i i i i i i



### MEM ORA ND UM OP INION No
. 04 -0 8- 00 18 1- CV Rochelle CO HE N-S AGI an d An n et t e G o l d

b er g, Ap pe lla nts
v . P ROF INANCE ASSOCIATES , INC
. , an d M i c h a e l B
. J o n e s , In d i v i d u a l l y, Appellee s Fr om the 166th J udicial District Court, Be x ar County , Texas

Trial Court No. 2005-CI -14159 Honora ble Martha T anner , J udg e Presiding Opinion by : Phy lis J . Speedlin, J ustice Sitt ing: Catherine Stone, Chief Justice

Phy lis J . Speedlin, J ustice Steven C. Hilbig, Just ice Deliver ed and F iled: Marc h 4, 2009 REV ERS ED AN D R EN DE RED I N PA RT; REV ERS ED AN D R EM AN DE D I N PA RT In this contract disput e, R ochelle Cohen-Sag i and Annette Goldbergappea l the trial court’ s judgme nt in favor of ProFinanc e Associates, Inc. and Michae l B
. J ones. We r ever se the judg ment
o f t h e t ri al co urt an d re n d er j u d gm en t th at P ro Fi n an ce an d J o n es t ak e n o th i n g aga i n s tC o h en -S agi and Goldber g ; we fur

ther re mand the ca se to the trial cour t for ca lculation of attorne y ’s fe es.04
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- 2- B ACKG ROUND S i s t e r s R o c h e l l e C o h e n - S a g i an d A n n e t t e G o l d

b e r g o w n e d tw o s e c ur i ty

c o mp an i e s : M H L, In c . l o c a t e d

i nL ar e d o , T e x a s an d C e n tr a l d e A l a r m a s A d l e r , S
. A
. d e C
. V
. ( “ A d l e r ” ) i nM o n t e r r e y, Me xico . In O c tob e r o f 1 99 7, MH Le nte re d into a no n-ex clu sive sa le s a dv iso ry a g re e me nt w ith ProFinanc e Associates, I nc. (the “1997 Ag ree ment”). The 1997 Ag ree ment provi d ed that ProFinanc e wo u l d : (1 ) identify one or more potential buy ers f or MHL and conta ct the potential buy ers to discuss the availability of MHL for sale; (2) transmit inf ormation provided by MHL to the potential buy ers; and ( 3) if re quested by MHL , assist in evaluating proposals submitt ed by interested biders. Additionally , Cohen-Sag i a nd Goldberg joined the 1997 Ag ree ment, and individually ag ree d to pa y ProFinanc e a commission if “any other business” owne d by Cohen-Sag i and Goldber g was sold to a “Pro te c te d

B uy e r ” d ur in g th e te r

m o f th e 1 9 9 7 A g r e e me n t o r

w it h in 2 4 mo n th s a f

te r the ag ree ment terminated ( here inafter ref err ed to as the “ tail provision”). The term “Protec ted B uy er” was de fined to include: (1) a par ty i d en t i fi ed by

ProFinanc e, or ( 2) a pa rty as to which MHL reque sted the assistance of ProFina nce. T he 1997 Ag ree ment could be ter minated by

either MHL
or Pr oF ina nc e up on 30 da y s’ wr itt e n noti c e . Coh e n- Sa g i and Go ldb e rg wo rk e d with Z e e na Hi ne s, vice pr esident of ProF inance , on the sale of MHL . All parties agree that the 1997 Ag ree ment was intended to apply

to the sale of MH L , and that Cohen-Sag i and Goldberg would only consider se lling both MHLand Adler

if the price was “ rig ht.” On Janu ary

27 , 1 99 9, Coh e n- Sa g i and Go ldb e rgso ld M HL

to A DT and

su bs e qu e ntl y

pa id
a c omm iss ion

and re late d e xpe nses to Pr oF ina nc e purs ua

nt t o th e te rm s o f t

he 19 97 Agre e me nt. There afte r, Cohen-Sag i and Goldberg ex ch an gedco rr es p o n d en ce wi thHi n es at P roFinance reg arding the sale of

Adler. H ines left P ro Fi nance at the end of 2000, and Cohen-Sag i and Goldber g beg an04
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- 3- corr espondingwith the company ’s pre sident, Michael B . J ones. B etween 2 0 0 1 and 2004,
corr espondenc e betwe en the pa rties was spor adic. On Fe bruar y 11, 2004, J ones conta cted CohenSag i via email and e x plained that an A merica n secur ity company , Diebold, was inter ested in buying alar m companies in Mexico. J ones re prese nted that he ha d made c ontact with David Ha g ue at Di e bo ld. Th a t sa

me da y , Co he n- Sa g i f

or wa rd e d a n up date d fa c t sh e e t re g ard ing Ad le r t o Jon e s to share with Diebold. On Marc h 5, 2004, Cohen-Sag i contac ted J ones for an update and advise d J ones sh e ha d b e e n ta lki ngto a

no the r br ok e r; ho we ve r, sh e a ff ir me d that ProF ina

nc e wo uld be e nti tle d to a commission “as ag ree d three y ear s ag o” if a n ag ree ment wer e to come to f ruition with Diebold.

In April, afte r losing patience w ith ProFinance ’s inactivity and l ac k of prog ress in selling Ad le r, Coh e n- Sa g i and

Gol db erg e xec ute d a

n a g re e me nt w iththe law f ir m of B uc ha na n Ing e rs oll for assistance in the sale of Adler . Shortly there afte r, B uchana

n I ng ersoll’s consultant, Peter Ray mon d, fo un d s ix to s e ve n p ote nti a l pu rc ha se rs fo r A dle r, on e of

wh ic h w a s Die bo ld. On

Au g us t 23, 2004, Cohen-Sag i emailed Jones, stat i n g t h at she had “ contra cted with anothe r broke r” a nd thanked him for his e ffor

ts. J ones responded t hat t heir ag ree ment was now c ance lled and re minded Cohen-Sag i that, under the tail provision of the 1997 Ag ree ment, his fee w ould be protec ted if Adler
wer e sold to a Protecte d Buyer dur ing the next 24 m onths. I n the springof 2005, Diebold purc hased Adler a fter Ra

y mond neg otiated the sale ; all the paper work re g ardingthe sale w as dra fted by Bu ch an an In ger s o l l an d

Di eb o l d
. S u

b s equ e n t l y , J o n es co n t ac t edHa gu e a tDi eb o l d re gar d i n g a commission for the sale of Adler; Hague denied knowledg e of any pree x isting re lationship between Adler a nd ProFinanc e.04
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1 ... T h e ju ry wa s ins tru c te d tha t a “c a u sa l co n n e c tio n ” re q u ire d “m o re tha n a m e re so licita tio n o r in tro d u c tio n .” For a cau s al conn ect i on t o exi s t , P r oFi nan ce’ s ac t i ons “mus t ha ve cr eat ed s om e mi ni mal i nt er es t i n t he pur cha s er wh i ch re su lted in the ultim a te sa le .”

- 4- There afte r, ProFina

nce ma de a dem an d u pon Cohen-Sag i and Goldber g for pa y ment of a
c omm iss ion

in relat ion

to t he sa le of

Ad le r. In r e sp on se , Co he n- Sa g i and Go ldb e rgbr ou g ht a decla ratory judgme nt action ag ainst ProFinanc e, s ee k ing a decla ration that the 1997 Agree ment
c on ta ine d a

“ pr oc ur ingc a

us e ” c on dit ion and that bec a us e Pr oF ina

nc e wa s n ot t

he pr oc ur ingc a

us e of the sale of Adler

to Diebold, they

wer e not obligated to pay a commission to ProFinance
. Profinance counter sued for its commiss ion under b r e a c h o f c o ntr a c t a n d p r o mi s sory

estoppel theorie s of re cover

y . The trial c ourt rea ligne d the par ties befor e trial, making ProFinanc e the plaintiff and Cohen-Sag i and Goldber g the def endants. At trial, Cohen-Sag i, J ones, R ay mond, and Hines testified. Cohen-Sag i testified that in 2001 she ente red into an or al ag ree ment with J ones providingthat ProFinanc e wou l d rec eive a commission if it “sold” Adler. Cohen-Sag i was ti red of living in Mexi co and very much wante d the company sold. Unlike the 1997 Ag ree ment, which provide d that ProFin an ce would rec eive a
c omm iss ion

me re ly fo r i de nti fy

inga Pr ot e c te d B uy e r, the or a l a g re e me nt r e qu ir e d Pr oF ina nc e to
e f f e c tu a te th e s a le o f A d le r . Sh e s tate d th a t s h e d id n o t p u t th e a g r e e me n t i nw r it in g b e c a u s e “ [w ]e
wer e ver y Mexi can in our

relationship. We shook hands over the phone.” J ones denie d that such
an ora l ag ree ment exis ted. At the conc lusion of trial, the jury made the f

ollowing r eleva

nt findings: (1) the par

ties intended for th e 1 9 9 7 A g r e e me n t to a p p ly to th e s a le o f A d le r ( Q u e s ti o n 1 ) ; ( 2 ) Co h e n - Sa g i and Goldbergfailed to c omply with the 1997 Ag ree ment (Que stion 2); ( 3) ProFina nce c omplied with the 1997 Ag ree ment with reg ard t o t he sale of Adler (Que stion 3); (4) no ca

usal conne ction 1 exis ted04
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- 5- betwee n the ac t i ons of ProFina nce a nd the sale of

Adler to Die bold (Question 8); and ( 5) CohenSag i, G o ld

b e r g , an d Pr o F in an c e e n te r e d

into ano r a l a g r e e me n t i n2 0 0 1 in w h ic hCo h e n - Sa g i and Go ldb e rg a g re e d to pa

y a c omm iss ion to Pr oF ina nc e if Pr oF ina

nc e so ld Ad le r (Q ue sti on 9)
. B oth parties moved f

or judg ment notwiths t an d i ng the ver dict, and the tria l court ente red judg ment for Pr oF ina nc e , th us dis re g ard ingQu e sti on s 8 and 9 as immate ri a l. Pr oF ina nc e wa s a wa rd e d d ama g e s, court c osts, and attorney ’s fe es. Cohen-Sag i and Goldber g timely appea led. D I S CUS S I ON In their first issue, Cohen-Sag i and Goldber g contend the tr ial court erre d in disreg ardingthe jury ’s answe rs to Questions 8 and 9 and in f ailing to r

ule as a m at t er o f l aw that the 2001 ora l
a g re e me nt s up e rs e de d the 19 97 Ag re e me nt. A tr ia l c ourt may dis re g ard a jur y fi nd ing on ly if

it i s unsupported by

evidenc e or if the iss u e i s i m m at eria l. Spence r v. Eagle Star Ins. Co. of Am. , 87 6 S. W.2 d 1 54 , 1 57 (T e x. 19 94 ); Crescendo Investme nts, Inc. v . Brice , 6 1 S. W. 3 d 4 6 5 , 4 7 7 ( T e x. App.—San Antonio 2001, pet. denied)
. A question is immater ial when it should no t h av e b een
su bmi tte d, or wh e n it wa s pro pe rl y su bmi tte d b ut h a s b e e n r e nd e re d immate ri a l by oth e r f ind ing s. Spence r , 8 76 S.W. 2d

a t 15 7; Cre

sc e nd o I nv estm e nts , 61 S.W .3d at 477. A question which ca lls for
a fi nd ingbe y on d th e pr ov inc e of the ju ry , su ch as a

qu e sti on of law, may be de e me d immate ri a l. Spence r , 876 S.W .2d at 157. Whe n a jur y make s a fi nd ingthat tw o c on tr a c ts e xist and it is e vid e nt that the te rm s o f b oth contra cts are inconsistent w ith e ach othe r, then the two c ontrac ts cannot subsist togethe r. W illeke v. Bailey , 1 44 Te x. 15 7, 18 9 S. W.2 d 4 77 , 4 79 (1 94 5) ; E d H o ff m a n M o to r s v . G

. F

. C. Co r p. , 304 S.W .2d 216, 217 (Tex. Civ. App.—S an Antonio 1957, writ re f’d n.r .e.). “ In that situation the rule is that the [contrac t] made first is conclusively presumed to have bee n superse ded by the other.”04
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- 6- W illeke , 1 89 S.W. 2d

a t 47 9; se e als o E

d H off ma n M oto rs , 3 0 4 S
. W
. 2 d

a t 2 1 7
- 1 8
. A c c o r d i n g l y, when two c ontrac ts betwee n the same pa rties ar e inconsistent , we conclusively presume the later contra ct superse des the e arlier contra ct. W

illeke , 1 89 S.W. 2d

a t 47 9; IP Petroleum Co. v. W evanc o En e rg y , L. L.C. , 116 S.W .3d 888, 899 (Tex. App.—Houston [1s t Dist.] 2003, pet. denied)
. I f the de termination of wh et h er a later a g ree ment superse des a f ormer a g ree ment must be
ma de by de ter min ingwh e the r t

he langua g e of

the tw o c on tr a c ts i s in c on sis te nt, the iss ue is a question of law. W

estern Tractor Corp. v. Continental-Eagle Corp. , 24 F.3d 240 (5th Cir. 1994). In the abse nce of such inconsistent pr ovisions which work an implied novation, a second c ontrac t will operate as a novation of the first contra ct only when the p ar t ies to both contrac ts intend and agre e t h at t h e oblig ations of the sec ond shall be substituted for and ope rate as a discha rg e of the obligations of the first. Chastain v. Cooper & Ree d , 152 Tex. 322, 257 S .W.2d 422, 424 (1953 ); CTTI Pr ie sm e y e r, In c . v . K &O Lt

d. P’ sh ip , 164 S.W .3d 675, 681 (Tex. App.—Aust in 2005, no pet.). It is not necessar

y that a novation be in writing or t hat i t be evidenc ed by express words; like any other ultimate fac t it may be proved as an infere nce from the acts a nd conduct of

the par ties and other fa cts and c ircumstance s. Cha sta in , 257 S.W .2d at 424. Whether a novation is intended, in the absenc e of an ex press ag ree ment to that effe ct, is usually a question of f

act a nd can only

become a qu e sti on of law whe n th e state of the e vid e nc e is su c h that re a so na ble min ds c ann ot dif

fe r a s to its eff ect. Id. ; CTT

I Priesme yer, 164 S.W .3d at 681. In t h i s case , Cohen-Sag i and Goldber g proff ere d testimony

that the 1997 Ag ree ment p ert ai n edo n l y

t o th e s al e o f M HL. W h en P ro Fi n an ce fo un d a b uy er fo r M HL i n1 9 9 9 , C o h en -S agi and Goldberg paid the promised commission to P roF inance . There afte r, the pa rties enter ed into an oral a g ree ment in 2001 reg ardingthe sale of Adler. Cohen-Sag i stated that in 2001, she and Jones04
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- 7- ve rb a lly a g re e d th a t if

Pr oF ina nc e so ld A dle r i t w ou ld r e c e ive a c omm iss ion a t “th e same ra te a s in
our p ri or a g re e me nt. ” Th e re fo re , unli ke the 19 97 Ag re e me nt, wh ic h o nly re qu ir e d Pr oF ina

nc e to identify Potential Buy ers a

nd transmit information in order to rec eive its commission, the 2001 oral ag ree ment require d ProFinanc e to actually sell Adler in orde r to be e ntitled to a commission. “[ The 2001 oral a g ree ment] was never intended as a

n ag ree ment to pay

[P roF inance ] for a sale that did not result from [ J o n es ’s ] efforts,” a ccor ding to Cohen- Sag i. Cohen-Sag i also added that the oral ag ree ment was not intended to imply the parties wer e operating under the 1997 Ag ree ment, and that she believe d the 1997 Ag ree ment terminated onc e MHL was sold to ADT in 1999. On the other h an d, ProFinanc e prof fer ed testimony

that there was a

meetingof the minds be tw e e n Pr oF ina

nc e and Coh e n- Sa g i and

Go ldb e rgto s e ll A dle r purs ua nt t o th e 19 97 Agre e me nt. ProFinanc e re lied on corr espondenc e betwe en the pa rties pursuant to which ProFinanc e fax ed a c opy of the 19 97 Agre e me nt t o Coh e n- Sa g i and Go ldb e rg a lle g e dly outli nin g the e xten de d te rm s o f t he ir ag ree ment reg ardingAdler. During trial, ProFinanc e ex plained “actual contact with s omebody ” and “discussions about the potential seller” that are “fa irly minimal” was all that wa s require d to rec eive thei r c o mm is s io n . Jo n e s te s ti f ie d h e f u lf il le d h is o b li g a ti o n s b y

id e n ti f y in g an d tr ansmitt ing inf or matio n to Di e bo ld ab out Adle r, and the re fo re Pr oF ina nc e is e nti tle d to a

c omm iss ion

fo r t he sa le be c a us e the tr ans a c tio n to ok

plac e wi thi n th e 24 -m on th p e ri od fo llo wi ngthe te rm inatio n o f t he ir service s. Whil e ProF inance denies t h e ex istence of a 2001 ora l ag ree ment, the jury considere d the
c on fl ic tin g e vid e nc e and

fo un d a 20 01 or a l a g re e me nt e xiste d. Th e jur y fu rt he r f ound that th e te rm s of the 20 01 a g re e me nt r e qu ir e d Co he n- Sa g i and Go ldb e rgto p ay

Pr oF ina nc e a c omm iss ion

on ly if Pr oF ina nc e ’s a c tio ns c re a te d s ome min ima l in te re st b y the purc ha se r whic h r e su lte d in the ult imate04
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2 ... W e al so agree wi t h C o hen- Sa gi and G o l d b erg’ s al t ernat i ve argume nt , whi ch i s t hat t he 1 9 9 7 A greem ent exp i red b y it s o wn t erm s o nce A D T b o ught M H L i n 1 9 9 9 ; a t that ti m e, ther e was no t hi ng l ef t f o r t he p art i es t o pe rf

o rm and t he co nt ract was t hus f ul l y executed. In f

act , on Ja nuary 17 , 20 0 0 , Zeena H i nes f axed a co p y of t he 1 9 9 7 A greem ent to M o se s G o ld b e rg , A n n e tte’s h u sb a n d , an d o n the fax c o v e r sh e e t re fer re d to the 1 9 9 7 A g re e m e n t as “fully ex e c u te d .”

3 ... Q uest i o n 4 asked t he jury whether P roF i nance s ub st ant i al l y rel i ed t o i t s d et ri m ent o n C o hen- Sa g i and G ol db er g’ s p r om i s es , i f any , and whe t her t hi s rel i anc e was f ores eea bl e b y C ohen- Sagi and G ol db er g; t he j ur y an s wer ed i n t he af f i r mat i ve. Q ues t i on 11 as ked t he j ur y wha t s um of mo ney woul d c om pens at e ProFi nan ce f or i t s damages t hat r es u l t ed f

r om i t s re l i an ce on C oh en - Sa g i an d G ol dber g ’ s promi s e; t h e j u r y an s we r ed $36, 000. T h e t r i al c ou r t di d n ot ent er j udgment on t hi s f i ndi ng , but di d on Q ues t i on 10 , i n whi ch t he j ur y f ound $36 , 00 0 woul d com pens at e ProFi nan ce fo r C o h e n -S a g i an d G o ld b e rg ’s f a ilure to c o m p ly with the ir a g re e m e n t with P ro F ina n c e .

- 8- sale of A dler a

nd amounted to more tha

n a mere sol icitation or i ntroduction. Be cause the 2001 oral ag ree ment was late r in time and its terms are inconsistent with the terms of the 1997 Ag ree ment, the 20 01 or a l a g re e me nt i s c on c lus ive ly pr e sume d to su

pe rs e de and

dis c ha rg e the 19 97 Ag re e me nt i n reg ard to the sa le of Adle r. 2 W illeke , 1 89 S.W. 2d

a t 47 9; se e als o E

d H off ma n M oto rs , 304 S.W .2d
a t 21 7- 18
. Onc e th e ju ry fo un d th a t an o ra l a g re e me nt e xiste d, the jur y ’s fi nd ing s w ithre sp e c t to Questions 1, 2, and 3 bec ame i m m aterial beca use the 1997 a

nd 2001 ag ree ments could not simult aneously

exis t. Accor dingly , Cohen-Sag i and Goldber g ’s first issue is sustained. ProFinanc e re quests that if we hold th at i t cannot re cover under the 1997 Ag ree ment, we
a ff ir m th e tr ia l c ourt ’s jud g me nt o n th e a lte rn a tiv e jur y fi nd ing s of p ro mis so ry

e sto pp e l. 3 ProFinanc e argues that t h e evidenc e supports the jury ’s finding s that ProFinanc e re lied to its detriment on Cohen-Sag i and Goldber g ’s promise to pay ProFinanc e if Adle r wa s sold to a buy er ide ntified by P ro Fi n an ce , an d

th atP ro Fi n an ce s u ff

er ed i n j ury as a re s u l to f i t s d et ri m en t al re l i an ce . C o h en -S agi and Goldber g respond that ProF inance cannot r ecove r under promissory

estoppel because the p ro m i s e o n which it seeks to re cover was c overe d by

an express contra ct, i.e
. , th e 2 0 0 1 oral
a g re e me nt. We a g re e . B e c a us e the jur

y fou nd that th e pa

rt ie s e nte re d into a

n o ra l a g re e me nt, ProFinanc e ca

nnot rec over unde r promissory estoppel. Se e Su ba ru of Am ., In c . v . D av id M c Da v id04
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- 9- Nissan, Inc., 8 4 S
. W
. 3 d

2 1 2 , 2 2 6 (T ex . 2 0 0 2 ) ( ci t i n g W he e le r v . W

hite , 398 S.W .2d 93, 96-97 (Tex. 1965)). C ONCL US I ON B e c aus e the jur

y fo un d th e pa

rt ie s e nte re d into a

n o ra l a g re e me nt i n 2 00 1 a nd be c a us e its terms ar e inconsistent with the t er m s of the 1997 Ag ree ment, the 2001 ag ree ment superse ded the 1997 Ag ree ment. As a re sul t , t h e jury ’s finding s with reg ard to the 1997 a g ree ment are rende red immaterial and must be disre g arde d. Spence r , 8 7 6 S
. W
. 2 d a t1 57 ; Cr esce ndo I

nv estm e nts , 61 S.W .3d at 477. Acc ording ly , we reve rse the judgme nt of the trial court, and rende r judgme nt that ProFinanc e and Jones take nothingag ainst Cohen-Sag i and Goldberg
. We remand the case to the trial court f

or a de termination on att o rn ey ’s fe es pursua nt to the Decla

ratory J udg ments Act. See T EX . C IV . P R AC . & R EM . C ODE ANN . § 37.009 (Ve rnon 2008).
Phy lis J . Speedlin, J ustice