T h e op i n i o n w i l l r ef er t o t h e ap p el l a n t s co l l ecti v el y a s “Ap p el l a n t s” a n dt o Jo y Ad a m s b y h er f

i r st n a m e. 1 L i k e w i s e , w e w i l l re f

e r t o t he a p p e l l e e a s “ M c F a d d e n” a nd t o t he i nd i v i du a l s , F ri e d a M c F a d d e n a ndB ru c e M c F a d d e n, b y th e i r f i r st n a m e s. CO UR T OF A P P E A LS

E I G H T H D I S T R I C T O F T E X AS E L P AS O , T E X AS

J OY B
. ADAM S D/B/A

E L L YSON AB S T R AC T & T I T L E C O
. , and EL L Y SO N AB STR

A C T & TITL E C O ., L .L .C ., A pp el l an t s,
v . D AV I D B R

U C E M c FAD D E N AS INDE PE NDENT E XECUTOR OF T HE E ST A T E OF F REI DA

H. McF ADDEN, DECE A SE D, A p p e l l e e . §

§ § § § § § § No
. 08
- 07
- 00 07 1- CV

A p p e a l f r om 1 1 2 t hD i s t ri c t C o urt
o f Peco s Co un

t y , T ex as (T C # P-10314- 112-CV)

O P I N IO N J o y B
. Ad am s and

E l l y s o n Abs t r a c t & T i

t l e C o mp any , L
. L
. C
. a

p p e a l f r o m a j u d g me nt
ren dered i

n f av o r o f Dav i d Bruce M cF adden

a s I nd e p e nd e n

t E x ecut o r o f

t h e Est at e o f

F rei da H. M c F a d d e n . W e a f

f i r m th e j u d g me n

t w i th r e g ar d to l i a b i l i ty an d d ama g e s . W e r e v e r s e th a t p or ti on 1
o f t h e j u d g me n

t aw ard i n g at t o rn e y s ’ f

e e s an d re man d f o r a n e wt ri a l o n t h a t i s s u e . F ACT UAL SUM M ARY I n 1 9 8 2 or

1 9 8 3 , F r e i d a

M c F a d d e n

p ur c h a s e d

E l l y s on A b s tr a c t an d

T i tl e C om p an y w i th
o f f i c e s l o c a t e d

i n Fo r t S t o c kt o n and

Al p i ne , T e xa s . Fo rt he ma

j o r i t y o f t hi s t i me p e r i o d , i

t w a s t he
on l y ti tl e c om p an y i n F or t S toc kton
. J oy A d am s w or k e d f orF r i e d a i n th e A l p i n e of f i c e f ortw o or t hr e e ye ar s and

Fr i e d a s o l d J o y t he Al p i ne o f f i c e i n 1 9 8 6 o r1 9 8 7
. I n 1 9 9 9 , J o y d i s c u s s e d p ur c ha s i ngt h e F o rt St o ckt o n o f f i ce f o r $300, 000 b ut t h e t ran s act i o n was n o t co n s um mat ed. Aro un d No v em

b er 2 0 0 0 , J oy l e arn e d

t h r o u g h a t h i r d p ar t y t h a t F r i e d a

w an t e d t o s e l l t h e F o r t S t o c kt o n

c o m p an y f or $150, 000. J o y

call ed F ri eda an d agreed t o purch as e E l l y s o n A b s t ract f o r t h at pri ce. Jo y

co n t act ed
an at t o rn ey F ri eda h ad reco m

men ded t o draf

t t h e do cum

en t s . On Dec em

b er 22, 2000, J o y

an d F ri eda
ex ecut ed an

Im pr o ved Pro pert y

Co m merci al Co n t ract co n v ey i n g t h e real

pro pert y t o J o y an d h er h us b an d, E
. P. “ A

pach e” A dam s , f

o r t he p u rch as e pri ce o f

$150, 000. On

J an uary 5, 2001, F ri eda
ex ecut ed a b i l l

o f s al e co n v ey i n g t o J o y an d A

pach e al l o f

t h e pers o n al

pro pert y s i t uat ed at t h e o f

f i ces
o f E l l y s o n Abs t ract &T i

t l e C o m pan y i n F o rt St o ckt o n , i

n cl udi n g b ut n o t l i

m i t ed t o “ al l f urn i t ure, fixt ur e s , c o mp u t e r s in c lu d in g a ll s o ft w ar e an d an y r e c o r d s c o n

t a in e d in t h e h ar d dr iv e , a ll fil e s , a ll
c ar d f i l e s o f l e g a l t r ansa c t i o ns, t y p e w r i t e r s, c a l c u l a t o r s, a d d i

ng ma c hi nes , c o p i e r s, t e l e p ho n e s , a ll
o f f i ce s uppl i es , an d an

y an d al l o t h er perso n al pro pert y s i t uat ed at t h e l o cat i o n

o f E l l y s o n A b s t ract
and T i t l e C o m p any . ” At t he t i

me o f s a l e , t he r e w e r e t w o t i

t l e i ns ur anc e c o m

m i t me nt s w i t h p e nd i ng
c l o s i n g s . Th e s e c o m

m i t me n t s re l at e d t o l arg e t ra c t s o f l an d an d w e re re f e rre d t o a s t h e “ W i

n d f arm P r o je c t s . ” O n e w a s r e fe rr e d t o a s t h e C h ic a g o A b s t r a c t P r o

je c t an d t h e o t h e ra s t h e S t e w ar t T it le Pr o j e c t . O n l y t h e Stew art Ti

t l e p roj e c t e v e n

t u a l l y c l o s e d t h roug h El l y s o n A b s t ra c t
. M cF adden al l eged--an d t h e j ury f o un d-- t h at F ri eda an d J o y h ad an o ral agreem en t t h at F ri eda
wo ul d recei

v e t h e pro cee ds f

ro m t h e t wo pen di

n g t i t l e co m m i t men t s b eca us e t h ey h ad b een

writ t en b e f o re t h e s a l e . In t h e ye ar f o l l o w i n g J o y ’ s p urc h a s e o f

t h e b u s i n e s s , El l y s o n A b s t ra c t & Ti

t l e C o ., L
. L
. C., recei

v ed $416,475. 30 f

ro m t h e St ewa

rt T i t l e deal
. J o y

di d n o t n o t i f

y F ri eda t h at t h e m

o n ey h a d b e e n r e c e i v e d an d s h e th r e ate n e d th e e m

p l oye e s a t E l l

y s on A b s tr a c t w i th te r m i n a ti on i f an y of t h em i n f o rm ed F ri eda a

b o ut i t
. F ri eda’ s at t o rn ey

wro t e a l et t er t o J o y dem an di n g t h at s h e pay

h er t h e pro cee ds recei

v ed o n t h e W i n df arm Pr o j ect , b ut J o y di d n o t do s o . F ri eda di ed o n J ul y 19, 2003
an d h e rs on , B ru c e M c F a d d e n , i n h i s c a p a c i ty a s e x e c utor of h i s moth e r ’ s e s ta te , f i l e d s u i t a g a i n s t J oyTh e r e c o r d b e f o r e us do e s n o t r e f

le c t w h e th e r th e tr ial c o ur t r ule d o n th e mo tio n f o r s ummar y

j ud gme n t. 2 A d am s , E
. P
. A d am s , an d

E l l y s on A b s tr a c t & T i

tl e C om p an y , L
. L
. C
. , a s s e r ti

n g c l a i m s f orb r e a c h of
co n t r ac t , co n v er si o n , b r ea ch o f f

i d u ci ar y d u t y , and c o m

mo n l aw f r au d
. A j ury f o un d i n McFad d en’s f av oron th e b r e a c h of c on

tr a c t, b r e a c h of f

i d u c i ary d u ty an d c on

v e r s i on c l a i

m s b u t f oun d i n f av orof J o y o n t he f r a u d c l a i m . T h e j ury

aw ar d e d a c t u a l d ama g e s i

n t he amo unt o f

$ 1 6 9 , 0 3 6
. 3 2 and
r e a s o n a b le at t o rn e ys ’ fe e s in

t h e amo un

t o f $ 2 0 5 , 0 0 0
. T h e jury a ls o fo un d t h a t J o y int e n

t io n a lly b reach ed h er f

i duci ary dut y , bu t i t d i d no t awa rd ex em pl ary dam ages . T h e t ri al

co urt en t ered j u d g me n t i n f av o r of M c F a d d e n

b a s e d o n t h e j ury ’ s v e rd i c t
. ILLE GA LITY In Iss ue On e, A

ppel l an t s co n t en d t h at an o ral agreem

en t requi ri n g J o y t o pay t h e pro cee ds f r o m t he p r e m i u m i s s u e d o n t he t i t l e p o l i c y i s i l l e g a l a s a ma t t e r o f la w b e c a

u s e at t he t i

me t he pro cee ds were recei

v ed F ri eda n o l o n ger h ad a li cen s e t o co n duct i n s uran ce bus i

n es s , an d t h eref

o re, J o y c o u l d no t l e g a l l

y p ay he rt he p r e m

i u m . Fo r t h e s a me r e a s o n, Ap p e l l ant s a l s o ar g u e t hat t he
co n t ract i s un en f

o rceab l e as a m

at t er o f l aw. A t t h e co n cl

us i o n o f M cF adden ’ s cas e-i

n -ch i ef , A ppel l an t s mo v ed f

o r an i n s t ruct ed v erdi ct
on th e g r oun d

th at th e or a l c on

tr a c t, i f i t e x i s te d , w a s i l l e g a l
. I n

s u p p ort of th e i rm oti on , A p p e l l an ts
as ked t h e t ri al co urt t o t ake j udi ci al n o t i ce o f t h ei r mo t i o n f o r sum m ary j udgmen t an d t h e at t ach ed
re c o rd s f rom t h e Te x a s D e p art me n t o f In s uran c e s h o w i

n g t h a t t h e l i c e n s e s o f

El l y s o n A b s t ra c t w e re
can cell ed o n J

un e 14, 2001 an d F ri eda’ s l i cen s e wa s can cell ed o n J un e 22, 2001. T h e co urt i n qui red 2 wh y i t s h o ul d t ake j udi ci al

n o t i ce a n d as ked A

ppel l an t s wh et h er t h ey wi s h ed t o i n t ro duce t h e ev i den ce b ef o re t h e j ury . A

ppel l an t s i n s i s t ed i t was a ques t i o n o f l aw. T h e t ri al co urt di d n o t af

f i rm at i v el y t ake j u d i c i a l n oti c e b u t s i

m p l y i n s tr uct ed co un s e l

to p r oc e e d
. T h e c our t ov e rru l e d th e moti on

f orI ll e g al it y is an af f irmati v e d e f

e n s e . T EX .R .C IV . P. 9 4
. 3 S ec t i on 2 5 0 2
. 0 5 1 of t h e T ex a s I n s u r a n ce C od e p r ovi d es t h a t “[ a ] com m i s s i on , r eba t e, d i s cou n t , p or t i on of 4 a t i t l e i n s u r a n c e p r e m i u m , o r o t h e r t h i n g o f v a l u e m a y n o t b e d i r e c t l y o r i n d i r e c t l y p a i d , a l l o w e d , o r p e r m i t t e db y a p er s on en g a g ed i n t h e bu s i n es s of t i t l e i n s u r a n ce or r ec ei ved or a cc ep t ed by a p er s on for en g a g i n g i n t h e bu s i n es s of ti tl e ins u r anc e o r f

o r s o li c it ing o r re f

e r r ing t it le ins u r anc e b u s ine s s .” T EX .I NS .C OD E ANN . § 2502. 051 (Ve r n o n 2009). Sect i o n 25 0 2
. 0 5 1 does n o t pr o h i b i t : (1 ) pa y m en t f o r ser v i ces a ctu a l l y

per f o r m ed by a t i t l e in su r a n ce 5 com p a n y , t i t l e i n s u r a n ce a g en t , or d i r ec t op er a t i on i n con n ec t i on wi t h t i t l e e x a m i n a t i on or wi t h cl os i n g t h e t r a n s a ct i on o r f u r n i sh i n g t i t l e e v i d en ce i f : (A ) t h e pa y

m en t does n o t exceed t h e per cen t a g e o f p r em i u m o r o t h er a m o u n t est a b l i sh ed b y t h e c o m m i ssi o n er f

o r t h e pa y

m en t ; a n d(B) t h e per son r ece i v i n g t h e pa y m en t i s l i cen seda s p r o v i d ed by t h i s t i t l e. T EX .I NS .C OD E ANN . § 2502. 053(1)(V e r n o n 2009). i n s t ru c t e d v e rd i c t o n

t h e g roun d

o f i l l e g a l i t y . Ap p e l l ant s d i d

no t r e qu e s t t he s u

bm i s s i o n o f any qu e s t i o ns t o t he j ury

o n t he i ra f f i r ma t i ve def en s e o f i l l egali t y o r t h ei r def en s e o f i m po s s i b i l i t y o f perf o rm an ce. A

p p e l l a nt s rai s ed t h e i s s ue 3 agai n i n t h ei r mo t i o n f o r n ew t ri al
. In

t h e s ect i o n

o f t h ei r mo t i o n ch al l en gi n g t h e l egal

an d f act ual
s u f f i c i e n c y of th e e v i d e n c e s u

p p orti n g th e j ury ’ s f

i n d i n g th a t J oy

b r e a c h e d th e or a l

a g r e e me n

t, Appel l an ts s ta te d : “ A s a matte r of l aw , J oy A d am s c ou l d n ot s h ar e p r oc e e d s of a ti tl e i n s uran ce prem i um wi t h F rei da M cF adden

an d co ul d n o t t h eref

o re h av e b reach ed an

y agreem en t wh i ch may h av e ex i s t ed. A s mo re f ul l y s t at ed i n Def en dan t s ’ M o t i o n

f o r S um m a r y J udgmen t , an y s uch
a g r e e me n t i s r e n d e r e d

v oi d b e c a u s e s u c h a c on tr a c t w ou l d

v i ol a te th e l aw an d b y t h e d oc tr i n e of i m p o s s i bi l i t y . ” Ap p e l l ant s a l s o f

i l e d a mo t i o n f o rj u d g me nt n o t w i

t hs t and i ng t he ve r d i c t
. C i

t i ng Sect i o n s 2502. 051 an d 2502. 053 o f t h e Tex as In s uran ce Co de, t h ey al l eged t h at M cF adden ’ s caus es 4 5
o f act i o n were “b arr ed as a mat t er o f l aw” b eca us e an y o ral agreem en t f o r Jo y t o pay F ri eda pro cee ds f rom t h e t i t l e p o l i c i e s w a s v o i d

an d un e n f o rc e a b l e . Th e t ri a l

c o urt o v e rru l e d

b o t h mo t i o n s . Th e v a l i d i t y o f a c o n

t ra c t i s g e n e ra l l

y a qu e s t i o n o f l aw . Farah v. M

af rige & Korman ik, P. C. , 9 2 7 S
. W
. 2 d

6 6 3 , 6 7 8 ( T e x . A

p p . - - H o u s t o n [ 1 s t D is t
. ] 1 9 9 6 , n o w r it )
. A n ill e g a l c o n

t r a c t is o n e in
w h i c h t h e p art i e s un d e rt ak e w h at t h e l awf o rb i d s . F

r a n k l i n v. Jacks on , 847 S. W
. 2d 306, 309 (T ex . A pp. -- E l Pas o 1992, writ den i ed). A co n t ract t o do a t h i

n g wh i ch can

n o t b e perf

o rm ed wi t h o uta v i o l a t i o n o f t h e l awi s v o i d
. Id
. B e c a u s e th e c on

tr a c t v i ol a te s th e l aw , i

t i m p os e s n o l e g a l

ob l i g a ti on
o n t h e p a rt i e s . Mi ller v. L ong-B ell Lumber Co. , 1 4 8 Te x . 1 6 0 , 2 2 2 S.W .2 d 2 4 4 , 2 4 6 (Te x . 1 9 4 9 ); F r an k lin , 847 S. W
. 2d at 309. Ho wev er, a co n t r a c t w hi ch

co ul d h av e b een

perf o rm ed i n a l egal
man n e r w i l l n o t b e d e c l are d

v o i d s i m p l y b ec a u s e i t may h av e b e e n

p e rf o rme d i n an i l l e g a l man n e r. F r an k lin , 8 4 7 S.W .2 d

at 3 0 9 , c iti ng

Le wis v . Dav is , 1 4 5 Te x . 4 6 8 , 1 9 9 S.W .2 d 1 4 6 , 1 4 8 -4 9 (1 9 4 7 ); W ade v. Jones , 526 S. W
. 2d 160, 162-63 ( T ex . Ci v . A pp. -- Dall as 1975, n o writ ). T h e l aw pres umes t h at co n t ract s are l egal , an d t h e b urden t o pro v e i l l egali

t y i s o n t h e part y as s ert i n g i t , i n t h i s cas e, A p p e l l an t s . Se e F r an k lin , 8 4 7 S
. W. 2 d

at 3 1 0
. U nl e s s t he f

a c e o f t he c o nt r a c t s ho w s i

t i s i l l e g a l , t he p art y a s s e rt i n g i l l e g a l i t y m u s t p re s e n t e v i d e n c e d e mo n s t rat i

n g t h e i l l e g a l i

t y b e f o re a c o urt may

d e c l are t h e co n t ract v o i d. Se e Le wis , 1 9 9 S
. W
. 2 d at 1 4 9 ; F r an k lin , 847 S. W
. 2d at 310. We be g i n w i t h t he p r e s u m

p t i o n t ha t t he c o nt r a c t i s l e g a l
. Ap p e l l ant s d i d no t i nt r o d u c e any
ev i den ce e s t ab l i s h i

n g t h at t h e co n

t ract was i l l egal at t h e t i

me i t was made. No r do t h ey al l ege t h at F ri eda di d n o t h o l d t h e appro pri at e l i cen s es at t h e t i me o f t h e o ral

agreem en t t h at J o y wo ul d pay

h er t h e p r oc e e d s r e c e i

v e d f r om th e tw o W i

n d f ar m P r oj e c ts
. B e c a

u s e th e c on

tr a c t c ou l d

h av e b een perf o rm ed i n a l egal f as h i o n at t h e t i

me i t was made, A

ppel l an t s h ad t h e b urden

t o i n t ro duce e v i den ce pro v i n g i l l egali t y . T h i s t h ey

f ai l ed t o do
. W e o v errul e Iss ue On e. UNENFOR CEAB ILI TY I n t h ei r seco n d i ssue, A

pp el l an t s m ai n t ai n t h at t h e o r al

agr eemen

t i s un en f o r ceab l e b ecause th e w r i tte n a g r e e me n

t i s un am b i g u ou s an d c on s ti

tu te s th e e n

ti r e a g r e e me n

t of th e p ar ti e s . A

p p e l l an ts
c o nt e nd t hat J o y a c qu i r e d t he r i g ht t o t he p r e m

i u m s e arne d

f r o m t he w indm

i l l p r o j e c t s w he n s he purch as ed t h e b us i

n es s b eca us e F ri eda c o n

v ey ed t h e “ f i l es ” t o h er as part o f

t h e t ran s act i o n , wh i ch incl u d e d t he r i g ht t o t ho se p r e m i u m s. I n t hei

r r e p l y br i e f , App e l l ant s have e xp and e d u p o nt h is argumen t
. Po i nt i n g t o an

i n t egrat i o n cl aus e i n t h e wri t t en co n t ract , t h ey

al l ege t h at t h e o rala g r e e me nt i s une nf o r c e a bl e and t he w r i t t e n a g r e e me nt m

u s t be e nf o r c e d a s w r i t t e n and c anno t be
a d d e d t o o r v ari e d

b y p arol e v i d e n c e . Th e p arol e v i d e n c e ru l e i s a

ru l e o f s u b s t an t i v e c o n t ra c t l aw , n o t e v i d e n c e . Hu ba c e k v . E nn is State B ank, 1 5 9 T e x. 1 6 6 , 3 1 7 S
. W
. 2 d 3 0 , 3 1 ( 1 9 5 8 ) ; DeC

lairev. G & B McI

ntosh F amily Limited Par tne r s hip , 2 6 0 S
. W
. 3 d

3 4 , 4 5 ( T e x . A

p p . - - H ou s ton [ 1 s t D i s t.] 2 0 0 8 , n o p e t. h
. )
. W e r e v i e wp ar ol
ev i den ce qu est i o n s de novo , a s qu e s t i o n s o f l aw . DeCl ai re , 260 S. W
. 3d at 45. W h e n t h e p ar t ie s h av e c o n c lu d e d a v a lid , in t e g r a t e d a g r e e me n

t , t h e p a r o l e v id e n c e ru le p re c l u d e s e n f o rc e me n t o f a p ri o r or c o n

t e m p o ran e o u s i

n c o n s i s t e n

t a g re e me n

t
. Edas cio, L

. L. C. v. Nexti raOn e L

. L

. C. , 2 6 4 S
. W
. 3 d 7 8 6 , 7 9 6 ( T e x. App
. - - H o u st o n [ 1 st D i st
. ] 2 0 0 8 , p e t
. f i l e d ) ; ISG Sta te Oper ations, I nc. v. National Her itage I n s u r a n c e Com

pany , 2 3 4 S.W .3 d

7 1 1 , 7 1 9 (Te x .A

p p .-- E a s t l and 2 0 0 7 , p e t
. d e ni e d )
. T he e xe c u t i o n o f a w r i t t e n c o nt r a c t p r e s u me s t ha t a l l p r i o rne g o t i a t i o ns
an d a g re e me n

t s re l at i n g t o t h e t ran s a c t i o n

h av e b e e n

me rg e d i n t o t h e w ri t t e n c o n t ra c t
. Edas c io , 264 S. W
. 3d at 796; ISG Stat e Ope r ations , 2 3 4 S
. W. 3 d

at 7 1 9
. C o ns e qu e nt l

y , t he a g r e e me nt w i l l

be
e n f o rc e d a s w ri t t e n an d c an

n o t b e a d d e d

t o , v ari e d , o r c o n

t ra d i c t e d b y p arol e v i d e n c e . Edas c io , 264 S. W
. 3d at 796; ISG Stat e Ope r ations , 2 3 4 S
. W
. 3 d

a t 7 1 9
. T h e p ar o l e v id e n c e ru le is p ar t ic u l a r ly appl i cab l e wh en t h e writ t en co n t ract co n t ai n s a reci t al t h at i t co n t ai n s t h e en t i re agreemen

t b et wee n t h e p art i e s o r a

s i m i l arl y-w o rd e d me rg e r p rov i s i o n . Edas c io , 264 S
. W. 3 d a t 7 9 6. E v i den ce t h at
v i ol a te s th e ru l e i s i

n c om p e te n t an d w i th out p r ob a ti

v e f or c e , an d c an n ot p r op e r l

y b e g i v e n l e g a l e f f e c t. G a r n e r v . F id e li ty Ba n k , N .A. , 2 4 4 S.W .3 d

8 5 5 , 8 5 9 (Te x .A

p p .--D a l l a s 2 0 0 8 , n o p e t .). Pa rol e v i d e n c e may

b e a dm i s s i b l e t o s h o w c o l l a t e ra l , c o n t e m p o ran e o u s a g re e me n

t s t h a t are
c o n s i s t e n t w i t h t h e un d e rl

y i n g ag r e e me n

t
. Gar y E. Patter

s on & A s s ociates, P

. C. v. Holub , 264 S
. W
. 3 d 1 8 0 , 1 9 7 ( T e x. App
. - - H o u st o n [ 1 st D i st
. ] 2 0 0 8 , p e t
. d e ni e d ) ; DeCl ai re , 260 S. W
. 3d at 45. B u t t h is e x c e p t io n

d o e s n o t p e r mit p ar o l e v id e n c e t h a t v ar ie s o r c o n t r a d ic t s e it h e r t h e e x

p r e s s t e r mso r t h e i

m p l i e d t e rm s o f t h e w ri t t e n a g re e me n

t
. Gar y E. Patter

s on , 2 6 4 S
. W
. 3 d

at 1 9 7 ; DeCl ai re , 2 6 0 S
. W. 3 d at 4 5
. A c o l l at e r a l a g r e e me nt i s o ne t he p ar t i e s m i g ht na t ur a l l

y mak e s e p ar a t e l

y , i
. e . , o ne
n o t o r d in ar ily

e x p e c t e d t o b e e mb o d ie d in , o rin

t e g r a t e d w it h t h e w r it t e n

a g r e e me n

t an d n o t s o c le ar ly
c o n n e c t e d w i t h t h e p ri n c i p a l t ran s a c t i o n a s t o b e p art an d p arc e l o f i t
. Gar ner , 244 S. W
. 3d at 859. A n a g r e e me n

t i s i n te g r ate d i f th e p ar ti e s i

n te n d e d a w r i

ti n g to b e a f

i n a l a n d c o m

p l e te
e x p re s s i o n o f a g re e d t e rm s . Morgan Bui ldings and Spas, Inc. v. Humane Society of Southeas t Texas , 2 4 9 S
. W
. 3 d

4 8 0 , 4 8 6 ( T e x . A

p p . - - B e a u mon t 2 0 0 8 , n o p e t.)
. T h e i

n c l u s i on of a me r g e rori

n te g r a ti on
c l a u s e d o e s n o t c o n c l

u s i v e l y e s t a b l i s h t h a t t h e w ri

t t e n c o n t ra c t i s f u l l y i n t e g rat e d
. Id

. A fu lly i nt e g r a t e d w r i t t e n a g r e e me nt i s a

f i na l and c o m p l e t e e xp r e s s i o n o f a l l

t he t e r m s a g r e e d

u p o n by t he p art i e s . Id
. A

p ar t ia lly i n t e g r at e d

a g r e e me n

t is a fin a l an d c o mp le t e e x

p r e s s io n o f a ll t h e t e r ms
a d dr e s s e d i n t hat w r i t t e n a g r e e me nt , bu t i s no t a f i na l and c o m p l e t e e xp r e s s i o n o f

a l l t he t e r m s t he p art i e s h av e a g re e d

u p o n . Id
. A c o ur t c o ns i d e r s t he s urr o und i ng c ir c u ms t a n c e s i

n d e t e r m i ni ng
w h e t h e r, an d

t o w h at d e g re e , an

a g re e me n

t i s i n t e g rat e d
. Id

. J o y an d F r ie d a d id n o t h av e a

w r it t e n a g r e e me n

t w h e r e b y F r ie d a

s o ld E llys o n A b s t r a c t t o J o y. I ns t e a d , Fr i e d a

s o l d J o y t he r e a l

p r o p e r t y , i

nc l u d i ng i m p r o ve me nt s , t he a

bs t r a c t p l ant , and

t he p e r s on a l p r op e r ty l oc ate d

on th e b u s i n e s s p r e m

i s e s . J oy an d F r i e d a s i g n e d th e i m p r ov e d p r op e r ty
c om m e r c i a l c on tr a c t on D e c e m

b e r 2 2 , 2 0 0 0 , w h e r e b y

F r i e d a a g r e e d to c on v e y th e r e a l p r op e r ty to Jo y f o r$1 50 , 00 0. S ect i o n

11 o f t he c o n t r act , en t i t l ed “ S peci al

P r o v i si o n s” pr o v i dedas f o l l o ws:

“ T h i s s a l e s h a l l

i n c l u d e th e r e a l

e s tate an d

a l l i m p r ov e me n ts l oc a te d

th e r e o n ; A l l

e qu i p me n t,
co m put ers, suppli es , ab s t ract pl an t , co pi ers, f

ax machi n es , Sel l er wi l l

n et $150, 000. 00. ” Th e co n t ract
a l s o i nc l u d e d an i nt e g r at i o n c l a

u s e i n S e c t i o n 2 2 ( C ) : “T hi s c o nt r a c t c o nt a i ns t he e nt i

r e a g r e e me nt
o f t h e part i es an d may

n o t b e ch an ged ex cept b y writ t en agreem en t
. ” D e s p i t e t he r e a l

p r o p e r t y c o nt r a c t ’s r e c i

t a t i o n t ha t i

t c o nt a i ns t he e nt i

r e a g r e e me nt o f

t hepart i es , i

t di d n o t s et f

o rt h al l t h e t erm s o f

t h e s al e an d t ran s f

er o f perso n al pro pert y . On

J an uary 5, 20 01 , F ri e da

e x e c ut e d a

“ B i l l o f Sa l e ” wh i c h

rec i t e d t h e s a l e o f

c e rt a i n pe rs o n a l p r o p e r t y

t o E. P. Ad am s and

J o y B
. Ad am s , e f

f e c t i ve J anu ary

3 0 , 2 0 0 1
. T he B ill o f S a l e i nc l u d e s t he f

o l l o w i ng d e s c r ip t io n

o f t h e p r o p e r t y: A ll o f t h e p e r s o n a l p r o p e r t y s it u a t e d at t h e o ffic e s o f E lly s o n A b s t r a c t an d

T it le C o m p an y at 1 1 7 S o u th M a i

n , F o r t S to c kto n , P e c o s C o un ty , T e x a s , 7 9 7 3 5
. . . i n c l u d i n g b u t n o t l i

m i t e d t o a l l f

urn i t ure , f i xt ure s , c o m

p u t e rs i n c l u d i n g a l l s o f t w are an d an y r eco r ds co n

t ai n ed i n t h e h ar d d r i

v e, al l f i l es, al l car d f i l es o f l egal t r an sact i o n s, t y p e w r i t e r s , c a l c u l at o r s , a d d i

ng ma c hi ne s , c o p i e r s , t e l e p ho ne s , a l l o f f i c e s u p p l i e s , and any and a l l o t he rp e r s o na l

p r o p e r t y s i t u a t e d a t t he lo c a t i o n o f

E l l y s o n Abs t r a c t and Ti t l e C o m p an y . T h e B ill o f S a le s e t s fo r t h

t h e t e r ms o f t h e p e r s o n a l p r o p e r t y t r an s fe rr e d fr o m F r ie d a

t o J o y an d

it l i s te d i te m s th at w e r e n ot i

n c l u d e d i n th e r e a l p r op e r ty c on

tr a c t. A p p e l l an ts c l a i m th a t th e or d e r s f

or t i t l e co m m i t men t s were pers o n al

pro pert y an d were i

n cl uded i n t h e B i l l o f Sal e as “ f

i l es . ” A

“ co m m i t men t f o r t i t l e i n s uran ce” i s def

i n ed b y t h e Tex as In s uran ce Co de t o mean a t i t l e i n s uran ce f o rm un der wh i ch a t i

t l e i n s uran ce co m

pan y o f f ers t o i s s ue a t i

t l e i n s uran ce po l i cy s ub

j ect t o s t at ed
e x c e p t i o n s , re qu i

re me n t s , an d t er m s . T EX .I NS .C O D E A NN . § 2 7 0 1 .0 0 1 (a )(V e rn o n 2 0 0 9 ). A
c o mmi t me n t fo rt it le in s ur an c e c o n s t it u t e s a s t a t e me n t o f t h e t e r ms an d

c o n d it io n s o n

w h ic h a t it le i n s uran c e c o m

p an y i s w i l l i n g t o i s s u e i

t s p o l i c y . T EX .I NS .C O D E A NN . § 2 7 0 1 .0 0 1 (b )(V e rn o n 2 0 0 9 ). T h e r e a l p r op e r ty c on

tr a c t an d th e b i l l of s a l e ar e s i l e n t w i th r e s p e c t to th e r i g h

t to th e p r e m

i u m s f r om t h e W in d far m P r o

je c t s , n e it h e ro f w h ic h

h a d c lo s e d a t t h e t ime o f t h e s a le
. I n s u p p o r t o f t h e ir
ar g u me n t th at “ f i l e s , ” a s u s e d

i n th e B i l l of S a l e , me an

t or d e r s f or c om m i tme n ts , A p p e l l an ts p oi n t to t h e t est i m o n y o f Br en da Faub i o n , a f

o r mer em pl o yee o f E l l y so n A b st r act
. Dur i

n g A pp el l an t s’ cr o ssex am i n at i o n , co un sel

asked Faub i o n

wh at makes up a t i

t l e pl an t , an d sh e r espo n ded“ [ t ] h e r eco r ds, th e e qu i p me n t, th e f i l e s . ” S h e e x

p l a i n e d th a t an a

b s tr a c t p l an

t i s c om p r i s e d of th e r e c or d s w h i c h s h ow pro pert y t i t l e. T h e f o l l o wi n g ex ch an ge t h en

o ccurred:[ A p p el l ant s’ co un sel ] : W

h at d o yo umea n

b y ‘f i l es’? [F aub i o n ]: I m ean

t h e ex i s t i n g f i l es t h at were l ef

t t h ere. [ A p p e l l an ts ’ c oun s e l ] : P e op l e th a t h a d a s k e d f or c om m i tme n ts
. R i g h t? [ F a u b i on ] : R i g h

t. [ A p p e l l an ts ’ c oun s e l ] : P e n d i

n g w ork
. R i g h

t? [ M c F a d d e n ’ s c o un s e l] : O b je c t a s t o fo r m. [ A p p e l l an ts ’ c oun s e l ] : P e n d i

n g w ork
. R i g h

t? [ F aub i o n ] : Y es. F aub i o n ’s t est i

mo n y as t o t h e mean i

n g o f t h e t er m “ f i l es” i s i n co m pet en t p a r o lev i den ce b ecause A pp el l an t s, wh o h av e assert ed t h r o ug ho ut t r i al

an d ap peal

t h at t h e co n

t r act s ar e un am

b i gu o us,
o f f e re d i t t o e x p l a i n t h e me an i

n g o f t h e t e rm

“ f i l e s ” i n t h e B i l l o f Sa l e . Swinnea v. E

R I Cons ulting Engineer s, Inc. , 2 3 6 S
. W
. 3 d

8 2 5 , 8 3 5 ( T e x . A

p p . - - T y l e r2 0 0 7 , p e t. f

i l e d ) ( p ar ol

e v i d e n c e ru l e p r oh i

b i ts t h e adm i s s i o n o f ex t ri n s i c ev i den ce t o v ary

o r ex pl ai n t h e t erm s o r co n

t radi ct t h e l egal

ef f ect o f an
un am b i g u ou s w r i

tte n i n s tr u me n t i n th e a b s e n c e of a s h ow i n g of f r a u d , a c c i d e n

t, or m i s tak e i n i ts p re p arat i o n). E ve n i f Fau bi o n’s t e s t i

mo ny o n t he s u bj e c t o f t he me ani

ng o f t he t e r m “f i l e s ” i s c o m

p e t e nt
ev i den ce, i

t do es n o t addres s wh o h ad t h e ri gh t t o t h e prem

i um s . T h ere i s n o l an guage i n t h e real pro pert y co n t ract o r t h e b i l l

o f s al e b y wh i ch F ri eda un am b i guo us l y ex press ed an i

n t en t t o t ran s f er t o J o y t he r i g ht t o t he p r e m

i u m s f r o m t he Wi nd f ar m P r o j e c t s a s p a r t o f

t he s a l e . C o ns i d e r i

ng t he
s urr o un di n g ci rcum s t an ces , we c o n cl

ude t h at t h e real

pro pert y co n

t ract i s o n l

y part i al l y i n t egrat ed be c a u s e i t d o e s no t f

u l l y a d dr e s s t he t r ans f

e ro f p e r s o na l p r o p e r t y and i t d o e s no t a d dr e s s at a l l

t he ri g h t t o t h e p re m

i u m s f rom t h e p e n d i n g t i t l e c o m m i t me n t o rd e rs . M c F a d d e n ’ s e x

p e rt w i t n e s s , B e rt M as s ey , ex

press ed an ex

pert o pi n i o n t h at h e wo ul d h av e ex pect ed t h e co n

t ract b et wee n

t h e part i esto a d dr e s s a c c oun ts r e c e i v a b l e , a c c oun

ts p aya b l e , an d w or k i n p r og r e s s , b u t i

t d i d n ot. H e w e n

t on t o e xp l a i n t hat he w o u l d have e xp e c t e d t he p ar t i e s t o have an a g r e e me nt p e r t a i ni ng t o o u t s t and i

ng
o b l i gat i o n s o f

E l l y s o n A b s t ract , t o i

n co me t h at t h e s el l er ex

pect ed t o recei

v e b ut wh i ch

h ad n o t yet be e n r e c e i ve d , and w hat va l u e t o p l a c e o n t r ans a c t i o ns i n p r o g r e s s t ha t ha d

no t ye t c l o s e d
. R e f

e rr i ng t o t h e t wo o ut s t an di

n g o rder s f

o r t i t l e co m m i t men t s , M as s ey

ex pect ed t o s ee s o met h i

n g i n an agreem en t rel at i n g t o wh at co m

pen s at i o n , i f an

y , t h e pri o r o wn er wo ul d recei v e f o r t h e wo rk t h at was do n e b ut n o t pai d f

o r up unt i l

t h e t i me t h e t ran s act i o n

cl o s ed. Th e p art i e s ’ o ra l

a g re e me n

t t h a t J o y w o u l d p ay F ri e d a t h e p re m i u m s w h e n

t h e W i n d f arm Pr o j ect s cl o s ed do es n o t co n

t radi ct t h e wri

t t en agreem

en t
. T h eref o re, t h e ev i den ce rega

rdi n g t h e o ral
co n t ract i s co m

pet en t ev i den ce an d t h e o ral co n t ract do es n o t v i o l at e t h e merger do ct ri n e. I s s ue Two i s o v errul ed. SUF F I CI EN CY OF THE EV I DE NCE In Iss ue Th

ree, A ppel l an t s ch al l en ge t h e l egal

an d f act ual s uf f i ci en cy o f t h e ev i den ce
s uppo rt i n g t h e j ury ’ s f

i n di n g t h at J o y

A dam s en

t ered i n t o an o ral agreem

en t wi t h F ri eda M cF adden t o pay h ert h e pr o ceeds r esul

t i n g f r o m t i t l e po l i ci es i ssued i

n co n n ect i o n wi t h t h e W i n df ar m P r o j ect s. Legal Suf f iciency A “ n o ev i den ce” o r l egal i n s uf f i ci en cy po i

n t i s a ques t i o n o f l aw whi ch ch al l en ges t h e l egal
s u f f i c i ency o f t h e e v i d e n c e t o s u

p p o rt a p art i c u l ar f

a c t f i n d i n g . Ser r ano v. Union Planter

s B ank, N
. A. , 1 6 2 S
. W
. 3 d 5 7 6 , 5 7 9 ( T e x. Ap p . - - E l P a s o 2 0 0 4 , p e t
. d e ni e d )
. T he r e ar e t w o s e p ar a t e “no
e v i d e n c e ” c l a i

m s . Id
. Whe n t he p ar t y havi ng t he bur d e n o f p r o o f s u f f e r s an unf avo r a bl e f i nd i ng , t he po i n t o f err o r ch al l en gi

n g t h e l egal

s uf f i ci en cy o f t h e ev i den ce s h o ul d b e t h at t h e f act o r i s s ue wa s
es t ab l i s h ed as “ a m

at t er o f l aw.” Id
. W

h en t h e part y

wi t ho ut t h e b urden

o f pro o f s uf f ers a n
un f av o rab l e f i n di n g, t h e ch al l en ge o n appea l i s o n e o f “ n o ev i den ce t o s uppo rt t h e f i n di n g. ” Id .; Inre Estate of Livingston , 999 S. W
. 2d 874, 879 (T ex . A pp. -- E l Pas o 1999, n o pet
. ). In t hi s cas e, M c F a d d e n

h a d th e b ur d e n

to p r ov e th e e x i s te n c e of th e or a l c on tr a c t. A n a p p e l l at e c o urt w i l l

s u s t a i n a l e g a l s u f f i c i e n c y o r “ n o -e v i d e n c e ” c h a l l e n g e i f t h e re c o rd
s h o ws : (1) t h e co m

pl et e ab s en ce o f a v i

t al f act , (2) t h e co urt i s b arr ed b y rul es o f l aw o r ev i den ce f r o m g i vi ng w e i g ht t o t he o nl

y e vi d e nc e o f

f e r e d t o p r o ve a

vi t a l f a c t , ( 3 ) t he e vi d e nc e o f

f e r e d t o p r o ve
a vi t a l f a c t i s no mo r e t han a

s c i nt i l l a , o r( 4 ) t he e vi d e nc e e s t a bl i s he s c o nc l

u s i ve l y t he o p p o s i

t e o f t he
v i t a l f a c t
. City of Ke ller v. Wils on , 1 6 8 S
. W
. 3 d 8 0 2 , 8 1 0 ( T e x. 2 0 0 5 ) ; E l Pas o Independent School Dis tric t v. Pabon , 214 S. W
. 3d 37, 41 (T ex . A pp. -- E l Pas o 2006, n o pet
. ). In co n duct i n g o ur r ev i ew,
w e c o n s id e rt h e e v id e n c e in t h e lig h t mo s t fa v o r a

b le t o t h e v e r d i c t an d

in d u lg e e v e ry r e a s o n a

b le i n f e re n c e t h at w o u l d

s u p p o rt i t
. City of Ke ller , 168 S. W
. 3d at 822. E v en i f ev i den ce i s un di s put ed, i t i s t h e p rov i

n c e o f t h e t ri e r of

f a c t t o drawf

rom i t w h a t e v e r i

n f e re n c e s i t w i s h e s s o l o n g a s mo re t h an o n e i n f e re n c e i s p o s s i

b l e . Id
. at 8 2 1
. B u t i f t he e vi d e nc e a l l o w s o nl y o ne i nf e r e nc e , ne i

t he rt he t ri e r o f f a c t n o r t h e re v i e w i

n g c o urt may

d i s re g ard i t
. Id
. at 822. W e are al s o m i n df ul t h at t h e t ri er
o f f a c t is t h e s o le ju d g e o f t h e c r e d ib ilit y o f t h e w it n e s s e s an d t h e w e ig h

t t o b e g iv e n

t h e irt e s t imo n

y. Id
. at 819. W

h en t h ere i s co n f

l i ct i n g ev i den ce, i

t i s t h e pro v i

n ce o f t h e t ri er o f f

act t o reso l

v e s uch
c o n f l i c t s . Id
. at 8 2 0
. I n e ve ry c i r c u m s t anc e i

n w hi c h a

r e a s o na bl e t r i e ro f

f a c t c o u l d r e s o l ve
c o nf l i c t i ng e vi d e nc e e i

t he rw ay , t he r e vi e w i

ng c o ur t m

u s t p r e s u me i

t d i d s o i n f avo r o f t he p r e va i l i

ng p art y , an d d i s re g ard t h e c o n f l i c t i n g e v i d e n c e i

n i t s s u f f i c i e n c y re v i e w . Id
. at 821. If

t h e ev i den ce a

t tr i a l w ou l d e n a b l e r e a s on a

b l e an d f a i r - m i n d e d p e op l e to d i f

f e ri n th e i rc on c l u s i on s , th e n

th e tr i e rof f a c t m u s t b e a l l o w e d

t o d o s o . Id
. at 8 2 2
. S o lo n g a s t h e e v id e n c e fa lls w it h in t h is z o n e o f r e a s o n a

b le d i s a g re e me n

t , w e may n o t s u

b s t i t u t e o ur j u d g me n

t f o r t h a t o f t h e t ri e r-of

-f a c t
. Id
. T h e ul

t i mat e t est fo r le g a l s u ffic ie n c y is w h e t h e rt h e e v id e n c e a t t r ia l w o u ld e n a b le r e a s o n a

b le an d fa ir

- min d e d

p e o p le t o re a c h t h e v e rd i c t un d e r re v i e w . Id
. at 827.D e s p i t e J o y ’ s d e n i al t h at an

o ra l a g re e me n

t e x i s t e d , t h e re i s e v i d e n c e f rom w h i c h t h e j ury
c o u ld h av e fo un d

J o y a g r e e d

t o p ay F r ie d a

t h e p r e miums fr o m t h e W in d far m P r o je c t s . B e fo r e h is
m o t h er di ed, Bruce M cF adden as ked em pl o yees at E l l

y s o n A b s t ract o n s ev eral o cca s i o n s wh et h er t he Wi nd f ar m P r o j e c t s ha d c l o s e d
. E a c h t i

me , t he e m

p l o ye e s s a i d t he y ha d no t
. Whi l e dr i vi ng a l o ng I- 10 i n J ul y 2002, Bruce s aw t h at t h e wi n df arm h ad go n e up. Co n s equen t l y , h e ca l l ed J o y

an d as ked h er i f t h e W i

n df arm Pr o j ect s h ad cl o s ed. Sh e s ai d t h ey h ad, an d Bruce a s ked wh en h i s mo t h er was g o i ng t o g e t he rmo ne y . J o y

r e p l i e d , “I ’ve be e n be a t i

ng m y s e l f a bo u t t he he a d

and s ho u l d e r s t ry

i ng t o f i gure o ut a wa

y t o get h er pai d. ” J o y

rev eal ed t h at s h e h ad b een s peaki n g t o t h e Tex as In s uran ce Co m m i ssi o n and t h ey wo u l d n o t a ll o w J o y t o p ay

h er . Bru ce t o l d

Jo y t h at i t wa s h i s mo t h er ’s
r et i r em ent mo n ey and sh e wa s co un t i n g o n i t
. He t h en ask ed Jo y whet h er sh e h ad u sed h i s mo t h er ’s
m o n ey t o b uy t h e n ew $65,000 Cadi l l ac Esc al ade h e h ad s een s i t t i n g i n t h e parki

n g l o t
. J o y

repl i ed,

“ B ru c e , I h av e n ’ t s p e n

t o n e d ime o f yo urmo t h e r ’ s mo n e y o n t h a t c ar . ” B ru c e t o ld

J o y h e w o u ld

c a ll h er t h e n ex

t day an d t h ey h

un g up. Bruce c al l ed h er a co upl e o f day s l at er an d J o y

adv i s ed h i

m t h at
s h e h ad an at t o rn e y

an d B ru c e s h ou l d

c a l l h i m . B ru c e a l s o te s ti f

i e d th a t a f te rth e s a l e of

E l l y s on A b s tr a c t, hi s moth e rh a d r e ta i n e d an E l l y s on A b s tr a c t e s c r owa c c oun

t to r e c e i v e th e p r e m

i u m s f r om t h e W i n df arm Pr o j ect s . A cco rdi

n g t o h i m , t h ere wo ul d h av e b een n o o t h er reas o n f o r h er t o keep a

n
e s c row a c c o un

t . H i s mo t h e r k e p t t h e a c c o un t o p e n un t i l t h e d ay s h e d i e d
. J ack M cIn

t y re, an i n depen den

t b us i n es s man , s po ke wi

t h F ri eda i n J ul y o r A u g us t o f 2000 ab o ut pu r ch asi

n g E l l y so n A b st r act
. F r i eda sai d t h e sal e wo ul d i n cl ud e t h e b ui l di

n g an d t h e b usi

n ess b u t s h e cl earl y i n di cate d to h i m th at s h e w ou l d

r e ta i n tw o “ w i n dm i l l c on tr a c ts
. ” S h e d i d

n ot
s peci f i call y t el l M cIn

t y re wh at t h e co n

t ract s were wo rt h

b ut h e un derst o o d t h at i

t was a s ub s t an

t i al
am o un t o f mo n ey . M cIn

t y re di d n o t purch as e t h e b us i n es s b eca us e h e co ul d n o t af

f o rd it at t h e t i

me. Bren da F aub i o n

wo rked f o r b o t h F ri eda an d J o y at E l l y s o n A b s t ract
. On

M arch 30, 2001,E lly s o n

A b s t r a c t r e mit t e d

t w o c a s h ie r ’ s c h e c k s t o “ F r e id a M c F a d d e n

d b a E lly s o n

A b s t r a c t , ” o n e in t h e amo un

t o f $ 4 , 4 0 5
. 8 7 an d

t h e o t h e r i n t h e amo un

t o f $ 6 , 5 6 7
. 8 3
. O n

A u g u s t 8 , 2 0 0 1 , R o s ie C a u s e y , an E l l

y s o n Abs t r a c t e m

p l o ye e , s e nt a

c h e c k t o Fr i e d a i n t he amo unt o f

$ 5 , 6 3 1 w i

t h t he
n o t a t io n “ W o o dw ar d

M t n T WP
- 0 6
- 0 3
. ” C a

u s e y a t t a c h e d a

n o t e w h ic h

s t a t e d , “ F r ie d a , I kn o wt h is i s n ’ t ex act l

y wh at yo u were ex

pect i n g, b ut we’ v e h ad t o s eparat e t h e ch arges f o r Ci el o an d Ch i cago T i t l e. Ci el o i s pay

i n g f o r t h ei r ch arges b ut we h av e n o t rece i ve d a ny t h i n g f ro m Ch i cago . ” F ri eda call ed El l y s o n A b s t ract an d s po ke wi

t h F aub i o n ab o ut t h es e ch ecks
. F aub i o n t o l d F ri eda t h at J o y

h ad i n s tru c te d th e m to s e n d th e c h e c k s to h e r . F r i e d a a s k e d h e rw h e th e rth e ma i

n p ar t of th e tr an s a c ti on h ad cl o s ed an d F aub i o n

t o l d h er i t h ad n o t
. F ri eda s ai d t h at s h e wa s n o t go i n g t o cas h

t h e ch ecks be c a u s e s h e b el i ev ed t h e dea l was go i n g t o cl o s e an d s h e di d n o t wan t i t t o appea

r t h at s h e wa s
a g r e e i ng t o t ak e t he l e s s e r amo unt o f m o ne y . Fr i e d a i

nd i c a t e d t o Fau

bi o n s he e xp e c t e d t o r e c e i ve t h e mo n e y w h e n

t h e d e a l c lo s e d

b e c a u s e t h e y h a d

d o n e 9 0 p e r c e n

t o f t h e w o r k
. A

p p r o x imat e ly s ix
m o n t h s af t er t h e s al e o f

E l l y s o n A b s t ract , F aub i o n

s po ke wi t h B r u c e M c Fa d den
. He a s ked h er
w he t he rt he Wi

nd f ar m P r o j e c t s ha d c l o s e d
. S he t o l d hi m t he y ha d no t
. T w o w e e k s l a t e r , B ru c e w e nt t o t he o f f i c e and s p o k e w i t h Fau bi o n a bo u t unc a s he d

c he c k s he ha d f

o und
. Ac c o r d i

ng t o Fau bi o n,
s o me o f t h e ch ecks were f o r t i t l e po l i cy prem

i um s t h at h ad b een

co l l ect ed af

t er Jo y h ad purch as ed E l l y s o n A b s t ract
. F aub i o n

as s umed t h at t h o s e ch ecks h ad n o t b een cas h ed b eca

us e t h ey h ad b e en
m i s p l a c e d
. T hr e e o rf

o uro t he rc he c k s w e r e f

r o m C ie lo L a n d o n t he C hi c a g o T i t l e t r ans a c t i o n. F aub i o n kn ew f r o m h erpr i o rco n

v er sat i o n wi t h F r i eda t h at sh e pu r

po sel y h ad n o t cash ed t h o se
c h e c k s . F a

u b io n r e c a lle d t h at a ft e rE llys o n

A b s t r a c t r e c e iv e d

t h e mo n e y fo rt h e S t e w ar t T it le p o lic y, J oy tol d h e r th at s h e d i d

n ot kn oww h e th e rs h e w ou l d b e a b l e to g i v e F r i e d a an y of th e mon e y . J oy
ex pl ai n ed t h at s h e h ad co n

t act ed St ewa

rt T i t l e i n San A n t o n i o an d t h ey ques t i o n ed wh et h er i t was l e g a l f o r J o y t o d i s b urs e an

y o f i t t o F ri e d a .M e l o dy T i j e r i na , a f o r me re m p l o ye e o f E l l y s o n Abs t r a c t , t e s t i f

i e d t ha t J o y w arne d t he
e mp lo ye e s if any o f t he m t o l d Fr i e d a t ha t t he mo ne y

f r o m t he Wi nd f ar m P r o j e c t s ha d c o me i n, s he
wo ul d f i re all o f t h em . It was b eca

us e o f t h i s t h

reat t h at T i

j eri n a n ev er t o l d F ri eda t h at t h e m o n ey h a d b e e n r e c e i v e d
. T i j e r i n a kn e wJ oy ’ s th reat was rel at ed to ac on d i

ti on of th e s a l e of

E l l y s on Abs t r a c t t o J o y . T i

j e r i na qu i t w o r k i ng f o r E l l y s o n Abs t r a c t i

n 2 0 0 1 be c a

u s e o f J o y ’s c o nd

u c t and s he
m ov e d to I d ah o. T i

j e r i n a r e g r e tte d n e v e rte l l i

n g F r i e d a th a t th e mon e y

f r om th e W i n d f ar m P r oj e c ts ha d be e n r e c e i

ve d i n J u l y o f 2 0 0 1 , bu t s he t o l d

B ru c e i n J anu ary o f 2 0 0 6 w ha t s he kne w . F i na lly, McF add en

o f f er ed ex per t t est i mo n y t o pr o v e t h e ex i st en ce o f an o r al agr eemen

t
. Ber t Mass ey

i s a T ex as at t o rn ey

wh o pract i ces real

es t at e l aw a

n d h as o wn ed a t i

t l e i n s ur a nc e age n cy

s i n ce 1980. M as s ey i s al s o a l i cen s ed es cro w o f f i cer an d i s an appro v ed ex am i n i n g at t o rn ey o f

real es t at e t i t l es f o r f i v e t i t l e i n s uran ce un derwrit i

n g co m pan i es wh o do b us i

n es s i n T ex as . M as s ey

h as quali f

i ed as
an ex p e r t o n t i t l e i

n s uran ce i

n pro cee di n gs b ef o re t h e St at e In s uran ce B o ard an d St at e In s uran ce Co m m i ssi o n . I n

pr epar at i o n

f o rh i s t est i

mo n y , Mass ey

r ev i ewed a l ar ge amo un t o f do cum en t s, i n c l u d i n g th e or d e rs h e e ts on

tw o p ote n

ti a l ti tl e i n s ur an c e tr a

n s a c ti on s an d th e d oc u me n ts r e l a te d to t h e s a l e o f

El l y s o n A b s t ra c t t o J o y . H e a l so r evi ew ed M c F a d d e n ’ s t ri a l e x h i b i t n o t e b o o k s . In M a s s e y ’s o p i

ni o n, t he r e w a s an o r a l

a g r e e me n t be t w e e n t he p a r t i e s . H e ba s e d

hi s o p i ni o n o n t he i s s u a n c e o f c h e c k s f

r o m E l l y s o n A b s t r a c t t o F r i e d a , t h e f

o r me r o w n e r . H e s t a t e d t h e r e h a d to b e an a g re e me n

t re l at i n g t o s o me mat t e rs t h a t w e re g o i n g t o h a p p e n a f t e r t h e c l o s i

n g b e c a u s e t h e re
w ou l d h av e b e e n

n o n e e d f orth e p ay

me n ts to b e ma d e a f

te rth e b u s i

n e s s w a s s ol d
. I n

c on n e c ti on wi t h h i s rev i ew o f t h e do cum

en t s pert ai n i n g t o t h e s al e o f

E l l y s o n A b s t ract t o J o y , M as s ey

t es t i f i ed t h a t t h e w r it t e n

c o n t r a c t s d id n o t a d dr e s s a c c o un

t s r e c e iv a b le , a c c o un

t s p aya b le , an d w o r k in p r og r e s s . H e e x

p l a i n e d th at h e w ou l d h av e e x

p e c te d th e p ar ti e s to h av e an

a g r e e me n

t p e r ta i n i n g to
o ut s t an di n g o b l i gat i o n s o f

E l l y s o n A b s t ract , t o i

n co me t h at t h e s el l er ex

pect ed t o recei

v e b ut wh i chh ad n o t yet b een recei v ed, an d wh at v al

ue t o pl ace o n

t ran s act i o n s i

n pro gress t h at h ad n o t yet cl o s ed. Ref er r i ng t o t h e t wo o ut st an di n g o r der s f

o rt i t l e co m m i t men t s re l at ed t o t h e W i

n df ar m P r o j ect s, M a s s e y e x p e c te d to s e e s ome th i

n g i n an a g r e e me n

t r e l a ti n g to w h a t c om

p e n s a ti on , i f an

y , th e p r i or
ow n e rw ou l d

r e c e i v e f orth e w or k

th at w a s d on e b u t n ot p a i d f oru p un ti l th e ti me th e tr an s a c ti on
c l o s e d
. T he w r i

t t e n a g r e e me nt s d i d

no t a d dr e s s any

o f t he s e ma t t e r s . M a s s e y

c o nc l u d e d t hat t he p ar t i e s m u s t have ha d

an o r a l a g r e e me nt be c a

u s e E l l y s o n Abs t r a c t p a i d

m o ni e s t o Fr i e d a a ft e rt he
s a le
. I n h is t h ir t y- s ix

ye ar s in t h e t it le in s ur an c e b u s in e s s , M a s s e y h a d n e v e rw o r k e d

o n an y t it le
co m m i t men t s as v al uab l e as t h e W i

n df ar m P r o j ect s. I n h i s o pi

n i o n , t h er e was n o qu est i o n t h at mo st
rura l t i t l e i n s uran c e c o m

p an i e s w o u l d

c o n s i d e r t h e s e t o b e t h e d e a l s o f a l i f e t i me . In addi t i o n t o ex pert t es t i mo n y , t h ere was o t h er ev i den ce rel ev an t t o t h e ex i s t en ce o f an

o ral
c o n t r a c t
. F r ie d a

o ffe r e d t o s e ll t h e b u s in e s s t o J a c k M c I n t yr e b u t ma d e c le art o h im t h a t t h e s a le
w o u l d no t i nc l u d e t he Wi

nd f ar m P r o j e c t s . J o y

p ur c ha s e d

t he bu s i ne s s f o ro ne - ha l f

o f t he p r i c e s he h ad b een quo t ed t wo years e a r l i e r . Af t er pur ch as i

n g E l l y s o n A b s t ract , J o y

t h reat en ed t o f

i re h er
e m p l o ye e s i f any o f t h e m t o ld F r i e d a

t ha t E l l y s o n Abs t r a c t ha d

r e c e i ve d t he mo ne y

f r o m t he W i n d f ar m P r oj e c ts
. M e l ody

T i j e r i n a kn e w th a t J oy ’ s th

r e a t w a s r e l a te d to a c on d i ti on of th e s a l e of E l l y s o n A b s t ract
. J o y

h ad El l y s o n A b s t ract em

pl o yees f o rward ch ecks t o F ri eda s ev eral mo n t h s af t er t h e s al e. A f

t er E l l y s o n A b s t ract recei

v ed t h e pro cee ds f

ro m t h e St ewa

rt T i t l e dea l , J o y

t o l d Bren da F a u b io n t h at s h e d id

n o t kn o ww h e t h e rs h e w o u ld b e a b le t o g iv e t h e mo n e y t o F r ie d a . T h is is
c o nt r ary t o he rp o s i

t i o n at t r i a l

t hat Fr i e d a

d i d no t r e t a i n any r i g ht t o t he p r e m

i u m s w he n s he s o l d

t he b u s i n e s s . Si m i l arl y , w h e n B ru c e M c F a d d e n

c a l l e d J o y i n J u l y 2 0 0 1 a b o u t t h e c l o s i

n g o f t h e W i

n d f arm P r o j e c t s an d h i s mo t h er’ s mo n ey , J o y di d n o t i n di cat e an

y s urpr i s e o r di s agreem

en t t h at F ri eda
e x p e c t e d t o r e c e iv e mo n e y in c o n

n e c t io n w it h t h e c lo s in g o f t h e W in d far m P r o je c t s b u t in s t e a d

s a id
s h e w a s try

i n g to f i g ur e ou t aw ay

f orh i s moth e rto g e t “ h e rmon e y . ” W h e n B ru c e a s k e d

J oywh et h er sh e h ad purch as ed a n ew v eh i cl e wi t h h i s mo t h er’ s mo n ey , J o y agai n ref err ed t o t h e m

o n ey
as F ri eda’ s mo n ey an d i

n s i s t ed s h e h ad n o t s pen

t o n e pen n y o f “ y o ur mo t h er’ s mo n ey . ” W

h en v i ewe d i n t h e l i gh t mo s t f av o rab l e t o t h e v erdi ct , t h e f o rego i n g ev i den ce s uppo rt s a co n cl us i o n t h at F ri eda
r e t a i ne d t he r i g ht t o t he p r e m

i u m s f r o m t he Wi nd f a r m P r o j e c t s w he n s he s o l d

t he bu s i ne s s t o J o y , and J o y an d F ri e d a h a d an o ra l a g re e me n

t t h a t F ri e d a

w o u l d r ec ei v e t h e p re m i u m s w h e n

W i n d f arm Pr o j ect s cl o s ed. F actual Suf f iciency In rev i ewi n g a ch al l en ge t o t h e f

act ual s uf f i ci en cy o f t h e ev i den ce s uppo rt i n g a v i t al f act , we
m u s t c o ns i d e r , w e i g h, and

e xam i ne a l l o f t he e vi d e nc e i

n t he r e c o r d , bo t h s u

p p o r t i ng and a g a i ns t t he f i n d i n g , t o d e c i d e w h e t h e r t h e v e rd i c t s h o u l d b e s e t a s i d e . P las-Tex, I nc. v. U.S. Steel C

or p. , 772 S
. W
. 2 d 4 4 2 , 4 4 5 ( T e x . 1 9 8 9 )
. W h e n a p ar ty

a tta c k s th e f

a c tu a l s u f f i c i e n c y of an a dv e r s e f i n d i n g on
an is s u e o n w h ic h t h e o p p o s in g p ar t y h a s t h e b ur d e n o f p r o o f, w e s h o u ld

s e t a s id e t h e v e r d ic t o n ly i f th e e v i d e n c e s u

p p orti n g th e j ury

f i n d i n g i s s o w e ak a s to b e c l e ar l y w r on g an d

man i f e s tl y un j u s t. Se e C ain v . B ain , 709 S
. W. 2 d 1 75, 176 (T ex . 1986). W e are n o t perm i t t ed t o s ub s t i

t ut e o ur j u d g me n t f o r t h at o f t h e j ury . Golden Eagle A rcher y, I nc. v. Jack

s on , 1 1 6 S
. W. 3 d

7 5 7 , 7 6 1
- 6 2 ( T e x. 2 0 0 3 )
. Fu r t he r , w e be ari

n m i nd t hat t he j ury i s t he s o l e j u d g e o f t he c r e d i bi l i t y o f w i t ne s s e s and

t he
w e i g h t t o b e g i v e n t o t h e i r t e s t i m o n y . Id. A s n o t ed i

n o ur di s cus s i o n

o f t h e l egal s uf f i ci en cy ch al l en ge, Jo y

den i ed t h e ex i s t en ce o f

an
o r a l a g r e e me n

t
. Ap p e ll an

t s c h a ll e n g e d

t h e c r e d ibilit y

o f t h e w it n e s s e s w h o t e s t if ie d in s u p p o r t o f a f i n di n g t h at an o ral agreem en t ex i s t ed. Jo y

ex p l a i n ed t h at t h e t wo ch ecks s en t t o F ri eda i

n M arch 2 0 0 1 w e r e f

un d s F r i e d a

l e f t i n E l l y s on A b s tr a c t’ s e s c r ow a c c oun

t. S h e s a i d F r i e d a w a s e n ti tl e d to t h e ch eck is s u e d by C i el o Lan d i n co n n ect i o n wi t h t h e Ch i cago T i

t l e deal b ecause it was a
r e i m b ur s e me n t f or h e re x p e n s e s . I t w a s th e j ury ’ s ta s k to d e te r m i n e c r e d i b i l i ty an d r e s ol v e c on f l i c tsin

t h e e v id e n c e . T h e r e c o r d d o e s n o t d e mo n s t r a t e t h a t t h e e v id e n c e s u p p o r t in g t h e jury’ s fin d in g is
s o weak as t o b e cl earl

y wro n g an d man i f

es t l y un j us t
. W e o v errul e Iss ue Th ree.In t h ei r r epl y b r i ef , Ap p el l a n t s co n t en dt h e tr i a l co u r t f a i l ed t o sub m i t sep a r a t e da m a g es qu est i o n s f o r ea ch 6 c ause o f ac ti o n . Cit in g H

ar r is Co un ty v. Sm ith , 96 S .W .3d 23 0 ( Te x. 2 00 2) , A pp e llan ts ar g u e th at th e e r r o r is h a r m f ul b e c a use t h e sin gl e b r o a d- f o r m da m a ges qu e sti on i n c l u d e d b o t h v a l i d a n d i n v a l i d m e a sur e s o f da m a ges. A p p el l a n t s d i dn ot r a i s e t h es e a r g u m en t s i n t h ei r i n i t i a l br i ef bu t i n s t ea dr es t r i ct ed t h ei r com p l a i n t t o t h e a bs en ce of an in s tr uc tio n o n th e pro pe r me as ur e o f dama g es . Th e R

ule s o f App e llate P r o c e dur e don o t allo w an app e llan t to inc lu d e in a re p ly

b r ie f a n e w is s u e no t rai s e db y

it s o r ig inal b r ie f

. T EX .R .A PP . P
. 3 8
. 3
. A cc or d i n g l y , we wi l l n ot ad d r e s s the argume n ts rais e df o r the f irs t t ime in the re p ly

b r ie f
. S ee F ew v. F ew , 271 S.W.3d 341, 346-47 (Tex.App.-- El P as o 20 08 , pe t. s tr uc k) (is s ue r ais e d f o r th e f ir s t time in r e ply

b r ie f w as n o t pre s e r v e d f

o r app e al); G ray v. W

oo dville H ea lth C a r e C en te r , 22 5 S .W .3d 61 3, 6 20 ( Te x.App .-- El P as o 20 06 , pe t. de n ie d) (is s ue r ais e d f o r th e f ir s t time in r e ply b r ie f w as n o t pr e se r v e d f

o r appe al ). CO NVERS ION A ND B REACH OF FI DUC IARY DU TY I n I s s u e s Fo ur and Fi

ve , Ap p e l l ant s r a i s e s u f

f i c i e nc y c ha l l e ng e s t o t he j ury ’s f i nd i ng s o n t he
co n v ersi o n an d b reach

o f f i duci ary dut y caus es o f act i o n . It i s un n ece s s ary t o addres s t h es e i s s ues b e c a u s e th e j ury ’ s f

i n d i n g on th e b r e a c h

of c on tr a c t c a u s e of a c ti on w i l l s u p p ort th e j u d g me n

t. CH AR GE E RR OR In I s s ue Si

x , A ppel l an t s as s ert t h at t h e t ri al

co urt f ai l ed t o i n s t ruct t h e j ury

o n t h e v ari o us
e l e me n ts of d ama g e s r e c ov e r a

b l e i n c on n e c ti on w i th th e b r e a c h

of c on tr a c t, b r e a c h of f

i d u c i ary d u ty
an d co n v ersi o n caus es o f act i o n . Ques t i o n

7 i n t h e co urt ’ s ch arge as ked t h e f o l l o wi n g: 6 W h at s u m o f mo n e y , i f

an y, if p a id n o win c a s h , w o u ld

fa ir ly a n d r e a s o n a b ly co m pen s at e The E

s tate of F r ieda McF

adden f o r it s dam ages , i f an y , f o r t h e co n duct d e s c r i be d i n Q u e s t i o ns 2 , 4 , 5 , o r6 ? Th e i n s t ru c t i o n s a c c o m

p an y i n g t h i s qu e s t i o n d i d n o t i

n c l u d e an y i n s t ru c t i o n s o n

t h e p rope r me a s ure
o f dam ages. D ama g e s m

u s t be me a s ur e d

by a l e g a l s t and a r d and t ha t s t and ar d

m u s t be u s e d t o g u i d e t he f a c t f i n d e r i n d e t e r m i n i n g w h at s u m

w o u l d c o m p e n s a t e t h e i

n j ure d p art y . J a c k s o n v . F o n ta in e ’s Clinics, Inc. , 4 9 9 S
. W. 2 d 8 7 , 9 0 ( T e x. 1 9 7 3 )
. A j ury qu e s t i o n w hi c h f

a i l s t o g u i d e t he j ury

o n any p rope r l e g a l

me a s ure o f

d ama g e s i s f

at a l l y d e f e c t i v e . Id. T o p r e s e r v e e rr or , th e c om p l a i n i n g p ar ty
m u s t o b j e c t t o t h e c h arg e an d t e n d e r t h e i n s t ru c t i o n s i

n s u b s t an t i a l l y c o rre c t f

o rm . T EX .R .C IV .P.R u le 2 7 8 p r o v id e s : “ F ai lur e to s ub mit a d e f initi o n o r ins truc ti o n s h al l n o t b e d e e me d a g r o u n df o r re v e r s al 7 of t h e ju d g m en t u n l es s a s ubs t a n t i a l l y cor r ec t d efi n i t i on or i n s t r u ct i on h a s bee n r eq u es t ed i n wr i t i n g a n dt en d er ed by the p arty c o mp la inin g o f

the j u d g me n t.” P ri o r t o t he S up re m e C o u rt ’ s d e c i s i o n i n Ton y Gul l o M

ot ors , the e x c e p ti o n ap p li e d w h e n tw o o r mo r e c la ims 8 w er e dep en d en t up o n t h e sa m e set of f a ct s o r ci r cum st a n ces a n d t h u s w er e in t er t w i n ed t o t h e poin t o f b ei n g i n sep a r a b l e. Se e Tony Gul l o M

ot ors , 2 1 2 S
. W
. 3 da t 3 1 1 ( d i s c u s s i n g e x c e p t i o n c r e a t e db y Ste w a r t T it le G u a ra n ty C

o m p a n y v . Ste rling , 82 2 S. W. 2 d1, 11
- 1 2 (T ex. 19 9 1 )
. Cour t s r ef er r ed t o t h e cl a i m s a s b ei n g “i n ext r i ca b l y i n t er t w i n ed” a n df ee s e g r e g at io n w as no t re qu ire d
. Se e Tony Gul l o M ot ors , 21 2 S .W .3d at 31 1. N o tin g th at th e e xc e ptio n th r e ate n e d to s w al lo w the rul e , t h e S up r e me C o u r t e li minate dthis f o r mu la ti o n o f

the e x c e p ti o n . Id ., 212 S .W.3d a t 312-13. 278; Jim H

o w e Hom es, I

nc. v. R og ers , 8 1 8 S.W .2 d 9 0 1 , 9 0 3 (Te x .A

p p .--A u s t i n 1 9 9 1 , n o w ri

t ). 7 W h i l e A p p e l l an ts ob j e c te d at th e c h ar g e c on f

e r e n c e th a t Q u e s ti on

7 d i d n ot i

n c l u d e i n s tru c ti on s on t h e m eas ure o f dam

ages f o r t h e v ari o us l egal

t h eo ri es , t h ey

di d n o t s ub m

i t i n writ i n g a reques t f

o r an i ns t ru c t i o n. C o ns e qu e nt l

y , t hi s i s s u e i s w a i

ve d
. We o ve rru l e I s s u e S i x. S EGREG ATION O F ATTORNEYS ’ FEE S I n I s s u e S e v e n , A

p p e l l an ts ar g u e th a t M c F a d d e n f

a i l e d to s e g r e g a te a tto rn e y s ’ f e e s . A p ar ty
s eeki n g at t o rn ey s ’ f

ees m us t s h o w t h at t h e f

ees were i n curr ed o n a cl ai

m t h at al l o ws reco v ery

o f s uch f ees , an d t h

us i s o rdi n ari l y requi red t o s egregat e f

ees i n curr ed o n

cl ai m s al l o wi n g reco v ery

o f f ees f rom t h o s e t h at d o n o t
. Ste w

ar t Title Gu ar

an ty C om pa ny v . A ie llo , 9 4 1 S.W .2 d

6 8 , 7 3 (Te x . 1 9 9 7 ). T he r e i s an e xc e p t i o n t o t hi s ru l e . Whe n d i s c r e t e l e g a l s e r vi c e s a dvanc e bo t h r e c o ve r a bl e c l a i m s and 8

unr e c o ve r a

bl e c l a i m s , at t o rne y s ar e no t r e qu i r e d t o s e g r e g a t e f

e e s t o r e c o ve rt he t o t a l

amo unt
c o v e ri n g a l l c l a i m s . See Tony Gullo M

otors I, L. P

. v. Chapa , 2 1 2 S.W .3 d a t 2 9 9 , 3 1 3 (Te x . 2 0 0 6 ); CA Partners v. Sp ears , 2 7 4 S.W .3 d 5 1 , 8 1 (Te x .A

p p .--H o u s t o n [1 4 t h D i s t .] 2 0 0 8 , p e t
. d e n i e d ). In T on y Gu ll o M

ot ors , th e S u

p r e me C our t e l i

m i n a te d th e e x c e p ti on

to th e s e g r e g a ti on

r e qu i r e me n t f or f e e s i n c urre d s o l e l

y o n a s e p arat e b u t i

n t e rt w i n e d c l a i m . T on y Gul lo M

ot ors , 212 S. W
. 3d at 313-14. I f an y at t o rn ey s’ f

ees r el at e so l el

y t o a cl ai m f o r wh i ch such f

ees ar e un r eco v er ab l e, t h e cl ai

man t m ust
s e g re g a t e re c o v e ra

b l e f rom un re c o v e ra b l e f e e s . Id. a t 3 1 3
. T h is s t an d ar d d o e s n o t r e qu ir e a t t o rn e ys t o k e e p s e p ar at e t im

e r e c o r d s w h e n

t h e y dr a ft t h e b r e a c h

o f c o n t r a c t an d fr a u d p ar a g r a p h s o f ap e t i

t i o n . See id. at 3 1 4
. T h e amoun t of r e c ov e r a

b l e a ttor n e y s ’ f

e e s i s s u f f i c i e n tl y s e g r e g a te d

i f , f or
e x am p l e , t h e at t o rn e y

t e s t i f i e s t h at a g i v e n p e rc e n t a g e o f t h e dra f t i n g t i me w o u l d h av e b e e n

n e c e s s ary
e v e n i f t h e c l a i m f o r w h i c h at t o rn e y s ’ f

e e s are re c o v e ra

b l e h a d n o t b e e n

a s s e rt e d
. Id

. a t 3 1 4 ; see CA Partners , 2 7 4 S
. W
. 3 d

at 8 2 ; 7979 A irpor t Gar

age, L. L. C. v. Dollar Rent A Car Sys tems, Inc. , 245 S
. W
. 3 d 4 8 8 , 5 0 9 ( T e x . A

p p . - - H ou s ton

[ 1 4 thD i s t. ] 2 0 0 7 , p e t. d e n i e d )
. T h e n e e d to s e g r e g a te
a t t o rn e ys ’ fe e s is a

qu e s t io n o f law , w h ile t h e e xt e n

t t o w h ic h c la ims c an

o rc an n o t b e s e g r e g a t e d

is
a m i x e d qu e s t i o n o f l awan d f a c t
. T on y Gu ll o M

ot ors , 2 1 2 S
. W
. 3 d a t 3 1 2
- 1 3 ; CA Partners , 274 S. W
. 3d at 82. M c Fa d d e n a s s e r t s t hat Ap p e l l ant s w a i ve d t he e rr o rby

f a i l i ng t o o bj e c t t o c o uns e l ’s t e s t i mo ny
o n at t o rn ey ’ s f

ees . A ppel l an t s prese rv ed t h ei

r co m pl ai n t b y o b j ect i n g t o t h e ch arge. See H

ong Kong Dev elopment, I

nc. v. Nguy en , 2 2 9 S
. W. 3 d 4 1 5 , 4 5 4 ( T e x. Ap p . - - H o u s t o n [ 1 s t D is t
. ] 2 0 0 7 , no p e t
. ) ( o bj e c t i o n t o c h a r g e p r e se r vede rr o rr e l a t e d t o unse g r e g a t e d

at t o rney ’s f

e e s) ; Y oung v. N e ath e r lin , 102 S. W
. 3d 415, 420 (T ex . A pp. -- Ho us t o n

[14t h Di s t
. ] 2003, n o pet
. )( h o l di n g t h at ob j e c ti o n t o c h ar g e p r e s e r v e d c h a l l e n g e , e v e n t h o u g h p ar t y h a d n o t o b j e c t e d t o t e s t i

mo n y on
unse g r e g a t e d

f e e s) ; s ee also McC

alla v. Ski Ri ver

Dev

. , Inc. , 239 S. W
. 3d 374, 383 (T ex . A pp. -- W aco 20 07 , n o pet
. ) ( t o pr eserv e co m pl ai n t t h at t h e o pp o si

n g p ar t y f ai l ed t o segr egat e i

t s at t o rn ey ’s f

ees,

“ [ g ] ener al l

y , su ch an i ssu e i s p r ese r v edb y o b j ec t i o n d ur i n g t est i mo n y o f f er edi n su p p o r t o f at t o rn ey ’s f e e s o r an o b j e c t i o n t o t h e j ury

qu e s t i o n o n at t o rn e y ’ s f

e e s ” ). W e t urn n o w t o t h e i s s ue o f wh et h er M cF adden was requi red t o s egregat e. McF adden argues t h at A ppel l an t s f ail ed t o as k an

y ques t i o n s duri

n g cro s s -ex am

i n at i o n regardi n g t h e n eed t o s egregat e. A p p e l l an ts w e r e n ot r e qu i

r e d to c r os s - e x am

i n e on th e i s s u e b e c a

u s e i t w a s M c F a d d e n ’ s b ur d e n to p rov e t h a t f

e e s e g re g at i o n i s n o t re qu i re d
. See CA Partners , 274 S. W
. 3d at 82. It can n o t b e di s put ed t h a t a p o r t io n o f c o un s e l’ s t ime w a s s p e n t d r a f t i n g t h e p le a d in g s r e lat e d t o t h e t o r t c la ims
. W

h ileM c F a d d e n mig h t ar g u e t h at t h is t ime is n o min a l, un r e c o v e r a b le fe e s ar e n o t r e n d e r e d

r e c o v e r a b le
me r e l y b e c a u s e th e y ar e n o m

i n a l
. S e e T

on y Gu ll o M

ot ors , 2 1 2 S
. W
. 3 d

a t 3 1 3 ; CA Partners , 274 S.W .3 d a t 8 4 . C o n s e qu e n

t l y , w e f i n d t h a t M c F a d d e n

w a s re qu i

re d t o s e g re g a t e . See CA Partners , 2 7 4 S
. W
. 3 d

at 8 4
. W e su st ai

n I ssu e S even. McFad d en d i d n o t f o r f eit h i s r i g h

t t o r ec o v erat t o rn ey ’s f e e s by f a i l i ng t o s e g r e g at e t he m be c a u s e t he e vi d e nc e he p r e s e nt e d r e g ar d i ng t he t o t a l a mo u nt
c o n s t i t u t e s s o me e v i d e n c e o f w h at t h e s e g re g a t e d amo un t s h o u l d b e . See T

on y Gu ll o M

ot ors , 212 S
. W
. 3 d a t 3 1 4 ; CA Partners , 2 7 4 S
. W
. 3 d a t 8 4
. T h e r e fo r e , a

r e man d fo ra n e wt r ia l o n

r e c o v e r a b le
a t t o rn e y ’ s f

e e s i s t h e a

p p ropri at e re me dy . Id. ADM I SSION OF EX P ER T T EST I M ONY I n I s s u e E i g ht , Ap p e l l ant s c o nt e nd t ha t t he t r i a l c o ur t a bu s e d i t s d i s c r e t i o n by

a dm i t t i ng t he
ex pert t es t i mo n y o f Be rt M as s ey . T h ere are t w o p a r t s t o t h i s i s s ue. F i rst , A ppel l an t s as s ert t h at M as s ey ’ s o pi

n i o n o n t h i s s ub j ect was n o t di s cl o s ed duri n g di s co v ery . Seco n d, A

ppel l an t s argue t h at M a s s e y ’ s op i

n i on on th i s s u b j e c t i s un r e l i a b l e . W e w i l l

a d dr e s s th e l a tte ri s s u e f

i r s t. W h e t h e r t o a dm

i t o r e x c l u d e e v i d e n c e i s w i

t h i n t h e t ri a l c o urt ’ s s o un d

d i s c re t i o n . National Liabil ity and F

ire Insur ance Com pany v. A llen , 15 S. W
. 3d 525, 527 (T ex . 2000). A cco rdi n gl y , we
re v i e wt h e a dm

i s s i o n o f e x

p e rt t e s t i mo n y f o r an a b u s e o f d i s c re t i o n . Helena C

hemical C

ompany v . W ilkins , 4 7 S
. W
. 3 d

4 8 6 , 4 9 9 ( T e x . 2 0 0 1 )
. T h e t r ia l c o ur t a b u s e s it s d is c r e t io n

w h e n i t s ru lin g is
arb i t r ar y , un r easo n ab l e, o r wi

t h o ut r ef er en ce t o an

y gu i di n g rul es o rl egal

pr i n ci pl es. K-Mart Cor

p.
v . Hon e y c utt , 2 4 S.W .3 d

3 5 7 , 3 6 0 (Te x . 2 0 0 0 ).Reli ab ili ty

Rul e 70 2 p r o v i des: I f s c i e n ti f i c , te c h n i c a l , or oth e rs p e c i a l iz e d

k n ow l e d g e w i l l

a s s i s t th e tr i e rof

f a c t to un derst an d t h e ev i den ce o r t o d e t e r m i ne a f act i n i s s ue, a wi

t n es s quali f

i ed as an e x p e r t b y k n o w le d g e , s k ill , e x

p e r ie n c e , t r a in in g , o r e d

u c a t io n may t e s t ify t h e r e t o in t h e f o rm o f an o p i n i o n o r ot h e rw i s e . T EX .R .E V ID . 7 0 2
. Fo r an e xp e r t ’s t e s t i mo ny t o be a dm

i s s i bl e , t he e xp e r t m

u s t be qu a l i f

i e d and t he
e xp e r t ’s o p i

ni o n m u s t be r e l e vant t o t h e is s u e s i n t he c a s e and

ba s e d u p o n a r e l i a bl e f o und a t i o n. E xxon P ipeline C

ompany v . Zw

ahr , 8 8 S
. W
. 3 d

6 2 3 , 6 2 8 ( T e x. 2 0 0 2 ) ; Helena C hemical C

ompany v. Wilkins , 4 7 S.W .3 d

4 8 6 , 4 9 9 (Te x . 2 0 0 1 ). A p p e lla n t s h av e n o t c h a lle n g e d

M a s s e y’ s qu a lific a t io n s a s an e x p e rt o r t h e r e le v an c e o f h is t e s t i m o n y . T h ey as s ai l o n l y o n e as pect o f

h i s t es t i mo n y , n am el y , h i s co n cl

us i o n t h at an o ral
a g r e e me nt e xi s t e d , and

t he y c o nt e nd t ha t hi s c o nc l u s i o n i s unr e l i a

bl e . U nr e l i a

bl e e vi d e nc e i s o f

no
a s s i s t an c e t o t h e t ri e r of

f a c t an d i s t h e re f

o re i n a dm i s s i b l e un d e r R

u l e 7 0 2
. E

. I

. du Pont de Nemo urs & Co. v. R obinson , 9 2 3 S
. W
. 2 d 5 4 9 , 5 5 7 ( T e x. 1 9 9 5 ) ; G r e e n b e r g T r a u r ig of Ne w Y or k, P.C. v. Moody , 1 6 1 S
. W
. 3d 56 , 9 3 ( T e x . A p p . - - H ou s ton

[ 1 4 th D i s t. ] 2 0 0 4 , n o p e t. )
. T h e r e l i a b i l i ty
r equ i r emen t f o cuses o n t h e pr i

n ci pl es, r esear ch , an d m et h o do l o gy un der l y i n g an ex per t ’s co n cl

usi o n s. Zw ahr , 8 8 S
. W
. 3 d

at 6 2 9
. B u t b e c a

u s e i t i s i m p os s i b l e to s e t th e c r i

te r i a f or e v a l u a ti n g th e r e l i a

b i l i ty of e x p e r t te s ti mon y i n n on - s c i e n

ti f i c c a s e s s uc ha s th i s , i

t i s w i th i n th e tr i a l c our t’ s d i s c r e ti on

to d e t e rm i n e h o wt o a s s e s s re l i a

b i l i t y . Greenbe r

g Traur ig of

Ne w Y or k, P.C. v. Moody , 161 S. W
. 3d at 93. A p p e l l an ts a s s e r t th at M a s s e y ’ s op i n i on i s un r e l i a b l e b e c a u s e i t i s b a s e d on th e e x i s te n c e of pay men t s t o F ri eda a f

t er t h e s al e an d t h ere were o t h er ex pl an at i o n s f

o r t h o s e pay

men t s , i n cl udi n g t h at
s om e of th e p ay me n ts w e r e f r om F r i e d a ’ s ow n

e s c r owa c c oun

t. T h os e w e r e n ot t h e on l y p ay me n tsmade t o F r i eda an d t h e ex i st en ce o f t h e pay men t s was n o t t h e o n l

y b asi s f o r Mass ey ’s o pi

n i o n . By
v i rt ue o f h i s ex peri en ce, Ma s s ey

was f am i l i ar wi t h t h e o perat i o n s o f

a t i t l e co m pan y an d wi t h wh at i s i n v ol v e d w h e n s u c h a b u s i n e s s i s s ol d
. M a s s e y

f oun d i t u n u s u a l th a t th e w r i

tte n d oc u me n ts d i d n ot
a d dr e s s a c c o unt s r e c e i

va bl e , a c c o unt s p aya

bl e , and w o r k i

n p r o g r e s s . H e w o u l d

have e xp e c t e d

t he part i es t o h av e an

agreem en t pert ai n i n g t o o ut s t an di

n g o b l i gat i o n s o f

E l l y s o n A b s t ract , t o i

n co me t h at th e s e l l e re x

p e ct ed to r e c e i

v e b u t w h i c h

h a d n ot ye t b e e n

r e c e i v e d , an d w h a t v a l u e to p l a c e on t ran s act i o n s i

n pro gress t h at h ad n o t yet cl o s ed. Un der t h es e ci rcum s t an ces , M as s ey

co n cl uded t h at t h er e m u st h ave b ee n an o r al ag r ee ment
. W e f i n d n o abuse i

t s d i scr et i o n i

n t h e t r ia l c o ur t ’s d e t e rm i n a t i o n t h at M a s s e y ’ s t e s t i

mo n y w a s re l i a b l e . Fail ure t o S

up pl emen t D isco very R espon se A p p e lla n t s a ls o c o mp la in

t h at M a s s e y’ s o p in io n

o n t h e e x is t e n c e o f an

o r a l a g r e e me n

t s h o u ld h ave been ex cl

u d edb ec au se Mc Fad d en di d n o t d i scl o se it
. A

p ar t y m u st d i scl o se at est i f

y i n g expe r t ’s
me n t a l i m p re s s i o n s an d o p i

n i o n s an d an

y me t h o d s u s e d t o d e ri

v e t h e m . T EX .R .C IV .P. 1 9 2 .3 (e )(4 ). A p ar t y may r e qu e s t d i s c l o s ur e o f

t he g e ne r a l

s u bs t anc e o f t he t e s t i f y i ng e xp e r t ’s me nt a l

i m p r e s s i o ns and o p i n i o n s an d a b ri e f s u m mary o f t h e b a s i s f

o r t h e m . T EX .R .C IV . P
. 1 9 4
. 2 ( f ) ( 3 )
. T h e R

u l e s of Ci v i l P r o cedu r e i

m po se o n a par t y an o n go i

n g dut y t o supp l emen

t o ramen d it s di sco v ery

r espo n ses. SeeT EX . R. C IV . P. 1 9 3 .5 . U n d e r R u l e 1 9 3 .6 (a ): A p ar t y wh o fa ils t o mak e , ame n d , o rs u p p le me n t a d is c o v e ry r e s p o n s e in

a t ime ly man n e rmay n o t in

t r o d u c e in e v id e n c e t h e mat e r ia l o rin fo r mat io n t h a t w a s n o t t ime ly d i s c l os e d , orof

f e rth e te s ti

mon y of a w i tn e s s ( oth e rth an

a n ame d p ar ty

) w h o w a s n ot ti me l y i d e n ti f i e d , un l e s s th e c our t f

i n d s th a t: ( 1 ) t he r e w a s g o o d

c a u s e f o rt he fa ilu r e t o t i

me l y mak e , ame nd , o rs u

p p l e me nt t he d i s c ov e ry r e s p on s e ; or ( 2 ) th e f a i l ur e to ti me l y mak e , ame n d , or s u

p p l e me n t th e d i s c ov e ry r e s p on s e w i l l n ot un f ai r l y sur pr i se o run f

ai r l y pr ej ud i ce t h e o t h erpar t i es.Th e c la im s aga in st E. P . Adam s w e r e dismiss e d. 9 T EX .R .C IV .P. 1 9 3 .6 (a ). M c Fa d d e n d i s c l o s e d

i n a s u p p l e me nt a l

d i s c o ve ry

r e s p o ns e t ha t M a s s e y

w o u l d t e s t i f y “t o t he f a c tor s , c u s toms an d

p r a c ti c e s g e n e r a l l

y i n v ol v e d i n d e v e l op i

n g , a s s e s s i

n g an d c on v e y i n g th e a s s e ts
o f an ab s t ract pl an

t , as well as h i s o pi

n i o n s as t o t h e reas o n ab l e co n s i derat i o n s an d pract i cal i m p l e me nt a t i o n o f

t r ans f e ro f f i l e s and a c c o unt i ng f o rp r e m i u m s w he n an a

bs t r a c t p la nt i s be i

ng
c o n v e ye d , e s p e c ia lly

a s t h e s e fa c t o r s a

p p ly t o t h e fa c t s o f t h is c a s e . ” T h is b r o a d d e s ig n a t io n

c e r t a in ly
co v ered M as s ey ’ s t es t i

mo n y regardi n g wh at h e ex

pect ed t o s ee i

n an agreem en t co n v ey i n g an ab s t ract p l an t. M a s s e y

e x p ect ed t h e p ar ti e s to h av e an a g r e e me n

t p e r ta i n i n g to ou ts tan d i

n g ob l i g a ti on s of E l l y s o n A b s t ract , t o i

n co me t h at t h e s el l er ex

pect ed t o recei

v e b ut wh i ch

h ad n o t yet b een

recei v ed,
an d w h a t v a l u e to p l a c e on

tr an s a c ti on s i

n p r og r e s s th a t h a d n o t ye t c l os e d
. A l th ou g h i t w a s n ot
s p e c i f i c a l l y s t at e d , M a s s e y ’ s c o n c l

u s i o n t h a t t h e p art i e s h a d

an o ra l a g re e me n

t a b o u t t h e s e ma t t e rs f al l s wi t h i n t h e di scl o sur e. T h e t r i al co ur t d i d n o t ab use i

t s di scr et i o n

b y o v errul i n g A pp el l an t s’
o b j ect i o n an d adm i t t i n g t h e t es t i

mo n y . Iss ue Ei gh

t i s o v errul ed. LI AB I LI TYOF EL LY SON AB STRAC T I n t h ei r f i n al i ssue, A

pp el l an t s co m pl ai n t h at t h e t r i al

co ur t err ed b y

en t er i n g j ud gm en

t agai n st E l l y s o n A b s t ract & T i

t l e C o m pan y , L
. L
. C. b eca

us e t h ere was n o ev i den ce o r i n s uf f i ci en t ev i den ce
s h ow i n g th a t i t w a s l i a b l e to M c F a d d e n . A

p p e l l an ts c on te n d th at th e p l e a d i

n g s an d e v i d e n c e d o n ot
s u p p o r t p ie r c in g t h e c o r

p o r at e v e il. T h e y a d d it io n a lly a s s e r t t h a t E llys o n A b s t r a c t & T it le C o mp an

y, L
. L
. C
. is a

limit e d liab ilit y company , n ot a

l i m i te d l i a b i l i ty cor por ation. I n th e or i g i n a l p e ti ti on , M c F a d d e n

n ame d a s d e f e n d an ts J oy B
. an d E
. P
. A d am s d

/ b / a E l l y s on 9 Ab s t r a c t & T i t le C o . A

p p e lla n t s in d ic a t e d

in a d is c o v e ry r e s p o n s e t h at “ E lly s o n A b s t r a c t & T it le L
. L
. C.” i s a po t en

t i al part y t o t h e s ui t
. M cF adden am

en ded t h e pet i

t i o n t o i n cl ude El l y s o n A b s t ract& T i

t l e Co
. , L. L. C. as a def

en dan t
. T h e pet i

t i o n al l egedt h at E l l

y so n A b st r act & T i

t l e Co
. , L. L. C. i s a l i m i te d l i a b i l i ty c or p or ati on l i c e n s e d to d o b u s i

n e s s i n T e x a s . C on

tr ary to A p p e l l an ts ’ c on te n ti on
o n a p p e a l t h at E llys o n

A b s t r a c t is a

limit e d liab ilit y company , J oy te s ti f i e d th a t E l l

y s on A b s tr a c t & T it le C o . , L
. L
. C
. is a

limit e d lia b ilit y cor por ation and s he i s t he p r e s i d e nt and s o l e s t o c kho l d e r . S he f o r me d t he L
. L
. C
. i

n 1 9 9 9 p r i o r t o p ur c ha s i

ng E l l y s o n Abs t r a c t f

r o m Fr i e d a . Ac c o r d i

ng t o J o y , t he L
. L
. C
. o w ns t he a

bs t r a c t p l an t and

t he e qu i p me nt w hi l e s he and

he rhu s band

p e r s o na l l y o w n t he b u ild in g . T h e e v id e n c e at t r ia l s h o w e d t h a t t h e L
. L
. C
. r e c e iv e d t h e p r e miums fr o m t h e S t e w ar t T it le p r oj e c t. A p e r s o n’s s t at u s a s a vi c e - p r i nc i p a l o f t he c o r

p o r a t i o n i s s u f

f i c i e nt t o i m p u t e l i a bi l i t y t o t he
c o rp o rat i o n . GTE

Southw es t, Inc. v. B ruce , 9 9 8 S
. W
. 2 d 6 0 5 , 6 1 8 ( T e x. 1 9 9 9 ) ; Dai ml erChrysler I ns. C o. v . A pp le , 265 S. W
. 3d 52, 64 (T ex . A pp. -- Ho us t o n [1st Di s t
. ] 2008, pet
. f i l ed). Co rpo rat i o n s can
a c t o n l y t h roug h t h e i r a g e n t s . GT E So uthw est , 9 9 8 S
. W. 2 d

a t 6 1 8
. A vi c e - p r i

nc i p a l r e p r e s e nt s t he
c o rp o rat i o n

i n i t s c o rp o rat e c a

p a c i t y . Id
. Wh e n

a c t io n s ar e t ak e n

b y a v ic e - p r inc ip a l o f a
c o rp o rat i o n , t h o s e a c t s may b e d e e me d t o b e t h e a c t s o f

t h e c o rp o rat i o n

i t s e l f
. Id. A v i ce-pri n ci pal
e n c om p a s s e s f our c l a s s e s of c or

p or ate a g e n

ts : ( a ) c or p or a te of f i c e r s ; ( b ) th os e w h o h av e a u th or i ty to e m p l oy , d i r e c t, an d d i s c h ar g e s e r v an

ts of th e ma s te r ; ( c ) th os e e n g a g e d i n th e p e r f or man c e of
no nd e l e g ab l e o r ab s o l

ut e dut i es o f

t h e m as t er; an d (d) t h o s e t o wh o m a m as t er h as co n f

i ded t he
man a g e me n

t o f t h e w h o l e o r a

d e p art me n

t o r d i v i s i o n o f h i s b u s i

n e s s . Hamme r ly Oaks, Inc. v. Edw ar ds , 95 8 S
. W
. 2d38 7, 39 1 ( T ex . 19 97 )
. Co ur t s use t h e v i ce- pr i n ci pal do ct r i n e t o di st i n gu i sh b e t w e e n t h e a c t s o f

t h e c o rp o rat i o n

i t s e l f an d t h at o f a m ere s e rv a

n t o r e m p l o ye e . Id. Ac t s o f a “me r e s e r v an

t o re mp lo ye e ” ar e t h e b a s is fo r c o r p o r a t e li a b ilit y b a s e d o n t h e d o c t r ine o f res pondeat
s uper ior
. Id. Th e l i a

b i l i t y o f t h e ma s t e r f

o r t h e n e g l i g e n

t a c t s o f h i s v i c e p ri

n c i p a l i s p l a c e d u p o n v e ry d i f f e r e nt g r o und s , name l

y , t hat t he ne g l i g e n t a c t s o f t h e vi c e p r i nc i p a l ar e t he ve ry

a c t s o f t hec o rp o rat i o n i t s e l f
. Id. T h e un d is p u t e d

e v id e n c e e s t a

b lis h e d t h a t J o y is a v ic e - p r in c ip a l o f E lly s o n A b s t r a c t & T it le C o . , L
. L
. C , and

t he mo ni e s w hi c h M c Fa d d e n s o u g ht t o r e c o v e r w e r e r e c e i ve d by t he L
. L
. C
. and
were n o t pai d t o F ri eda. Co n s equen t l y , J o y ’ s act s are t h e act s o f t h e co rpo rat i o n . T h e j ury ’ s f i n di n gs
are s uf f i ci en t t o i m put e l i ab i l i

t y t o t h e L
. L
. C. W e o v errul e Iss ue Ni n e. Hav i n g sust ai n ed I ssue S ev en , we r ev er se t h at po r t i o n o f t h e j ud gm en t awar di n g at t o rn ey s’ f ees . F i n di n g n o o t h er err o r, we af

f i rm t h e remai

n der o f t h e j udgmen

t
. W e reman d t h e ca

us e f o r t ri al
o n t h e s o l e i s s u e o f

at t o rn e y s ’ f

e e s . J ul y 29, 2009 A NN C RA WF OR D M cC L URE , J

us t i ce Bef o r e Ch ew, C. J. , McCl

ur e, an d Car r , JJ. C arr , J
. , no t p ar t i c i

p at i ng