AFFIRMED as MODIFIED and Opin ion Filed September 17, 2020 

# S

In The 

### Court of Appeals Fifth District of Texas at Dallas No. 05-18-00799-CV JONATHAN CORNWELL AND S HADD MCKINNEY, Appellant V. DIANA SCOTHORN, STEWART SCOT HORN, THE BENEFIT LINK, INC., AND SCOTHORN AERO, INC., Appellee On Appeal from the 429th Judicial District Court Collin County, Texas Trial Court Cause No. 429-05287-2016 MEMORANDUM OPINION Before Chief Justice Burns, Jus tice Molberg, and Justice Partid a-Kipness Opinion by Chief Justice Burns 1 Jonathan Cornwell and Shadd McKinney appeal the trial court’s j udgment awarding Diana and Stewart Scothorn $183,890.18 on their claim of promissory estoppel against Cornwell and Mc Kinney and awarding McKinney $1 7,427.86 for credit card expenses and loss of credit reputation. In nine is sues, Cornwell and McKinney argue the trial court erred “by including the jury’s p romissory estoppel

1 The Honorable David Bridges, Justice, participated in the subm ission of this appeal; however, he did not participate in the issuance of this opinion due to his deat h on July 25, 2020. Chief Justice Burns has reviewed the record and the briefs in this cause.–2– finding and associated damages” against them; the evidence does not support the jury’s answers to the question regarding promissory estoppel, t he question regarding the Scothorn’s estoppel defense, a nd the question regarding Cor nwell and McKinney’s fraud; the trial court erred in not awarding Cornwel l and McKinney equitable relief and awarding the Scothorns costs; the evidence conclusively established the jury’s award of damages was excessive; and the trial court erred in denying Cornwell and McKinney’s mo tion for new trial. As modif ied, we affirm the trial court’s judgment. In December 2016, the Scothorns filed suit against Cornwell and McKinney. The facts as set forth in the Scothorns’ fourth amended petitio n are as follows. Legacy Aeronautics is a closely-held corporation, and Diana is the majority shareholder. Diana is also the s ole shareholder of The Benefit Link, Inc., a Medicare supplement insurance company. In April 2015, the Scothorns wer e introduced to Cornwell and McKinney at church. Cornwell and McKinney had lef t positions in the aeronautics industry and were seeking investors to start Le gacy. In discussions with the Scothorns, Cornwell and McKinney identified customers and contracts they had or were reasonably certain to have. The Scothorns agreed t o provide the initial capital, which was all that was supposed to be required to fund initial operations, and no extended or continuing c ontributions were contemplated. In August 2016, the parties signed a written agreement that con firmed Diana owned eighty percent of Legacy, and Cornwell and McKinney each owned ten–3– percent. The agreement was made retroactive back to the incept ion of Legacy in April 2015. At all times, Cornwe ll and McKinney ran Legacy’s d aily operations. Despite the Scothorns’ initial unde rstanding that they would on ly make the initial equity contribution, Cornw ell and McKinney continued to request additional funds. Cornwell and McKinney i ndicated that there were substan tial deals in place or in Legacy’s pipeline that required additional funds to be fu lfilled. Between April 2015 and October 2016, the Scothorns advanced approximately $2. 35 million to Cornwell and McKinney directly o r indirectly through direct pay ments or purchases made on behalf of Cornwell and Mc Kinney and Legacy. Of this am ount, $1.7 million went to Cornwell and Mc Kinney and/or Legacy, $37,700 wa s spent on equipment purchases by Legacy, a nd $626,000 was used to pay for Legacy’s staffing. By October 2016, the Scothorns be came weary of Cornwell and McK inney’s repeated requests for additiona l advances. Following Cornwell and McKinney’s representations that they were working twenty-four hours a day and not getting paid, the Scothorns offered the help of a Benefit Link employee, Mica h Lynch, who requested financial information to create a budget and provide operational structures and support. By late October or early November, operations had not improved and Cornwell and McKinney were reque sting additional funds. By tha t time, Lynch had determined Legacy had accounts payable of a million dollars and was unable to fund–4– its operations. Lynch also had a difficult time getting comple te information from Cornwell and McKinney. The Scothorns discovered that, a lthough Legacy was not profitab le and at times insolvent, Cornwell and Mc Kinney collectively paid themse lves direct compensation in excess of $240,000 during the partial year 2015 and more than $300,000 during 2016. Cornwell a nd McKinney did not account fo r the payments as wages or distributions; inst ead, when Legacy received funds, Cornwell and McKinney dispersed the funds to themselves. At the same time, Cornwell and McKinney did not make any distri butions to the Scothorns, Legac y was incurring additional debt to third-party vendors for contract labor, and Cornwell and McKinney were charging personal e xpenses to Legacy. In Novembe r 2016, the Scothorns requested documentation of Legacy’s expenses, but Cor nwell and McKinney failed to provide suppor t for the expenses or document ation as to the necessity of the expenses as they related to Legacy’s business. On November 14, 2016, Cornwell and McKinney indi cated they would not continue t o run Legacy without additional cash from the Sc othorns. On November 17, 20 16, Cornwell and McKinney notified the Scothorns that (1) they had “secured” the leased space rented by Legacy, (2) they would seek other employment, (3) the compan y credit card was past due and could not be paid, (4) all equipment owned by Lega cy was located in the leased space, and (5) approximately $60,000 in accounts rec eivable remained to be collected by Legacy for work already completed. Based on th e foregoing, the–5– Scothorns filed suit alleging cau ses of action for breach of fi duciary duty/constructive fraud, fraud/fr audulent inducement, money had and received, alter ego, conversion, conspiracy, breach of contract, and promissory estoppel. The Scothorns also requested the a ppointment of a receiver. Cornwell and McKinney filed an answer denying that all conditio ns precedent had occurred and asserting the following affirmative defenses: duress, lack of consideration, fraud, ratifica tion, waiver, and estoppel or qua si-estoppel. Cornwell and McKinney also asserted that the Scothorn’s claims were barr ed by the business judgment rule and the Scothorns’ damages were caused by themsel ves or others. Cornwell and McKinney also filed counterclaims and third-party claims and asserted the following version of the facts. Cornwell and McKi nney formed Legacy in April 2015 and granted Stewart a twenty-percent interest in exchange for start-up capital on an as-needed basis. At all times, Cornwell and McKi nney made it clear that they lacked capital, the business was not likely to attain profitability for some time, and they would need additional funds to conduct operation s while the business developed. Cornwell and McKinney were to receive a salary for conducting Legacy’s operations and, as funds were needed, th ey were to inf orm Stewart, and Stewart would advance the funds. At that time, Stewart did not disclose or mention that his wife, Diana, was involved in Legacy’s business or that she was providing the funds to meet Legacy’s operating requirements. Instead, Co rnwell and McKinney were led to believe the y were dealing with Stewart as their fellow–6– shareholder. In July 2015, Stewa rt made advances of $189,420.1 2 and $150,000. In August 2015, after only a few m onths of operations and despite being told at the outset that additional funds would be needed to fund Legacy’s o perations until it became profitable, Stewart exp ressed frustration about the fund s needed to operate Legacy. Stewart made it clear that, unless he was given a high er percentage of ownership, he would refuse to provide further financial support to Legacy. Cornwell and McKinney offered to change the ownership structure to make Stewart a sixty percent owner, and Stewart con tinued to fund Legacy as needed. Stewart served as corporate officer in charge of the finances f or Legacy, while Cornwell and McKinney conducted da y-to-day operations. Cornwel l and McKinney discussed financial expe nditures with Stewart, and Ste wart cleared the expenditures before payments were made. In this role, Stewart made further advances to Legacy as follows: $86,000 on December 3, 2015; $85 ,000 on December 18, 2015; $100,000 on March 12, 2016; $100,000 on Marc h 24, 2016; $100,000 on April 10, 2016; and $75,000 on April 20, 2016. Dur ing this time period, Cornwell and McKinney provided Stewart with details on the amou nts Legacy was paying and, in his capacity as ch ief financial officer, Stewart approved the expenditures. During this same time period, Cor nwell and McKinney continued t o develop Legacy’s business and pursue ne w clients. Cornwell and McKinne y developed a business strategy to pursue government contracts through a fede ral small business–7– set-aside program. On August 17, 2016, Cornwell and McKinney d iscussed with Stewart the opportunity to serve as the prime contractor on a f ederal contract with Bell Helicopter serving as the sub-contractor. Cornwell and Mc Kinney discussed similar opportunities with Bell Helicopter, Raytheon, and Lockh eed Martin, and they kept Stewart informed about these opportunities. In April 2016, Stewart required fi ve percent of all revenue gen erated be paid to his charitable foundation. Stewart also required that $100, 000 per month be repaid to Stewart as “ruminative compensation for Capital initially in vested.” If not paid, this “ruminative compensation” was to “earn interest of 50% per month” and “accumulate and compound” until paid. Stewart also told Cornwe ll and McKinney they could recover some of the pe rcentages taken from them by m eeting certain weight loss demands. In August 2016, Cornwell and McKinne y discussed with Stewart tr ansferring his ownership to his wife, Diana . Stewart remained a corporate officer of Legacy, and Cornwell and McKinney contin ued to deal with Stewart, not D iana. Nevertheless, on September 19, 2016, The Benefit Link sent docu ments to the Texas Secretary of State purporting to name Diana as the sole shareho lder of Legacy, which she never was. At no time did Cornwell or McKinney receive any consideration for any part of their original forty percent ownership interest in Legacy. Although Cornwell and McKinney’s relationship with Stewart cont inued to deteriorate, Cornwell and McKinne y continued to do their jobs a nd generate revenue–8– through purchase orders and sale s contracts. Cornwell and McKi nney further pursued promising prospective business relations with Bell Heli copter, Lockheed Martin, and others for government small business set-aside cont racts However, as early as October 2016, the Scothorns began discussi ons with their attorney concerning Legacy and directed Micah Lynch, as a n employee of The Benefit Link, to review Legacy’s finances. The Scothorns also suggested Marcus Young, another employee of The Benefit Link, for a position at Legacy. Cornwell and McKinney cooperated with thes e efforts and were given no in dication that the Scothorns were planning to end the ir involvement and support of Legacy. At a November 4, 2016 meeting, Ste wart demanded that Cornwell a nd McKinney sign a stock agreement and promissory note that would obligate Cornwell and McKinney to pay $3,500,000 each to the Scothorns. This amo unt exceeded anything the Scothorns advanced t o Legacy, and Cornwell and McK inney had never agreed to be personally liable for funds contributed, loaned, o r advanced to Legacy. When Cornwell and McKinney refuse d to sign, the Scothorns proce eded with their plans to shut down Legacy. On November 6, 2016, at the direction of the Scothorns, Lynch m ade demand for all documents related to L egacy’s business operations, incl uding vendor information, customer informa tion, log-in and password informat ion, accounts payable, existing lease agreements, and purchase orders. Two d ays later, Stewart emptied Legacy’s bank accounts, e ffectively suspending Legacy’s operations.–9– Cornwell and McKinney came to be lieve the Scothorns had decidedto shut down Legacy and form a new competing company, Scothorn Aero, In c. (SAI). On November 22, 2016, Diana filed pa pers with the Texas Secretary of State forming SAI. Prior to that, SAI developed a website and a business pla n using third-party vendors. Young, who received train ing and information regardin g Legacy’s business, became SAI’s executive director. SAI is wholly owned by Stewart and Diana, and both they and Lynch serve as officers of SAI. Based on these facts, Cornwell and McKinney asserted cla ims of breach of fiduciary du ty/knowing participation, fraud, tortious int erference with existing and p rospective business relations, aiding and abetting/ci vil conspiracy/ratification, r espondeat superior/vice principal, and attorney’s fees. At a jury trial in April 2018, S tewart testified he met McKinne y at a time when he was the chief executive officer of The Benefit Link and Dian a was the owner. McKinney said he wanted to tell Stewart about getting into busi ness making cabinets and galleys for commercial and pr ivate jets. McKinney said Cor nwell was his friend and was extremely experienced w ithin the industry and had twent y-five years of experience. Stewart met with C ornwell and McKinney, and they t old Stewart they had existing clients from their company that was going out of b usiness. Cornwell and McKinney said they had “in the neighborhood of $10 million in contracts that they wanted to get,” and they j ust needed more space and more e quipment to get the contracts. They asked Stewart to invest, but he said he was no t interested.–10– McKinney was “very persistent,” s o Stewart said he would “pray about it” and ask his wife about it. At a subsequent meeting, Cornwe ll and McKinney discussed with S tewart orders or business “in the tens of millions” and a profit margi n of thirty percent. They discussed “Two and a half million dollars in revenue with $750,000 in profit for the first year.” At another meeting, Cornwell and McKinney said they could start the business with $180,000 to get the necessary equipment and s ecure the space. Once they got new business, the re would be a down payment on th e work, “so you have cash flow that automatically comes in.” Regarding ownersh ip, Stewart was to receive a twenty-percent interest for “that one $180,000.” Ste wart gave Cornwell and McKinney each a check for $15,000 in return for twenty-perc ent ownership and a return based on the “$750,000 in profit the first year, two a nd a half million dollars in sales.” Stewart also gave C ornwell a $150,000 check to secu re premises for the business and buy equipment. Ste wart testified they “never talk ed about them having any kind of huge salary because there was no way that you could ever do the numbers to justify that.” Specifically, Stewart testified he did not a gree that Cornwell and McKinney could each be paid $180, 000 per year, and he did not a gree on a specific amount for Cornwell’s a nd McKinney’s salaries. As part of the investment, Cornwell and McKinney provided Stewa rt a Branding Plan that memorialized in writing “some of the most si gnificant things that we both agreed on and thought thi s would be important.” The Pl an discussed filling–11– a “void in the current VIP aviation marketplace” for cabinetry and galleys by “starting our business debt-free and having long-term reoccurri ng business.” The Plan contained a “three-year finan cial projection sales of two and a half million, net profit $750,000.” The Plan stated, “we can meet our competitor s [sic] prices if we want to because we will have l ess overhead and no debt.” In August 2015, Stewart agreed to fund money for projects that were delayed and for equipment, and he told Co rnwell and McKinney they would have to increase the percentage of interest tha t he and Diana had. In an email, Cornwell and McKinney agreed to give Stewart and Diana a sixty percent inter est and take a twenty percent interest each. Ste wart testified this agreement was not formalized. According to what Cornwell and McKinney were telling Stewart, i n August 2015 “Everything from a profit margin and from the revenue side was going as expected.” Stewart testified that, in December 2015, TBL Staffing was star ted at the request of Cornwell and McKinne y and was funded by The Benefit Link. Stewart testified the idea was to “create a profit center” by providing staffing to Legacy that Legacy would have to pay for anyw ay. For “maybe the first few weeks,” Legacy paid for the staffing provided by TBL Staffing, but “after that , they didn’t pay anymore.” McKinney came to Stew art and said he had “a payment that’s missing again” and asked Stewart to “bail us out.” Stewart “agreed to put more money in” and put in $85,000. About two week s later, McKinney needed mon ey to bid a new–12– project. Stewart agreed to adva nce more money but told Cornwel l and McKinney they would “have to revisit the equity structure again.” Over the next few months, Cornwell and McKinney did not pay TBL Staffing and, by April 2016, Legacy ow ed TBL Staffing “about $625,000.” Stewart was “really upset” and “wrote a ver y terse letter” to Cornwell and McKinney telling them to “please go ahead and straighten up.” Cornwell and McKinney told Stewart they were “going to get some kind of payment plan worked out by TBL, ” and Stewart was “comfortable going forward.” Stewart also told Cornwell an d McKinney he “needed to see all the checks or any withdrawals out of the acc ount and any deposits coming in, because [he] had virtually no clue what was going on .” In response, Stewart received emails containing “some” of the information, b ut he “did not receive all of the expenses.” For a couple of months, the emai ls continued but Cornwell and McKinney then told Stewart “they got a little too busy to be able to do this anymore.” TBL Staffing was shut down and, at that time, L egacy owed TBL Staffing $625,747. Stewart testif ied this amount came from The Benefit Link and Diana and Stewart. Throughout 2016, Stewart met with Cornwell and McKinney once or twice a month, and Cornwell “would put up a spreadsheet” on cash flow, projects in progress, and costs. However, “ there were no documents that we re given.” Regarding profit margins, Stewart still understood “what they t old me, which was everything was 30 percent.” In August 2016, McKinney had gone to a “women-–13– owned, small business administra tion conference” and met somebo dy from Bell Helicopter and learned of “a set-aside contract for women-owned or, at least, for small business.” Cornwell and McKinney asked Stewart to “switc h over all the ownership directly into Diana’s name” and “kind of change the e ntire partnership to reflect that to get a signed agre ement.” Cornwell sent Stewart a text on August 16 saying that the solicitation on the Bell Helicopter contract wa s due on August 17 or 18 and asking Stewart to “get these documents done.” On August 17, 2016, the parties signed an agreement “ref lecting that Diana was now 80 p ercent shareholder,” Stewart was “zero,” and Cornwe ll and McKinney “were 10 percent each.” At this same time, Cornwell and McKinney again asked for more m oney “to clean up some of the other projects that they had” before “gear [ing] up for the government contracting part.” Stewart agreed to give Cornwell and McKinney more money. Later in August, “because this was a done deal, accordi ng to [McKinney], the $111 million contract, [Cornwe ll and McKinney] had asked if they could earn back an additional 10 percent.” Stewart testified he and Diana were “ecstatic knowing that we could have something that could actually give u s return on money we invested now for a considerable amount of time and not recei ved anything.” Stewart knew that both Cornwell and McKinney wanted to lose wei ght, so Stewart said to them, “what if we just say in January, if you guys have lost this weight, you guys can get your additional 10 percent.” The weight loss agre ement was made a part of a signed agreement.–14– By October 2016, Cornwell and Mc Kinney were “bidding on Departm ent of Defense stuff” and “got really, really busy,” so Stewart asked Lynch to “come in and take a look and help.” Lynch “h ad a background in really turni ng things around,” and Lynch was able to run some advertisements and “get some can didates in to send over to Legacy” to help. One of the candidates was Young. As Lynch worked on a budget with Cornwell, Cornwell pr ovided Lynch with spreadsheets that Stewart “was familiar with seeing.” However, these spreadsheets, for t he first time, showed Cornwell’s and McKinney’s salari es. Lynch “couldn’t make any s ense of the numbers when she was looking at it.” At one time, “the account s payable would be $30,000,” and the “next time it was $300,000,” then “it worked its way up to 900- and-some-odd thousand, and finally a million-one.” Also in October, Stewart advanced Cornwell and McKinney another $70,000 “for labor and materials on a job that they were getting.” As part of making Legacy a woman-owned busine ss, McKinney went to the bank to add Diana and Stewart as signatories on Legacy’s checki ng account. Prior to October 201 6, Stewart did not have access to the checking acc ount. Stewart accessed Legacy’s bank account and found “a number of charges t hat were questionable.” Stewart testified he and Diana invested a total of $1,793,102 i n Legacy. Stewart did not know about “the $15,000 each [Cornwell and McKi nney] took out a month” and only learned of the pay ments in discovery. Stewart also learned Cornwell and McKinney had a debit card that “they were charging all kinds of–15– things” on, including “Pediatric dentists, $2,000 Kroger bills, $2,000 hotel bills, $800 dinners, all sorts of personal things.” In late October 2016, McKinney called Stewart to tell him the B ell Helicopter deal was not going to happen. At a subsequent meeting, Stewart presented Cornwell and McKinney with a promissory note after working with his atto rney to “draft something up trying to figure out if [Cornwell and McKinney] wo uld be accountable.” Stewart testified that, even though the amount o f the promissory note was $3.5 million, “it was really j ust a negotiating point.” St ewart arrived at the $3.5 million figure by adding together the “million and a half” the Scothorns had invested and the approximately $2 million Legacy had “in terms of revenu e.” Cornwell and McKinney said they would get an attorney to look at the promiss ory note, and Stewart agreed. After going to see an attorney, Cornwell and M cKinney “came back and said we are not going to sign any note in any way.” Stewar t told Cornwell and McKinney there had to be “some document” showing they “were inv olved in this process,” and it had to be a promissory note. Stewart said he did not care what the amount of the note was, and he told Cornwell and McKinney to “g o ahead and figure that out.” Stewart testified he never reached an agreement wit h Cornwell and McKinney. When asked if he owed a fiduciary duty to Legacy, Stewart testi fied that, from August 17, 2016 when he signed a document making him chief fina ncial officer of Legacy until November 22 when h e resigned, “the title of chief financial officer–16– owed a fiduciary duty, but I did not have any of the documents or the ability to operate in that position given th e information that I had.” Wh en asked what he was asserting in the lawsuit that Cor nwell and McKinney did wrong, Stewart responded: They did not–they had a fiduciary duty to the company and to it s shareholders, and they breached that in many ways by not operat ing the company in its best interest. They were definitely working on their own self interest, making sure that they got paid. If you wanted t o walk through each one of the statements and look, you can notice, yo u know, there were other things that obviously didn’t get paid if you h ad a million dollars in payables, but you did pay yourself. And non e of that makes sense when you’re a president and CEO of a accompany. Yo u have an obligation to make sure t hat the company is operating a t its best, and let the shareholder kn ow what’s going on. I had no c lue what was going on until we got [Lynch] i nvolved. That was never any information that was given to me. That’s something that should be on the forefront at all points in time. But I also would never ha ve invested the first dime had I known this was the kind of integrity. Now, I mean, I don’t think that I had any of that information. It’s kind of like I didn’t know what I didn’t know, but I do know what I know now. And I believed what they to ld me before. I believed ever ything that they said was true. It all made sense to me. They just c ontinued to induce us to go ahead and put more money in, based on what they told us was happening in the business , and, in fact, that was not th e case. Stewart testified he and Diana sought to rec over $1,793,102. On cross-examination, Stewart a greed the document he signed ma de him chief financial officer retroactively from the inception of the compa ny. Stewart admitted he received an email on August 17, 2016, from the accountant fo r Legacy and The Benefit Link containing a correction to form 1125-E that was be ing provided to the IRS. The form was titled “Compens ation of Officers” and showed Cornwell was paid $120,000 and McKinney was pa id $119,000. Stewart testifie d he “never saw–17– this document.” Stewart testifie d that, “if [Cornwell and McKi nney] requested pay, they got paid.” Allyn Needham, an economic consul tant, performed a lost profit s analysis on Legacy. Relying on a projection of five years’ worth of future sales for Legacy provided by McKinney, Needham tes tified Legacy lost between $7 million and $9 million in profits over a five-year period from 2017 to 2021. Needham testified that Legacy never made any profit, and Legacy did not have any money to keep operating unless the Scothorns or someone put money in. In response to q uestioning, Needham agreed that the Scothorns never got a return on their i nvestment in Legacy. The jury found the Scothorns s ubstantially relied to their det riment on promise(s) made by Cornwell and McKinney, this reliance was for eseeable by Cornwell and McKinney, and the Scothorns were entitled to damag es of $201,318.04. The jury also found Stewart did not comply with h is fiduciary duties owed to legacy while he was chief financial officer of Legacy, but Stewart’s conduct was excused. The jury found Stewart committed fraud against Co rnwell and McKinney, his fraud was not excus ed, and McKinney was entitled to $9427.86 in out-of-pocket damages and $8000 in damages for loss of credit r eputation. In April 2018, the trial court entered a final judgment awardi ng the Scothorns $183,890.18, a sum the court arrive d at by subtracting the dama ges awarded to McKinney, $17,427.86, from the damages awarded to the Scothorns , $201,318.04.–18– The judgment also awarded the Scothorns their costs against Cor nwell and McKinney. Cornwell and McKinney filed a motion for new trial asserting t he jury’s fraud and breach of fiduciary duty findings against Stewart negated o r barred the finding of promissory estoppel against C ornwell and McKinney, the evide nce was legally and factually insufficient to support the jury’s findings , and the trial court erred in failing to award Cornwell and Mc Kinney equitable relief and in awarding costs against Cornwell and McKinney. C ornwell and McKinney also file d a motion to modify the final judgment in which they argued, among other thi ngs, the Scothorns were not entitled to recover ex penses of litigation, including postage, photocopies, and delivery services. The tri al court granted Cornwell and Mc Kinney’s motion in part, reduced the costs awarded to the Scothorns by $184, and d enied the motion in all other respects. This appeal followed. In their first issue, Cornwell and McKinney argue the trial co urt erred by including the jury’s promissory estoppel finding and associated damages against them when the jury’s fraud and fiduciary duty findings against Stewart negate the finding of promissory estoppel against Cornwell and McKinney. In particular, Cornwell and McKinney argue the Scothorns “should not be allowe d to benefit all the while participating in fraud against” Cornwell and McKinney . Cornwell and McKinney, in a single sentence, a ssert that “the same argument can be made regarding the finding that Appe llee Stewart Scothorn breached h is fiduciary duty.”–19– In support of their assertions in their first issue, Cornwell a nd McKinney cite

one case: El Paso Healthcare Syste m, Ltd. v. Piping Rock Corp. , 939 S.W.2d 695 (Tex. App.—El Paso 1997, writ de nied). In that case, El Paso H ealthcare System (EPHS) sought to develop a medical office building and enlisted the help of Piping Rock, a developer. Id. at 697. The parties entered an agreement providing that Piping Rock would execute an agreement to purchase the land for the proposed building from EPHS and then contri bute the land to the partners hip as its capital contribution. Id. For its contribution, EPHS agreed to execute a Build and Leas e Agreement under which it would lease all of the office space fr om the partnership upon completion of the building. Id. The agreement required Piping Rock to obtain and close a nonrecourse short-term construction loan no later t han April 1, 1990. Id. at 698. The construction loan wa s to fund all costs of buildin g construction. Id. Piping Rock had the option to terminate the partnership without liability if the construction loan and the purchase of the land were not accompl ished by April 1,
1990. Id. Piping Rock never obtained the construction loan, nor did it close the land purchase contract. Id. The parties nevertheless con tinued to work on the project together. Each party claims that the other induced it to contin ue. Id. at 699. EPHS presented evidence that it allowed Piping Rock to stay on the p roject because Piping Rock continually represented that it was close to closing a con struction loan. Id. EPHS asserted that it agreed to temporarily fund construction c osts after April 1, 1990, not because it wanted to induce Piping Rock to complete t he project without–20– financing, but in reliance and anticipation on forthcoming fina ncing. Id. Piping Rock presented evidence that a fter April 1, 1990, EPHS asked Pi ping Rock to continue with the construction even though there was no loan in place and agreed to fund the construction costs, including Piping Rock’s costs, in order to complete the project. Id. Several Piping Rock requests to EPHS, dated after April 1, 19 90, for payment of significant construction costs incurred, including P iping Rock’s developer overhead, provided evidence that Piping Rock relied t o its detriment on EPHS’s promise to pay construction costs. Id. Piping Rock filed suit against EPHS alleging, among other thing s, a promissory estoppel claim. Id. at 698. EPHS counterclaimed against Piping Rock for breach of the Agreement, fraudulent inducement, negligent m isrepresentation, intentional interference with con tract and breach of fiduciary duty. Id. The jury found that Piping Rock breached the Agreement and intentionally interfered with EPHS’s contract to sell the medical office building but found n o damages for EPHS on either cause of action. Id. The jury found for Piping Rock on its promissory estoppel claim and awarded $440,000 in damages for Piping Rock’ s developer overhead and $48,000 in costs for clearing a “staging area” nex t to the construction site. Id. The jury failed to find for e ither party on any other cause o f action. Id. On appeal, EPHS argued, among other things, that the doctrine o f unclean hands barred Piping Rock from recovering on its promissory esto ppel claim. Id. at 700. In making this argument, EPHS pointed to the jury’s findi ngs that Piping Rock–21– breached the original Agreement a nd that Piping Rock interfered with EPHS’s contracts to sell the medical office building. Id. The court noted it was undisputed that Piping Rock failed to obtai n financing as required in the Agreement. Id. The court then stated the following , which Cornwell and McKinney qu ote in their brief: A party may not predicate an estoppel in his favor on, or asser t such estoppel for the purpose of making effective, obtaining the ben efit of, or shielding himself from the results of his own fraud, and, si milarly, he may not do so with respect to his own dereliction of duty, v iolation of law, wrongful act, or other inequitable conduct in the trans action in question. Id. However, the court noted, Pipi ng Rock was not seeking to enfo rce favorable provisions of the contract the jury found it had breached. Id. Instead, Piping Rock was seeking to enforce promises E PHS allegedly made outside the agreement. Id. The court had already found evidence in the record sufficient t o determine that EPHS’s promises were made to induce Piping Rock to remain on th e project despite any breach. Id. The court determined that an equitable unclean hands defense could not be based on the very breach EPHS essentially excused by mak ing the subject promises in order to keep Piping Rock on the job. Id. The court concluded that enforcing Piping Rock’s equitable promissory estoppel claims in this context did not offend equity. Id. Thus, Piping Rock addressed whether an uncle an hands defense barred recovery on a promissory estoppel claim. Piping Rock does not stand for the proposition that Stewart’s fraud in this case negated the Scoth orns’ promissory estoppel claims. See id. To the extent the jury found Stewart committed fraud and–22– damaged McKinney $9427.86 in out-o f-pocket damages and $8000 in damages for loss of credit reputation, we cannot conclude this finding prec luded the jury from also finding that the Scothorns were entitled to damages of $20 1,318.04 on their promissory estoppel claim agai nst Cornwell and McKinney. See id. As to Cornwell and McKinney’s argument that “the same argument can be made” re garding the jury’s finding that Stewart breached his fiduciary duty, we not e that the jury found Stewart’s breach of fiduciary duty was excused, and Stewart bre ached a fiduciary duty owed to Legacy, not Cornwe ll and McKinney. We overrule Co rnwell and McKinney’s first issue. In their second issue, Cornwel l and McKinney argue the evidenc e is legally and factually insufficient to support the jury’s answer to Ques tion 16 regarding promissory estoppel. Specifically, Cornwell and McKinney argue there is no evidence that they “would provide a return to [the Scothorns] o f the funds advanced, that the funds advanced would onl y be used for initial operatio ns, or that Legacy would not incur debt.” In determining whether there is l egally sufficient evidence to support the jury’s decision, we view the evidence in the light most favorab le to the verdict, crediting favorable evidence if reasonable jurors could, and di sregarding contrary evidence unless reasonable jurors could not. City of Keller v. Wilson , 168 S.W.3d 802, 807 (Tex. 2005); Lamajak, Inc. v. Frazin , 230 S.W.3d 786, 793 (Tex. App.— Dallas 2007, no pet.). To evaluate the factual sufficiency of the evidence supporting–23– the finding, we consider all the evidence and will set aside th e verdict only if the evidence supporting the jury finding is so weak or so against t he overwhelming weight of the evidence that the finding is clearly wrong and un just. See Cain v. Bain , 709 S.W.2d 175, 176 (Tex. 1986); Dyson v. Olin Corp. , 692 S.W.2d 456, 457 (Tex. 1985); Lamajak , 230 S.W.3d at 793. The elements of a promissory estoppel claim are (1) a promise, (2) foreseeability of reliance thereon by the promisor, and (3) sub stantial detrimental reliance by the promisee. Trevino & Assocs. Mech., L. P. v. Frost Nat. Bank , 400 S.W.3d 139, 146 (Tex. App. —Dallas 2013, no pet.); see English v. Fischer , 660 S.W.2d 521, 524 (Tex. 1983); Fretz Constr. Co. v. S. Nat’l Bank of Houston , 626 S.W.2d 478, 480 (Tex. 1981). To sh ow detrimental reliance, the plaintiff must demonstrate that he materially changed his position in reliance on the promise.
Trevino , 400 S.W.3d at 146; see English , 660 S.W.2d at 524 (finding no promissory estoppel when plaintiff could not show he would not have taken his detrimental actions if defendant had not made promise). Cornwell and McKinney assert, in part, that a “fourth element” of promissory estoppel must be proven: that in justice can be avoided only by enforcing the defendant’s promise, citing Collins v. Walker , 341 S.W.3d 570, 573–74 (Tex. App.—Houston [14th Dist.] 2011, no pet.) (elements of promissor y estoppel are: (1) a promise, (2) foreseeability of reliance by the promisor, (3) substantial and–24– reasonable reliance by the promise e to its detriment, and (4) e nforcing the promise is necessary to avoid injustice). Question 16 of the jury charge asked, “Did the Scothorns substa ntially rely to their detriment on promise(s) made by any of those listed below , and was this reliance foreseeable by that person?” The jury answered “Yes” for both Cornwell and McKinney. Cornwell and McKinney did not object to the jury charge question on promissory estoppel. To pres erve an appellate complaint pre mised on a defective jury charge, a party must “point out distinctly the objectionab le matter and the grounds of the objection.” T EX

. R. C IV

. P. 274. “Any complaint as to a question, definition, or instruction, on account of any defect, omission, or fault in pleading, is waived unless specifically inc luded in the objections.” Id. If a party fails to lodge an objection to the jury charge that timely and plainly makes t he trial court aware of the complaint, error is not preserved and the complaint is waiv ed on appeal. Ford
Motor Co. v. Ledesma , 242 S.W.3d 32, 43 (Tex. 2007); see also T EX

. R. C IV

. P. 278. Because Cornwell and McKinney fa iled to object to the jury char ge question on promissory estoppel, their argument concerning a “fourth elemen t” is waived. See
T EX

. R. C IV

. P. 274. Stewart testified Cornwell and Mc Kinney discussed orders or bus iness “in the tens of millions,” a profit marg in of thirty percent, and “Two and a half million dollars in revenue with $750,000 in profit for the first year.” Cornwell and McKinney said they could start the business with $180,000 to ge t the necessary–25– equipment and secure the space. Once they got new business, th ere would be a down payment on the work, “so you have cash flow that automatically comes in.” Regarding ownership, Stewart was to receive a twenty-percent in terest for “that one $180,000.” Stewart gave Cornwell and McKinney each a check for $15,000 in return for twenty-percent ownership and a return based on the “ $750,000 in profit the first year, two an d a half million dolla rs in sales.” Stew art also gave Cornwell a $150,000 check to secure premises for the business and buy equi pment. Stewart testified they “never talked a bout them having any kind of huge salary because there was no way that you could ever do the numbers to justify that.” Stewart testified he did not agree that Cornwell and McKinney could each be paid $18 0,000 per year, and he did not agree on a specifi c amount for Cornwell’s and Mc Kinney’s salaries. Cornwell and McKinney provided Stewart a Branding Plan that mem orialized in writing “some of the most significant things that we both ag reed on and thought this would be important.” The Plan discussed filling a “void i n the current VIP aviation marketplace” for cabine try and galleys by “starting ou r business debt-free and having long-term reoccurring business.” The Plan contained a “three-year financial projection sales of two and a half million, net profi t $750,000.” The Plan stated, “we can meet our competitors [sic] prices if we want to because we will have less overhead and no debt.” Based on Cornwell and McKinney’s promises, the Scothorns ultima tely advanced more than $1.7 million in cash. Although the Scothorn s never received–26– any money from Cornwell, McKinne y, or Legacy, Cornwell and McKi nney paid themselves $15,000 a month without telling the Scothorns. We c onclude this evidence was legally and factually sufficient to support the ju ry’s answer to Question 16 regarding promissory estoppel. City of Keller , 168 S.W.3d at 807; Cain , 709 S.W.2d at 176; English , 660 S.W.2d at 524. We overrule Cornwell and McKinney’s second issue. In their third issue, Cornwell and McKinney argue the evidence is insufficient to support the jury’s affirmative answer to Question 19, whic h asked whether Stuart’s breach of fiduciary dut ies owed to Legacy was excused. Question 19 also provided the following instruction: A party’s conduct is excused if the other party is estopped fro m complaining about the unauthorized conduct. A party is estoppe d from complaining of the unauthori zed conduct if when, with knowledge of the facts has [sic] so conducted himself as to lead the other p arty to believe that he would not h ave acted as he did. Cornwell and McKinney argue “ther e is a lack of legal and factu al sufficiency of the evidence with regards to question number 19 of the Charge of th e Court.” In support of this argument, Cornwell and McKinney argue courts have held that “[e]stoppel arises where, by the fault of one, another is induced to change his or her position for the worse,” citing Avary v. Bank of America, N.A. , 72 S.W.3d 779, 788 (Tex. App.— Dallas 2002, no pet.). Cornw ell and McKinney cite Avary in asserting the elements of an estoppel defense are (i) a false representation or concea lment of material facts, (ii) made with knowledge, actual or constructive, of those fact s, (iii) with the–27– intention that it should be acted on, (iv) to a party without k nowledge or means of obtaining knowledge of the facts, (v) who detrimentally relies on the representations.
Id. Cornwell and McKinney argue the re is no evidence Stewart’s co nduct in which he failed to comply with his fid uciary duties changed his posit ion for the worse based upon the actions of Cornwell and McKinney. Further, they argue the testimony shows there were numerous meetings between Stewart and Cornwell and McKinney, and all major decisions were m ade with Stewart’s approval. Thus, Cornwell and McKinney rely on the elements of an “estoppe l defense” in making their arguments. However, as the Scothorns point out , Question 19 submitted the defense of quasi estoppel. Quasi -estoppel is a t erm applied to certain legal bars, such as ratification, election, acquiescence, or ac ceptance of benefits. Forney 921 Lot Dev. Partners I, L.P. v. Paul Taylor Homes, Ltd. , 349 S.W.3d 258, 268 (Tex. App.—Dallas 2011, pet. denied); Steubner Realty 19, Ltd. v. Cravens Road 88, Ltd. , 817 S.W.2d 160, 164 (Tex. App. —Houston [14th Dist.] 1991, no writ). It is a long-standing doctrine applied to preclude cont radictory positions: it precludes a person from asserting, to another’s disadvantage, a right inconsistent with a position previously taken. Lopez v. Munoz, Hock ema & Reed, L.L.P. , 22 S.W.3d 857, 864 (Tex. 2000); see Schauer v. Von Schauer , 138 S.W. 145, 149–50 (Tex. Civ. App.—Austin 1911, wr it ref’d) (“Where a person has, with knowledge of the facts, acted or conducted himself in a particular manner, o r asserted a particular claim, title, or right, he cannot afterwards assume a position inconsistent with such–28– act, claim or conduct to the prejudice of another.”). The doct rine applies when it would be unconscionable to allow a person to maintain a positio n inconsistent with one in which he acquiesced. Lopez , 22 S.W.3d at 864; Atkinson Gas Co. v. Albrecht , 878 S.W.2d 236, 240 (Tex. App.—Cor pus Christi-Edinburg 1994, wr it denied); Vessels v. Anschutz Corp. , 823 S.W.2d 762, 765–66 (Tex. App.—Texarkana 1992, writ denied). Unlike equitable estoppel, quasi-estoppel does n ot require a showing of a false representation or detrimental reliance. Forney 921 , 349 S.W.3d at 268; Steubner Realty 19, Ltd. , 817 S.W.2d at 164. Stewart testified that, from August 17, 2016, when he signed a document making him chief financial officer of Legacy until November 22 when he resigned, “the title of chief financial o fficer owed a fiduciary duty, bu t I did not have any of the documents or the ability to operate in that position given the information that I had.” The document Stewart signe d made him chief financial off icer retroactively from the inception of the company. However, Stewart testified he “had no clue what was going on until we got [Lynch] involved.” Stewart believed everything that Cornwell and McKinney said was true, and they continued to indu ce the Scothorns to put more money into Legacy. Throughout 2016, Stewart met with Cornwell and McKinney once or twice a month, and Cornwell “would put up a spreadsheet” on cash flow, projects in progress, and costs. However, “ there were no documents that we re given.”–29– Regarding profit margins, Stewart still understood “what they t old me, which was everything was 30 percent.” Prior to October 2016, Stewart did not have access to Legacy’s checking account. Stewart accessed Leg acy’s bank account and found “a n umber of charges that were questionable.” Stewart did not know about “the $15,0 00 each [Cornwell and McKinney] took out a month” and only learned of the payment s in discovery. Stewart also learned Cornwell a nd McKinney had a debit card tha t “they were charging all kinds of things” on, including “Pediatric dentists , $2,000 Kroger bills, $2,000 hotel bills, $800 dinners, all sorts of personal things. ” Thus, although the record shows St ewart did not fulfill his fid uciary duties to Legacy, the record also shows that Cornwell and McKinney concea led financial information from Stewart and made false representations concern ing Legacy’s fiscal condition that Stewart relied on to his detriment. Stewart and Diana invested a total of $1,793,102 in Legacy, and they did not receive any return on their investment in Legacy. Thus, even accepting Cornwell and McKinney’s framing o f the issue, there was sufficient evidence establishing that estoppel excused Stew art’s breach of his fiduciary duty to Legacy. See Avary , 72 S.W.3d at 788. More to the point, the evidence was legally and factually sufficient to support the ju ry’s answer to Question 19 on the basis of quasi estoppel. See City of Keller , 168 S.W.3d at 807; Cain , 709 S.W.2d at 176; Forney 921 , 349 S.W.3d at 268; Steubner Realty 19, Ltd. , 817 S.W.2d at 164. We overrule Cornwe ll and McKinney’s third issue

.–30– In their fourth issue, Cornwell and McKinney argue the trial co urt erred in not awarding them equitable relief based on the jury’s finding Stew art breached his fiduciary duty. A trial court’s decision regarding equitable r elief is reviewed under an abuse of discretion standard and may only be overturned if t he decision was arbitrary or unreasonable. Hill v. Shamoun & Norman, LLP , 544 S.W.3d 724, 742 (Tex. 2018). Specifically, Cornwell and McKinney argue the Sco thorns “emptied Legacy’s bank account in the amount of $47,000,” and they shoul d have been awarded this amount as equitable relief. Cornwell and McKinney ignore the fact that the jury found Stewart did not fulfill his fiduciary duty to Legacy, not to them, and the jury correctly found Stewart’s breach of fiduciary duty was excused. Under these circumstances, we cannot conclude the trial court abused its discretion in not awarding Cornwell and McKinney $47,000 in equitable relief. We overrule Cornwell and McKinney’s fourth issue. In their fifth issue, Cornwell and McKinney argue the evidence is legally and factually insufficient to support the jury’s answer to Question 8, which asked whether they committed fraud against the Scothorns. Again, Cor nwell and McKinney ignore the fact that the jury also found their fraud w as excused. Further, the trial court’s judgment does not refer to the jury’s finding that Cornwell and McKinney committed fraud or make any award based on the finding of fraud. A trial court may disregard a jury finding only if it is unsupp orted by evidence, a condition not met in this case, or if the issue is immaterial

. Spencer v. Eagle Star–31– Ins. Co. of Am. , 876 S.W.2d 154, 157 (Tex. 1994) (citing C. & R. Transport, Inc. v. Campbell , 406 S.W.2d 191, 194 (Tex. 1966)). A question is immaterial wh en it should not have been submitted, o r when it was properly submitt ed but has been rendered immaterial by other findings. Id. ; Chambers v. Equity Bank, SSB , 319 S.W.3d 892, 902 n.15 (Tex. App.—T exarkana 2010, no pet.) (where questions disregarded by trial court were r endered immaterial by jury’s o ther finding, court would not address sufficiency of evidence in support of jury’s answers to those questions). Here, the jury’s f inding that Cornwell and McKinne y committed fraud was rendered immaterial by the jury’s finding that the fraud wa s excused, and the trial court properly disregarded the finding of fraud and did n ot incorporate that finding into the final judgment. See Spencer , 876 S.W.2d at 157. Accordingly, we need not address the sufficiency of the evidence to support the finding of fraud . See
Chambers , 319 S.W.3d 892, 902 n.15. We overrule Cornwell and McKinney’ s fifth issue. In their sixth issue, Cornwell and McKinney argue the trial cou rt erred in awarding costs against them. As a general rule, the successful party to a suit shall recover of his adversary all costs incurred therein. T EX

. R. C IV

. P. 131. A successful party is one who gets a judgment from a competent court vindica ting a civil claim of right. Hasty Inc. v. Inwood Buckhorn Joint Venture , 908 S.W.2d 494, 502 (Tex. App.—Dallas 1995, writ denied). The allocation of costs is a m atter for the trial court’s discretion and cannot be overturned on appeal, absent a n abuse of discretion.–32– Nolte v. Flournoy , 348 S.W.3d 262, 270 (Tex. App.—Texarkana 2011); Madison v.
Williamson ; 241 S.W.3d 145, 157 (Tex. App.—Houston [1st Dist.] 2007, pet. denied). In making their argument, Cornwe ll and McKinney renew their arg ument that the breach of fiduciary duty finding against Stewart negated th e finding against them for promissory estoppel and point out that they prevailed in a summary judgment proceeding prior to trial. We have already rejected the argume nt that Stewart’s breach of fiduciary duty negated the promissory estoppel findin g against Cornwell and Scothorn. Further, in this proceeding, the jury found the Scothorns’ damages were $201,318.04, McKinney was en titled to $9427.86 in out-of-p ocket damages and $8000 in damages for loss of credit reputation, and the tr ial court entered a final judgment awarding the Scothorns $183,890.18. Under these circu mstances, we conclude the trial court did not abuse its discretion in awardi ng the Scothorns their

costs. See Nolte , 348 S.W.3d at 270; Madison ; 241 S.W.3d at 157. We overrule Cornwell and McKinney’s sixth issue. In their seventh issue, Cornwell and McKinney argue the trial c ourt erred in awarding the amount of costs submitted in the Scothorns’ amende d bill of cost. Specifically, Cornwell and McKinney argue $773.50 for legal doc ument services was an expense of litigation that was not recoverable. At oral argument, counsel for the Scothorns agreed to the $773.50 reduction in costs. Accord ingly, we sustain Cornwell and McKinney’s seventh issue.–33– In their eighth issue, Cornwell and McKinney argue the evidence conclusively establishes the jury’s award of damages is excessive. In suppo rt of this issue, Cornwell and McKinney submit a s ingle sentence: “Based upon the arguments above, the jury’s award of $201,318.04 against Appellants is ex cessive based on the evidence presented at trial.” An appellant’s failure to cite l egal authority or provide substantive analysis of a legal issue results in waiver of the complaint. Fredonia
State Bank v. Genera l Am. Life Ins. Co. , 881 S.W.2d 279, 284 (Tex. 1994). Accordingly, we need not further address Cornwell and McKinney’ s eighth issue. In their ninth issue, Cornwell and McKinney argue the trial cou rt erred in denying their motion for new tria l. Again, aside from citing a uthority for the propositions that (1) “denying a motion for new trial is appeal able” and (2) the standard of review is abuse of d iscretion, Cornwell and McKinne y fail to provide any substantive analysis of the issue other than the assertion that the trial court erred “for the reasons set forth in the above sections.” We conclude Cornwell and McKinney have also waived this complaint. See id. We need not further address Cornwell and McKinney’s ninth issue. We reform the trial court’s judgm ent to delete the award of $77 3.50 in costs to the Scothorns. As modified, we affirm the trial court’s jud gment.

180799F.P05 /Robert D. Burns, III/ ROBERT D. BURNS, III CHIEF JUSTICE–34– 

# S

Court of Appeals Fifth District of Texas at Dallas JUDGMENT

JONATHAN CORNWELL AND SHADD MCKINNEY, Appellants

No. 05-18-00799-CV V. DIANA SCOTHORN, STEWART SCOTHORN, THE BENEFIT LINK, INC., AND SCOTHORN AERO, INC., Appellees On Appeal from the 429th Judicial District Court, Collin County, Texas Trial Court Cause No. 429-05287- 2016. Opinion delivered by Chief JusticeBurns. Justices Molberg and PartidaKipness participating.

In accordance with this Court’ s opinion of this date, the judg ment of the trial court is MODIFIED as follows: the award of $773.50 in costs to Diana Scothorn and Stewart Sco thorn is deleted. It is ORDERED that, as modified, the judgm ent of the trial court is AFFIRMED

. It is ORDERED that appellees Diana Scothor n, Stewart Scothorn, The Benefit Link, Inc., and Scothorn Ae ro, Inc. recover their costs of this appeal from appellants Jonathan Cornw ell and Shadd McKinney.

Judgment entered this 17th day of September 2020.