TeleResource Corporation v. Accor North America, Inc.

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH

NO. 02-12-00475-CV

TELERESOURCE CORPORATION APPELLANT

V.

ACCOR NORTH AMERICA, INC. APPELLEE

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FROM THE 158TH DISTRICT COURT OF DENTON COUNTY

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OPINION

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I. INTRODUCTION

Appellant TeleResource Corporation (TRC) appeals from a partial

summary judgment granted in favor of Appellee Accor North America, Inc. and a

final judgment following a jury trial. In seven issues, TRC argues that the trial

court erred by granting Accor summary judgment on TRC’s anticipatory

repudiation claim, that the evidence is legally and factually insufficient to support
some of the jury’s findings, and that the trial court erred by submitting an

improper jury question on Accor’s damages. We will affirm as modified.

II. BACKGROUND

Accor is a Delaware corporation with its principal place of business in

Carrollton. Accor owns, operates, or franchises over 900 economy hotels across

the United States, Canada, and Mexico under the names Motel 6 and Studio 6.

TRC is a Texas corporation with its principal place of business in Dallas. It

provides telecommunication services and support, sometimes through

subcontractors, for companies in the hospitality industry.

In early April 2003, Accor and TRC signed a Master Services Agreement

(MSA) in which TRC agreed to provide specific services and support for the

telecommunication systems used by Accor’s properties, including repairing or

replacing defective telecommunication parts and components, conducting routine

maintenance of the systems, and providing remote alarm monitoring. The MSA

had an initial term of forty-two months and called for two types of fees to be paid

by Accor to TRC: (1) fees for recurring services and (2) fees for nonrecurring

services. The monthly recurring-services fee was based upon a set fee per

guest room and covered the support and services set out in the MSA. Under

Modification 2 to the MSA, TRC invoiced Accor sixty days in advance of the

month that TRC was to perform recurring services, and Accor’s payment was

2
due thirty days before TRC commenced the services.1 The fee for nonrecurring

services covered labor and materials for services that were not included in the

recurring-services fee.2 TRC invoiced Accor bimonthly for nonrecurring services,

and Modification 2 required Accor to pay for the services within fourteen days of

invoicing.

Modification 2 to the MSA contained the following provision regarding

payment of fees:

Material Default. If [Accor] shall fail to provide payment in
strict accordance with the dates, deadlines and obligations set forth
herein the same shall be a material default. In the event of a
material default TRC may, at its sole option, suspend provision of
Services under this Agreement until such time as the deficiency, in
payment, is made without affecting the binding nature of this
Agreement. Immediately upon receipt of payment in full, of such
past due monies, which caused the material default, TRC may
require adequate assurance of future performance by [Accor] and
upon receipt of such assurance shall immediately resume provision
of Services under this Agreement. [Accor] expressly agrees that any
suspension of Services resulting from such Default shall not relieve
[Accor] of monies due under this Agreement for the term of any such
suspension. . . . In the event that any such past due fees remain

1
The parties signed Modification 2 to the MSA in December 2003.
Modification 2 contained the following illustration regarding billing for recurring
services: When TRC billed Accor on January 1, 2004, Accor’s payment, which
was due by January 31, 2004, covered TRC’s services for the month of March
2004.

The parties signed Modification 1 to the MSA soon after signing the MSA.
Accor was moving its headquarters, and TRC agreed to upgrade and move
Accor’s telecommunication system to the new location.
2
For example, a nonrecurring-services fee would include the cost of labor
and materials for replacing damaged equipment.

3
 unpaid for thirty (30) days beyond the due date, a material Default
shall have occurred. [Emphasis added.]

TRC completed transitioning Accor’s properties from the previous support

provider in August 2003. Thereafter, the parties proceeded under the MSA and

Modifications—TRC provided services and support to Accor’s properties, and

Accor paid TRC for those services.

With the initial term of the MSA ending in 2006, Accor invited TRC and

other businesses to submit bids in March 2006 as part of a request for proposal

process that Accor launched in December 2005. TRC submitted a bid, but Accor

ultimately chose another business, Source, Inc., to provide the

telecommunication services and support for its properties after the MSA expired.

It was around that time that, according to Jorge Gonzalez, TRC’s former CFO

and president, “things got a little bit messy.”

On August 1, 2006, TRC sent Accor an invoice for October’s recurring-

services fee, but Accor declined to pay it because according to the version of the

MSA in its possession, the initial term of the MSA commenced on April 11, 2003,

(the effective date) and expired forty-two months later in early October 2006.

Thus, Accor did not want to pay for recurring services beyond the initial term of

the MSA.3 When the parties met to compare contracts, they learned that TRC

3
TRC also later sent Accor an invoice for November’s recurring-services
fee, but Accor declined to pay it.

4
had a different version of the MSA—TRC’s MSA had a handwritten effective date

of June 1, 2003, meaning that the initial term of the MSA expired at the end of

November 2006, not in early October 2006.

By letter dated August 23, 2006, TRC notified Accor that it would suspend

service to Accor’s properties effective at 5:00 p.m. that day because pursuant to

section g.1.(b) of Modification 2 to the MSA, and “as a result of the failure of

[Accor] to provide payment in strict accordance with the dates, deadlines and

obligations set forth therein,” Accor had committed a material default under the

MSA. To avoid a suspension of service, TRC demanded that Accor pay the

invoices detailed in a spreadsheet attached to the letter by 5:00 p.m. that day.

According to the spreadsheet, the “Total Balance Outstanding” was $311,183.33.

Of that amount, approximately $198,000 represented the October 2006 fee for

recurring services, which was not due until August 31, 2006, according to

Modification 2 to the MSA. The remaining approximately $112,000 represented

invoices for nonrecurring services. Of that $112,000, only twelve invoices

totaling approximately $3,400 had gone unpaid for over thirty days, and sixty-

three invoices totaling approximately $23,000 had gone unpaid for at least

fourteen days but less than thirty days. Thus, considering Modification 2’s

payment requirements for recurring and nonrecurring services, of the

$311,183.33 that TRC demanded Accor pay to avoid suspended service,

approximately $284,000 was not yet due.

5
 TRC extended the due date for the payment that it had demanded by one

day, and Accor made efforts to contact TRC’s counsel and negotiate, but TRC

ultimately suspended service to Accor as of 5:00 p.m. on August 24, 2006.4 On

September 1, 2006, about a week after TRC had suspended service, TRC

received Accor’s payment for the twelve invoices for nonrecurring services that

had gone unpaid for over thirty days and for forty-seven of the invoices for

nonrecurring services that had gone unpaid for at least fourteen days, but TRC

did not withdraw its suspension of service. Accor consequently initiated an

“emergency plan”—its own employees were fielding service-related calls—and it

accelerated the transition period that had to occur before Source was fully

capable of handling Accor’s telecommunication needs.

The parties sued each other for breach of contract and other claims. The

trial court granted Accor’s motion for partial summary judgment on TRC’s claim

for anticipatory repudiation, and a jury made a number of findings at the

conclusion of a trial. As relevant to this appeal, jury question number 2 asked,

Did Accor fail to comply with the [MSA] and Modification 2 by
failing to provide payment or continuing to fail to provide payment in
strict accordance with the dates, deadlines and obligations set forth
in paragraph (b), “Non-Recurring Services,” in Modification 2 to the
[MSA] from August 1, 2006 through August 24, 2006[?]

4
Accor’s counsel sent TRC a fax stating that Accor considered TRC’s
“suspension of service . . . to be a breach of the parties’ agreement. [TRC]
demanded sums not due and payable by [Accor] and then suspended the service
based on [Accor’s] refusal to pay those sums, even though [Accor] was
attempting to work with [TRC] on resolving the dispute.”

6
The jury answered, “Yes.” But jury question number 2(a) asked,

Did [TRC] waive, through its course of conduct, strict
compliance with the requirements of paragraph (b), “Non-Recurring
Services,” in Modification 2 to the [MSA]?

The jury answered, “Yes.” Jury question number 3 asked,

Did Accor fail to comply with the [MSA] and Modification 2 by
allowing invoices to remain unpaid for at least thirty (30) days
beyond the due date as set forth in paragraph (g)(1)(b), “Material
Default,” of Modification 2 to the [MSA]?

The jury answered, “Yes.” But jury question number 3(a) asked,

Did [TRC] waive, through its course of conduct, strict
compliance with the requirements of paragraph (g)(1)(b), “Material
Default,” of Modification 2 to the [MSA]?

As with jury question number 2(a), the jury answered, “Yes.” Jury question

number 5A asked,

Did [TRC] fail to comply with the [MSA] and Modification 2 by
improperly suspending services under the [MSA] after demanding
payment for invoices that were not more than thirty (30) days
overdue?

The jury answered, “Yes.” Jury question number 12 asked in relevant part,

What sum of money, if any, if paid now in cash, would fairly
and reasonably compensate Accor for its damages, if any, that
resulted from [TRC’s] failure to comply with the [MSA]?

The jury answered, “$236,174.70.” Jury question number 14 asked,

What is a reasonable fee for the necessary services of Accor’s
attorneys, stated in dollars and cents?

7
The jury answered “$190,000” for preparation and representation in the trial

court; “$25,000” for representation through an appeal to the court of appeals; and

“$5,000” for representation through proceedings in the supreme court. TRC

appeals.5

III. PARTIAL SUMMARY JUDGMENT

In its first issue, TRC argues that the trial court erred by granting Accor

summary judgment on TRC’s anticipatory repudiation claim. TRC argues that it

did not waive its claim, and it directs us to summary judgment evidence that

Accor’s general counsel told TRC on August 22, 2006, that Accor had no

intention of making any further payments to TRC—“a classic repudiation of the

contract.”

In a summary judgment case, the issue on appeal is whether the movant

met the summary judgment burden by establishing that no genuine issue of

material fact exists and that the movant is entitled to judgment as a matter of law.

Tex. R. Civ. P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,

289 S.W.3d 844, 848 (Tex. 2009). We review a summary judgment de novo.

Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). We take as

true all evidence favorable to the nonmovant, and we indulge every reasonable

5
The jury additionally found that TRC sustained damages in the amount of
$86,682.20 for unpaid invoices for nonrecurring services. Thus, excluding
attorneys’ fees, the final judgment awarded Accor $149,492.50 ($236,174.70 less
$86,682.20). Accor does not appeal that finding.

8
inference and resolve any doubts in the nonmovant’s favor. 20801, Inc. v.

Parker, 249 S.W.3d 392, 399 (Tex. 2008); Provident Life & Accident Ins. Co. v.

Knott, 128 S.W.3d 211, 215 (Tex. 2003). We consider the evidence presented in

the light most favorable to the nonmovant, crediting evidence favorable to the

nonmovant if reasonable jurors could and disregarding evidence contrary to the

nonmovant unless reasonable jurors could not. Mann Frankfort, 289 S.W.3d at

848. The summary judgment will be affirmed only if the record establishes that

the movant has conclusively proved all essential elements of the movant’s cause

of action or defense as a matter of law. City of Houston v. Clear Creek Basin

Auth., 589 S.W.2d 671, 678 (Tex. 1979).

“Under Texas law, when one party repudiates a contract, the

nonrepudiating party has the right to accept the repudiation and bring a cause of

action for damages immediately, or to keep the contract alive and sue for

damages as they accrue.” Thomas v. Thomas, 902 S.W.2d 621, 624 (Tex.

App.—Austin 1995, writ denied); see Ingersoll-Rand Co. v. Valero Energy Corp.,

997 S.W.2d 203, 211 (Tex. 1999). “[A] contract cannot be thus treated, for one

purpose, as subsisting, and, for another purpose, as at an end. Upon such a

repudiation . . . the other may make his choice between the two courses open to

him, but can neither confuse them together nor take both.” Greenwall Theatrical

Circuit Co. v. Markowitz, 97 Tex. 479, 487, 79 S.W. 1069, 1071–72 (1904).

9
 Here, when Accor allegedly communicated its intent to make no further

payments under the MSA, TRC did not treat the MSA as terminated and sue

Accor for the anticipatory breach. Instead, TRC suspended service, an option

available to it under Modification 2, and sued Accor years later, after the MSA

had expired. TRC argues that it did not treat the MSA as continuing in effect

because it suspended service, but Modification 2 did not provide for termination

of the MSA in the event that TRC suspended service. By electing to file suit after

the time for performance of the MSA, TRC chose to ignore Accor’s alleged

anticipatory repudiation, see Bumb v. InterComp Techs., LLC, 64 S.W.3d 123,

125 (Tex. App.—Houston [14th Dist.] 2001, no pet.) (reasoning similarly), and to

purse a claim for breach of contract; indeed, the jury charge included no less

than four different questions inquiring into whether Accor failed to comply with the

MSA. See Am.’s Favorite Chicken Co. v. Samaras, 929 S.W.2d 617, 626 (Tex.

App.—San Antonio 1996, writ denied) (“Since the time for performance had

passed in the instant case, Samaras clearly was entitled to sue for breach of

contract and to elect to have the issue submitted to the jury as an express breach

or failure to comply.”).

We hold that the trial court did not err by granting Accor’s motion for partial

summary judgment on TRC’s anticipatory repudiation claim. We overrule TRC’s

first issue.

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 IV. WAIVER FINDINGS

In its second and third issues, TRC argues that the evidence is legally and

factually insufficient to support the jury’s findings in question numbers 2(a) and

3(a) that TRC waived, through its course of conduct, strict compliance with

Modification 2’s payment deadlines.

We may sustain a legal sufficiency challenge only when (1) the record

discloses a complete absence of evidence 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 establishes conclusively the opposite of a vital

fact. Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998),

cert. denied, 526 U.S. 1040 (1999); Robert W. Calvert, “No Evidence” and

“Insufficient Evidence” Points of Error, 38 Tex. L. Rev. 361, 362–63 (1960). In

determining whether there is legally sufficient evidence to support the finding

under review, we must consider evidence favorable to the finding if a reasonable

factfinder could and disregard evidence contrary to the finding unless a

reasonable factfinder could not. Cent. Ready Mix Concrete Co. v. Islas, 228

S.W.3d 649, 651 (Tex. 2007); City of Keller v. Wilson, 168 S.W.3d 802, 807, 827

(Tex. 2005).

When reviewing an assertion that the evidence is factually insufficient to

support a finding, we set aside the finding only if, after considering and weighing

11
all of the evidence in the record pertinent to that finding, we determine that the

credible evidence supporting the finding is so weak, or so contrary to the

overwhelming weight of all the evidence, that the answer should be set aside and

a new trial ordered. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986)

(op. on reh’g); Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Garza v. Alviar,

395 S.W.2d 821, 823 (Tex. 1965).6

Jury question number 2(a) specifically referenced payment for

nonrecurring services. And although jury question number 3(a) generally asked

if TRC had waived strict compliance with the requirements of paragraph g.1.(b) of

Modification 2, which appears to apply to payments for both recurring and

nonrecurring services, jury question number 3 specifically asked if Accor had

allowed invoices to remain unpaid for at least thirty days beyond their due date,

as set forth in paragraph g.1.(b). The record reflects that at the time of the

suspension of service, the only invoices that were unpaid for at least thirty days

beyond their due date were for nonrecurring services. Thus, we consider in our

sufficiency analysis whether TRC waived strict compliance with Modification 2’s

payment deadlines for nonrecurring services.

Waiver is the intentional relinquishment of a right actually known, or

intentional conduct inconsistent with claiming that right. Ulico Cas. Co. v. Allied

6
We apply these same standards of review to TRC’s other arguments that
challenge the legal and factual sufficiency of the evidence to support a jury
finding.

12
Pilots Ass’n, 262 S.W.3d 773, 778 (Tex. 2008). The elements of waiver include

(1) an existing right, benefit, or advantage held by a party; (2) the party’s actual

knowledge of its existence; and (3) the party’s actual intent to relinquish the right,

or intentional conduct inconsistent with the right. Id. TRC’s argument implicates

the third element.

Modification 2’s section (b) required Accor to pay invoices for nonrecurring

services within fourteen days of invoicing. Section g.1.(b) made it a material

default if fees, including nonrecurring fees, remained unpaid for thirty days

beyond the due date. These contractual provisions formed the bases for jury

question numbers 2, 2(a), 3, and 3(a). But while these provisions established

deadlines for making payments for nonrecurring services and for determining

when a material default occurred, the record demonstrates that the parties

engaged in a process for resolving disputed fees for nonrecurring services that

supplanted those contractual obligations.

Jessie Burgess, Accor’s Senior Director of IT telecommunication, testified

that early in their relationship, the parties experienced difficulty timely invoicing,

reviewing, and paying fees for nonrecurring services. Anthony D’Amico, TRC’s

president and CEO, testified similarly—that there were some issues getting

invoices for nonrecurring services approved and paid. Eventually, the parties

worked out a “dispute resolution process.” Under this procedure, Accor would

receive a batch of electronic invoices from TRC twice a month. Accor would then

13
review each invoice for correctness and either pay it as a capital expenditure,

identify it as disputed, or submit it to accounts payable. According to TRC, the

parties met every week to resolve the disputed invoices; sometimes Accor would

pay the invoice, and other times invoices would be reduced or eliminated.

Significantly, regarding the length of time that it took an invoice to go

through the dispute resolution process, Mark Boggess, a data analyst at Accor

who worked on the nonrecurring-services invoices, opined that the whole

process took anywhere from two weeks to thirty days. Burgess similarly

described the process as a “30-day processing cycle.” Timothy Grossenbacher,

TRC’s COO at the time of the suspension of service, testified that it could take up

to forty-five days to work out a disputed invoice. D’Amico testified that the

dispute resolution process was not a “rubber-stamp process” and that there were

a few delays in getting some of the invoices paid.

As for whether any of the overdue invoices for nonrecurring services

contained on the spreadsheet attached to TRC’s demand that Accor pay

$311,183.33 were in the dispute resolution process, Burgess explained that the

invoices “very well could have been in the dispute process, which is more than

likely why they would not have been paid.” Indeed, he testified, “I can tell you if

it’s a 30-day processing cycle and we had just received, say, a bill for August 1st

and it was August 24th, then that August 1st through 15th was likely still in the

system being processed.”

14
 The evidence thus demonstrates that, as to disputed invoices, the parties

informally adopted, and operated under, a dispute resolution process that

effectively supplanted Modification 2, section (b)’s requirement that Accor pay

invoices for nonrecurring services within fourteen days of invoicing and

section g.1.(b)’s determination that a material default occurred when

nonrecurring fees remained unpaid for thirty days beyond their due date. Under

the process actually implemented by the parties, and contrary to Modification 2’s

fourteen- and thirty-day deadlines, disputed invoices were received, reviewed,

and paid or not paid over a period of time that took anywhere from two weeks to

forty-five days.

Notwithstanding this evidence, TRC argues that the evidence is insufficient

to support the jury’s findings because “[n]o witness testified that the overdue

invoices . . . remained unpaid because those invoices were in the dispute

process.” Instead, “[t]he best Accor’s witness could muster was a guess that the

unpaid invoices ‘could have been in the dispute process.’” We disagree with

TRC’s assessment of the record. The jury could have relied upon the

circumstantial evidence detailed immediately above to conclude that the unpaid

invoices contained on the spreadsheet attached to TRC’s demand letter were in

the dispute resolution process. See Lozano v. Lozano, 52 S.W.3d 141, 149

(Tex. 2001) (stating that circumstantial evidence may be used to establish a

material fact). Moreover, Burgess unequivocally testified that Accor did not

15
arbitrarily make the decision to pay or not pay an invoice; rather, “[i]t would be

because it was disputed why it would not be paid.”

TRC additionally contends that it did not waive its rights, but instead

exercised them, because after demanding, and failing to receive, payment from

Accor, TRC suspended service to Accor’s properties—conduct that was “entirely

consistent with its rights under the contract.” TRC certainly demanded payment

from Accor and suspended service to Accor’s properties in August 2006, but we

cannot ignore the evidence demonstrating that throughout much of the initial term

of the MSA, TRC intentionally engaged in conduct that was inconsistent with its

rights under sections (b) and g.1.(b) of Modification 2 to the MSA. See Ulico

Cas. Co., 262 S.W.3d at 778. Accordingly, we hold that the evidence is legally

and factually sufficient to support the jury’s findings that TRC waived, through its

course of conduct, strict compliance with Modification 2’s payment deadlines.

We overrule TRC’s second and third issues.

V. TRC’S BREACH

In its fourth issue, TRC argues that the evidence is legally and factually

insufficient to support the jury’s finding that TRC breached the MSA by

“improperly suspending services . . . after demanding payment for invoices that

were not more than thirty (30) days overdue.” TRC contends that it not only had

the right to declare a material default because “past due fees remain[ed] unpaid

for thirty (30) days beyond the due date” (referencing the final part of

16
section g.1.(b) of the MSA), but that it also had the right to declare a material

default because Accor failed to provide payment “in strict accordance with the

dates, deadlines and obligations set forth” in the MSA (referencing the first part of

section g.1.(b) of the MSA). TRC acknowledges that it “may have been

improper” to suspend service if the suspension was based on Accor’s failure to

pay invoices that were not yet due, but TRC contends that it did not do that; it

asserts that it instead suspended services because “there were payments that

were over thirty days overdue.”

TRC’s arguments ignore the effect of the jury’s finding. TRC’s theory at

trial was that it suspended service because Accor committed a material default

under two different parts of section g.1.(b) of Modification 2—the part that

required Accor to “provide payment in strict accordance with the dates, deadlines

and obligations set forth” in the MSA and the part that made it a material default

when “past due fees remain[ed] unpaid for thirty (30) days beyond the due date.”

But Accor’s theory at trial was that TRC suspended service because Accor

refused to pay for invoices that were not yet due. Thus, like in most, if not all,

cases, the jury was responsible for resolving a conflict between competing

theories about an ultimate fact, and it did so when it answered jury question

number 5A in Accor’s favor. By finding that TRC improperly suspended service

after demanding payment for invoices that were not more than thirty days

overdue, the jury impliedly rejected TRC’s argument that it suspended service as

17
a result of Accor’s failure to pay invoices that had remained unpaid for thirty days

beyond their due date. Contrary to TRC’s arguments, the mere existence of

competing theories at trial does not render the evidence legally or factually

insufficient, nor may we decide the issue on the mere ipse dixit of TRC.7

As mentioned above, of the $311,183.33 that TRC demanded Accor pay to

avoid suspended service, approximately $284,000 was not yet due and

approximately $23,000 had gone unpaid for at least fourteen, but less than thirty,

days. TRC argues that there is nothing in the MSA that prohibited it from

demanding payment for invoices that were not thirty days overdue, but TRC did

not limit its actions to merely demanding payment of invoices that were not thirty

days overdue; as the jury found, TRC took the additional step of actually

suspending service after demanding payment for invoices that were not more

than thirty days overdue. Modification 2 permitted TRC to suspend service in the

event of a material default, but a material default did not include the reason for

which TRC suspended service.

We hold that the evidence is legally and factually sufficient to support the

jury’s finding in question number 5A. We overrule TRC’s fourth issue.

7
TRC does not argue that any of the jury’s findings conflict.

18
 VI. JURY QUESTION NUMBER 12

TRC argues in its fifth issue that the trial court erred by submitting jury

question number 12, Accor’s damages question, without an instruction setting

forth the measure of damages.

Damages must be measured by a legal standard, and that standard must

be used to guide the factfinder in determining what would compensate the injured

party. Jackson v. Fontaine’s Clinics, Inc., 499 S.W.2d 87, 90 (Tex. 1973). A jury

question that fails to guide the jury on any proper legal measure of damages is

fatally defective. Id. However, to complain on appeal about a damages question

that omits an instruction on the measure of damages, the complaining party must

not only object to the omission, it must also tender a written instruction in

substantially correct form. Cameron v. Terrell & Garrett, Inc., 618 S.W.2d 535,

538 n.4 (Tex. 1981); Jim Howe Homes, Inc. v. Rogers, 818 S.W.2d 901, 902–03

(Tex. App.—Austin 1991, no writ).

Here, although TRC objected that jury question number 12 did not properly

set out any elements of damages to be considered by the jury, it did not tender a

written instruction on the proper measure of damages in substantially correct

form. Therefore, TRC did not preserve this issue for appellate review.

Relying on the oft-quoted language in State Department of Highways and

Public Transportation v. Payne that “[t]here should be but one test for

determining if a party has preserved error in the jury charge, and that is whether

19
the party made the trial court aware of the complaint, timely and plainly, and

obtained a ruling,” TRC argues that it preserved error because it sufficiently

made the trial court aware of its complaint and obtained a ruling. 838 S.W.2d

235, 241 (Tex. 1992). The supreme court in Payne held that a question

submitted in writing by the State was sufficient to preserve its argument on

appeal that the trial court erred by submitting an erroneous jury question. Id. at

239–41. This case presents a completely different set of circumstances. The

issue here concerns the omission of an instruction on the proper measure of

damages. While rule of civil procedure 272 expressly permits a party to object to

a jury question either in writing or orally, rule 278 specifically requires that

challenges to the omission of an instruction be preserved by written submission

in substantially correct form. Tex. R. Civ. P. 272, 278; see Payne, 838 S.W.2d at

241 (“[W]e do not revise our rules by opinion.”). Considering Payne’s specific

facts and the rules of civil procedure, we agree with Accor that Payne did not

abrogate the rule in Cameron that a party must have tendered a written

instruction on the measure of damages in substantially correct form to later

complain on appeal about a damages question that omitted an instruction on the

measure of damages. See, e.g., Elliott v. Whitten, No. 01-02-00065-CV, 2004

WL 2115420, at *11–12 (Tex. App.—Houston [1st Dist.] Sept. 23, 2004, pet.

denied) (mem. op.) (reasoning similarly).

20
 TRC argues that it would have been “sheer guesswork to try to craft such

an instruction because Accor itself never disclosed to the court or [TRC] what

damages it was suing for,” but as we explain in addressing TRC’s sixth issue, the

jury’s damages award was not derived from sheer guesswork. We decline to

overlook TRC’s burden to tender a written instruction on account of Accor’s

purported omissions throughout the litigation. We overrule TRC’s fifth issue.

VII. ACCOR’S DAMAGES

In its sixth issue, TRC argues that the evidence is legally and factually

insufficient to support the jury’s finding in question number 12 that Accor

sustained damages in the amount of $236,174.70. TRC contends that the only

evidence about Accor’s damages was Burgess’s testimony that after TRC

suspended service, but before Source completed its transition period, Accor had

to use internal employees to answer the help line, there was a risk that Accor

could incur liability if its 911 service did not function properly, and the potential

existed that any customers who had a negative experience could choose to not

stay at another of Accor’s properties in the future. TRC argues that Accor

“provided no scintilla of quantification for any valuation for these concerns over

liability of loss of customers, or damages in any other form.” We agree that

Accor offered no evidence attempting to quantify Burgess’s testimony about

potential liability, but there was other evidence that the jury relied upon to arrive

at its damages award.

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 “The universal rule for measuring damages for the breach of a contract is

just compensation for the loss or damage actually sustained.” Stewart v. Basey,

150 Tex. 666, 670, 245 S.W.2d 484, 486 (1952). As Accor explains, the

evidence shows that it paid TRC recurring-services fees for August and

September 2006 but that Accor did not receive the recurring services for part of

August and all of September 2006 because TRC had suspended service.

Calculating the recurring-services fee paid per day for the month of August 2006

(approximately $6,383), multiplying it times six days8 (August 26 through August

31, 2006), and adding it to a recurring-services fee for September 2006

($197,876.10) results in a figure of $236,174—an amount identical to the finding

made by the jury in question number 12.

TRC argues that Accor was not entitled to recover damages for the August

and September 2006 recurring services that it paid because section g.1.(b) of

Modification 2 provided that “any suspension of Services resulting from such

Default shall not relieve [Accor] of monies due under this Agreement for the term

of any such suspension.” However, this language required Accor to continue to

pay for services during the period of a suspension; it does not prohibit a jury from

later awarding Accor damages based on services that Accor paid for, but did not

receive, as a result of an improper suspension and breach by TRC. See Dynegy

8
TRC suspended service on August 24, 2006, but the jury apparently did
not count August 25, 2006, as a day that Accor did not receive recurring
services.

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Midstream, Servs., L.P. v. Apache Corp., 294 S.W.3d 164, 168 (Tex. 2009) (“We

give contract terms their plain and ordinary meaning unless the instrument

indicates the parties intended a different meaning.”).

TRC additionally argues that because the jury found in question 5B that

TRC did not improperly continue suspending service after it had received

payment of overdue invoices on September 1, 2006, “the period of any wrongful

suspension is confined to August 24-September 1,” and there is no evidence

that Accor sustained $236,174.70 in damages during that brief period. But as we

have explained before, a jury’s failure to find a particular fact merely means that

the proponent failed to meet its burden of proving the fact by a preponderance of

the evidence. Dunnagan v. Watson, 204 S.W.3d 30, 40 (Tex. App.—Fort Worth

2006, pet. denied) (citing C & R Transp., Inc. v. Campbell, 406 S.W.2d 191, 194

(Tex. 1966)). It does not mean the reverse of the failed fact finding. Id. Thus,

the jury was not precluded from considering as damages the fees that Accor paid

TRC for September’s recurring services.

We hold that the evidence is legally and factually sufficient to support the

jury’s damages finding. We overrule TRC’s sixth issue.

VIII. ATTORNEYS’ FEES

In its seventh issue, TRC challenges the legal and factual sufficiency of the

evidence to support the jury’s finding in question number 14 awarding Accor

$190,000, $25,000, and $5,000 in attorneys’ fees for, respectively, representation

23
at the trial level, at the court of appeals, and at the supreme court. Just before

TRC rested, it presented testimonial and documentary evidence of its attorneys’

fees. The following exchange then occurred during Accor’s cross-examination of

TRC’s attorney:

Q. I didn’t go to Cal Tech and -- but I’ve heard that for
every action, there is a corresponding and opposite reaction. Is that
an engineering principle?

A. Yes, it is.

Q. I would, therefore, assume that the figures that you
have stated for your firm as reasonable charges would be figures
that would be certainly reasonable for Accor in response to the -- the
amounts that -- and time that was spent?

A. Yes. I think it’s commensurate on both sides.

For whatever reason, Accor did not go on to present any evidence of its own

attorneys’ fees. Nevertheless, Accor argues that the evidence is legally and

factually sufficient to support the jury’s award because TRC’s attorney’s

testimony that he thought the reasonableness of the fees charged was

commensurate on both sides constituted either a judicial admission, thus

dispensing with the need for Accor to present evidence of reasonable attorneys’

fees, or a quasi-admission, which is some evidence supporting the jury’s award.

We disagree with each explanation.

A judicial admission is a formal waiver of proof usually found in pleadings

or the stipulations of the parties. Mendoza v. Fid. & Guar. Ins. Underwriters, Inc.,

606 S.W.2d 692, 694 (Tex. 1980). It is conclusive upon the party making it, and

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it relieves the opposing party’s burden of proving the admitted fact and bars the

admitting party from disputing it. Id. The public policy underlying the rule is that

it would be unjust to permit a party to recover after he has sworn himself out of

court by clear, unequivocal testimony. Id. The elements commonly recited for a

judicial admission are: (1) a statement made during the course of a judicial

proceeding; (2) that is contrary to an essential fact or defense asserted by the

person making the admission; (3) that is clear, deliberate, and unequivocal;

(4) that, if given conclusive effect, would be consistent with public policy; and

(5) that is not destructive of the opposing party’s theory of recovery. Lee v. Lee,

43 S.W.3d 636, 641–42 (Tex. App.—Fort Worth 2001, no pet.); see Mendoza,

606 S.W.2d at 694.

Our supreme court has confirmed the requirements that the admission be

clear and intentional. In Gevinson v. Manhattan Construction Co. of Oklahoma,

the court reasoned, “[W]hether the admission be made orally from the witness

stand or in a written instrument introduced in evidence, it is essential, among

other things, that the statement be clear and unequivocal.” 449 S.W.2d 458, 466

(Tex. 1969). And as Justice Greenhill once explained, “It is of the nature of an

admission, plainly, that it be by intention an act of waiver.” Griffin v. Superior Ins.

Co., 161 Tex. 195, 204, 338 S.W.2d 415, 420 (1960) (Greenhill, J., dissenting)

(quoting 9 Wigmore on Evidence (3rd Ed.) 597, § 2594a) (emphasis added).

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 Here, Accor’s question and TRC’s attorney’s answer can be interpreted in

any number of ways. One interpretation—Accor’s—is that TRC admitted or

stipulated that Accor is entitled to recover over $200,000 in reasonable attorneys’

fees. Another interpretation—TRC’s—is that TRC did not admit anything,

including that Accor is entitled to recover attorneys’ fees. Yet another

interpretation—considering that Accor’s question was posed before it had

presented its case-in-chief—is that Accor was merely setting the stage to prove

up its own attorneys’ fees by asking TRC’s attorney something to the effect of,

“Well, if your figures are reasonable, wouldn’t my figures, which are similar to

yours, also be reasonable?” However, our responsibility on appeal is not to

determine whether potential interpretation A is correct, whether potential

interpretation B is correct, or whether potential interpretation C is correct. Our

task is to recognize that because multiple interpretations of the testimony exist,

TRC’s attorney did not clearly admit that Accor was entitled to recover

reasonable attorneys’ fees. The matter is anything but clear. And if TRC’s

attorney did not clearly so admit or stipulate, we cannot conclude that TRC

deliberately, or intentionally, waived the requirement that Accor present evidence

of reasonable attorneys’ fees.

In addition to requiring a clear and deliberate statement, “it is important to

consider whether the statement relates to facts peculiarly within the declarant’s

own knowledge or is simply his impression of a transaction or an event as a

26
participant or an observer.” Gevinson, 449 S.W.2d at 466. This is because “[i]f a

party’s testimony consists only of a narrative of events in which he participated or

which he observed, there is an obvious possibility that he may be mistaken like

any other witness.” Griffin, 161 Tex. at 204, 338 S.W.2d at 420 (Greenhill, J.,

dissenting).

TRC’s attorney’s testimony that he thought the reasonableness of the fees

charged was commensurate on both sides appears to be nothing more than the

impression that he gathered from litigating the case against Accor for several

years. There is nothing in the record to indicate that he had any knowledge

about the peculiars of Accor’s attorneys’ fees. See Mendoza, 606 S.W.2d at 695

(“We are of the opinion that Mendoza’s opinion testimony was not so clear and

unequivocal as to come under the rule announced in Carr, and that the possibility

of a mistake has not been eliminated.”).

Accor alternatively argues that TRC’s attorney’s testimony was a quasi-

admission and, therefore, some evidence of reasonable attorneys’ fees. Unlike a

judicial admission, a quasi-admission is not conclusive upon the person making

the admission, but it is some evidence of the statement. Id. at 694.

Nonetheless, the reasonableness of attorneys’ fees is generally a question of fact

to be determined by the factfinder, and the award, if any, must be supported by

competent evidence. See Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998).

When considering the reasonableness of a fee, the factfinder should consider the

27
factors set out in Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d

812, 818 (Tex. 1997). The supreme court also recently clarified that a lodestar

calculation requires certain basic proof necessary to support an award of

reasonable attorneys’ fees—evidence about the number of hours worked, the

rate charged, the nature of the work, and when the work was performed. See

El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 763 (Tex. 2012).

To the extent that TRC’s attorney’s statement is a quasi-admission, it was

conclusory and devoid of any evidentiary substance upon which the jury could

have based its fees award because there is no evidence attempting to establish

the reasonableness of the fees through application of any of the Arthur Andersen

factors or, if applicable, the El Apple requirements. Accor argues that it can rely

upon TRC’s attorney’s testimony as evidence of the El Apple requirements, but

that evidence was specific to TRC’s attorneys’ fees, not Accor’s. The record is

completely devoid of any evidence specifically detailing the reasonableness of

Accor’s fees, and a bare conclusion offered by TRC’s attorney simply cannot

supply the proof necessary to support the jury’s award. See, e.g., In re A.A.L.,

No. 12-11-00161-CV, 2012 WL 1883763, at *2–3 (Tex. App.—Tyler May 23,

2012, no pet.) (mem. op.) (“Renee’s attorney did not testify, nor did he present an

affidavit, itemized statements, exhibits, or any other offer of proof, about the

reasonableness of his fees.”); O & B Farms, Inc. v. Black, 300 S.W.3d 418, 422–

23 (Tex. App.—Houston [14th Dist.] 2009, pet. denied) (“Counsel’s bare

28
testimony of the name of his law school, his years practicing, and the hours he

worked on the case does not establish that any particular fee is reasonable.”);

see also Cas. Underwriters v. Rhone, 134 Tex. 50, 54, 132 S.W.2d 97, 99 (1939)

(reasoning that bare conclusions, even if admitted without objection, are no

evidence).

We hold that the evidence is legally insufficient to support the jury’s award

of attorneys’ fees to Accor. Accordingly, we sustain TRC’s seventh issue.

IX. CONCLUSION

Having sustained TRC’s seventh issue, we modify the final judgment to

delete the portion awarding Accor $190,000 in attorneys’ fees for preparation and

representation in the trial court; $25,000 in attorneys’ fees for an unsuccessful

appeal by TRC in the court of appeals; and $5,000 in attorneys’ fees for an

unsuccessful appeal by TRC to the supreme court. Having overruled the

remainder of TRC’s issues, we affirm the trial court’s judgment as modified. See

Tex. R. App. P. 43.2(b).

/s/ Bill Meier

BILL MEIER
JUSTICE

PANEL: GARDNER, WALKER, and MEIER, JJ.

DELIVERED: March 13, 2014

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