Opinion

Mary Gret McKenzie D/B/A Gen's Antiques and Mary Gret McKenzie v. Positive Action International Inc., D/B/A Grace Hart & Co.

Court: Texas Court of Appeals, 1st District (Houston)
Filed: Apr 26, 2012
Status: Published
Cited by: 0 cases
Authority: More cited than 42.2%

“Each contract should be considered separately to determine its material terms.”

How later courts described this case

“Each contract should be considered separately to determine its material terms.”
stating that courts must determine what terms are material or essential to contract on contract-by-contract basis, depending on subject matter of contract at issue
holding that party waived argument that pleadings did not support charge submission by failing to make timely objection to charge on that ground
“Appellate complaints of improper jury argument must ordinarily be preserved by timely objection and request for an instruction that the jury disregard the improper remark.”

Written by the judges who cited it.

The opinion

Opinion issued April 26, 2012

In The

Court of

Appeals

For The

First District

of Texas

————————————

NO. 01-10-01073-CV

———————————

Mary Gret McKenzie d/b/a Gen’s Antiques and Mary Gret McKenzie , Appellants

Positive

Action International, Inc. d/b/a Grace Hart & Company , Appellee

On Appeal from the 80th District Court

Harris County, Texas

Trial Court Case No. 2008-16738

MEMORANDUM OPINION

This

case arises from a dispute between a lessee and its commercial landlord. Appellants, Mary Gret

McKenzie d/b/a Gen’s Antiques and

Mary Gret McKenzie (collectively, “Gen’s Antiques”), leased

retail spaces in an antiques mall from appellee, Positive Action International,

Inc. d/b/a Grace Hart & Co.

(“Hart & Co.”). Gen’s Antiques

alleged multiple causes of action, including constructive eviction and breach

of contract, and Hart & Co. alleged a counterclaim for breach of

contract. The jury returned a verdict in

favor of Hart & Co. Following a

series of post-trial rulings, the trial court entered a final modified judgment

ordering that both parties take nothing.

In eight points of error, Gen’s Antiques argues that: (1) the

jury’s findings that Hart & Co. did not constructively evict it and did not

breach the leases were erroneous because “there was overwhelming and uncontroverted evidence” against

those findings; (2) the trial court erred in denying its motion for judgment

notwithstanding the verdict on its constructive eviction and breach of contract

claims; (3) the jury’s adverse finding on its breach of contract claim was also

improper because Hart & Co.’s failure to pay Gen’s Antiques its sales

proceeds constituted a breach of the leases; (4) the jury’s finding that Hart

& Co. did not breach an oral agreement was incorrect because Hart & Co.

failed to pay Gen’s Antiques its sales proceeds; (5) the jury erred in failing

to award damages on its constructive eviction, breach of lease, and breach of

oral agreement claims; (6) the trial court erred in refusing a jury question on

its breach of trust claim; (7) the jury erred in failing to award it attorney’s

fees based on its claims of breach of written and oral contracts; and (8) the

trial court erred in denying its motion for new trial based on improper jury

argument.

Hart & Co. asserts five

cross-points, arguing that the trial court: (1) erred in entering judgment that

it take nothing based on the argument that “no live pleading” supported its

recovery for breach of contract and attorney’s fees; (2) abused its

discretion in finding “no live pleadings”; (3) erred in modifying the judgment

based on an issue not objected to at trial and therefore waived by Gen’s

Antiques; (4) erred in modifying the judgment based on an issue not presented

in a motion for new trial and therefore waived by Gen’s Antiques; and (5) abused

its discretion in exercising plenary power to modify the judgment based on an

issue not presented in a motion for new trial.

We affirm

in part and reverse and remand in part for the trial court to render judgment

on the jury’s verdict.

Background

Relationship

of Parties

Hart & Co. operated an antiques mall and leased spaces

to various merchants for the sale of antiques and collectibles. Gen’s Antiques leased space consisting of four

booths and two window spaces and paid the related security deposits consisting

of one month’s rent. Gen’s Antiques also

signed a lease and paid a security deposit for two more desirable window spaces

that it planned to move into in February 2008.

In addition to providing the terms of booth location,

rent, and permissible uses of the premises, the leases included the following

terms relevant to this case:

TERM . . . This lease shall be

month-to-month.

Lessee [Gen’s Antiques] has deposited with

Lessor [Hart & Co.] [ an amount equal to one

month’s rent] as security for the prompt performance by Lessee of each and

every duty of Lessee under this Lease.

Under the circumstances of any default by Lessee, Lessor may apply or

retain all or any part of such security to remedy the default or to reimburse

Lessor for any amount which Lessor may spend as a result of the default. . . .

Any of the following occurrences or acts shall

constitute an event of default under this lease:

If Lessee, at any time during the Term, shall . . . fail to make any payment of

rent, late fees or other sum herein required to be paid by Lessee . . . or

fails to observe or perform any other provisions hereof for thirty days after

Lessor shall have delivered to Lessee written notice of such failure, or

. . .

If the premises shall have been abandoned, provided that the premises shall be

deemed to have been abandoned if Lessee transfers a substantial part of

Lessee’s operations, business and personnel from the premises to another

location or fails to carry on its business at the premises for a period of two

consecutive weeks.

In the event [a] default shall have occurred,

Lessor shall have the right at its election, then or at any time thereafter, to

give [L] essee written notice of Lessor’s election to

terminate this Lease on a date specified in such notice. Upon the giving of such notice, this Lease

and the estate hereby granted shall expire and terminate on such date as fully

and completely and with the same effect as if such date were the date hereinbefore

fixed for the expiration of the Term, and all rights of Lessee hereunder shall

expire and terminate and Lessor shall forfeit Lessee’s deposit.

This agreement shall be deemed to include the

Positive Action International Inc., dba Grace Hart

& Co., policy (a copy of which has been provided to Lessee) and Exhibits A

attached hereto and made a part hereof.

In the event of a conflict between this lease and the Positive Action

International Inc., dba Grace Hart & Co., policy,

this lease will prevail.

Unless otherwise provided herein, any notice,

tender, or delivery to be given hereunder by either party to the other may be

effected by placing such notice, tender or delivery in the party’s mail slot at

Positive Action International Inc., dba Grace Hart

& Co., by personal delivery in writing or by registered or certified mail,

postage prepaid, return receipt requested, and shall be deemed received as of

mailing.

Lessor expressly grants Lessee the right to

terminate this lease before the end of the lease period. If Lessee elects to exercise this right,

Lessee must:

Provide written notice to Lessor on or before

the first of the month prior to the month Lessee intends to vacate the

premises.

Pay Lessor all sums for rent, advertising, work

days, etc. as due.

Vacate the premises as otherwise described in

this lease. Lessor agrees to refund

Lessee’s deposit (subject to the conditions of Section 3.2 [providing the

Lessor may keep all or any part of deposit in event of any default by Lessee])

if Lessee elects to exercise his right to terminate as described above.

(Emphasis in

original).

Exhibit A, attached to the lease and expressly

incorporated into the terms of the lease, provided general policies regarding

specific deadlines and late fees for paying rent, the number of days the lessee

is required to work at the antique mall and related policies, guidelines for

proper maintenance of the space, and store hours. It also provided that lessees like Gen’s

Antiques were required to conduct all sales through the “front desk at Grace

Hart & Co.,” but it did not provide specific procedures for the

reimbursement of payments made to Hart & Co. for the lessee’s merchandise.

This suit arose from a dispute that occurred on December

11, 2007. Gen’s Antiques argues that Grace

Hart, president of Hart & Co., became irrational and told McKenzie and her

business partner, Gregory Nolte, to leave the premises and never come

back. Hart & Co. argues that McKenzie

is the one who became angry and chose to leave the mall without giving notice

as required by the leases.

Hart & Co. sent Gen’s Antiques a letter dated December

12, 2007 to the address “805 Sandman, Houston, TX.” This letter stated,

This is to inform

you that since you defaulted on the contract and moved out on your own

volition, you automatically forfeit all your deposits. Please refer to [the section of the lease

describing acts constituting default].

Effective with

this letter, neither you, Gret Morgan McKenzie or

your associate Gregory Joseph Nolte are permitted on or in the premises of

Grace Hart and Company. . . .

All further communications are to be

presented to attorney Walter Wright . . . and not to us. Any checks that you may have coming will be

mailed within 5 days of our normal processing date.

We are sorry that you have elected to

take this action and we wish you success in whatever plans you have for the

future.

Hart & Co.’s attorney sent a second letter to both

McKenzie and Nolte dated December 17, 2007.

The letter stated that it was in reference to

your

trespass upon and around the premises of Grace Hart & Company at 313 West

19th Street; your slander and/or libel of Ms. Hart and Grace Hart & Co.

directed toward the dealers in the shop and more especially toward prospective

shop patrons; your terroristic threats upon Ms. Grace Hart and your disorderly

conduct and drunkenness in and around the premises of Grace Hart & Company.

The December 17, 2007 letter went on

to inform McKenzie and Nolte that “your inappropriate and uncalled for actions

. . . will no longer be tolerated.” They

were advised not to enter the premises under any circumstances or confront,

make comment to, or interfere with any employees, dealers, or patrons. The letter concluded:

Your

recent conduct and acts of slander and/or libel have already resulted in an

actionable cause of action against you for monetary and punitive damages. Your theft and misuse of the confidential

business records of Grace Hart & Co. will result in criminal charges being

filed against you personally under all applicable criminal statutes and laws

that apply in Harris County, in the City of Houston, in the State of Texas or

in the United States.

Pleadings of Parties

On March 31, 2008, Gen’s Antiques filed suit against Hart

& Co., alleging breach of contract for Hart & Co.’s “forceful and

unlawful eviction without notice,” breach of lease for failing to comply with

the terms of the leases, breach of trust and money had and received for Hart

& Co.’s alleged failure to tender payment of funds from the sales of Gen’s

Antiques’ merchandise, defamation and business disparagement, conversion,

theft, intentional infliction of emotional distress, and attorney’s fees. Gen’s Antiques subsequently amended its

petition, dropping its claims for defamation, business disparagement, civil

theft, and intentional infliction of emotional distress and adding a claim for

constructive termination of the lease.

On July 1, 2009, Hart & Co. filed its “First Amended

Original Answer and Counter Claim.” It

included general and verified denials of Gen’s Antiques’ claims and also

asserted counterclaims for interference with contract rights and business

relations. Hart & Co. subsequently

filed a second amended answer and counterclaim, adding a claim for breach of

contract for Gen’s Antiques’ alleged breach of the lease agreements. Specifically, Hart & Co. alleged that it

had “performed all of the promises and covenants of this agreement for which it

was promisor. In the alternative, if

need there be, [Hart & Co.] has substantially performed all of the promises

and convenants concurrent or conditions precedent

have occurred or been excused for which [it] was the obligor.” Hart & Co. alleged that Gen’s Antiques

breached the lease by failing “to pay all rent[ ,] late

fees[,] and charges due” under the lease, by failing to provide the “required

written notice thirty days prior to terminating the month to month tenancy and

vacating the property,” and by behaving “in a manner which is abusive toward

customers, other dealers, or Lessor or their guests.” Hart & Co. also claimed it was entitled

to attorney’s fees on its breach of contract claim.

On March 29, 2010, Hart & Co. filed its third amended answer

and counterclaim. This document again

alleged various verified denials and affirmative defenses, and it again

included Hart & Co.’s claim of interference with contract rights and business

relations. This counterclaim was related

in paragraphs fourteen and fifteen. In language

identical to that used in Hart & Co.’s second amended answer and

counterclaim, paragraph sixteen alleged that Hart & Co. and Gen’s Antiques

entered into several lease agreements.

Again tracking the same language as in its second amended counterclaim,

paragraph seventeen began, “Counter-Plaintiff has totally performed all of the

promises and covenants of this agreement for which it was the promisor.” However, paragraph seventeen cut off after

stating, “In the alternative, if need there be, Counter- Plaintiff[ .

. . .]” The next page begins with

paragraph twenty-two, stating, “Further pleading Counter-Plaintiff avers that Counter-Defendants , Mary Gret

McKenzie d/b/a Gen’s Antiques and Mary Gret McKenzie [have]

withheld the last month’s rent on grounds that the security deposit is security

for unpaid rent. Counter-Plaintiff avers

that Counter-Defendants, Mary Gret McKenzie d/b/a

Gen’s Antiques and Mary Gret McKenzie [have] acted in

bad faith and the Counter-Plaintiff is entitled to relief pursuant to [section]

93.010 of the Property Code.”

Trial on Merits and Jury’s Findings

The jury trial occurred in April 2010. Greg Nolte, one-time partner and current

employee of McKenzie and Gen’s Antiques, testified about the general structure

of an antique mall. He stated that Hart

& Co. leased spaces to various antique and collectibles dealers, that they

all “worked collectively” to operate the mall, and that “all the sales are

collected at a single source at the front door and then the sales are

distributed on a weekly basis.” He

testified that each dealer would get a “settlement report” or record of its

sales and was then “issued a check for that total amount.” He testified that, as of December 2007, Gen’s

Antiques leased four booths and two window spaces from Hart & Co. and that

Gen’s Antiques had paid security deposits totaling $1,421.75 on the four booths

and $150 for the window spaces. He

further testified that Gen’s Antiques had paid a $160 deposit for two more

desirable window spaces because it anticipated moving into those spaces in

February 2008.

Nolte testified that the dispute with Hart & Co. involved

a special event called “Mistletoe Madness,” which was a holiday event that many

businesses in the Heights area, where Hart & Co. is located, participated

in. Nolte and McKenzie agreed to provide

wine and seafood étouffée , as they had on previous

occasions, in exchange for Hart & Co. paying half the estimated cost “a

couple of weeks” in advance and the other half “a few days before” the

event. Nolte testified that, on this

occasion, Hart & Co. did not pay him in a timely manner. He later acknowledged on cross-examination

that a Hart & Co. employee brought him an envelope that he refused to

accept on Friday, December 7, 2007, the day of the event, testifying that he

was too busy at that time—“the product was already purchased and I was cooking

rice for a thousand people at that point.”

Hart & Co. argued that the envelope contained the cash payment owed

to Nolte, and Nolte agreed that it “probably” did.

He stated that he and McKenzie arrived to work their

scheduled day at the antiques mall on December 11, 2007, and were summoned to Grace

Hart’s office. Hart paid them for their

expenses related to the Mistletoe Madness event. On cross-examination, Nolte further stated

that he and McKenzie were upset at not having received the money sooner,

because they needed it to purchase wine and food prior to the day of the

event. He testified that, in response to

Hart’s saying “here’s your money” and “throwing [the envelope] down on the

desk,” McKenzie said, “[I]t’s the principle of the thing, Grace.” Following this brief exchange, Hart then

“started hitting the desk” and claiming, “[Y] ou are

saying I have no principles.” Nolte

testified that

Ms.

Hart said get out, get out of my store now.

I raised my hand, I said excuse me.

Are you saying get out of your office or get out of your store, and she

said get out of the store now. Then she

got on her phone and she was screaming, they’re blocking the door, they’re

killing me, they are assaulting me. I quickly thought, we need to get out on the

public floor, we do not need to raise this volatile

situation any further. We need to

retreat quickly. It was irrational

behavior.

Nolte testified that Hart’s

irrational behavior continued once they left Hart’s office, as Hart followed

him and “ continu [ ed ] to

harass” him. He testified that Hart

pointed at McKenzie and said, “[Y] ou’re an

alcoholic,” then pointed at him and screamed, “[Y] ou are mean people.”

He testified that McKenzie asked about the return of their deposits, and

Hart indicated that her husband, Grant Hart, would be at the antiques mall that

afternoon to return the deposits. Nolte

stated that he and McKenzie then left the premises and that they never received

the deposits.

Nolte testified that Hart & Co. did not give Gen’s

Antiques any notice that it needed to leave the store prior to that incident

and that he and McKenzie had expected to continue working with Hart & Co.

through the busy Christmas season and in the future. He pointed out that Gen’s Antiques had just

had business cards printed with the address at Hart & Co.

Nolte also testified regarding his and McKenzie’s receipt

of the December 12, 2007 letter and stated that he was “stunned” to read that

Hart & Co. claimed that Gen’s Antiques moved out of its own volition. He testified that Gen’s Antiques did not take

any legal action at that time, however, because he and McKenzie “still thought

we were going to get paid for our sales and that was the big deal.” Nolte further related that Gen’s Antiques was

expecting its “weekly sales previous to December 11th when we were kicked out,

plus several thousand dollars, 3,000 or whatever plus in layaway sales at that

time that we had due to be collected over the next several months.” He testified that Gen’s Antiques received one

check for approximately $2,100 “shortly after we received this letter.” He testified that, after receiving that check

via certified mail at the address on Sandman, [1]

Gen’s Antiques did not receive any further checks.

He also testified regarding his impressions upon

receiving, on February 20, 2008, the letter dated December 17, 2007. He testified that he was, “[a]gain, shocked,

I couldn’t believe the terroristic threats et cetera that I was accused of in

this letter.” He stated that he could

not recall any event or occurrence that precipitated the writing of that letter

and that the “only reason I had re-entered or approached to enter the premises

. . . was to deliver furniture” within the week after Gen’s Antiques was

evicted from the property. He testified

that he advised Hart on December 12, 2007, as Gen’s Antiques was moving out of

the property, that he would need to return with furniture that was on

layaway. He also testified that after

Gen’s Antiques moved out of Hart & Co.’s premises on December 12, it put

all of the merchandise into storage.

Following the receipt of the letter dated December 17, 2007, Gen’s

Antiques contacted Hart & Co.’s lawyer to request its deposits, rents, and

costs of moving and storing its merchandise.

Nolte testified that Gen’s Antiques discovered the existence of other

correspondence sent by Hart & Co. and the remaining settlement statements

only after suit was filed, during Grace Hart’s deposition. Based on that information, Gen’s Antiques

calculated that Hart & Co. owed it $3,109.09 for sales of Gen’s Antiques’

merchandise that had been previously collected by Hart & Co..

cross-examination, Nolte acknowledge that Gen’s Antiques received one letter

and one check from Hart & Co. at 805 Sandman, but he denied ever seeing the

four other certified mail envelopes containing the settlement statements and

checks that Hart & Co. had mailed to that address. He testified that “all of our business mail

goes to P.O. Box 980217.” However, Nolte

also acknowledged that the address listed for Gen’s Antiques with the State Comptroller

of Accounts for sales tax purposes in February 2008, around the same time Hart

mailed some of the remaining checks, was the address at 805 Sandman.

McKenzie also testified.

She confirmed that Gen’s Antiques leased space from Hart & Co. and

that she listed a post office box address on each of the leases with the intent

that it be used for purposes of business correspondence. She testified that, although she owned the

property at 805 Sandman, she did not live there during the time in question

because the house needed “a lot more construction to then get move-in ready. .

. .”

Regarding the events of December 11, 2007, McKenzie

testified that, after Grace Hart handed over the envelope containing Nolte’s

reimbursement for expenses related to Mistletoe Madness, Hart said to McKenzie,

“[Y] ou don’t like me, do you?” McKenzie testified that she responded, “[W] hether I like you or not has nothing to do with the fact

that you didn’t give us our money when you said you were. I said it’s about the principle.” McKenzie testified that Hart then began

pounding her fists on the desk and screaming and eventually told her “get out,

get out now.” McKenzie testified that

Nolte asked, “[D]o you mean get out of your office or do you want us to get out

of this store?” Hart “screamed again,

get out ofthis store.

Get out of this store now.”

McKenzie further testified that Hart called her husband and told him, “[T]hey

are trying to kill me, they are assaulting me, they will not let me out of my

office, they’re blocking the door,” in spite of the fact that she and Nolte

were not blocking the door or assaulting or threatening her in any manner.

McKenzie testified that she and Nolte decided they needed get

out to the front of the store and that Hart followed behind them and yelled, “[Y] ou’re an alcoholic.

And then she yelled at Greg, you’re a mean person.” McKenzie then crossed to the other side of

the store and asked the dealer who was working at the desk on that side to come

“[b]e a witness that this woman has just thrown us out.” She also asked the bookkeeper to witness Hart’s

remarks that she was throwing Gen’s Antiques out of the antique mall and that

she had called McKenzie an alcoholic. [2] McKenzie testified that she made these

statements to the two witnesses in front of Hart and that “Hart never denied

any of it.” She then told Hart that she

expected to get her deposits back that afternoon, and Hart responded that her

husband, Grant Hart, would bring them that afternoon. McKenzie testified that she and Nolte left at

that time, purchased packing materials, and returned to begin packing up. Grant Hart never arrived with the deposit

money. She acknowledged that “[t]here

were no dealers on the 11th or 12th moving their items in” to Gen’s Antiques’

booths and window spaces. She further

testified that Gen’s Antiques moved out of Hart & Co. because “[Hart] threw

us out. And we would not stay there

because the lady . . . acted very crazy.”

She testified that Gen’s Antiques vacated the property involuntarily.

Regarding the letter dated December 12, 2007, McKenzie

further testified that when she received it she thought, “[Y] ou must be kidding me.

She knows we know she threw us out.”

She was similarly shocked upon receiving the letter dated December 17,

2007 and thought that Hart was lying about the events referenced in that letter. McKenzie also testified that she did not

receive the four letters that Hart & Co. sent by certified mail with the

remaining settlement statements and checks.

McKenzie further testified regarding Gen’s Antiques’

damages resulting from the events of December 11, 2007 and the amount of the

deposits Gen’s Antiques had paid in accordance with the terms of the

leases. This testimony was consistent

with the damages and amounts related by Nolte.

On cross-examination, McKenzie testified that she had some

personal experience with the eviction process as a result of her ownership of

rental property, and she acknowledged that Gen’s Antiques was not removed from

Hart & Co.’s premises through any formal or legal process. She “was just told to get out and get out now.”

She also testified again that she never

saw the envelopes containing the checks sent by Hart & Co. and that she did

not recall receiving any slips from the post office attempting to deliver them. She opened the envelopes in court and

confirmed that they contained settlement statements and checks from Hart &

Co. to Gen’s Antiques. McKenzie also

confirmed that the address registered with the Texas Comptroller’s Office in

February 2008 and her voter registration address was 805 Sandman.

Grace Hart testified, consistent with Nolte’s testimony,

that Hart & Co. and Gen’s Antiques entered into leases for four floor

spaces and two window spaces that were in effect in December 2007 and that

Gen’s Antiques had paid the deposits associated with those leases. She acknowledged that the address McKenzie

listed on the leases was a post office box and not the address on Sandman.

Hart testified that she did not “kick out” Gen’s

Antiques. She testified that, following

the incident on December 11, when Gen’s Antiques began packing up its

merchandise, she asked another dealer, Cathy Merrill, to call other dealers and

invite them to display merchandise in Gen’s Antiques’ spaces. She testified that she did not begin this

process until December 12, the day that Gen’s Antiques removed all of its

merchandise. She stated that she did

this because “I had half my shop empty practically, all that whole side and all

the windows and it was the holidays. And

I was terrified, of course. So I told

Cathy . . . [that] every dealer that can [could] bring stuff to fill that side

up and you get all the money that you make from those places so that I wouldn’t

have an empty store.”

Regarding the letter dated December 17, 2007, Hart

testified that she and her husband asked their attorney to send it because

“[w]e wanted them to stay away from us totally and completely. We wanted to make a statement that they

needed to just leave us alone.” She was

concerned that McKenzie “was going to be contacting our dealers and starting

more trouble than there was already,” and she did not want McKenzie and Nolte “to

hang around in the front [of the property] smoking cigarettes and talking to

our dealers.” She further testified that

she believed the letter conveyed her intent that if McKenzie or Nolte returned

to the premises or attempted to contact her dealers, she would pursue further

action, and that she and her husband “felt we had to be strong because they

were pretty powerful and we felt like we had to be strong.”

Hart testified that she attempted to distribute to Gen’s

Antiques its sales proceeds following the incident on December 11, 2007, and

she acknowledged that Hart & Co. continued to send the checks and

settlement statements by certified mail, requiring the recipient’s signature,

to the Sandman address in spite of the fact that previous letters were returned

undelivered. Hart testified that she

believed that they were delivered but that McKenzie refused to sign for them or

accept them. She testified that she used

the certified mail procedure that she did because she was concerned about

security, and she testified that she was not familiar with the procedure for a

recipient to sign for a delivery to some location where the recipient would not

be physically present, like a post office box.

Attorneys for both parties testified regarding their

attorney’s fees. Gen’s Antiques’

attorney testified that his firm had billed Gen’s Antiques for $74,618.45 in

connection with this case, not including the trial or “billable expenses,” and

he provided detailed testimony about his qualifications and other information

about the firm’s representation of Gen’s Antiques. He also testified that expenses from trial

would be approximately $12,000, and he provided specific testimony regarding

the factors he considered in reaching the total amount of attorney’s fees.

Hart & Co.’s attorney, Jeffrey Gillespie, testified

regarding his own attorney’s fees. Gen’s

Antiques did not object to his testifying on this topic. He testified regarding his qualifications and

that he has been paid a total of $5,000 by Hart & Co., but that he believed

the total value for the work performed on the breach of contract claims was

$15,000. He testified that he did not

keep time records of the work he performed for Hart & Co., as he usually

billed his clients on a flat-rate basis.

He also testified that the amount of $15,000 represented only work he

did on the breach of contract claim because “the only matter which I’m entitled

to attorney’s fees is on a claim for breach of contract.” Gillespie acknowledged that he began

representing Hart & Co. in April 2009, a little more than a year after

Gen’s Antiques’ counsel became involved.

After the close of evidence, Hart & Co. moved to

nonsuit its tortious interference claim and its claim that McKenzie conspired

with Gen’s Antiques to tortiously interfere with Hart

& Co.’s contractual and business relations, which the trial court

granted. Gen’s Antiques amended its

pleadings, with leave of the trial court, to assert a claim that Hart & Co.

breached an oral agreement with Gen’s Antiques by failing to turn over sales proceeds

and layaway funds collected by Hart & Co.

The proposed charge contained questions regarding (1)

whether Hart & Co. constructively evicted Gen’s Antiques, (2) whether Hart

& Co. complied with the terms of the lease agreements, (3) if it found

Gen’s Antiques was not constructively evicted, whether Gen’s Antiques complied

with the terms of the lease agreements, (4) whether Hart & Co. complied with

an oral agreement with Gen’s Antiques regarding distribution of sales proceeds,

(5) if it found in favor of Gen’s Antiques, the damages suffered by Gen’s

Antiques related to lost rent, moving costs, storage costs, lost profits, and

lost deposits, (6) if it found in favor of Hart & Co., the amount of damages

related to Gen’s Antiques’ breach of the leases, (7) whether Hart & Co.

converted property from Gen’s Antiques, (8) the amount of damages for

conversion, if any, (9) if it found in favor of Gen’s Antiques on the issue of

conversion, whether any harm to Gen’s Antiques was caused by malice, (10) if it

found malice, the amount of exemplary damages to be assessed in favor of Gen’s

Antiques, (11) if it found in favor of Gen’s Antiques on the issues of breach

of the lease or oral agreement, the amount of reasonable and necessary

attorney’s fees to be awarded to Gen’s Antiques, and (12) if it found in favor

of Hart & Co. on the issue of breach of the lease, the amount of Hart &

Co.’s reasonable and necessary attorney’s fees.

At the charge conference, Gen’s Antiques requested that

the trial court include jury questions on the issues of breach of trust, breach

of lease, money had a received and civil theft. [3] The trial court refused to include questions

on these issues. Gen’s Antiques did not

present any objection to the presence of a jury question on Hart & Co.’s counterclaims

for breach of contract and attorney’s fees.

Hart & Co. objected to the form of jury question number eleven on attorney’s

fees, which the trial court overruled.

Hart & Co. also sought to have a question included asking the jury

if it found that Hart & Co. had tendered payment to Gen’s Antiques, which

the trial court also rejected.

Following the parties’ closing arguments, the jury found

that: (1) Hart & Co. did not constructively evict Gen’s Antiques from the

premises; (2) Hart & Co. did not fail to comply with the terms of the

lease agreements in effect in December 2007; (3) Gen’s Antiques failed to

comply with the terms of the lease agreements; and (4) Hart & Co. did not

fail to comply with an oral agreement with Gen’s Antiques regarding

distribution of sales proceeds. It found

$1 in damages for Hart & Co. based on Gen’s Antiques’ failure to comply

with the terms of the leases and $15,000 as Hart & Co.’s reasonable and

necessary attorney’s fees incurred on this claim. Finally, the jury found that Hart & Co.

did not convert property from Gen’s Antiques.

The jury did not answer questions five, eight, nine, ten, or eleven

regarding damages for Gen’s Antiques because the need to provide an answer to

those questions was expressly contingent on a finding in favor of Gen’s

Antiques on the issues of breach of lease, breach of oral agreement, or conversion.

Post-Trial Motions and Entry of Judgment

Gen’s Antiques moved for judgment notwithstanding the

verdict (“JNOV”), arguing that it had presented evidence supporting its claims

that Hart & Co. breached the oral and written contracts and constructively

evicted it. This motion also argued that

Hart & Co. was not entitled to damages for breach of contract or for

attorney’s fees, but it did not argue that these claims were not supported by

the pleadings. On August 6, 2010, the

trial court denied Gen’s Antiques motion for JNOV.

Hart & Co. moved to disregard the jury’s answer to

question six, regarding damages that resulted from Gen’s Antiques’ failure to

comply with the terms of the lease. Hart

& Co. argued that the jury’s answer of $1 was not supported by the record

because it had presented evidence of a much greater amount of damages in the

form of January rent payments. [4] Gen’s Antiques responded by arguing that,

while several witnesses testified regarding the amount of rent that Gen’s

Antiques paid to Hart & Co., Grace Hart did not testify that Hart & Co.

was owed rent for the month of January or about the amount of rent due.

On August 31, 2010, the trial court entered judgment

reciting the findings of the jury and finding “that the jury answer to Question

Number Six should be disregarded since it is against the great weight and

preponderance of the evidence and is inconsistent with recoverable damages

under Texas law, and that [Hart & Co.] should have judgment against [Gen’s

Antiques] for its damages from breach of the lease in the amount of $1571.75,

comprised of the rent due for January 2008, together [with] prejudgment

interest and reasonable and necessary attorney’s fees in the amount of

$15,000.” It also ordered that Gen’s

Antiques take nothing from Hart & Co.

Finally, it ordered, “in equity, that [Hart & Co.] pay

the amount of $3,109.09 to [Gen’s Antiques], which represents the money

collected by [Hart & Co.] for the benefit of [Gen’s Antiques] for sales

proceeds from [Gen’s Antiques’] merchandise which the Court finds was held

under a constructive trust.”

On September 10, 2010, Gen’s Antiques moved for a new

trial, arguing that it was entitled to judgment in its favor on the issues of

constructive eviction, breach of lease, breach of contract, breach of oral

contract, conversion, and attorney’s fees.

It also argued that Hart & Co. was not entitled to attorney’s fees

because the award of attorney’s fees was based on the allegedly erroneous

finding that Gen’s Antiques breached the leases, because Hart & Co. failed

to “present its claim for breach of lease to Gen’s prior to the filing of same

as required by [Texas Civil Practice and Remedies Code section] 38.002(2),” and

because it failed to present legally and factually sufficient evidence of its

attorney’s fees. Finally, Gen’s Antiques

argued that a new trial was appropriate based on improper jury argument made by

Hart & Co.’s attorney. Gen’s

Antiques did not argue in this motion for new trial that Hart & Co. failed

to plead a breach of contract claim or a claim for attorney’s fees.

On September 30, 2010, Gen’s Antiques moved for remittitur

of the $15,000 in attorney’s fees that the trial court’s judgment had awarded

to Hart & Co., arguing that the evidence was insufficient to support that

award. The motion for remittitur again

argued that the trial court erred in awarding attorney’s fees under Civil

Practice and Remedies Code section 38.001 because Hart & Co. failed to

present its claim to Gen’s Antiques or its agent as required by section 38.002.

On December 8, 2010, Hart & Co. argued in a letter

brief that it presented its claim to Gen’s Antiques in its December 12, 2007

and December 17, 2007 letters. It argued

in the alternative that Gen’s Antiques waived this issue by failing to plead a

verified denial or object to the admission of evidence of Hart & Co.’s

attorney’s fees.

In a letter dated December 9, 2010, Gen’s Antiques’

counsel argued for the first time that the trial court’s award of damages to

Hart & Co. for breach of contract and the resulting attorney’s fees was

improper because it “has not pled breach of contract, breach of lease or any

fact pattern which might constitute reasonable notice of such causes of action

in Hart & Co.’s Third Amended Petition filed on March 29, 2010. . . .” Gen’s Antiques also argued that the December

12 and December 17, 2007 letters did not make a demand for any payment or

otherwise provide notice of Hart & Co.’s breach of contract claim. Gen’s Antiques supplemented this letter on

December 10, 2010, addressing the fact that Hart & Co.’s third amended

petition and counterclaim skipped from paragraph seventeen to paragraph twenty-two. It stated that “it was not uncommon for Hart

& Co. to file mis -numbered pleadings. We assumed that was the case with Hart &

Co.’s Third Amended Answer and Counter-Claim; which, of note, also has two

paragraphs elevens (11’s).”

On December 13, 2010, the trial court signed a

modification of the final judgment. This

judgment recited the findings of the jury and the fact that the trial court had

previously granted a “partial JNOV” on Hart & Co.’s behalf “to award

$1,571.75 based on the uncontroverted evidence that such sum was the amount of

one-month’s rent.” It went on to state,

“The court now finds that there was no live pleading on file at the time of

trial that asserted breach of contract allegations and no leave to file a trial

amendment was timely filed by [Hart & Co.] to support the award of actual

damages and attorney’s fees for breach of contract. The court now vacates that Judgment and

Orders that [Hart & Co.] take nothing on [its] breach of contract claim.”

The trial court then recited that its previous judgment had

found that a constructive trust existed with regard to sales proceeds from

Gen’s Antiques’ merchandise in the amount of $3,109. It stated,

The

Court granted leave of court for [Gen’s Antiques] to file a trial amendment

alleging Constructive Trust. The Court

further found that [Hart & Co.] attempted tender of those funds prior to

the lawsuit being filed and re-tendered those funds and [Gen’s Antiques]

accepted those funds, prior to entry of judgment.

The trial court concluded that

both parties take nothing by their claims against the other, stating,

is therefore, ORDERED, ADJUDGED, and DECREED that Plaintiff, Mary Gret McKenzie d/b/a Gen’s Antiques and Mary Gret McKenzie, individually, take nothing from Defendant,

Positive Action International, Inc. d/b/a Grace Hart & Co. and that Counter

Plaintiff, Positive Action International, Inc. d/b/a Grace Hart & Co. take

nothing from Counter Defendant, Mary Gret McKenzie

d/b/a Gen’s Antiques and Mary Gret McKenzie. IT IS FURTHER ORDERED, ADJUDGED, and DECREED

that Costs of Court are assessed against the party incurring same.

On January 12, 2011, Gen’s Antiques requested modification

of this judgment, arguing that the trial court’s December 13, 2010 judgment

erroneously stated that the trial court allowed it to file a trial amendment

pleading a constructive trust. Gen’s

Antiques stated that it did not amend its pleadings with respect to that cause

of action, and it argued that the trial court erred in concluding that a

constructive trust existed with regard to the money Hart & Co. collected

from the sale of its merchandise. Gen’s

Antiques also moved again for a new trial on its claims of constructive

eviction, breach of written and oral contracts, conversion, and attorney’s

fees, and it again argued that a new trial was required because of the

allegedly improper jury argument of Hart & Co.’s attorney.

Both parties filed notices of appeal.

Sufficiency of Evidence on Jury’s Findings

In its first point of error, Gen’s Antiques argues that “there

was overwhelming and uncontroverted evidence” against the jury’s answers to

questions number one and two—whether Hart & Co. constructively evicted it

from the premises and whether Hart & Co. breached the terms of the leases. In its third point of error, Gen’s Antiques

argues that, because Hart & Co. failed to pay Gen’s Antiques its sales

proceeds, Hart & Co. breached the written leases, and the jury’s finding

that Hart & Co. did not breach the leases was incorrect. In its fourth point of error, Gen’s Antiques

argues that the jury’s finding on question number four was incorrect because

Hart & Co. failed to pay Gen’s Antiques its sales proceeds. In its fifth point of error, Gen’s Antiques

argues that the jury erred in failing to award damages on its constructive

eviction, breach of lease, and breach of oral agreement claims. Finally, in its seventh point of error, Gen’s

Antiques argues that the jury erred in failing to award it attorney’s fees

based on its claims of breach of written and oral contracts. We construe these points as arguments that

the evidence supporting the jury’s verdict was legally and factually

insufficient.

Standard of Review

In conducting a legal-sufficiency review, we credit

favorable evidence if a reasonable factfinder could

and disregard contrary evidence unless a reasonable factfinder

could not. City of Keller v. Wilson , 168 S.W.3d

802, 827 (Tex. 2005); Brown v. Brown ,

236 S.W.3d 343, 348 (Tex. App.—Houston [1st Dist.] 2007, no pet.). We consider the evidence in the light most

favorable to the finding under review and indulge every reasonable inference

that would support it. City of Keller , 168

S.W.3d at 822 . We sustain a

no-evidence contention only if: (1) the record reveals 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 conclusively establishes the opposite of the

vital fact. Id. at 810 ; Merrell Dow Pharms., Inc. v. Havner , 953

S.W.2d 706, 711 (Tex. 1997).

When an appellant complains of the legal sufficiency of

the evidence supporting an adverse finding on which it had the burden of proof,

it must show that the evidence establishes, as a matter of law, all vital facts

in support of the issue. Dow Chem. Co. v. Francis ,

46 S.W.3d 237, 241 (Tex. 2001) (per curiam ). We must first examine the record for evidence

supporting the finding, and we then examine the entire record to determine if

the contrary proposition is established as a matter of law. Id. We sustain the issue only if the contrary

position is conclusively established. Id.

In reviewing a challenge to the factual sufficiency of the

evidence, we must consider and weigh all the evidence and should set aside the

judgment only if it is so contrary to the overwhelming weight of the evidence

as to be clearly wrong and unjust. Arias v. Brookstone ,

L.P. , 265 S.W.3d 459, 468 (Tex. App.—Houston [1st Dist.] 2007, pet. denied)

(citing Cain v. Bain , 709 S.W.2d 175,

176 (Tex. 1986)). When an appellant

attacks the factual sufficiency of an adverse finding, he must demonstrate that

the finding is against the great weight and preponderance of the evidence. Francis ,

46 S.W.3d at 242 .

Whether reviewing the evidence for legal or factual

sufficiency, we assume that jurors decided questions of credibility or

conflicting evidence in favor of the finding if they reasonably could do

so. See

City of Keller , 168 S.W.3d at 819 . We do not substitute our judgment for that of

the factfinder if the evidence falls within this zone

of reasonable disagreement. Id. at 822 .

Jury Finding that Hart

Did Not Constructively Evict Gen’s Antiques and Related Damages and Attorney’s

Fees

Question one asked the jury, “Did Grace Hart & Co.

constructively evict Gen’s Antiques from the premises that are the subject of

the lease agreements in effect in December 2007?” The jury was instructed:

mere notice to quit, followed by vacation of the premises by the tenant, does

not constitute constructive eviction[ .] In order to prove its claim of constructive

eviction a tenant must establish the following four elements[ :]

an intention

of the landlord that the tenant no longer enjoy the premises;

a material

act by the landlord that substantially interferes with the intended use and

enjoyment of the premises;

the act

permanently deprives the tenant of the use and enjoyment of the premises; and

the tenant

abandons the premises within a reasonable time after the commission of the act. [5]

Gen’s Antiques did not object to

this jury question. Thus, the

sufficiency of the evidence must be measured by the jury charge. See Romero v. KPH Consol., Inc. , 166 S.W.3d 212, 221 (Tex. 2005).

The

jury answered that Hart & Co. did not constructively evict Gen’s

Antiques. Gen’s Antiques argues that the

evidence demonstrated that Grace Hart engaged in several acts “which

permanently deprived Gen’s [Antiques] from the use and enjoyment of its lease

space.” Specifically, Gen’s Antiques

argues that the evidence established that: (1) Grace Hart “engaged in

irrational verbal and physical behavior on December 11, 2007 which caused”

McKenzie and Nolte “to fear for their physical safety”; (2) Hart encouraged

other dealers to move into “Gen’s Antiques’ space on December 12, 2007 which

substantially interfered with Gen’s use and enjoyment of the Premises and

precluded Gen’s from moving back into the space during the two week window of

time before Gen’s would have been liable for abandonment”; (3) Hart & Co.’s

December 12, 2007 letter “banned” Gen’s Antiques from entering the premises;

and (4) Hart & Co.’s December 17, 2007 letter also banned Gen’s Antiques

from the premises and “threatened Gen’s principals with criminal prosecution if

they merely entered the Premises.” Gen’s

Antiques argues that these acts “show a pattern of harassing behavior by [Grace

Hart] toward Gen’s, which confirm Hart & Co.’s intent to evict Gen’s and to

permanently and swiftly deprive Gen’s of its lease space.”

Conflicting

evidence was presented at trial. Both

Nolte and McKenzie testified that Grace Hart became confrontational and

irrational on December 11, 2007, told them both to “get out, get out now,”

called McKenzie an alcoholic, and told both of them that they were “mean

people.”

Hart, however, testified that she did not “kick out”

McKenzie and Nolte. The letter dated

December 12, 2007 expressed her belief that McKenzie and Nolte moved out of

their own volition, in addition to stating that neither McKenzie nor Nolte was

permitted on the premises in the future.

Hart further testified that she asked someone to begin calling other

dealers on December 12, 2007 to move their merchandise into the spaces being

vacated by Gen’s Antiques so that she would not have an “empty” store for the

busy Christmas season. Nolte’s and

McKenzie’s testimony also indicated that when they were removing their

merchandise from the premises on December 12, 2007, no other dealers had placed

merchandise in their spaces at that time.

Gen’s Antiques bore the burden to establish that Hart

& Co. constructively evicted it from the premises; therefore, we first

examine the record for evidence supporting the jury’s finding. See

Francis , 46 S.W.3d at 241 . Hart testified that she did not “kick out”

Gen’s Antiques, and the letter Hart & Co. sent to Gen’s Antiques dated

December 12, 2007 stated that Gen’s Antiques moved out of its own volition. Hart also testified that she did not begin

asking other dealers to move their merchandise into Gen’s Antiques’ spaces

until December 12, 2007, the day that Gen’s Antiques packed and removed its own

merchandise. McKenzie and Nolte both

testified that they removed Gen’s Antiques’ merchandise themselves and that no

other dealers had placed any merchandise in Gen’s Antiques’ space at the time

it vacated the premises, and McKenzie acknowledged that Hart & Co. did not

remove Gen’s Antiques through any formal means.

Hart testified that she sent the December 17, 2007 letter

in an effort to prevent McKenzie and Nolte from “hanging out” in front of the

store and contacting the other dealers after they had made the previous

decision to leave. Given this evidence,

McKenzie’s and Nolte’s testimony that the only reason Gen’s Antiques vacated

its leased spaces was because they were told to “get out” by Hart and because

her irrational behavior made it impossible for Gen’s Antiques to carry out its

business on the premises cannot conclusively establish a constructive

eviction. See id. ( holding that reviewing court may

sustain legal sufficiency challenge to issue on which appellant had burden of

proof only if contrary position is conclusively established).

Considering and weighing all the evidence, we further

conclude that the jury’s finding that Hart & Co. did not constructively

evict Gen’s Antiques is not against the great weight and preponderance of the

evidence. See id. at 242 ; Arias , 265 S.W.3d at 468 .

The jury’s finding on this question indicates that it found Hart’s

testimony and evidence credible and that it found McKenzie’s and Nolte’s

testimony and evidence not credible. See City of Keller , 168 S.W.3d at 819

(stating, “Jurors are the sole judges of the credibility of the witnesses and

the weight to give their testimony. They

may choose to believe one witness and disbelieve another,” and holding that

reviewing courts must assume jurors decided all credibility questions in favor

of verdict if reasonable human beings could do so). We will not substitute our judgment for that

of the factfinder .

See id. at

822 .

The evidence supporting the jury’s finding on the issue of

constructive eviction is supported by legally and factually sufficient

evidence. Because the jury found that

Hart & Co. did not constructively evict Gen’s Antiques, Gen’s Antiques cannot

establish that it was entitled to damages or attorney’s fees based on this

claim.

We overrule Gen’s Antiques’ first, fifth, and seventh

points of error as they relate to the jury’s finding on the constructive

eviction claim.

Jury Finding that Hart &

Co. did not Breach the Leases and Related Damages and Attorney’s Fees

In question number two, the jury was asked, “Did Grace

Hart & Co. fail to comply with the terms of the lease agreements in effect

in December 2007?” The jury answered,

“No.” As we have already discussed, the

evidence was legally and factually sufficient to show that Hart & Co. did

not constructively evict Gen’s Antiques.

Gen’s Antiques also argues that it could not have been deemed to abandon

the spaces until two weeks after December 11, 2007 under the terms of the

leases and that Hart & Co. breached the leases by failing to pay Gen’s

Antiques its sales proceeds.

Gen’s Antiques argues that, under the terms of the leases,

it could not have been deemed to have abandoned the premises until the

expiration of two weeks after the complete removal of all inventory or the

failure to do business, and, thus, “[w] ithin those

two weeks, but for Hart & Co.’s causing other dealers to fill Gen’s space

with merchandise, Gen’s had the option of returning the same or other inventory

into its space at Hart & Co.” The

relevant portion of leases provides various acts constituting “events of

default,” such as a lessee failing to pay rent, and it also provided that

default occurs:

[ i ]f the premises shall have been abandoned, provided that

the premises shall be deemed to have been abandoned if Lessee transfers a

substantial part of Lessee’s operations, business and personnel from the

premises to another location or fails to carry on its business at the premises

for a period of two consecutive weeks.

The plain language of this provision indicates that a default

occurs when a premises is abandoned. It

further provides a space will be “deemed” to have been abandoned if a lessee

transfers a substantial part of its operations to another location or fails to

carry on its business at the premises “for a period of two consecutive weeks.” It does not provide an unequivocal right to a

two-week period in which a lessee like Gen’s Antiques may opt to return

merchandise following its decision to remove all of its business from the

premises. Thus, as a matter of law, Gen’s

Antiques cannot demonstrate that Hart & Co. violated the terms of the

leases by encouraging other dealers to move merchandise into the empty spaces

following Gen’s Antiques’ removal of its items.

See Francis , 46 S.W.3d at 241 .

Gen’s Antiques also argues that Hart & Co. breached

the leases by failing to pay its sales proceeds. We first observe that the leases and

incorporated documents contain no provisions regarding the nature of this

obligation or the method for reimbursing Gen’s Antiques for sales of its

merchandise completed at Hart & Co.’s central cash register. Thus, as a matter of law, Gen’s Antiques cannot

demonstrate that any act of Hart & Co. relating to the payment of sales

proceeds violated the terms of the leases.

See id.

Gen’s Antiques further argues that the leases provide the

address to which Hart & Co. was obligated to send all business

communications—namely, the post office box address provided on the bottom of

each lease. However, the terms of the

leases provided that

any

notice, tender, or delivery to be given hereunder by either party to the other

may be effected by placing such notice, tender or delivery in the party’s mail

slot at Positive Action International Inc., dba Grace

Hart & Co., by personal delivery in writing or by registered or certified

mail, postage prepaid, return receipt requested, and shall be deemed received

as of mailing.

The leases contain no provision requiring

delivery of any “notice, tender, or delivery” to a particular address, and they

provide for multiple methods for delivery, including personal delivery or

delivery by registered or certified mail.

As a matter of law, Gen’s Antiques cannot establish that Hart & Co.’s

attempt to mail the settlement statements and checks to the address on Sandman,

rather than the post office box, violated the terms of the lease. See id.

Thus, the jury’s finding that Hart & Co. did not fail

to comply with the terms of the leases is supported by sufficient

evidence. Because the jury found that Hart & Co. did

not breach the leases, Gen’s Antiques cannot establish that it was entitled to

damages or attorney’s fees based on this claim.

We overrule Gen’s Antiques’ first, fifth, and seventh

points of error as they relate to the jury’s finding on the breach of lease

claim.

Jury Finding that Hart &

Co. Did Not Breach an Oral Agreement and Did Not Convert Gen’s Antiques’

Property by Failure to Pay Sales Proceeds

Question four asked, “Did Grace Hart & Co. fail to

comply with an oral agreement with Gen’s Antiques regarding distribution of

sales proceeds from sale of Gen’s Antiques’ merchandise?” The jury was instructed on the formation of

an agreement: “In deciding whether the parties reached an agreement, you may

consider what they said and did in light of the surrounding circumstances,

including any earlier course of dealing.

You may not consider the parties’ unexpressed thoughts or

intentions.” The jury answered, “No,”

finding that Hart & Co. did not fail to comply with an oral agreement with

Gen’s Antiques.

In question number seven, the jury was asked, “Did Grace

Hart & Co. convert property from Gen’s Antiques?” The jury was instructed:

“Conversion” is

the unauthorized and unlawful assumption and exercise of dominion and control

over the personal property of another to the exclusion of, or inconsistent

with, the owner’s rights.

“Owner” means a person who:

(1) acquired the

property through purchase or other means;

(2) had legal possession of the property; or

(3) had a right to immediate possession of the property.

“Property”

includes money.

The jury answered, “No.”

Breach of oral agreement

To prevail on its cause of action for breach of an oral

agreement, Gen’s Antiques was required to prove : (1) the

existence of a valid contract; (2) its own performance or tender of

performance; (3) Hart & Co.’s breach of contract;

and (4) its damages as a result of the breach. See Prime Prods., Inc. v. S.S.I. Plastics, Inc. ,

97 S.W.3d 631, 636 (Tex. App.—Houston [1st Dist.] 2002, pet. denied). The elements of a valid contract are (1) an

offer, (2) an acceptance, (3) a meeting of the minds, (4) each party’s consent

to the terms, and (5) execution and delivery of the contract with the intent

that it be mutual and binding. Id.

The elements of written and oral contracts are the same and must be

present for a contract to be binding. Wal-Mart Stores, Inc. v. Lopez , 93 S.W.3d 548, 555 (Tex.

App.—Houston [14th Dist.] 2002, no pet.). For an agreement to be enforceable,

there must be a meeting of the minds with respect to its subject matter and

essential terms. Id.

at 556 . The determination of

a meeting of the minds, and thus offer and acceptance, is based on the

objective standard of what the parties said and did. Id.

The

question of whether a contract contains all the essential terms for it to be

enforceable is a question of law. Beal Banks, S.S.B. v. Schleider ,

124 S.W.3d 640 , 654 n.8 (Tex. App.—Houston [14th Dist.] 2003, pet. denied). What terms are material or essential to a

contract are determined on a contract-by-contract basis, depending on the

subject matter of the contract at issue.

T.O. Stanley Boot Co. v. Bank of El Paso , 847 S.W.2d 218, 221

(Tex. 1992) (“Each contract should be considered separately to determine its

material terms.”).

Nolte testified that “all the sales are collected at a

single source at the front door and then the sales are distributed on a weekly

basis.” He testified that each dealer

gets a “settlement report” or record of its sales and is then “issued a check

for that total amount.” Nolte also

testified generally that “all of our business mail goes to P.O. Box 980217,”

and his testimony seemed to indicate that, in the regular course of dealing, settlement

statements and checks were distributed in person or left at Hart & Co.’s

premises for pick up. However, he did

not provide any testimony regarding a specific agreement as to how the settlement

reports and checks were to be distributed, especially in light of Gen’s

Antiques’ vacation of the premises. Nolte also acknowledged that the address

listed for Gen’s Antiques with the State Comptroller of Accounts for sales tax

purposes in February 2008, around the same time Hart & Co. mailed some of

the remaining checks, was the address at 805 Sandman.

McKenzie also confirmed that the address Gen’s Antiques

registered with the Texas Comptroller’s Office in February 2008 and her own

voter registration address was at 805 Sandman.

McKenzie did not provide any testimony regarding the terms by which Hart

& Co. was to distribute sales proceeds collected on behalf of Gen’s

Antiques.

Hart testified that she attempted to distribute to Gen’s

Antiques its sales proceeds following the incident on December 11, 2007, and

she acknowledged that Hart & Co. continued to send the checks and

settlement statements by certified mail, requiring the recipient’s signature,

to the Sandman address in spite of the fact that previous letters were returned

undelivered. Hart testified that she

believed that they were delivered but that McKenzie refused to sign for them or

accept them. She testified that she used

the certified mail procedure that she did because she was concerned about

security, and she testified that she was not familiar with the procedure for a

recipient to sign for a delivery to some location where she would not be

physically present, like a post office box.

It is undisputed that Hart & Co. was obligated to pay

sales proceeds to Gen’s Antiques for its merchandise that was sold through Hart

& Co.’s central cash register.

However, the parties presented no testimony of the specific terms of how

these payments were to be delivered. While

Nolte’s testimony implied that Gen’s Antiques and the other dealers typically

received their settlement statements and checks at the premises and that Gen’s

Antiques used the post office box for its business correspondence, this does

not establish that other reasonable methods of delivery were not also

contemplated by the parties. Thus, Gen’s

Antiques failed to establish the specific terms of the meeting of the minds

between itself and Hart & Co. on the issue of method of paying sales

proceeds. See Lopez , 93

S.W.3d at 556 (holding that for agreement to be enforceable,

there must be meeting of minds with respect to its subject matter and essential

terms).

Assuming, without deciding, that these terms were not

essential and, thus, that the agreement to pay sales proceeds was enforceable,

the evidence that Hart & Co. tendered performance was legally and factually

sufficient. See T.O. Stanley Boot Co. ,

847 S.W.2d at 221 (stating that courts must determine what terms are material

or essential to contract on contract-by-contract basis, depending on subject

matter of contract at issue). Hart

testified that she sent the settlement statements and checks to the address on

Sandman via certified mail requiring the recipient’s signature for security

reasons. She knew that McKenzie had received

mail sent to that address on previous occasions, and it was the address where

McKenzie was registered to vote and the address that Gen’s Antiques had

registered with the comptroller for sales tax purposes. The envelopes containing the settlement statements

and checks were returned unclaimed, and Hart sent them to her attorney.

Although McKenzie and Nolte testified that Gen’s Antiques

never received the unclaimed envelopes containing the settlement statements and

checks, this testimony cannot conclusively establish that Hart & Co. failed

to tender performance or that it breached an oral agreement. See

Francis , 46 S.W.3d at 241 (holding that reviewing court may sustain legal

sufficiency challenge to issue on which appellant had burden of proof only if

contrary position is conclusively established).

Furthermore, considering and weighing all the evidence, we

conclude that the jury’s finding that Hart & Co. did not breach any alleged

oral agreement regarding sales proceeds is not against the great weight and

preponderance of the evidence. See id. at 242 ;

Arias , 265 S.W.3d at 468 . It was solely within the province of the jury

to weigh Hart’s testimony and postal records demonstrating that Hart & Co.

attempted to distribute to Gen’s Antiques its sales proceeds against McKenzie’s

and Nolte’s testimony that Gen’s Antiques never received those envelopes. See

City of Keller , 168 S.W.3d at 819 (stating, “Jurors are the sole judges of

the credibility of the witnesses and the weight to give their testimony. They may choose to believe one witness and

disbelieve another,” and holding that reviewing courts must assume jurors decided

all credibility questions in favor of the verdict if reasonable human beings

could do so). We will not substitute our

judgment for that of the factfinder . See id.

at 822 .

Thus, the evidence supporting the jury’s finding that Hart

& Co. did not fail to comply with the terms of an oral agreement regarding

payment of sales proceeds is supported by legally and factually sufficient

evidence. Because the jury found that Hart

& Co. did not breach an oral agreement, Gen’s Antiques cannot establish

that it was entitled to damages or attorney’s fees based on this claim. [6]

Conversion

Regarding Gen’s Antiques’ claim that Hart & Co.

converted its property by failing to pay the sales proceeds,

we likewise conclude that the evidence was legally and factually sufficient to

support the jury’s adverse answer.

The charge instructed the jury that conversion is “[t]he

unauthorized and wrongful assumption and exercise of dominion and control over

the personal property of another, to the exclusion of or inconsistent with the

owner’s rights.” See Waisath v. Lack’s Stores, Inc. , 474

S.W.2d 444, 447 (Tex. 1971). To establish conversion of personal property, a plaintiff

must prove (1) the plaintiff owned, had legal possession of, or was entitled to

possession of the property; (2) the defendant, unlawfully and without

authorization, assumed and exercised dominion and control over the property to

the exclusion of, or inconsistent with, the plaintiff's rights; (3) the

plaintiff made a demand for the return of the property; and (4) the defendant refused

to return the property. Te x. Integrated Conveyor Sys.,

Inc. v. Innovative Conveyor Concepts, Inc. , 300 S.W.3d 348 , 365–66 (Tex. App.—Dallas 2009, pet. denied).

As discussed

above, Hart testified that Hart & Co. attempted to mail the sales proceeds

to Gen’s Antiques. Thus, Gen’s Antiques

cannot conclusively establish that Hart & Co. exercised dominion and

control over the payments inconsistent with Gen’s Antiques’ rights or that Hart

& Co. refused to return the property.

See Francis , 46 S.W.3d

at 241 (holding that reviewing court

may sustain legal sufficiency challenge to issue on which appellant had burden

of proof only if contrary position is conclusively established). Furthermore, as we have previously held that

the evidence was legally and factually sufficient that Hart & Co. attempted

to tender payment, the jury’s adverse finding on the issue of conversion was

not against the great weight and preponderance of the evidence. See id.

at 242 ; Arias ,

265 S.W.3d at 468 . Because the jury

found that Hart & Co. did not convert Gen’s Antiques’ property, Gen’s

Antiques cannot establish that it was entitled to damages or attorney’s fees

based on this claim.

We overrule Gen’s Antiques’ third, fourth, and fifth

points of error as they relate to Gen’s Antiques’ claims concerning payment of

the sales proceeds.

Jury Finding that Gen’s Antiques Breached the

Leases

Hart & Co. asserts several cross-points on appeal,

including a challenge to the trial court’s modified judgment that ordered that

it take nothing on its breach of contract claim and related attorney’s

fees. Hart & Co. asks this Court to

reinstate the trial court’s award of $1,571.75 as damages on its breach of

contract claim. Gen’s Antiques argues

that Hart & Co. failed to properly plead the issues of breach of contract

and related attorney’s fees.

Alternatively, it challenges the legal and factual sufficiency of the

jury’s finding that it breached the terms of the leases.

Sufficiency

of pleadings

In its first and second cross-points on appeal, Hart &

Co. argues that the trial court erred in finding “no live pleadings” from it

alleging breach of contract and attorney’s fees and in modifying the judgment

to order that it take nothing on those claims.

In its third and fourth cross-points, it argues that Gen’s Antiques

waived its complaint on this issue because it did not object at trial and did

not present this issue in its motion for new trial. Thus, we first address the argument that Hart

& Co. failed to properly plead its counterclaims for breach of contract and

related attorney’s fees.

Hart & Co.’s second amended answer and counterclaim

contained causes of action for breach of contract and related attorney’s fees. Those pleadings alleged that Hart & Co.

had “performed all of the promises and covenants of [the leases] for which it

was promisor. In the alternative, if

need there be, [Hart & Co.] has substantially performed all of the promises

and convenants concurrent or conditions precedent

have occurred or been excused for which [it] was the obligor.” Hart & Co. alleged that Gen’s Antiques

breached the lease by failing “to pay all rent[ ,] late

fees[,] and charges due” under the lease, by failing to provide the required

written notice thirty days prior to terminating the month-to-month tenancy and

vacating the property, and by behaving “in a manner which is abusive toward

customers, other dealers, or Lessor or their guests.” Hart & Co. also alleged that it was

entitled to attorney’s fees on the breach of contract claim.

However, Hart & Co.’s third amended petition, filed

for the purpose of adding an affirmative defense to Gen’s Antiques’ defamation

claim, cut off after the beginning of paragraph seventeen, stating, “In the

alternative, if need there be, Counter-Plaintiff[. . . .]” The next page began with paragraph twenty-two,

stating, “Further pleading Counter-Plaintiff avers that

Counter-Defendants , Mary Gret McKenzie d/b/a

Gen’s Antiques and Mary Gret McKenzie [have] withheld

the last month’s rent on grounds that the security deposit is security for

unpaid rent.” Thus, any paragraphs

containing its breach of contract and related attorney’s fees counterclaim are

missing from the third amended petition, which was the live pleading at the

time of trial.

However, Grace Hart testified regarding Gen’s Antiques’

failure to comply with the terms of the leases, and counsel for Hart & Co.

advanced arguments that Gen’s Antiques breached its leases without objection by

Gen’s Antiques that such evidence and argument was not supported by the

pleadings. Furthermore, the jury charge

contained questions asking whether Gen’s Antiques breached the leases and what

constituted reasonable and necessary attorney’s fees for Hart & Co. arising

from Gen’s Antiques’ breach. Again,

Gen’s Antiques presented no objections to these questions.

We agree with Gen’s Antiques that Hart & Co.’s third

amended petition did not state a cause of action for breach of contract and

related attorney’s fees. However, issues

not raised by the pleadings may be tried by the express or implied consent of

the parties. See Tex. R.

Civ. P. 67; Moore v. Altra Energy Techs., Inc. , 321

S.W.3d 727, 733 (Tex. App.—Houston [14th Dist.] 2010, pet. denied). Rule of Civil Procedure 67 provides that

“[w]hen issues not raised by the pleadings are tried by express or implied

consent of the parties, they shall be treated in all

respects as if they had been raised in the pleadings.” Tex.

R. Civ. P. 67. Furthermore, Rule

of Civil Procedure 90 provides that “[e]very defect, omission or fault in a

pleading . . . [that] is not specifically pointed out . . . before the instruction

or charge to the jury . . . shall be deemed to have been waived by the party

seeking reversal on such account.” Tex. R. Civ. P. 90.

We conclude that Gen’s Antiques waived its right to

complain that the charge to the jury was not supported by the pleadings by failing

to object before the instruction or charge to the jury. See id. ;