O.C.T.G., L.L.P and Sojourn Partners, L.L.C. v. Laguna Tubular Products Corporation and LTP Real Estate, LLC

Affirmed in Part, Reversed and Remanded in Part, and Majority and
Dissenting Opinions filed May 31, 2018.

In The

Fourteenth Court of Appeals

NO. 14-16-00210-CV

O.C.T.G., L.L.P. AND SOJOURN PARTNERS, L.L.C., Appellants
V.

LAGUNA TUBULAR PRODUCTS CORPORATION AND LTP REAL
ESTATE, L.L.C., Appellees

On Appeal from the 190th District Court
Harris County, Texas
Trial Court Cause No. 2013-44749

DISSENTING OPINION
I respectfully disagree with the majority’s conclusion that the trial evidence
is legally sufficient to support the jury’s finding in response to the question on the
value of the land for the retention pond (Question 7). Because the trial evidence is
legally insufficient to support this finding or to prove any market value of the land,
the trial court should have disregarded the jury’s answer and awarded the second
plaintiff actual damages of $255,000 (the uncontested amount) rather than
$405,000. Based on this substantial reduction in the second plaintiff’s recovery,
this court should reverse all awards of attorney’s fees to the second plaintiff and
remand to the trial court for a determination of attorney’s fees.

I also disagree with the majority’s decision not to address whether the trial
evidence is legally sufficient to support a finding that the $967,645 in
transportation costs were reasonable expenses. Binding precedent calls this court
to do so because the issue almost certainly will arise again on retrial and the
interests of judicial economy weigh in favor of addressing it now.

A. The court errs in concluding that the trial evidence is legally sufficient
to support the jury’s finding in response to Question 7.
In issue 8, appellant/defendant Sojourn Partners, L.L.C. asserts that the trial
court erred in awarding appellee/plaintiff LTP Real Estate, L.L.C. $150,000
against Sojourn based on the jury’s finding in response to Question 7 because,
among other things, the evidence is legally insufficient to support this finding.

Under the Purchase and Sale Agreement (“Purchase Agreement”), Sojourn
agreed to provide, on its remaining contiguous property such rainwater-detention
areas, if any is required by law, as may be necessary to accommodate all new
roadways, improvements, and structures proposed as of December 31, 2009, to be
built on the land. LTP Real Estate agreed to reimburse Sojourn for the cost of all
rainwater detention and construction required by the Purchase Agreement. On
LTP Real Estate’s behalf, appellee/plaintiff Laguna Tubular Products Corporation
paid Sojourn via appellant/defendant O.C.T.G., L.L.P. $255,000 for a rainwater-
detention pond. Sojourn kept the money, and did not have a pond built. Trial
testimony showed that, because the law required Laguna’s worksite to have a
pond, LTP Real Estate needed to build a pond on two acres of its own land.

In Question 7, the trial court asked the jury, “What is the value of [LTP Real

2
Estate’s] land on which a rainwater detention area is to be built?” The jury
answered “$150,000.” The trial court did not submit any instructions with
Question 7. Sojourn objected to the charge and requested the trial court to ask
about the “market value” or, alternatively, the “fair-market value” of the LTP Real
Estate land on which a rainwater detention area is to be built (the “Pond Land”).
The trial court overruled this objection and refused to ask the jury about the market
value or fair market value of the property. On appeal, Sojourn asserts that the trial
court erred in doing so and that this court should review the sufficiency of the
evidence to support a finding of the market value of the Pond Land.

1. The trial court erred in overruling Sojourn’s objection to Question
7.
If the trial court erred in overruling Sojourn’s objection that the trial court
should inquire as to the Pond Land’s market value, then this court must determine
whether the trial evidence is legally sufficient to support a jury finding based on
the market value of the Pond Land.1 Presuming for the sake of argument that
Question 7 had defects other than the failure to ask about the Pond Land’s market
value, Sojourn was not required to complain as to these other defects to get a
sufficiency review based on market value.2 Sojourn did not have the burden of
submitting a substantially correct damage question for LTP Real Estate’s breach-
of-contract claim against Sojourn, and Sojourn could preserve error simply by
getting an adverse ruling on an objection during the charge conference.3 To the

1
See Seger v. Yorkshire Ins. Co., 503 S.W.3d 388, 407–09 (Tex. 2016); Triyar Cos., LLC v.
Fireman’s Fund Ins. Co., 515 S.W.3d 517, 525 n.12 (Tex. App.—Houston [14th Dist.] 2017, pet.
filed); Sacks v. Hall, 481 S.W.3d 238, 246–49 (Tex. App.—Houston [1st Dist.] 2015, pet.
denied).
2
See Seger, 503 S.W.3d at 407–09; Triyar Cos., LLC, 515 S.W.3d at 525 n.12; Sacks, 481
S.W.3d at 246–49.
3
See Tex. R. Civ. P. 274; Spencer v. Eagle Star Ins. Co., 876 S.W.2d 154, 157 (Tex. 1994); Pan
v. Liu, No. 14-12-00831-CV, 2014 WL 3512834, at *2 (Tex. App.—Houston [14th Dist.] Jul. 15,
3
extent Question 7 had other defects, Sojourn waived them by failing to object.4

According to the majority, Sojourn objected to Question 7 on the ground that
the trial court should ask about market value at the time of trial or about fair
market value at the time of trial.5 This characterization is not accurate. In
Question 7, the trial court asked about value at the time of trial, and no party
objected that the value should be determined as of any other time. Sojourn urged
the trial court to use “market value” or, in the alternative, “fair market value” in
Question 7 rather than “value.” Sojourn did not object that the trial court failed to
inquire about market value or fair market value at the time of trial.

In the charge the trial court indicated that if the charge used a word in a way
that differed from the word’s ordinary meaning, the trial court would provide a
proper legal definition. The trial court did not define the term “value” in the jury
charge. So, absent a valid objection from Sojourn, we would measure the
sufficiency of the evidence supporting the jury’s answer to Question 7 based upon
the commonly understood meaning of “value.”6 In the context of this case, that
meaning would be “monetary worth” and would not be limited to fair market
value.7 The question the trial court submitted allowed the jury to base its finding
on any determination as to the property’s monetary worth, without any requirement

2014, no pet.) (mem. op.).
4
See Kormanik v. Seghers, 362 S.W.3d 679, 688 (Tex. App.—Houston [14th Dist.] 2011, pet.
denied) (measuring sufficiency of the evidence based on the question submitted to the jury when
no party asserted a valid objection at the charge conference to any defect in the question).
5
See ante at 21 & n.8.
6
See In re Athans, 478 S.W.3d 128, 134–35 (Tex. App.—Houston [14th Dist.] 2015, orig.
proceeding); Barnhart v. Morales, 459 S.W.3d 733, 745 (Tex. App.–Houston [14th Dist.] 2015,
no pet.).
7
See Rowan Cos., Inc. v. Wilmington Trust Co., 305 S.W.3d 698, 709–12 (Tex. App.—Houston
[14th Dist.] 2009), pet. granted, judgm’t vacated w.r.m.).

4
that the value be the property’s market value.8 In this context, the proper measure
of LTP Real Estate’s damages for the loss of use of the property is the property’s
market value.9 Thus, the trial court erred in overruling Sojourn’s objection to
Question 7, and this court should conduct a legal-sufficiency review of the trial
evidence of the land’s market value at the time of trial.10 Market value is the price
that a willing buyer would offer a willing seller when neither is under compulsion
to buy or sell.11

2. The trial evidence is legally insufficient to support the jury’s finding
in response to Question 7.
When reviewing the legal sufficiency of the evidence, we consider the
evidence in the light most favorable to the challenged finding and indulge every
reasonable inference that would support it.12 We credit favorable evidence if a
reasonable factfinder could and disregard contrary evidence unless a reasonable
factfinder could not.13 Then, we determine whether the evidence at trial would
enable reasonable and fair-minded people to find the facts at issue.14 The

8
See id.
9
See Hall v. Hubco, Inc., 292 S.W.3d 22, 34–36 (Tex. App.—Houston [14th Dist.] 2006, pet.
denied).
10
See Seger, 503 S.W.3d at 407–09; Triyar Cos., LLC, 515 S.W.3d at 525 n.12; Sacks, 481
S.W.3d at 246–49; Hall, 292 S.W.3d at 34–36. The majority concludes that, even though the
rainwater-detention area has not yet been built, the proper measure of LTP Real Estate’s
damages would be based on the value of the land years ago when Sojourn breached the Purchase
Agreement by not having the area constructed. Even if this were the correct measure of damages
under Texas law, no party objected to Question 7’s failure to submit this measure, and therefore
this court cannot review the sufficiency of the evidence under this measure. See Kormanik, 362
S.W.3d at 688.
11
See City of Harlingen v. Estate of Sharboneau, 48 S.W.3d 177, 182 (Tex. 2001) (stating that
market value is price that would be offered by willing buyer to willing seller, when neither is
under compulsion to buy or sell).
12
City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005).
13
See id. at 827.
14
See id.

5
factfinder is the only judge of witness credibility and the weight to give to
testimony.15
At trial, Eddie Anaya testified that Laguna operates under a county
requirement to build a retention pond, so Laguna would have to build the retention
pond on its own, on LTP Real Estate’s property. According to Anaya, the
retention pond would take two acres of land, and he estimated each acre had a
minimum value of $75,000. Anaya noted that that this sum was the amount LTP
Real Estate paid per acre when it bought the 26.48 acres from Sojourn under the
Purchase Agreement. Anaya testified that LTP Real Estate’s minimum amount of
damages would be $150,000 for the two acres needed to build the retention pond.

Rowland testified that the county told Laguna that Laguna was violating the
retention-pond requirement. According to Rowland, Laguna had looked into
alternatives to building a retention pond and determined its only option was to give
up part of its yard and build a pond on LTP Real Estate’s land. Like Anaya,
Rowland estimated the pond would consume about two acres of land. Anaya
testified that LTP Real Estate paid $75,000 per acre when it purchased the land.

The evidentiary value of expert testimony comes from its basis, not from the
mere fact that the expert has said it.16 Conclusory opinions add nothing to the body
of evidence. When an expert appraisal witness offers no basis for the expert’s
opinion or the basis of the expert’s opinion provides no support for the expert’s
conclusions, then the law deems the proffered proof conclusory and incapable of
providing probative evidence, even if no party objects.17 Rowland and Anaya did
not testify as expert witnesses; instead, they testified as representatives of the
15
See id. at 819.
16
See Houston Unlimited, Inc. Metal Processing v. Mel Acres Ranch, 443 S.W.3d 820, 829 (Tex.
2014).
17
See id.

6
corporate property owner under Texas’s property-owner rule.

Under the property-owner rule, an owner stands qualified to testify to the
value of the owner’s property; nonetheless, as set forth in the Supreme Court of
Texas’s most recent pronouncement, the testimony must meet the “same
requirements as any other opinion evidence.”18 The property-owner rule falls
under Texas Rule of Evidence 701, which allows a lay witness to provide opinion
testimony if the testimony is (a) rationally based on the witness’s perception and
(b) helpful to a clear understanding of the witness’s testimony or the determination
of a fact in issue.19 Based on the presumption that an owner is familiar with the
owner’s property and its value, the property-owner rule stands as an exception to
the requirement that a witness otherwise must establish the witness’s qualifications
to express an opinion on land values.20 Under the rule, an owner’s valuation
testimony fulfills the same role as expert testimony.21
Because the law treats property-owner testimony as the functional equivalent
of expert testimony, we must judge property-owner testimony by the same
standards.22 Thus, as with expert testimony, an owner’s property valuation may
not be based solely on the owner’s ipse dixit. 23 That means a property owner may
not simply echo the phrase “market value” and state a number to substantiate the
owner’s claim; rather, the property owner must provide the factual basis on which
the opinion rests.24 Meeting this burden is essential but not onerous, particularly in

18
Natural Gas Pipeline Co. of Am. v. Justiss, 397 S.W.3d 150, 156 (Tex. 2012) (quoting Porras
v. Craig, 675 S.W.2d 503, 504 (Tex. 1984)) (internal quotations omitted).
19
See Tex. R. Evid. 701; Justiss, 397 S.W.3d at 157.
20
See Justiss, 397 S.W.3d at 157.
21
See id.
22
See id. at 159.
23
See id.
24
See id.
7
light of the resources available today.25 The witness must substantiate the
valuation; a naked assertion of “market value” does not suffice.26 Even if
unchallenged, the property owner’s testimony must support the verdict, and
conclusory or speculative statements do not.27 This court’s precedent holds that
evidence of the amount paid in the past to purchase property, by itself, is legally
insufficient to support a finding as to the property’s market value at a later date.28

LTP Real Estate bought the two acres at issue from Sojourn as part of a
26.48-acre tract in a complex business transaction under which Sojourn agreed to
build a retention pond on its remaining land. The 26.48-acre purchase took effect
on December 31, 2009. The question submitted to the jury asked for the value of
the property at the time of trial, almost six years after the purchase. Presuming for
the sake of argument that this time frame is incorrect under Texas law, because no
party objected to Question 7 on this ground, this court still measures the
sufficiency of the evidence to support a finding of the property’s market value as
of the time of trial.29

Six years matters. Even if LTP Real Estate had paid $150,000 in the past to
purchase the two acres in question, evidence of that past purchase, by itself, does
not amount to legally sufficient evidence to support a finding as to the property’s
market value six years later.30 Other than evidence of this purchase, the only

25
See id.
26
See id.
27
See id.
28
See DZM, Inc. v. Garren, 467 S.W.3d 700, 702–05 (Tex. App.—Houston [14th Dist.] 2015,
no pet.); Lee v. Dykes, 312 S.W.3d 191, 195–99 (Tex. App.—Houston [14th Dist.] 2010, no
pet.).
29
See Kormanik, 362 S.W.3d at 688.
30
See DZM, Inc., 467 S.W.3d at 702–05; Lee, 312 S.W.3d at 195–99.

8
proffered proof of the Pond Land’s value at trial was Anaya’s conclusory statement
that each acre of land had a value of at least $75,000 and that LTP Real Estate’s
minimum damages would be $150,000 for the two acres needed to build the
retention pond. This ipse dixit as to the land’s value and LTP Real Estate’s
damages does not amount to legally sufficient evidence of the market value of the
two acres.31 Indeed, this testimony does not address the price that a willing buyer
would offer to a willing seller to purchase the two acres, when neither is under
compulsion to buy or sell.32 The hole in the proof makes the trial evidence legally
insufficient to support the jury’s finding in response to Question 7.33

Because the trial evidence is legally insufficient to prove any market value
for the land in question, the trial court should have disregarded the jury’s answer to
Question 7, and awarded LTP Real Estate a judgment of $255,000 (the uncontested
amount) against Sojourn rather than a judgment of $405,000.34 Thus, this court
should sustain issue 8 to the extent Sojourn asserts legal insufficiency of the
evidence to support the jury’s finding in response to Question 7. Doing so would
substantially reduce LTP Real Estate’s recovery, and so the court would have to
reverse all awards of attorney’s fees to LTP Real Estate and remand to the trial
court for a determination of the amount of reasonable and necessary attorney’s fees
that should be awarded to LTP Real Estate based on its recovery of $255,000 in
actual damages.35

31
See DZM, Inc., 467 S.W.3d at 702–05; Lee, 312 S.W.3d at 195–99.
32
See City of Harlingen, 48 S.W.3d at 182.
33
See DZM, Inc., 467 S.W.3d at 702–05; Lee, 312 S.W.3d at 195–99.
34
See DZM, Inc., 467 S.W.3d at 702–05; Lee, 312 S.W.3d at 195–99.
35
See Bluelinx Corp. v. Texas Const. Sys., Inc., 363 S.W.3d 623, 630–31 (Tex. App.—Houston
[14th Dist.] 2011, no pet.).

9
 3. The court’s legal-sufficiency rationale lacks merit.

The majority instead concludes that the trial evidence suffices to support the
jury’s finding in response to Question 7.36 The trial court did not submit a benefit-
of-the-bargain measure of damages in Question 7. The trial court did not ask the
jury to find an amount of damages that would restore LTP Real Estate to the
economic position it would have occupied had Sojourn fully performed the
Purchase Agreement.37 Nor did the trial court ask the jury to find the land’s value
at the time of Sojourn’s breach. Instead, the trial court asked the jury to find the
land’s current value, or monetary worth, without any requirement that the value be
the property’s market value.38

The majority relies upon an apparent conclusion that under Texas law, the
proper measure of damages for LTP Real Estate’s breach-of-contract claim is the
benefit-of-the-bargain measure and that the jury is to measure such damages at the
time of the breach.39 Even if the majority were correct on this point, no party
objected to the trial court’s failure to submit the benefit-of-the-bargain measure in
Question 7 or to the trial court’s failure to instruct the jury to determine the
damages as of the time of the breach. So, on appeal, we are not to measure the
sufficiency of the evidence under this standard, even if it were the correct standard
under Texas law.40

36
See ante at 20–25, 27.
37
See Kormanik, 362 S.W.3d at 689–91.
38
See Rowan Cos., Inc., 305 S.W.3d at 709–12.
39
See ante at 20–21.
40
See Osterberg v. Peca, 12 S.W.3d 31, 55 (Tex. 2000) (holding that appellate court could not
review the sufficiency of the evidence based on a particular legal standard because that standard
was not submitted to the jury and no party objected to the charge on this ground or requested that
the jury be charged using this standard); Hirschfeld Steel Co. v. Kellogg Brown & Root, Inc., 201
S.W.3d 272, 283–86 (Tex. App.—Houston [14th Dist.] 2006, no. pet.) (reviewing sufficiency of
10
B. Now is the time to address the legal sufficiency of the evidence to support
a finding that the transportation costs were reasonable expenses.
On appeal, OCTG argues that under the Gossett line of cases41 the trial
evidence is legally sufficient to support the jury’s finding of $1,562,127 in
damages based on “[t]he reasonable and necessary expenses incurred in the past by
Laguna . . . .” In response to Question 8A and Question 9, the jury found this
amount of damages, as requested by Laguna. Laguna sought these damages based
on three categories:

 (1) $327,632 that Laguna paid to have joints re-inspected (“Reinspection
Costs”),
 (2) $967,645 in transportation costs (“Transportation Costs”), and
 (3) $276,850 that Laguna paid Cimarex as reimbursement for reinspection
expenses that Cimarex had incurred (“Cimarex Costs”).
The majority correctly concludes that (1) the trial evidence is legally
sufficient to support a finding that the Reinspection Costs were reasonable and
necessary expenses, and thus the trial evidence is legally sufficient to support a
finding of at least $327,632 in damages for Laguna’s breach-of-contract and
breach-of-warranty claims; and (2) applying the standard from the Gossett line of
cases, the trial evidence is legally insufficient to support a finding that the Cimarex
Costs were reasonable expenses. But, the analysis does not end there.

OCTG argued in its briefing that the trial evidence is legally insufficient to
support a finding that the Transportation Costs were reasonable expenses, and
Laguna responded arguing that the evidence is legally sufficient. Laguna and

evidence based on unobjected-to jury instruction and rejecting various arguments based on
different legal standards).
See McGinty v. Hennen, 372 S.W.3d 625, 627–28 (Tex. 2012); Dallas Railway and Terminal
41

Co. v. Gossett, 294 S.W.2d 377, 382–83 (Tex. 1956).

11
OCTG focused on this issue during oral argument in this court, and each of them
submitted post-submission briefs on this issue. Yet, the majority chooses not to
address this point, reasoning that doing so would not affect the appellate remedy.42
A remand for a new trial in accordance with an opinion holding the
evidence legally insufficient to support a finding that the Transportation Costs
were reasonable expenses would not appear to be the same appellate remedy as a
remand for a new trial in accordance with an opinion that does not address this
issue. In the former case, if the trial evidence of the Transportation Costs in the
second trial closely resembled the trial evidence in the first trial on this point, the
trial court would be required by this court’s opinion to grant a motion for new trial
by OCTG if the jury found the full amount of damages Laguna sought in the
second trial. In the latter case, the trial court would not be required to do so.

In any event, presuming for the sake of argument that there is no absolute
requirement that this court address the Transportation Costs issue because the court
may reverse the trial court judgment as to Laguna’s breach-of-contract and breach-
of-warranty claims and remand for a new trial without reaching this point, this
court still should address the Transportation Costs issue if it is likely to arise again
on retrial and if the interest of judicial economy weighs in favor of addressing the
issue now.43 Both considerations call the court to action.

Laguna likely will seek the same damages in the second trial that Laguna
sought in the first trial. And, OCTG likely will argue legal insufficiency of the
evidence to support a finding that the full amount of those damages were

42
See ante at 16, n.3.
43
See Hernandez v. Great Am. Ins. Co. of New York, 464 S.W.2d 91, 93 (Tex. 1971); Galveston
Centr. Appraisal Dist. v. Valero Refining-Texas L.P., 463 S.W.3d 177, 189 n.11 (Tex. App.—
Houston [14th Dist.] 2015), rev’d on other grounds by, 519 S.W.3d 66 (Tex. 2017); Garza v.
Cantu, 431 S.W.3d 96, 107 n.7 (Tex. App.—Houston [14th Dist.] 2013, pet. denied).

12
reasonable expenses. As to the Reinspection Costs and the Cimarex Costs, the trial
court and the parties can find guidance in this court’s analysis. But, not so for the
Transportation Costs.

In the second trial, as in the first, the parties almost certainly will face the
issue of whether the Transportation Costs were reasonable expenses, and the
evidence regarding the Transportation Costs may closely resemble the evidence of
these costs in the first trial. Laguna might speculate that this court viewed the
evidence as legally sufficient to support a finding that the Transportation Costs
were reasonable expenses, reasoning that the court would have addressed the issue
if the court viewed the evidence as insufficient. Operating under this premise,
Laguna might offer the same evidence as to the Transportation Costs again. And,
if the jury finds in Laguna’s favor for the full amount in the second trial, in the
second appeal this court might reverse and remand for a third trial of these claims
because the evidence is legally insufficient to support a finding that the
Transportation Costs were reasonable expenses.

The parties already have spent nearly $2 million in attorney’s fees in this
case, and they now face a second trial on the main claims in this litigation. At
considerable time and expense, the parties have provided thorough briefing and
argued the Transportation Costs issue in this appeal. Addressing this issue today
not only would save the litigants time and money but also would conserve judicial
resources, cut transaction costs, and serve the interest of judicial economy.
Binding precedent demands that the court address this issue now.44

C. The trial evidence is legally insufficient to support a finding that the
$967,645 in transportation costs were reasonable expenses.
If this court were to address the Transportation Costs issue, the court should

44
See Valero Refining-Texas L.P., 463 S.W.3d at 189 n.11; Garza, 431 S.W.3d at 107 n.7.

13
find the trial evidence legally insufficient to support a finding that the
Transportation Costs were reasonable expenses.

Laguna points to evidence of amounts charged or paid as evidence of
reasonable expenses. But this evidence does not necessarily reflect the
reasonableness of those amounts because parties operating in a freedom-of-
contract realm can agree to pay amounts that are unreasonable.

Texas’s “paramount public policy” favoring freedom of contract mandates
that Texas courts not lightly interfere with parties’ freedom to contract as they see
fit.45 Under Texas law, parties can even agree to things some might consider
extreme, as long as their agreement does not violate the law or public policy.46
This freedom of contract means that contractors generally can charge unreasonably
high prices for their goods and services, and parties have the freedom to choose to
pay unreasonably high prices for goods and services.47 Thus, proof of the amounts
charged or paid, by itself, is not legally sufficient evidence that these charges are
reasonable and necessary; instead, the trial record must contain separate evidence
that raises a fact issue regarding the reasonableness and necessity of the expenses
or costs in question.48

To have raised a fact issue as to reasonableness and necessity of expenses,
Laguna had to have shown more than simply “the nature of the injuries, the
character of and need for the services rendered, and the amounts charged

45
Fairfield Indus. v. EP Energy E & P, Co., 531 S.W.3d 234, 249 (Tex. App.—Houston [14th
Dist.] 2017, pet. filed).
46
Id.
47
See id.
48
See Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 200–01 (Tex. 2004);
Gossett, 294 S.W.2d at 382–83; O & B Farms, Inc. v. Black, 300 S.W.3d 418, 422–23 (Tex.
App.—Houston [14th Dist.] 2009, pet. denied).

14
therefor.”49 The law requires some other “evidence showing that the charges are
reasonable.”50

Laguna offered evidence at trial showing that it had paid $957,645 in
Transportation Costs after termination of the Finishing Agreement (from August
2013 through March 2015) to transport pipe to contractors to perform inspection
and threading services. Proof that Laguna incurred these expenses, by itself, is
legally insufficient to show that the expenses were reasonable and necessary. 51 No
trial witness testified that these expenses were reasonable or that they were
necessary. Yet, even if we presume for the sake of argument that these expenses
were necessary, the evidence still would not meet the standard.
When asked how Laguna chose trucking vendors, William Rowland,
Laguna’s Chief Operating Officer, answered: “Who — at that point when things
were busy, as cheap as possible and whoever is available. Freight was very hard to
come by, but we were able to negotiate pretty much a flat rate with almost
everybody at $200 a load.” Rowland did not testify that all of these charges were
“$200 a load,” only that almost all of them were at “$200 a load.” Rowland did
not state whether $200 per load was a reasonable cost. Rowland also indicated that
it was hard to find transportation contractors and that he chose “whoever [was]
available” yet also sought transportation charges that were “as cheap as possible.”
Unlike the testimony regarding the selection of reinspection contractors,
Rowland’s testimony on this point did not include statements that Rowland
selected transportation contractors who would charge a reasonable price.

The trial evidence as to the process by which Laguna selected the
49
Gossett, 294 S.W.2d at 383.
50
Id.; McGinty, 372 S.W.3d at 627.
51
See McGinty, 372 S.W.3d at 627–28; Mustang Pipeline Co., 134 S.W.3d at 200–01;
Gossett, 294 S.W.2d at 382–83; O & B Farms, Inc., 300 S.W.3d at 422–23.

15
transportation contractors did not reveal factors that were considered to ensure the
reasonableness of the ultimate price.52 Under the Gossett line of cases, the trial
evidence is legally insufficient to support a finding that the Transportation Costs
were reasonable expenses.53 And, this court should say so because the parties
surely will face the issue again on retrial. Having already incurred a hefty sum in
attorney’s fees and with another trial still ahead, they deserve the benefit of this
court’s guidance on the issue.

D. Conclusion

With the trial evidence legally insufficient to prove any market value for the
land in question, the trial court should have disregarded the jury’s answer to
Question 7, and awarded LTP Real Estate a judgment in the uncontested amount
($255,000) against Sojourn rather than a judgment of $405,000. This court should
sustain issue 8 to the extent Sojourn challenges the legal sufficiency of the
evidence to support the jury’s answer to Question 7. Following this course would
require a big cut in LTP Real Estate’s damages, and so the court would have to
reverse all awards of attorney’s fees to LTP Real Estate and remand to the trial
court for a determination of the amount of reasonable and necessary attorney’s fees
that should be awarded to LTP Real Estate based on its recovery of $255,000 in
actual damages. Because the court does not do so, I respectfully dissent.

With a new trial on the horizon, the court should review the trial evidence as
to the $957,645 in Transportation Costs. A legal-sufficiency review would reveal
that the process by which Laguna selected the transportation contractors did not
ensure the reasonableness of the ultimate price. So, this court should deem the trial

52
See McGinty, 372 S.W.3d at 627–28.
53
See id.

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evidence legally insufficient to support a finding that the Transportation Costs
were reasonable expenses. Because the majority refuses to address the issue and
instead chooses to stand silent, I respectfully dissent.

/s/ Kem Thompson Frost
Chief Justice

Panel consists of Chief Justice Frost and Justices Jamison and Busby. (Jamison, J.,
majority).

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