Opinion
05-22-00445-CV
02-09-2024
RICHMAN TRUSTS, A TEXAS GENERAL PARTNERSHIP, MARC H. RICHMAN, AND HARVEY A. RICHMAN, Appellants/Cross-Appellees v. RALPH LUBINS TIME, INDIVIDUALLY, AND AS INDEPENDENT EXECUTOR OF THE ESTATE OF JUDITH SHARON RICHMAN, DECEASED, AND AS TRUSTEE OF THE RICHMAN 2008, ET AL., Appellees/Cross-Appellants
On Appeal from the 68th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-19-15404
Before Justices Molberg, Pedersen, III, and Nowell
MEMORANDUM OPINION
ERIN A. NOWELL, JUSTICE
The underlying suit involves a family partnership dispute between two nieces, a nephew, and their two uncles, concerning whether specific heirs of Judith Richman are partners in a general partnership and whether the partnership owns three parcels of property in Dallas, Texas.
For simplicity, we refer to Appellants/Cross-Appellees Richman Trusts, a Texas General Partnership, Marc H. Richman, and Harvey A. Richman, collectively as RTP or individually as Marc or Harvey. We refer to Appellees/Cross-Appellants Ralph Lubins Time, Individually, and as Independent Executor of the Estate of Judith Sharon Richman, Deceased, and as Trustee of the Richman 2008 Revocable Trust, and as Trustee of the Ralph Lubins Time Exempt Trust, and Robin Michele Beckerman, Individually, and as Trustee of the Stefani Alyson Beckerman Exempt Trust, and as Trustee of the Victoria Time Beckerman Exempt Trust, and Brenda Deane Time, Individually, and as Trustee of the Arielle Time Burnstein Exempt Trust, and as Trustee of the Raphael Time Burnstein Exempt Trust, and as Trustee of the Zev Time Burnstein Exempt Trust, collectively as the Heirs or individually as Ralph, Michele, or Brenda.
The trial court granted RTP's motion for partial summary judgment and concluded, as a matter of law, "there is not [a] material fact dispute pertaining to [the Heirs] claims for judicial declarations that they are general partners of the Richman Trust Partnership." The remaining claims proceeded to trial. A jury determined, among other things, the three properties at issue were not acquired with RTP funds.
RTP raises eight issues on appeal: (1) the evidence is legally and factually insufficient to support the jury's finding the properties at issue were not purchased with RTP funds; (2) the evidence is legally and factually insufficient to support the jury's finding that Judith, Marc, and Harvey did not intend for the properties to be owned by RTP instead of themselves individually; (3) the trial court erred by not submitting an adverse possession jury question; (4) the evidence does not support the award of redemption damages; (5) the trial court erred by awarding lost profits; (6) the trial court lacked jurisdiction to grant the Heirs exclusive possession of the properties at issue and award writs of possession in their favor; (7) the trial court abused its discretion by awarding prejudgment interest; and (8) the trial court abused its discretion by awarding costs. In a single cross-issue, the Heirs challenge the trial court's order granting partial summary judgment in favor of RTP.
We reverse the trial court's December 7, 2020 order granting partial summary judgment and remand for further proceedings. We vacate paragraph 5 of the final judgment. We modify paragraph 6 to reflect the correct date of the order granting partial summary judgment and modify paragraphs 12 and 13 to reflect the proper amount of both prejudgment interest and daily interest. In all other respects, we affirm the final judgment.
Statement of Facts
The Children and RTP
Victor Richman was a prominent businessman and tax attorney in Dallas. He and his wife, Maryon, had three children: Judith, Harvey, and Marc. In 1955, they created two trusts for each child. Each of the six trusts terminated when the beneficiary turned thirty, and the trusts' assets were distributed to that child, individually. Judith turned thirty in 1968, Harvey in 1969, and Marc in 1975.
While it is unclear when, at some point Victor created RTP, a Texas general partnership. There was no written partnership agreement for RTP; however, it is undisputed Judith, Harvey, and Marc were RTP's general partners, each with an equal one-third partnership interest. Victor was not a partner, but he managed and controlled RTP, which included managing all the Richman family properties.
At trial, the parties disputed when RTP formed; however, the date of formation is not relevant for disposition of the appeal.
The Properties
Victor and Maryon purchased numerous real properties in Dallas (RTP Partnership Properties) through the years. Whether they used their individual funds to purchase the three specific properties at issue or gifted funds to RTP that RTP subsequently used to purchase the properties was disputed at trial and now on appeal. The specific properties at issue (the Properties in Dispute) are as follows: (1) 304 and 306 S. Record, Dallas, Texas 75202, (2) 2117-2129 Greenville Avenue, Dallas, Texas, 75206, and (3) 5632 Richmond Avenue, Dallas, Texas 75206.
The Record Street Properties were purchased on October 31, 1967, in the names of the six trusts (each Trust receiving an undivided 1/6th interest). The Greenville Avenue Property was purchased on March 4, 1969, in the name of the Harvey Richman Trusts No. 1 and 2, the Marc Richman Trusts No. 1 and 2, and Judith, individually, because she had already turned thirty. The Richmond Avenue Property was purchased on October 9, 1972, also in the names of the four trusts and Judith, individually.
When Victor's health began to decline in 1985, Marc, who was also an attorney, became RTP's managing partner. At one point in time, Marc managed "nine properties with 16 leases that were Richman family involved."
The Heirs
Judith died on August 29, 2008, leaving three children: Ralph, Robin, and Brenda. Ralph had no children. Brenda had three children: Raphael, Arielle, and Zev. Robin had two children: Stefani and Victoria.
Before her death, Judith created the 2008 Richman Revocable Trust (the 2008 Trust) and upon her death, her Estate bequeathed all of her property, which included her "33.333% general partner interest in [RTP]" to the 2008 Trust. The 2008 Trust identified Ralph as trustee with the following beneficiaries:
A. 33.3333% to Ralph Lubins Time, in trust,
B. 13.3333% to Raphael Time Burstein, in trust;
C. 13.3333% to Arielle Time Burstein, in trust;
D. 13.3333% to Zev Time Burstein, in trust;
E. 13.3333% to Stefani Alyson Beckerman, in trust; and
F. 13.3333% to Victoria Time Beckerman, in trust.
In administering the Estate, Ralph as trustee of the 2008 Trust, assigned Judith's one-third interest in RTP to the Heirs as listed above. The "Assignment of Partnership Interest" (Assignment) was executed on January 6, 2010, but made effective as of August 1, 2009. Marc signed the Assignment as general partner under the notation, "NOTICE RECEIVED AND TRANSFER ACCEPTED."
The Decade Leading to Litigation
For approximately the next decade, Ralph, Brenda, and Robin received what they believed were RTP partnership distributions and IRS Schedule K-1's. The distributions were always equal to Marc's and Harvey's distributions. Marc regularly updated the Heirs about property issues like parking, repairs, and zoning. However, Marc maintains he never believed the Heirs were RTP partners and did not believe the Assignment made them partners. He described his updates related to the properties as "trying to do right" by his sister's children. He believed Judith's death resulted in her withdrawal from RTP leaving the Heirs with only a creditor's redemption interest in RTP.
In September 2018, Marc sent the Heirs a "Redemption Letter" for their "Creditors' interest in the Richman Trusts." The letter included an expert valuation of the fair market value of Judith's one-third interest in RTP at the time of her death. The valuation totaled $509,200.00.
Upon realizing there was a difference of opinion surrounding the Heirs' partnership status in RTP, the Heirs investigated the Assignment and Properties in Dispute. The deeds to the Properties in Dispute revealed the properties had been deeded to Judith, Harvey, and Marc in individual one-third interests and not to RTP. Despite the individuals' names being on the deeds, Marc believed RTP owned the three properties. The Heirs believed Judith, Harvey, and Marc owned them as tenants-in-common before Judith's death.
The Heirs also disagreed with the valuation of Judith's redemption interest. The redemption letter gave the Heirs one year to accept the valuation or file suit to challenge the valuation. The Heirs filed suit.
The Lawsuit, Subsequent Court Proceedings, and Final Judgment
The Heirs filed a trespass-to-try-title suit seeking determinations that they are partners in RTP and owners of an undivided one-third interest in the Properties in Dispute. In the alternative, they sought a determination of the redemption price of Judith's one-third partnership interest in RTP on the date of her death. They also alleged Marc and Harvey breached their fiduciary duties resulting in lost profits, loss of reputation regarding certain pieces of real estate, and loss of countless business opportunities.
RTP answered and counterclaimed seeking a declaration the Heirs were not RTP partners and RTP owned the Properties in Dispute. In the alternative, if the partners owned the Properties in Dispute as co-tenants, then RTP sought a declaration that RTP had adversely possessed the Properties in Dispute because of the partners' lack of individual use or management.
RTP subsequently filed a motion for partial summary judgment on the Heirs' request to be declared RTP partners. The trial court granted the motion thereby concluding, as a matter of law, Judith's death was an event of withdrawal pursuant to the Texas Business Organizations Code, and the Heirs were never RTP partners.
The remainder of the case proceeded to trial before a six-person jury. At the conclusion of testimony, the jury was asked three questions: (1) "Do you find that the Properties in Dispute were acquired with RTP property?"; (2) "Do you find that the intent of the partners of RTP was that the Properties in Dispute were owned by RTP rather than by the individual partners?"; and (3) "What is the redemption price for Judith Richman's one-third (1/3) partnership interest in the Richman Trust Partnership?" The trial court denied RTP's request for a jury question on adverse possession, and the Heirs dropped their breach of fiduciary duty claim against Marc and Harvey.
The jury answered "No" to questions 1 and 2 and determined Judith's redemption price for her one-third interest was $228,426.67. The trial court entered judgment on the verdict and subsequently denied RTP's motion for new trial, motion to modify judgment, and judgment notwithstanding the verdict. Both parties timely filed notices of appeal.
Traditional Partial Summary Judgment
In a cross-issue, the Heirs challenge the trial court's order granting a partial traditional summary judgment in favor of RTP in which the court determined, as a matter of law, the Heirs did not have a general partnership interest in RTP.
The Heirs sought the following judicial declarations in the trial court:
(1) The Assignment of Partnership Interest document is valid and enforceable;
(2) Judith's one-third general partner interest in RTP was assigned/transferred to them with the consent of Marc and Harvey, the remaining partners;
(3) As a result, each of the Heirs hold a portion of Judith's one-third general partner interest in RTP;
(4) Each Heir is entitled to their pro-rata share of all RTP profits as RTP partners; and (5) Marc has been responsible for managing all RTP assets since August 28, 2008.
In its partial summary judgment motion, RTP contended the Heirs could not rely upon the Assignment executed sixteen months after Judith's death because her death resulted in an immediate withdrawal from the partnership and the Estate thereby gained only a creditor's redemption interest in RTP. RTP further asserted neither Marc nor Harvey executed the Assignment consenting to the Heirs' becoming partners. Accordingly, RTP argued the Heirs' claim to a general partnership interest failed as a matter of law.
The Heirs filed a response arguing Marc and Harvey consented to their admission as partners and subsequently acknowledged and accepted the transfer of Judith's one-third general partnership interest through Marc's signature on the Assignment. They argued the reasonable interpretation of the unambiguous Assignment demonstrates a transfer of Judith's RTP partnership interest to the Heirs. The Heirs further asserted RTP tax documents and checks issued to them for years after Judith's death created a fact issue about their partnership status. The parties raise these same arguments on appeal.
We review the trial court's summary judgment de novo. Provident Life &Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Id. Under Texas Rule of Civil Procedure 166a(c), the party moving for summary judgment bears the burden to show no genuine issue of material fact exists and is entitled to judgment as a matter of law. Id. at 216. If the movant satisfies its burden, the burden shifts to the nonmovant to raise a fact issue precluding summary judgment. Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018). A fact issue exists if more than a scintilla of evidence establishes the existence of the challenged element. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). More than a scintilla of evidence exists when the evidence rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. Id. at 601.
We review a declaratory judgment rendered by summary judgment under the same standards that govern summary judgments generally. Chang v. Liu, No. 05-20-00977-CV, 2022 WL 17175006, at *5 (Tex. App.-Dallas Nov. 23, 2022, no pet.) (mem. op.); Aery v. Hoskins, Inc., 493 S.W.3d 684, 690-91 (Tex. App.-San Antonio 2016, pet. denied). "A declaratory judgment is not an appropriate remedy to resolve a purely factual dispute[,]" and "a plaintiff who moves for summary judgment on a claim for declaratory relief must conclusively prove no genuine issue of material fact exists, and it is entitled to the requested declaratory relief as a matter of law." Aery, 493 S.W.3d at 691.
It is undisputed RTP never had a written partnership agreement; therefore, it is a general partnership under Texas law and governed by the Texas Business Organizations Code. See TEX. BUS. ORGS. CODE ANN. § 152.002(a). The parties agree that Marc and Harvey, as the remaining partners after Judith's death, both needed to consent for the Heirs to become partners. See id. § 152.201. It is also undisputed the Assignment is valid and enforceable; however, the parties dispute the effect of the Assignment with regard to Judith's one-third RTP interest.
Section 152.501(a) of the Texas Business Organizations Code provides that a "person ceases to be a partner on the occurrence of an event of withdrawal." Id. § 152.501(a). An "event of withdrawal of a partner occurs" upon "the partner's death." Id. § 152.501(b)(7)(a).
Section 152.406, provides, in relevant part, the following regarding the "Effect of Death" on "Partnership Interest":
(a) For purposes of this code: . . .
(2) on the death of a partner:
(A) if the partnership interest of the deceased is subject to redemption under Subchapter H, the partner's surviving spouse, if any, and an heir, devisee, personal representative, or other successor of the partner, to the extent of their representative right to the redemption price, are creditors of the partnership until the redemption price is paid.Id. § 152.406(a)(2)(A).
RTP argues Judith's death resulted in her withdrawal from the partnership, leaving her Estate and the 2008 Trust a redemption interest in RTP, not a partnership interest. See id. §§ 152.501(a), (b)(7)(A), 152.406(a)(2)(A). This interpretation presupposes that the transformation of Judith's general partnership interest to a redemption interest was not only automatic upon her death, but also unalterable by the parties. Section 152.406(c) of the business and organizations code states otherwise: "This chapter does not impair an agreement for the purchase or sale of a partnership interest at any time, including on the death or divorce of an owner of the partnership." Id. § 152.406(c).
According to the statute, Judith's partnership interest was subject to a redemption upon her death. However, the statute allows the parties to enter into an agreement for the purchase or sale of the partnership interest at any time, "including on the death" of the partnership interest owner. Id. Thus, we begin by considering whether the Assignment created an agreement for the purchase or sale of Judith's partnership interest, regardless of her death.
When construing a written assignment, we apply the rules of interpretation and construction applicable to contracts. Elness Swenson Graham Architects, Inc. v. RLJII-C Austin Air, LP, 520 S.W.3d 145, 154 (Tex. App.-Austin 2017, pet. denied). Our primary goal is to ascertain the intent of the parties as expressed in the written assignment. Id. To accomplish that objective, we examine and consider the entire writing in an effort "to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless." Id.
Here, the title of the document is "Assignment of Partnership Interest." The Assignment acknowledged, "Judith Sharon Richman owned a 33.3333% general partner interest in the Richman Trust Investments, a Texas general partnership, (the "Partnership") at the time of her death." It further recognized that "pursuant to the terms of her Last Will and Testament," all of her interest in the Partnership passed to the Richman 2008 Trust, which then, pursuant to the Trust terms, distributed the 33.3333% interest in the Partnership to the various Heirs. Ralph, in his capacity as the independent executor of the Estate and in his capacity as trustee of the 2008 Trust, "instruct[ed] the General Partner of the Partnership, in writing, of Assignor's and Assignee's desire that Assignor assign to Assignee Assignor's 33.3333% Partnership Interest (the "Assigned Partnership Interest") in the Partnership as set forth above." The Assignment states the "Assignor does hereby grant, sell, assign, transfer, and convey the Assigned Partnership Interest unto each Assignee ...."
11.1111% to Ralph Lubins Time, as Trustee of the Ralph Lubins Time Exempt Trust; 4.44444% to Brenda Deane Time, as Trustee of the Arielle Time Burnstein Exempt Trust; 4.44444% to Brenda Deane Time, as Trustee of the Raphael Time Burnstein Exempt Trust; 4.44444% to Brenda Deane Time, as Trustee of the Zev Time Burnstein Exempt Trust; 4.44444% to Robin Michele Beckerman, as Trustee of the Victoria Time Beckerman Exempt Trust; and 4.4444% to Robin Michele Beckerman, as Trustee of the Stefani Alyson Beckerman Exempt Trust.
Marc signed the Assignment on behalf of RTP as general partner. Directly above his signature, the Assignment specified, "NOTICE RECEIVED AND TRANSFER ACCEPTED." According to the Heirs, their partnership status went unquestioned for ten years before Marc suddenly claimed Judith's death resulted in a complete withdrawal of her partnership interest regardless of the Assignment. Moreover, the Assignment is titled "Assignment of Partnership Interest" and repeatedly identifies Judith's 33.3333% partnership interest in RTP as the interest being assigned through her Will and the 2008 Trust, which Marc "received" and "accepted" by signing the document as RTP's general partner.
Contrary to RTP's position, Judith's death did not foreclose the possibility of transferring her partnership interest. RTP provides no authority, and we have found none, to support its argument that section 152.406(c) is only a prospective provision allowing a partner to contract for the sale of a partnership interest before the event of withdrawal. Thus, the Assignment does not establish, as a matter of law, that the Heirs were entitled to only a redemption interest in RTP. In fact, the Assignment never uses the term "redemption interest," but instead refers to the "partnership interest" eight times.
Harvey testified during his deposition that it was "reasonably correct" the Assignment was trying to transfer Judith's partnership interest, which went to the 2008 Trust, through her will to the Heirs.
RTP contends that regardless of whether the Assignment could transfer a partnership interest, summary judgment was still appropriate because there is no evidence Harvey and Marc consented to the transfer. We disagree and, as explained below, conclude the Heirs presented more than a scintilla of evidence raising a fact issue as to whether Marc and Harvey consented.
Section 152.201 states, "A person may become a partner only with the consent of all partners." TEX. BUS. ORGS. CODE ANN. §152.201. Importantly, this section does not require consent in writing. Marc's signature, as RTP's general partner, bound RTP to the Assignment through his "accept[ance]" of the "transfer." See id. § 152.302 ("an act of a partner, including the execution of an instrument in the partnership name, binds the partnership"). Moreover, Marc did not argue in appellants' motion for partial summary judgment that his signature on the Assignment was no evidence of his consent, but rather that his signature "fails to provide definitive proof of consent." The Heirs did not need to provide definitive proof to overcome summary judgment. Instead, they only needed to present more than a scintilla of evidence creating a fact issue. Ridgeway, 135 S.W.3d at 600-01.
The summary judgment record demonstrates Marc and Harvey discussed "major" decisions affecting RTP. Harvey explained during his deposition that Marc would talk to him, he would tell Marc whether he agreed or disagreed, and "Marc signs whatever we both agree to." Marc likewise testified that when he needed Harvey's consent for RTP matters, they conferred, and then he signed on behalf of the partnership as managing general partner. While section 152.201 requires the consent of all partners before another person may become a partner, it does not require such consent in writing. See TEX. BUS. ORGS. CODE ANN. §152.201. Thus, Marc's and Harvey's testimony provides more than a scintilla of evidence raising a genuine issue of material fact as to whether Marc executed the Assignment as managing general partner of RTP and on behalf of Harvey because they had discussed and Harvey had consented to the admission of the Heirs as partners.
The record also contains disputed testimony about conversations between family members regarding Judith's RTP interest. Marc testified he told the Heirs in the hospital chapel before Judith died, they would not become partners. Marc testified he never believed they were partners, never said they were partners, never accepted them as partners, and never wanted them to be partners. He also stated the Heirs agreed in writing on several occasions they were only creditors with a redemption interest, and they admitted consulting an attorney who told them the same. Marc explained he executed the Assignment with an understanding that "Judy's estate's interest, their redemptive interest, was transferred to these people and that I was to pay them. And I said, okay, I'll do that. And I did do that."
Ralph, however, testified Marc and Harvey treated the Heirs as partners prior to the Assignment. "They provided consent shortly after my mom passed away in 2008." He testified the Assignment was backdated with the effective date of August 1, 2009, because that was the date they agreed the Heirs were admitted into the partnership. Ralph explained,
There was never any question at the time for years. We simply thought and acted as partners. We received partnership draws. We had meetings and talked about property maintenance. We eventually had
property together. I received IRS documents and tax filings that claimed me as a partner. I paid taxes on my partnership income, it referenced my losses, my partnership losses in [RTP].
Finally, the Heirs produced more than a scintilla of evidence that Marc and Harvey consented to the Heirs becoming partners through post-Assignment conduct. The Heirs produced years of K-1's indicating their alleged partnership income. A CPA told Ralph the K-1's indicated they were RTP partners "in the eyes of the IRS." Marc's explanation that the Heirs received K-1's because his CPA decided the IRS needed documentation to account for the money the Heirs were receiving as creditors merely highlights a disputed fact issue as to why the Heirs received tax documents generally provided only to partners. The Heirs also produced years of checks in which the Heirs received "draws," or partnership distributions signed by Marc, in equal one-third amounts. To the extent Marc explained the "draws" were merely payments toward the Heirs as redemption creditors, this again creates a fact issue regarding post-Assignment conduct evidencing whether Marc and Harvey consented to the Heirs becoming RTP partners.
Viewing the Assignment and the summary judgment evidence of the parties' conduct in the light most favorable to the Heirs, there is more than a scintilla of evidence raising a genuine issue of material fact as to whether Marc and Harvey consented to the Heirs becoming RTP partners. We sustain the Heirs' cross-issue, reverse the partial summary judgment, and remand for further proceedings.
Sufficiency of the Evidence to Support Jury Questions No. 1 and No. 2
In its first two issues, RTP challenges the legal and factual sufficiency of the evidence to support the jury's answers to Questions No. 1 and No. 2. Question No. 1 asked: "Do you find the Properties in Dispute were acquired with RTP property?" Question No. 2 asked, "Do you find that the intent of the partners of RTP was that the Properties in Dispute were owned by RTP rather than by the individual partners?" The jury answered, "No" to both questions.
A party will prevail on its legal-sufficiency challenge of the evidence supporting an adverse finding on an issue for which the opposing party bears the burden of proof if there is a complete absence of evidence of a vital fact or if the evidence offered to prove a vital fact is no more than a scintilla. Waste Mgmt. of Tex., Inc. v. Tex. Disposal Sys. Landfill, Inc., 434 S.W.3d 142, 156 (Tex. 2014). We must credit favorable evidence that supports the verdict, if reasonable jurors could, and disregard contrary evidence unless reasonable jurors could not. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). Anything more than a scintilla of evidence is legally sufficient to support a jury's finding. Cont'l Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 450 (Tex. 1996). To be more than a scintilla, the evidence must "rise to a level that would enable reasonable and fair-minded people to differ in their conclusions." Gharda USA, Inc. v. Control Sols., Inc., 464 S.W.3d 338, 347 (Tex. 2015).
In contrast to a legal sufficiency review, a challenge to the factual sufficiency of the evidence requires us to "consider and weigh all the evidence," and to "set aside the verdict only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust." Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curiam); see also CExchange, LLC v. Top Wireless Wholesaler, No. 05-17-01318-CV, 2019 WL 3986299, at *6 (Tex. App.-Dallas Aug. 23, 2019, pet. denied) (mem. op.).
Texas Business Organizations Code section 152.102 provides for the classification of partnership property:
(a) Property is partnership property if acquired in the name of:
(1) the partnership; or
(2) one or more partners, regardless of whether the name of the partnership is indicated, if the instrument transferring title to the property indicates:
(A) the person's capacity as a partner; or
(B) the existence of a partnership.
(b) Property is presumed to be partnership property if acquired with partnership property, regardless of whether the property is acquired as provided by Subsection (a).
(c) Property acquired in the name of one or more partners is presumed to be the partner's property, regardless of whether the property is used for partnership purposes, if the instrument transferring title to the property does not indicate the person's capacity as a partner or the existence of a partnership, and if the property is not acquired with partnership property.
TEX. BUS. ORGS. CODE ANN. § 152.102(a)-(d). The deeds to the Properties in Dispute do not indicate Judith, Harvey, and Marc's capacity as partners or the existence of a partnership. Thus, appellants challenge the sufficiency of the evidence to support subsection (b) because the "unequivocal" testimony from Marc and Jerry Candy, the long-time family accountant, established Victor and Maryon gifted funds to RTP; those funds were deposited into RTP's Mercantile Bank account; and RTP then used those funds to purchase the Properties in Dispute. As explained below, the jury heard evidence other than Marc's and Candy's "unequivocal" testimony that supports the jury's finding.
It is undisputed no documents exist establishing the source of funds for the initial acquisition of the Properties in Dispute. Therefore, the jury only heard witness testimony about the source of funds for the purchases.
Robin testified, "It was always clear with my grandparents they were creating a legacy." Although Robin admitted she did not know where the funds to purchase the Properties in Dispute originated, she knew Victor and Maryon purchased the properties based on "talking to my grandparents and seeing legal paperwork that detailed it all."
The jury was read a portion of Harvey's deposition in which he said Victor and "probably mother too" purchased the Properties in Dispute. Similarly, Marc testified during his deposition that "I'm sure it was my parents' funds" that purchased the properties. "My parents, it was their money that purchased the property."
Despite Marc's deposition testimony, he explained during trial that he never denied his parents used their money, but he believed they "used the vehicle of the partnership to do it." He testified Victor gifted the funds to the partnership and then RTP used the gifted funds to buy the Properties in Dispute. Marc claimed Victor filed a gift tax return supporting his position; however, this document was never produced in discovery or admitted into evidence.
In an email dated January 7, 2015, Marc stated, "When Pop bought 304 and 306 in 1967 he put the title in Judy Richman Trust #1 and #2, HAR Trusts #1 and #2, and MHR Trusts #1 and #2." Nothing in the email indicated Victor bought the Properties in Dispute for RTP with RTP property or that Marc's reference to "Pop" meant RTP. Marc dismissed the language he used in the email because, "I didn't do a lawyer statement because I was talking to my nieces and nephews;" therefore, he did not include the details regarding Victor's gift to the partnership.
Marc also testified that Candy, the family's long-time accountant, told him about the gift to RTP to purchase the Properties in Dispute. Candy knew the Richman family his entire life and started bookkeeping for Victor in the late 1960s. By 1974, he was doing all Victor's accounting work.
Candy testified the Properties in Dispute were purchased with funds from RTP's bank account at Mercantile Bank. He had personal knowledge of the transaction by "doing the books . . . and posting the cash receipts and disbursement journal to the general ledger." Despite not preparing his first tax return for the family until 1974, he testified he looked at the tax returns for prior years because he received copies. He also claimed he "randomly asked" to see the gift tax return from 1967 (the year the Record Street Properties were purchased), despite not working for the family at that time. Candy did not share his recollection of the gift tax return with RTP's counsel until one week before trial. Despite being confident in his recollection of the 1967 gift tax return, he could not answer questions about the costs of the Properties in Dispute, when the Greenville Property was acquired, or who were the grantees of the properties. The last time Candy recalled looking at any other tax returns was "probably ten years ago."
Finally, George Love testified as an expert and explained that in the early sixties and seventies, it was industry standard for partnership property titles to be placed in the name of individual partners to avoid taxation at the partnership level (the higher rate). However, he also acknowledged it was an "accepted practice" for general partnerships in the sixties to purchase property in the name of the partnership.
"Jurors are the sole judges of the credibility of the witnesses and the weight to give their testimony." City of Keller, 168 S.W.3d at 819. This includes the testimony of experts. See Thota v. Young, 366 S.W.3d 678, 695-96 (Tex. 2012). Love's expert testimony did not conclusively prove the Properties in Dispute were acquired with RTP property based on industry standards at the time of purchase, particularly because he admitted he had no personal knowledge about RTP or the family trusts. And, the jury did not have to believe Love's conflicting statements about the "industry standard."
In summary, the jury could reasonably discredit Marc's trial testimony about the purchase of the Properties in Dispute and instead believe Marc's and Harvey's deposition testimony in which they said their parents bought the properties. It was within the jury's province to assess the credibility of both Marc and Candy. Neither had any documentation to support who funded the properties, and the first mention of the alleged gift tax return was shortly before trial. The jury was free to disbelieve Candy's memory particularly in light of the other details he could not recall about the Richman family business. In circumstances such as this when a reasonable jury could resolve evidence either way, we presume the jury did so in favor of the prevailing party. City of Keller, 168 S.W.3d at 821 ("Courts reviewing all the evidence in a light favorable to the verdict thus assume that jurors credited testimony favorable to the verdict and disbelieved testimony contrary to it.").
Accordingly, applying the legal sufficiency standard of review and crediting evidence favoring the verdict if reasonable jurors could and disregarding contrary evidence unless reasonable jurors could not, we conclude more than a scintilla of competent evidence supports the jury's finding the Properties in Dispute were not acquired with RTP property. Gharda USA, Inc., 464 S.W.3d at 347; City of Keller, 168 S.W.3d at 827 ("The final test for legal sufficiency must always be whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review."). After considering and weighing all the evidence, we likewise conclude the jury's finding is not so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. See Cain, 709 S.W.2d at 176; see also CExchange, LLC, 2019 WL 3986299, at *6. Thus, the evidence is legally and factually sufficient to support the trial court's judgment. City of Keller, 168 S.W.3d at 827. We overrule RTP's first issue.
We now consider whether the evidence is legally and factually sufficient to support the jury's finding that Judith, Harvey, and Marc did not intend for the Properties in Dispute to be owned by RTP. The jury was instructed as follows:
It is presumed that the Properties in Dispute are not RTP Properties because you found in Question number 1 that the Properties in Dispute were not acquired with partnership property. That presumption can be overcome if Defendants prove, by a preponderance of the evidence, that RTP's partners intended the Properties in Dispute to be RTP's property. (emphasis added)
In determining whether the Properties in Dispute are partnership assets, the fact that the property is in the name of the partners is not conclusive but rather the intent of the partners controls. Mere use of the property in a partnership operation does not make it an asset of the partnership. Instead, whether property used in the partnership's operation is owned by the partnership is [a] question of intent.
Circumstances that may be considered in determining whether RTP's partners intended the Properties in Dispute to be RTP's property include:
• The partnership representing to taxing authorities it was partnership property;
• The partnership paying the taxes and insurance on the property;
• The partnership paying for repairs and renovations to the property;
• The partnership not paying rent to the partners for use of property;
• Sworn statements by partners that the property is partnership property;
• The partnership reporting income as partnership income;
• The partnership's books of accounts, records, cancelled checks, financial statements, and tax returns showing the land and improvements to be partnership property; and
• The individual partners did not pay for the property.
It is well-settled "the fact the deed was taken in [the partners'] name is not conclusive in determining whether the land was a partnership asset." King v. Evans, 791 S.W.2d 531, 533 (Tex. App.-San Antonio 1990, writ denied); see also Etheridge v. Opitz, 580 S.W.2d 167, 178 (Tex. App.-Tyler 2019, pet. dism'd). "Whether or not land taken in the name of one or more partners is in fact partnership property always depends upon the intent of the parties and the understanding and design under which they acted." Logan v. Logan, 156 S.W.2d 507, 512 (Tex. 1941).
First, we reject RTP's argument that the intent of the partners was established because the Properties in Dispute were purchased with gifted funds from RTP's bank account. As explained above, the evidence is sufficient to support the jury's contrary finding.
Next, RTP acknowledges the deeds to the Properties in Dispute were in the names of the individual partners but also implies the jury could not give any consideration to this fact when determining intent. We disagree. While we recognize land deeded in the name of an individual partner is not conclusive to determining whether the land is a partnership asset, the jury was free to consider the fact that the deeds remained in the names of the individual partners without any written conveyance transferring the Properties in Dispute to RTP as a lack of intent for the Properties in Dispute to be RTP properties.
The jury also heard testimony regarding two additional properties-Posen and PK Plano-that were incorrectly included in the umbrella of RTP Partnership Properties; however, Marc corrected this error by drafting deeds conveying one to Judith and the other to Marc, Harvey, and the Heirs. Accordingly, the jury could reasonably infer that Marc, as an attorney, knew how to draft deeds and transfer property to its rightful owners. The lack of any conveyance of the Properties in Dispute from the individual partners to RTP could be seen as an indication the partners never intended the Properties in Dispute to be RTP properties.
The evidence confirms RTP consistently included the income from all Richman Trust Properties on its federal tax returns, including income from the Properties in Dispute. However, RTP also mistakenly included properties on its tax returns (Posen and PK Plano) that RTP later deeded to others. The jury also heard that RTP sent K-1's to Ralph, Robin, and Michele for years, yet despite these IRS filings, Marc denied the documents indicated they were partners. The jury, in assessing Marc's credibility and the inconsistency in which RTP filed IRS tax documents regarding RTP Properties, could reasonably discount RTP's representations to taxing authorities as showing any intent by the partners that RTP owned the Properties in Dispute. Similarly, because of the fluid nature with which RTP identified and handled its partnership properties, including the Properties in Dispute, the jury could reasonably discount that paying taxes on the Properties in Dispute from the partnership bank account showed intent of ownership.
For example, after realizing the Posen property belonged to Judith instead of RTP, Marc sent an email to Ralph in April 2007 in which he admitted, "Richman Trusts has been getting the K-1 on the income for years and paying the taxes due for both interests in the building. We need to get that K-1 out of Richman Trusts and into Judy's estate. If Uncle Harvey finds that we are paying your mother's taxes and have been for years, gracious soul that he is, he will not take that well."
Marc and Harvey signed sworn declarations in which they both stated the Properties in Dispute were acquired as, and intended to be, RTP property. However, the record does not include any signed declaration providing Judith's intent regarding the properties. In an attempt to pacify this glaring omission, Marc argues Judith swore the Properties in Dispute belonged to RTP by signing her tax returns because "otherwise, she should have separately reported their income as personal real-estate rental income." But again, the record also indicates other instances in which properties RTP thought it owned were later discovered to belong to Judith.
Marc asserts the Estate inventories Ralph filed as executor of Judith's estate indicate "everyone believed the Properties in Dispute were partnership properties at all times" because Ralph did not include them in his original or supplemental inventories. However, Ralph explained he excluded them because he relied on Marc's representations and "didn't think there was any reason not to trust that" or conduct an independent deed search to confirm ownership.
There is no evidence the individual partners paid for insurance, repairs, renovations, or other expenses. Instead, RTP made such payments. Although that evidence could indicate the partners intended the Properties in Dispute to be RTP property, it is insufficient to overcome the presumption the Properties in Dispute are not RTP Properties, a presumption that was RTP's burden to overcome by a preponderance of the evidence. On this record, the evidence is sufficient for a reasonable and fair-minded jury to rationally conclude the partners did not intend for the Properties in Dispute to be owned by RTP. See City of Keller, 168 S.W.3d at 823 (evidence legally insufficient to support verdict when there is "no evidence" supporting it). And although there is some evidence supporting an intent otherwise, jury verdicts are sacrosanct and appellate courts should be reluctant to disturb verdicts unless required by law. See Del Bosque v. Barbosa, No. 05-22-00230-CV, 2023 WL 1097556, at *4 (Tex. App.-Dallas Jan. 30, 2023, no pet.) (mem. op.) (citing Herbert v. Herbert, 754 S.W.2d 141, 143 (Tex. 1988)). Here, the jury's finding is not so weak or against the great weight and preponderance of the evidence as to be clearly wrong and unjust. See Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001). Accordingly, the evidence is both legally and factually sufficient to support the trial court's judgment. City of Keller, 168 S.W.3d at 827. We overrule RTP's second issue.
Adverse Possession
In its third issue, RTP argues even if RTP did not originally own the Properties in Dispute, it acquired the properties through adverse possession as a matter of law, or alternatively, the trial court should have submitted an adverse possession jury question. The Heirs respond RTP failed to establish adverse possession against all three partners and was not entitled to a jury question.
Adverse possession means an actual and visible appropriation of real property, commenced and continued under a claim of right that is inconsistent with and hostile to the claim of another person. TEX. CIV. PRAC. &REM. CODE ANN. § 16.021(1). The concept of adverse possession allows a person to claim title to real property presently titled to another. Jackson v. Ethridge, No. 01-21-00667-CV, 2023 WL 2249203, at *5 (Tex. App.-Houston [1st Dist.] Feb. 28, 2023, no pet.) (mem. op.). To prevail on a claim of adverse possession, a claimant must establish, by a preponderance of the evidence (1) the actual and visible possession of the disputed property, (2) that is adverse and hostile to the claim of the owner of record title, (3) is open and notorious, (4) peaceable, (5), exclusive, and (6) involves continuous cultivation, use, or enjoyment throughout the statutory period. Anderton v. Lane, 439 S.W.3d 514, 517 (Tex. App.-El Paso 2014, pet. denied). RTP asserted adverse possession under the twenty-five-year limitations period. TEX. CIV. PRAC. & REM. CODE ANN. § 16.027.
"[A] co-tenant may not adversely possess against another co-tenant unless it clearly appears he has repudiated the title of his co-tenant and is holding adversely to it." King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 756 (Tex. 2003). "The ouster standard that applies to cotenants differs from the adverse possession requirement courts impose between strangers because cotenants have rights to ownership and use of the property a stranger would not have." BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59, 70 (Tex. 2011). The repudiation must be clear, unequivocal, and unmistakable. Gonzalez v. Pena, No. 04-14-00048-CV, 2015 WL 505088, at *3 (Tex. App.-San Antonio Feb. 4, 2015, no pet.) (mem. op.) (citing Todd v. Bruner, 365 S.W.2d 155, 160 (Tex. 1963)).
In the adverse possession context, "exclusive" refers to the exclusivity of ownership being asserted, meaning possession of the land must "indicate unmistakably an assertion of a claim of exclusive ownership in the occupant." Fish v. Hodges, No. 03-10-00532-CV, 2012 WL 2979078, at *6 (Tex. App.-Austin July 12, 2012, pet. denied) (mem. op.). Moreover, "[n]o matter how exclusive and hostile to the true owner the possession may be in appearance, it cannot be adverse unless accompanied by the intent on the part of the occupant to make it so." Ellis v. Jansing, 620 S.W.2d 569, 571-72 (Tex. 1981) (quoting Orsborn v. Deep Rock Oil Corp., 267 S.W.2d 781 (Tex. 1954)). This intention to claim the property as one's own must be to the exclusion of all others. Tran v. Macha, 213 S.W.3d 913, 915 (Tex. 2006) (per curiam).
During the charge conference, RTP conceded it had to establish adverse possession against all of the partners and the judge asked, "What evidence is there that they are adversely possessing against Marc Richman?" Counsel could not direct the court to any specific evidence but instead replied, "The partnership is the one controlling everything, that's all I can say. . . Marc . . . obviously he testified that he did a lot for the partnership."
RTP could not adversely possess the Properties in Dispute because it always had the partners' permission to use and manage them. Marc acted as the general manager beginning in 1985 and negotiated leases, collected rent, and wrote checks on behalf of RTP. Given that Marc acted with the other partners' permission in managing RTP, RTP cannot establish an unmistakable assertion or intention to claim the Properties in Dispute to the exclusion of all others. The adverse possession doctrine is a "harsh" one, and before taking such a severe step, "the law reasonably requires that the parties' intentions be very clear." Tran, 213 S.W.3d at 915. RTP did not establish as a matter of law its adverse possession claim or the existence of a fact issue entitling it to a jury question on the issue. We overrule RTP's third issue.
Sufficiency of Evidence to Support Redemption Price
RTP next contends the evidence is legally and factually insufficient to support the $228,426.67 redemption price finding because the jury was asked only to determine the redemption price at Judith's death rather than the amount the Heirs were entitled to at the time of trial, which would include past redemption payments. The Heirs respond the evidence is sufficient because RTP's payments after Judith's death were not redemption payments, and the jury was not required to apply the fifty-five percent discount because the discount was unsupported by expert testimony.
Question No. 3 asked:
What is the redemption price for Judith Richman's one-third (1/3) partnership interest in the Richman Trust Partnership?
The redemption price is the fair value of Judith Richman's partnership interest on the date of her withdrawal from the partnership.
Answer in dollars and cents.
Answer: $228,426.67
To the extent RTP challenges the amount because it paid the Heirs more than $780,000.00 over several decades, meaning, the jury should have awarded zero, we reject this argument in light of our disposition reversing RTP's motion for partial summary judgment. If the Heirs are ultimately determined to be RTP partners, then those payments, which were distributed to Marc and Harvey in the exact same amounts, were not redemption payments but partnership distributions. This question remains undecided. However, if it is determined on remand that the Heirs received a redemption interest upon Judith's death, as explained below, we conclude the evidence is legally and factually sufficient to support the jury's redemption price in response to Question No. 3.
RTP argues, "The amount that RTP should have been required to pay Appellees based on the redemption price is zero, based on the uncontroverted evidence that Appellees have been more than fully satisfied for their redemption price." (Emphasis in original.) However, because a fact issue exists regarding whether the Heirs are partners, the question of whether a redemption claim exists remains unanswered. Further, RTP did not object to Question No. 3 as written but only to the submission of the question at all "because there's no evidence of this redemption value." It did not object that the "question did not ask what was still owed to the heirs." (Emphasis in original.) See TEX. R. CIV. P. 274 ("Any complaint as to a question, definition, or instruction, on account of any defect, omission, or fault in pleading, is waived unless specifically included in the objections."); see also Equistar Chems, L.P. v. Dresser-Rand Co., 240 S.W.3d 864, 868 (Tex. 2007) (party failed to preserve error challenging the measure of damages the jury was instructed to use by failing to timely object and make trial court award of its complaint).
The jury heard testimony the alleged redemption payments were the same for the Heirs, Marc, and Harvey and reflected on the Heirs' K-1's.
Generally, Texas courts lack jurisdiction to issue advisory opinions, meaning those opinions that decide an abstract question of law without binding the parties. See Abbott v. Mexican Am. Legis. Caucus, Tex. House of Representatives, 647 S.W.3d 681, 689 (Tex. 2022). However, both parties have addressed the redemption price award on appeal. By considering the issue, we avoid a second appeal based on the outcome of the partnership determination on remand. Thus, in the interest of judicial economy, we consider the sufficiency of the evidence supporting the jury's finding because it is not an abstract question of law and, therefore, not advisory.
The only evidence before the jury about the "fair value" of the redemption price was in the September 21, 2018 letter Marc sent to the Heirs, which included an independent expert valuation of the fair market value of Judith's one-third partnership interest as of August 28, 2008, the date of her death and withdrawal. After the expert applied a fifty-five percent discount for lack of control and lack of marketability, the valuation totaled $509,200.00.
The Heirs do not dispute the fair-market values of the RTP Properties per the expert's valuation; instead, they dispute the fifty-five percent discount because RTP did not explain the discount. They contend the redemption value totals the "net asset value of percentage general partnership interest," which equaled $969,867.00, per the expert's valuation before applying the discount.
RTP argues the Heirs provided no expert testimony or evidence of an alternative redemption value and "without any contrary evidence regarding 'fair value' for the redemption price, the jury's finding cannot be sustained." Essentially, RTP asserts the jury was bound by the expert's valuation.
Because RTP is attacking the legal sufficiency of an adverse finding on which it did not have the burden of proof at trial, it must demonstrate there is no evidence to support the finding. Graham Cent. Station, Inc. v. Pena, 442 S.W.3d 261, 263 (Tex. 2014). It is not necessary to have expert testimony from both parties. City of Keller, 168 S.W.3d at 819-20. "Even uncontroverted expert testimony does not bind jurors unless the subject matter is one for experts alone." Id. at 820. However, jurors are not free to disbelieve testimony that is conclusively negated by undisputed facts. Id. "But whenever reasonable jurors could decide what testimony to discard, a reviewing court must assume they did so in favor of their verdict, and discard it in the course of legal sufficiency review." Id.
As a general rule, the jury has broad discretion to award damages within the range of evidence presented at trial, so long as a rational basis exists for its calculation. Examination Mgmt. Servs., Inc. v. Kersh Risk Mgmt., Inc., 367 S.W.3d 835, 844 (Tex. App.-Dallas 2012, no pet.). The jury's findings will not be disregarded merely because its reasoning in arriving at its figures may be unclear, and the fact that there is nothing in the record to show how the jury arrived at a specific amount is not necessarily fatal to the verdict. Id. Instead, when the evidence supports a range of awards, an award of damages within that range may be an appropriate exercise of the jury's discretion. Id.
Here, despite RTP's assertion "there is no rational basis for the calculation," the jury appears to have used the information in the Redemption Letter. The jury subtracted the market value of the Properties in Dispute (because it determined they were not RTP properties in Question No. 1) from the "Gross Value of Total Partnership Assets" and then divided that value by three as follows: $2,925,280.00 - ($1,250,000.00 + $495,000.00 + $495,000.00) / 3 = $228,426.67. Because RTP did not offer evidence explaining why its expert discounted Judith's one-third interest for lack of control and lack of marketability, the jury acted within its province to ignore the fifty-five percent discount. See, e.g., Fort Worth Morg. Corp. v. Abercrombie, 835 S.W.2d 262, 267 (Tex. App.-Houston [14th Dist.] 1992, no writ) (concluding jury's failure to deduct insurance premiums from award was not erroneous when appellant offered no evidence regarding the discount and did not request a jury instruction on a discounted rate). The record contains more than a scintilla of evidence supporting the award; therefore, the jury's finding is legally sufficient to support the trial court's judgment. City of Keller, 168 S.W.3d at 827; Cazarex, 937 S.W.2d at 450. Likewise, the record is factually sufficient to support the trial court's judgment because the finding is not so contrary to the overwhelming weight of the evidence as to be clearly wrong and manifestly unjust. Cain, 709 S.W.2d at 176.
These amounts represent the market values of the Greenville Avenue Property, the Richmond Property, and the Record Street Properties.
Finally, RTP argues the italicized portion of paragraph 6 of the judgment must be reversed and set aside. Paragraph 6 reads as follows:
6. It is further ORDERED, ADJUDGED, and DECREED that in accordance with the October 31, 2020 Order Granting, in Part, and Denying, in Part, Defendants' Motion for Partial Summary Judgment, the Court has determined that Plaintiffs are not general partners of Defendant RTP and pursuant to Chapter 152 of the Texas Business Organizations Code, Judith Richman withdrew from RTP on the date of her death, August 28, 2008, and Plaintiffs, therefore, are entitled to receive from Defendant RTP, and Defendant RTP is required to pay to Plaintiffs, the "fair value" of Judith Richman's one-third (1/3) general partnership interest in RTP as of August 28, 2008.
Though not raised by either party, the final judgment incorrectly states the date of the order granting, in part and denying in part RTP's motion for partial summary judgment. The order was signed December 7, 2020. We modify paragraph six of the final judgment to reflect the correct date.
Because the trial court's summary judgment declared the Heirs were not partners in RTP and nothing more, RTP contends the italicized portion should be deleted as it misstates the court's summary judgment order and awards relief not submitted to the jury. Even if we assume, without deciding, the final judgment contains an error, we conclude the error was rendered harmless by paragraphs 7 and 8 of the final judgment, which state:
7. It is, therefore, ORDERED, ADJUDGED, and DECREED that in accordance with the jury's verdict, the fair value for Judith Richman's one-third (1/3) general partnership interest in RTP as of
August 28, 2008, the date Judith Richman passed away and withdrew from the general partnership, is $228,426.67 (the "Redemption Price").
8. It is further ORDERED, ADJUDGED, and DECREED that Plaintiffs shall have and recover from Defendant RTP, and Defendant RTP shall pay to Plaintiffs, the Redemption Price of $228,426.67, for which execution shall issue.
RTP did not suffer any injury based on the language in the judgment; therefore, it failed to demonstrate reversible error. See TEX. R. APP. P. 44.1(a). We overrule RTP's fourth issue.
Other Asserted Errors in the Judgment
In its final four issues, RTP challenges several provisions of the judgment. We address each separately.
Lost Profits
Paragraph 5 of the final judgment declares the Heirs are entitled to receive one-third of all profits generated by the Properties in Dispute since Judith's death in 2008. RTP argues the lost profits award is "wholly improper, unsupported by the evidence at trial, and was never submitted to the jury."
A judgment is the court's consideration and determination of the case. See Shetewy v. Mediation Inst. of N. Tex., LLC, 624 S.W.3d 285, 287 (Tex. App.-Fort Worth 2021, no pet.); see also TEX. R. CIV. P. 301. The judgment's wording must therefore be "certain and definite." Shetewy, 624 S.W.3d at 287; see also Paxton v. Simmons, 640 S.W.3d 588, 596 (Tex. App.-Dallas 2022, no pet.) ("A judgment must be sufficiently definite and certain to define and protect the rights of all litigants, or it must provide a definite means of ascertaining such rights, to the end that ministerial officers can carry the judgment to execution without ascertainment of facts not therein stated.") (quoting Steed v. State, 183 S.W.2d 458, 460 (1944)).
In construing a judgment, we focus on its substance-not its form-and no magic language is required. Shetewy, 624 S.W.3d at 288. However, the language chosen must clearly show a judicial action. Id. "Thus, a judgment must show intrinsically and distinctly, rather than inferentially, that the matters in the record have been determined in favor of one of the litigants or that the rights of the parties in litigation have been adjudicated." Id. At its core, a judgment grants or denies relief. Id. Decretal language is the language employed to grant or deny that relief. Id.
Paragraph 5 of the judgment "ORDERED, ADJUDGED, and DECREED that in accordance with the jury's verdict and the determination that Plaintiffs are cotenants of each of the Properties in Controversy":
a. Plaintiffs, collectively, are entitled to receive one-third (1/3) of all profits generated by the property located at 304-306 S. Record Street, Dallas, Texas 75202, beginning on August 28, 2008, the date of Judith Richman's passing;
b. Plaintiffs, collectively, are entitled to receive one-third (1/3) of all profits generated by the property located at 2117-2129 Greenville Avenue, Dallas, Texas 75206, beginning on August 28, 2008, the date of Judith Richman's passing;
c. Plaintiffs, collectively, are entitled to receive one-third (1/3) of all profits generated by the property located at 5632 Richmond Avenue, Dallas, Texas 75206, beginning on August 28, 2008, the date of Judith Richman's passing.
The judgment included a footnote that all profits meant, "E.g., 1/3 of all revenues -1/3 of all expenses."
Per the jury's finding in Question No. 1, the Heirs are co-tenants with Marc and Harvey. Paragraph 1 under "Property Ownership" of the final judgment reflects this determination. The general rule for co-tenants in Texas requires them to share any income or rents generated from the jointly-owned property according to their respective interests. I-10 Colony, Inc. v. Lee, 393 S.W.3d 467, 478 (Tex. App.- Houston [14th Dist.] 2012, pet. denied). The judgement awards the Heirs one-third of all profits generated by the properties beginning on the date of Judith's death; the judgment defines profits to mean revenue minus expenses. In so doing, the judgment awards the Heirs lost profits generated by the properties. See Miga v. Jensen, 96 S.W.3d 207, 213 (Tex. 2002) (defining lost profits as damages for the loss of net income to a business and, broadly speaking, reflect income from lost business activity, less expenses that would have been attributable to that activity). Although the Heirs argue they do not seek and were not awarded "lost profits" and rather seek and were awarded only "profits," their argument is not well taken; they attempt to create a distinction without a difference.
RTP argues the Heirs waived their right to recover lost profits because they presented no evidence of lost profits and failed to request a jury question on those damages. Additionally, it asserts paragraph 5 is not sufficiently definite and certain because, "How could a sheriff ever execute on such a judgment without a dollar amount?" We agree. "Lost profits can be recovered as consequential damages only when the amount is proved with reasonable certainty." Radiant Fin., Inc. v. Bagby, No. 05-16-00268-CV, 2017 WL 2927825, at *4 (Tex. App.-Dallas July 10, 2017, pet. denied) (mem. op.) (citing Phillips v. Carlton Energy Grp., LLC, 475 S.W.3d 265, 278 (Tex. 2015)). "If no evidence is presented to prove lost profits with reasonable certainty, the trial court must render a take-nothing judgment as to lost-profits damages." Id. (citing Barton v. Resort Dev. Latin Am., Inc., 413 S.W.3d 232, 236 (Tex. App.-Dallas 2013, pet. denied)). The Heirs failed to present evidence of any profits from the Properties in Dispute other than Ralph's brief testimony that the Heirs received K-1's from the time of Judith's death until 2018. The Heirs also presented no evidence of expenses. We conclude the Heirs failed to meet their burden to show lost profit damages with reasonable certainty and, accordingly, the trial court was required to render a take-nothing judgment as to those damages.
Additionally, even if the Heirs had presented damages evidence, paragraph 5 does not provide the specific information from which "ministerial officers can carry the judgment into execution without ascertainment of facts not therein stated." Stewart v. USA Custom Paint &Body Shop, Inc., 870 S.W.2d 18, 20 (Tex. 1994). By looking at the judgment, a clerk would not be able to determine the specific amount of profits each Heir is entitled for purposes of execution.
We sustain RTP's fifth issue, and we vacate paragraph 5 (a), (b), and (c).
Writs of Possession
Paragraphs 2 and 3 of the final judgment award the Heirs possession of the Properties in Dispute and writs of possession for their interest in each property. RTP argues (1) the trial court lacked subject matter jurisdiction to grant possession to the Heirs because this was not an eviction suit; (2) the Heirs have sought to be named co-tenants of the Properties in Dispute, which means their undivided interest in the properties gives them an equal right to possession, not an exclusive right superior to RTP; and (3) the Properties in Dispute are currently leased to tenants who have a superior right to possession of those properties and granting exclusive possession to the Heirs gives them the power to evict all of the current tenants without grounds for eviction, notice, or due process.
Paragraph 2 "ORDERED, ADJUDGED, and DECREED that Plaintiffs are entitled to and shall have and recover possession of said one-third (1/3) undivided interests in and to each of the Properties in Controversy." As previously explained above regarding co-tenant law and based on the jury findings, the statement is correct.
Paragraph 3 "ORDERED, ADJUDGED, and DECREED that Plaintiffs shall have writs of possession issued for their interests in each of the above Properties in Controversy." (Emphasis added.) Here, the underlying suit involved a dispute concerning title to properties; therefore, to the extent RTP argues the trial court lacked jurisdiction and jurisdiction belonged in the justice court, its argument is without merit. See TEX. GOV'T CODE ANN. § 27.031(b)(4) (stating justice court does not have jurisdiction over a suit regarding land titles); see also Brumley v. McDuff, 616 S.W.3d 826, 836 (Tex. 2021) ("A suit that seeks to resolve the title dispute is, in effect, an action in trespass to try title, whatever its form.").
Further, RTP's challenge to the writs of possession overlooks the plain language of Texas Rule of Civil Procedure 804, which requires a trial court to include a writ of possession in a judgment resolving a trespass to try title claim. TEX. R. CIV. P. 804; Rodriguez v. Rodriguez, No. 04-19-00246-CV, 2020 WL 2139301, at *3 n.2 (Tex. App.-San Antonio May 6, 2020, no pet.) (mem. op.) ("[A] trial court is required to include a writ of possession in a judgment resolving a trespass to try title claim which determines title or possession to property."). Here, the judgment does not grant an exclusive right superior to the active leasehold tenants, but only to the Heirs "for their interest." (Emphasis added.) In reaching this conclusion, we reject RTP's reliance on the general proposition that a lease grants a tenant exclusive possession of the premises as against the owner. See Levesque v. Wilkens, 57 S.W.3d 499, 504 (Tex. App.-Houston [14th Dist.] 2001, no pet.). Exclusive possession is not a requirement in every lease because a landlord may reserve some rights of possession and entry within the terms of the lease. Id. at 505; see also Abest Holdings, LLC v. Fort Worth Mar-G, Ltd., No. 10-18-00161-CV, 2021 WL 2252351, at *7 (Tex. App.-Waco June 2, 2021, no pet.) (mem. op.). The plain language of the writ does not grant the Heirs an exclusive right to control, and RTP has not cited to any such limiting language within the lease agreements for the Properties in Dispute. We overrule RTP's sixth issue.
Award of Prejudgment Interest and its Calculation
The trial court awarded $270,971.75 in prejudgment interest. RTP argues the amount should be set aside because the Heirs were not entitled to redemption damages. As explained above, whether the Heirs are partners or entitled to a redemption interest will be decided on remand. In the interest of judicial economy, we determined the evidence is sufficient to support the redemption price found by the jury. If the judgment stands, then the Heirs will be entitled to prejudgment interest. We therefore address RTP's challenge to the prejudgment interest calculation.
We review the trial court's award of prejudgment interest for an abuse of discretion. Wilmer-Hutchins Indep. Sch. Dist. v. Smiley, 97 S.W.3d 702, 706 (Tex. App.-Dallas 2003, pet. denied). Both parties agree any obligation to pay interest on the redemption value is calculated using the rate specified by Texas Finance Code section 302.002, which provides a rate of "six percent a year." TEX. FIN. CODE ANN. § 302.002. Paragraph 12 of the final judgment ordered RTP to pay "all accrued but unpaid interest on the Redemption Price, which amounts to $270,971.75, plus an additional $81.20 per day from January 29, 2022, until the date this Final Judgment is signed and entered." In a footnote, the court noted, "This is the amount of interest that has accrued on the Redemption Price from August 28, 2008, the date of Judith Richman's withdrawal from the partnership, through January 28, 2022."
RTP asserts the trial court's interest calculation contains a numerical error and provides the following calculation:
Principal x Rate Per Year x Number of Years = Prejudgment Interest $228,426.67 x 0.06 x 13.41759445 = $183,896.19 (not $270,971.75)
This number represents the time difference between August 28, 2008 (the date of Judith's death and withdrawal) and January 28, 2022. The trial court indicated in a footnote these were the two dates used to calculate prejudgment interest. RTP has not challenged the dates but only the mathematical calculation.
The Heirs respond they are entitled to the full amount of interest awarded, but they have not provided information or "shown their work" in defending the interest amount.
We agree the trial court's calculation is incorrect; however, we also disagree with RTP's calculation. Because we have the necessary information before us, we may reform the judgment. See TEX. R. CIV. P. 43.2(b). Based on information in the record, the prejudgment interest owed is $183,942.10. The daily interest rate should also be modified from $81.20 to $37.52.
Our calculation differs based on the number of days from August 28, 2008 and January 28, 2022. Using the website, https://www.convertunits.com/dates/from/Aug+28,+2008/to/Jan+28,+2022, the number of days is 4902. Dividing 4902 days by 365.25 years totals 13.4209446 years.
($228,426.67 x .06) / 365.25.
RTP's seventh issue is sustained, and paragraph 12 of the final judgment is modified to reflect prejudgment interest in the amount of $183,942.10 and a daily interest rate of $37.52. We likewise modify paragraph 13 to reflect the proper daily interest rate for calculating post-judgment interest.
Award of Improper Costs
In its final issue, RTP argues paragraph 4 of the final judgment should be reversed in its entirety because it states the Heirs "shall have and recover from [RTP] all costs incurred in this case." RTP argues, at a minimum, the court should have ordered the parties to bear their own costs because neither side was wholly successful on their claims.
We review a trial court's order allocating costs for an abuse of discretion. Boyce v. Eberstein, 636 S.W.3d 708, 711 (Tex. App.-Dallas 2021, pet. denied). Texas Rule of Civil Procedure 131 provides, "[t]he successful party to a suit shall recover of his adversary all costs incurred therein, except where otherwise provided." TEX. R. CIV. P. 131. A "successful party" is "one who obtains judgment of a competent court vindicating a civil right or claim." Fortitude Energy, LLC v. Sooner Pipe LLC, 564 S.W.3d 167, 189-90 (Tex. App.-Houston [1st Dist.] 2018, no pet.). A plaintiff who prevails on one claim but not others in the same suit is a successful party. See, e.g., Hasty Inc. v. Inwood Buckhorn Joint Venture, 908 S.W.2d 494, 503 (Tex. App.-Dallas 1995, writ denied) (concluding trial court properly awarded costs to plaintiff despite succeeding on only one of three claims).
Although the trial court granted a partial summary judgment in favor of RTP, the Heirs were still a "successful party" despite not prevailing on every single claim they asserted. Id. Accordingly, the trial court did not abuse its discretion by awarding all costs against RTP rather than ordering each to bear their own. We overrule RTP's eighth issue.
Conclusion
We reverse the trial court's December 7, 2020 order granting partial summary judgment and remand for further proceedings. We vacate paragraph five of the final judgment. We modify paragraph 6 to reflect the correct date of the order granting partial summary judgment and modify paragraphs 12 and 13 to reflect the proper amount of both prejudgment interest and daily interest. In all other respects, the judgment of the trial court is affirmed.
Molberg, J., dissenting without opinion
JUDGMENT
In accordance with this Court's opinion of this date, the judgment of the trial court is MODIFIED AS FOLLOWS:
We REVERSE the trial court's December 7, 2020 order granting partial summary judgment and REMAND for further proceedings.
We VACATE Paragraph 5 in its entirety. We DELETE "October 31, 2020" in Paragraph 6 and REPLACE with "December 7, 2020."
We DELETE "$270,971.75" and REPLACE with "$183,942.10" in Paragraphs 12 and 13. We DELETE "$81.20" and REPLACE with "$37.52" in Paragraphs 12 and 13.
In all other respects, the judgment is AFFIRMED.
It is ORDERED that each party bear their own costs of this appeal.
Judgment entered this 9th day of February, 2024.