### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

NO. 03-0 8 -00 527 -CV

Ray D. Rober tson, Inc. d/ b/a Cus tom Sand & G ravel; and R. D. Robertson, Ind ividu ally , Appellan ts

v. Jam es B. Morin and Curry & Mor in, L LP , Appellees

F ROM THE DISTRICT CO URT OF TRAVIS COUNTY , 201S T JUDICIAL DISTRICT NO. D-1- GN-06- 0014 15 , HO NORAB LE MARGARET A. COO P ER , JUDGE PRESIDI NG

M E M O R

A N D U M O P I N I O N R. D. Robertson and his wholly -owne d company , Ray Robertson, I nc., d/b/a Custom Sand & Gr a ve l ( Rob e rt so n) a pp e a ls a no -e vid e nce summa

ry jud g me nt o n c la ims he a sse rt s

a g a ins t hi s f

or me r l e g a l c ouns e l, a

pp e lle e s Jam e s B . ( “ B ra d”) M ori n an d Cu rr y & Mo ri n, L .L .P. A p p e l l e e s ’ s u m m a r y-

j u d g m e n tm o t i o nc h a l l e n g e d t h e e l e m e n t s o f

c a u s a t i o nan d

d a m a g e s . In tw o is su e s, Rob e rt so n a sse rt s th a t th e dis tr ic t court a bu se d its disc re tio n in excl ud ingthe a ff ida vit of his damag es expert and e rre d in holding that his rema ining summary -judg ment evidenc e fa iled to r a ise a g e nu ine iss ue of

ma te ri a l f

a c t. We wi ll a ff

ir m th e dis tr ic t c ourt ’s jud g me nt. Robertson is based in Mar shall, Texas. He pr esente d summary -judg ment evidenc e that, at re levant times, he wa s eng ag ed in the business of a cquiring and lea sing sa nd and g rave l quarr ies and the mining and proc essing of sand a nd g rave l. His company ’s financ i al and tax stateme n ts in e v id e n c e r e f le c te d to ta l a s s e ts o f a

p p r o xim a te ly $ 4 0 0 , 0 0 0 a s o f A u g u s t 1 9 98, ofThese c osts included: “Mater ials proce ssing plant a nd associate d mining equipment,” 1 $2,500,000; “Shop and offic e building,” $250,000; “Mater ials hauling tru cks,” $1,000,000; an d “Int er i m wo rk i n g cap i t al ” t o co v er t h e c o s t s o f “ m o b i l i z [ i n g] a l l e qu i p m en tan d [ b egi n n i n g] operations of the new pit, estimated to take approximately 90 day s,” $800,000. 2 which $ 3 , 6 0 0 wa s cash, a nd annual ne t income that ra ng ed betwe en roug hly

$2,200 and $7,000 betwee n 1995 and 1998. Robertson acknow ledg ed havinga “ba d” cr edit rating . On the other hand, Robertson also pre sented e vidence tha t h e q u a li f ie d f o r the potentially

advanta g eous minority -owne d or “disadva

ntag ed” busine ss contrac ting status with various gove rnmental e ntities, including the City of Austin and the Te x as De partment of T ranspor tation. I n May 1999, Robertson enter ed into an earne st money contra ct t o purcha se an 819-

acr e par cel of

land in Webberville, in ea stern Tra vis County , that had bee n shown to have r ich g rave l reser

ves. Robertson conte mplated that he would mine the g rave l and sell it to Aust in-are a cont ra ct o rs . The a g ree d-upon purc hase pr ice wa s $4 mill ion. As Robertson admitted below,

“ [b]e c a us e of a po or c re dit ratin g , w hic h w a s w e ll- kn ow n to a ll the pa rt ic ipa nts , [he ] wa s una

ble to purcha se the prope rty

without assistance.” He e ng ag ed a f irm, Bonding& T echnic a l S e r v ic es (B TS), operated by

Sheri Aar on and Dick Davis, t o assist him i n developinga business plan a nd obtaining funding for the Webbe rville proper ty purcha se and start-up costs. BTS provide d the initial $25,000

ear nest money

to hold the option. R obertson also a ssigne d the ea rnest-mone y

contra ct to B TS and g a v e A ar o na

p o w e r o f a t t o r n e y. Robertson and B TS devised a “ business plan” f o r u s e in recruiting investors. The p l an ’s “p ro

j ec ts u m m ary ” s t at edt h at R o b er t s o nwa s s e e k i n g a t o t al o f $ 8 , 5 5 0 , 0 0 0 i nfi n an ci n g, $4 mil lio n o f wh ic h wa s to c ov e r the land purc ha se , a

nd the re ma ind e r t o c ov e r s tart -u p c os ts. The

13

plan furthe r ela

borate d that “Mr. Robertson has prog rammed a mining oper ation that will util ize a dr a g li n e , c o n v e y o r s an d a p la n t to p r o d

u c e an e s ti mate d 5 0 0 to n s o f s an d an d g r a v e l per hour.” Other por tions of the plan re fer

red to a nticipated purcha ses of he avy equipment including front-e nd loader s, a bulldozer, water pumps, a scre ening plant with “cone crushe r,” a nd the dra g line. Th e s u mmary -judg ment rec ord re flec ts that closing wa s repe atedly postponed or extended over a

period of months as B TS unsuccessf ully attempted to obtain fi n an cing for Robertson. BT S init ially approa ched c om m ercial banks bef ore ultimately

turning to offshore

source s. Ultimately , howeve r, the e arne st-money cont ra ct ex pired without BT S obtaining the funding

. There afte r, Robertson hire d M o ri n and his firm—who ha d previously repr esente d him in some domestic relations matter s—on a conting ency -fe e basis to r epre sent him in s eeking d a m a g e s h e a t t r i b u t e d

t o B T S ’ s f

a i l u r e t o o b t a i nf

i n an c i n g f

o r t h e W e b b e r

v i l l e v e n tu r e . In Marc h 2 0 0 1 , M o ri n, on Robertson’s beha lf, filed suit ag ainst BTS, Aa ron, Davis, and other defe ndants in Har

rison County district court (the “Unde rlying Suit”). I n mid-Aug ust 2001, venue was tra nsfer red to Tr avis County

. Robertson, throug h Morin, pled contra ctual theor ies, neg lige nce,

and br e a c h o f f

idu c iary du tie s. He a lle g e d in

jur y in the fo rm of “ los s of the bu sin e ss o pp or tun ity to purcha se the subjec t property which would have fulfilled his business plan,” and t h at he incur red dama g e s o f “ los s o f i nc ome in an amo un t not to e xce e d $ 90 ,0 00 ,0 00 .” B TS, Aa ro n, and Da vis counter claimed, se eking reimburse ment of approx imately $500,000 in out-of-poc ket expenses they alleg edly incurre d while assisting Rober tson.Th e le tte r r e a d, in r e le va nt p art : 2 During the cour se of our

relationship, I have not be en k ep t informed of signific ant de ve lop me nts , I

have be e n mi sin fo rm e d a

bo ut t he status of my c a se , an d my int e re sts h a v e n o t b e e n p r o te c te d

. G e n e r a ll y , my te le p h o n e c a ll s ar e n o t p r o mp tl y returne d or they are not returne d at all. B ased on the information in my persona l f ile, y ou have not conducted a

ny meaning ful discover

y conce rningthe meri t of my claims or the other sides defe nses. You have failed to c ontact or inter view cr itical witness [si c] that I have ide nti fi e d a

nd ma de a va ila

ble to y ou . De sp ite my

mul tip le re qu e sts , no on e in your fi rm has info rm e d me of a pla n o f a c tio n o r s tr a te g y

to p ro te c t my interests and de velop my claims. As a r es u l t , Ican not make informed de cisions about the prog ress of your re prese ntations or lack thereof. F rankly , Ihave no ide a wh a t y ou are do ingto p ro te c t my

int e re sts
. Ple a se tak e a

pp ro pr ia te a c tio ns to p ro te c t my int e re sts in t

he pe nd ingc a se un til I se c ur e other counse l. Wi thi n 7 da y s o f your r e c e ipt

of thi s le tte r, ple a se se nd

me my complete f

ile in usable for

m. The file should contain all information ge nerated befor e and a fter suit wa s filed, i ncluding but not limit ed to, all information supplied to y ou by me, all information produc ed by third parties, and all information that y ou have ide ntified or sec ured f rom any source conce rning y our re prese ntation of me. Ple a se a lso se nd

me an it e mize d a c c ounti ngof e xpe ns e s. 4 The Unde rly ing Suit was set for trial in Marc h 2004. I n a letter dated Nove mber 19, 2 0 0 3 , R o b e rt s o n a c c u s e d M o r i n o f v ar i o u s i n a d e qu a c i e s i n h i s r e p r e s e n t a t i o n , an d f ir e d h im. 2 Ap pe lle e s d e ny

the a sse rt ion s in

Rob e rt so n’ s le tte r, c la imi ng that Ro be rt so n h a d n e ve r p re vio us ly voiced dissatisfac tion with the lega l service s he wa s rec eiving , and sug g es t i n g t h at the letter w as

mere “g ener alized boiler

plate” unsupported by the fac ts. Appellee s further contend that discove ry in t he Un de rl y ingSui t r e ve a le d th a t th e fa c ts w e re sig nif ic antl y dif fe re nt a nd muc h le ss f

a vo ra ble than Robertson had initially repr esente d to Morin before Morin ag ree d to take the c ase. I n response to Robertson’s letter, Morin f iled a motion t o wi thdraw, w hich was

e ve ntu a lly

g ra nte d b y the dis tr ic t c ourt . T he re a ft e r, Rob e rt so n w a s a pp are ntl y un a ble to r e ta in repla ceme nt counsel. Robertson blames Mor in for this, assertingthat Morin “held the f ile hostag e”5

and that he c ould not find another attorney willing to take his c ase on a conting ency basis without fi rs t r e vie wi ngthe fi le . App e ll ees cla im that Mo ri n ma de mul tip le inq uir e s w ithRob e rt so n a s to wher e he should for

war d the file, but neve r re ceive d a re sponse. Ro b e rts o n c o n ti n u e d to p u r s u e th e s u it p r o s e . H e u n s u c c e s s f u ll y mo v e d f

or a

c on tin ua nc e on the e ve of tr ia l. Af

te r thi s mot ion wa s de nie d, Rob e rt so n s e ttl e d th e Un de rl y ingSui t for $6,000. On

Ap ri l 24 , 2 00 6, Rob e rt so n, wi th n e w c ouns e l, s ue d a pp e lle es, asse rt ingc la ims fo r p ro fe ssi on a l ne g lig e nc e and br e a c h o f f

idu c iary du ty
. As to bo th the or ie s, Rob e rt so n s ou g ht t o

rec over a s damag es the va lue of the rec overy he claimed he would have obtained in the Unde rly ing Suit absent appellee s’ bre ache s of duties. After discovery , appellee s filed a no- evidenc e motion for

su mma ry jud g me nt c ha ll e ng ingthe c a us a tio n a nd dama g e s e le me nts of

Rob e rt so n’ s c la ims

. Specific a ll y , a

p p e ll e e s c h a ll e n g e d

w h e th e r Ro b e rts o nc o u ld

p r o d u c e e v id e n c e th a t h e c o u ld h a ve

rec overe d any

of the damag es he ha d soug ht in t h e Underly ing Suit—lost profits he claimed he would have e arne d had he be en able to purcha se the Webber ville property

. Rob e rt so n f

ile d a re sp on se to a

pp e lle e s’ mot ion wi th e vid e nc e . M uc h o f t he re sp on se addre ssed whethe r appe llees had br ea ch ed t h eir duti es to Robertson, eleme nts that were not

c ha lle ng e d b y

the mot ion . Re g ard ingthe dama g e s is su e , Ro be rt so n re fe rr e d so le ly to a n a ff ida vit prepare d b y Gilbert He rre ra, his dama g es expert. Appellee s objected to He rre ra’ s aff idavit on g rounds that it contained da mag es opinions that were not r eliable, that it c ontained statements of fa ct that wer e not shown to be ba sed on He rre ra ’s persona l knowledg e, and that it contained opinions reg ardingMorin’s conduc t as a lawy er in the Under ly ing Suit that Her rer a was not qua lified to give

.The judg ment also ref lects that the district cour t struck a suppleme ntal aff idavit from 3 Her rer a that Robertson had filed following the hear ing. Robertson does not c omplain of this ruling on a pp e a l. 6 Following a hea

ring , the di strict court sustained a ppellees’ objections to Herr era ’s af fidavit, g rante d

a pp e lle e s’ su mma

ry -j ud g ment mot ion , a

nd re nd e re d ju dg me nt t

hat Ro be rt so n ta

ke no thi ngon

his

c la ims a g a ins t a

pp e lle e s. This appea l followed.

3 I n his second issue, R o b er t s o n urg es that the district cour t abused its discretion in excluding H er rer a’s damag es opinions as unreliable . Robertson does not cha lleng e the dis tr ic t c ourt ’s ru lin g s su sta ini nga pp e lle e s’ oth e r o bje c tio ns . A tri a l c ourt ’s de c isi on

to a dmi t or e xclu de e xpe rt te sti mony is r e vie we d f or an a bu se of discre tion. Helena Che m. Co. v. W ilkins , 47 S.W. 3d 48 6, 49 9 ( Te x. 20 01 ). “ Th e te st f or a bu se

o f d i s cr etion is whether the trial court a cted without re fer ence to any g uiding r ules or princ iples.” E.I. du Pont de Nem ours & Co. v. Robinson , 923 S.W .2d 549, 558 (Tex. 1995). I f a pa rty opposes and objec ts to the admission of expert testimony , the proponent bear s the burden of demonstrating its admissi bility

. Id. at 557.

Ex pert te s ti mo n y

is a d mi s s ib le if

( 1 ) th e e xp e rt i s qu a li f

ie d , an d ( 2 ) th e te stimony is releva nt and base d on a re liable foundation. W ilkins , 47 S.W.3 d at 4 99 ; Robinson , 923 S.W .2d

a t 55 6; se e als o Tex. R. Evi d. 702. Ex pert testimony is also unreliable if “ther e is simply too gr eat

an ana ly tical gap between the data a nd the opinion proffe red.” Gammill v. Jac k W illiams C hevrole t , 9 7 2 S

. W

. 2 d 7 1 3 , 7 2 7 (T ex . 1 9 9 8 ) ( qu o t i n g Gene ral Elec. Co. v. J oiner , 522 U.S. 136, 146 ( 1997)).7 Fa ctors used by

courts to deter

mine whether

expert testimony

is reliable include :

1. the extent to which the theory has bee n or ca

n be tested; 2. the extent to which the technique relies upon the subjective interpre tation of the e xpe rt ; 3. whether

the theory

has bee n subjected to pe er r eview a nd/or publication; 4. the technique ’s potential rate of e rror ; 5. whether the un d er l y i n g theory or technique has been g ener ally acc epted a s valid by the re levant scie ntific community ; and 6. the non-judicial uses w hich have been ma de of the theory or tec hnique.

Robinson , 923 S.W .2d at 557. These fac tors are non-exclusive and fle x ible. Id.

A trial cour

t has no discre tion to admit an ex pert’s opinion when the opinion is based on nothing more than the expert’s e x perie nce. Ga mmill , 972 S.W .2d at 726. A conc lusion is not so simply beca use an e x pert say s it is s o. Merr el l Do w Pharms. v. Hav ner , 953 S.W .2d 706, 712 (T ex . 1 9 9 7 ). When the expert “br ings to c ourt littl e more than his cre dentials and a subjective opinion,” this is not evidenc e that would supp o rt a judgment. Id. (q u o t i n g Viterbo v. Dow Chem. Co. , 826 F.2d 420, 421- 22 (5th Cir. 1987)).

Her rer a pre sented, a

nd the district court e x cluded, e ssentially two sets of opinions g oing to the issue of

whether Robertson could have proven lost-prof its damag es in the Under ly ing Suit: (1) opinions co n ce rn i n g the likelihood that Robertson would have se cure d the financ ing

nece ssary to purcha se the Webber

ville p roperty

and execute his business plan a bsent the alleg ed8

wr o n g d o i n g o f B T S , Aa ro nan d Da v i s ; an d

(2 ) a s s u m i n g R o b er t s o nh ado b t ai n edt h e f i n an ci n g, opinions concer

ning the income the ope rations would have ear ned:

1 6

. A s s u m m ar i z e d i n E xh i b i t I I , I r e v i e w e d a n u mb e r o f d o c u m e nts in t his matter. B ased on the documents re viewed, it is my profe ssional opinion that the Project a

nd the P rojec t’s business plan s hould have resulted in financing sufficie nt to purchase the Webberville Proper ty and fund the sand and g rave l development plans. Te sts by Capitol Agg reg ates a

nd Trini ty

Eng ineer ing T e s t i n g C o r p o r a t ion on the Web be rv ill e Pr op e rt

y e sti ma te d g ro ss r e c ov e ra

ble rese rve s of sand a

nd g rave l materials betwe en 24,699,000 and 30,000,000 tons. I mpo rt an tly , the L OI s neg otiated by RDR/R obertson g uara

nteed a continuous stream of reve nue. The L OI s substantially mitigated ma

ny of the op e ratio na l and fi na

nc ia l r isk s e vid e nt i n th e Pr oje c t. T he Pr oje c t’ s b us ine ss plan assumption of $ 4 , 5 0 0,000 to fund the sand a nd g rave l development p l an s wa s in-line with market c osts at the time. The other ope rating a ssumpt ion s w e re re a so na ble and c on sis te nt w ithmark e t c on dit ion s. 17. As summarized in Ex hibit I I I , utiliz ing the Project’s business plan, I c a lc ulate d th e Pr oje c t’ s e xpe c te d n e t pr e se nt va lue (“NPV ” ) and int e rn a l r a te of re turn (“I RR”) throug h a discounted cash f low approa ch (“ DCF” ). Taking into account the Proje ct’s business plan, I al s o incorporated my building produc t i n d

u s tr y e xp e r ie n c e a s w e ll a s a v a il a b le in d u s tr y ma r k e t d a ta
. Utiliz ing a

n 18% discount rate, I

calc ulated a r ang e of N PV for the Projec t betwee n $18,800,000 and $26,600,000 and a rang e of I RR between 36% and 51%. B ased on my

revie w of the Projec t, RD R / R o b ertson would have reta i ned betwe en 35% a nd 50% of the e quity

value of the Project. I calc ulated that in addition to a rea sonable sala

ry , RDR/R obertson would have re a lize d b e tw e e n $ 6, 60 0, 00 0 a nd $1 3, 30 0, 00 0 in

NPVof the Pr oje c t. 18. Financ ing in the Proje ct involved a de g ree of risk, as discusse d below. The proposed f

inancingrequire d a sophisticated f inancial institution wit h the capa city to properly as sess risk versus r ewa rd. An e x perie nced inve stment bank in g f ir m ( “ I

- B an k ” ) w it

h a p p r o p r iate k

n o w le d g e o f

th e r e a l e s tate and c on str uc tio n sand and g ra

ve l mark e t wo uld have a

pp ro a c he d Pr ivate Eq

uit y Firms (“PE F irms”) a

nd Ang el I nvestors (“ AI s”) with a spe cific a ppetite for real es t at e and proje ct financ ings. PE firms a nd AI s are investors, not lender s. They

ty pically invest in projects with hig h projec ted re turns. Real estate a nd development projec ts that a re not candidate s for tra ditional bank financ ing of

ten turn to PE Firms and AI s. Additionally , while manag ementHerrer a e la bo rate d, “ Se e d F ina

nc ingis f

ina nc ingfo r t

he de ve lop me nt o f a

bu sin e ss 4 conce pt, Start-Up Fina

ncing is a financ ing p rovi ded to companie s for the use in development and marke ting and Early -Stag e Financing is financ ing provided t o companies that have c ompleted the product de velopment stag e and r equire funds to initiate manufac turing and sale s.” 9 involvement is often important to PE F irms a nd AI s they often have e x tensive ind us tr y e xpe ri e nc e and

do no t r e qu ir e pe rs on a l g ua ra nte e s. 19

. Gi ve n th e de ve lop me nta l na tur e of the Pr oje c t, an e xpe ri e nc e d I -B ank wo uld have f ocused on ide ntify ing PE F irm s an d AI s interested in See d, Start-up an d E ar l y -S t age fi n an ci n g. Private equity is a term often used to identify an 4 investment in a co m p any that is not publi cly

trade d or listed in a stock exchang e (i.e ., “private”) . Pr i v ate e quity is ge nera lly

reg arde d as an i n v es t m en t wh i ch o ff

er s i n v es t o rs t h e op p o rt u n i t i es t o ac h i ev e s u p er i o r l o n gt er m re tu rn s co mp ar edt o t ra d i t i o n al i n v es t m en t s . P ri v at e e qu i t y o ff er s l o n gte rm , h ig h r eturn s w hic h r e pr e se nt a pr e mium to the pe rf

or manc e of pu bli c equities. Private equity profe ssionals are highly skilled. The re turns rea liz ed are the re su lt of the inv e stm e nt r isk pr ivate e qu ity

inv e sto rs a ssume . Pr ivate e qu ity ri sk is o ft e n mo d e r a

t e d t hr o u gh p o r t f o l i o div e rs if

ic a tio n w hic h c on sis ts of various stag es of investments in a broad rang e of industries. In my view, the Project a

nd its strateg ic pre sence in t h e construction sand a nd g rave l ind us tr ie s w ou ld h a ve c omp le me nte d th e div e rs if ic a tio n s tr a te g y

of mos t pr ivate e qu ity

po rt fo lio s. 2 0

. A s i d e f

r o m m an a g i n g r i s k

t h r o u g h p o rt fo l i o d i v er s i fi c a t i o n , P E F i r m s an d A Is also measur e the leve l of interest in investing in a par ticular business base d on rate of return benchma rks. The rate of return is most o ft en m easur ed thr ou g h a

n I RR. B e tween 19 90 and 20 05 , p ri vate e qu ity

inv e stm e nts aver aged a 14 .5 % ann ual ret urn vers us an 1 1. 3% an nu al r etu rn f rom th e S &P 50 0. Th e 14 .5 % re tur

n r e pr e se nts an I RR b e nc hma rk fr om w hic h PE F ir

ms and AI s w e ig h a

n inve stm e nt. F ro m a

re tur n pers pect ive , it

is i mpo rt ant t o rea liz e that an inve stment in the Project, with limi ted oper atinghistory and development c hara cter istics is m ore r isky than an es tablished enter prise. Acc ording ly , PE Firms and AI s would have a dded a premium of betwe en 5% and 10 % t o th e 14 .5 % I RR ben c hma rk . In my vie w, PE F ir

ms a nd AI s w ou ld have inve sted in the purcha se of the W ebber ville Property

and the line of cre dit for the development of the sand and g rave l deposits when the Projec t’s I RR ex cee ded 25%. The Project’s I RR was estimated to be betwe en 36% a nd 51%.I n a dd iti on to t he fo re g oin g pa

ra g ra ph s o f H e rr era’s a ff

ida vit , th e dis tr ic t c ourt

a lso 5 sustained appe llees’ reliability objection to the following para g raph r eg ardingthe g ener al purposes of awa rd ingdama g e s in

c ivi l c a se s: 15

. Th e e xpre ss p ur

po se of de te rm ini ng damag e s in a lit ig a tio n matte r i s to compensate the ag g rieve d party for the loss(e s) suffe red direc tly or sustained conseque ntially as a result of the actions or conduct of the offe nding pa rty or pa rt ie s. Th e me tho do log y of c a lc ulatin g dama g e s r e qu ir e s a re a so na ble compar ison utiliz ing a “but for ” ana ly sis, i.e., the value in the a bsence of the a lle g e d d a ma g e and

/or c on du c t. 10 21. PE Firm[s] and AI s often invest in e x chang e for owner ship c ontrol (i.e., they rec eive 50% or more of owner ship). Owner ship c ontrol is a key fe ature re al i z ed i n return f

or the use of

funds provided a

nd risks undertake n in the investment. I n my

experience , owner ship control rang es fr om 50% to 65% of the e quity , depending on the s pecif ic i nvestment. Ba sed on my revie w of the Project a

nd the projec ted I RR, R DR/Robertson wo u l d have r etained betwee n 35% and 50% of the e quity value of the Project in exchang e for the $ 8 , 5 0 0,0000 to purcha se the Webber ville Property

and fund the sand and g rave l development plans, in addition to a re asonable level of compe nsation, RD R/Ro be rt so n w ou ld h a ve re a lize d be tw e e n $6 ,6 00 ,0 0 and $1 3, 30 0, 00 0 in NPV of the Project. I n my profe ssional opinion the Project and the Project’s business plan s hould have r esulted in financ ing suf ficient to purc hase the Web be rv ill e pr op e rt

y and fu nd the sa nd and g ra ve l de ve lop me nt p lans . 5 Appellee s contend that H errera ’s opinions that Robertson would have obtaine d the financ ing ne cessa

ry to purch as e the Webberville prope rty and execute his business plan

wer e unsupported, unr eli ab l e, and the mer e ips e dix it of the e x pert. We ag ree . To the extent that Her rer a identifies a

ny bases for his opinion that Robertson would have obtained fina ncing , he re lies heavily on “letter s of i n t en t ” t h at s upposedly “g uara nteed a continuous stream of r evenue ” and “substantially

mitigated ma

ny of the ope rational a

nd financ ial risks evident in the P rojec t.” Her rer a

a pp are ntl y re fe rs to tw o le tte rs in the re c or d, on e wr itt e n by a re pr e se ntativ e of Tr in it y Mat eri als, I nc., on Mar ch 31, 1999, and the other by a re prese ntative of Rainbow Materials, Inc., on Apr il 20,T h e Trinity Materia ls letter indicated that the company “would be ve ry

much intere sted 6 in m ar k e ti n g th e p r o d

u c t o f Co n c r e te A g g r e g a te an d p o s s ib ly A s p h a lt A g g r e g a te o f w hich y ou are proposing to produce in the Aust in are a . . . providing the price is competitive ($3.00 to $3.75 per ton) in spe c and a

vailable.” The Rainbow Mat er i al s l etter me rely “conf irm[ed] Rainbow Materia l’ s c o mm itme n t t o c o n s id e r in g th e u s e o f c r u s h e d s to n e f o r c o n c r e te f

r o m yo u r p r o posed fa c ili ty on I H- 35 .” Al tho ug h the wr ite r co nti nu e d, “ I a m sur e that Rain bo w Ma te ri a ls wil l pu

rc ha se ag g reg ate f

rom y our fa cility

for pr oducing concr ete,” this as s er t i o n is qualified: “provide d the materia l at y our facility meets t he current specifications for use of ag g reg ate in a spe cific a pplication as we ll as being economica lly competitive for Rainbow to use y our mater ial.” The writer c oncluded,
“ Ra inb owMate ri a ls, I nc . will we lc ome the op po rt un ity to c on sid e r a lte rn a tiv e so ur c e s o f m a te ri a ls for their operations, espec ially limestone based products for the Austin and S an Mar cos marke ts.” Although e ach le tter cited the company ’s total annual de mand for c oncre te mater ials, neither indicated a

ny particula r amount that t h e co m pany would purcha se or be willing to purc hase f rom Rob e rt so n, the pr ic e , o r a ny oth e r m a te ri a l te rm .

11 1999. Contrary to H err era ’s assumptions, these letters do not purport to “guara ntee” any thing e x cept that the two companie s would “consider ” or be interested in f urther ne g otiations rega rding the purcha se of some unspe cified a mount of materials fr om Robertson, provided the mate rials met specific ations and we re of fer ed at a n acc eptable pr ice. 6 He rr e ra a lso pr e dic a te s his fi na

nc ing op ini on s on pr oje c tio ns state d in t he “ bu sin e ss plan” that Rober

tson and BT S had prepa

red a s a tool for re cru iting investors. B ey ond a passing statement that the plan’ s “oper ating assumptions are r easona ble and c on sistent with market conditions”—which he never explains—Herre ra does not indicate why it would be rea sonable for

an expert in his field to a cce pt those projec tions at face value. See Te x. R. E vid . 7 03 ; In re Christus Sp oh n H os p. Kle be rg , 2 22 S.W. 3d

43 4, 44 0 (T e x. 20 07 ). Simi larl y , He rr e ra pr ov ide s n o a na ly sis reg arding why he should a cce pt the business plan’s assumptions that $4.5 milli on woul d b e t he

a mou nt o f f ina nc ingre qu ir e d to e xec ute the bu sin e ss pla n, oth e r t ha n a n une xpla ine d r e fe re nc e to “mar ket costs at the time.”12 He rr era lik e wi se fa ils to c ite any ob je c tiv e ba se s o r m e tho do log y to s up po rt

his op ini on that th e pr oje c t w ou ld l ur e inv e sto rs if it h a d a n inte rn a l ra te of re tur

n e xce e din g 25 pe rc e nt. Fur ther, he wholly

fails to addre ss whether or how the availability of financ ing w ould be impacted by Ro b e rts o n ’ s p o o r c r e d it h is to r y , la c k o f c a

p it a l, o r th e f

a c t th a t th e s c a le o f the projec t h e e n v is io n e d

dw ar f e d Ro b e rts o n ’ s p r e v io u s e n te r prise. Volkswagen of Am., Inc . v. Ramirez , 159 S.W .3d 897, 911-12 (Te x . 2004 ) (f ailure to a ddress ke y

fac tor in causation analy sis was, “by itself, near ly

fata l”). This ruling is li k ewise f atal to Her

rer a’s opinions conc erningthe viability of Robertson’s propose d enter prise and the profits it would have e arne d, as those opinions assumed that Ro be rt so n co uld have purc ha se d the Web be rv ill e pr op e rt y and fu nd e d the e nte rp ri se in t

he fi rs t pla c e . E ve n le a vin g thi s f law a sid e , H e rr e ra ’s los t- pr of its op ini on s are un re lia

ble

. To re c ov e r l os t profits, by whateve r method calc ulated, “the amount of the loss must be shown by competent evidenc e with re asonable cer tainty .” Springs W

i n d o w Fashions Div., Inc. v . Blind Maker, I nc. , 1 8 4 S

. W

. 3 d 8 4 0 , 8 8 4 (T ex . Ap p . — Au s t i n2 0 0 6 , p et
. gra n t ed , re m an d edb y agr . ) ( qu o t i n g So uth west Battery Corp. v. Owen , 115 S.W. 2d 10 97 , 109 8 (T e x. 19 38 )) . D e te rm ini ngwh e the r e vid e nc e of los t profits is rea sonably

cer tain requires a fa ct -i ntensive inquiry based on obje ctive fa cts, fig ures, or data. Texas Instruments v . Teletr on Energy M anageme nt , 877 S.W .2d 276, 278-80 (Te x . 1994); Ca p it a l M e tr o . Tr a n s p . A u th

. v . Ce n tra l o

f Te n n . R y . & Nav igation C o. , 114 S.W .3d 573, 579 (Tex. App.—Austin 2003, pet. denied). A s with his o p in io n s reg ardingfinanc ing, H err era predic ates his los t- pr of

its op ini on s o n p ro

je c tio ns state d in Ro be rt so n’ s b us ine ss p lan, y e t ne ve r e xpla ins wh y it is r e a so na ble to d o s o. No r d oe s H e rr e ra e xpla in wh y it wa s re a so na ble to re ly on his ow n “ bu sin e ss13

and proje ct industry experience ” when his r esume, attached to his af fidavit, indicates no e x perie nce with the construction sand or g rave l industry

. He rr e ra ’s a ff

ida vit of fe rs no ob

je c tiv e fa c ts, se ts o ut n o me tho ds , a nd pr e sent s no explanation as t o h o w h e ar ri ved at his var ious conclusions. I n the abse nce of any underlying pr inc ipl e s, me tho ds , o r o bje c tiv e data , H e rr e ra ’s op ini on s are bas e d o n n oth ingmor e tha n h is own qualifications. W ithout any p ri n cipl es, methods, or objec tive data with which to r eview the reliability of He rre ra’ s conclusions, the distri ct co u rt acted within its discretion in excluding Her rer a’s opinions. S

e e G a mm ill , 97 2 S. W.2 d at 72 6; Havne r , 9 5 3 S

. W

. 2 d a t7 1 2

. A c c o r d i n g l y,

we ove rrule Robe rtson’s sec ond issue.

I n his fir st issu e , Robe rt so n urg e s tha t th e dis tr ic t c ourt e rr e d in g ra nti nga pp e lle e s’ no-evide nce summar

y -judg ment motion. W e re vie w th e d istrict court’s summary judgme nt de novo. Va le nc e Op e ra tin g Co . v . D or se tt , 164 S.W. 3d

65 6, 66 1 ( Te x. 20 05 ); Pr ov ide nt Life & Ac c ide nt I ns . Co. v . Kn ott , 128 S.W .3d 211, 215 (Tex. 2003)

. S u m m ary judgme nt is proper whe n there are no dis pu te d is su e s o f m a te ri a l f a c t and the mov ant i s e nti tle d to jud g me nt a s a ma tte r of law. Te x. R. Civ . P. 16 6a (c ). A no- e vid e nc e mot ion fo r sum mary jud g me nt mus t be g ra nte d if , a ft e r a n a de qu a te time for discove ry , (1) the moving p ar t y as s er t s that there is no evidence of one or more e ssential

e le me nts of

a c la im o r d e fe ns e on

wh ic h a n a dv e rs e pa

rt y wo uld have the burd e n of pr oo f a t tr ia l, and (2) the non-movant fa ils to produce more than a scintil la of summary -judg ment evidenc e ra ising a g enuine issue of materia l fac t on those elements. Te x . R. Civ. P . 166a(i). Ano-evide nce summar y judgme nt is essentially

a dire cted ve rdict g rante d befor e trial, to w hich we a pply a leg al-suff

iciency

s t an d ar d o f review. King Ranch, Inc. v . Chapman , 1 18 S.W. 3d 74 2, 75 0- 51 (T e x. 20 03 ); Perdue14

v. Patten Corp. , 142 S.W .3d 596, 603 (Tex. App.—Austi n 2 0 0 4 , n o pet.). Conseque ntly , a no-evide nce summary judgme nt w ill be sustained when: (1) there is a complete absenc e of e vidence of a vital fa ct; (2) the c ourt is barre d by rules of la

w or of e vidence fro m gi v i n g we i gh t to the only evidenc e off

ere d to prove a vital f

act; (3) the e vidence offe red to prove a vital fa ct is no more than a scintilla; or (4) the evidence conclusively establishes the opposite of a vital fac t. King Ranch , 11 8 S. W.3 d at 751

. W e vi e w t he e vid e nc e in t

he lig ht m os t f

a vo ra ble to t he no n- mov a nt, disreg ardingall contra

ry evidenc e and inf

ere nces. Id. (c i t i n g Havne r , 953 S.W .2d at 711). More than a sc intill a of suppor

ting e vidence exis ts if the evidenc e would allow r easona ble and f air-minded people to differ

in their conc lusions. Id. “L ess than a sc intill a of e vidence exis ts when the e vidence is ‘so weak as to do no more than c reate a mer e surmis e o r s uspicion’ of a fac t.” Id. (quoting Kindred v. Con/Chem, Inc. , 650 S.W .2d 61, 63 (Tex. 1983)).

I n his response to appe llees’ motion, as noted, Rober tson cited solely

to Herr era ’s

a ff ida vit in a rguin g that hi s su mma

ry -j ud g me nt pr oo f ra ise d a fa c t is su e a s to dama g e s. On a pp e a l, Rob e rt so n urg e s u s to c on sid e r o the r s umm ary -j ud g me nt e v i d e nc e that, h e no w c on te nd s, wa s le g a lly

su ff ic ie nt t o s up po rt

los t- pr of its dama g e s. Ev en a ssu

min g Rob e rt so n p re se rv e d e rr or a s to the se contentions, see Mc Con ne ll v . S ou ths ideIn de

p. Sc h. Di st. , 858 S.W .2d 337, 339-41 (Te x . 1993), the

e vid e nc e to w hic h h e no w r e fe rs fa ils to p re se nt a fa c t is su e a s to dama g e s. Rob e rt so n re lie s on th e de po sit ion te sti mony

of Th oma s G le nd e nn ing , a

re a l e state develope r, as pr oof that h e woul d have obta ined financ ing a bsent the alleg ed wr ong doing of B TS, Aa ro n, and Da

vis

. Gl e nd e nn ing te sti fi e d that he ha d c on te mpl a te d p ur c ha sin g the Web be rv ill e pr op e rt y him se lf , po ssi bly le a sin g it to Rob e rt so n to min e fo r g ra ve l in e xch ang e fo r a ro y altyGlendenningexplained that a g rave l lease is similar to an oil and g as lea se. 7 15 pay ment, with an ey e to eve ntually d ev el o p i n g the prope rty for other uses af ter the g rave l was depleted. Gl e nd e nn ingde nie d, ho we ve r, that he wo uld have loa ne d Ro be rt so n f

un ds to p ur c ha se 7 the l an d—and testified that he had re jected suc h a proposa l from Robertson out-of- hand. Glendenningadded that he was una war e o f R o b ertson’s c redit history and would have perf

ormed due diligenc e conce rning such matters befor e enter ing into a lease or other business ar ra ng ement with him. I n this c ontext , Glendenningalso testified that, in his view, the proje ct was “ financ eable ,” explaining that “I

cer tainly wouldn’t g o forwa

rd with it unless Ithought it was possible, a nd Ihave g ood succe ss on having all of m y other proje cts financ ed.” H oweve r, Glende nning did not purpor t to offer an opinion as to whethe r he thoug ht Robertson could have obt ai n ed fi n ancing , or for any particula r ente rprise Rober

tson hoped to conduct ther e if Rober tson pur chase d the prope rty . Nor wa s Glendenningdesig nated a s an ex pert as to the availability of financing

. His testimony is no evidence that Robertson would have obtained fina ncing for his venture

. Robertson also attempts to rely on his own “business plan” a s evidenc e both that he would have obta ined financ ing a nd ear ned prof its. He emphasizes the l eng th of the doc ument, which

e xce e ds 18 0 p a g e s, c ounti ng a tta c hme nts
. Th e do c ume nt doe s re fe r to obj e c tiv e e ng ine e ri ngdata indicating that the Webberville proper ty contained larg e quantities of g rave l, a s well as indicia that there exis ts a marke t for sand a nd g rave l in the Austin area . Howeve r, while it purports to projec t Robertson’s reve nue and expenses fr om operations on the W ebber ville property , these proje ctions

are pr e dic a te d u

po n th e same so rt

of un su pp or te d a ssumpt ion s that we re fa ta l to H e rr e ra ’s a ff

ida vit ;

e .g ., that Ro be rt so n “ c ur

re ntl y ho lds le tte rs of

int e nt, ve rb a l a g re e me nts , a nd wr itt e n c on tr a c ts t oI n a dd iti on to t he pr e vio us ly

dis c us sed let ter s of inte nt, the re are so me ma te ri a ls s up ply 8 contr acts attached to the pla n to which Robertson is a par ty , but these conc ern ope rations in other are as of the state. 16 provide 100,000 tons of materia ls pe r month” that will “ g uara ntee more than $800,000 of re venue monthly .” Rob e rt so n’ s pr oje c tio ns are un su pp or te d by ob je c tiv e data
. “ Th e me re ho pe fo r s uc c e ss 8 of an untrie d enter

prise, eve n when that hope is realistic, is not enoug h for r ecove ry of lost profits.” Te x as In str um e nts , 8 7 7 S

. W .2d at 280. The business plan is no e vidence of lost profits. See id. at 278-81. We over

rule Rober

tson’s first issue. Ha vin g ov e rr

ule d b oth of Rob e rt so n’ s is su e s, we a ff ir m the dis tr ic t c ourt ’s jud g me nt.

__________________________________________ Bob Pembe rton, J ustice Be fore J ustices Patterson, Pember ton and Waldrop Affir med Filed: August 27, 2009