Court Opinion

ID: 4266545
Source: CourtListenerOpinion
Date Created: 2018-04-23 20:46:57.256524+00
Date Added: 2024-06-11T14:26:55.849915
License: Public Domain

AFFIRM; and Opinion Filed April 18, 2018.

                                              In The
                                Court of Appeals
                         Fifth District of Texas at Dallas
                                       No. 05-16-01209-CV

       THAD F. BAKER AND 3900 COMMERCE 1996, LTD., Appellants
                                V.
   THOMAS HABEEB, TOMMY HABEEB ENTERPRISES, INC. AND ATVD, LLC,
                             Appellees

                      On Appeal from the 192nd Judicial District Court
                                   Dallas County, Texas
                           Trial Court Cause No. DC-14-10940

                              MEMORANDUM OPINION
                           Before Justices Lang, Brown, and Whitehill
                                   Opinion by Justice Brown
       Appellants Thad F. Baker and 3900 Commerce 1996, Ltd. appeal a final judgment granted

in favor of appellees Thomas Habeeb, Tommy Habeeb Enterprises, Inc. and ATVD, LLC. In three

issues, appellants argue (1) the trial court abused its discretion in allowing appellees’ expert Paul

Rich to testify as to the future value of master tapes for episodes of two television shows, (2) the

evidence was insufficient to support the jury’s award of damages, and (3) the trial court erred in

submitting a negligence claim to the jury. For the following reasons, we affirm the trial court’s

final judgment.

                                           BACKGROUND

       Habeeb has worked in the entertainment industry as a television actor, producer, and writer

for approximately 35 years. He owns Tommy Habeeb Enterprises, Inc., which develops and
produces content for network and syndicated television shows, and ATVD, LLC, which

distributes, or licenses, content. Beginning in January 2013, Habeeb took over production on

several projects and began working in a commercial building at 620 Exposition Avenue in Dallas,

Texas, where the production was ongoing.        The building was owned by 3900 Commerce.

Following a default on the lease in July 2013, Habeeb and Jim Campbell, owner of one of the

projects in development, negotiated with Baker, 3900 Commerce’s managing partner, to remain

in the building through production.

       Production of Campbell’s project wrapped up in December 2013, but Habeeb still had need

for office space. He attempted to negotiate with Baker to remain at 620 Exposition, but they never

entered into a written lease. Instead, they entered into an oral arrangement for Habeeb to pay

$1,000 per month for January and February 2014 and thereafter vacate the premises. The parties

disputed the exact area in the building contemplated by their oral arrangement; Baker believed it

covered some office space only, but Habeeb testified that it covered a larger area including a

storage room where he was keeping raw footage and master tapes of television programming. The

storage room was locked with a deadbolt, and a note on its door read, “Do Not Touch.”

       In anticipation of Habeeb vacating by the end of February 2014, Baker planned to clean

and renovate the space to prepare for new tenants. Baker testified that he thought a lot of the

property in the area where Habeeb officed belonged to the prior tenant and told Habeeb,

“[w]herever your stuff is, make sure you put it some place where we won’t haul it off.” According

to Habeeb, he moved some items in the kitchen area, where there was a leak and they “were doing

electrical work and things like that.”

       On February 17, 2014, 3900 Commerce maintenance workers removed items from the

storage room, which they accessed through the room’s back wall, and an adjacent hallway. Baker

had instructed the crew to throw away trash, but retain any items that appeared to be valuable and

                                               –2–
move those to a nearby warehouse. One of the maintenance workers, Ernesto Aleman, testified to

throwing some materials into a dumpster, but also taking forty to fifty fifty-five-gallon trash bags

with all sizes of “movie” tapes from shelving in the storage room to the off-site warehouse.

       Scott Ricamore, a freelance television producer working for Habeeb, went to retrieve a

master tape from the storage room later that day and discovered the room had been mostly emptied.

Ricamore notified Habeeb, and they retrieved some property from a dumpster. Habeeb contacted

the Dallas Police Department to report the missing property and tried to contact Baker. The next

day, Aleman returned the tapes from the warehouse at the direction of Baker’s son-in-law.

According to Habeeb, however, master tapes for forty-six half-hour episodes of the television show

Stag: A Test of Love (Stag) and seven one-hour episodes of the television show Billionaire Car

Club (BCC), along with some equipment, financial records, and memorabilia, were never located

or returned.

       Habeeb sued Baker, alleging the loss of the property and asserting claims for negligence,

breach of warranty, breach of the oral lease agreement, and conversion. At trial, Habeeb explained

that he had made seventy-two episodes of Stag, a reality show filming bachelor and bachelorette

parties and the parties’ aftermaths. The average cost to make an episode of Stag is about $75,000.

Broadcast versions of Stag aired domestically on ABC, NBC, CBS, FOX and the CW networks

and in fifty to sixty other countries. Uncensored versions of the same episodes were sold to the iN

DEMAND network. Habeeb had not received a new order for Stag during the three years prior to

trial, but it was airing on iN DEMAND at the time of trial. BCC, a magazine format show profiling

car collectors, also was broadcast both in domestic and foreign markets. According to Habeeb, it

would cost about $60,000 to reshoot an episode of BCC. He believed there was a market for both

the Stag and BCC programming.

                                                –3–
           Appellees designated Paul Rich as an expert to testify on the value of the missing tapes.

Rich is the owner and CEO of BoPaul Media Worldwide, a corporation specializing in global

distribution of film and television programming. Rich has experience valuing and selling entire

libraries of film and television shows and has consulted for banks and international media

companies in evaluations, mergers, and acquisitions. He has distributed and marketed television

and film programming since 1973 and reality, or non-scripted, programming specifically since

2000. Indeed, Rich distributed both Stag and/or BCC from approximately 2005 to 2009 or 2010.

           An “Asset Valuation” report prepared by BoPaul Media was admitted into evidence. The

report concludes the total discounted value of the library of missing Stag and BCC episodes was

$4,847,000. BoPaul Media valued the missing episodes as if they were to be continued in

distribution worldwide as they had been for the previous ten years, primarily broadcast in

syndication domestically and on national television channels and DVD/VOD outlets in more than

eighty countries. BoPaul Media used three cycles of distribution: (1) a first repeat cycle, a cycle

of three years of repeats of a show after its original run; (2) a second repeat cycle of three years;

and (3) a third cycle of perpetuity representing the show’s remaining life. The report included a

table showing the estimated value of each episode over the three cycles and across free and paid

television, video/DVD, internet, new media, and non-theatrical rights sales in twenty-nine

territories beginning from the second quarter of 2015. BoPaul Media then discounted the library’s

value by deductions of fifteen percent allocated for internal rate of return,1 twenty percent for net

present value,2 and twenty percent for return on investment.3

      1
        Rich defined internal rate of return as an “interest rate giving a net present value of zero when applied to the expected cash flow of a project.
Its value, compared to the cost of the capital involved, is used to determine the project’s viability.”
     2
       Rich defined net present value as “an assessment of the long-term profitability of the TV series made by adding together all the revenue it
can be expected to achieve over its whole life and deducting all the costs involved, discounting both future costs and revenue at an appropriate rate
NPV.”
      3
        Rich defined return on investment as “the amount of profit, before tax and after depreciation, from an investment made, usually expressed
as a percentage of the original total cost invested.” Rich’s report states a ROI discount of twenty-two percent, but the amount he applied in his
calculation was twenty percent.

                                                                         –4–
        BoPaul Media used an asset approach as one method for valuation, relying upon the

economic principle of substitution, seeking to estimate the costs of recreating an asset of equal

value to that being replaced. It also used the economic principle of competition by consulting the

marketplace and studying sales by similar businesses, including BoPaul Media, to estimate the

value in comparison to similar businesses whose assets’ values had been recently established by

the market. The report states that “virtually all of the estimates are based on unpublished but

reliable, anecdotal industry information gathered by BoPaul Media through its global network of

buyers and sellers of licensed media rights.” The valuation was based on Mr. Rich’s forty years’

experience in licensing a similar product “throughout the world, market pricing predicated on

BoPaul Media’s current and most recent sales, and estimated value on pricing of similar content

from known competitors in the field over the past 12 months.” The assessment also took into

account overall marketplace conditions, trends, and fiscal outlook going forward.

       During his trial testimony, Rich explained that individuals active in the sales of

programming usually perform valuations of television and film libraries because they have the

information at hand and experience working with it. He also expanded on the underlying

information he considered to prepare the valuation. He reviewed (1) past distributions of the shows

reflected in license agreements (specifically, seven Stag agreements and seventeen BCC

agreements); (2) distributions of approximately 100 hours of similar programming for the same

audience on like channels reflected in rights and sales that BoPaul Media previously distributed;

and (3) “anecdotal information.” Rich testified that, because the terms of television licensing

agreements are not published or otherwise public knowledge, anecdotal information that he has

picked up through his experience in the business is very important for these types of evaluations.

He has obtained information from hundreds of buyers at television stations and competitors around

the world. According to Rich, it is standard methodology in the industry to use all three items –

                                               –5–
actual historical sales, information about the sales of similar shows, and experience-based

anecdotal information – for a valuation.

       Appellants’ expert, George Cavelli, is an accountant who has spent most of his 30-year

career in the entertainment field. He primarily audits, or performs royalty and participation

examinations of, motion picture or record distributors and valuations. Cavelli looked at the same

Stag and BCC licensing agreements that Rich reviewed and, using Rich’s three-cycle and

discounting formulas, estimated the future earnings for the missing episodes was $160,000. He

did not take any comparable sales into account for his valuation. He testified that he typically

looks at historical data to see how a particular property performed in the past to estimate future

earnings, or asset value. Cavelli would look to performance of other properties if no historical

information is available. And, to a certain extent, he would look at anecdotal evidence, or the type

of evidence “just from being in the industry” like film reviews and observable public perceptions,

but noted that it is hard to quantify. Cavelli examined Rich’s report and concluded that there was

no basis for Rich’s estimated future revenues.

       Following trial, the jury found appellants liable for negligence and assessed damages of

$2,582,854.60. It also found appellants liable for conversion and breach of the oral lease, assessing

damages at $500. Appellants moved for judgment notwithstanding the verdict, which the trial

court denied.    Instead, the trial court entered a final judgment awarding the damages of

$2,582,854.60 for recovery on the negligence claim, but disregarding the jury’s verdict on the

conversion and breach of contract claims. Appellants appeal from the trial court’s final judgment.

                                        EXPERT TESTIMONY

       In their first issue, appellants contend the trial court abused its discretion in allowing Rich

to testify on the value of the missing episodes of Stag and BCC. Appellants argue both Rich lacked

qualification to testify and his opinions were unreliable.

                                                 –6–
         The trial court is the “evidentiary gatekeeper” responsible for excluding irrelevant and

unreliable expert evidence. Exxon Pipeline Co v. Zwahr, 88 S.W.3d 623, 629 (Tex. 2002). It has

broad discretion to determine the admissibility of evidence, and we will reverse only for an abuse

of that discretion. Id. A trial court abuses its discretion if it acts without reference to any guiding

rules and principles. E.I du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549, 558 (Tex.

1995).

         An expert’s testimony is admissible if the expert is qualified to testify about “scientific,

technical, or other specialized knowledge” and the testimony is relevant and based upon a reliable

foundation. TEX. R. EVID. 702; TXI Transp. Co. v. Hughes, 306 S.W.3d 230, 234 (Tex. 2010);

Zwahr, 88 S.W.3d at 628. If an expert’s testimony is based on unreliable data or if the expert

draws conclusions from his underlying data based on a flawed methodology, the testimony is

unreliable. Ford Motor Co. v. Ledesma, 242 S.W.3d 32, 39 (Tex. 2007) (quoting Merrell Dow

Pharms., Inc. v. Havner, 953 S.W.2d 706, 714 (Tex. 1997)).

         In Robinson, the supreme court suggested six factors courts may consider to assess

reliability: (1) the extent to which the expert’s theory has been or can be tested; (2) the extent to

which the technique relies on the expert’s subjective interpretation; (3) whether the theory has

been subjected to peer review and/or publication; (4) the technique’s potential rate of error; (5)

whether the relevant scientific community has accepted as valued the underlying theory or

technique generally; and (6) the nonjudicial uses made of the theory or technique. Robinson, 923
S.W.2d at 549, 557. The supreme court, however, has emphasized that these factors are non-

exclusive and do not fit every scenario. See, e.g., Hughes, 306 S.W.3d at 235; Gammill v. Jack

Williams Chevrolet, Inc., 972 S.W.2d 713, 725-26 (Tex. 1998)). Rather than focus entirely on the

reliability of an expert’s technique, it may be appropriate in some cases “to analyze whether the

expert's opinion actually fits the facts of the case.” See Hughes, 306 S.W.3d at 235; Helena

                                                 –7–
Chemical Co. v. Wilkins, 47 S.W.3d 486, 499-501 (Tex. 2001). To do so, the trial court must

determine whether there are any significant analytical gaps in the expert opinion that undermine

its reliability. Hughes, 306 S.W.3d at 235; Whirlpool Corp. v. Camacho, 298 S.W.3d 631, 642

(Tex. 2009) (expert must show how the data relied upon is valid support for the opinion).

Additionally, an opinion based only on subjective belief or unsupported speculation is unreliable.

Hughes, 306 S.W.3d at 239. The court's ultimate task, however, is not to determine whether an

expert's conclusions are correct, but rather whether the expert’s analysis in reaching those

conclusions is reliable. Zwahr, 88 S.W.3d at 629 (citing Gammill, 972 S.W.2d at 728); Robinson,
923 S.W.2d at 558 (“The trial court’s role is not to determine the truth or falsity of the expert’s

opinion.”).

       At the outset, we address appellees’ contention appellants failed to preserve their challenge

to Rich’s expert testimony because they did not re-urge their objection during Rich’s trial

testimony. Appellants filed a motion to exclude Rich’s testimony prior to deposing him. The trial

court denied the motion. Appellants then filed a motion to reconsider after deposing Rich. At the

hearing, appellants referred to some of Rich’s deposition testimony in urging their objection, and

appellees introduced Rich’s file into evidence. At the close of the hearing, the trial court

announced it was not going to strike Rich, but would defer ruling, hear Rich’s testimony, and rule

accordingly at the time of trial. At the outset of trial, appellants again requested the trial court to

reconsider its ruling on the motion to exclude. In response, the trial court stated, “I’m going to

overrule or deny your Motion for Reconsideration.” To preserve a complaint that expert evidence

is unreliable, a party must object to the evidence before trial or when the evidence is offered. See

Maritime Overseas Corp. v Ellis, 971 S.W.3d 402, 409 (Tex. 1998). Because appellants raised

their objection to Rich’s testifying as an expert both before trial and again at the outset of trial and

the trial court denied their motion, we conclude they adequately preserved error for this appeal.

                                                 –8–
       Appellants acknowledge Rich’s expertise in television programming sales but contend that,

unlike accounting or finance, his experience does not convey the specialized knowledge required

to opine on the value of the lost episodes. We disagree. Rich has worked as a television and film

distributor and marketer since 1973. He has sold and licensed television programming around the

world since 1996 and reality, or non-scripted, television programming since 2000. Rich testified

to his belief that, other than cable television channels, his company sells more men’s lifestyle

programming than any other company. He also has experience valuing and selling entire libraries

of films and television shows, and people in the industry have used him and his methodology to

facilitate such valuations. We conclude that Rich had specific experience on the subject matter of

this lawsuit, and his knowledge, skill, experience, and training in selling and licensing the very

type of product at issue in this lawsuit qualify him to offer an opinion on appellees’ damages. See

TEX. R. EVID. 702.

       Appellants next contend that Rich’s testimony is unreliable because his methodology is

flawed and there is too great an analytical gap between his asset valuation and the underlying data

upon which he relied. As support, appellants complain Rich (1) misinterpreted or ignored

historical sales data; (2) relied on dissimilar programming as a comparison; and (3) improperly

relied on subjective, unquantifiable “anecdotal information.”

        Appellants complain Rich’s opinion ignored, cherry-picked, or misrepresented the data he

reviewed. First, appellants argue Rich assigned much higher valuations for the missing episodes

than the proceeds from historical licensing agreements for Stag and BCC episodes that he

reviewed. Appellants direct us to a licensing agreement with FOXTEL in Australia charging $778

for an hour of Stag from August 2007 through July 2009. The asset valuation report, however,

assigned a value of $10,000 for the first-repeat cycle of a Stag episode in Australia/New Zealand.

Appellants also refer to a 2007 United Kingdom licensing agreement charging $10,000 plus thirty

                                               –9–
percent royalty for fifteen episodes of Stag, but the asset valuation report assigns a first-repeat

cycle value of $5,000 per episode. To explain the difference in values, Rich testified that

consideration had to be given to the rights being sold and the applicable time period of the

agreements. For example, the FOXTEL agreement was only for a limited subscription service

license in Australia for the FOX subscription channel. Rich also considered the many other

channels and outlets, like home video and the internet, that were not reflected in the FOXTEL

agreement. Rich also relied on data showing another distributor, Shine International, had $28,095

in gross receipts for Stag in Australia for a period from October 2010 to December 2010. In

addition, Habeeb had informed Rich that Australia was a good territory for his programming with

average value in the range of $13,000 per hour. Finally, Rich applied the fifty-five percent

discount to all of the projections shown in the report, reducing the $10,000 projection for

Australia//New Zealand and the $5000 projection for the United Kingdom by more than half.

       Appellants also complain Rich rendered an opinion as to future value of the episodes in

twenty-nine different territories, despite a lack of demand for Stag during the three years preceding

trial and after reviewing licensing agreements pertaining to only four territories for Stag and

sixteen territories for BCC. Habeeb did testify that he had not sold Stag in a foreign market during

the three years preceding trial, but the show was airing at the time of trial on iN DEMAND and

had aired in upwards of fifty or sixty different countries. Moreover, with the master tapes of forty-

six episodes missing for more than two of the three years preceding trial, the inventory available

to license was very substantially reduced. Although appellants’ brief recites that Rich reviewed

only five Stag agreements (Canada, the United Kingdom, Australia, the Middle East, and the

Philippines), which provided data for four territories, the record also contains an agreement for

France and data showing Stag was sold in Russia, New Zealand, and India and had aired in well

over a hundred domestic broadcast and cable markets.

                                               –10–
       Appellants also cite a large discrepancy between $778 per hour for Stag and $3000 per

hour for Bikini Destination in the FOXTEL Australia agreement as evidence that Rich relied upon

dissimilar shows in arriving at his opinion. But licensing rates for each show reflected in the

different agreements were not static. For example, another agreement with MTV in Finland

licensed new episodes of Bikini Destination for $600 and renewals for $300. Indeed, it would take

someone with Rich’s expertise in the field to understand the significance of the difference in the

licensing rates from agreement to agreement and country to country. Rich described reviewing

sales of approximately 100 hours of similar programming for the same audience on like channels.

He looked not only at sales of Bikini Destination, but also specifically identified The Extremist

and Man’s 7 Show as similar shows geared toward a male audience and the record includes sales

data for those shows as well. We do not think a single discrepancy between one licensing rate for

Stag and another for Bikini Destination in a single agreement renders Rich’s opinion or his

consideration of like programming unreliable.

       Nor do we think the evidence shows that Rich either ignored or misinterpreted the available

historical data. Unlike Cavelli, Rich did not make his valuation by simply plugging the licensing

rates from the historical agreements into his three-cycle formula and applying the discounts.

Instead, as he explained, he used the historical sales, sales histories of other like programming, and

other information he had access to through his experience in the business to formulate the

valuation.

             Appellants next argue Rich’s reliance on anecdotal information renders his

methodology and opinions fatally flawed. Appellants specifically direct us to Rich’s response

when asked whether there is a piece of paper or somewhere to look for the numbers he used, apply

a formula, and reach the same conclusion: “No, because I can’t – I can’t put down all of the factors

that went into the third piece, for example, anecdotal. I can’t give you all that information. It’s

                                                –11–
impossible. I would have to wire my brain and pass it on to you.” Rich, however, also testified

the “anecdotal information” he relied upon included unpublished information related to sales of

similar programming that he learned from other television programming buyers and sellers.

According to Rich, the information was not a guess, but reflected factual events that happened to

be unpublished.     He further testified to consideration of marketplace trends, including the

“explosion” of new media, including many new channels and internet outlets, providing a

destination for American-produced reality television programming and the fact that American

shows remained popular in foreign markets even though those countries were creating some of

their own programming.       That Rich did not have written evidence to support each bit of

information he relied upon should not disqualify him from offering an opinion in his field. His

experience, along with the other information he relied upon, is a proper basis for his testimony.

See Gammill, 972 S.W.2d at 726 (“Experience alone may provide a sufficient basis for an expert’s

testimony in some cases, but it cannot do so in every case.”).

       We also disagree with appellants’ general argument that Rich’s methodology fails because

he did not explain how or why the prior sales of Stag or BCC episodes, sales of similar

programming, or the “anecdotal information” Rich relied upon were actual indicators of the future

value of the missing episodes. Appellants’ expert Cavelli, applying Rich’s three-cycle formula

and discounts, also used prior sales of the shows as the basis for his valuation opinion, testifying

that he estimated future earnings based on past performance. Although Cavelli did not consider

any comparable data in reaching his opinion in this case, he testified that he would look to

performance of other programming and, to a certain extent, anecdotal evidence “just from being

in the industry” if there is no historical information available. And, pre-existing profits, along with

other facts and circumstances, is an accepted method of estimating lost profits. See Texas

Instruments, Inc. v. Teletron Energy Mgmt., Inc., 877 S.W.2d 276, 279 (Tex. 1994).

                                                –12–
       Ultimately, appellants’ complaints reflect a disagreement with Rich’s consideration of any

factors other than the actual prior sales reflected in the historical licensing agreements. But, the

fact that Cavelli testified to a contrary methodology is not proof that Rich’s methodology is flawed.

See CBS Outdoor, Inc. v. Potter, No. 01-11-00650, 2013 WL 269091, at * 14-15 (Tex. App.—

Houston [1st Dist.] Jan. 24, 2013, pet. denied) (mem. op.). The disagreement did not establish that

Rich’s testimony was patently subjective; it simply raised a conflict in the evidence, and resolution

of that conflict was a matter for the jury. Id.

       This is not a case of an expert simply laying out his credentials and then offering only a

subjective opinion. See Kia Motors Corp. v. Ruiz, 432 S.W.3d 865, 878 (Tex. 2014). Rich’s

testimony established that he had expertise in valuing television programming libraries. He

undertook a quantitative analysis of information used to make the asset valuation, and the record

contains the asset valuation report and over a hundred pages of related documents that Rich

reviewed, all of which was admitted into evidence without objection. According to Rich, he used

a standard methodology in the industry for the valuation by examining three sources of information

– actual historical sales, information about the sales of similar shows, and experience-based

anecdotal information. That Rich did not testify to the specific data underlying his calculation of

each projection does not constitute a significant analytical gap rendering his testimony unreliable.

The trial court’s role was not to determine whether each of Rich’s projections as to the value of an

episode in a particular territory was correct; it was to determine only if the analysis he used to

reach his conclusions was reliable. See Gammill, 972 S.W2d at 728; Zwahr, 88 S.W.3d at 629.

We conclude Rich’s expert testimony fits the unusual facts of this case and the trial court did not

abuse its discretion in finding Rich’s methodology and testimony reliable and, thus, admissible.

See Hughes, 306 S.W.3d at 239. Accordingly, we overrule appellants’ first issue.

                                                  –13–
                                               LOST PROFITS

       In their second issue, appellants contend appellees did not establish the value of the missing

tapes in reasonable certainty. Specifically, appellants contend Cavelli’s testimony was the only

reliable evidence of damages and Rich’s testimony, appellees’ only evidence of lost profits, was

legally insufficient to support the verdict.

       An appellant attacking the legal sufficiency of an adverse finding on an issue on which it

did not have the burden of proof must demonstrate that no evidence supports the finding. See

Examination Mgmt. Servs., Inc. v. Kersh Risk Mgmt., Inc., 367 S.W.3d 835, 839 (Tex. App.—

Dallas 2012, no pet.); Exel Transp. Servs., Inc. v. Aim High Logistics Servs., LLC, 323 S.W.3d
224, 232 (Tex. App.—Dallas 2010, pet. denied). We review the evidence presented at trial in the

light most favorable to the jury’s verdict, crediting all favorable evidence jurors could believe and

disregarding all contrary evidence unless reasonable jurors could not. See Exel Transp. Servs.,
323 S.W.3d at 232. Anything more than a scintilla of evidence is legally sufficient to support the

jury’s finding. Id.

       Plaintiffs may recover lost profits as damages if the loss is the natural and probable

consequence of the act or omission complained of and the amount of the loss is shown with

reasonable certainty. Texas Instruments, 877 S.W.2d at 279 (quoting Southwest Battery Corp. v.

Owen, 115 S.W.2d 1097, 1098-99 (Tex. 1938)). “Reasonable certainty” in the proof of lost profits

is a fact-intensive determination and “is intended to be flexible enough to accommodate the myriad

circumstances in which claims for lost profits arise.” Texas Instruments, 877 S.W.2d at 279; Holt

Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 84 (Tex. 1992). Reasonable certainty cannot be

established when profits are largely speculative; for example, profits “from an activity dependent

on uncertain or changing market conditions, or on chancy business opportunities, or on promotion

of untested products or entry into unknown or unviable markets, or on the success of a new and

                                                  –14–
unproven enterprise, cannot be recovered.” Texas Instruments, 877 S.W.2d at 279. “The focus is

on the experience of the persons involved in the enterprise and the nature of the business activity,

and the relevant market.” Id. at 280. Lost profits need not be susceptible to exact calculation, but

estimates must be based on objective facts, figures, or data from which the amount may be

ascertained. Helena Chem. Co., 47 S.W.3d at 504; Holt Atherton, 835 S.W.2d at 84. Pre-existing

profit, together with other facts and circumstances, may indicate with reasonable certainty the

amount of profits lost. Texas Instruments, 877 S.W.2d at 279. There is no particular rule or

method for measuring lost profits, but once a party chooses a method, it must provide one complete

calculation under that method. Holt Atherton, 835 S.W.2d at 85.

       Fair market value is the proper measure of damages for the loss of personal property. See

Saulsberry v. Ross, 485 S.W.3d 35, 51 (Tex. App.—Houston [14th Dist.] 2015, pet. denied). Fair

market value is generally determined either by using comparable market sales, calculating

replacement costs less depreciation, or capitalizing net income (profits). Phillips v. Carlton

Energy Group, LLC, 475 S.W.3d 265, 278 (Tex. 2015). The reasonable certainty of proof

requirement also applies when lost profits are used to determine the market value of property for

which recovery is sought. Id. Yet, “when evidence of potential profits is used to prove the market

value of an income-producing asset, the law should not require greater certainty in projecting those

profits than the market itself would.” Id.

       A jury is free to accept or reject all or any portion of an expert’s testimony it does not find

credible. See McGailliard v. Kuhlmann, 722 S.W.2d 694, 697 (Tex. 1986) (jury has considerable

discretion in evaluating opinion testimony from an expert on the amount of damages); Kirkpatrick

v. Memorial Hosp. of Garland, 862 S.W.2d 762, 772 (Tex. App.—Dallas 1993, writ denied). The

jury also has discretion to award damages within the range of evidence presented at trial, so long

as there is a rational basis for calculation.     See, e.g., Basic Capital Mgmt., Inc. v. Dynex

                                                –15–
Commercial, Inc., 402 S.W.3d 257, 265 (Tex. App.—Dallas 2013, pet. denied). The jury’s finding

may not be set aside because its reasoning in arriving at the amount of damages is unclear.

Examination Mgmt. Servs., 367 S.W.3d at 844.

       Appellants contend Rich’s testimony constitutes no evidence of lost profits due to the

deficiencies they alleged rendered it unreliable and, even if his testimony was reliable, those same

deficiencies preclude appellees from showing lost profits with reasonable certainty because his

opinion is not based on objective facts, figures, or data. However, the evidence shows that, both

before and after the loss of the master tapes, there was an established domestic and foreign market

for men’s reality-based lifestyle television programming, and both Stag and BCC specifically.

Habeeb had years of experience in producing programming content, and Rich had years of

experience distributing and valuing programming. This is not a case of a new or unproven

enterprise, an untested product into unknown or unviable markets, chancy business opportunities

or dependency on uncertain or changing market conditions.

       Using only some historical sales of Stag and BCC episodes as his underlying data, Cavelli

adopted Rich’s single calculation using the three-cycle formula and discounts to estimate future

earnings of $160,000. Rich considered additional data he gathered from forty years’ experience

in licensing the same and similar shows, including the current and most recent sales of similar

content by his company and known competitors in the field, as well as market conditions and

trends. Although appellants criticize Rich for using the additional data and not showing how he

used that data to arrive at his opinion, there is no requirement that Rich’s opinion be exact or that

he produce documents supporting his opinion and estimates. See Holt Atherton, 835 S.W.2d at 84

(failure to produce documents supporting an opinion or estimate of lost profits goes only

to weight of the evidence).     Further, historical profits, together with the other facts and

circumstances, may indicate with reasonable certainty the amount of profits lost. Helena Chem.

                                               –16–
Co., 47 S.W.3d at 505; Texas Instruments, 877 S.W.2d at 279. We conclude Rich’s estimate was

based on objective facts, figures, and data such that the amount of lost profits due to the missing

Stag and BCC episodes could be ascertained.

       Appellants also argue that Rich’s projections are not net lost profits. Lost profits are

damages for the loss of net income – income from the lost business activity less expenses that

would have been attributable to that activity. Examination Mgmt. Servs., 367 S.W.3d at 840.

Appellants claim Rich’s projections reflect only gross sales and ignore costs and overhead

associated with the shows, but his calculation included a discount of twenty percent of the library’s

value for return on investment, which represented these costs. Appellants have a burden to provide

at least some evidence that appellees’ otherwise complete loss profit calculation was inadequate

due to missing expense, but do not direct us to any specific expenses that were not deducted as

return on investment. See ERI Consulting Eng’rs, Inc. v. Swinnea, 318 S.W.2d 867, 879 (Tex.

2010) (“It is not necessarily the case that a company will incur increased expense or overhead,

especially if the company is already profitable at the time the damage began and evidence supports

an inference that it could have performed profitable services using only its existing resources.”).

       Moreover, appellants brought all of the deficiencies they alleged in Rich’s opinion to the

jury’s attention. See ERI Consulting Eng’rs, 318 S.W.2d at 876 (the amount of damages, including

lost profits, is a fact question for the jury).       Appellants’ objections to Rich’s testimony

regarding lost profits go to the credibility or the weight to be given to this evidence by

the jury. See generally Ledesma, 242 S.W.3d at 40-41 (concluding complaints about expert

testimony went to the weight of such testimony when the testimony did not present too great an

analytical gap between the data and the opinion, and the expert's testimony did not amount to

anything more than a recitation of his credentials and a subjective opinion). Both parties made

their argument to the jury, and the jury found damages of $2,582,856.60, which was within a range

                                               –17–
of the projections supported by the evidence.     While it is not clear how the jury arrived at this

figure, it had the discretion to award damages within the range of the evidence presented at trial.

Howell Crude Oil Co., v. Donna Refinery Partners, Ltd., 928 S.W.2d 100, 108 (Tex. App.—

Houston [14th Dist.] 1996, writ denied). Cavelli’s testimony combined with appellants’ cross-

examination of Rich could have lead the jury to reasonably conclude a lesser award was more

appropriate. We may not set aside the jury’s finding because its reasoning in reaching its finding

is unclear. Examination Mgmt. Servs., 367 S.W.3d at 844. Viewing all of the evidence in the

light most favorable to the trial court's award of damages and disregarding any contrary evidence

because a reasonable factfinder could, we conclude the jury’s damages award was within the range

of evidence presented and is supported by more than a scintilla of evidence to establish damages

with reasonable certainty. See Helena Chemical Co., 47 S.W.3d at 506. Accordingly, we overrule

appellants’ second issue.

                                            NEGLIGENCE

       In their third issue, appellants argue the trial court erred in submitting appellees’ negligence

claim to the jury. Specifically, appellants claim they owed no duty to appellees other than under

the oral lease agreement and, because appellants’ conduct in throwing away and removing personal

property was intentional, submission of a negligence question was improper and, thus, cannot

support a negligence finding.

       A trial court must submit jury questions raised by the written pleadings and the evidence.

See TEX. R. CIV. P. 278. The trial court has broad discretion in submitting a question as long as

the question fairly places the disputed issue before the jury. Rosell v. Central Western Motor

Stages, Inc., 89 S.W.3d 643, 653 (Tex. App.—Dallas 2002, pet denied). We review a trial court’s

submission of questions under an abuse of discretion standard. Id. Reversal is warranted if the

trial court denies a proper submission of a valid theory of recovery raised by the pleadings and

                                                –18–
evidence. Id. Otherwise, we reverse only if harm results and, for harm to result, the error must

probably cause the rendition of an improper judgment. TEX. R. APP. P. 44.1(a)(1); Rosell, 789
S.W.3d at 653.

        In Texas, the elements of actionable negligence are a legal duty owed by one person to

another, a breach of that duty, and damages proximately resulting from that breach. See Western

Invs., Inc. v. Urena, 162 S.W.3d 547, 550 (Tex. 2005). Whether a defendant owed a legal duty to

a plaintiff is a question of law for the trial court to decide from the particular facts surrounding the

occurrence in question, Military Highway Water Supply Corp. v. Morin, 156 S.W.3d 569, 572

(Tex. 2005); whether a defendant breached a duty is a question of fact. Caldwell v. Curioni, 125
S.W.3d 784, 793 (Tex. App.—Dallas 2004, pet. denied). Texas law recognizes several duties on

the part of landlords with respect to premises turned over to tenants. See Shell Oil Co. v. Khan,

138 S.W.3d 288, 297 (Tex. 2004). One of those duties is to use ordinary care in making repairs in

the event a landlord undertakes to repair a tenant-controlled area. Id. (citing Flynn v. Pan

American Hotel Co., 183 S.W.2d 446, 448 (Tex. 1944)); Blancett v. Lagniappe Ventures, Inc., 177
S.W.3d 584, 590 (Tex. App.—Houston [1st Dist.] 2005, no pet.).

        Here, appellees’ third amended petition alleges that appellants owed appellees, as paying

tenants, a duty to use ordinary care to perform any repairs or work on the premises in a reasonable

manner, including in a manner that would not injure appellees’ personal property. Appellants

breached this duty, and the breach was the proximate cause of damage to appellees. The evidence

at trial shows that, during the term of the oral lease arrangement, appellants planned and executed

a cleanup in space occupied by appellees in order to redesign the space for future lessees. 3900

Commerce maintenance workers removed appellees’ items from the locked storage room by

entering through the room’s rear wall. The workers threw some of the materials into a dumpster

and transported forty to fifty fifty-five-gallon trash bags with all sizes of “movie” tapes to the

                                                 –19–
warehouse. Although appellees were able to retrieve some items from the dumpster and tapes

were returned from the warehouse, other items, including Stag and BCC master tapes, remained

missing. After the close of evidence, the jury responded “yes” to the charge question, “Did the

negligence, if any, of [appellants] proximately cause the occurrence in question?”

       After examining the particular facts surrounding appellants’ activity, we conclude the trial

court correctly determined that appellants, as a landlord entering leased premises and undertaking

to clean the area for a redesign, had a duty to appellees as a matter of law. Further, there was

sufficient evidence of a breach of that duty in the conduct of 3900 Commerce workers throwing

away some of appellees’ property and removing other property offsite to fairly place the issue

before the jury. Reviewing the written pleadings and the evidence, we conclude the trial court did

not abuse its discretion in submitting the jury question on negligence. See TEX. R. CIV. P. 278;

Rosell, 789 S.W.3d at 653.

       Additionally, we disagree with appellants’ position that, because the property damage was

the result of Baker’s intentional instructions to “throw out or otherwise carry away and store

Habeeb’s property,” there can be no evidence supporting a negligent act. A negligence claim

differs from an intentional tort not in whether the defendant intended the action, but whether he

intended the resulting injury. See Reed Tool Co. v. Copelin, 689 S.W.2d 404, 406 (Tex. 1985);

Gavrel v. Lieberman, No. 2-08-414-CV, 2010 WL 1270334, at *2 (Tex. App.—Fort Worth Apr.

1, 2010, no pet.) (mem. op.). Here, there is no evidence that Baker or anyone else at 3900

Commerce intended to harm appellees in the cleanup; indeed, Baker testified that he thought the

                                              –20–
property belonged to a previous tenant, not Habeeb. Accordingly, we overrule appellants’ third

issue.

         We affirm the trial court’s final judgment.

                                               /Ada Brown/
                                               ADA BROWN
                                               JUSTICE

161209F.P05

                                                –21–
                               Court of Appeals
                        Fifth District of Texas at Dallas
                                       JUDGMENT

 THAD F. BAKER AND 3900                              On Appeal from the 192nd Judicial District
 COMMERCE 1996, LTD., Appellants                     Court, Dallas County, Texas
                                                     Trial Court Cause No. DC-14-10940.
 No. 05-16-01209-CV          V.                      Opinion delivered by Justice Brown;
                                                     Justices Lang and Whitehill participating.
 THOMAS HABEEB, TOMMY HABEEB
 ENTERPRISES, INC. AND ATVD, LLC,
 Appellees

     In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED.

     It is ORDERED that appellees THOMAS HABEEB, TOMMY HABEEB
ENTERPRISES, INC. AND ATVD, LLC recover their costs of this appeal from appellants
THAD F. BAKER AND 3900 COMMERCE 1996, LTD.

Judgment entered this 18th day of April, 2018.

                                              –22–