We modify t he trial court ’s ju dgm ent to show th at it w as “ IN T HE 259 TH JUDICIA L DISTRICT COURT OF JONES COU NT Y, 1 T EXA S,” ra

the r t han in “ T A YL OR

CO UN T Y. ” Opinion filed May 21, 20 09



### In The 

# Eleven th Court of Appeals

____________ 

### No. 1 1- 07 -0 03 77 -CV

____ ____ __ PE NN ER CA TTLE, INC ., Ap pellant

V. BILL C OX AN D T OM N IX, Ap pellees

On App eal from the 259th Distric t Court

Jones County, Texas Trial Court Cause No. 20,519

O P I N I O N Penner Cattle, I nc. filed suit a g ainst Bill Cox and Tom Nix alleg ing br eac h of contra ct. Cox and Nix countercla imed, asser ting a rec iproca l brea ch of c ontrac t claim. The trial c ourt conduc ted a benc h trial, found for

Cox and Nix on the liabili ty issues, an d aw ar d ed C ox actua l damag es of $252,712.14 and conditional attorne y ’s fe es in the event of an a ppeal. We modify

and af firm in part

a nd re ve rs e a nd

re ma nd in p a rt

. 1 I

. Ba c k

gr ou nd Fa c ts B il l Co x is a li v e s to c k d e a le r
. T o m N ix a p p r o a c h e d h im a n d a s k e d if h e kn e w of any one wh o w a nte d to ru

n ca ttl e on ha

y g ra zer
. Cox men tio ne d this to L a rr y Yo de r, a

br ok e r, a nd

tol d h imW hile in Ni x ’s c ar e, 24 he ad die d. 2 2 that the hay

g razer w ould support 300 to 400 head of c attle. Yoder contac ted Dennis Penne r. Penner was int ere sted, and on be half of Penne r Cattle, he e ntere d into a contra ct with Cox . The c ontrac t require d Cox to acquire and maintain the c attle. Penner was re sponsible for the pur chase cost; the cost of fe ed, medicine , and tra nsportation; and 35¢ per

pound for a ll weig ht ga ined. Cox acquir ed 323 hea d in June and J uly of 2003. Penner reimburse d Cox for his c osts. The cattle we re transported to Nix ’s prope rty . I n ear ly September, Cox tol d Yoder that the g razing was g e tti ngsh or

t and tha t th e c a ttl e ne e de d to be pic ke d u p. Th e cat tl e we re no t sh ipp e d unti l Oc t o b er 2 3 , 2 0 0 3 , wh en 2 0 1 h ea d we re t ra n s p o rt ed

. W h et h er b ec au s e P en n er d i d n o ts en d en o u gh trucks or be cause Nix was c laiming a secur ity interest to secure pay ment of his expenses is unclear , but Nix kept 98 hea d of cattle. 2 What is clear is that the pa rties disputed what Penne r owe d for medic ine, fe ed, and transportation costs. Penner re ceive d a bill for $23,353.75. Yode r re quested but did not rec eive

su pp or tin g do c ume nta

tio n. He re vie we d th e c on tr a c t and c a lc ulate d th a t Pe nn e r o we d o nly $19,337.93. Penner w ired that amount to a third pa rty with instruc tions to deliver the funds to Cox when the 98 he ad we re r elea sed. Nix di d not relea se the c attle but s o l d t h em i n Marc h 2004 for $4 9, 78 3. 14

. Cox c la ime d that Pe nn e r no w ow e d $2 9, 70 5. 74

. Th e inc re a se d bil l wa s d ue , in pa rt , to g r a zi n g c h a r g e s in c u r

r e d a f te r O c to b e r 2 3

. Wh e n th e c a tt le w e r e s o ld , N ix w a s p a id and the ba lanc e of

the fu nd s w a s g ive n to Cox’ s c ouns e l. I I

. Issues Pe n n e r c h a ll e n g e s th e ju d g me n t w it h f o u r is s u e s
. We n e e d o n ly a d dr e s s th e f ir s t issue, which alleg es that the trial court’s conseque ntial da mag e awa

rd is a g ainst the g reat w ei gh t and preponde ranc e of the evidenc e. I I I

. An aly sis A. Standard of Review

. Penner a sserts in his issue a fac tual sufficie ncy challeng e to t he trial court’s da mag e aw ard. I n revie wing a fa ctual suff iciency challeng e, we consider a ll of the evidenc e and uphold the f inding unless the evidenc e is too weak to support it or the finding is so ag ainst the overw helming w eig ht3

of the e vidence as to be manife stly unjust. Pool v. Ford Motor Co. , 7 1 5 S.W .2d 629 , 6 3 5 ( T e x. 1986). B. Los t P ro

fit s. The tr ia l c ourt

a wa rd e d Co x bre a c h o f c on tr a c t da ma g e s to ta lin g $2 52 ,7 12 .1 4. Th is repr esente d $34,000 in attorney ’s fees, di rec t damag es of $43,712.14, and conse quential damag es in t he fo rm of los t pr of

its of $1 75 ,0 00

. Cox c a lc ulate d thi s by a ssumin g that Pe nn e r h a d ti me ly pa id for the c attle’s medicine , fee d, and tra nsportation and that he ha d then invested t h is money in the

c a ttl e bu sin e ss. Cox te sti fi e d th a t he wo uld have purc ha se d a loa d of cu tti ngbu lls a nd so ld t he m in 50 to 60 da

y s for a profit of $6,000 to $7,000. Cox testified that he wa s familiar with the mar ket and that he could have re peate d this investment every 60 day s. Cox testified t h at , b ec au s e o ver f our y ear s had ela

psed since the dispute arose , he had lost 25 cattle investment opportunities and a total of $175,000. Th e tr ia l court ’s a wa

rd is b a se d u

po n f a c tua lly ins uf fi c ie nt e vid e nc e fo r t

hr e e re a so ns . F ir st, there was insuffic ient evidenc e that lost profits wer e re asonab l y foreseea ble. Second, Cox’s testimony was c onclusory

. Third, t he evidence indicates t hat Nix not Cox was de prived of f unds and that Nix was re paid when the 98 head of cattle we re sold in Marc h 2004. Gene rally , the measure of damag es for brea ch of a contra ct is that which re stores the injured party to the economic position he would have enjoy ed if the contra ct had bee n perf ormed. Mood v. Kronos Prods., Inc. , 245 S.W .3d 8, 12 (Tex. App.—Dallas 2007, pe t. de nied). This measure may include re asonably cer

tain lost prof

its. Holt Atherton Indus., Inc. v . Heine , 8 3 5 S. W. 2 d 8 0 , 8 4 ( T e x. 1992). L ost profits may

be in the for

m of direc t damag es – that is, profits lost on the contrac t itself – or in the for

m of conseque ntial damag es – such a s profits lost on other contra cts resulting from the brea ch. Mood , 245 S.W .3d at 12. B ut to recove r conse quential lost profits, a claimant must show the pa rt ie s con te mpl a te d at the tim e the y ma de the c on tr a c t th a t su c h d a ma g e s w ou ld b e a pr ob a ble result of the br eac h. Mead v . Johnson Group, Inc

. , 615 S.W .2d 685, 687 (Tex. 1981). Cox po int s to Penn er’s te sti mony to e sta bli shfo re se e a

bil ity . Pe nn e r a g re e d th a t th e c a ttl e business can be profitable; that a knowledg eable person c an succ essfully invest in the business; and that, if Cox and Nix did not rec eive the money they wer e owe d, they

would be dama g ed bec ause of their inabilit y t o i n v es t t h at money in the future. O bviously , in any brea ch of c ontrac t case , theThe pr o b lem w ith com bining tw o f

orm s of dam ag e f

or los t use of m oney is ill ust rate d by the re sul t in this ca se
. A ss um ing a 3 pre se nt v al ue of

$43,712.14, a

f uture v al ue of

$218,712.14 (43,712. 14 + 175,000) , a nd a pay of f in 50 m onths , C ox ’s te st im ony assum es a n ann ual rate o f

retu rn of 46.7 3%. T he 7.7 5% prejud gm ent int erest began ac cruin g on March 3, 2 00 4. Over 50 m on ths, Cox ’s $175,000 l ost

prof its aw ar d e ar

ned pre judg m ent int er es t of

$63,935.61. W

hen this is c om

bine d w ith h is l o st p ro fits, the original $ 43 ,71 2.1 4 grew to $2 82 ,64 7.7 5 (43 ,71 2.1 4 + 175 ,00 0 + 63, 93 5.6 1) – a rate of return o f 55. 89 %. 4 f a i l u r e o f o n e p a rt y t o p a y a n o t h e r w i l l d e p r i v e t h e i n n o c e n t p a rt y o f t h e u s e o f t h a t m o n e y. Prejudg ment interest compensates inj ured parties for this damag e, and w e note that Cox receive d 7. 75 % p re

jud g me nt i nte re st o n h is d a ma g e s. Ci ty o f H o u s to n v
. Te

x a n La n d & Ca tt leCo. , 138 3 S.W .3d 382, 388 (Tex. App.—Houston [14t h Dist.] 2004, no pet.). I f C o x ’s t estimony wer e
su ff ic ie nt, the re wo uld be no ne e d f or the fo re se e a

bil ity ru le in c omm e rc ia l c on tr a c t di sp ute s b e c a us e his testimony would be true in almost all inst ance s. Be cause Cox did not establish that the parties contemplated a

ny damag es bey ond those inhere nt with a brea ch of c ontrac t, the trial court’ s awa rd is based upon fa ctually

insufficient e vidence

. Cox a lso fa ile d to of

fe r s uf fi c ie nt e vid e nc e to e sta

bli sha $1 75 ,0 00 loss. To reco ve r l os t profit s , o ne must prove them with re asonable cer tainty and with compete nt evidence

. Bowen v. Robinson , 227 S.W .3d 86, 96 (Tex. App.—Houston [1st Dist.] 2006, pet. denied) . The trial c ourt had nothing more than Cox’s opinion t hat he c ould have pr ofitably boug ht a nd sold a load of c utting bulls every 60 day s. Cox is qua lified to r ender expert testimony on the cattle business, a nd opinions or estimates of lost prof

its may be compe tent evidenc e – if that opinion or estimate is base d on objective f

acts, figures, or

data f rom which the a

mount of lost profits may be asc erta ined. KMG K a n a l

- M u l l e r - G r u p p e D e u t s c h l a n d G m b H & C o
. v
. D a v is , 1 7 5 S. W. 3 d 3 7 9 , 3 9 1 ( T e x. App.—Houston [1st Dist.] 2005, no pet.). Cox failed to pr ovide the trial court with any objective evidenc e to substantiate hi s o p i nion. See Tex aco, Inc . v. Phan , 1 3 7 S. W. 3 d 7 6 3 , 7 7 2

- 7 3 ( T e x. Ap p. —H ou sto n [1st Di st .] 2004 , n o p e t.) (o wn e r’ s b a re a sse rt ion of a pr of it m a rg in o f a

c e rt a in pe rc e nt, e ve n on e ba se d on pr ior e xpe ri e nc e , w a s n ot s uf fi c ie nt e vid e nc e to s up po rt a n a wa rd of los t profits). F i n a l l y, C o x f

a i l e d t o e s t a b l i s h t h a t h e , r a t h e r t h a n N i x , w a s d e p r i v e d o f t h e u s e o f t h e m o n e y. Cox testified that he had been fully paid for the cattle and for his c harg es and expenses. The orig inal disputed items were char g es t hat Nix had incurred for m edicine, fee d, and pasture . At trial, Cox and Ni x als o te sti fi e d th a t th e c a ttl e los t w e ig ht b e c a us e the y we re no t time ly pic ke d up an d tha t th e y los t5

profits of $11,982.32. Cox testified t hat t he damag e award would g o to him and that he would then pay Nix . Thus, if any one los t the us e of money , it was Nix

. But Nix was paid in full when the 98 head of cattle we re sold in Marc h 2004. Be cause it was Nix who lost t h e u se of the mone y and beca use Nix was paid in ear ly 2004, Cox failed to pre sent sufficie nt e vidence that Penner’ s failure to pay cause d him to suffe r l ost profits for 50 months. Penner ’s first issue is sustained. This holding

make s it un ne c e ssa

ry to a dd re ss P e nn e r’ s r e ma ini ngiss ue s.

I V. Holding As to the claims betwe en Penner and Cox , the judg ment of the trial c ourt is reve rsed a nd

rema nded for a new trial. Be cause Cox ’s consequential damag e claim is unl iquidated, the new trial shall include liability and dama g es. See T EX
. R. A PP
. P. 44.1(b). As to the cla ims between Penne r
a nd Ni x, no c omp la int

is m a de re g a rdi nge ith e r t he lia bil ity fi nd ing s o r t

he tr ia l c ourt ’s fa ilure to

awa rd dama g es to Nix

. There fore , the t rial cour t’s judgme nt involving the cla ims between Penne r and Nix is aff

irmed. Additionally , the trial cour t’s judgme nt is modi fied to re flec t t hat it is from

“ J o n e s ” C o u n t y.

RI CK STRANGE JUSTI CE

May 21, 2009 Panel consists of: Wright, C.J ., M c C a l l , J. , a n d

S t r a n g e , J.