1 Circuit Judge of the Ninth Circuit, sitting by designation. UNITED STATES COURT OF APPEALS

For the Fifth Circuit

No. 95-10438

QUEST MEDICAL, INC.,

Plaintiff - Counter Claimant -

Appellee,

VERSUS

EARL J APPRILL,

Defendant - Counter Claimant -

Appellant.

Appeal from the United States District Court

for the Northern District of Texas

April 12, 1996

Before POLITZ, Chief Judge, GOODWIN 1 and DUHÉ, Circuit Judges.

DUHÉ, Circuit Judge:

Appellant, Earl J. Apprill, (“Apprill”) sued appellee, Quest

Medical, Inc., (“Quest”) under four alternative theories of

liability for Appellee’s alleg ed fraudulent conduct in a stock

purchase transaction. After the jury returned a verdict in favor

of Appellant on all theor ies, the district court, pursuant to

Appellee’s motion for judgment notwithstanding the verdict, reduced

the jury’s award of $270,000 actual damages and $500,000 exemplary

dama ges to $101,027 of actual damages with no exemplary damages.

Appellant appealed, and we affirm.2 Also on January 6, Quest purchased 175,000 HemoTec shares

from Wellington Management Company for $5.00 per share. On January

10, Quest paid Walter Braun $5.00 per share for his 239,322 shares.

The stock purchase agreement between Quest and Walter Braun further

provided th at Braun’s purchase price would be adjusted upward to

include a portion of any profit realized by Quest should Quest

dispose of the shares within 270 days of the purchase date.

2 I. BACKGROUND

In the fall of 1988, Quest began negotiating with Apprill to

purchase Apprill’s stock in HemoTec, Inc. Quest planned to launch

a tender offer for HemoTec and needed to acquire certain large

blocks of the stock before the tender offer could be successful.

Quest represented to Apprill that the price offered for his stock

($4.625 per share) was equal to or higher than the pric e Quest

would pay other large shareholders. Quest presented Apprill a

Stock Purchase Agreement which Apprill refused to sign because it

c ontained a clause purporting to grant Quest discretion to de lay

subsequent cl osings contemplated by the Agreement during the

pendency of the tender offer. After Quest represented to Apprill

that the provision did not give Que st the ability to delay the

subsequent cl osings beyond April 1, 1989, Apprill signed the

Agreement on January 6, 1989 and transferred most of his shares to

Quest at the first closing on January 11. 2

Quest launched its tender offer on January 19, offering $5.00

per share. The tender offer continued until August 28. On April

1, because the tender offer was still outstanding, Quest refused to

purchase the rest of Apprill’s stock, but demanded that Apprill

sell his s tock to Quest the day after the tender offer ended.

Apprill refused and sold his shares to another purchaser at a3 Apprill contended that Quest’s misrepresentations violated §

10(b) of the Securities Exchange Act of 1934 and Rule 10b-5

promulgated thereunder, Tex. Bus. & Comm. Code Ann. § 27.01 (West

1987) (i.e., statutory fraud), Tex. Rev. Civ. Stat. Ann. art. 581-

33B (West Supp. 1996) (i.e., the Texas Securities Act), and Texas

common-law fraud principles.

3 higher price.

Quest sued Apprill for breach of contract. Apprill

counterclaimed asserting four different theories of liability based

on Quest’s misrepresentations. 3 At the first trial, the jury found

that Apprill breached the Agreement by refusing to sell the

remainder of his stock to Quest. The jury rejected Apprill’s Rule

10b-5, Texas Business and Commerce Code (“§ 27.01"), and Texas

Securities Act (“TSA”) counterclaims, but concluded Apprill had

established his common-law fraud counterclaim. The jury made awards

in favor of each party against the other, and the district court

entered a net judgment in favor of Apprill. Both parties appealed.

In an unpublished disposition, we affirmed the verdict on Quest’s

breach of contract claim, remanding solely for redetermination of

the amount of Quest’s damages. Conversely, we reversed the jury’s

findings on Apprill’s four counterclaims and remanded those claims

to the district court for a new trial.

On remand, Quest moved for summary judgment, inter alia , on

the amount of its damages for Apprill’s breach of contract. The

district court granted the motion only as to damages awarding Quest

$105,493. The district court then set Apprill’s fraud claims for

trial, bifurcating the exemplary damages issue. The jury returned

a verdict for Apprill on all four theories of recovery. Although4 One who commits fraud as proscribed by § 27.01 is liable for

“actual damages.” Tex. Bus. & Com. Code Ann. § 27.01(b) (West

1987). The statute, however, does not define actual damages. In

the absence of such a statutory definition, Texas courts generally

look to the common law for guidance, see, e.g.

, W.O. Bankston

Nissan, Inc. v. Walters

, 754 S.W.2d 127, 128 (Tex. 1988) (“This

court has defined actual damages [under the Texas Deceptive Trade

Practices Act] as those recoverable at common law.”); Brown v.

American Transfer & Storage Co.

, 601 S.W.2d 931, 939 (Tex.)

(“Actual damages means those recovera ble at common law.”), c ert.

denied , 449 U.S. 1015 (1980); Waldon v. Williams , 760 S.W.2d 833,

835 (Tex. App. - Austin 1988, n.w.h.) (construing Tex. Prop. Code

Ann. § 92.056(b)(4) (redesignated as Tex. Prop. Code Ann. §

92.0563(a)(4) (West 1995))); Frank B. Hall & Co. v. Beach, Inc.

, 733 S.W.2d 251, 265 (Tex. App. - Corpus Christi 1987, writ ref’d

n.r.e.) (construing Tex. Ins. Code Ann. art. 21.21 § 16(b)(1) (West

Supp. 1996)), such that the measure of damages recoverable under §

2 7.01 is the same as that under a claim of common-law fraud.

Accordingly, we note that the Texas Supreme Court has recognized:

[u]nd er common law, there are two measures of damages for

misrepresentation: (1) the “out of pocket” measure, which is the

“difference between the value of that which was parted with and

4 instructed on the elements of all four theories, the jury received

a single damages instruction. The jury awarded Apprill $270,000 in

actual damages and, after completing the bifurcated portion of the

trial, awarded him $500,000 in exempl ary damages. Apprill moved

for jud gment on the verdict, and Quest sought judgment

notwithstanding the verdict (“JNOV”). The district court denied

Apprill’s motion and granted Quest JNOV.

The district court concluded the evidence did not support an

award of actual damages of $270,000. The district court calculated

the actual damages suppor ted by the evidence under each of

Apprill’s theories of recovery. On Apprill’s § 27.01 and commonlaw fraud claims, the court concluded that Apprill incurred no outof-pocket loss and that his benefit-of-th e-bargain loss was only

$16,740. 4 The district court further concluded that $500,000 inthe value of that which was received”; and (2) the “benefit of the

bargain” measure, which is the difference between the value as represented and the value actually received.

W.O. Bankston Nissan, Inc. , 754 S.W.2d at 128.

Applying these damages formulas, the district court first found

that Apprill received $4.625 per share. Next, the district court

determined Apprill parted with only $4.1875 per share, the closing

price of HemoTec stock on January 6, 1989, thereby incurring no out-of-pocket loss. With respect to the benefit-of-the-bargain

measure, the district court found that Quest represented to Apprill

that he would receive the same price being paid other large

shareholders--i.e., Wellington Management Company was paid $5.00

per share and Braun received $5.00 per share plus a “kicker.” As

such, Apprill’s benefit-of-the-bargain damages on the 44,639 shares

actually transferred to Quest were $16,739.625 [($5.00 per share

- $4.625 per share) X 44,639].

5 exemplary damages was unreasonable in light of such a small actual

damage award and that no reas onable amount of exemplary damages,

w hen added to $16,740, would exceed Apprill’s recovery under the

TSA. Accordingly, the district court did not determine an

appropriate amount of exemplary damages under these theories. On

Apprill’s TSA claim, the district court found sustainable damages

of $101,027, basing its calculation on the 44,639 shares actually

transferred by Apprill to Quest. The district court held exemplary

damages were not recoverable under the TSA. Finally, as to

Apprill’s Rule 10b-5 claim, the district court refused to reach the

damages issue because it was “satisfied that such damages, even if

recoverable, would amount to no more than those recoverable under

[the TSA].” Thus, the district court concluded that Apprill could

only recover damages under one theory of recovery, that the TSA

afforded Apprill the largest recovery, that the TSA did not provide

for exemplary damages, and that Apprill’s TSA damages were5 Under Texas law, “[w]hen a party tries a case on alternative

theories of recovery and a jury returns favorable findings on two

or more theories, the party has a right to a judgment on the theory

entitling him to the greatest or most favorable relief.” B oyce

Iron Works, Inc. v. Southwestern Bell Tel. Co.

, 747 S.W.2d 785, 787

(Tex. 1988). If prior to judgment the prevailing party fails to

elect between the alternative t heories, the court should utilize

the findings affording the greater recovery and render judgment

acc ordingly. B irchfield v. Texarkana Memorial Hosp.

, 747 S.W.2d

361, 367 (Tex. 1988).

T he parties do not dispute the accuracy of these statemen ts of

Texas law. Instead, the gist of this dispute is whether the

district court correctly concluded that the TSA afforded Apprill

the greatest recovery.

6 $101,027. 5 Accordingly, the district court entered net judgment in

favor of Quest. Apprill appealed.

Apprill contends the district court erred by: (1) finding that

the record did not support the jury’s award of $270,000 in actual

damages on his § 27.01 and common-law fraud claims; (2) concluding

that the $500,000 in exemplary damages assessed by the jury was not

reasonably proportioned to the actual damages awarded under the §

27.01 and common-law fraud theories; (3) holding that the TSA does

not provide for the recovery of exemplary damages; and (4) basing

Apprill’s TSA damages only on the 44,639 shares actually

transferred to Quest, and not on the entire 61,239 shares covered

by the Agreement. Additionally, Apprill maintains the district

court erred by entering judgment for Quest on its breach of

contract claim and by imposing an incorrec t interest rate for

computing prejudgment interest owed by Apprill on Quest’s breach of

contract award. We find no merit in Apprill’s contentions and

affirm.7 II. DISCUSSION

Apprill’s appeal proceeds against the backdrop of the district

court’s granting Quest JNOV. We review rulings on motions for JNOV

de novo, applying the same standard as the district court, Crist v.

Dickson Weldi ng, Inc. , 957 F.2d 1281, 1285 (5th Cir.), c ert.

denied

, 506 U.S. 864 (1992), which directs us to “view the evidence

in the light most favorable to the party opposing the motion, and

sustain the JNOV ‘only if we find that on all the evidence no

reasonable juror could arrive at a verdict contrary to the district

court’s conclusion,’” Allied Bank-West, N.A. v. Stein , 996 F.2d

111, 114 (5th Cir. 1993) (quoting Ellison v. Conoco, Inc.

, 950 F.2d

1196, 1203 (5th Cir. 1992), cert. denied , 509 U.S. 907 (1993)).

A. Actual damages

1. § 27.01 and common-law fraud theories

Apprill argues that the rec ord supports the jury’s award of

$270,000 in actual damages under his § 27.01 and common-law fraud

theories. His argument is two-fold.

a. Out-of-pocket measure of damages

The district court found that the parties stipulated that the

value of HemoTec stock on the date of sale was $4.1875 per share.

The parties stipulated this was the closing price of the stock on

that date. The district court must determine the f air market value

of the stock to properly compute out-of-pocket damages.

Apprill advocates that the district court should have

determined the fair market value of the stock by employing by6 The measure of damage in a stock conversion suit is the

market value of the stock at the time of the conversion.

If the conversion of the stock is attended by fraud, wilful

wrong, or gross negligence, then the measure of damages is

the highest market value between the date of the conversion

and the filing of suit.

Patterson v. Wizowaty

, 505 S.W.2d 425, 427 (Tex. Civ. App.

- Houston [14th Dist.] 1974, n.w.h.) (citations omitted). See also

De Shazo v. Wool Gr owers Cent. Storage Co. , 162 S.W.2d 401, 404

(Tex. 1942).

7 The testimony relied upon by Apprill was as follows:

Q Did Mr. Thompson tell you during this conversation that in

December, a few weeks before this he had offered Mr. Braun five

dollars a share and was going to offer Mr. Braun five dollars a share again?

A No, sir.

Q If Mr. Thompson told you that, would you have sold at four

and five eighths?

A Is your question if Mr. Thompson had told me that he was

paying five dollars would I have so l d for less than that five

dollars?

Q Yes.

A Absolutely not.

Q Why not?

A Because he assured me I was getting a premium for my stock,

and he told me that I would get the highest price possible, and

I would get at least the same amount or more than what he would

pay for Wellington or Mr. Braun.

8 analogy the valuation technique used in stock conversion cases. 6

Had it done so, the district court would have found evidence that

HemoTec stock reached a hig h of $10.75 per share on August 28,

1989, and that Apprill testified he would not have sold his stock

had he not been misled by Quest. 7 From these facts, the jury could

have inferred that Apprill would have held his stock and profited9

from the large increase in its value, since the stock conversion

method allows consideration of later values. See supra note 6.

That th e parties stipulated that “[o]n January 6, 1989, t he

closing price for Hemotec stock was $4.1875 per share” is true.

(Emphasis added). However, the distinction Apprill attempts to

draw between the price at which HemoTec stock last traded on

January 6 and the market value of HemoTec stock on that date is

untenable. “According to the classic formulation, ‘[f]air market

value is the price at which the property would change hands between

a willing buyer and a willing seller, neither being under any

compulsion to buy or to sell and both having reasonable knowledge

of relevant facts.’” A merada Hess Corp. v. Commissioner

, 517 F.2d

75, 83 (3d Cir.) (citing United States v. Cartwright

, 411 U.S. 546,

551 (1973) (q uoting Treas. Reg. § 20.2031-1(b))), c erts. denied

,

423 U.S. 1037, 1037 (1975). S ee also Keener v. Exxon Co., USA

, 32

F.3d 127, 132 (4th Cir. 1994), cert. denied

,

__ U.S.

__, 115 S.Ct.

1108 (1995); United States v. Campbell

, 897 F.2d 1317, 1322 (5th

Cir. 1990); Sommers Drug Stores Co. Employee Profit Sharing Trust

v. Corrigan Enters.

, 793 F.2d 1456, 1461 (5th Cir. 1986), certs.

denied , 479 U.S. 1034, 1089 (1987). “Where . . . the property to

be valued consists of securities traded on a stock exchange, the

general rule is that the average exchange price quoted on the

valuation date furnishes the most accurate, as well as the most

readily ascertainable, measure of fair market value.” A merada Hess

Corp.

, 517 F.2d at 83 (footnote omitted). S ee also Barry v. Smith

( In re New York, N. H. & H. R.R.), 632 F.2d 955, 962-63 (2d Cir.),8 “NASDAQ,” N ational Association of Securities Dealers

Automated Quotations, is an autom a ted information system that

provides brokers and dealers with price quotations on securities

traded in the over-the-counter market.

10 cert. denied , 449 U.S. 1062 (1980).

When computing out-of-pocket loss, the valuation date is the

date of sale--i.e., January 6, 1989. Although no evidence of the

mean exchange price of HemoTec stock on this date was submitted,

the parties did stipulate that the closing price on January 6 was

$4.1875 per share. Under federal law, stipulations of fact fairly

entered into are controlling and conclusive and courts are bound to

enforce them, see United States Abatement Cor p. v. Mobil

Exploration & Prod. U.S., Inc. ( In re U.S. Abatement Corp.), 79

F.3d 393, 400 (5th Cir. 1996); Holiday Inns, Inc. v. Alberding

, 683

F.2d 931, 935 (5th Cir. 1982); A. Duda & Sons Coop. Ass’n v. United

States

, 504 F.2d 970, 975 (5th Cir. 1974), unless m anifest

injustice would result therefrom or the e vidence contrary to the

stipulation was substantial, see Donovan v. Hamm’s Drive Inn , 661

F.2d 316, 317 (5t h Cir. 1981); L oftin & Woodard, Inc. v. United

States , 577 F.2d 1206, 1232 (5th Cir. 1978).

The district court admitted an exhibit of reports prepared by

NASDAQ 8 that detailed the high ($4.3125), low ($4.187 5), and

closing ($4.1875) price per share on January 6. Additionally,

Apprill submitted an exhibit demonstrating the computation of his

alleged damages under the TSA which represented the v alue of

HemoTec stock on the date of sale to be $4.18 75 per share. This

evidence was supportive of, not contrary to, the parties’ pretrial11

stipulation. Further, because Apprill prepared and submitted the

TSA damages exhibit, we see no manifest injustice in requiring him

to stand behind his evidence or in accepting the pretrial

stipulation.

Next, the record shows Apprill first argued that the jury’s

$270,000 actual damages figure could be arrived at by employing an

out-of-pocket damages calculation based on an analogy t o stock

conversion cases in his memorandum in opposition to Q uest’s JNOV

motion. The jury was never presented this theory. Instead, the

jury received a single damages instruction:

If you find that material misrepresentation(s) by Quest

caused some injury or damage to Apprill, you must then

determine the amount of that injury or damage in monetary

terms. In that respect, you should award to Apprill an amount

of money shown by a preponderance of the evidence to be fair

and adequate compensation for all loss or damage caused by

Quest’s wrongful conduct.

Apprill’s damages can be measured in two ways: the “out

of pocket’ measure, which is the difference between the price

he received for his HemoTec shares and the market value of

those shares at the time of the transaction with Quest, or the

“benefit of the bargain” measure, which is the difference

between the value of the shares as represented by Quest and

the value Apprill actually received.

Apprill’s only objection to this charge was that it did not contain

an instruction on the mandatory damages provision of the TSA or on

this Circuit’s Rule 10b-5 out-of-pocket measure of damages.

A district court has discretion to consider new theories

raised for the first time in a post-trial brief, Abbott v. Equity

Group, Inc.

, 2 F.3d 613, 629 n.59 (5th Cir. 1993) (ci ting United

States ex rel. Am. Bank v . C.I.T. Constr. Inc. of Tex. , 944 F.2d

253, 259 n.8 (5th Cir. 1991)), cert. denied

,

__ U.S.

__, 114 S.Ct.9 As noted in note 6, supra

, damages in a stock conversion case

tainted by fraud, wilful wrong, or gross negligence are based on

the highest market value attained by the stock between the

conversion and filing of suit. The evidence submitted by the

parties concerning the changing value of HemoT ec stock only

canvassed the period from the execution of the Agreement on January

6, 1989, to the termination of the tender offer on August 28, 1989.

Suit was filed November 7, 1989.

Further, whil e Apprill argues that the highest price for the

stock during this period was $10.75 per share, this was actually

the closing price on the date the stock reached its highest value.

The highest price at which HemoTec stock traded during the period

covered by the evidence was $11.00 per share. Thus, out-of-pocket

expenses under a stock conversion analogy would be $285,574 using

the $11.00 per share fair market value, instead of the $273,414

advocated by Apprill using the $10.75 per share fair market value

12 1219 (1994), and an issue first presented to the district court in

a post-trial brief is properly raised below when the district court

exercises its discretion to consider the issue, Southwestern Eng’g

Co. v. Cajun Elec. Power Coop.

, 915 F.2d 972, 979 (5th Cir. 1990).

The rec ord does not indicate that the district court ever

considered the applicability of the stock conversion analogy.

Further, Apprill submitted this theo ry only after the jury, the

ultimate fact finder in this case, rendered its verdict. Apprill,

therefore, called upon the district court, and now calls upon us,

to speculate that the jury not only divined this intricate formula

for computing actual damages without any instruction from counsel

or the court, but also extracted from the record the evidence

Apprill alleges supports an award of $270 ,000. We decline to so

speculate and note that “[t]his Court does not look with favor upon

tardy arguments t hat are brought to the lower court’s attention

post-trial after coun sel has had the opportunity to salvage what

[he] may from the record.” 9 R isher v. Aldridge

, 889 F.2d 592, 595figure.

1 0 See, e.g.

, American Int’l Trading Corp.

, 835 F.2d at 540

(precluding a party from arguing for the first time on appeal that

Mexican law, rather than Texas law, applies because the damages

com putation would be radically different under Mexican law);

Brantley , 804 F.2d at 324 (refusing to address party’s contention

that social security benefits were im properly deducted from her

award of back pay because she did not complain in the district

court); Whi te Farm Equip. Co. v. Kupcho , 792 F.2d 526, 529 (5th

Cir. 1986) (refusing to consider argument that settlement agreement

should be governed by Tex. Bus. & Com. Code Ann. § 35.62, which

would place a greater value on an element of the settlement

calculus, because the argument was first made on appeal); Sowell v. Natural Gas Pipeline Co. , 789 F.2d 1151, 1155 n.4 (5th Cir. 1986)

( holding party’s argument that data used in calculating dam ages included unlawful prices was waived because not raised before the

district court).

13 (5th Cir. 1989). Consequently, we conclude this issue was not

properly raised below, and therefore is raised for the first time

on appeal. S ee First United Fin. Corp. v. Specialty Oil Co., Inc.-

I , 5 F.3d 944, 948 & n.9 (5th Cir. 1993).

We are a court of errors, and will not consider matters raised

for the first time on appeal, unless our failure to do so would

result in manifest injustice. B rantley v. Surles

, 804 F.2d 321,

324 (5th Cir. 1986). “Manifest injustice, however, exists in

extreme circumstances.” A merican Int’l Trading Corp. v. Petroleos

Mexicanos , 835 F.2d 536, 540 (5th Cir. 1987). We have found such

circumstances lacking where a party raises for the first time on

appeal an argument aimed at revising the method of co mputing

damages. 10 Such circumstances likewise are lacking here, and so we

refuse to consider Apprill’s stock conversion analogy initially on

appeal.

b. Benefit-of-the-bargain measure of damages1 1 As demonstrated supra note 4, the benefit-of-the-bargain loss

using a “represented value” of $5.00 per share is $16,740. Using

$6.00 per share, the loss increases to $61,379 (i.e., [$6.00 per share - $4.625 per share] X 44,639 shares).

14 Alternatively, Apprill attacks the district court’s

computation of his benefit-of-the-bargain loss because the district

c ourt found the “represented value” of the stock to be $5.00 per

share, when the evidence reveals that one shareholder was paid

approximately $6.00 per share. To support the $6.00 per share

amount, Apprill points to a single statement at trial by Quest’s

President:

Q How much did you ultimately pay to Walter Braun?

A I don’t remember. As we discussed earlier, we paid him

about a million two, and if I’m not mistaken eventually we paid him two hundred thousand more dollars. So I think it’s

about a million four which was probably about six dollars a share, something like that.

Without addressing whether $5.00 per share or $6.00 per share

is the appropriate “represented value” of the stock, we recognize

that neither value gives rise to a benefit-of-the-bargain loss even

remotely approaching $270,000. 11 Additionally,

Under Texas law, damages must be established with a reasonable

degree of certainty. “There can be no recovery for damages

which are speculative o r conjectural.” The damages must be

ascertainable in some manner other than by mere speculation or conjecture, and by reference to some fairly definite standard,

established experience, or direct inference from known facts.

Furthermore, “[w]hile mathematical precision is not required

to establish the extent or amount of one’s damages, one must

bring forward the best evidence of the damage of which the

situation admits, and there must be some basis for reasonable

inferences.”

Richter, S.A. v. Bank of Am. Nat’l Trust & Sav. Ass’n

, 939 F.2d

1176, 1188 (5th Cir. 1991) (citations omitted). The lone statement1 2 Apprill again relies solely on his testimony quoted supra in

note 7.

15 by Quest’s President fails to substantiate with the requisite

certainty Apprill’s claim that the “represented value” of his

HemoTec stock was $6.00 per share.

2. TSA theory

Apprill’s sole complaint about the district court’s TSA actual

damages calculation is that the computation d oes not account for

all 61,239 shares of HemoTec stock encompassed by the Agreement.

He contends the record contains ample evidence that he would not

have sold any of his stock absent Quest’s misrepresentations. 12 The

district court, however, excluded from the TSA damages calculation

the 16,600 shares Apprill refused to deliver to Quest.

The TSA provides:

In damages, a seller shall recover (a) the value of the

security at the time of sale plus the amount of any income the

buyer received on the security, less (b) the consider ation

paid the seller for the security plus interest thereon at the

legal rate from the date of payment to the seller.

Tex. Bus. & Com. Code Ann. 581-33(D)(4) (West Supp. 1996).

Apprill’s trial exhibit showing his proposed calculation of his TSA

damages includes figures for both incom e allegedly received by

Quest on the 16,600 shares and the amount allegedly paid by Quest

for those sha res. Quest disputes the soundness of Apprill’s

calculation, pointing out that it never paid Apprill anything for

these shares because Apprill refused to go forward with the sale,

that it received no income on these shares because it never

obtained ownership of them, and that the amount Apprill designates13 See supra note 11.

16

as income received by Quest is actually the amount of damages Quest

was awarded on its breach of contract claim. We recognize that to

award Apprill recovery for shares which he never conveyed to Quest,

and instead sold to a third party at a price higher than that

offered b y Quest, would contravene the plain language of Article

581-33D(4) and would afford him an unwarranted windfall.

B. Exemplary damages

1. § 27.01 and common-law fraud theories

Initially, Apprill argues that, if we sustain the jury award

of actual damages of $270,000 under the § 27.01 and common-law

fraud theorie s, we must conclude that the $500,000 exemplary

damages award is reasonable. This argument fails in light of our

affirm ance of the district court’s conclusion that the evidence

does not support $270,000 of actual damages. Next, Apprill

contends that $500,000 is not unreasonable or disproportionate when

compared with actual benefit-of-the-bargain damages un der his §

27.01 and common-law fraud theories of $61,379. 13 Again, Apprill’s

contention falters insofar as we hold the district court correctly

computed benefit-of-the-bargain damages to be only $16,740.

Apprill, however, further contends that, if the correct amount of

actual damages under his § 27.01 and common-law fraud claims is

$16,740, an exemplary damages awa rd of $500,000 still is not

unreasonable, and thus the district court erred in concluding1 4 Apprill argues that the ratio of actual damages to punitive

damages in this situation is 16.6 to 1, which is acceptable under

Texas law. He arrives at this ratio by adding to actual damages of

$16,740 prejudgment interest, calculated from January 11, 1989, to

November 14, 1994 , at the rate of 10% per annum compounded daily

(i.e., $13,299) for a total of $30,039. The ratio of $500,000 to

$30,039 is 16.6 to 1. We take no position on the accuracy of these

calculations, or on the correctness of the assumptions underlying

them, but simply note that our review of Texas case law indicates

tha t prejudgment interest is not typically included when

determining the propor t ionality of actual damages to punitive

damages. Accordingly, we reject Apprill’s attempt to do so.

17 oth erwise. 1 4 We are asked, therefore, to determine whether the

d i strict court correctly concluded that $500,000 in exemplary

damages was unreasonable in the face of a $16,740 actual damages

award.

Where state law provides the basis for decision, the propriety

of an award of exemplary damages an d the factors the jury may

consider in deter mining their amount are questions of state law.

Browning-Ferris Indus. of Vt., Inc. v. Kelco Disposal , Inc. , 492

U.S. 257, 278 (1989). Texas law provides that “[f]raudulent

misrepresentations used to induce the creation of a contract,

coupled with damages caused by the misrepresentation, will support

an award for exemplary damages.” A rtripe v. Hughes

, 857 S.W.2d 82,

87 (Tex. App.

- Corpus Christi 19 93, writ denied). S ee also

Spoljaric v. Percival Tours, Inc.

, 708 S.W.2d 432, 436 (Tex. 1986);

Trenholm v. Ratcliff

, 646 S.W.2d 927, 933 (Tex. 1983). In response

to special interrogatories, the jury found th at Quest made

misrepresentations to Apprill with the intent of inducing Apprill

to enter into the Agreement. Accordingly, the parties agree that

exemplary damages are recoverable under Apprill’s § 27.01 and18

common-law fraud causes of action . The dispute concerns the

appropriate amount, if any, of such damages on these facts.

Texas la w requires that exemplary damages be reasonably

proportioned to actual damages. A lamo Nat’l Bank v. Kraus

, 616

S.W.2d 908, 910 (Tex. 198 1). This proportionality requirement,

however, is merely a tool to aid in determining whether the award

is the produc t of the jury’s passion or reason. G lasscock v.

Armstrong Cork Co.

, 946 F.2d 1085, 1095 (5th Cir. 1991) (citing

Wright v. Gifford-Hill & Co.

, 725 S.W.2d 712, 714 (Tex. 1987)),

cert. denied

, 503 U.S. 1011 (1992). Indeed, “[t]here can be no set

rule or ratio between the amount of actual and exemplary damages

which will be considered reasonable. This determination must

depend upon the facts of each particular case.” K raus

, 616 S.W.2d

at 910. Accordingly, to determine whether a particular award of

exemplary damages is reasonable, Texas law requires the reviewing

court to view the facts in light of: “(1) the nature of the wrong,

(2) the character of the conduct involved, (3) the degree of

culpability of the wrongdoer, (4) the situation and sensibilities

of the parties concerned, and (5) the extent to which such conduct

offends a public sense of justice and propriety.” Id

.

In rejecting the jury’s $500,000 exem plary damages award as

unreasonable, the district court referred to our decision in Maxey

v. Freightliner Corp.

, 665 F.2d 1367 (5th Cir. 1982) (en banc). In

Maxey , we concluded that a ratio of approximately 3 to 1 provided

a good rule of thumb for reviewing the reasonable proportional

relationship of exemplary damages to actual da mages under Texas1 5 Net worth is relevant to the issue of punitive dam ages,

Lunsford v. Morris

, 746 S.W.2d 471, 473 (Tex. 1988), and “[a]

defendant’s ‘ability to pay’ bears directly on the question of

adequate punishment and deterrence,” id . at 472.

19 law. 665 F.2d at 1377-78 (discussing Miley v. Oppenheimer & Co.

,

637 F.2d 318 (5th Cir. 1981)) . Although we have recognized more

recently that Texas courts have not adopted a set ratio that will

make an award of exemplary damages per se reasonable, see Brown v.

Petrolite Corp.

, 965 F.2d 38, 48 (5th Cir. 1992); Glasscock

, 946

F.2d at 1095, we nonetheless cannot ignore that the ratio in this

case, after properly reducing Apprill’s actual damages, approaches

30 to 1.

Apprill was paid a price higher than that at which HemoTec

stock traded on the day the Agreement was executed. Also, though

the evidence demonstrated that Quest’s net worth on September 30,

1993, was $18,693,037, Quest had net operating income of

approximately $300,000 in 1993 and a net operating loss of

approximately $200,000 in 1992. 15 Further, Quest had never before

been accused of engaging in similar fraudulent conduct. Finally,

unlike in personal injury cases where monetary damages cannot

replace a lost life or restore a maimed body, the injury in this

case was purely financial and an award of compensatory damages is

capable of making the injured party, Ap prill, completely whole.

“Punitive (or exemplary) damages are levied against a defendant to

punish [it] for outrageous, malicious , or otherwise morally

culpable conduct,” Transportation Ins. Co. v. Moriel , 879 S.W.2d

10, 16 (Tex. 1994), and “for the public purpose of punishment and20

deterrence,” id

. at 17. While we do not in any respect condone

Quest’s conduct, we cannot say that the district court erred by

concluding tha t $500,000 of exemplary damages was more than was

necessary and proper to serve the public concerns of punishing and

deterring Quest. Further, the district court did not err in

holding that any appropriate amount of exemplary damages, when

added to $16,740, would not be sufficient to exceed Apprill’s over

$101,000 recovery under his TSA claim.

2. TSA theory

The TSA imposes liability on those who buy or offer to buy

securities by means of an untrue statement of material fact. Tex.

Rev. Civ. Stat. Ann. art. 581-33B (West Supp. 1996). An aggrieved

seller may sue either at law or in equity for rescission or for

damages if th e buyer no longer owns the security. I d

. With

deliberate detail, the TSA provides precisely what sums such a

seller may recover including compensatory damages, costs, a n d

attorney’s fees. Tex. Rev. Civ. Stat. Ann. art. 581-33D(2), (4),

(6 )-(7) (West Supp. 1996). Further, Article 581-33(M) provides

that “[t]he rights and remedies provided by this Act are in

addition to any other rights (including exemplary or punitive

damages) or remedies that may exist at law or in equity.” Tex.

Rev. Civ. Stat. Ann. art. 581-33M (West Supp. 1996).

The district court held exemplary damages were un available

under the TSA. Apprill, however, argues that he is entitled to

recover exemplary damages under the TSA, and that $500,000 in

e xemplary damages is reasonably proportional to his TSA award of1 6 That portions of the TSA were modeled after the Securities

Act of 1933 and the Securities Exchange Act of 1934 is evident.

See Tex. Rev. Civ. Stat. Ann. art. 581-33 (West Supp. 1996)

21 ove r $101,000 in actual damages. Apprill relies on the lack of

language expressly excluding such a recovery and on the “in

addition to” language of Article 581-33M. Apprill’s claim, thus,

requires us to interpret the TSA.

We must construe the TSA so as to give effect to the intent of

the enacting legislature. Union Bankers Ins. Co. v. Shelton , 889

S.W.2d 278, 280 (Tex. 1994); Sorokolit v. Rhodes , 889 S.W.2d 239,

241 (Tex. 1994). “Legislative intent can be inferred from the

absence or presence of a particular provision in a statute.” G reen

v. Watson , 860 S.W.2d 238, 244 (Tex. App. - Austin 1993, n.w.h.)

(citing Morrison v. Chan

, 699 S.W.2d 205, 208 (Tex. 1985)). Albeit

the Texas legislature saw fit to expressly afford an aggrieved

seller the right to seek compensatory damages, costs, and

attorney’s fees pursuant to his TSA claim, conspicuously absent

from Article 581-33D ’s remedial scheme is a provision for the

recovery of exemplary damages. The legislature’s express mention

of one person, thing, consequence, or class is tantamount to the

express exclusi on of all others. C ole v. Huntsville Memorial

Hosp. , 920 S.W.2d 364, 372 (Tex. App. - Houston [1st Dist.] 1996,

writ requested); Lenhard v. Butler

, 745 S.W.2d 101, 105 (Tex. App.

- Fort Worth 1988, writ denied). We therefore cannot consider the

Texas legislature’s fail ure to include exemplary damages in the

list of elements of relief for violations of the TSA to be a mere

oversight. 16Comment-1977 Amendment, prepared by Committee on Securities and

Investment Banking of the Section on Corporation, Banking and

Business Law of the State Bar of Texas (hereinafter “Commentary”).

Because of the obvious similarities between the TSA and the federal

securities acts, Texas courts look to decisions of the federal

courts to a id in the interpretation of the TSA. S ee Searsy v.

Commercial Trading Corp.

, 560 S.W.2d 637 (Tex. 1977); A nheuserBusch Cos. v. Summit Coffee Co.

, No. 05-92-00389-CV, 1996 WL 14061

at *6 (Tex. App.

- Dallas Jan. 12, 1996, n.w.h.); Campbell v. C.D.

Payne & Geldermann Sec., Inc.

, 894 S.W.2d 411, 417 (Te x. App. -

Amarillo 1995, writ denied); Star Supply Co. v. Jones , 665 S.W.2d

194, 196 (Tex. App. - San Antonio 1984, n.w.h.). Accordingly, it

is persuasive that we have held exemplary damages are not

recoverable under those provisions of the federal securities acts

that correspond to Article 581-33. S ee Jones v. Miles

, 656 F.2d

103, 108 n.8 (5th Cir. 1981); Hill York Corp. v. American Int’l

Franchises, Inc. , 448 F.2d 680 (5th Cir. 1971).

1 7 Apprill argues that, prior to the 1977 Amendment to the TSA,

Article 581-33A(2) specifically provided for the reco very of

exemplary damages upon proof that the misrepresentation was

willfully made. Accordingly, Article 581-33M, after amendment,

preserves that right of recovery. However, Apprill fails to

acknowledge that the Comments to the 1963 Amendment which added the

exemplary damages language to Article 581-33A(2) provide that this

language was added to “emphasize the preservation of rights under

Art. 4004,” (now Bus. & Comm. Code Ann. § 27.01--statutory fraud).

Thus, the purpose of this language was not to create a right to

exemplary damages under the TSA, but to preserve that right under

the statutory fraud cause of action in the Business and Commerce

Code.

22 Also, Apprill’s argument that the “in addition to” language of

Article 581-33M creates a right to exemplary damages under the TSA

is equally unavailing. The Commentary to Article 581-33 provides,

with respect to Article 581-33M:

The parenthetical reference to exemplary damages replaces--

w ithout substantive change--references at the end of old §§

33A[ 17 ] and 33C to exemplary damages and art. 4004 (now

Business & Commerce Code § 27.01). Thus all common law and

statutory liabilities outside the Texas Securities Act

, inc luding § 27.01 (which permits triple damages in some

instances), remain intact and may be used along with the Texas

and U.S. Securities Act liabilities

.

(Emphasis added). As these comments and Article 581-33M’s heading18 We note that the Commentary with respect to Article 581-33D

discussing the recovery of attorney’s fees on a TSA claim states:

New par.(7) allows a court to award attorneys fees to a

successful plaintiff if the court finds that this would be

equitable in the circ umstances. . . . All the circumstances

shou ld be considered, e.g. the conduct of the defendant in the

transaction (for example, fees are more appropriate against a

fraudulent defendant than against a neglig ent or careful one),

the conduct of the plaintiff in the transaction, the conduct of

both parties in the lawsuit, whether the defenda nt benefited

from the violation, and whether there was a special or fiduciary

relationship between the plaintiff and defendant. R ecov ery of

exemplary damages for the same transaction, under common law or

Business & Commerce Code § 27.01, should also be considered,

since such damages serve in part to cover attorneys fees

.

(Emphasis added). This discussion further indicates the Committee

did not contemplate that exemplary damages, along with attorneys

fees, were recoverable under the TSA.

23 (i.e., “Saving of Exist i ng Remedies”) suggest, this provision

merely confirms that other theories of liability that yield relief

for the same transaction that gives rise to a cause of action under

the TSA and that, unlike the TSA, allow recovery of exemplary

damages are not preempted by the TSA. 18 Consequently, Article 581-

33M does not create a separate, affirmative right to exemplary

damages on a cause of action under the TSA.

Apprill further contends that Chapt er 41 of the Texas Civil

Practice and Remedies Code, entitled “Exemplary Damages,” creates

a right to recover exemplary damages under the TSA. S ee Tex. Civ.

Prac. & Rem. Code Ann. § 41.001 et seq. (West Supp. 1996). Section

41.002(a) states that Chapter 41 “applies to any action in which a

claimant seeks exemplary damages relating to a cause of action.”

Section 41.00 2(b) contains an exclusive list of actions to which

Chapter 41 does not apply. Apprill makes much of the fact that the1 9 For example, § 41.002(b) provides: “This chapter establishes

the maximum exemplary damages that may be awarded in an action

subject to this chapter, including an action for which exemplary

damages are awarded under another law of this state.” Tex. Civ.

Prac. & Rem. Code Ann. § 41.002(b) (West Supp. 1996). Likewise, §

24 TSA is not excluded by § 41.002(b ) and argues that the Texas

legislature purposefully avoided expressly precluding recovery of

exemplary damages under the TSA, thereby indicating its intent to

afford such a remedy.

The better reading of Chapter 41, however, is that it merely

sets standards for and limits upon an award of exemplary damages

when the underlying cause of action subject to Chapter 41's terms

makes recovery of such damages available. This view is buttressed

by the Texas legislature’s purpose for enacting Chapter 41. Facing

increasing cost and unavailability of liabili ty insurance as a

result, in part, of a lack of predictability in the state’s civil

justice system, the Texas legislature enacted “tort reform

measures,” which included Chapter 41, aimed at restoring and

maintaining reasonable predictability in the Texas system. S ee id

.

§ 41.001 historic al and statutory notes (referring to Tex. Civ.

Prac. & Rem. Code Ann. § 9.001 historical and statutory notes (West

Supp. 1996) f or provisions of 1987 Act detailing legislative

findings and purpose underlying enactment of Chapter 41). The

provisions of Chapter 41, thus, were not intended to create new

avenues for the recovery of exem plary damages, but to provide

ascertainable standards for and reasonable limits upon the recovery

of such damages under those causes of action already determined to

support such claims. 19 In so doing, the legislature provided41.003 is entitled “Standards for Recovery of Exemplary Damages,”

and states that “exemplary damages may be awarded only if the

claimant proves by clear and convincing evidence that the harm with

respect to which the claimant seeks recovery of exemplary damages

results from . . . (1) fraud; (2) malice; or (3) wilful act or

omission or gross neglect in wrongful death actions.” I d

. §

41.003(a). Section 41.008 puts a cap on the amount of exemplary

damages that may be awarded. Id . § 41.008.

25 liability insurers concrete guidelines by which they could evaluate

the extent of their potential exposure, thereby making it more

attractive to insurers to issue coverage in the state at affordable

rates. Apprill’s contention that Chapter 41 creates a right to

exemplary damages on a TSA cause of action, thus, is incorrect.

Finally, we recognize that implicit in Apprill’s argument is

the contention that, even if exemplary damages are not an element

of recovery for a violation of the TSA, Article 581-33M’s saving

language allows a TSA claimant to recover, in addition to the

actual damages awarded on a TSA claim, exemplary damages awarded on

any other claim on which the TSA claimant has received favorable

f indings and which supports such an award, like a § 2 7.01 or

common -law fraud claim. In effect, Apprill wants to be able to

piece together the most favorable portions of the jury’s verdict to

maximize his recovery. Recall, however, that under Texas law a

party who submits numerous theories of liability to the jury, and

who obtains findings of liability on two or more of those theories,

is entitled to only a single recovery. B oyce Iron Works, Inc.

, 747

S.W.2d at 787. If the party fails to elect prior to entry of

judgment under which theory he wishes to recover, the trial court

must enter judgment under the theory that affords the party the2 0 For example, when determining which theory provides the

greatest recovery, does the trial court compare only the actual

damage s awards under each theory, leaving any exemplary damages

award to be added to the largest actual damages award regardless of

the theory that produces the exemplary damages award? If so, what

if the theory producing the largest actual damages award does not

allow recovery of exemplary damages? If, as in this case, only

some of the theories upon which the party prevails afford for the

recovery of exemplary damages, should the district court add the

actual and exemplary damages awarded under those theories together

and compare that total amount of damages to the actual damages

amount awarded under the theories that do not allow for recovery of

exemplary damages to determin e the theory providing the greatest

recovery?

2 1 Our research also uncovered Helm v. Landry Serv. Co.

, No. 01-

94-00348-CV, 1995 WL 319014 (Tex. App.

- Houston [1st Dist.] May

25, 1995, writ denied). Although H elm was not designated for

publication, and therefore under Tex. R. App. P. 90 the opinion may not be cited as authority, we find it instructive. In H elm , the

jury made the following awards to the plaintiff:

(1) for defendant’s misappropriation of plaintiff’s trade

secret, actual damages of $1,0 17,000 and exemplary damages of

$250,000;

(2) for defendant’s unfair competition, actual damages of

$404,806;

(3) for defendant’s actual fraud, actual damages of $500,000 and

exemplary damages of $400,000; and

(4) for defendant’s constructive fraud, actual damages of

26 greatest recovery. B irchfield

, 747 S.W.2d at 367. Apprill’s mixand-match theory, then, creates a quandary of questions. 20

Texas courts have yet to address this issue. Our only

guidance lies in dicta in Holland v. Hayden , 901 S.W.2d 763 (Tex.

App.

- Houston [14th Dist.] 1995, writ denied). In a footnote, the

court stated:

We have neither been cited nor have we found a Texas opinion

which di rectly addresses whether a plaintiff may pick and

choose among damages elements arising under alternative

theories of recovery. However, current statements of Texas

law and a federal opinion[, Cryak v. Lemon

, 919 F.2d 320, 326

(5th Cir. 1990),] suggest not.

Id

. at 767 n.8. 21 Although dicta, we find this assessment by the$500,000 and exemplary damages of $400,000.

The judgment awarded the plaintiff actual damages of $ 1,017,000

under the misappropriation theory and exemplary damages of $400,000

under either the actual or constructive fraud theory.

In response to the defendant’s complaint about the structure of

the award, the court held:

When a party tries a case on two or more alternative theories

of recovery, and a jury retu rns favorable findings on two or

more of the theories, the party has a right to judgmen t on the

theory entitling it to the greatest relief. We are not aware of

any authority, and [plaintiff] cites none, giving a prevailing

party the right to choos e an actual damage award under one

theory and an ex emplary damage award under another theory.

Rather, as in Boyce Iron Works and its progeny, the prev ailing

party is entitled to judgment on the single theory under which

it recovered the greatest relief. Here, that theory is

misappropriation of a trade secret.

Id

. at *5 (citations omitted). Accordingly, the court reformed the

j udgment to award the plaintiff $1,017,000 of actual damages and

$250,000 of exemplary damages.

27 Texas Court of Appeals acutely persuasive, see, e.g.

, St. Paul Ins.

Co. v. Rakkar , 838 S.W.2d 622 (Tex. App. - Dallas 1992, writ

denied) (reforming judgment to award plaintiff actual and punitive

damages on his breach of duty of good faith and fair dealing claim

after conclud ing that trial court incorrectly trebled actual

damages awarded on Insurance Code claim), and conclude that Apprill

cannot cut and paste elements of relief arising from different

theories of recovery. Thus, Apprill cannot tack any exemplary

damages award based on his § 27.01 or common-law fraud theories

onto his TSA actual damages award.

C. Quest’s breach of contract claim

1. Apprill’s affirmative defenses

Apprill argues the district court, upon remand, erred by28

entering judgment for Quest on its breach of contract claim without

addressing his affirmative defenses under Rule 10b-5 and the TSA.

In the first appeal, however, a panel of this court affirmed

Quest’s breach of contract claim, stating: “On the facts of this

case, Apprill ratified the Stock Purchase Agreement as a matter of

law and was barred from asserting his mistake and fraud defenses to

the contract.” Quest Medical, Inc. v. Apprill , No. 92-1067, slip

op. at 8 (5th Cir. July 16, 1993). In a footnote, the panel

further concluded that Apprill voluntarily withdrew his TSA

affirmative defense at the first trial and that any claim to the

contrary was not preserved for appeal. Id ., slip op. at 9 n.4.

The law of the case doctrine precludes reexamination of issues

decided on appeal, either by the district court on remand or by the

appellate court itself upon a subsequent appeal. C onway v.

Chemical Leaman Tank Lines, Inc.

, 644 F.2d 1059, 1061 (5th Cir.

1981). This rule applies whether the issue was decided expressly

or necessarily by implication. I d

. The law of the case doctrine,

however, is not inviolable; an appellate court decision is to be

followed in all subsequent proceedings in the same case unless

evidence in the subsequent trial is s ubstantially different, the

prior decision was clearly erroneous and would work m anifest

injustice, or controlling authority has in the in terim made a

contrary rule of law applicable. Illinois Cent. Gulf R.R. Co. v.

International Paper Co. , 889 F.2d 536, 539 (5th Cir. 1989).

The earlier panel of thi s court sustained Quest’s breach of

contract claim and rejected Apprill’s affirmat ive defenses. It22 Article 5069-1.05 provides, in relevant part:

Sec. 2. Except as provided Section 1 of this article, all

judgment s, together with taxable court costs, of the courts of

this state earn interest, compounded annually, at the rate

published by the c onsumer credit commissioner in the Texas

Register. The consumer credit commissioner shall compute on the

29 remanded only the question of the amount of damages for the breach.

The district court granted summary judgment on the damages issue,

rejecting Appr ill’s asserted defenses under the law of the case

doctrine. The district court properly invoked the doctrine.

2. Prejudgment interest rate

The district court awarded Quest prejudgment interest on its

breach of contract damages at a rate of 10% per annum, compounded

daily. Apprill argues the appropriate rate is 6% simple interest.

State law governs the award of prejudgment interest. F SLIC v.

Texas Real Estate Counselors, Inc.

, 955 F.2d 261, 270 (5th Cir.

1992). Under Texas law, prejudgment interest may be awarded under

either contractual or equitable theories. P erry Roofing Co. v.

Olcott

, 744 S.W.2d 929, 930 (Tex. 1988). Judgments based on

contracts earn interest at the rate specified in the contract. Tex.

Rev. Civ. Stat. Ann. art. 5069-1.05 § 1(1) (West Supp. 1996). If

the contract specifies no rate of interest, “interest at the rate

of six percent per annum shall be allowed on all

. . . co ntracts

ascertaining the sum payable.” Tex. Rev. Civ. Stat. Ann. art.

5069-1.03 (West 1987). If the sum payable is not ascertainable

from the contract, prejudgment interest may be appropriate in

equity, the rate being that specified in Tex. Rev. Civ. Stat. Ann.

art. 5069-1.05 (West Supp. 1996). 22 P erry Roofing Co.

, 744 S.W.2d15th day of each month the judgment interest rate . . . . The

interest rate so computed shall be the judgment rate, except that

if the rate so computed is less than 10 perc ent, the judgment

interest rate shall be 10 percent . . . .

Tex. Rev. Civ. Stat. Ann. art 5069-1.05 § 2 (West Supp. 1996).

30 at 930. S ee also Axelson, Inc. v. McEvoy-Willis

, 7 F.3d 1230, 1234

(5th Cir. 1993).

Apprill admits the Agreement did not specify any rate of

interest, but argues the sum payable for breach of the contract was

reasonably ascertainable from the contract in l ight of the

circumstances, such that Article 50 6 9-1.03's 6% rate applies.

Quest contends the agreement is silent on the measure of damages,

thus a 10% rate is proper. Whether the Agreement is a contract

“ascertaining the sum payable” within the meaning of Article 5069-

1.03 is controlling.

The requirement that the contract set out a sum payable is

liberally construed. L a Sara Grain Co. v. First Nat’l Bank of

Mer cedes , 673 S.W.2d 558, 567 (Tex. 1984). In fact, “[i]t is

sufficient

. . . if the contract provides the conditions upon which

liability depends and fixes a measure by which the sum payable can

be ascertained with reasonable certainty, in the light of the

attending circumstances.” I d

. (quoting Federal Life Ins. Co. v.

Kriton

, 249 S.W. 193, 195 (Tex. 1923)). However, “[i]f the

contract does n ot ‘unambiguously[] establish the amount owed,’

article 5069-1.05 applies.” A xelson, Inc.

, 7 F.3d at 1234. Review

of the method by which the district court arrived at the breach of

contract damages amount reveals that the measure of damages was not2 3 The parties stipulated to the amount of Quest’s br each of

contract damages, which Quest calculated as:

(1) As of August 29, 1989, Apprill had 16,600 shares of

Hemotec, Inc. (“Hemotec”) stock which he had sold to Quest under

the Stock Purchase Agreement but had not yet tendered.

(2) On that date, one share of Hemotec was convertible into .61

shares of Bio-Medicus stock, so that the 16,600 shares of

Hemotec were convertible into 10,126 shares of Bio-Medicus.

(3) Also on August 29, 1989, Bio-Medicus shares were trading at

$18.00 per share. Therefore, the value of Apprill’s remaining

Hemotec shares was $182,268.00.

(4) Quest was obligated to pay Apprill $76,775.00 for his

remaining Hemotec shares under the Stock Purchase Agreement.

(5) Thus, Quest’s damages due to Apprill’s failure to deliver

the remaining shares on August 29, 1989 are $105,493.00, the

differen ce between the market value of the shares on that date

and the amount Quest was obligated to pay for them.

The district court adopted this computation.

31 discernable from the face of the Agreement. 23 Thus, the district

court correctly awarded Quest prejudgment interest at 10% per

annum, compounded daily. Lafarge Corp. v. Hartford Casualty Ins.

Co.

, 61 F.3d 389, 401-02 (5th Cir. 1995); Axelson, Inc.

, 7 F.3d at

1234.

III. CONCLUSION

Based on the foregoing discussion, we conclude that the

district court properly granted judgment notwithstanding the

verdict and only awarding Apprill $101,027 in actual damages on his

TSA cause of action, and thus its judgment is AFFIRMED.