Court Opinion

ID: 3111889
Source: CourtListenerOpinion
Date Created: 2015-10-16 07:00:07.294805+00
Date Added: 2024-06-11T11:52:25.960940
License: Public Domain

COURT OF APPEALS
                        SECOND DISTRICT OF TEXAS
                             FORT WORTH

                            NO. 02-10-00474-CV

HERITAGE OPERATING, L.P.                                      APPELLANT
D/B/A METRO LIFT PROPANE OF
DALLAS

                                     V.

RHINE BROTHERS, LLC, DFW                                      APPELLEES
PROPANE EXCHANGE, LLC,
KENDALL L. RHINE, KENDALL T.
RHINE, ANTHONY L. RHINE,
JANICE RHINE, AND JAMES
MARCUS WITHERS

                                  ----------

         FROM THE 153RD DISTRICT COURT OF TARRANT COUNTY

                                  ----------

                       MEMORANDUM OPINION1
                                  ----------

     We have considered appellant Heritage Operating, L.P. d/b/a Metro Lift

Propane of Dallas’s (Heritage) motion for rehearing and appellees Rhine

     1
      See Tex. R. App. P. 47.4.
Brothers, LLC, DFW Propane Exchange, LLC, Kendall L. Rhine, Kendall T.

Rhine, Anthony L. Rhine, Janice Rhine, and James Marcus Withers’s motion for

rehearing and motion for reconsideration en banc. We deny the motions but

withdraw our March 15, 2012 opinion and substitute the following.

      Heritage appeals the trial court’s take-nothing judgment in this case

concerning breach of a covenant not to compete. We reverse and remand.

                               Background Facts

      Appellee Kendall L. Rhine became an officer, director, and shareholder of

Metro Lift Propane in 1997. At that time, Metro Lift had locations in Atlanta and

Nashville. By 2003, Metro Lift had ten locations, including one in Grand Prairie.

Kendall L.’s son, Anthony Rhine, ran the Grand Prairie Metro Lift location.

      On January 1, 2004, Kendall L. and the other owners of Metro Lift sold

Metro Lift’s ten locations to Heritage. Heritage and the Metro Lift owners were all

represented by counsel during the sales negotiations.               Heritage paid

$15,464,663.44 for the company. Kendall L. and the other former owners were

offered positions with Heritage. Kendall L. declined.

      As part of the sale, Kendall L. and the other former owners were asked to

sign noncompetition agreements. Heritage agreed to pay Kendall L. $500,000 to

sign the noncompete, paid out over five years. The agreement stated, in part,

      [Kendall L.] agrees that for a period of ten (10) years, commencing
      with the date of this Agreement, he will not:

                                        2
            (a) Engage in the business of the propane cylinder exchange
      business within a 75-mile radius of . . . any of the operations of
      [Metro Lift locations] (the “Restricted Area”).

            ....

             (d) Furnish, divulge, or make accessible to anyone any
      confidential or proprietary information or trade secrets (“Confidential
      Information”) concerning the Metro Lift Business including, but not
      limited to, customer identification, customer lists, business records
      and supply cost and pricing data. Notwithstanding the foregoing,
      such Confidential Information shall not include: (i) information that is
      or becomes generally available to [Kendall L.] on a non-confidential
      basis from a source other than Heritage or its affiliates provided that
      such source is not bound by an agreement of non-disclosure to
      Heritage.

            (e) Provide to, arrange for, guarantee funds, or arrange for
      product supply or consumer tank or cylinder purchases to any
      person who engages [in the propane cylinder exchange business] in
      the Restricted Area.

             (f) Be a member of a partnership or a stockholder, investor,
      officer, director, employee, agent, associate, or consultant, of any
      person, partnership, or corporation which does any of the acts
      described in the foregoing subparagraphs.

      In “[l]ate 2008, early 2009,” Kendall L.’s wife, Janice Rhine, began

investing in propane cylinder exchange businesses owned and operated by

Kendall L.’s sons, Kendall T. and Anthony Rhine, including DFW Propane, in

Grand Prairie.2 Kendall L. testified that his wife has not worked outside their

home in forty years and does not possess much knowledge about running a

      2
       Kendall T. and Anthony Rhine, as managers of Metro Lift locations, had
also signed noncompetes in conjunction with the Metro Lift sale. Kendall T. had
been restricted from North Carolina for five years, and Anthony was restricted
from Texas for five years. Janice Rhine did not have a noncompete.

                                         3
cylinder exchange business. Janice Rhine testified that at least one check she

signed for DFW Propane came from a joint account she shared with Kendall L.

She also testified that Kendall L. would write checks out of her living trust and

that she would reimburse him by putting money back in his account. Kendall L.

also wired $221,062.95 to a title company for the purchase of property for DFW

Propane. Kendall L. wrote checks out to DFW Propane and had his wife sign

them.

        Heritage sued Kendall L., his sons, and his wife, among others, for breach

of contract, trade secret misappropriation, interference with contract, tortious

interference with contract and prospective business relations, civil conspiracy,

and aiding and abetting. Heritage also sought an injunction against the Rhines.

A jury found that Kendall L. violated his noncompete, that all of the defendants

intentionally interfered with Kendall L.’s noncompete, and that the defendants

conspired against Heritage, but that Heritage had suffered zero dollars in lost

profits or loss of goodwill or reputation.3

        The trial court then entered a judgment finding that the noncompete was

unreasonable and thus, void. The trial court granted judgment in favor of the

defendants and denied injunctive relief.          The trial court made the following

relevant findings of fact and conclusions of law:

        3
       The jury also found that Anthony did not violate his noncompete and that
no defendant misappropriated trade secrets. Heritage does not challenge these
findings on appeal.

                                              4
            6. The confidential information of [Metro Lift] consisted of
      customer identification and history, sales, inventory[,] and
      operational procedure.

           7. The confidential information of [Metro Lift] was neither
      complex nor difficult to independently obtain or create.

              8. The value, if any, of the confidential information of [Metro
      Lift] quickly eroded after the sale of [Metro Lift] to [Heritage] and was
      essentially non-existent two (2) years after the sale.

             9. The enforcement of Kendall L. Rhine’s non-competition
      agreement beyond five years after the sale of [Metro Lift] to
      [Heritage] was not necessary to protect any legitimate business
      interest of [Heritage].

            10. The Kendall L. Rhine non-competition agreement was
      unreasonable in scope and time and greater than necessary to
      protect the goodwill and business interests of [Heritage].

            11. [The] Kendall L. Rhine non-competition agreement would
      be reasonable if limited to a time period not to exceed five (5) years.

             12. Kendall L. Rhine did not take any action prior to the fifth
      year anniversary of the non-competition agreement which violated its
      terms.

            ....

             1. Kendall L. Rhine’s non-competition agreement is
      reformed in that its term is reduced to five (5) years from the date of
      its execution.

            2. Permanent injunctive relief is neither warranted nor
      equitable under the facts of this case.

This appeal followed.

                                         5
                                   Discussion

1. The reasonableness of the noncompete

      In its first issue, Heritage complains of the legal and factual sufficiency of

the evidence supporting the trial court’s finding that the limitations of the

noncompete are unreasonable.

      We may sustain a legal sufficiency challenge only when (1) the record

discloses a complete absence of evidence of a vital fact; (2) the court is barred

by rules of law or of evidence from giving weight to the only evidence offered to

prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a

mere scintilla; or (4) the evidence establishes conclusively the opposite of a vital

fact. Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998),

cert. denied, 526 U.S. 1040 (1999); Robert W. Calvert, “No Evidence” and

“Insufficient Evidence” Points of Error, 38 Tex. L. Rev. 361, 362–63 (1960). In

determining whether there is legally sufficient evidence to support the finding

under review, we must consider evidence favorable to the finding if a reasonable

factfinder could and disregard evidence contrary to the finding unless a

reasonable factfinder could not. Cent. Ready Mix Concrete Co. v. Islas, 228
S.W.3d 649, 651 (Tex. 2007); City of Keller v. Wilson, 168 S.W.3d 802, 807, 827

(Tex. 2005).

      When reviewing an assertion that the evidence is factually insufficient to

support a finding, we set aside the finding only if, after considering and weighing

all of the evidence in the record pertinent to that finding, we determine that the

                                         6
credible evidence supporting the finding is so weak, or so contrary to the

overwhelming weight of all the evidence, that the answer should be set aside and

a new trial ordered. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986)

(op. on reh’g); Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Garza v. Alviar,

395 S.W.2d 821, 823 (Tex. 1965).

      In his motion for rehearing and motion for consideration en banc, Kendall

L. Rhine argues that this court erroneously applied Texas law. The noncompete

agreement contains a choice of law provision that states, “The laws of the State

of Delaware shall govern this Agreement. The parties hereto agree and consent

to the jurisdiction of the courts in the city and state in which [Kendall L. Rhine]

resides to adjudicate all claims and controversies arising under this Agreement.”

As Rhine pointed out in his brief on appeal, Texas courts will enforce a choice of

law provision unless it is contrary to Texas public policy.      See DeSantis v.

Wackenhut Corp., 793 S.W.2d 670, 677 (Tex. 1990), cert. denied, 498 U.S. 1048

(1991). The court must determine

      first, whether there is a state the law of which would apply under
      section 188 of the Restatement absent an effective choice of law by
      the parties, or in other words, whether a state has a more significant
      relationship with the parties and their transaction than the state they
      chose; second, whether that state has a materially greater interest
      than the chosen state in deciding whether this noncompetition
      agreement should be enforced; and third, whether that state’s
      fundamental policy would be contravened by the application of the
      law of the chosen state in this case.

Id. at 678.

                                        7
      Delaware has a substantial relationship to the parties because Heritage’s

corporate offices are located there.    However, Texas has a more significant

relationship to the parties and the transaction because two of the ten Metro Lift

locations from which Kendall L. Rhine was restricted were located in Texas and

none of the locations were in Delaware.4 Second, Texas has a materially greater

interest than does Delaware in “protecting the justifiable expectations of entities

doing business” in this state.    Id. at 679 (refusing to apply a choice of law

provision because Texas had a materially greater interest than Florida because

Florida’s interest in the contract was “limited to protecting a national business

headquartered in that state”). Finally, in DeSantis, the supreme court explicitly

stated that “the law governing enforcement of noncompetition agreements is

fundamental policy in Texas.”     Id. at 681.   Based on the factors outlined in

DeSantis, we decline to apply Delaware law in this case.

      The Covenants Not to Compete Act states,

      [A] covenant not to compete is enforceable if it is ancillary to or part
      of an otherwise enforceable agreement at the time the agreement is
      made to the extent that it contains limitations as to time,
      geographical area, and scope of activity to be restrained that are
      reasonable and do not impose a greater restraint than is necessary
      to protect the goodwill or other business interest of the promisee.

      4
      The locations were Charlotte and Mooresville, North Carolina; Dallas and
Grand Prairie, Texas; Houston, Texas; Louisville, Kentucky; Nashville,
Tennessee; Epping, New Hampshire; Boston and Taunton, Massachusetts; New
Orleans, Louisiana; St. Louis, Missouri; and Greensboro, North Carolina.

                                         8
Tex. Bus. & Com. Code Ann. § 15.50(a) (West 2011).             A covenant not to

compete is a restraint of trade and unenforceable as a matter of public policy

unless it meets a reasonableness standard.        Juliette Fowler Homes, Inc. v.

Welch Assocs., 793 S.W.2d 660, 662 (Tex. 1990); Martin v. Credit Prot. Ass’n,

793 S.W.2d 667, 668 (Tex. 1990). Whether an agreement not to compete is a

reasonable restraint of trade is a question of law for the court. Peat Marwick

Main & Co. v. Haass, 818 S.W.2d 381, 388 (Tex. 1991); Martin, 793 S.W.2d at

668–69.   Restraints are unreasonable if they are broader than necessary to

protect the legitimate interests of the employer. DeSantis, 793 S.W.2d at 681–

82; Henshaw v. Kroenecke, 656 S.W.2d 416, 418 (Tex. 1983).

      The trial court found that the noncompete was unreasonable in both scope

and time. The only reformation the trial court made, however, was to the time

period, and the trial court found that the noncompete would be reasonable if it

were reduced to five years.5 Thus, we will evaluate only whether the ten-year

prohibition period is unreasonable.

      5
        In his motion for rehearing and motion for reconsideration en banc,
Kendall L. Rhine claims that the trial court “also reformed the agreement so as to
specifically limit the scope of activity being restricted therein.” But, as Rhine
notes, the trial court’s judgment states

             The Court . . . finds that the limitations set forth in the Non-
      Competition Agreement between [Heritage] and [Kendall L. Rhine] is
      unreasonable as to time and scope of activity and is greater than
      would be necessary to protect the goodwill and business interests of
      [Heritage].    [The] Non-Competition Agreement is reformed by
      reducing the period of limitation to five (5) years. The Court further
      finds that the scope of activity in Section 1(e) of the Non-Competition

                                        9
      We first note that it was Kendall L.’s burden to establish that the

noncompete limitations were greater than was necessary. Tex. Bus. & Com.

Code Ann. § 15.51(b) (West 2011) (stating that it is the promisor’s burden to

establish that the noncompete is not reasonable when the primary purpose of the

agreement to which the covenant is ancillary is not to obligate the promisor to

render personal services).     To meet this burden, Kendall L. argued that the

evidence was that any confidential information eroded in value quickly. However,

Kendall L. has not addressed Heritage’s claim that it also bought Metro Lift’s

goodwill.

      Goodwill is a protectable, valuable interest, and parties may determine its

value and contract for its sale. Marsh USA Inc. v. Cook, 354 S.W.3d 764, 777

(Tex. 2011) (“Texas law has long recognized that goodwill, although intangible, is

property and is an integral part of the business just as its physical assets are.”).

Goodwill is defined as a “business’s reputation, patronage, and other intangible

      Agreement is partially ambiguous and should be construed to
      include the language “engages in the propane cylinder exchange
      business” so that it reads as follows:

                   (e) Provide to, arrange for, guarantee funds, or arrange
      for product supply or customer tank or cylinder purchases to any
      person who engages in the propane cylinder exchange business in
      the Restricted Area.

The judgment clearly states that the only reformation made was to the time
period. The trial court construed the scope of activity to include language
that was unintentionally omitted from one of the six prohibited activities, but
was identical to language in all of the other noncompete agreements. This
change did not reduce the scope of activity.

                                         10
assets that are considered when appraising the business, esp[ecially] for

purchase; the ability to earn income in excess of the income that would be

expected from the business viewed as a mere collection of assets.” Black’s Law

Dictionary 763 (9th ed. 2009).

        Kendall L. presented evidence through a number of witnesses that some

intangible interests (specifically, customer and pricing lists) eroded in the first five

years after the sale, but he did not present evidence that all of Metro Lift’s

intangible interests eroded in the first five years. Tom Harlan, another former

owner of Metro Lift, testified that any customer and pricing lists that were sold

with Metro Lift would have no value after five years. Harlan was not asked about

the value of Metro Lift’s goodwill. The only evidence on goodwill came from Eric

Beatty, chief legal officer of Heritage, who testified,

        [O]ne of those critical assets that Heritage can purchase is the future
        patronage of those customers. Goodwill. And one of the most
        critical concerns that I—I feel comfortable saying on behalf of
        Heritage is that we have the ability to ensure that we can protect that
        future patronage. And the only way to do that is to ensure that our
        seller, who knows that business infinitely better than we do for that
        location, will not come back in and take that goodwill right back.

Beatty testified that the parties valued Metro Lift’s goodwill and other intangible

assets at the time of closing and attributed $7 million of the purchase price to

them.

        A noncompete signed by an owner selling a business is quite different than

one signed by an employee. Marsh USA Inc., 354 S.W.3d at 790 n.5 (noting that

section 15.50 does not address the “distinction between what type of agreement

                                          11
is enforceable to protect goodwill in the context of the sale of a business and the

context of a post-employment restriction”); see Hill v. Mobile Auto Trim, Inc., 725
S.W.2d 168, 177 (Tex. 1987) (Gonzalez, J., dissenting) (noting that courts

“scrutinize covenants not to compete in employment relationships more closely

than covenants not to compete associated with the sale of a business”),

superseded by statute, Tex. Bus. & Com. Code Ann. § 15.50(a). Courts have

been more inclined to enforce a long or limitless time period barring competition

after a sale of a business. See, e.g., Oliver v. Rogers, 976 S.W.2d 792, 801

(Tex. App.—Houston [1st Dist.] 1998, pet. denied) (holding that a lack of a time

limitation did not render noncompete unreasonable as a matter of law);

Greenstein v. Simpson, 660 S.W.2d 155, 159 (Tex. App.—Waco 1983, writ ref’d

n.r.e.) (“[A] person may agree[] in connection with the sale of his business[] not to

re-enter a similar competitive business for the remainder of his life.”); York v.

Dotson, 271 S.W.2d 347, 348 (Tex. Civ. App.—Fort Worth 1954, writ ref’d n.r.e.)

(“One may lawfully agree not to compete in a particular business, in a reasonably

limited territory, during the remainder of his life. Such contracts are held not to

be in restraint of trade.”); Clay v. Richardson, 290 S.W. 235, 236 (Tex. Civ.

App.—Fort Worth 1926, writ dism’d w.o.j.) (upholding covenant of theater seller

never to open a theater again in town where theater was located).

      Kendall L. is “semiretired,” does not live in Texas, and he has ownership

interests in propane cylinder exchange companies in locations across the

country, including Florida, Illinois, Indiana, and Alabama. Kendall L. presented

                                         12
no evidence of any great hardship borne by him by staying out of the Grand

Prairie area, nor did he demonstrate any injury to the public that outweighs the

legitimate benefits that the negotiated noncompete granted to Heritage.      See

DeSantis, 793 S.W.2d at 681–82 (noting that a noncompete is reasonable if

neither hardship to the promisor nor public injury outweighs the covenant’s

legitimate benefits to the promisee).

          Kendall L. was represented by counsel during the sale negotiations. He

testified that although Heritage drafted the contracts, he and his attorney

negotiated terms of the sale.      He was aware that if he did not agree to a

noncompete, there would be no deal with Heritage, and he did not think there

was anything unfair about Heritage’s request that he sign a noncompete.

Kendall L. testified that he fully understood he would be bound by the

noncompete and that he could open up propane cylinder exchange businesses

anywhere in the country except within seventy-five miles of the listed prohibited

cities.    When asked at trial if he thought it was fair to him that he sign the

noncompete, he responded, “Yeah, I got money for it.”       Heritage valued the

intangible assets of Metro Lift at $7 million and had the former owners sign

noncompete agreements to protect the value of those intangibles, including

Metro Lift’s goodwill. Kendall L. was paid half a million dollars separately from

                                        13
the sale of the business to agree to the ten-year noncompete period, and

Heritage has paid Kendall L. the agreed-to price.6

      Based on the evidence described above, we do not believe that Kendall L.

demonstrated that it was unreasonable of Heritage to protect its $7 million

investment for a period of ten years. Nor, as discussed above, do we believe

that a ten-year noncompete period is unreasonable as a matter of law when

ancillary to a contract for the sale of a business. See Oliver, 976 S.W.2d at 801;

Greenstein, 660 S.W.2d at 159.         We hold that the evidence is legally and

factually insufficient to support the trial court’s finding that the limitations of the

noncompete are unreasonable. We sustain Heritage’s first issue.

2. Permanent injunction

      In its second issue, Heritage argues that the trial court erred by refusing to

enter a permanent injunction against Kendall L. to enforce the noncompete.

      The noncompete agreement included a provision that allowed for injunctive

relief. The provision read,

             [Kendall L. Rhine] agrees that the covenants contained in this
      section relate to matters which are of special and unique character
      which give Heritage peculiar value impossible of replacement, and
      for the lack of which Heritage cannot be reasonably or adequately
      compensated in damages . . . . [I]f [Kendall L. Rhine] should breach

      6
       It would seem that if the noncompete were unenforceable, then the price
paid for the unenforceable promise would also be unenforceable. See Sheline v.
Dun & Bradstreet Corp., 948 F.2d 174, 177 (5th Cir. 1991) (“The covenant not to
compete and the severance compensation clause were mutually dependent
promises, and as such, the unenforceability of one necessarily rendered the
other unenforceable.”).

                                          14
          this Agreement, Heritage’s damages will be difficult to determine, if
          not impossible to determine. Therefore, [Kendall L. Rhine] expressly
          agrees that in addition to the right to recover damages, Heritage
          shall be entitled to injunctive and/or equitable relief to prevent a
          breach hereof, and to secure the enforcement hereof.

          The decision to grant or deny a permanent injunction is ordinarily within the

sound discretion of the trial court. Butnaru v. Ford Motor Co., 84 S.W.3d 198,

204 (Tex. 2002).

          Under the common law, a party seeking an injunction must show that

without injunctive relief he will suffer irreparable injury for which he has no

adequate legal remedy. Tom James Co. v. Mendrop, 819 S.W.2d 251, 252 (Tex.

App.—Fort Worth 1991, no writ). However, in its motion for rehearing, Heritage

notes that if a party relies on a statute that defines the requirements for injunctive

relief,    then   the   express   statutory    language   supersedes    common     law

requirements. Butler v. Arrow Mirror & Glass, Inc., 51 S.W.3d 787, 795 (Tex.

App.—Houston [1st Dist.] 2001, no pet.). The Covenants Not to Compete Act

provides for “damages, injunctive relief, or both” for a breach of a noncompete by

the promisor. Tex. Bus. & Com. Code Ann. § 15.51(a). Thus, a party seeking

injunctive relief under the Covenants Not to Compete act does not have to show

irreparable injury for which he has no adequate legal remedy as a prerequisite to

injunctive relief. See Letkeman v. Reyes, 299 S.W.3d 482, 486 (Tex. App.—

Amarillo 2009, no pet.) (“It is enough simply to prove a distinct or substantial

breach.”); see also Tex. Bus. & Com. Code Ann. § 15.52 (stating that “the

procedures and remedies . . . provided by Section 15.51 . . . are exclusive and

                                              15
preempt any other criteria for enforceability of a covenant not to compete or

procedures and remedies in an action to enforce a covenant not to compete

under common law or otherwise”).

      We acknowledge that Heritage is correct that it did not have to show

irreparable injury for which it has no adequate legal remedy in order to secure an

injunction. However, because we are remanding the case for a new trial, we do

not reach a conclusion on Heritage’s second issue. On remand, the trial court

will have the opportunity to review Heritage’s request for injunctive relief again.

3. Damages

      In its third issue, Heritage argues that the jury’s finding that it suffered zero

damages is against the great weight and preponderance of the evidence and is

manifestly unjust. In response to four questions on damages, the jury awarded

zero dollars. After trial, Heritage moved for the entry of judgment, requesting that

the trial court disregard the jury’s answers to the damages questions. Heritage

also moved for a judgment notwithstanding the verdict and a new trial on the

grounds that the $0 damage award was manifestly too small.

      In reviewing an issue asserting that the jury’s failure to make a finding is

“against the great weight and preponderance” of the evidence, we must consider

and weigh all of the evidence and set aside the finding only if the evidence is so

weak or the finding is so contrary to the great weight and preponderance of the

evidence as to be clearly wrong and unjust. Dow Chem. Co. v. Francis, 46
S.W.3d 237, 242 (Tex. 2001); In re King’s Estate, 150 Tex. 662, 665, 244 S.W.2d
16
660, 661 (1951). When there is objective evidence of injury, a jury’s award of

zero damages is against the great weight and preponderance of the evidence.

Horton v. Denny’s Inc., 128 S.W.3d 256, 260 (Tex. App.—Tyler 2003, pet.

denied); Davis v. Davison, 905 S.W.2d 789, 791 (Tex. App.—Beaumont 1995, no

writ).

         Heritage presented the testimony of Mark Rambin, a certified public

accountant. Rambin reviewed the sales transactions and financial statements of

Metro Lift from 2004 to mid-2010 and “certain financial information” from DFW

Propane, and he rendered an opinion on Heritage’s lost net profits from 2009

through the end of the noncompete period in 2013. DFW Propane produced in

discovery eighteen sales contracts it had with former Heritage customers. In

2008, Heritage had made a net profit of $72,000 from those customers. Rambin

then made a projection of what the future sales to those eighteen customers

would have been from 2010 through 2013.          He estimated that Heritage lost

$287,970 in net profit from the loss of those customers. Rambin then applied a

“discount” to “account[] for the risk that a business activity may not happen as it

was projected to happen.” The discount accounts for lost customers, changes in

the economy, and “any variable that might impact the ability of the business to

achieve its objectives.”    Rambin’s adjusted lost net profit estimation was

$235,202.

         Kendall L. did not present a competing expert, but he did challenge

Rambin’s calculations because one of the companies with a contract with DFW

                                        17
Propane, Ram Tool, did not ultimately buy its propane from DFW Propane.

Rambin responded,

      I’m not certain it impacts [the projected lost net profits], because as I
      was able to see, those sales [to Ram Tool] did tail off. So Heritage
      lost that business. There’s a contract showing that DFW [Propane]
      somehow had some contact with them and ultimately Heritage lost
      that business. So I’m not certain it has an impact on that calculation.

      Kendall L. also implied that another former customer, Big D Clutch, was no

longer in business. Rambin explained that it would not affect his calculation

because “that’s the type of thing that the discount rate and the fact that I didn’t

increase the sales adjusts for. Those types of business risks are part of that

calculation.” This “discount” he applied to his projection “takes into consideration

the time value of money, the interest factor, as well as the business risk factor.”

He defined the business risk factor as “[a]ny type of uncertainty[] that a business

might go out of business, the economy might change, different things might

happen.” Thus, he explained the discount rate accounted for companies like Big

D Clutch going out of business.

      Kendall L. presented testimony from five former customers of Metro Lift

who had signed contracts with DFW Propane. All five former customers testified

that they left Metro Lift for DFW Propane because DFW Propane offered a better

price. Only two customers testified that they were actively looking for a new

provider, and only one of those could testify that he recalled that he contacted

DFW Propane before DFW Propane contacted him. The other three testified that

DFW Propane solicited them. That DFW Propane offered a lower rate might

                                         18
explain why a customer might have left Metro Lift for DFW Propane, but it is not

any defense to Metro Lift’s contention that it lost business because of DFW

Propane’s presence in its area. DFW Propane’s own witnesses demonstrated

that Metro Lift lost customers because DFW Propane took them. Even if Kendall

L. challenged Rambin’s methodology in making his future lost profit projections,

Kendall L. did not challenge the evidence, including signed contracts produced

by DFW Propane, that Metro Lift’s former customers left Metro Lift for DFW

Propane.

     Thus, while there was evidence that not all of the contracts DFW Propane

provided resulted in sales, there was uncontroverted evidence that Metro Lift did

lose some sales to DFW Propane. See D/FW Commercial Roofing Co. v. Mehra,

854 S.W.2d 182, 187 (Tex. App.—Dallas 1993, no writ) (“A party must show

either a history of profitability or the actual existence of future contracts from

which lost profits can be calculated with reasonable certainty.”). Those contracts,

along with Rambin’s testimony on Metro Lift’s financial records, also provided

some evidence of how much profit Metro Lift lost from those customers. See ERI

Consulting Eng’rs, Inc. v. Swinnea, 318 S.W.3d 867, 876 (Tex. 2010) (“Recovery

for lost profits does not require that the loss be susceptible of exact calculation.”)

(quoting Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 84 (Tex. 1992)).

There is therefore some objective evidence of the damages Heritage suffered.

See Horton, 128 S.W.3d at 260. Thus, after having considered the evidence

admitted, we hold that the evidence is factually insufficient to support a finding of

                                         19
zero damages, so as to be manifestly unjust, and we sustain that part of

Heritage’s third issue.7   We do not, however, hold that Heritage proved the

amount of its damages as a matter of law. See Dow Chem. Co., 46 S.W.3d at

241 (noting that a “matter of law” issue “should be sustained only if the contrary

proposition is conclusively established”).        Although the contracts provide

reasonably certain evidence of lost profits, Kendall L. disputed that all of the

contracts led to sales. A lost profits calculation “is a fact intensive determination,”

Holt Atherton Indus., 835 S.W.2d at 84, and it is not our province to “find facts,”

Pool, 715 S.W.2d at 634. Because we cannot say that Heritage established its

damages as a matter of law, we cannot render a damages award. See Guevara

v. Ferrer, 247 S.W.3d 662, 670 (Tex. 2007) (nothing that when there is evidence

to support some damages it is not appropriate to render judgment but it is

appropriate to remand for a new trial).

     On rehearing, Kendall L. Rhine argues that the trial court abused its

discretion in failing to exclude Rambin’s testimony. Rhine argues that Rambin’s

      7
        In his motion for rehearing and motion for reconsideration en banc,
Kendall L. Rhine argues that by so holding, this court “has chosen to essentially
act as ‘jury number two’ and substitute [our] judgment for that of the jury.” Rhine
assumes that the jury failed to award damages because it did not find Heritage’s
witnesses’ testimony credible and that no evidence presented at trial establishes
a causal link between Rhine’s breach and Heritage’s lost profits. Taking Rhine’s
assumption as true that the jury awarded zero damages because Heritage did
not demonstrate causation, the testimony of Rhine’s own witnesses who stated
that they left Metro Lift for DFW Propane and Rambin’s testimony that Metro Lift
would have made a certain profit from those customers is evidence that DFW
Propane caused Metro Lift to lose profits.

                                          20
testimony was not reliable because it was based on speculation and not on

objectively verifiable data.   To determine whether a trial court abused its

discretion, we must decide whether the trial court acted without reference to any

guiding rules or principles; in other words, we must decide whether the act was

arbitrary or unreasonable. Low v. Henry, 221 S.W.3d 609, 614 (Tex. 2007); Cire

v. Cummings, 134 S.W.3d 835, 838–39 (Tex. 2004). An appellate court cannot

conclude that a trial court abused its discretion merely because the appellate

court would have ruled differently in the same circumstances. E.I. du Pont de

Nemours & Co. v. Robinson, 923 S.W.2d 549, 558 (Tex. 1995); see also Low,
221 S.W.3d at 620. Expert testimony is admissible when the expert is qualified

and the testimony is relevant and based on a reliable foundation. See Robinson,
923 S.W.2d at 554. Rhine only challenges Rambin’s testimony on the grounds

that it was not based on a reliable foundation.

     Prior to trial, Rhine moved to exclude Rambin’s testimony as unreliable

because Rambin’s opinion was based on “illustrations of potential lost profits”

and based on clients that Heritage believed, but had not verified, that it had lost

to Metro Lift.   Rambin’s deposition testimony, attached to Rhine’s motion to

exclude and Heritage’s response to the motion, shows that he had received

historical sales information from Heritage and had requested sales information

from DFW Propane, but had not yet received it. Prior to his deposition, Rambin

produced documents to Rhine demonstrating “how [he] would intend to calculate

[a lost profit estimate] if—based on if we got the complete information.”       He

                                        21
explained, “I have not been provided with the detailed sales information for DFW

Propane, and that—I believe that information is going to be more determinative

of what DFW Propane has actually done and that would be more indicative of the

lost profits that Metro Lift would have incurred relative to the matters at issue in

this lawsuit.” Rambin testified that he

      got the detailed sales information by customer, by transaction, for—I
      believe going back to sometime in 2005 to essentially the present
      and analyzed that information on a customer-by-customer basis,
      including the cost of sales, and analyzed persistency of customer
      relationships, the profitability of customer relationships, the volume of
      customer relationships.

      The trial court overruled Rhine’s objections.     Right before trial, Rambin

submitted revised calculations that included the “discount” rate. Rhine objected

again, and the trial court overruled Rhine’s objection again, stating, “If the only

difference between his opinion as of before 30 days prior to trial and the

supplement . . . is discount, I anticipate that that will probably be an area of

cross-examination or rebuttal.”      On rehearing, Rhine objects to Rambin’s

testimony on the grounds that (1) Rambin’s opinions were projections and not

based on hard facts; (2) Rambin could not verify which customers actually moved

their business to DFW Propane; and (3) Rambin “did not know the cost of

propane in 2011, 2012, and 2013 or what Heritage’s margins would be in the

future.”

      Rambin’s methodology of using Metro Lift’s historical sales data before and

after DFW Propane’s entry into the market and then projecting Heritage’s lost

                                          22
future profits is an acceptable method for calculating lost profits. See Swinnea,
318 S.W.3d at 877 (“Contrasting revenue from a time period immediately before

the period at issue is an established method of proving revenue for a lost profit

damages calculation.”); Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 505 (Tex.

2001) (noting that damages can be shown with reasonable certainty by a profit

history or some other objective data such as future contracts); White v. Sw. Bell

Telephone Co., 651 S.W.2d 260, 262 (Tex. 1983) (noting that pre-existing profits

are admissible to show projected lost profits with reasonable certainty). That

Rambin, when he testified on October 22, 2010, could not foretell the cost of

propane in 2011, 2012, or 2013 does not mean that his calculations are

unreliable. Rambin used competent, historical data to compute past trends and

to make estimations about future sales. This is more than mere speculation.

See Helena Chem. Co., 47 S.W.3d at 506 (holding that evidence of past net

profits coupled with facts and circumstances of future costs was sufficient to

support award of estimated future profits). It is true that Rambin’s calculations

included customers that Heritage believed it lost because of Kendall L. Rhine’s

breach of the noncompete but, in fact, had not lost because of the breach.

“Weaknesses of the facts, however, in support of an expert’s opinion go to the

weight of his testimony not its admissibility.” Tenngasco Gas Gathering Co. v.

Bates, 645 S.W.2d 496, 498 (Tex. App.—Corpus Christi 1982, writ ref’d n.r.e.)

(holding that trial court did not err in admitting expert testimony on value of

property when expert based his opinion on the value of other, arguably similar

                                       23
property).     On cross-examination, Rhine properly challenged whether the

customers in question left Heritage because of Rhine’s breach of the

noncompete. See Swinnea, 318 S.W.3d at 878 (noting that the defendant bears

the burden of proving that “an otherwise complete lost profits calculation is in fact

missing relevant credits”).    Thus, we cannot say the trial court abused its

discretion in admitting Rambin’s expert testimony. We overrule Rhine’s cross

issue.     Because we have sustained Heritage’s third issue as to factual

insufficiency, we do not need to address Heritage’s fourth issue (regarding

nominal damages) or fifth issue (regarding the exclusion of evidence). See Tex.

R. App. P. 47.1; see also MBM Fin. Corp. v. Woodlands Operating Co., 292
S.W.3d 660, 665 (Tex. 2009) (“[N]ominal damages are not for compensation;

they are for cases in which there are no damages, or none that could ever be

proved.”).

                                    Conclusion

         Having sustained Heritage’s first issue and part of its third issue, and

having declined to reach its fourth and fifth issues, we reverse the trial court’s

judgment as to the reasonableness of the noncompete and as to damages. Our

resolution does not disturb the jury’s findings on liability.     However, we are

required to remand this proceeding for a new trial on liability and damages. See

Tex. R. App. P. 44.1(b) (prohibiting a separate trial solely on unliquidated

damages when liability is contested); see also Estrada v. Dillon, 44 S.W.3d 558,

562 (Tex. 2001) (stating party’s failure to present on appeal an additional discrete

challenge to liability when party challenges damages does not defeat plain

                                         24
language of rule 44.1(b)). We therefore reverse the trial court’s judgment and

remand for a new trial.

                                                LEE GABRIEL
                                                JUSTICE

PANEL: GARDNER, MEIER, and GABRIEL, JJ.

DELIVERED: June 21, 2012

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