1 United States Court of Appeals,

Fifth Circuit.

No. 95-11146.

ARA AUTOMOTIVE GROUP, Plaintiff-Counter Defendant-AppellantCross-Appellee,

v.

CENTRAL GARAGE, INC., Defendant-Counter Claimant-Appellee-CrossAppellant,

Robert A. Bauman, Jr., Defendant-Counter Claimant-Appellee-CrossAppellant.

Oct. 10, 1997.

Appeals from the United States District Court for the Northern

District of Texas.

Before JONES, STEWART and DENNIS, Circuit Judges.

EDITH H. JONES, Circuit Judge:

This dispute stems from the termination of Central Garage,

Inc. as an ARA Automotive Group ("ARA") distributor. ARA sued on

a sworn account for goods delivered, and Ce ntral Garage

counterclaimed for breach of contract, breach of fiduciar y duty,

and Texas DTPA violations. After offsetting jury verdicts in favor

of both sides, the district court entered a modest net judgment for

Central Garage.

Both sides now appeal on multiple grounds. Our principal

conclusion is that there is insufficient evid ence to support the

jury's finding that ARA owe d Central Garage a fiduciary duty.

Accordingly, we reverse and remand for recalculation of the effect

of the offsetting jury verdicts.

I. Background2

Based on the facts revealed at trial, ARA manufactured air

conditioners and other auto parts in Grand Prairie, Texas. Central

Garage, a distributor of ARA products in Florida from 1953 until

1989, had become ARA's largest distributor by the mid-1980s. The

parties had a written distributorship agreement that was terminable

at will and negotiated a new marketing agreement every November to

cover prices, credit, and other term s for the coming year. The

parties generally followed this new agreement beginning December 1,

although the written agreement might not be signed until as late as

January or February of the next year. The last marketing agreement

was signed in January 1988. Central Garage's obligation to ARA

under the agreements was secured by guarantees executed first by

Robert Bauman, Sr., who ran Central Garage until 1982, and later by

Robert Bauman, Jr., who succeeded his father in the business. In

addition to the dist r ibutorship and marketing agreements, the

companies entered into several other written contracts, including

agreements for Central Garage to provide engineering serv ices in

the development of ARA after-market power locks and power windows,

and an agreement for Central Garage to open a retail store

featuring ARA products with an annual $50,000 subsidy from ARA.

Other agreements between the parties were not reduced to

writing. The most fiercely disputed agreement in the case was a

promise allegedly made in early 1988 by Mark Kalupa, then ARA's

president. Kalupa testified that he told Bauman, Jr. that Central

Garage could maintain a b alance on its account with ARA of up to

$500,000, interest-free. The alleged purpose of this "floating1 Kalupa was apparently fired for reasons not directly related

to the subject matter of this suit. After his termination, Kalupa

filed suit against ARA for breach of his employment contract.

3 balance" arrangement was to assist Central Garage with its plans to

expand its retail operations in Florida. Although Kalupa did not

specify a duration for the arrangement, both he and Bauman, Jr.

testified that they assumed it would last at least until Central

Garage's new Florida stores were comfortably established, or

approximately three to five years.

A RA representatives testified that they had no knowle dge of

this arrangement before Kalupa was fired in December 1988, 1 and

t hat if he did make it, it was unauthorized. No documentary

evidence of a $500,000 floating balance was introduced at trial.

While the existence of the floating balance arrangement is

disputed, it is undeniable that as of the end of 1988, the balance

in Central Garage's account with ARA had ballooned. When Kalupa

was dismissed , he was replaced by Howard Blank. As confirmed by

ARA documents, Blank set out to improve ARA's profit margin on

sales in Florida either by collecting the Central Garage account or

entering the retail market directly.

Although ARA and Central Garage had agreed on pricing terms

f or a renewal of the marketing agreement to begin on December 1,

1988, no writ ten marketing agreement had been executed as of

February 1989. In February, Blank and other ARA officers initiated

a series of meetings with Central Garage to renegotiate the

marketing agreement for 1989 and to cause Central Garage to reduce

its account balan c e. Negotiations were unpleasant and4

unsuccessful. ARA terminated the relationship, ending sales of its

products through Central Garage and subsidy payment s under the

retail store subsidy agreement.

In April 1989, ARA opened a company-owned retail store in the

Tampa area in direct competition with Central Garage. ARA used

information about Central Garage's operations to pursue customer

leads and set its prices, initially at two dollars lower than

Central Garage on most products. ARA hired four employees from

Central Garage's retail operations and offered substantial product

incentives to induce dealers and other major Central Garage

customers to patronize its store. Central Garage lost customers,

and testimony at trial in 1994 indicated that many of those

customers had not come back. Former ARA officers called the

company's mov e into Tampa "predatory" and "malicious." Even so,

ARA's foray into retailing was short-lived: in October 1990, it

went out of business nationwide.

In May 1989, ARA filed this suit for payment of the

outstanding balance in Centra l Garage's account. Central Garage

counterclaimed that ARA had breached the power window, power door

lock, and retail store subsidy agreements and had violated the

Texas Deceptive Trade Practices Act. Central Garage also alleged

that ARA and Central Garage had developed a fiduciary relationship

in which each side shared confidential information and undertook to

look out for the other party's interests. Central Garage contended

that when Blank refused to honor the promise of a $500,000 floating

balance, requested pay m ent of the account, terminated Central2 The jury also fou nd that Robert Bauman, Sr. and Robert

Bauman, Jr. personally guaranteed Central Garage's debt to ARA, but

that Bauman, Sr. had been released from his guarantee by ARA.

5 Garage's distributorshi p

, and entered the Tampa retail market

itself, ARA breached a fiduciary relationship that had been formed

over a number of years.

After a trial that began in September 1994, the jury agreed,

and awarded Central Garag e $741,843.75 in damages for breach of

fiduciary duty. The jury also awarded $100,000 to Central Garage

on a claim that ARA's refusal in 1989 to continue subsidy payments

under the retail store subsidy agreement was a breach of contract.

However, the jury rejected Central Garage's DTPA claim and its

claim that ARA breached the power door and windows agreements.

In ARA's behalf, the jury found that Central Garage owed

$ 810,333.23 for goods delivered. 2 The court awarded each side

$100,000 in attorneys' fees. An offset of these awards resulted in

a $31,510.52 net judgment for Central Garage. The district court

then awarded pre-judgment interest from June 30, 1990, the date on

which the court found that the damages caused by ARA's breach of

fiduciary duty accrued. Both parties now appeal.

II. ARA's appeal

A. Breach of fiduciary duty.

ARA contends that there is insufficient evidence to establish

a fiduciary relationship betw een itself and Central Garage and

challenges the district court's refusal to grant judgment as a

matter of law on this claim. We review the jury's verdict to

determine if the facts and reasonable inferences point so strongly6

and overwhelmingly in favor of one party that reasonable minds

could not arrive at a different verdict. S ee Brock v. Merrell Dow

Pharmaceuticals, Inc., 874 F.2d 307, 308 (5th Cir.1989), c ert.

denied, 494 U.S. 1046, 110 S.Ct. 1511, 108 L.Ed.2d 646 (1990).

Under Texas law, a supplier/distributor relationship is not

the type of formal relationship that automatically gives rise to a

fiduciary duty. C rim Truck & Tractor v. Navistar Int'l, 823 S.W.2d

591, 594 (Tex.1992); A dolph Coors Co. v. Rodriguez, 780 S.W.2d

477, 481 (Tex.App.—Corpus Christi 1989, writ denied). A fiduciary

r elationship may arise from a variety of relationships where the

parties are "under a duty to act for or give advice for the benefit

of another upon matters within the scope of their relation." T exas

Bank and Trust Co. v. Moore, 595 S.W.2d 502, 507 (Tex.1980). The

existence of a fiduciary rela tionship, outside of formal

relationships that automatically give rise to fiduciary duties, is

usually a fact intensive inquiry. M oore, 595 S.W.2d at 508.

However, when the evidence offered is no evidence of a fiduciary

relationship, the issue can be determined as a matter of law. C rim

Truck, 823 S.W.2d at 594. Under Texas law, "a fiduciary duty will

not be lightly created" since "it imposes extraordinary duties" and

requires the fiduciary to "put the interests of th e beneficiary

ahead of its own if the need arises." F loors Unlimited, Inc. v.

Fieldcrest Cannon, Inc., 55 F.3d 181, 188 (5th Cir.1995). ARA

contends that Central Garage only presented evidence demonstrating,

at best, subjective trust, cordiality, length of relationship and

other matters that do not support a finding of fiduciary3 See Crim Truck, 823 S.W.2d at 594 ("fact that one businessman

trusts another, and relies upon his promise to perform a contract,

does not rise to a confidential relationship"; cordiality and long

duration are no evidence of a fiduciary relationship); T higpen v.

Locke, 363 S.W.2d 247, 253 (Tex.1962) ("Mere subjective trust alone

is not enough to transform arms-length dealing into a fiduciary

relationship").

7 relationship. 3

Central Garage points to the parties' long history of "oral

and written agreements, joint undertakings, shared confidences and

cooperative ventures" which support t he jury's verdict. Bauman,

Jr. remembered ARA executives staying at his family's home when his

grandfather was running Central Garage in the 1950s. Robert

Baccus, President of ARA until 1986, and Bauman, Sr., who owned

Central Garage until 1982, were close friends. The Bauman and

Baccus families socialize d often, vacationed together, and often

did business on a handshake basis. ARA paid for the honeymoon

trips of Bauman, Sr.'s children. ARA's Baccus wrote in a business

letter to Central Garage in 1979: "I would lean over backwards to

avoid hurting you regardless of its effect on ARA."

When it was time for Bauman, Jr. to take over Central Garage,

Baccus persuaded Bauman, Sr. to retire earlier th an he otherwise

would have. Baccus respected Bauman, Jr., and saw him as a more

aggressive businessman than his father. Baccus even considered

hi ring Bauman, Jr. for an officer position at ARA. Bauman, Jr.

considered his relationship with Baccus to be almost like a

"father-son" relationship.

After Bauman, Jr. took over Central Garage in 1982, he was

invited by ARA to attend meetings at ARA offices with top4 Mark Kalupa testified:

Q: What was the nature of your working relationship

between ARA on the one hand and Central Garage on the

other as they approac hed these agreements and followed

through on them?

A: Very close relationships. It was a partnership

agreement between two firms. I would say it was a very

close working relationship between the two companies.

Bauman, Jr.'s testimony about a "partnership" was in the

c ontext of assisting O'Pry with the pricing and marketi n g

plans.

5 The written power window and power lock agreements called for

Central Garage to receive $1.00 from each unit sold, rather than a

8 executives. Bauman, Jr. was privy to information about ARA's

strategy, products, and pricing, but, although he was asked not to

reveal what he learned, he was not asked to sign a confidentiality

agreement. Bauman, Jr. traveled with Baccus on several occasions

to help evaluate business opportunities for ARA. Bauman, Jr. met

with ARA Vice President Jerry O'Pry in 1988 to help set the prices

that ARA would ch arge all of its distributors. Bauman, Jr. made

recommendations to ARA regarding its choice of suppliers for power

window and keyless entry products. Norman Vail, a national sales

manager for ARA, testified that in working with Bauman, Jr. on

engineering projects, they "were like brothers."

Mark Kalupa, who succeeded Baccus as president of ARA in 1986,

and Bauman, Jr. testified that the parties regarded aspects of

their relationship as a partnership. 4 By contract, Central Garage

employees provided engineering services for ARA's after-market

power locks and windows, in return for a royalty for every product

sold by ARA. 5 Bauman, Jr. also made instructional presentations tofee for engineering services.

6 An April 1987 letter from ARA's Dan Kelly to Central Garage

read:

We at ARA anticipate continued growth at Central Garage

which will, we believe, command an ever-growing

commitment of funds to Central Garage.... This financing

may take the form of direct financing of expansion by

Central Garage into new markets and/or products.

7 Kalupa testified:

I just had an oral agreement with Rob [Bauman] that I had

a lot of faith in. There was no need for it [a writing].

It was an oral agreement, a partnership with someone we

had a great deal of trust in, and we didn't put it in

writing.

9 other ARA distributors and was well-respected at ARA.

ARA's parent company set a goal of building ARA from $130

m illion in revenues in 1986 to $500 million by 1991. To achieve

this goal, ARA began to work with Central Garage to expand sales of

ARA products. Central Garage was the only ARA distributor to

receive a promise that ARA would assist its expansion into new

markets. 6 In 1987, ARA agreed to subsidize Central Garage's

development of new retail stores, beginning with a small prototype

store in a strip mall. ARA would provide $50,000 for each of the

prototype store's first three years of operation, and Central

Garage allowed ARA to approve how the money was spent and provided

ARA with marketing and financial information about the store.

ARA's Kalupa attempted to persuade Central Garage to pursue a

significant n umber of free-standing retail stores. To encourage

this expansion, Kalupa orally agreed 7 to the $500 ,000 floating

balance arrangement. Central Garage began to rely on Kalupa's10

promise, taking full advantage of the $500,000 floating balance to

help finance new stores.

The pivotal case for evaluating this evidence is the Texas

Supreme Court decision in Crim Truck, which reversed a jury verdict

finding a fiduciary duty between a franchisor and franchisee. 823

S.W.2d at 592. The C rim Truck court found no evidence of a

confidential, or fiduciary, relationship between Navistar and the

Crim family, who had operated a Navistar (formerly In ternational

Harvest er) franchise since 1943. I d. at 593. The evidence of

confidence, trust and reliance over the course of the parties' 42-

year relationship was held to be no evidence of a relationship that

required Navistar "to put the Cr ims' interests before its own,"

because

this argument clashes with the rule that a party to a contract

is free to pursue its own interests, even if it results in a

breach of that contract, without incu rring tort liability.

The fact that one businessman trusts another, and relies upon

his promise to perform a contract, does not rise to a

confidential relationship. Every contract includes an element

of confidence and trust that each party will faithfully

perform his obligation under the contract.

Id. at 594-95 (citations omitted).

Durin g the 42-year relationship, the Crims "had always done

the things requested by the Franchisor ...," including moving their

store and setting up a "prototype building suggested by

International Harvester." I d. at 595, n. 6. The franchisor had

previously held the Crims out as "an excellent dealership with whom

they hope to continue a long and fruitful relationship." I d. The

parties had operated for the first 15 years without any written

agreement at all. Id. at 593. The written contract only allowed11

for termination if the Crims violated one of eleven conditions and

explicitly stated that the agreement was one "invol ving mutual

c onfidence and trust...." I d. at 595-96. Notwithstanding their

lengthy relationship, Navistar unilaterally terminated the Crims

for failing to purchase a new computer system required by Navistar,

a decision decried as arbitrary, since fewer than fifty percent of

all the franchisees were using the new system. I d. at 602 (Mauzy,

J., dissenting).

Following Crim Truck, this court has twice dealt with attempts

to impose a fiduciary relationship on otherwise arms-length

business relationships. In Floors Unlimited, we affirmed summary

judgment for a carpet manufacturer on a fiduciary claim brought by

a te rminated dealer. 55 F.3d at 188. The manufacturer had

repeatedly used the term "partnership" with its dealers, allegedly

to create the image of a more than "arms length" transaction. I d.

However, we rejected the use of the term "partnership" as evidence

of a fiduciary relationship because it was "mere conversation."

Id. The parties had operated for 11 years based only on an oral

agreement. I d. The court also rejected evidence of trust and

confidence be tween the parties as support for a fiduciary duty,

since this is "what is customarily shared between business

associates." Id. at 188. The manufacturer and dealer agreed "to

work together out of self-interest, [but] they had different goals

and were free to pursue their own interests." Id.

Lee v. Wa l-Mart Stores, Inc., 943 F.2d 554, 557-560 (5th

Cir.1991), modified 951 F.2d 54, relied on Crim Truck in reversing8 Citing Schiller v. Elick, 150 Tex. 363, 240 S.W.2d 997, 1000

(1951); F itz-Gerald v. Hull, 150 Tex. 39, 237 S.W.2d 256, 261

(19 51); MacDonald v. Follett, 142 Tex. 616, 180 S.W.2d 334, 339

(1944); Gaines v. Hamman, 163 Tex. 618, 358 S.W.2d 557 (1962).

9 See Thigpen, 363 S.W.2d at 253 (communication of confidential

information; but declining to find fiduciary relationship between

trust officer of bank and grocery store owners who were "close

friends" and saw each other frequently; bank officer helped

12 a jury verdict that found a fiduc iary relationship between a

developer and a retailer. The developer, Lee, had bought land and

constructed stores under oral assurances that Wal-Mart would later

sign a lease. I d. at 556. In the disputed transactions, Lee

relied on Wal-Mart's encouragement to purch ase land for

d evelopment, but Wal-Mart backed out. I d. We held that the

asserted "relationship based on r epeated transactions" and a

profitable business arrangement was not a fiduciary r elationship

under Crim Truck and earlier Texas cases. I d. at 557. Earlier

Texas cases had recognized fiduciary duties only when parties "were

looking to profit from a shared risk, e.g., an oil and gas well, or

the sale of a particular property" and not where the "parties'

pos i tions, harmonized for purposes of self-interest, were yet

naturally antagonistic." I d. at 558-59. 8 We ultimately concluded

that Wal-Mart could not be required to bear the responsibility to

look out for Lee's best interest. Id. at 559.

The parallels between the present case and the previous cases

are obvious, yet Central Garage's briefs make no attempt to

distinguish them. Instead, it cites cases enumerating the various

factors present in this c ase as indicative of a fiduciary

relationship. 9 Since C rim Truck, however, few Texas cases haveguaranteed loans for owners, served as a business advisor, and was

shareholder in owners' corporation); C onsolidated Bearing & Supply

Co., Inc. v. First Nat'l Bank of Lubbock, 720 S.W.2d 647, 649

(Tex.App.—Amarillo 1986, no writ) (length and nature of the

relationship between the parties; but affirming judgment finding

no fiduciary between bank and long-ti me customer, despite

relationship of trust and disclosing information customer would not

disclose to public; "only proof of long-standing banker-depositor

relationship"); H arris v. Sentry Title Co., Inc., 715 F.2d 941,

946 (5th Cir.1983), modified, 727 F.2d 1368, cert. denied 469 U.S.

1037, 105 S.Ct. 514, 83 L.Ed.2d 404 (1984) (parties' close,

personal or family like ties; but reversing finding of fiduciary

duty allegedly based on single joint venture); C onsolidated Gas &

Equip. Co. v. Thompson, 405 S.W.2d 333, 336 (Tex.1966) (degree of

trust reposed in one party by another; but reversing imposition of

constructive trust; "usual cases of fiduciary relationship have

been attorney-and-client, partners, close family relationships such

as that of parent-and-child, and joint adventurers, parti cularly

when there is an agreement among the joint venturers to share

financial gains and losses"); United Teachers Assoc. Ins. Co. v.

MacKeen & Bailey, Inc., 99 F.3d 645, 649-650 (5th Cir.1996)

(affirming district court's finding of fiduciary relationship

between insurer and actuary on whom insurer relied).

1 0 See, e.g., General Resources Organization, Inc. v. Deadman,

907 S.W.2d 22, 31 (Tex. App.—San Antonio 1995, writ denied)

(affirming jury verdict on b reach of fiduciary duty against

attorney who provided false guarantees to buyer in gold scam);

Sassen v. Tanglegrove Townhouse Condo. Ass'n, 877 S.W.2d 489, 492

(Tex.App.—Texarkana 1994, writ denied) (affirming jury verdict on

fiduciary breach against attorney-in-fact of con do owner). S ee

also United Teachers Associates, 99 F.3d at 649; H ed en v. Hill,

937 F.Supp. 1230, 1238 (S.D.Tex.1996) (denying summary judgment on fiduciary claim against attorney who represented plaintiff's former

partner and former company); S anders v. Casa View Baptist Church,

898 F.Supp. 1169, 1176 (N.D.Tex.1995) (denying summary judgment on fiduciary claim against plaintiffs' marriage counselor).

13 found fiduciary relationships outside of legal relationships that

carry fiduciary duties as a matter of law. 10 No Texas case cited

by Central Garage or uncovered in our research has affirmed a

fiduciary obligation in the context of a franchisor -franchisee,

manufacturer-distributor relationship, or other transactional

setting involving experienced managers. Federal courts that have

applied Texas law to such relationships have not found a fiduciary1 1 See Floors Unlimited, 55 F.3d at 188 (affirming summary

judgment for carpet manufacturer against dealer); L ee, 943 F.2d at

557-60 (reversing jury verdict finding fiduciary duty b e tween

developer and retailer); H ionis Intern. Enterprises v. Tandy

Corp., 867 F.Supp. 268, 274 (D.Del.1994), aff'd 61 F.3d 895 (3d

Cir.1995) (applying Te x as law) (granting summary judgment for

manufacturer against dealer).

14 obligation. 11

We decline to be the first. Even given the extensive evidence

of cooperation and friendship cited by Central Garage, the jury's

verdict cannot be sustained consistent with Texas law. These two

sophisticated businesses entered into a number of contracts for

mutual benefit, but the evidence does not demonstrate that either

party agreed to p ut the other's interests ahead of its own. S ee

Crim Truck, 823 S.W.2d at 594. Every major agreement governing the

relationship between ARA and Central Garage, with the exception of

the "floating balance " arrangement, was eventually reduced to a

writing that explicitly set out the parties' obligations. The

distributorship agreement, the annual marketing agreements, the

power window agreement, and the power lock agreement all permitted

either party to terminate the contract, for any reason, upon thirty

days notice. Central Garage did not have an exclusive territory.

The power lock and power windows agreements specifical ly stated

that Central Garage was an independent contractor, despite Bauman,

Jr.'s input into the selection of the supplier. C ompare Crim

Truck, 823 S.W.2d at 596, n. 7 (agreement only cancelable for

enumerated causes; recited that it was "a personal agreement,

involving mutual confidence and trust ..."). ARA insisted on and

got ind ividual guaranties from the Baumans. The testimony15

referring to the parties' relationship as a "partnership" does not

change its nature. S ee Floors Unlimited, 55 F.3d at 188;

Thanksgiving Tower Partners v. Anros Thanksgiving Partners, 64 F.3d

227, 231 (5th Cir.1995).

Central Garage relies heavily on Baccus's 1979 letter

promising that he would "lean over backwards to avoid hurting you

regardless of its effect on ARA." Baccus wrote to assuage Central

Garage's complaints about ARA's selling MAPA parts in Florida. The

next lines read:

However, I do have a responsibility to our company and to the

market place. And unless there is more evidence than we have

covered in our discussi on, I have no alternative but to

approve the use of the MAPA line as it is now being programmed

in Florida.

This letter is hardly evidence of a fiduciary relationship:

Baccus, Bauman, Jr.'s father figure, put Central Garage on notice

that when their interests diverged, ARA would look out for itself.

It would be patently unreasonable for Central Garage t o believe

that ARA would put its own interests aside, in a fiduciary-like

manner, to further the interests of Central Garage.

The other key factors supporting a fidu ciary relationship

under the Texas cases are simply not present here. There is no

agreement to share profits or losses. ARA did not exercise such

control over Centra l Garage, its largest and most important

distributor, as to create a situation of "disproportionate

bargaining power and control" inherent in other relationships where

a fiducia ry duty has been found. S ee Arnold v. National County

Mut. Fire Ins. Co., 725 S.W.2d 165, 167 (Tex.1987) (unequal1 2 See also Rutherford v. Exxon Co., 85 5 F.2d 1141, 1146 (5th

Cir.1988) ("We cannot equate faith built up over years of a

business relationship such as the one in this case with the

confidence that, for example, a client places in her attorney").

16 bar gaining power and exclusive control of insurer gives rise to

fiduciary duty to insured in settling claims); Adolph Coors Co.,

780 S.W.2d at 481 ("the supplier-distributor relationship does not

require special protection, nor does the supplier h ave the same

exclusive control over the distributor's business that the insurer

has over the insured's claim").

Taking Bauman, Jr.'s descriptions of his relationship s with

Baccus and other ARA officers to their fullest implications, there

is insufficient evidence to support a finding of fiduciary duty.

See Crim Truck, 823 S.W.2d at 594-95. 12 Even Baccus, who was

arguably Bauman, Jr.'s closest confidant at ARA, expressly informed

Central Garage that ARA's interests ultimately came first. In any

event, Baccus retired in 1986. Although Bauman, Jr. describes a

friendship with Kalupa, nothing in his testimony raises it above a

cordial business relationship. And Kalupa was not the key to doing

business with ARA; other investors controlled the company.

Although Bauman, Jr. may have had reason to believe that Chip Hart,

an owner and member of the board, supported Central G arage's

expansion plans until early 1988, there is absolutely no indication

that his rela tionship with the Harts could have given rise to a

fiduciary duty. But if he had any expectation that ARA ownership

was looking out for Central Garage's interests, it should have

ended as of Augus t 1988, when Bauman, Jr. learned that the Harts17

had placed ARA up for sale.

Furthermore, unless routine manufacturer-distributor

relationships are to be considered fiduciary, the jury verdict can

not be sustained i n this case on the basis that ARA possessed

confidential information. All of the "confidential" information,

for example, the computer printout of all the ARA parts bought by

Central Garage in 1987 and 1988, is information that would normally

be exchanged between a manufacturer and a large distributor. A

manufacturer can hardly be expected not to have a list, by part

number, of all inventory sold to each customer. Other information,

such as Central Garage's sales and profits, is not unusual in any

agreement where a manufacturer will be extending sign ificant

credit. Central Garage's price list was public and could be

obtained from any of its customers. The retail store blueprints

and merchandising layouts were bargained for by ARA as part of the

written retail subsidy agreement for the explicit purpose of using

them in other ARA stores.

Although ARA's subsequent use of this information might have

been improper under an unfair competition theory, the m ere

possession of this information by a manufacturer could not give

rise to a fiduciary duty without stretching the Texas cases beyond

recognition. As the Texas Supreme Court has opined, "a

constructive trust [imposed upon breach of a fiduciary duty] does

not arise on every moral wrong and [ ] can not correct every

injustice." P ope v. Garrett, 147 Tex. 18, 211 S.W.2d 559 , 562

(1948).1 3 See In re Letterman Bros. Energy Securities Litigation, 799

F.2d 967, 975 (5th Cir.1986), cert. denied, 480 U.S. 918, 107 S.Ct.

1373, 94 L.Ed.2d 689 (1987) (creditor-debtor relationsh i p not

fiduciary; breach of promise to provide financing is not breach of

fiduciary duty). In December 1988, while still an ARA distributor,

Bauman, Jr. obtained a $250,000 floating balance arrangement from

another manufacturer.

18 Finall y, the "floating balance" credit arrangement is not

evidence of a fiduciary relationship. Central Garage officials

testifie d that this was not uncommon in the industry. 1 3

Furthermore, Kalupa himself testified that, although he did not see

a business justification for d oing so, the floating balance

arrangement could be called at any time by the president of ARA.

Accordingly, the jury verdict finding a fiduciary relationship

between AR A and Central Garage is based on legally insufficient

evidence, and the motion for judgment as a matt er of law should

have been granted.

B. Breach of retail store subsidy agreement.

Under the retail store subsidy agreement, ARA was to provide

$50,000 per year to Central Garage to subsidize a prototype retail

store. Central Garage sought, and the jury awarded, $100,000 in

damages based on ARA's failure to make the paymen ts for 1989 and

1990. ARA argues that because Central Garage was no longer a

distributor, no longer obtained ARA approval for expenditures, and

no longer reported results of operations to ARA, ARA's obligation

to make the subsidy payments was relieved as a matter of law.

There is, how e ver, sufficient evidence that Howard Blank

breached a n d/or repudiated the contract before Central Garage

ceased to be a distributor and before the three-y ear contract14 See Rich v. McMullan, 506 S.W.2d 745, 747 (Tex.Civ.App.—San

Antonio 1974, writ ref'd n.r.e.) ("one who prevents or makes

impossible the performance of a condition precedent upon which his

liability under a contract is made to depend cannot avail himself

of its nonperformance").

1 5 ARA's sworn account claim ($810,333.23)—Central Garage breach

of contract claim ($100,000)—Central Garage's breach of fiduciary

duty claim ($741,843.75) = $31,510.52.

1 6 By ARA's calculations, it was owed $796,983.97 in prejudgment

interest as of October 1994 (the date of judgment).

19 expired; ARA, therefore, is not relieved of its otherwise

contingent obligation. 14 Finally, ARA continued to make monthly

payments for six months after telling Central Garage to stop

providing the required information, arguably waiving the conditions

precedent to ARA's liability. The jury verdict must be sustained.

C. Offsetting of damage awards.

In calculating the judgment amount, the court offset the

jury's awards to ARA and Central Garage, and calculated prejudgment

interest on the net judgment of $31,510.52 in favor of Central

Garage. 15 ARA argues that the district court should not have offset

the awards before cal culating prejudgment interest because the

distributorship agreement and the marketing agreement entitled ARA

to 1.5% per month, or 18% per year, in interest from January 1,

1991 through the date of judgment on its sworn account claim. ARA

contends that the offsetting should have been done af ter the

calculation of prejudgment interest on the awards at the different

rates. 16 Central Garage counters that the district court has the

discretion to prevent unjust enrichment by offsetting jury awards

before calculating prejudgment interest. I nfra-Pak (Dallas), Inc.20

v. Carlson Stapler & Shippers Supply, Inc., 803 F.2d 862, 866 (5th

Cir.1986). The district court found that the damages for breach of

f iduciary duty were fixed as of June 30, 1990, six months before

the account balance was found due and owing. Since the district

court's decision was predicated on the verdict against ARA for

breach of fiduciary duty, we decline to address the p arties'

arguments on this point. The district court ought to revisit this

issue on remand in the absence of the verdict on breach o f

fiduciary duty.

D. Calculation of Attorneys' fees

The dist rict court awarded attorneys' fees of $100,000 to

each party and then offset the awards against each other. Although

ARA presented evidence that it had incurred $896,691.20 in

attorneys' fees, the district court found that ARA's sworn account

claim was a relatively simple claim. The district court also found

that the bulk of the trial was focused on Central Garage's

counterclaims, that ARA's fees included bills from two separate law

firms preparing for the trial , and that ARA had three changes in

representation with the inherent duplication that accompanies such

changes. The district court also found that ARA's defense of

Central Gar age's counterclaims was not interrelated to or

inseparable from the sworn account claim.

ARA argues that since it had to d efend against the

counterclaims in order to recover on its sworn account, it should

be able to recover attorn eys' fees for the work of defending the1 7 See Flint & Assoc. v. Intercontinental Pipe & Steel, 739

S.W.2d 622, 624 (Tex.Ap p.—Dallas 1987, writ denied) (if

counterclaims interrelated with or inseparable from plaintiff's

claim, plaintiff allowed attorneys' fees for defending

counterclaims against its claim for purchase price of goods sold).

18 In re Smith, 966 F.2d 973, 978 (5th Cir.1992).

21 counterclaims. 17 However, given the district court's discretion in

setting the amount of fees 18 and its explicit findings, we find no

reason to disturb its calculation of ARA's attorneys' fees.

III. Cross-Appeal of Central Garage.

A. Estoppel defense to ARA's sworn account claim

Central Gara ge alleges that ARA: 1) encouraged Central

Garage to overextend itself in reliance on Kalupa's promise of

interest-free use of $500,000 for at least three to five years; 2)

declared the account balance due within a year of Kalupa's promise;

3) refused to take back unused inventory; 4) opened a store in

Tampa to drive Central Garage out of business; and 5) filed this

suit for the account balance despite Kalupa's testimony that the

floating balance was not due at the time suit was filed. Central

Garage claims this meets the definition of estoppel: as a result

of one party's words or conduct, another is induced to change his

position for the worse. W heeler v. White, 398 S.W.2d 93, 96

(Tex.1965).

Although the court instructed th e jury on estoppel, Central

Garage contends that the court erred when it refused to give a

separate jury question on the estoppel defense. ARA contends that

because of the separate instruction, the charge, taken as a whole,22

correctly instructed the jury. S ee Coughlin v. Capitol Cement Co.,

571 F.2d 290, 300 (5th Cir.1978). Citing no authorities, Central

Garage counter s that the instruction is "meaningless" without a

question for the jury to answer on the estoppel defense.

ARA's argument is persuasive. Central Garage could have

argued to the jury, with the full support of the court's

instruction, that ARA was estopped f rom seeking recovery on its

account. The court's error, if any, in refusing to submit a

separate interrogatory was harmless.

B. DTPA claim against ARA

Central Garage first argues that there is no evidence to

support the jury's verdict on its DTPA claim and thus Central

Garage should be awarded a new trial on this issue. Central Garage

did not move for a directed verdict below, thus we review the

jury's verdict that ARA did not commit DTPA violations to determine

if there is a ny evidence to support the finding. Z ervas v.

Faulkner, 861 F.2d 823, 832 n. 9 (5th Cir.1988). Although Central

Garage does not credit evidence contrary to its position, such

evidence exists in the record and prevents reversal un der our

narrow standard of review.

Second, the parties agree that Texas law on DTPA causation

requires that the deceptive practice be a "pr oducing" cause, not

"proximate" cause of the plaintiff's injuries. They also agree

that the district court erroneously instructed the ju ry to apply

the more demanding proximate cause standard to Central Garage's

DTPA interrogatory. But as Central Garage did not object to this1 9 Central Garage did submit an instruction with a "producing"

cause standard, but this was not included in the court's final

charge.

23 ins truction, it may only insist on appeal that the wording is a

plain error warran ting a new trial on the DTPA issue. 1 9 Fed.Rule

Civ.P. 51. To show plain error, Central Garage must show that "an

incor rect statement of law was probably responsible for an

incorrect verdict, leadin g to substantial injustice." F ruge v.

Penrod Drilling Co., 918 F.2d 1163, 1169 (5th Cir.1990). Based on

the facts developed at trial and Central Garage's theory of DTPA

violations, we cannot find plain error in this case.

Third, Central Garage argues that the district court erred in

submitting a jury question on ARA's estoppel defense to the DTPA

claim. The jury found in favor of ARA on this issue, but the

common law defense of estoppel cannot defeat a Texas DTPA claim.

Kennemore v. Bennett, 755 S.W.2d 89, 91 (Tex.1988). Since we have

affirmed the jury verdict that there was no DTPA violation, the

error in giving the estoppel instruction was harmless.

IV. Conclusion

For the foregoing reasons, we REVERSE the denial of judgment

as a matter o f law on the fiduciary duty claim, VACATE the

judgment, and REMAND for entry of judgment in favor of ARA

rejecting the fiduciary duty claim and for further proceedings in

accordance herewith.