Summary
concluding trial court's judgment and findings showed trial court simply changed its mind after oral pronouncement and before judgment; in civil cases, written judgment controls over oral pronouncements made by trial court
Summary of this case from Kaur-Gardner v. Keane Landscaping, Inc.Opinion
No. 05-08-00360-CV.
Opinion Filed April 15, 2009.
On Appeal from the 192nd Judicial District Court, Dallas County, Texas, Trial Court Cause No. 06-03265-K.
Before Justices WRIGHT, O'NEILL, and LANG.
MEMORANDUM OPINION
Appellant Wise Business Services, Inc. (WBS) appeals a judgment in favor of Incisive Info, Inc. On appeal, WBS contends the trial court erred in awarding damages to Incisive because the contract sued upon was illegal. Incisive responds damages were properly awarded because the contract was legal. Incisive has also filed a cross-appeal asserting (1) the trial court erred in failing to award damages for breach of a nonsolicitation clause in the contract, (2) the damages awarded did not comport with the trial court's oral pronouncements, (3) the trial court erred in determining the amount of attorneys fees awarded, and (4) the trial court erred in failing to award it fifty dollars in restitution. For the following reasons, we affirm the trial court's judgment.
This case involves an underlying contract between the United State Department of Agriculture (USDA) and WBS which was, at least partially, subcontracted to Incisive. The contract concerned the provision of business intelligence and data warehousing services to the USDA. Government regulations required the contract be awarded to an 8(a) certified business as defined by the Small Business Act (SBA). WBS was an 8(a) certified business, Incisive was not.
Before the USDA contract was awarded to WBS, that contract was being performed by MIS, another 8(a) certified company. MIS could no longer perform the contract because it was going out of business. The USDA was satisfied with the performance of MIS's employee, Walter Wofford, and wanted him to continue to perform the work under the contract. MIS's owner, Harlee Glover, sought to find a way for his daughter's company, Incisive, to profit from Wofford's labor and the USDA contract. He suggested Incisive hire Wofford. However, because Incisive was not an 8(a) certified company, it could not directly contract with the USDA. Glover then sought to find an 8(a) certified company to enter into a contract with the USDA who would then subcontract the work to Incisive. Glover approached WBS.
Glover and WBS orally agreed that WBS would bid on the USDA contract, Glover would arrange for Wofford to work on the contract, and WBS would pay for Wofford's services. Glover then gave WBS his contact information at the USDA. The USDA selected WBS to complete MIS's contract, which was to run from April 18, 2005 to September 30, 2005. Wofford began work on the contract as an Incisive employee even though the parties had not yet entered into a written contract.
On April 27, 2005, Incisive sent WBS its proposed written contract. This contract stated it was to begin on April 26, 2005 and was terminable at will. According to Alicia Fortson, Glover's daughter and Incisive's owner, this contract was a written memorialization of the prior oral agreement, which she asserted included a nonsolicitation clause. Fortson testified the written memorialization also contained nonessential terms not previously agreed upon.
When WBS received the proposed written contract, it made some changes to the contract and sent its version to Incisive on May 5, 2005. The WBS contract was to run from April 26, 2005 to September 30, 2005. WBS's version also included a nonsolicitation clause. This document is in the record as exhibit 7, which is signed by WBS, but not Incisive.
The relationship between WBS and Incisive soured and on June 15, 2005, WBS notified Incisive that it was terminating their relationship. Meanwhile, Incisive had already commenced providing services and invoicing WBS. WBS paid some invoices, but when it became clear no written contract would be agreed upon, it ceased paying invoices. At that time, $8,232.25 in invoices for previously rendered services remained unpaid.
Wofford resigned from Incisive on June 20, 2005 to pursue opportunities "on his own terms." Wofford formed his own business and then subcontracted with WBS to continue the work on the USDA contract. Incisive sued WBS for services Wofford had actually provided while he was still employed by Incisive and for services he would have provided had the entirety of the USDA contract been completed by Incisive with Wofford's services. Incisive also alleged WBS solicited Wofford in violation of a nonsolicitation agreement and sought damages for that breach.
WBS responded that the contract sued upon was illegal and violated the SBA. Specifically, the SBA requires that at least 50% of a contract for services awarded to an 8(a) business be performed by employees of the 8(a) business. According to WBS, because Incisive alleged its contract required Incisive to perform all of the work under the USDA contract, the contract was illegal and unenforceable.
In its findings of fact and conclusions of law, the trial court found an oral contract existed. The trial court's findings do not set out the terms of that contract. The trial court awarded $8,232.25 in damages, representing the amount that Incisive invoiced WBS, but WBS failed to pay. In the alternative, the trial court found Incisive could recover the same amount under an unjust enrichment theory.
In two issues, WBS contends the trial court erred in awarding Incisive any breach of contract damages or unjust enrichment damages because the contract sued upon violated the SBA. If parties contract to undertake illegal activity, their contract is void and will not be enforced by a court. Miller v. Long-Bell Lumber Co., 148 Tex. 160,165, 222 S.W.2d 244, 246 (Tex. 1949); Signal Peak Enters. of Tex. Inc. v. Bettina Invest., Inc. 138 S.W.3d 915, 920-21 (Tex.App. 2004, pet. stricken). Where the illegality does not appear on the face of the contract, it will not be held illegal unless the facts showing its illegality are before the judge. See Franklin v. Jackson, 847 S.W.2d 306, 310 (Tex.App. 1992, writ denied). A contract that could have been performed in a legal manner will not be declared void because it may have been performed in an illegal manner. Franklin, 847 S.W.2d at 310. When two constructions of a contract are possible, preference will be given to that which does not result in a violation of law. Franklin, 847 S.W.2d at 309-10; Signal Peak Enters., 138 S.W.3d at 921.
WBS's illegality argument is premised on its assertion that its subcontract with Incisive required Incisive, a non 8(a) certified company, to perform the entirety of the USDA contract. However, the trial court did not find any such contract existed and did not enforce any such contract. The trial court only awarded damages for work Wofford actually performed as an employee of Incisive, which was only a small portion of the USDA contract. Further, while it may have been the intent of the parties for Wofford to perform all of the work under the contract, WBS has directed us to no evidence that either the USDA contract or the subcontract required Incisive to perform the entirety of that contract. Further, while WBS's proposal to the USDA referenced Wofford as the expert to work on the project, the proposal did not specifically require that Wofford perform all the work. Indeed, that proposal expressly stated that WBS was required to employ "technically qualified personnel" and that it could also use consultants and/or subcontractors. We conclude WBS has failed to show the contract was illegal when made. We resolve WBS's two issues against it. We now turn to Incisive's cross appeal. In its first issue, Incisive attacks the legal and factual sufficiency of the trial court's failure to find WBS breached a nonsolicitation clause that it contends was part of the parties' contract. The trial court did not make any findings with respect to the nonsolicitation clause. The trial court could have found against Incisive on this claim either because (1) Incisive did not prove the parties agreed to a nonsolicitation clause, or (2) Incisive did not prove WBS actually solicited Wofford. Here, Incisive challenges only the trial court's failure to find the parties agreed to a nonsolicitation clause. However, the record does not show the trial court's judgment rests on such a finding. See Parker Petroleum Co. v. Laws, 150 Tex. 430, 432, 242 S.W.2d 164, 165 (Tex. 1951) (attacking only one of multiple possible bases of trial court's judgment does not establish reversible error). Because the trial court could have found against Incisive based upon a finding that WBS did not actually solicit Wofford and Incisive does not challenge that finding, it fails to present reversible error. See id; see also Employers Cas. Co. v. Henager, 852 S.W.2d 655, 658 (Tex.App. 1993, writ denied) (unchallenged findings are binding).
Further, after reviewing the evidence presented at trial, we conclude the evidence is legally and factually sufficient to support the trial court's findings. When an appellant complains of the legal sufficiency of the evidence supporting an adverse finding on a matter on which the appellant had the burden of proof, it must show 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); Rich v. Olah, 274 S.W.3d 878, 884 (Tex.App. 2008, no pet.). In reviewing a "matter of law" challenge, we first examine the record for evidence supporting the finding, and then examine the entire record to determine if the contrary proposition is established as a matter of law. Dow Chem. Co., 46 S.W.3d at 247. We sustain the point of error only if the contrary proposition is conclusively established. Id.
When a party attacks the factual sufficiency of an adverse finding, it must demonstrate the adverse finding is against the great weight and preponderance of the evidence. Dow Chem. Co., 46 S.W.3d at 241; Rich, 274 S.W.2d at 884. We must consider and weigh all of the evidence and can set aside the finding only if the evidence is so weak or if the finding is so against the great weight and preponderance of the evidence that it is clearly wrong and unjust. Id.
Incisive first contends the evidence is legally and factually insufficient to support the trial court's failure to find the parties orally agreed to a nonsolicitation clause. To show an oral nonsolicitation clause existed, Incisive relies upon the testimony of Glover and Fortson. Glover testified he met Demetria Wise, the owner of WBS, at a lunch meeting in late March or early April of 2005. Glover testified that he was acting as a representative of Incisive and that WBS generally agreed to subcontract the work of the USDA contract to Incisive. Glover, however, did not testify to any specifics of the oral agreement, much less the existence of a nonsolicitation clause. Fortson did testify that Wise orally agreed to a nonsolicitation provision and claimed that exhibit 7 constituted a written memorialization of that agreement. Wise however testified and denied the existence of any long term contract. She specifically denied that exhibit 7, which Incisive never executed, constituted a memorialization of a prior oral agreement.
The testimony concerning the nonsolicitation clause was thus conflicting. While there may have been an oral agreement in place, we cannot agree that Incisive established conclusively that the parties orally agreed to a nonsoliciation provision. Nor can we agree that the trial court's failure to find such an agreement is so against the overwhelming weight of the evidence as to be clearly wrong and manifestly unjust.
Incisive next asserts exhibit 7 constitutes a binding written contract because it was signed by WBS and ratified by both parties. The primary evidence of ratification is that Incisive sent its employee to work on the USDA contract. However, it did so before exhibit 7 was even created. Thus, that conduct does not establish a ratification of the written contract. Incisive also contends evidence that WBS and Incisive representatives met at a banking facility for purposes of setting up an account to run the business establishes the parties had agreed to the terms set out in exhibit 7. While this conduct may establish an agreement existed, we cannot agree the conduct is necessarily referable to the written contract. Thus, Incisive had not shown conclusively that the parties agreed to the terms set out in exhibit 7 or specifically a nonsoliciation clause. Nor can we conclude the trial court's failure to find a written contract existed is so against the overwhelming weight of the evidence as to be clearly wrong and unjust. We resolve Incisive's first issue against it.
Incisive next asserts the trial court erred in rendering a written judgment contrary to its oral pronouncements. This point is premised on Incisive's position that the written judgment contained a clerical error and the oral pronouncements should control. We do not agree with Incisive that a clerical error exists. Instead, the trial court's judgment and findings show the trial court simply changed its mind after the oral pronouncement and before judgment. In a civil case, any time there is a conflict between oral pronouncements made by a trial judge and his written judgment, the written judgment controls. See in re JDN Real Estate — McKinney, L.P., 211 S.W.3d 907, 914 n. 3 (Tex.App. 2006, orig. proceeding); Gasperson v. Madill Nat'l Bank, 455 S.W.2d 381, 387 (Tex,. Civ. App.-Fort Worth 1970, writ ref'd n.r.e.).
Incisive also contends the trial court erred in failing to award it damages for its unjust enrichment claim. According to Incisive, the written findings of fact and conclusions of law show the trial court found in its favor on that claim. It complains however that the trial court did not award it additional damages for that claim. Incisive misconstrues the trial court's findings of fact and conclusions of law. A review of the trial court's findings shows that the trial court's unjust enrichment findings were an alternative basis to support the $8,232.25 breach of contract damages. Incisive has failed to argue or show the trial court used an incorrect measure of damages for the unjust enrichment award. We resolve Incisive's second issue against it. Because of our disposition of this issue, we do not reach Incisive's third issue which is premised on its assertion that the trial court's oral pronouncements control.
In its fourth issue, Incisive contends the trial court erred in failing to award it $45,000 in attorneys fees. Incisive sued WBS for breach of contract for services rendered, for breach of a nonsolicitation clause, and for unjust enrichment. At trial, Incisive's counsel testified that Incisive's reasonable and necessary attorneys fees to prosecute the case through trial was $45,000. The primary breach of contract claim Incisive raised in this case was breach of the nonsolicitation provision. The trial court failed to find in favor of Incisive on this claim. The breach of contract damages the trial court did find were $8,232.25 which represented a breach of the parties' agreement to pay Incisive for services actually rendered.
A trial court's award of attorneys fees will not be disturbed absent an abuse of discretion. Gonzalez v. Nielson, 770 S.W.2d 99, 102 (Tex.App. 1989, writ denied). We review an award of attorneys fees in the light most favorable to the trial court's ruling and indulge every presumption in its favor. Union Gas Corp. v. Gisler, 129 S.W.3d 145, 157 (Tex.App. 2003, no pet.). Reasonable attorneys fees are determined by the particular circumstances of the case and must bear some reasonable relationship to the amount in controversy. Republic Nat'l Life Ins., Co. v. Heyward, 568 S.W.2d 879, 887 (Tex.Civ.App. 1978, writ ref'd n.r.e.). The court can also look at the entire record, the evidence presented on reasonableness, the amount in controversy, common knowledge of the case, and the relative success of the parties. Burnside Air Conditioning Heating, Inc. v. T.S. Young Corp., 113 S.W.3d 889, 897 (Tex.App. 2003, no pet.).
Here the trial court awarded Incisive $12,500 in attorneys fees. According to Incisive, the trial court should have awarded it the full $45,000 claimed at trial. However, in light of the entire record, including the fact that Incisive did not prevail on its main claim and recovered only $8,232.25 in damages, we find no abuse of discretion. We resolve the fourth issue against Incisive.
In its fifth and final issue, Incisive contends the trial court erred in failing to award it fifty dollars in restitution. At trial, WBS argued Incisive failed to prove its restitution claim. The trial court told Incisive it could "eat" the fifty dollars. Incisive's counsel responded "I think we can." Incisive now asserts the trial court erred in failing to award it fifty dollars. We conclude Incisive waived this claim. Cf. In re CCJ, 244 S.W.3d 911, 921 (Tex.App. 2008, no pet.) (party may abandon claim). We resolve this issue against Incisive.
We affirm the trial court's judgment.