand for another trial.”).
We review legal sufficiency challenges to determine whether the evidence
“would enable reasonable and fair-minded people to reach the verdict under
review.” City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). In
determining whether legally sufficient evidence supports a challenged finding, we
must consider the evidence that favors the finding if a reasonable factfinder could,
and we must disregard evidence contrary to the challenged finding unless a
reasonable factfinder could not. Id. We may not sustain a legal sufficiency, or “no
evidence,” point unless the record demonstrates: (1) a complete absence of a vital
fact; (2) the court is barred by rules of law or of evidence from giving weight to the
only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital
fact is no more than a mere scintilla; or (4) the evidence conclusively establishes
the opposite of the vital fact. Id. at 810. The factfinder may choose to “believe one
witness and disbelieve others” and “may resolve inconsistencies in the testimony
of any witness.” McGalliard v. Kuhlmann, 722 S.W.2d 694, 697 (Tex. 1986); see
City of Keller, 168 S.W.3d at 820–21.
Proximate cause is an element of each of SSC’s tort claims. See Nat’l Prop.
Holdings, L.P. v. Westergren, 453 S.W.3d 419, 423 (Tex. 2015) (fraudulent
inducement); ERI Consulting Eng’rs v. Swinnea, 318 S.W.3d 867, 881 (Tex. 2010)
11
(civil conspiracy); Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29
S.W.3d 74, 77 (Tex. 2000) (tortious interference with a contract); Finger v. Ray,
326 S.W.3d 285, 291 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (breach of
fiduciary duty). There may be more than one proximate cause of an occurrence.
Del Lago Partners, Inc. v. Smith, 307 S.W.3d 762, 774 (Tex. 2010).
“The components of proximate cause are cause in fact and foreseeability.”
Ryder Integrated Logistics, Inc. v. Fayette Cnty., 453 S.W.3d 922, 929 (Tex.
2015). “Cause in fact is essentially but-for causation.” Id. A tortious act satisfies
the cause-in-fact component of proximate cause when it is “a substantial factor in
causing the injury and without which the injury would not have occurred.” Del
Lago Partners, 307 S.W.3d at 774 (citing W. Invs., Inc. v. Urena, 162 S.W.3d 547,
551 (Tex. 2005)). “If the defendant’s negligence merely furnished a condition that
made the injury possible, there can be no cause in fact.” Urena, 162 S.W.3d at 551.
Proximate cause “cannot be established by mere conjecture, guess or
speculation.” Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 477
(Tex. 1995). To establish causation, the evidence “must show more than a
possibility.” Lenger v. Physician’s Gen. Hosp., Inc., 455 S.W.2d 703, 706 (Tex.
1970). “Verdicts must rest upon reasonable certainty of proof.” Id. Cause in fact
may be established by direct or circumstantial evidence, including expert-opinion
testimony. See, e.g., Havner v. E-Z Mart Stores, Inc., 825 S.W.2d 456, 459 (Tex.
12
1992). However, “[b]are baseless opinions will not support a judgment even if
there is no objection to their admission in evidence.” City of San Antonio v.
Pollock, 284 S.W.3d 809, 816 (Tex. 2009). When an expert opinion is admitted
without objection, it may be considered probative even if its basis is unreliable. Id.
at 818. “But if no basis for the opinion is offered, or the basis offered provides no
support, the opinion is merely a conclusory statement and cannot be considered
probative evidence, regardless of whether there is no objection.” Id. “[A] claim
will not stand or fall on the mere ipse dixit of a credentialed witness.” Burrow v.
Arce, 997 S.W.2d 229, 235 (Tex. 1999).
The jury in this case found that Bandier Realty breached its fiduciary duty to
SSC, intentionally interfered with the earnest-money contract, participated in a
civil conspiracy that damaged SSC, and fraudulently induced SSC to enter into the
Del Papa Assignment Agreement. The jury also found that Switchback participated
in Bandier Realty’s breach of fiduciary duty, participated in a civil conspiracy that
damaged SSC, and assisted or encouraged Bandier Realty’s interference with the
earnest-money contract.
Appellants challenge the evidentiary basis for the jury’s conclusions.
Specifically, they contend that SSC lacked the financial ability to exercise the
option by purchasing the land for $5 million on its own, and its only potential
investor, Larry Johnson, would not have invested in the project regardless of their
13
actions. As such, the appellants argue there was legally insufficient evidence that
their actions were a but-for cause of SSC’s failure to acquire the property.
In response, SSC argues that Johnson’s actions and testimony created a fact
issue about whether he would have “proceeded with the SSC deal” but for the
actions of Bandier Realty and Switchback. In particular, it contends that Johnson’s
action in “giving SSC the non-refundable earnest money,” despite knowing that the
sellers had not extended the inspection period or deleted the financial-strength
provision, showed that he would have moved forward with the deal. SSC argues
that this action conflicted with Johnson’s testimony, creating a credibility issue that
the jury resolved in its favor and which we must credit under the applicable
standard of review. SSC argues that the jury was “free to conclude” that both the
conduct of Bandier Realty and other concerns about the property “played a role in
Johnson’s departure.” Thus, SSC reasons that the jury’s finding that Bandier
Realty and Switchback proximately caused its injuries is supported by sufficient
evidence.
We disagree with SSC’s depiction of the record. First, the evidence showed
that SSC lacked the financial ability to purchase the land for $5 million without an
investor or equity partner. Although Britton asserted at trial that he could have
closed the deal, he conceded on cross-examination that he could not have done so
without investors. Similarly, the sellers’ agent also testified that SSC lacked the
14
financial ability to purchase the property independently. In addition, SSC never
satisfied the financial-strength provision, which was a necessary condition for the
sellers to finance the $4 million balance that would have remained after the
$1 million down payment. Under the earnest-money contract, the failure to satisfy
the financial-strength provision was grounds for the sellers to declare the contract
in default.
Second, there is no evidence that Johnson intended to purchase the
101 acres, give or loan SSC the money to do so, invest in SSC, or form a joint
business entity with SSC for the purpose of purchasing and developing the
property. Johnson testified that he was interested in the property, but the unfinished
due diligence would have been enough to end the deal for him. He testified that he
was concerned about the lack of utilities, drainage, rights of way, access roads, and
annexation by a MUD district. Without an extension of the inspection period, any
one of these unresolved issues was “a killer,” significant enough for him to decline
the investment opportunity. Yet he never received any assurance that the
inspection period would be extended, which meant that he would not go forward
with the transaction.
The only written agreement between Johnson and SSC was the
November 29 “Letter Agreement Regarding Assignment of Contract.” This
document did not purport to actually assign the earnest-money contract. Instead,
15
the parties agreed “to work together exclusively towards a mutually acceptable
agreement for the assignment of the Contract from Britton’s affiliate to an affiliate
of Johnson which benefits both Britton and Johnson prior to the end of the
Inspection Period.” It also required Britton to obtain an extension of the inspection
period and deletion of the financial-strength condition. This agreement did not
provide any terms of financial compensation, carried interest, or any sort of profit
sharing. By its plain terms it was an executory contract that did not immediately
assign the earnest-money contract.
Still SSC argues that Johnson’s provision of $32,500 in nonrefundable
earnest money showed, contrary to his testimony, that he was prepared to assume
the contract and consummate the deal and was willing to abandon his demands to
delete the financial-strength condition and extend the inspection period. However,
the evidence in the record shows that the $32,500 was a loan secured by a
promissory note. Thus, while the earnest money was nonrefundable as to SSC,
Johnson’s investment was not at risk: he could recover his money from Britton. In
addition, Johnson’s letter agreement with Britton provided that the consideration
for the loan was Britton’s promise to obtain an extension of the inspection period
and a deletion of the financial-strength condition. There is no evidence in the
record that Johnson abandoned these demands. Instead, his testimony
unequivocally showed that he would not proceed with the deal without an
16
extension of the inspection period, an option that was available to him under the
letter agreement with Britton.
The insufficiency of this evidence is evident in light of a similar case
recently decided by the Supreme Court of Texas, addressing an issue of but-for
causation in a case arising from a real estate deal that fell through. The case of
HMC Hotel Properties II LP v. Keystone-Texas Property Holding Corp., 439
S.W.3d 910 (Tex. 2014), involved the attempted sale of the Rivercenter Mall and
the land beneath the San Antonio Riverwalk hotel. HMC Hotel Props. II LP, 439
S.W.3d at 911. The hotel leased the land beneath it from Keystone-Texas Property
Holding Corporation. Id. The lease included a right-of-first refusal provision,
affording it up to 90 days to attempt to negotiate an agreement to purchase the land
if Keystone decided to sell it. Id. at 911–12. Nothing in the lease required the hotel
to execute a waiver of this provision if it chose not to purchase under those
circumstances. Id. at 914–15.
After the properties were listed for sale, a potential buyer emerged for the
two properties, offering $166 million for both. Id. at 911. Keystone invited the
hotel to make an offer to purchase, but it also requested the hotel waive its rights
under the lease provision. Id. at 912. The hotel initially indicated that it would sign
the requested waiver, but after meeting with the potential buyer, the hotel
suspected that the purchase price had been inflated to discourage it from making an
17
offer. Id. At that point, the hotel informed Keystone by letter that no waiver was
forthcoming. Id. Notably, at all relevant times, the title insurers had stated that they
required a waiver from the hotel in order to issue a “clean” title insurance policy.
Id. at 913–14.
When the sale of the land beneath the hotel fell through, the hotel sued for
breach of contract, and Keystone countersued for tortious interference with a
contract. Id. at 912. The jury found for Keystone, which had argued that the letter
from the hotel had been “passed to the proposed title insurers, [and had] scuttled
the sale.” Id. The court of appeals held that the evidence was sufficient to show
that the letter “proximately caused the deal’s demise.” Id.
In the Supreme Court, the hotel argued that there was no evidence of but-for
causation, i.e., “no evidence show[ed] the outcome would have been different if
[the hotel] had not sent its letter.” Id. at 913. The Supreme Court agreed. First, it
observed that the hotel had no obligation to provide the waiver that the title
insurers demanded, and that there was no evidence that the insurers would have
dropped that demand. Id. at 915. Second it rejected testimony about how the title
insurers might have “insured around” the lease provision after the expiration of 90
days and in the absence of the hotel’s letter. Id. at 916. The Supreme Court said,
“[I]n the end, all of this testimony is simply speculation about what the title
insurers might have done had [the hotel] handled itself differently. Testimony
18
based on nothing but speculation is evidence of nothing at all.” Id. Third, the Court
agreed that the evidence showed that the hotel’s letter had a “substantial effect” on
the deal, but it explained that “testimony that the letter was a substantial factor in
bringing about harm to Keystone is only half of the cause-in-fact element. . . .
Keystone also had to show that absent [the hotel’s] letter, the harm would not have
occurred.” Id. at 917 (citation omitted).
This case is similar to HMC Hotel Properties. SSC’s argument that Johnson
would have provided the funding it needed to exercise the option but for the
actions of the appellants fails because it is too speculative. Nothing in the evidence
shows that Johnson would have provided SSC with funding but for the actions of
Bandier Realty and Switchback. Rather, the evidence shows that even if the
substituted earnest money had been accepted, and even if Halberdier, Banzhaf, and
Britton had comported themselves amicably and with civility at the meeting on
December 1, Johnson still would have harbored doubts about the investment
because his due diligence was incomplete. There is no evidence in the record that
Johnson would have retreated from his demand to eliminate the financial-strength
condition or to extend the inspection period. And his loan of money to Britton did
not require him to abandon those demands. To the contrary, it was predicated upon
them.
19
Here, the evidence showed only that Johnson might have consummated the
deal or provided SSC with the funds to do so. This is not sufficient to establish to
the but-for element of cause in fact, which requires reasonable certainty and cannot
rest on a mere possibility. See Lenger, 455 S.W.2d at 706.
SSC argues that because there can be more than one proximate cause, the
jury was “free to conclude” that the conduct of Bandier Realty and Switchback
“played a role in Johnson’s departure.” We agree that the evidence supports such a
conclusion. Johnson testified that he became “disgusted” by the conduct of Bandier
Realty, i.e., Halberdier and Banzhaf, as well as that of Britton. He testified that it
created doubt as to who was in control of the earnest-money contract. But the
question before us is whether the evidence supports the verdict actually rendered,
which included an award of actual damages. Actual damages require proof of
causation. See Doe, 907 S.W.2d at 477; Lenger, 455 S.W.2d at 706. And evidence
that the appellants played a role in bringing about the injury SSC complains of “is
only half of the cause-in-fact element.” HMC Hotel Props., 439 S.W.3d at 917.
SSC also had to show that absent the conduct of Bandier Realty and Switchback,
the injury would not have occurred. Id. This they failed to do.
Finally, SSC argues that as a matter of policy, a finding that the evidence
was insufficient to support the verdict as to causation would “create an unintended
safe-harbor from liability for defendants who breach their fiduciary duties early in
20
a transaction.” It argues that the appellants’ actions “chas[ed] off Johnson before
he could finalize the SSC deal.” It argues that we therefore should affirm based on
“the settled principles that a fiduciary should be punished for its breaches and that
relationships of trust should be protected.”
Texas law provides equitable remedies for breach of fiduciary duty that are
distinct from awards of actual damages. See, e.g., ERI Consulting Eng’rs, Inc., 318
S.W.3d at 874 (equitable forfeiture is distinguishable from an award of actual
damages because it serves a separate function of protecting fiduciary
relationships); Burrow, 997 S.W.2d at 240 (fee forfeiture available in absence of
proof of actual damages for an attorney’s breach of fiduciary duty); Kinzbach Tool
Co. v. Corbett-Wallace Corp., 138 Tex. 565, 573–74, 160 S.W.2d 509, 514 (1942)
(“It would be a dangerous precedent for us to say that unless some affirmative loss
can be shown, the person who has violated his fiduciary relationship with another
may hold on to any secret gain or benefit he may have thereby acquired.”); Saden
v. Smith, 415 S.W.3d 450, 469 (Tex. App.—Houston [1st Dist.] 2013, pet. denied)
(“Even if a fiduciary does not obtain a benefit by violating his duty, he still may be
required to forfeit the right to compensation for his work.”).
SSC did not seek the alternative remedy available to it under Texas law: fee
forfeiture. Bandier Realty was SSC’s broker, and its payment was the commission
it earned when the sale of the 101 acres was closed. SSC did not seek recompense
21
for the commission Bandier Realty earned. In addition, although SSC did seek
damages for unjust enrichment, the jury returned a take-nothing verdict on that
question. Thus, we reject SSC’s policy-based arguments.
We sustain the appellants’ fourth issue, and we hold that the evidence is
legally insufficient to support the verdict as to causation. As a result of our
resolution of this issue, it is unnecessary for us to address the other arguments
raised by the appellants. TEX. R. APP. P. 47.1.
Conclusion
We reverse the judgment of the trial court and render judgment that SSC
take nothing from appellees Bandier Realty Partners and Switchback Ventures.
Michael Massengale
Justice
Panel consists of Chief Justice Radack, and Justices Higley and Massengale.
22