Court Opinion

ID: 9777542
Source: CourtListenerOpinion
Date Created: 2023-08-29 20:15:01.127802+00
Date Added: 2024-06-11T07:32:56.035697
License: Public Domain

SEARS, Justice (Assigned),
dissenting.
I respectfully dissent.
The basic mistake in the majority opinion is the finding that the option agreement was a unilateral contract. This is contrary to the facts, the conclusion of law reached by the trial court, and the existing case law of Texas.
The facts show there were several lawsuits pending between these parties which were all compromised and settled by the simultaneous execution of 37 documents. Therefore, the option agreement was only one of 37 documents which the parties executed in order to fully settle all their disputes. These documents are all intertwined and impose duties and obligations on all parties. It is not logical and there is no legal precedent for separating one of these documents from the other 36 and finding the one to be “unilateral.” In fact, the trial court rejected several jury instructions filed by the Appellants which would have instructed the jury that “the Purchase Option was a unilateral offer.” Further, the Appellants’ have not assigned a point of error for the trial courts’ failure to so instruct the jury. Therefore error, if any, is waived. Vawter v. Garvey, 786 S.W.2d 263, 264 (Tex.1990); Allright, Inc. v. Pearson, 735 S.W.2d 240, 240 (Tex.1987).
The sale of the old St. Anthony Hotel in San Antonio, Texas, involved remarkably similar transactions. Several parties were involved in several disputes which were all compromised and settled by the execution of several documents. Lease agreements and a stock purchase agreement were among the settlement documents. One side tried to defeat the exercise of the option by claiming the option was a unilateral contract and must be read separate and apart from the other settlement documents. The other side claimed the documents were all part of the settlement and could not be separated to defeat the option. The trial court agreed • that “all documents and instruments executed and delivered in furtherance of such objective should be read and construed together.” Morrison v. St. Anthony Hotel, 274 S.W.2d 556 (Tex.Civ.App.-Austin 1955, writ ref d n.r.e.). This is still good law and is not discussed or distinguished by the majority opinion.
Janes v. Gibbs is an often cited case dealing with equitable relief, and it supports the judgment of the trial court in this ease. The majority opinion summarily rejects this valid ease law by finding that the facts in Gibbs were only “slightly contested” while the facts in this case were “strongly contested.” Jones v. Gibbs, 133 Tex. 627, 130 S.W.2d 265 (1939). It is of no concern to an appellate court whether the facts are “slightly contested” or “strongly contested,” because it is the sole province of the jury to resolve these factual disputes regardless of the degree to which they are contested. A court of appeals cannot step into the shoes of a jury and replace their judgment with its own. Lofton *721v. Texas Brine Carp., 777 S.W.2d 384, 387 (Tex.1989); St. Paul Medical Center v. Cecil, 842 S.W.2d 808, 813 (Tex.App.-Dallas 1992, no writ).
In many instances the majority opinion rejects the jury’s resolution of the disputed facts, finds the facts to the contrary, and ignores existing case law in order to reverse the judgment of the jury. This is not the function of an appellate court. If there is more than a scintilla of evidence supporting the findings of the jury, they must be affirmed. County of Burleson v. General Electric Capital Corp., 831 S.W.2d 54, 57 (Tex.App.-Houston [14th Dist.] 1992, writ denied).
I believe the facts show, and the jury found, that any failure to timely exercise the optión by Appellees was caused by the acts and misrepresentations of Appellants. Further, these acts and misrepresentations were designed to make exercising the option impossible. By their verdict, the jury found-that Appellants never intended to accept “reasonable compliance”, and never intended to allow the option to be exercised. For example, Appellants complain that Appellees defaulted because a Federal lien attached to the property for taxes due. However, evidence showed that the lien was filed because appellants failed to pay income taxes due on rental income received by Zu.
Although there were several instances of the intent of Appellants’ to prevent Appel-, lees’ from exercising the option, I believe the attorney for Appellants made their intent crystal clear. The closing was scheduled for 3 p.m. and Appellants’ attorney did not arrive until after 5 p.m. All banking establishments were closed by that time, as was the Harris County District Clerk’s Office. Appellants attorney then refused to accept a cashier’s cheek and claimed the agreement requirements of cash meant “greenbacks”, or “coins of the realm.” If Appellants’ attorney had been on time, the cashiers check could have been exchanged for cash at any bank before 5 p.m. This rejection was unreasonable. Also, Appellants’ attorney refused to accept the court order releasing the Gentry Lien because the order was not “recorded.” However, if the closing had been held at 3 p.m. as scheduled, the release could have been recorded before the clerks’ office closed. This rejection was also unreasonable. Both acts constitute breaches of the agreement by Appellants.
The jury found that Appellees’ failure to “timely” exercise the purchase option was excused due to the wrongful acts and breach of contract by Appellants. This is the correct result and is supported by solid Texas law. When one party to a contract impedes the performance of the other, the failure to perform by the other party cannot be used by the wrongdoer to defeat performance of the contract. See Citizens National Bank v. Vitt, 367 F.2d 541 (5th Cir.1966).
The majority opinion holds that the doctrine of forfeiture should not be applied to disputes arising out of option agreements. Apparently, the majority opinion holds that equity cannot apply to an option agreement. The majority cites a no writ El Paso case which holds that “an option contract does not come within the equitable rule against forfeiture since failure to comply strictly with the conditions of the option deprives no party of any right and abrogates no contract.” See B.F. Saul Real Estate Inv. Trust v. McGovern, 683 S.W.2d 531, 534 (Tex.App.-El Paso 1984, no writ). The problem with reliance on this case is that the McGovern ease is a suit for liquidated damages provided for in a loan commitment agreement. It is not a “classic option agreement.” Further, the lender in McGovern did not breach any provision of the agreement and the borrower failed to put on any evidence. In this appeal, the Appellees presented the jury with an abundance of evidence showing that Appellants’ breached several provisions of the agreement. The El Paso Court found the loan commitment to be a unilateral contract because “the lender cannot be forced to do anything.” As shown below in this dissent, the Appellants’ herein were required to perform many acts. I find the majority reliance on this authority inapposite.
The fact that this option agreement is only one of 37 documents executed by the parties in compromise and settlement of all disputes between them should clearly remove it from the “classic option agreement.” Also, this *722agreement, unlike the one in McGovern, requires certain acts and conditions to be met and/or performed by the Appellants. First and foremost, it requires Appellants to accept Appellees performance if it is “reasonable.” See paragraph 4d of the Stock Purchase Agreement. Paragraph 6b prohibits CESA conveyance of any “security interest or ownership interest in the stock of Zu Corporation, 3113 Bering Corporation and Northland Corporation, or the bulk assets of those corporations.” In the same paragraph, CESA agrees that it will “undertake to prevent Zu Corporation and 3113 Bering Corporation from conveying or mortgaging the Land.: CESA further agrees to prevent Zu, 3114 Bering, and SRD Vending Inc. from authorizing or issuing any additional stock or in any way diminishing or diluting their value. In paragraph 6c, CESA obligates itself to acquire “any outstanding shares of North-land Corporation owned by Salah Izzedin.” CESA agrees in paragraph 6e to prevent Zu, 3113 Bering and Northland from making payments of certain “actual or constructive dividends”, and in 6f to “cause Northland Corporation not to enter into leases that would be injurious to the business of Trumps, Inc.”
Paragraph 6d of the Stock Option Agreement is the most obvious evidence of a bilateral agreement, and evidence that other agreements between the parties cannot be excluded from this agreement in an attempt to claim it is a unilateral contract. Paragraph 6d provides:
During the term of this Agreement, CESA will undertake to require Zu Corporation, 3113 Bering Corporation and Northland Corporation to perform their obligations under any agreements in which they are lessors or landlords. This includes, without limitation, the obligation of Northland Corporation to keep taxes current on any property owned by it. CESA will undertake to require Northland to perform its obligations to W. Bell and Co. under their subleases, and CESA will undertake to provide Fontenot and Watters with notice and an opportunity to cure any defaults on Northland’s obligations to W. Bell and Co. If Fontenot and Watters cure any defaults to W. Bell and Co., they will be entitled to an offset for amounts actually paid to W. Bell and Co. to cure default of Northland against the obligations of Trumps on the lease.
It is clear that the option agreement requires CESA to complete certain acts and prohibits them from performing other acts. Further, under the provisions of this agreement, CESA obligates itself to compel at least three other corporations to do, and refrain from doing, certain things.
In conclusion, I find the Stock Option Agreement to be a bilateral agreement and would affirm the findings of the jury and the judgment of the trial court.