Opinion ID: 2427974
Heading Depth: 1
Heading Rank: 2

Heading: costs v. value

Text: Presidio's argument in its motion for rehearing is that the Court improperly computed damages based upon costs rather than value. See Leyendecker, 683 S.W.2d at 373. Presidio contends that the way the Court calculated damages, Formosa does not have to pay the full value of what Presidio furnished Formosa. Instead, Presidio asserts Formosa will receive what Presidio furnished at cost. Presidio contends that Presidio will not be paid the full value of what it gave, and thus will not be made whole. Formosa responds that Presidio's theory is wrong because it measures the damages after the contract is complete by striking a completely new bargain. Formosa argues that the proper measure of damages is computed as of the time of the sale, or as in this case at the point of contract. See Leyendecker, 683 S.W.2d at 372. Formosa contends that the policy underlying fraud law is to redress actual losses. See Morriss-Buick Co. v. Pondrom, 131 Tex. 98, 113 S.W.2d 889, 890 (1938). It is true that damages in a fraudulent inducement case are computed as of the time of the fraud. In this case, at the point of contract. However, Formosa essentially adopts the Court's rationale; therefore, Formosa's arguments suffer from the same fundamental flaws as those of the Court. That is, the damage calculation should be based upon the contract actually made, rather than the contract the parties would have made but for Formosa's fraudulent inducements. Here, Presidio was entitled to show and did show the value of its loss based upon what actually happened because of Formosa's fraudulent inducements when the parties made the contract. Taking the known facts when Presidio completed the project, and applying Presidio's regular calculations of costs plus profit margin as of the time the parties negotiated the fraudulently induced contract, produces a damages result based upon objective facts, figures or data, and predicated on one complete calculation. See Szczepanik v. First S. Trust Co., 883 S.W.2d 648, 649 (Tex.1994). The Court's new writing reinforces my view, as expressed in my original dissent, that the Court has engaged in an improper factual sufficiency review. Despite its protestations, the Court weighs the evidence, which it cannot do. See Havner v. E-Z Mart Stores, Inc., 825 S.W.2d 456, 458 (Tex.1992). The Court asserts that Presidio's damage evidence was entirely speculative because there is no evidence that Presidio would have been awarded the project if it had made a 1.3 million dollar bid. The Court then states that the evidence indicates that Presidio would not have been awarded the project because two of the three other bids Formosa received were lower than 1.3 million. The Court concludes that Presidio's evidence is not based on expenses incurred and profits lost on this contract because of Formosa's representations, but rather is based upon an entirely hypothetical, speculative bargain that was never struck and would never have been consummated. If this is not weighing the evidence, I do not know what is.