Court Opinion

ID: 2988278
Source: CourtListenerOpinion
Date Created: 2015-09-23 02:26:23.898697+00
Date Added: 2024-06-11T11:44:53.925138
License: Public Domain

Affirmed and Memorandum Opinion filed November 29, 2012.

                                                 In The

                           Fourteenth Court of Appeals

                                        NO. 14-11-00940-CV

 ROBERT PARKER, OSCAR MACIAS, AND PARKER MAC, LLC, Appellants

                                                    V.

                                        HTR, INC., Appellee

                       On Appeal from the County Court at Law No. 3
                                   Harris County, Texas
                              Trial Court Cause No. 947736

                       MEMORANDUM OPINION
      Appellants Robert Parker, Oscar Macias, and Parker Mac, LLC assert that the trial
court erred in concluding that they breached an oral commission agreement with appellee
HTR, Inc. In four issues, they assert that (a) the agreement at issue is unenforceable
because it violates the statute of frauds provision of the Texas Uniform Commercial
Code—Sales (the ―Texas UCC‖);1 (b) because the agreement is unenforceable, attorney’s

      1
          See Tex. Bus. & Com. Code § 2.101 (short title), § 2.201 (statute of frauds).
fees were not appropriate; and (c) the evidence is legally and factually insufficient to
support part of the trial court’s damages award. We affirm.

                                         BACKGROUND

       This suit arose because Mike Starling, president of HTC, Inc., discovered that
Robert Parker and Oscar Macias sold industrial equipment directly to two customers
Starling had referred to them: Morris Industries and Ellison Technologies. HTC sued
Parker, Macias, and the company they formed, Parker Mac LLC, in September 2009,
seeking a ten-percent commission on the proceeds from these sales. The case was tried to
the bench on June 8, 2011. The following evidence was presented.

       Parker and Macias began building industrial equipment together in 2005 in the
Midland, Texas area, apparently working under the name of ―Parker Mac Fabrication.‖2
Parker primarily managed the financial side of the business, while Macias was tasked
with fabrication and some bidding of projects. Macias had been acquainted with Starling
since the mid-1980s. Starling’s company, HTR, is located in the Houston area. Starling
had referred business to Macias over the course of their acquaintance. Starling continued
to refer customers to Parker and Macias once the two went into business together. HTR
generally received a commission from the sales Starling referred to Parker Mac
Fabrication, although the parties never had any formal, written agreement.

       Parker testified that, customarily, when Starling referred sales to Parker Mac
Fabrication, he and Macias would submit quotes to HTR based on specifications
provided by Starling. HTR would mark up the equipment prices and provide quotes to
customers for the equipment. When the bid was accepted by the end customer, HTR
would pay Parker Mac Fabrication half for the equipment up-front and the other half
when the job was completed. Parker would not see the final invoice provided to the
customer, so he was not aware of the exact amount of HTR’s commission on these sales.
       2
          On January 13, 2009, Parker and Macias completed a certificate of formation of Parker Mac,
LLC. This certificate of formation, by its terms, became effective when the document was filed by the
Texas Secretary of State on March 27, 2009. The certificate of formation was admitted into evidence.
The sales that form the basis of this suit, however, occurred prior to the formation of Parker Mac, LLC.

                                                   2
Parker testified that he, Macias, and Starling/HTR had successfully completed about
seven or eight jobs working in this manner. Parker agreed that a ten percent commission
would not be unreasonable for providing this type of referral service.

       Starling described their business together as follows: ―Sometimes they [Parker,
Macias, and Parker Mac Fabrication] would send me a quote that was my cost.
Sometimes [Macias] would send me a quote and say that your commission of ten percent
is built into this price.‖ He stated that they ―had the same terms on almost every deal. It
was either 50 percent down and 50 percent upon shipment or 50 percent down and 40
percent upon shipment, 10 percent upon installation.‖ Starling testified that generally, he
had been paid a ten percent commission by other industrial manufacturers when he sold
their equipment, that he built a ten percent commission into the ―deals‖ he worked with
Parker Mac Fabrication, and that he works on a ten percent commission at the present
time. He acknowledged on cross examination that he had no records to show that he had
ever billed Parker, Macias, or Parker Mac Fabrication directly for his commissions;
rather, he testified that he was paid by invoicing the ―end customer.‖ He stated that if he
was sent a ―net figure‖ from Macias, he would mark the price up before he sent it to the
customer, but that if he was sent a ―gross figure,‖ he would not.

       Starling testified that he and Parker Mac Fabrication had an agreement that ―[a]ny
deal [he] brought to the table, [he] was entitled to a commission upon.‖ Starling further
testified that he had had a conversation with both Parker and Macias in which Parker had
assured him that any customer Starling brought to Parker and Macias would ―always‖ be
Starling’s. Starling testified that a ten percent commission is ―a common commission
paid on machinery sales.‖

       Regarding the specific sales in question, the parties testified as follows. Starling
testified that in September 2007, he was contacted by Mike Stern of Morris Industries.
Morris Industries is located in New Jersey. Morris Industries was looking to purchase
pipe feed and turning tables. Starling explained that HTC initially provided the quotes to
Morris Industries and that he worked with Macias in preparing several quotes regarding

                                             3
these tables, communicating ―back and forth‖ with Mike Stern. According to Starling,
Stern wanted to visit the location where the tables were built. Starling informed Stern
that the tables were built in Midland, Texas and told Parker that Stern wanted to visit
their site. Stern visited the site where the tables were fabricated.

       On November 25, 2008, Gregg Edwards, the office manager for Parker Mac
Fabrication, provided an equipment price quote directly to Stern at Morris Industries.
This quote was for fabrication and installation of three equipment tables, for a total price
of $156,000.00. This quote was sent via email, and a copy of the email was sent to
Starling at HTR.3 Morris Industries accepted the quotation, ordered the tables from
Parker Mac Fabrication, and paid for them. HTR did not receive any commission on the
sale of this equipment. On January 29, 2009, HTR invoiced Parker Mac Fabrication for
one-half of ―commission due for Morris Pipe & Supply Co.‖ HTR invoiced Parker Mac
Fabrication for $7,800, a ten percent commission on half of the total sale to Morris. HTR
invoiced Parker Mac Fabrication for the remaining half of the ten percent commission on
March 11, 2009. Both invoices were admitted as evidence.

       Parker testified that Starling was not owed any commission for this sale because
he had not referred this job to Parker Mac Fabrication. Instead, according to Parker,
another individual had referred this job to Parker Mac Fabrication. Parker did not dispute
the equipment price reflected in the invoice.

       Starling testified that Ellison Technologies was the ―very first customer‖ he
brought to Parker Mac Fabrication in 2004 or 2005. Starling received commissions for
the Ellison Technologies sales he referred to them. Parker and Macias sold additional
equipment directly to Ellison Technologies in 2007 and again in 2008. Starling was not
paid a commission on these later sales to Ellison Technologies. The record contains an
undated invoice from HTR to Parker Mac Fabrications reflecting commissions due on
―work performed on or about: 03/01-06/01/2007 & 11/24/2008‖ for equipment sold to

       3
           This email and quote were admitted into evidence.

                                                    4
Ellison Technologies. This invoice also reflects a ten percent commission owed on
equipment sold to Ellison; the total amount invoiced was $6,525.

       Parker testified that the jobs reflected in this invoice were not jobs that Starling or
HTR brought to Parker Mac Fabrication. Parker explained that, although HTR initially
referred Ellison Technologies to Parker Mac Fabrication, the equipment sales in the
invoice were obtained through Parker Mac Fabrication’s employee’s ―own efforts.‖
Parker did not dispute the sales price of the equipment reflected in the invoice. Starling
admitted that he had not directly referred the sales at issue in this invoice to Parker Mac
Fabrication.   According to Starling, Parker acknowledged that he owed HTC the
commissions on the sales to Morris Industries and Ellison Technologies, but Parker was
unable to pay these commissions because he was ―in financial distress.‖

       Starling’s attorneys testified regarding their fees, and the trial court took the matter
under advisement. On July 26, 2011, the trial court signed a judgment in favor of HTR,
awarding it $22,125.00 in damages and $18,000 in attorney’s fees. The trial court signed
findings of fact and conclusions of law on September 20, 2011. This appeal timely
ensued thereafter.

                                        ANALYSIS

A.     Statute of Frauds

       In their first issue, Parker, Macias, and Parker Mac, LLC assert that their oral
agreement with HTC is barred by the statute of frauds provision contained in the Texas
UCC. This provision provides, in pertinent part, as follows:

       Except as otherwise provided in this section a contract for the sale of goods
       for the price of $500 or more is not enforceable by way of action or defense
       unless there is some writing sufficient to indicate that a contract for sale has
       been made between the parties and signed by the party against whom
       enforcement is sought or by his authorized agent or broker.
Tex. Bus. & Com. Code § 2.201(a).

                                              5
        The statute of frauds is an affirmative defense that must be pleaded or it is waived.
See Tex. R. Civ. P. 94. However, appellants never raised the Texas UCC statute of
frauds in the underlying proceedings. Rather, they raised the general statute of frauds
codified in Texas Business & Commerce Code section 26.01(b)(3).4 The general statute
of frauds provides, in pertinent part, that an agreement that is not to be performed within
one year is not enforceable unless the agreement is in writing and signed by the person to
be charged with the agreement. Id. § 26.01.

        Regardless of its applicability to the facts of this case, appellants have abandoned
their general statute of frauds argument on appeal. And because they did not raise the
Texas UCC statute of frauds below, they have waived that affirmative defense. 5 See Tex.
R. Civ. P. 94; see also Adams v. H & H Meat Prods., Inc., 41 S.W.3d 762, 776 (Tex.
App.—Corpus Christi 2001, no pet.) (holding that because appellant pleaded affirmative

        4
          Appellants pleaded the statute of frauds as a bar to HTC’s recovery in their answer, asserting
that ―claims arising from an oral contract within the statute of frauds are fatally flawed and may be
dismissed without opportunity to amend‖ and citing to Zaremba v. Cliburn, 949 S.W.2d 822 (Tex.
App.—Fort Worth 1997, writ denied). This case involved an oral contract subject to the general statute of
frauds. See id. at 826–27 (citing section 26.01 of the Texas Business & Commerce Code). Appellants
make no mention of a contract for the sale of goods in their answer.
        5
          Appellants have not claimed that this issue was tried by consent. See Tex. R. Civ. P. 67.
Further, no mention of the UCC is made anywhere in the reporter’s record. In fact, the only reference to
the sale of goods or products during the bench trial is the following exchange between appellants’
attorney and Starling, which has no bearing on the Texas UCC statute of frauds:
        Q. Now, sir, your role in all of this is to, I take it, distribute products for the defendant --
        is that correct -- or the defendants; is that correct?
        A. Distribute products --
        Q. Sell products?
        A. No, I am selling products.
        Q. Okay. The focus is to sell their goods; is that correct?
        A. Yes.
        Q. And no money ever is given to you unless a sale occurs; is that right?
        A. That’s correct.
        Q. And you would agree the dominant factor in a sale would be the sale of the products
        of the defendants as far as this whole transaction you’ve sued over; is that correct?
        A. That’s correct.

                                                       6
defense only under Texas UCC statute of frauds and failed to plead affirmative defense
under general statute of frauds, he had waived general statute of frauds defense on
appeal). Accordingly, we overrule appellants’ first issue.

        Further, in light of our disposition of appellants’ first issue, we need not address
their second issue in which they claim HTC was not entitled to attorney’s fees because
HTR’s breach of contract claim was barred by the Texas UCC.6

B.      Legal and Factual Sufficiency of the Evidence

        In their third and fourth issues,7 appellants challenge the legal and factual
sufficiency of the evidence to support the trial court’s findings and conclusions regarding
the sales and commissions related to Ellison Technologies. They specifically challenge
the following findings and conclusions:

            2. Plaintiff and Defendants had an enforceable oral contract in which
               Defendants promised to pay, and/or understood regardless of how or
               to whom payment for the sales was made, that Plaintiff was entitled
               to receive a ten percent (10%) of funds received commission on
               sales from business Plaintiff referred to Defendants as is further
               detailed in Findings of Fact 3-5.
            3. Plaintiff referred two clients to Defendants for which it was entitled
               to the ten percent (10%) contractual commission, Morris Industries
               and Ellison Technologies for FMC Corporation. As a direct result of
               those referrals, Defendants sold goods and services to Morris
               Industr[ies] and received payment for same of $156,000; and
               Defendants sold goods and services to Ellison Technologies for
               FMC Corporation and received payment for same of $65,250.
            4. Neither of the sales described in Finding of Fact No. 3 would have
               been possible or occurred without the efforts of HTR, Inc. Plaintiff
               identified the need of the buyers, had extensive conversations with
               them concerning the orders, and coordinated much of the

        6
         We note that appellants did not object to attorney’s fees on this basis. The only objection
lodged to the testimony regarding attorney’s fees at the bench trial was that HTC had not disclosed the
amount of attorney’s fees in response to appellants’ requests for disclosures.
        7
           Appellants cite no legal authority whatsoever in this section of their brief. See Tex. R. App. P.
38.1(i) (―The brief must contain a clear and concise argument for the contentions made, with appropriate
citations to authorities and to the record.‖ (emphasis added.)).

                                                     7
                 communication between Defendants, the manufacturers of the
                 equipment, and buyers.
            5. Plaintiff, through its material and significant efforts in making the
               sales described in Finding of Fact 3, earned the ten percent (10%)
               commission, which commission is standard in the industry.
            6. Defendants breached their contract with Plaintiff by refusing to pay
               the commissions to Plaintiff, Plaintiff suffered determinable
               monetary damages as a result of the breach, and Plaintiff is entitled
               to recover its damages from Defendants. The commissions that
               remained unpaid on April 9, 2009, $22,125, are the damages.

      Findings of fact ―have the same force and dignity‖ as a jury’s verdict and are
reviewable under the same standards of legal and factual sufficiency. BMC Software
Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). When a legal sufficiency
challenge concerns an issue on which the appellant does not bear the burden of proof, the
court of appeals reviews it under a ―no evidence‖ standard:

      ―No evidence‖ points must, and may only, be sustained when the record
      discloses one of the following situations: (a) a complete absence of
      evidence of a vital fact; (b) the court is barred by rules of law or of
      evidence from giving weight to the only evidence offered to prove a vital
      fact; (c) the evidence offered to prove a vital fact is no more than a mere
      scintilla; (d) the evidence establishes conclusively the opposite of the vital
      fact.

City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005). When a party attacks the
factual sufficiency of a finding, we set it aside only if it is so contrary to the
overwhelming weight and preponderance of the evidence that it is clearly wrong and
manifestly unjust. Hartis v. Century Furniture Indus., Inc., 230 S.W.3d 723, 734 (Tex.
App.CHouston [14th Dist.] 2007, no pet.).

      Even if we were to agree with appellants that there is no support for findings four
and five regarding the specific efforts HTC undertook in regards to the equipment sales to
Ellison Technologies,8 we conclude that there is ample support in the record for findings
two, three, and six.          First, as discussed above, Starling testified that he had an

      8
          As noted above, Starling testified that he did not ―directly‖ refer these sales to appellants.

                                                       8
arrangement with Parker and Macias whereby he would refer clients to them, and HTC
would receive a ten percent commission on sales of industrial equipment to those clients.9
Macias testified that, near the time that he and Parker went into business together, he and
Starling had an express conversation in which he told Starling that if Starling sent Parker
Mac Fabrication clients, Parker Mac would pay Starling a ten percent commission. This
testimony supports the trial court’s second finding and conclusion that the parties’ ―had
an enforceable oral contract‖ in which Parker Mac agreed to pay Starling/HTC a ten
percent commission on sales from business Starling/HTC referred to Parker Mac.
Although Parker denied the existence of an ongoing agreement with Starling/HTC, the
trial court is the sole judge of the credibility of the witnesses. Hartis, 230 S.W.3d at 734.
The trial court may take into consideration all the facts and surrounding circumstances in
connection with the testimony of each witness and accept or reject all or any part of that
testimony. Id. Thus, the trial court could have found Parker’s testimony less credible
than that of Starling and Macias.

        Second, Starling testified that he was responsible for referring Ellison
Technologies to appellants. Macias agreed that Starling had initially referred Ellison
Technologies to Parker Mac Fabrication. Parker testified that the first job Parker Mac
Fabrication had done for Ellison was ―set up‖ by HTC. Thus, there is no dispute that the
relationship between Parker Mac Fabrication and Ellison Technologies was initiated
directly by Starling’s efforts. In fact, Starling testified that ―Monty,‖ the salesman from
Ellison Technologies, contacted Parker and Macias directly regarding the tables at issue
in this case, and they called Starling and asked what to do. Starling stated that he told
Parker and Macias that Monty was ―try[ing] to go around‖ him. According to Starling,
Parker assured him that he would be paid a commission on ―the deal.‖

        9
          The existence of an oral contract is generally a question for the factfinder. See Ward v. Ladner,
322 S.W.3d 692, 698 (Tex. App.—Tyler 2010, pet. denied); cf. Parker Drilling Co. v. Romfor Supply Co.,
316 S.W.3d 68, 73 (Tex. App.—Houston [14th Dist.] 2010, pet. denied) (―The existence of an implied
contract involves inferences drawn from circumstantial evidence and is therefore a question of fact.‖).

                                                    9
       This testimony supports the trial court’s finding and conclusion number three
regarding HTC’s entitlement to the ten percent commission on the sales to Ellison
Technologies as a ―direct result‖ of Starling’s referral of this ―client‖ to Parker Mac
Fabrication.     Nothing in the record suggests that Parker Mac Fabrication had any
connection to Ellison Technologies other than through the referral by Starling. Further,
Starling stated that Parker told him that Parker ―had been a salesman all his life and that
he knew how valuable and how hard it was to establish customer relationships and that
any customer of [Starling’s] would always be [Starling’s].‖ Again, although Parker
testified that the sales to Ellison came about through Parker Mac’s own efforts,10 the trial
court could have found his testimony less credible than that of Starling. See id.

       Finally, there is no dispute that none of the appellants paid HTC for the
commissions on the Ellison Technologies sales. HTC invoiced Parker Mac for these
sales, and the appellants never disputed the prices reflected in these invoices. By failing
to pay HTC the commissions that Starling earned on these sales, the appellants breached
their oral agreement with HTC.             Accordingly, the trial court’s sixth finding and
conclusion is supported by the record.

       In sum, the evidence is legally and factually sufficient to support the trial court’s
findings that the parties had an enforceable oral contract whereby appellants would pay
HTC a ten percent commission for sales to clients that were referred to them by Starling,
that Starling referred Ellison Technologies to appellants and appellants made sales of
$65,250 to Ellison, and that appellants breached their contract by failing to pay HTC the
ten percent commission on these sales. These findings sufficiently support the trial
court’s judgment. We therefore overrule appellants’ fourth and fifth issues.

       10
           Parker’s testimony indicates that this ―work‖ was done during the initial project for Ellison
referred by HTC.

                                                  10
                                    CONCLUSION

      Having overruled appellants’ issues, we affirm the judgment of the trial court.

                                         /s/    Adele Hedges
                                                Chief Justice

Panel consists of Chief Justice Hedges and Justices Brown and Busby.

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