R. C. Jones, Superior Waste Management Services, Inc., and JTI Contractors, Inc. v. Rustin Transportation Company, L.P.

Opinion issued August 2, 2007

In The

Court of Appeals

For The

First District of Texas

NO. 01-04-00566-CV

__________

R.C. JONES, SUPERIOR WASTE MANAGEMENT SERVICES, INC.

AND JTI CONTRACTORS, INC., Appellants

V.

REPUBLIC WASTE SERVICES OF TEXAS, LTD. AND

RUSTIN TRANSPORTATION COMPANY, L.P., Appellees

On Appeal from the 295th District Court

Harris County, Texas

Trial Court Cause No. 2001-59389

O P I N I O N

This is an appeal from a final judgment rendered on a jury verdict in favor of

appellees, Republic Waste Services of Texas, Ltd. ("Republic") (1) and Rustin

Transportation Company, L.P. ("Rustin"), in a breach of contract and fraud action

brought by appellants, R.C. Jones, Superior Waste Management Services, Inc.

("Superior"), and JTI Contractors, Inc. ("JTI"). In two issues, appellants contend that

(1) as a matter of law, the evidence is insufficient to support the jury's verdict that

Rustin, Republic's subcontractor, did not breach its subcontracts with them by failing

to pay them certain rate increases for hauling trash and (2) the trial court erred in

denying their motion for new trial on the ground that Rustin's trial counsel engaged

in improper and incurable jury argument. We affirm.

Background

In 1999, the City of Houston began soliciting bids for a long-term contract for

disposal of its trash. The proposed 20-year project called for: (1) the construction

and operation of two City-owned transfer stations, one in southwest Houston (the

Westpark transfer station) and another in southeast Houston (the Lawndale transfer

station) and (2) the hauling of trash from these transfer stations to a landfill for

disposal. Republic was the low bidder on the City of Houston waste disposal

contract. The City estimated Republic's bid amount for the 20-year contract to be

$295 million.

All city contracts up for bid must comply with the City's Minority and Women

Business Enterprises ("MWBE") Program. Before being awarded a contract, a city

contractor must submit an MWBE participation plan, along with either executed

subcontracts or letters of intent for each MWBE subcontractor. For the proposed City

contract at issue, the City set the MWBE participation requirement as follows: "at

least 30% of the total value of all construction subcontracts or supply agreements"

and "contracts or supply agreements in at least 20% of the remaining value of this

Agreement."

Republic subcontracted all transfer station waste loading and hauling to Rustin,

which operates every transfer station in the City of Houston. Ted Meyer, Republic's

area president, and Donald Poarch, Rustin's owner, agreed that Rustin, which is not

an MWBE, would subcontract with MWBEs to meet the MWBE requirement.

Superior, which is owned by R.C. Jones, an African-American, and JTI, which is

owned by Jesse Valeriano, an Hispanic, agreed with Rustin to haul waste to

Republic's landfill. Both Jones and Valeriano signed blank letters of intent. They

understood that the letters of intent were not themselves the agreements, but merely

precursors for more extensive and complete agreements.

Once City Council approved the contract with Republic (the "City Contract"),

Republic entered into a subcontract with Rustin. The Republic subcontract provided

for yearly rate adjustments pursuant to a formula set forth in the City Contract.

JTI and Superior each signed a set of three subcontracts (the "Rustin

subcontracts") to perform hauling work at the two City of Houston transfer stations,

Westpark and Lawndale. The Rustin subcontracts also provided for yearly rate

adjustments "for the applicable year" but did not define that term.

Westpark and Lawndale were scheduled to open in July 2000. However,

Westpark did not open until March 9, 2001, and Lawndale did not open until October

of that year. Until the Westpark and Lawndale transfer stations opened, JTI and

Superior agreed with Rustin to perform hauling work out of other privately-owned

transfer stations operated by Rustin including the Sommermeyer/290, Sam Houston,

and Friendswood transfer stations.

When the Westpark transfer station opened, Superior took both of its trailers

there, and JTI also began hauling from Westpark, although it hauled mostly from the

Sommermeyer transfer station. The Rustin subcontracts paid Superior and JTI an

initial rate of $5.25 per ton to work out of Westpark and Lawndale. However, at

Westpark, Superior's costs were $6.06 per ton and JTI's costs were $6.78 per ton. At

the contracted rate of $5.25 per ton, Superior and JTI were losing money working at

Westpark and Lawndale.

Jones recognized that Superior was losing money at Westpark, and he

requested a contract directly from Republic's president, Bill Linthicum. Linthicum

testified that Jones complained that "his drivers weren't being treated fairly to be

allowed to get the same number of loads that the . . . Rustin drivers were." Rustin

allowed Superior to send one of its trailers back to the more profitable Friendswood

transfer station. Both Linthicum and Jones exchanged proposed contracts that proved

unacceptable to the other. Jones took his concerns to the Mayor's Office of

Affirmative Action and Contract Compliance. Jones was told by the City that, once

the Lawndale transfer station opened, he needed to have both of his trucks running

from the Lawndale and Westpark transfer stations.

Faced with this dissatisfaction from Superior, Republic and Rustin reviewed

their records and discovered that JTI had been overpaid $1.81 per ton for the first four

months that Westpark was open, from March 2001 through June 2001. After the

overpayment was discovered, Poarch, Rustin's owner, asked Valeriano, JTI's owner,

to meet Republic's new area president, Linthicum, to discuss JTI's profitability.

Valeriano told them that he was making money. On July 1, 2001, Rustin adjusted the

rate that JTI was paid to conform with the figures in the Rustin subcontracts.

When the Lawndale transfer station opened in October 2001, Superior realized

that it could not make money hauling from there, either. By the end of the next

month, Superior ceased operations and sued Republic asserting a number of legal

theories, all based on a purported contractual and/or partnership relationship arising

out of the letters of intent.

While the litigation was ongoing between Superior and Republic, Republic and

Rustin asked Valeriano to prepare a profit and loss statement for the individual

transfer stations. Valeriano responded that he could not separate it by transfer station.

Instead, he spent 10 minutes preparing a profit and loss statement and determined that

he was making money on the Rustin work. (2)

One month later, Superior's counsel deposed Valeriano in conjunction with the

Superior case against Republic and questioned him at length about the financial

statement that he had prepared. Based on the questions he answered during his

deposition, Valeriano "felt like [his] price increases hadn't been paid; and in going

through that financial statement that [he] had produced, [he] realized that maybe [he]

wasn't making money at Westpark like [he] had originally thought [he] was."

Valeriano's CPA discovered that JTI was losing money at Westpark and had been

underpaid approximately $160,000 in Consumer Price Index ("CPI") rate increases.

Valeriano also discovered that he was not getting a 10% participation in the MWBE

contract. After an investigation by Rustin in response to JTI's claims, Rustin issued

two checks totaling more than $65,000 to one of Valeriano's trucking entities.

Because Valeriano cashed the checks and stopped hauling from the City transfer

stations, Rustin believed that the matter was settled. Valeriano notified Rustin that

he was terminating his performance under the Rustin subcontracts, but would

continue to haul from Sommermeyer.

JTI, who was represented by the same attorney who represented Superior,

subsequently intervened in Superior's suit against Republic, and Rustin was brought

in as a co-defendant. The parties appeared for trial. During closing argument,

Rustin's trial counsel alluded to how appellants' theory of the case was merely a

"lawyer's construct" and how Valeriano changed his testimony after meeting with

Superior's attorney. After a nearly three-week long trial, the jury rendered a verdict

for Republic and Rustin finding that there was no agreement for Superior or JTI to

have a 10% participation in the City Contract; that there was no fraud by Republic in

signing the letters of intent; and that Rustin had not breached its subcontracts.

Superior and JTI filed a motion for new trial and for judgment notwithstanding the

verdict that was denied by the trial court.

CPI Adjustments

In their first issue, appellants contend that they are "entitled to judgment

against Rustin on the CPI claims because the unambiguous contracts should be

interpreted by the court, and the damages are liquidated and undisputed." (3) We

disagree.

Standard of Review

A judgment notwithstanding the verdict ("JNOV") is proper when a directed

verdict would have been proper. Tex. R. Civ. P. 301; Fort Bend County Drainage

Dist. v. Sbrusch , 818 S.W.2d 392, 394 (Tex. 1991). A motion for JNOV should be

granted when (1) the evidence is conclusive and one party is entitled to recover as a

matter of law or (2) a legal principle precludes recovery. Mancorp, Inc. v. Culpepper ,

802 S.W.2d 226, 227 (Tex. 1990); John Masek Corp. v. Davis , 848 S.W.2d 170, 173

(Tex. App.--Houston [1st Dist.] 1992, writ denied). We review the denial of the

appellants' motion under the legal sufficiency standard. See Brown v. Bank of

Galveston , 963 S.W.2d 511, 513 (Tex. 1998); CDB Software, Inc. v. Kroll , 992

S.W.2d 31, 35 (Tex. App.--Houston [1st Dist.] 1998, pet. denied).

In a legal-sufficiency review, a court should look at all the evidence in the light

most favorable to the finding to determine whether a reasonable trier of fact could

have formed a firm belief or conviction that its finding was true. City of Keller v.

Wilson , 168 S.W.3d 802, 822 (Tex. 2005). To give appropriate deference to the

factfinder's conclusions and the role of a court conducting a legal sufficiency review,

looking at the evidence in the light most favorable to the finding means that a

reviewing court must assume that the factfinder resolved disputed facts in favor of its

finding if a reasonable factfinder could do so. Id . A corollary to this requirement is

that a court should disregard all evidence that a reasonable factfinder could have

disbelieved or found to have been incredible. Id . This does not mean that a court

must disregard all evidence that does not support the finding. Id .

Analysis

The jury answered the following questions pertaining to Rustin:

Question 9

Did Rustin fail to comply with the contracts between Superior and

Rustin in payment of CPI increases?

It is your duty to interpret the following language of the signed

agreements between Rustin and Superior:

"The transportation rate for the applicable Contract Year shall be

adjusted . . . ."

You must decide its meaning by determining the intent of the

parties at the time of the agreement. Consider all the facts and

circumstances surrounding the making of the agreement, the

interpretation placed on the agreement by the parties, and the conduct of

the parties.

Answer "Yes" or "No":

Answer: [No]

Jury Question 19 simply replaced "Superior" with "JTI," but was otherwise verbatim.

The jury answered Jury Question 19 "No" as well.

Superior and JTI each signed a set of three hauling subcontracts with Rustin.

Exhibit "A" to each subcontract called for a rate adjustment for "the applicable

Contract Year," but did not define that term. Although appellants suggest that we

should construe the various contracts at issue as a matter of law, the trial court

evidently found language in these contracts ambiguous. In the jury charge, the trial

court submitted an instruction that the jury "must decide [the contract's] meaning by

determining the intent of the parties at the time of the agreement." See J.M.

Davidson, Inc. v. Webster , 128 S.W.3d 223, 229 (Tex. 2003) (ambiguous contract

creates a fact issue on the parties' intent). Although appellants find it significant that

Rustin did not plead ambiguity, a court may conclude that a contract is ambiguous

even in the absence of a proper pleading by either party. Id . at 231.

Section 6.03 of the City Contract provides for the adjustment of rates

"[b]eginning July 1, 2001 and each subsequent July 1, thereafter," in accordance with

the CPI formula set forth in Exhibit "H" to the contract. Appellants contend that the

Rustin subcontracts should be read together with the City Contracts to ascertain the

parties' intent. All six of the Rustin subcontracts were executed at the same time and

all say the same thing: Superior's and JTI's rates for the "applicable Contract Year"

shall be adjusted using the formula set forth in Exhibit "A." Appellants argue that the

language in Exhibit "A" of the Rustin subcontracts "exactly mirrors" the language in

Exhibit "H" of the City Contract. Appellants suggest that the Rustin subcontracts

should be read in conjunction with the City Contract, which, under its operative

provisions, includes a July 1, 2001 effective date for CPI adjustments.

Exhibit "A" to the Rustin subcontracts provides, in part, as follows:

Cost Adjustment for Transportation Rate :

The transportation rate for the applicable Contract Year shall be adjusted

by the cumulative percent determined as follows:

0.30 times the Labor Index for the applicable Contract Year divided by

the Labor Index for March, 1998; plus

0.30 times the Machinery and Equipment Index for the applicable

Contract Year divided by the Machinery and Equipment Index for

March 1998; plus

0.40 times the Fuel Index for the applicable Contract Year divided by

the Fuel Index for March 1998.

Exhibit "H" to the City Contract provides, in part, as follows:

CPI COST ADJUSTMENT

The disposal rate for the applicable Contract Year shall be adjusted by

the cumulative percent determined as follows:

0.20 times the Construction Index for the applicable Contract Year

divided by the Construction Index for March 1998;

plus 0.30 times the Labor Index for the applicable Contract Year divided

by the Labor Index for March 1998;

plus 0.35 times the Machinery and Equipment Index for the applicable

Contract Year divided by the Machinery and Equipment Index for

March 1998;

plus 0.15 times the Fuel Index for the applicable Contract Year divided

by the Fuel Index for March 1998.

(Emphasis added to note the differences in the two provisions.) Appellants find it

significant that both exhibits capitalize "Contract Year." They argue that, if the

subcontracts and the City Contract are read together and the rate is adjusted on July

1 of each year, Superior is due $77,204 and, after crediting Rustin for its overpayment

on the Sommermeyer/Highway 290 route, JTI is due $160,002. (4)

In contrast, both Rustin's president, Sid Sherwood, and owner, Donald Poarch,

testified that its intent was for Superior and JTI to get increases when Rustin received

its increases under Rustin's various contracts. (5) The appellants argue that, if there is

an ambiguity, "a possible interpretation of 'applicable Contract Year' is that Superior

and JTI were to receive rate adjustments on each route when Rustin received its

adjustments from its customers." Using these dates for adjustments, the appellants

assert that Superior is due $72,618 and JTI is due $154,987.96.

Finally, appellants state that "the only other interpretation for the 'applicable

Contract Year' is that the rate increases were to be paid one year after actual work

began on each route." Appellants contend, however, that this interpretation is

unreasonable when viewed in light of the context of the other contemporaneous

contracts and circumstances. In summary, appellants argue that, under any

interpretation, Rustin breached its contracts and failed to pay the adjustments.

Rustin asserts that neither Superior nor JTI was entitled to any adjustments

because (1) Superior stopped hauling before any CPI increases became due and (2)

JTI "was brought up to date on all its CPI increases in February 2003, after it quit

hauling from all but the Sommermeyer transfer station, for which it had been

previously overpaid." In June 2001, Poarch's CPA, Jim Pouns, proposed to

Republic's president, Bill Linthicum, that Rustin receive a rate increase. Pouns asked

for a delay on any increases, and Pouns asked Linthicum what constituted the

"applicable Contract Year" for purposes of CPI adjustments under Superior's

contracts with Rustin. Linthicum responded via e-mail that he thought the

"applicable Contract Year" meant the "initial operating date," which, for the City-owned transfer stations, was March 9, 2001, when the Westpark transfer station was

opened. Linthicum's e-mail stated that "I have read the contract between Rustin and

Superior, and I interpret the contract year as March 9, 2001, though March 8, 2002.

There is nothing in the contract defining 'contract year.' Superior Waste

Management stated this contract began on March 9th, 2001, not when the agreement

was signed." Accordingly, Linthicum instructed Rustin to prepare for a CPI

adjustment for Superior in March 2002, and, as is standard in the trucking industry,

only if Superior requested one. (6) Neither Superior nor JTI requested a CPI increase

either in July 2001 or March 2002.

Jones's first formal request for a rate increase was in a demand letter sent by

his attorney in August 2002 after Superior had already stopped hauling for Rustin.

Sid Sherwood, Rustin's president, responded and explained that Superior was not due

any adjustments using the base year 2000 because decreases in the fuel index--the

most heavily-weighted index under the Rustin subcontracts--offset any increases in

other indices. However, Superior's inquiry prompted Sherwood to ask Jim Goodyear

to review JTI's numbers to determine if JTI was being paid the proper rate. Using

March 1, 2002 as the initial due date for CPI adjustments and the CPI formula in the

Rustin subcontracts, Goodyear found that JTI was underpaid on some routes and

overpaid on others (namely, Sommermeyer), and he prepared a schedule of price

increases for JTI, effective on September 1, 2002.

Goodyear testified that he used the date of March 1, 2002 to calculate the CPI

adjustments because that date was the one-year anniversary of the opening of

Westpark; in other words, it was the first due date for an adjustment based on a March

1, 2001 "Initial Operating Date." (7) Consequently, Rustin issued two checks to JTI

totaling more than $65,000. With respect to Superior, Goodyear indicated that it was

not entitled to adjustments because it was no longer hauling for Rustin as of March

1, 2002.

Appellants have presented at least three different versions of how the contract

could have been interpreted. Rustin presented evidence from, among others, Jim

Goodyear and Bill Linthicum who both testified that it was their understanding and

impression that the adjustment date should be March 2002, if requested by JTI and

Superior. We must assume that the jury resolved disputed facts in favor of its finding.

See City of Keller , 168 S.W.3d at 822 . After reviewing the record in the light most

favorable to the jury's finding and disregarding all evidence that a reasonable

factfinder could have disbelieved or found to be incredible, we hold that the evidence

is legally sufficient to support the judgment and the trial court did not err in denying

the appellants' motion for directed verdict.

We overrule appellants' first issue.

Incurable Jury Argument

In their second issue, appellants argue that the trial court erred in denying their

motion for new trial because "the false accusations against counsel for Superior and

JTI that he had suborned perjury" made by counsel for appellees in closing argument,

"constitute incurable, reversible error." Appellants argue that "House committed

incurable reversible error by accusing John Able (Rustin's trial counsel) of suborning

perjury." "Attacks upon the integrity of opposing counsel are categorically

prohibited." Appellants further argue that "Ms. House planned this argument. She

attempted to plant the seed of some improper conduct by Mr. Able during her cross.

She then argued it as fact during her closing argument." Appellants contend that,

because the evidence "absolutely establishes that Rustin failed to pay the contracted

rate for services to Superior or JTI," it is impossible to conclude that the jury was not

influenced by the "outrageous accusation" against Superior and JTI's lawyer. We

disagree.

Closing Argument and Motion for New Trial

In closing argument, Republic's counsel commented that "[t]his case is a

construction of attorneys, trying to turn a letter of intent into something entirely

unintended by any of the parties." Next, Rustin's counsel, Jennifer House, stated

[House]: [Republic's lawyer] alluded to the fact that this case

is a lawyer's construct, it is created by lawyers. I am

proud to be a lawyer. I take no pride in accusing

other lawyers of wrongdoing, but I cannot help but

have difficulty with the fact that Rustin never made

representations to these minority subcontractors that

they were going to be entitled to overall 20 percent

participation of $295 million.

. . .

And when [Valeriano] testified in October of 2002

that he was operating profitably from Westpark and

Lawndale, he was telling the truth.

Why did the story change, then? Why did the story

change? Because he met Mr. Able and Mr. Able

said, "Jesse, by the way, did you know under our

theory you are entitled to $5 million of profit over

20 years?"

[Able]: Objection, Your Honor. There is no evidence that I

told him anything.

[Trial Court]: Sustained.

[House]: Suddenly -- and you heard the testimony. Mr. Able

questioned him, and the testimony was he met with

Mr. Able after his deposition. Do you know who

else he met with? The gentleman sitting in this

corner right here, Greg Brown, CPA.

. . .

And I will tell you why he is a party to this lawsuit.

Because the couple of hundred thousand dollars that

he was going to make or was making with Rustin,

vis-a-vis the existing work that he was doing, in his

mind was peanuts compared to the $5 million that he

was going to ask you for under the trumped up claim

that he was entitled to 10 percent of $295 million

over 20 years. And that's why the story changed,

and that's why we are here.

After nearly three weeks of trial, the case was submitted to the jury on issues

primarily relating to whether the Letters of Intent gave rise to a contract between

Republic and Superior and/or JTI, whether Republic breached that contract, whether

Republic committed fraud in connection with the Letters of Intent, and whether

Rustin breached its subcontracts with Superior and JTI to pay CPI increases. By an

11-1 verdict, the jury found in favor of Republic and Rustin on all issues.

Appellants filed their motion for new trial, alleging, among other things, that

House's closing argument constituted incurable, reversible error. After significant

briefing and two hearings, the trial court denied the motion. In its order, the trial

court stated that

the court considered the entire record and believes that the evidence

supports the jury verdict and was not the result of the improper,

inflammatory jury argument made by Jennifer House.

The court has reviewed all of the evidence in the case supporting

the jury verdict and finds that there is more than sufficient evidence to

support the verdict. The court also notes that the inflammatory

argument was of short duration, was not repeated, and an objection to

the argument was promptly sustained. There was also evidence that Mr.

Valeriano's testimony did change. The court finds that the probability

that the jury verdict was grounded on proper evidence is greater than the

probability that the verdict was based on the improper argument.

But let there be no doubt that the argument was improper. And

although Ms. House in oral argument stated that she "was stunned by the

seriousness with which the Court regarded the allegations," the denial

of the new trial does not mean that the court condones this type of

argument. Attacks on opposing counsel are error. (citations omitted)

In Ms. House's argument she completely concocted a

conversation between the plaintiff's counsel, Mr. Able, and the plaintiff,

Mr. Valeriano, and implied that Mr. Able suborned perjury. Ms. House

stated in closing argument "Why did the story change, then? Why did

the story change? Because he met Mr. Able and Mr. Able said, 'Jesse,

by the way, did you know under our theory you are entitled to $5 million

of profit over 20 years?'"

What is most disturbing is Ms. House's attempt to explain away

this made-up conversation. In her brief and in her oral argument before

the court she attempted to justify her statement, claiming it was based on

questions asked by Mr. Able in a deposition. The court has reviewed the

entire deposition of Mr. Valeriano and there is no reference to such a

question or statement or meeting. And most certainly there was no

evidence before the jury of such a question or statement or meeting. Ms.

House continues her misstatements in her briefing. At page 5 of her

brief, Ms. House says, "each and every questioned statement made by

Ms. House is in the record and is based in fact." There is absolutely no

evidence in the record of such a meeting or such a statement.

At oral argument, realizing that the court was skeptical that

questions were asked in a deposition would be considered a meeting,

Ms. House then argues that Mr. Able and Mr. Valeriano must have met

to form the attorney client relationship and that such a meeting could be

inferred from the fact that Mr. Valeriano became Mr. Able's client.

While undoubtedly there were many meetings between Mr. Able and

Mr. Valeriano, (although of course there is no evidence in the record of

such meetings) what Ms. House fabricated was the content of such a

meeting and the implication that Mr. Able suborned perjury and induced

Mr. Valeriano to change his story.

Lawyers, in the heat of battle, do make misstatements of fact and

law, and unwarranted personal criticisms. But they should not

compound their errors in legal briefs filed after careful reflection. And

they should not impugn the rest of their law firm by making an irrelevant

argument that "all of my partners were 100% behind my representation."

Standard of Review

We review the denial of a motion for new trial to determine if the trial court

abused its discretion. Champion Int'l Corp. v. Twelfth Court of Appeals , 762 S.W.2d

898, 899 (Tex. 1988) (orig. proceeding). A trial court abuses its discretion when it

acts in an arbitrary or unreasonable manner or if it acts without reference to any

guiding rules or principles. Downer v. Aquamarine Operators, Inc. , 701 S.W.2d 238,

241-42 (Tex. 1985).

To obtain reversal of a judgment on the basis of improper jury argument, a

complainant must prove (1) an error; (2) that was not invited or provoked; (3) that

was preserved at trial by a proper objection, motion to instruct, or motion for mistrial;

(4) that was not curable by an instruction, a prompt withdrawal of the statement, or

a reprimand by the trial court; and that (5) the argument by its nature, extent, and

degree constituted reversibly harmful error. Standard Fire Ins. Co. v. Reese , 584

S.W.2d 835, 839 (Tex. 1979). Reversal is proper only upon a showing that "the

probability that the improper argument caused harm is greater than the probability

that the verdict was grounded on the proper proceedings and evidence." Id . at 840.

An Error

To obtain reversal, appellants must first prove "an error" that was not "invited

or provoked." Id . at 839. Counsel must confine argument "strictly to the evidence

and to the arguments of opposing counsel." Tex. R. Civ. P. 269(e). Criticism,

censure, or abuse of counsel is not permitted. Appeals to passion and prejudice are

improper, as are calls to punish a litigant for the acts of counsel. Tex. R. Civ. P. 269;

Tex. Disciplinary R. Prof'l Conduct 3.04 (1990), reprinted in Tex. Gov't Code

Ann. tit. 2, subtit G. app. A (Vernon 2005) (Tex. State Bar R. art. X, § 9).

In this case, there was no evidence of any post-deposition meeting between

Valeriano and his attorney. House's assertion that Valeriano's testimony changed

"because he met Mr. Able and Mr. Able said, 'Jesse, by the way, did you know under

our theory you are entitled to $5 million of profit over 20 years?'" and her decision

to repeat Republic's statement that this "case is a lawyer's construct" constituted

improper jury arguments. See id. House's closing arguments were not confined "to

the evidence and to the argument of opposing counsel," and thus violated rule 269(e).

No one argues that the error was invited or provoked.

Preservation of Error

Appellants must next prove either that the uninvited error (1) was preserved at

trial by a proper objection, motion to instruct, or motion for mistrial or (2) was not

curable by an instruction, a prompt withdrawal of the statement or a reprimand by the

trial court. Standard Fire Ins. Co. , 584 S.W.2d at 839 . If a party is to preserve error,

an objection must be made when the improper argument occurs, unless the conduct

or comment cannot be rendered harmless by proper instruction. Dow Chem. Co. v.

Francis , 46 S.W.3d 237, 241 (Tex. 2001). The burden to prove that improper

argument was incurable rests on the claimant. See Gen. Motors Corp. v. Grizzle , 642

S.W.2d 837, 845 (Tex. App.--Waco 1982, writ dism'd).

Appellants made one objection to the argument, and the trial court sustained

the objection; however, appellants failed to request that the trial court instruct the jury

to disregard the argument. Appellants did not request any relief from the trial court

regarding these comments until their motion for new trial, after the jury had returned

a verdict. Thus, to prevail, appellants must show that the statements constituted

incurable jury argument. See Busse v. Pac. Cattle Feeding Fund No. 1, Ltd. , 896

S.W.2d 807, 815 (Tex. App.--Texarkana 1995, writ denied) (stating failure to press

for instruction at time of erroneous jury argument operates as waiver of any possible

complaint about argument).

Improper jury arguments can be either curable or incurable. Otis Elevator Co.

v. Wood , 436 S.W.2d 324, 333 (Tex. 1968). A jury argument is "curable" when its

harmful effect can be eliminated by instructing the jury to disregard what they have

just heard. Id. However, when an argument is so inflammatory that its harmfulness

could not be eliminated by an instruction to the jury to disregard it, the prejudicial

nature of the argument is so acute that it is "incurable." Id . If an argument is

considered to be curable, counsel must make a prompt objection to it and request an

instruction, or the error is waived. Id. When an argument is incurable, a failure to

object does not result in a waiver, under the reasoning that "counsel making the

argument is the offender so the law will not require opposing counsel to take a chance

on prejudicing his cause with the jury by making the objection." Id . Whether an

argument is incurable depends on "the degree of prejudice flowing from the

argument--whether the argument, considered in its proper setting, was reasonably

calculated to cause such prejudice to the opposing litigant that a withdrawal by

counsel or an instruction by the court, or both, could not eliminate the probability that

it resulted in an improper verdict." Id.

Here, to decide whether the jury argument was incurable, we examine the

record to determine whether an instruction to disregard House's improper arguments

would have sufficiently remedied the harm. See Standard Fire Ins. Co. , 584 S.W.2d

at 839 ; Goswami v. Thetford , 829 S.W.2d 317, 321 (Tex. App.--El Paso 1992, writ

denied). Only rarely will an improper argument so prejudicially influence the jury

that the error cannot be cured. Standard Fire Ins. Co. , 584 S.W.2d at 839 ; s ee Tex.

Employers' Ins. Ass'n v. Guerrero , 800 S.W.2d 859, 862-67 (Tex. App.--San

Antonio 1990, writ denied) (holding intentional appeal for verdict based on parties'

race or ethnicity is incurable); Howard v. Faberge, Inc. , 679 S.W.2d 644, 649-50

(Tex. App.--Houston [1st Dist.] 1984, writ ref'd n.r.e.) (holding demonstration of

product's inflammability by counsel's attempt to ignite his arm during closing

argument was incurable when experiment was not cumulative of evidence adduced

during trial); In re W.G.W. , 812 S.W.2d 409, 415-16 (Tex. App.--Houston [1st Dist.]

1991, no writ) (holding in custody dispute that attempt to link mother's cervical

cancer to immoral conduct was incurable because there was no evidence to support

such connection).

Improper argument regarding the alleged wrongful conduct by a lawyer is not

per se incurable. As Texas courts have held, "charges that opposing counsel

manufactured evidence, suborned perjury, or was untruthful are highly improper and

are generally considered to be incurable. " Yoakum , 826 S.W.2d. at 758 (emphasis

added). To determine whether a specific instance of accusing opposing counsel of

suborning perjury is incurable, we must examine all of the circumstances surrounding

the making of the statement to determine if the comment was so inflammatory that its

perceived prejudicial effect could not have been cured by an instruction to the jury.

Standard Fire Ins. Co. , 584 S.W.2d at 840 .

Under the facts of this case, House's comments were curable. To preserve

error, appellants should have timely objected to the comments and sought an

appropriate instruction from the trial court who, after listening to all of the evidence

and the offending comments and viewing the jury's reaction to the comments, was in

the best position to fashion the appropriate remedy for the transgression and punish

counsel for her conduct. Appellants should not have waited until after the jury had

returned with its verdict to seek relief for House's clearly improper argument.

While House's comments were reprehensible, the comments were short in

duration and occurred at the very end of almost three weeks of trial after the jury had

heard all of the evidence, including evidence that clearly contradicted House's

accusations of perjury. Although the record indisputably reveals that Valeriano did

testify differently when deposed during the suit between Superior and Republic and

later when JTI intervened in the suit against Republic and Rustin, Valeriano presented

the jury with an arguably legitimate explanation for the change in his position. (8) Thus,

the jury could have, with the proper instruction, found House's arguments to be

deliberately false and in bad faith. Furthermore, contrary to House's apparent

implications, the issue of the changed testimony was not dispositive of the jury's

determination of this case. This issue went to appellants' theory of damages, how

much appellants were entitled to recover, which the jury never reached per the court's

instructions. The changed testimony did not go to the issue of liability that was

reached by the jury--whether there was a breach of contract regarding CPI

adjustments and the requisite contractual percentage of income that appellants were

required to make under their contracts with Rustin. Of particular importance is the

fact that at no time did the trial court in any way condone or show approval for the

comments in front of the jury and thus its ability to issue a curative instruction was

not impaired. See Yoakum , 826 S.W.2d. at 758-59. Appellants' only objection was

immediately sustained by the court, and appellants elected not to pursue the matter

any further by requesting an instruction to disregard or a reprimand from the court.

Under these facts, House's comments were not so inflammatory that their

perceived prejudicial effect would have prevented the jury from following its oath

with the proper instructions from the judge. Appellants could have requested the trial

court to instruct the jury that "the record does not show any post-deposition meeting

or conversations between Mr. Able [appellants' counsel], his retained accounting

experts, and Mr. Valeriano and to disregard any reference to such meeting or

conversations between any of them." Appellants could have gone further by asking

the trial court to instruct the jury that it was improper for House to impute

wrongdoing of any kind to appellants' counsel. The trial court, if it had been timely

requested to do so, could have also admonished House that any further argument

along such lines would result in a mistrial. In this case, the timely request for relief

regarding an imaginary post-deposition meeting or conversation would not have

prejudiced appellants' case in front of the jury. See General Motors Corp. v.

Iracheta , 161 S.W.3d. 462, 472 (Tex. 2005) (held comments before closing

arguments made in Spanish by party, not his counsel, directly to a Spanish speaking

jury were incurable.)

Appellants' reliance on the holdings in Yoakum and Stephens v. Smith , 208

S.W.2d 689 (Tex. Civ. App.--Waco 1948, writ ref'd n.r.e.) to support the conclusion

that House's comments constituted incurable error is misplaced. The facts of those

cases are clearly distinguishable from the facts in this case. In both of the cases in

which the appellate courts found allegations that counsel manufactured evidence at

trial to be incurable, the trial court, by its conduct, erroneously condoned or implied

to the jury that the conduct was proper. Accordingly, the trial court's ability to

fashion an appropriate instruction was impaired. In Yoakum , not only did the trial

court erroneously prevent counsel from arguing that allegations of manufactured

evidence by opposing counsel was error, but the offending counsel referred to the

trial court's rulings to bolster his allegations in front of the jury. Yoakum , 826

S.W.2d at 758. Likewise in Stephens , the court overruled attempts by opposing

counsel to correct the error of counsel's arguments that he "deliberately planted a lie

in the mouth of a witness." Stephens , 208 S.W.2d at 691 . In other cases cited by

appellants, in which allegations that counsel manufactured and/or destroyed evidence

were found to be incurable, either additional facts impaired the trial court's ability to

give an effective curative instruction, or the length of the improper argument made

an effective curative instruction impossible. See Howsley & Jacobs v. Kendall , 376

S.W.2d 562, 566 (Tex. 1964) (held that counsel's comments were incurable when,

during closing argument, counsel asked the jury who was more likely to be telling the

truth--a man on his deathbed "about to come face to face with his Master" or "a

colored boy who had been under the coaching of this battery of lawyers, when he got

on there to give words that were not his words."); Montgomery Ward & Co. v.

Brewer , 416 S.W.2d 837, 845-48 (Tex. Civ. App.--Waco 1967, writ ref'd n.r.e.)

(held as incurable repeated accusations throughout closing argument that opposing

counsel had destroyed key evidence as to the issue of liability and the pointing

directly to counsel while making these accusations).

Because we hold that the error was curable by an instruction, a prompt

withdrawal of the statement, or a reprimand by the trial court, the appellants were

required to object, request an instruction to disregard, and request a motion for

mistrial. Standard Fire Ins. Co ., 584 S.W.2d at 839 . By failing to do so, appellants

have waived this error. Id . We overrule appellants' second issue.

Harm

Finally, assuming that the error had been preserved, appellants must prove that

"the argument by its nature, extent, and degree constituted reversibly harmful error."

Id . On appeal, we must evaluate the improper argument in light of the entire case,

from voir dire to closing arguments. Luna v. North Star Dodge Sales, Inc. , 667

S.W.2d 115, 120 (Tex. 1984). The test is whether a juror of ordinary intelligence

would have been persuaded by the improper argument to agree to a verdict contrary

to that to which the juror would have otherwise agreed. See Tex. Employers Ins.

Ass'n v. Puckett , 822 S.W.2d 133, 136 (Tex. App.--Houston [1st Dist.] 1991, writ

denied).

We have reviewed the entire record, and we agree with the trial court's finding

that

[t]he court has reviewed all of the evidence in the case supporting the

jury verdict and finds that there is more than sufficient evidence to

support the verdict. The court also notes that the inflammatory

argument was of short duration, was not repeated, and an objection to

the argument was promptly sustained. There was also evidence that Mr.

Valeriano's testimony did change. The court finds that the probability

that the jury verdict was grounded on proper evidence is greater than the

probability that the verdict was based on the improper argument.

Accordingly, we hold that the trial court did not err in denying appellants'

motion for new trial. See Standard Fire Ins. Co. , 584 S.W.2d at 840 (for reversal,

must show probability that improper argument caused harm greater than probability

verdict grounded on proper proceedings and evidence).

We overrule appellants' second issue.

Conclusion

We affirm the judgment of the trial court.

George C. Hanks, Jr.

Justice

Panel consists of Justices Jennings, Hanks, and Higley.

Justice Jennings, dissenting.

1. During the pendency of this appeal, appellants dismissed Republic from the appeal.

2.

Valeriano prepared the financial statement by taking the income that he received from

the two transfer stations, calculating that income as a percentage of his total revenue,

and then applying that percentage to his costs.

3.

While the appellants do not specify the procedural vehicle whereby they preserved

their matter-of-law point on appeal, the record reflects that they filed a motion for

judgment notwithstanding the verdict ("JNOV") asserting that they were entitled to

a JNOV on their contract claim against Rustin for CPI adjustment increases. A

legal-sufficiency challenge may be preserved by a motion for directed verdict, a

motion for judgment notwithstanding the verdict, an objection to submitting an issue

to the jury, a motion to disregard a jury finding on an issue, or a motion for new trial.

See Cecil v. Smith , 804 S.W.2d 509, 511 (Tex. 1991); C.M. Asfahl Agency v. Tensor,

Inc. , 135 S.W.3d 768, 786 (Tex. App.--Houston [1st Dist.] 2004, no pet.) .

4.

Rustin's CFO, Jim Goodyear, agreed with the calculations from Greg Brown,

appellants' accounting expert, based on a July 1, 2001 effective date. However, he

took issue with the July 1, 2001 effective date.

5.

Sherwood testified that he was under the impression that, when Rustin got a rate

increase, JTI and Superior would get an increase, but he changed his understanding

when "it was pointed out to me in the contract."

6.

Linthicum testified that, "in our business, in the waste hauling business, all CPIs are

-- it is the burden of the person contracting the services to request CPIs, whether they

are increases or decreases. It is standard in the industry."

7.

Westpark actually opened on March 9, 2001, but it was easier to calculate from the

first of the month.

8.

At trial, Valeriano testified that, when he was deposed, he was under the impression

that the Westpark route was profitable. He had not evaluated the various routes

separately. Based on the line of questions posed to him during his deposition, he

determined that he needed to have an accountant audit the individual routes. He

testified at trial that, only after he was able to take the time to do so, he discovered

that the Westpark route was not, in fact, profitable.