Opinion
No. 05-05-00603-CV
Opinion Filed August 28, 2006.
On Appeal from the County Court at Law No. 2, Dallas County, Texas, Trial Court Cause No. 03-8528-B.
Affirmed in part; Reversed and Rendered in part.
Before Justices FITZGERALD, FRANCIS, and LANG.
MEMORANDUM OPINION
In this breach of contract dispute, Don Jacobson d/b/a Business Machines International and BMI, Inc. appeal the trial court's judgment in favor of Business Machine Experts, Inc. (BME). In four issues, Jacobson and BMI complain the trial court erred in (1) rendering judgment against Jacobson individually, (2) finding in BME's favor on its breach of contract claim, (3) failing to apply an indemnification provision to reduce the damage award, and (4) awarding appellate attorney's fees.
We agree the trial court erred in awarding damages against Jacobson individually. Consequently, we reverse the trial court's judgment as to that issue and render judgment that BME take nothing against Jacobson individually. In all other respects, we affirm the trial court's judgment.
In 1992, Jacobson founded and was president of BMI, a company which sells business equipment. Ten years later, Jacobson began negotiations to sell the company's assets to Harry Otto's company, BME. Ultimately, the parties agreed on a $650,000 purchase price, and Jacobson and Otto, as the respective presidents of their companies, signed the Asset Purchase Agreement.
Pursuant to the agreement, BME purchased all assets of BMI unless they were specifically excluded. The purchased assets included a Bank of America account. Also, BME agreed to assume only certain liabilities and obligations of BMI as set out in the agreement. The parties closed the deal on October 29, 2003; however, the effective date of the agreement was four weeks earlier, October 1, 2003. At issue in this appeal are nine checks, totaling $19,261.01, that Jacobson issued on the Bank of America account during those four weeks. Four of the checks, accounting for $13,600, were paid to Jacobson or his wife. BME contended at trial that the checks were written for obligations that it had not agreed to assume; BMI contended the checks were disclosed to BME prior to the sale and BME accepted the disbursements.
Following a bench trial, the trial court found in BME's favor and awarded BME $19,621.01 from BMI and Jacobson for breach of contract for improperly disbursing funds through unauthorized checks and $470.98 for nonpayment of taxes. In addition, the trial court awarded attorney's fees against BMI and Jacobson. The trial court offset this award against damages awarded to BMI, leaving a net award to BME of $12,000.32. BMI and Jacobson appealed.
In the first issue, Jacobson argues the trial court erred in awarding damages against him individually because there was no contract between him and BME and BME did not plead breach of contract against him in his individual capacity. In response, BME concedes there was no contract between BME and Jacobson, individually, and that it did not plead a breach of contract claim against Jacobson. However, it argues reversal is not required because language in the judgment "making Jacobson a party to the contract" was a "scrivener's error" and there was sufficient evidence to hold Jacobson liable under an alter ego theory.
As for the "scrivener's error" argument, the law is clear that a formal judgment, plain and unambiguous in its terms, speaks for itself and is not to be impeached by or interpreted in light of prior statements or acts of the court. Austin v. Kerr-McGee Ref. Corp., 25 S.W.3d 280, 287 (Tex.App.-Texarkana 2000, no pet.). Here, the judgment unambiguously awards damages against Jacobson for breach of contract; accordingly, we will not interpret or construct contrary to its express terms.
Likewise, we reject BME's argument that there was sufficient evidence to establish that Jacobson "used the corporate form as part of a basically unfair device to achieve an inequitable result, requiring this Court to disregard the corporate fiction and hold Jacobson individually liable." BME did not plead an alter ego theory nor is there any evidence that such a theory was tried by consent. See Johnson v. Structured Asset Servs., LLC, 148 S.W.3d 711, 719 (Tex.App.-Dallas 2004, no pet.) (explaining that when determining whether issue tried by consent, court examines record, not for evidence of issue, but for evidence of trial of issue). We conclude the trial court erred in rendering judgment against Jacobson individually for breach of contract. Accordingly, we sustain the first issue and render judgment that BME take nothing against Jacobson individually.
In the second issue, BMI argues the trial court erred in awarding judgment against it for breach of contract for improper disbursement of funds through the nine checks written on the Bank of America account. BMI argues the checks were written in the normal course of business, were disclosed within the four corners of the agreement, and were accepted by BME when it signed the agreement. BME counters that the plain language of the agreement provided the specific liabilities it assumed, and the payments were not listed in those liabilities and were thus improper. We agree with BME.
When examining the language of a contract, we must give effect to the true intention of the parties as expressed in the document. See Lenape Res. Corp. v. Tenn. Gas Pipeline Co., 925 S.W.2d 565, 574 (Tex. 1996). We accord the language in a contract its plain meaning unless doing so would defeat the parties' intent. DeWitt County Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 101 (Tex. 1999). We presume the parties intended every clause to have an effect. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (1996).
The agreement established October 1, 2002 as the "effective date" of the agreement and of closing the transaction for accounting purposes, "including, without limitation, calculation of the Assumed Obligations." Section 2.1 of the agreement set out the liabilities and obligations BME was assuming and provided, in relevant part, as follows:
2.1. Assumed Obligations. . . . [BME] hereby agrees that after the Closing Date it shall, [sic] pay, perform, discharge and/or assume only the following known liabilities associated with the Business carried out at the Facility and no others (the "Assumed Obligations"). Thus the Assumed Obligations are:
* * *
b. the liabilities and obligations of [BMI] to pay [BMI's] accrued liabilities as of the Effective Date, a listing of which as of October 1, 2002, is set forth on Schedule 2.1(b)[.]
Section 2.2 addressed liabilities not being assumed and expressly excluded "all liabilities and obligations that have accrued, become owing or arise on or prior to the Effective Date pertaining to the Assets or Business that are not otherwise assumed under Section 2.1 above[.]"
It is undisputed that the checks were written — after the effective date of the agreement — for liabilities not provided for in Section 2.1. Moreover, BME does not dispute that the checks were written on the Bank of America account, an asset purchased as of the effective date. Consequently, we conclude that, under the express terms of the contract, the liabilities paid by the checks were not authorized.
In reaching this conclusion, we are unpersuaded by BMI's argument that because the payments were disclosed to BME at closing, and BME elected not to terminate the agreement, BME accepted the liabilities. That BMI disclosed the payments as part of exceptions to the financial statement does not transform the payments into "Assumed Obligations" of BME. Nor does BMI's duty to continue running the business after October 1, 2002 somehow trump the specific provisions regarding which liabilities BME was willing to assume. We reject the second issue.
In the third issue, BMI argues the judgment "does not take into account" a seller indemnification provision in the agreement pursuant to which BME's damages should be reduced by $3000.
In its brief, BMI provides no case law to support its position; consequently, this issue is inadequately briefed. See Tex.R.App.P. 38.1(h). Moreover, BMI has not cited this Court to any place in the record where it requested the trial court apply the indemnification provision or complained about trial court's failure to apply the provision. We have reviewed the Motion for Hearing on Proposed Judgment and Motion for New Trial, and this issue is not addressed in either. Under these circumstances, we conclude the complaint waived. See Tex.R.App.P. 33.1.
In the fourth issue, BMI complains the trial court erred in awarding attorney's fees to BME in the event of an appeal because there was no evidence to support such an award. Again, we disagree.
Section 38.001 provides that a party may recover its attorney's fees in a breach of contract claim. Tex. Civ. Prac. Rem. Code Ann. § 38.001(8) (Vernon 1997). When considering the issue of attorney's fees, the trial court may take judicial notice of the usual and customary attorney's fees and the contents of the file without receiving further evidence in a proceeding before the court. Id. at § 38.004. A trial court's own proceedings, coupled with the fact that it may take judicial notice under section 38.004, constitutes some evidence to support the award of attorney's fees on appeal. Gill Sav. Ass'n v. Chair King, Inc., 797 S.W.2d 31, 32 (Tex. 1990) (per curiam). Because the trial court in this case could take judicial notice of the contents of the file and the "usual and customary" fees necessary for appeal, we conclude the trial court did not err in awarding BME $1500 in conditional appellate fees. We resolve the fourth issue against BMI.
We reverse the trial court's judgment as it pertains to Don Jacobson and render judgment that BME take nothing against Jacobson individually. We affirm the judgment in all other respects.