Court Opinion

ID: 3082806
Source: CourtListenerOpinion
Date Created: 2015-10-16 02:12:32.252975+00
Date Added: 2024-06-11T09:33:06.446334
License: Public Domain

Opinion issued February 12, 2015

                                       In The

                                Court of Appeals
                                      For The

                           First District of Texas
                             ————————————
                               NO. 01-13-00145-CV
                             ———————————
                      HELITRANS COMPANY, Appellant
                                          V.
                ROTORCRAFT LEASING CO., LLC, Appellee

                    On Appeal from the 239th District Court
                           Brazoria County, Texas
                         Trial Court Case No. 39003

                        MEMORANDUM OPINION

      Helitrans Company appeals the trial court’s judgment rendered in favor of

Rotorcraft Leasing Co., LLC, on Helitrans’s breach of contract action. In eight

issues, Helitrans contends that the trial court erred in concluding that Rotorcraft did

not breach its agreement with Helitrans, and that it abused its discretion in denying
Helitrans’s motions to compel discovery. In a cross-point, Rotorcraft asserts that

the trial court erred in denying its request for attorneys’ fees under the agreement.

We affirm in part and reverse and remand in part.

                                     Background

   A. Factual and Procedural History

      Helitrans and Rotorcraft provide offshore commercial helicopter services to

the oil and gas industry in and around the Gulf of Mexico. In February 2007, the

two companies entered into an Asset Purchase Agreement (APA) under which

Rotorcraft purchased all of Helitran’s assets, namely, Helitrans’s sixteen aircraft,

customer contracts, commercial operators’ licenses, and inventory, as well as

assumed Helitrans’s bases. As part of the APA, Rotorcraft also purchased HMC

Helicopter Service, Inc., a small independent helicopter company, from Helitrans

and entered into year-long consulting agreements with Helitrans’s President, Greg

Obert, and its Chief Financial Officer, Shane Leonard. HIG Capital, a private

equity investment firm which owned 51% of Rotorcraft at the time of closing,

participated in negotiating the APA on behalf of Rotorcraft.

      The APA was subsequently amended three times—on March 19, 2007, April

16, 2007, and April 18, 2007. In particular, Amendment No. 1 to the APA,

characterized as an “earn out” provision, provides, in relevant part:

      The Purchase Price shall consist of $15.25 million of cash at Closing,
      less the Escrow amount, plus up to $750,000 to be earned over a two-
                                          2
      year period if the Business achieves aggregate revenues of at least $30
      million for the 24 months after Closing . . . .

      In June 2006, King Flight Service, LLC, sued Helitrans to recover money

Helitrans allegedly owed for services provided by King Flight, unrelated to the

APA. King Flight subsequently joined Rotorcraft as a defendant, alleging that

Rotorcraft had assumed Helitrans’s corporate liabilities and was liable for

Helitrans’s debt to King Flight. Rotorcraft filed a cross-claim against Helitrans for

defense and indemnity under the APA related to the King Flight litigation.

Helitrans filed a counter-claim against Rotorcraft alleging breach of contract and

seeking specific performance, and later amended it to add claims of fraud and

promissory estoppel and seeking reformation of the APA and a declaratory

judgment. King Flight and Helitrans settled. Helitrans’s breach of contract and

fraud claims against Rotorcraft proceeded to trial.

      Helitrans had served Rotorcraft with requests for production and a subpoena

duces tecum seeking documents reflecting the revenue Rotorcraft earned from its

purchase of Helitrans. Dissatisfied with Rotorcraft’s responses to its discovery

requests, Helitrans filed several motions to compel. Prior to trial, the court granted

Rotorcraft’s no-evidence motion for partial summary judgment dismissing

Helitrans’s claims for promissory estoppel and reformation. The case was tried to

the court.

                                          3
   B. Evidence Presented at Trial

      1. Amendment No. 1 to the APA

      The parties presented conflicting interpretations of the earn-out provision in

Amendment No. 1 of the APA. Helitrans argued that the provision allowed it to

earn a prorated amount, up to a maximum of $750,000, depending on the revenue

generated by the assets Rotorcraft purchased from Helitrans within two years of

the sale. According to Helitrans, while $750,000 was the maximum amount it

could earn under the APA, Helitrans was entitled to a prorated payment up to that

figure despite the fact that there was no minimum amount drafted into the

provision. Obert testified that he understood the provision to be a sliding scale,

depending on the earnings generated by the acquired assets, up to $750,000.

      Rotorcraft argued that the provision at issue created a condition precedent,

making payment of the $750,000 contingent on the assets achieving an agreed

benchmark of $30 million in profits within two years with no payment due if that

did not occur. Rotorcraft’s President, Rodger Bagwell, testified that he understood

the provision to mean exactly that. Jeff Zanarini, Managing Director at HIG

Capital, testified that the $750,000 in the provision was not a tiered payment. He

and Fabian de Armas, who was also with HIG, both testified that they never told

Leonard or Obert that there would be prorated payments if the assets did not

generate $30 million in the two years after closing. Zanarini further testified that if

                                          4
a prorated payment had been contemplated, it would have been written out in detail

in the amendment itself. Rotorcraft introduced evidence showing that the total

revenue generated by the assets purchased under the APA during the two years

after the closing was $23,060,878.71.

      2. Helitrans’s Breach of Contract Claims

      Helitrans alleged that Rotorcraft had breached the APA by raising the rates

of Helitrans’s customers and closing some of its bases of operation. However, on

cross-examination, Obert and Leonard admitted that Rotorcraft did not promise

that it would never raise rates or change the base locations of the customers

acquired under the APA. Obert and Leonard also acknowledged that Helitrans

itself performed annual rate evaluations, including evaluating possible rate

increases, prior to the APA.

      Bagwell testified that the parties had anticipated that rates would be raised

following execution of the APA, and that rate increases were discussed with Obert

and Leonard before the APA was finalized. HIG’s Zanarini and de Armas also

testified that Obert and Leonard participated in discussions regarding rate increases

on multiple occasions.

      In support of Helitrans’s allegation that Rotorcraft had breached the APA by

losing clients as a result of base closings, Leonard initially testified that he did not

know prior to the closing that Rotorcraft intended to relocate or close some of

                                           5
Helitrans’s bases.    However, when presented with his deposition on cross-

examination, he acknowledged that he was aware before the APA was executed

that Rotorcraft intended to close some of the bases.

      Bagwell testified that Rotorcraft closed several bases because it had existing

bases nearby and that no customers were lost a result of these base closures.

Helitrans’s Beaumont base was closed for reasons of efficiency and safety and no

customers were lost as a result of that base closure. According to Bagwell, the

only customer that decided not to continue flying with Rotorcraft because of a base

closure was Evans Operating.        Bagwell testified that Evans Operating never

alleged that Rotorcraft breached its contract, and that Rotorcraft continued to fly

for Evans from time to time.

      At the conclusion of trial, the court determined that (1) the aggregate

revenue provision was unenforceable, (2) Rotorcraft did not breach the APA or

commit fraud against Helitrans, and (3) Rotorcraft was not entitled to attorneys’

fees or indemnification under the APA. The trial court signed its judgment on

October 30, 2012. Helitrans filed a motion for new trial which the trial court

denied. The court subsequently filed findings of fact and conclusions of law.

                                     Discussion

      At the outset, we note that in the Statement of Facts portion of its brief,

Helitrans challenges the legal and factual sufficiency of the trial court’s findings of

                                          6
fact 4-5, 13-14, 16-18, 20-26, 29-31, 34-37, and 41-57. Helitrans also challenges

the trial court’s conclusion of law 16 and every conclusion of law concerning “any

revenue Rotorcraft alleges the assets generated,” “the terms of the underlying

contracts not being in evidence,” and the court’s determination that “Rotorcraft

properly or fully assumed the obligations of Helitrans after the execution of the

APA.” However, other than summarily reciting in its Statement of Facts which of

the court’s findings and conclusions it challenges, Helitrans does not provide

argument demonstrating that the trial court’s findings of fact were without

evidentiary support in the record or that its conclusions of law were erroneous.

      An appellant’s brief “must contain a clear and concise argument for the

contentions made, with appropriate citations to authorities and to the record.” TEX.

R. APP. P. 38.1(i). A party asserting error on appeal bears the burden of showing

that the record supports the contention raised and of specifying the place in the

record where matters upon which it relies or of which it complains are shown.

Sisters of Charity of Incarnate Word, Houston, Tex. v. Gobert, 992 S.W.2d 25, 31

(Tex. App.—Houston [1st Dist.] 1997, no pet.).        We are not required to sift

through a voluminous record without guidance from the appellant to determine

whether an assertion of error is valid. Melendez v. Exxon Corp., 998 S.W.2d 266,

280 (Tex. App.—Houston [14th Dist.] 1999, no pet.); see TEX. R. APP. P. 38.1(f),

                                         7
(h). We conclude that Helitrans has failed to adequately brief its challenge to the

trial court’s findings of fact and conclusions of law.

                               A. Breach of Contract Claim

      Helitrans contends that Rotorcraft breached the APA in two ways. First, it

argues that Rotorcraft breached its obligation to pay Helitrans under the earn-out

provision of Amendment No. 1 to the APA. Second, it asserts that Rotorcraft

failed to assume Helitrans’s obligations as required under section 1.2 of the APA.

Florida law will be applied pursuant to the choice-of-law provision in the APA.

   1. Provision

      In its third and fourth issues, Helitrans contends that the trial court erred in

 concluding that the earn-out revenue provision in the APA is unenforceable and,

 alternatively, ambiguous. In its eighth issue, it argues that the evidence is legally

 and factually insufficient to support the court’s conclusion that Rotorcraft did not

 breach this provision of the APA. Because these issues are interrelated, we

 address them together.

      Amendment No. 1 of the APA, which sets out the provision in dispute,

 provides, in relevant part:

      1. The Purchase Price shall consist of $15.25 million of cash at
         Closing, less the Escrow amount, plus up to $750,000 to be earned
         over a two-year period if the Business achieves aggregate revenues
         of at least $30 million for the 24 months after Closing . . . .

                                           8
In its judgment signed October 30, 2012, the trial court found that

             Rotorcraft Leasing Co., LLC did not breach Amendment No. 1
      to the Asset Purchase Agreement by failing to pay Helitrans Company
      an earn out. The provision referred to by the parties as the “aggregate
      revenue” clause is unenforceable as determined by this Court. The
      provision merely requires Rotorcraft Leasing Co., [LLC] to pay some
      amount, up to $750,000.00, after the purchased assets achieved at
      least $30 million in revenues two years following the execution of the
      Asset Purchase Agreement. This amount could be nothing. Thus, the
      provision is ineffective and does not create a binding contractual
      obligation between the parties regardless of the aggregate revenue
      achieved by the purchased assets over the two years following the
      execution of the Asset Purchase Agreement.

      Helitrans argues that Amendment No. 1 “clearly embodies a prorationed

[sic] earnout as the Business’ aggregate revenues reached toward $30 million;

otherwise it would have included specific benchmarks for lower business revenue

goals. The formula in this case provides for an earnout payment of $576,521.97

when the Business revenues reach $23,060,878.71, without the need for any

additional terms as shown below . . . .”           We find Helitrans’s argument

unpersuasive.

      To be enforceable, an agreement must be sufficiently specific and reflect the

agreement by the parties to all essential terms, see Bergman v. DeIulio, 826 So. 2d
500, 503 (Fla. Dist. Ct. App. 2002), and a court must interpret a contractual

provision using the plain meaning of the words. See Interfirst Fed. Sav. Bank v.

Burke, 672 So. 2d 90, 92 (Fla. Dist. Ct. App. 1996). Courts should not interpret

contracts in a manner that extends or enlarges the obligations of a contracting party
                                         9
beyond the plain meaning of the language used in the contract itself. Leesburg

Cmty. Cancer Ctr. v. Leesburg Reg’l Med. Ctr., Inc., 972 So. 2d 203, 207 (Fla.

Dist. Ct. App. 2007). The failure to sufficiently determine quality, quantity, or

price may preclude the finding of an enforceable agreement. Jacksonville Port

Auth. v. W.R. Johnson Enters., Inc., 624 So. 2d 313, 315 (Fla. Dist. Ct. App. 1993)

(citing Blackhawk Heating and Plumbing Co., Inc. v. Data Lease Fin. Corp., 302
So. 2d 404 (Fla. 1974)). Further, a court may not supply material contract terms

which the parties have omitted. Farrell v. Phillips, 414 So. 2d 1119, 1120 (Fla.

Dist. Ct. App. 1982).1

       Here, the provision at issue provides but one benchmark that must be

reached to trigger the additional payment. As the trial court noted, this provision

neither specifies the exact amount of additional payment nor provides a method of

1
       1 CORBIN ON CONTRACTS § 4.3 states the rule as follows:

       In the process of negotiating an agreement, a term that is frequently left
       indefinite and to be settled by future agreement, or by some other specified
       method, is the price in money—the compensatory exchange for the subject
       matter of purchase. . . . If the parties provide a practicable method for
       determining this price or compensation there is no such indefiniteness or
       uncertainty as will prevent the agreement from being an enforceable
       contract. The same is true if they agree upon payment of a “reasonable”
       price or compensation. [Footnote omitted.] There are cases, however, in
       which it is clear that the parties have not expressly or implicitly agreed
       upon a “reasonable price,” and also have not prescribed a practicable
       method of determination. Where this is true, the agreement is too indefinite
       and uncertain for enforcement. [Footnote omitted.]

Id. at 567 (Joseph M. Perillo, rev. ed. 1993).
                                             10
calculation for such payment in the event such a payment is triggered, and no terms

or formulas are provided elsewhere in the a mendments or the APA. To find that

the provision provides for a prorated earn-out or formula would require the trial

court to rewrite the provision which it is not permitted to do. See Edgewater

Enters., Inc. v. Holler, 426 So. 2d 980, 982 (Fla. Dist. Ct. App. 1982).

      In support of its argument that the provision is a prorated earn-out provision,

Helitrans relies on Hebert Acquisitions, LLC v. Tremur Consulting Contractors,

Inc., No. 03-09-00386-CV, 2011 WL 350466 (Tex. App.—Austin Feb. 4, 2011, no

pet.) (mem. op.). In that case, Hebert acquired the assets of Tremur, a construction

company, pursuant to the asset purchase agreement executed by the parties. See id.

at *1. The agreement included a provision detailing additional payments, called

contingent price payments, to be made on the first three anniversaries of the

closing if specified thresholds for gross revenue were met. Id. at *2.

      In its opinion, the Hebert court noted that the maximum contingent price

payment available for the first year ranged from $55,950 if the company had gross

revenue of at least $2 million up to $447,600 if the company achieved gross

revenues of at least $5 million during the first year it was operated by Hebert. See

id. Thus, the parties clearly contemplated a “floor,” i.e. $55,950, and there is

nothing in Hebert reflecting that the earn-out payments between the defined

amounts were prorated. Notably, the gross revenues for the first year were $6

                                         11
million and Hebert did not dispute that it owed the $447,600 contingent price

payment to the appellees. See id. at *5, 11. For these reasons, Hebert lends no

support to Helitrans’s position.

      Helitrans also urges us to consider the testimony of its expert, Dr. Kenneth

Lehrer, regarding his interpretation of the provision and the amount owing to

Helitrans under the provision. The trial court granted Rotorcraft’s pretrial motion

to exclude Dr. Lehrer’s testimony regarding his interpretation of the contract but it

allowed him to testify as an economist. It is well settled that expert testimony is

not allowed on questions of law. Briggs v. Jupiter Hills Lighthouse Marina, 9 So.
3d 29, 32 (Fla. Dist. Ct. App. 2009). Ordinarily the interpretation of a written

contract is a matter of law to be determined by the court. DEC Elec., Inc. v.

Raphael Const. Corp., 558 So. 2d 427, 428 (Fla. 1990). The trial court properly

excluded Dr. Lehrer’s testimony as to the interpretation of the APA provision.

      If the parties had intended to create a prorated earn-out provision, they could

have done so in the APA. This was not done. Courts cannot interpret contracts in

a manner that extends or enlarges the obligations of a contracting party beyond the

plain meaning of the language used in the contract itself. Leesburg Cmty. Cancer

Ctr., 972 So. 2d at 207. We conclude that the trial court properly determined the

                                         12
provision in Amendment No. 1 to be unenforceable as a matter of law. We

overrule Helitrans’s third and eighth issues. 2

    2. Assumption of Post-Closing Obligations

      In its fifth, sixth, and seventh issues, Helitrans challenges the trial court’s

conclusion that Rotorcraft fulfilled its obligations under the customer contracts it

acquired from Helitrans, that there were no customer contracts required to be

assumed under the APA, and that Rotorcraft did not breach section 1.2 of the

APA. 3

      Section 1.2 provides, in pertinent part:

      Assumed Obligations: At the closing, the Purchaser shall assume and
      agree to pay, satisfy, perform and discharge as the same shall become
      due only the liabilities of the Seller, including all post-Closing
      obligations under existing Contracts (other than obligations or
      liabilities as the result of the breach of any such Contract prior to the
      Closing Date) of the Sellers listed in Schedule 1.2(a) hereto (the
      “Assumed Obligations”), pursuant to an Assumption Agreement
      substantially in the form of Exhibit 1.2(a) hereto.

      The elements of a breach of contract action are (1) a valid contract; (2) a

material breach; and (3) damages. Sulkin v. All Florida Pain Mgmt., Inc., 932 So.
2d 485, 486 (Fla. Dist. Ct. App. 2006) (quoting J.J. Gumberg Co. v. Janis Servs.,
2
         Because we conclude that the trial court properly found the provision to be
         unenforceable, we do not reach Helitrans’s fourth issue related to the trial court’s
         conclusion that the provision is, in the alternative, ambiguous. See TEX. R. APP.
         P. 47.1 (stating that appellate court need only address every issue necessary for
         final disposition of the appeal).
3
      These issues are incorrectly enumerated in Helitrans’s brief as issues 5, 5, and 6.
      For the sake of accuracy, we refer to these issues as 5, 6, and 7.
                                             13
Inc., 847 So. 2d 1048, 1049 (Fla. 4th DCA 2003) (internal citation omitted). In its

brief, Helitrans argues that Rotorcraft failed to fulfill its obligations under the

customer contracts acquired under the APA because it raised the contractual rates

and closed a number of Helitrans’s bases and, in doing so, breached section 1.2 of

the APA.

      In contrast to the direct examinations of Obert and Leonard, Leonard

acknowledged during cross-examination that Rotorcraft did not promise that it

would never raise rates on those customers acquired under the APA. Obert and

Leonard also testified that Helitrans itself performed annual rate evaluations of its

customers’ contracts prior to the APA, which contemplated possible rate increases.

      Bagwell testified that rate increases were discussed with Obert and Leonard

before the APA was finalized. Zanarini and de Armas testified that Obert and

Leonard were aware of Rotorcraft’s intention to raise rates on some of the

customer contracts and that Obert and Leonard participated in discussions

regarding rate increases on multiple occasions.

      With regard to base closures, Leonard acknowledged that he was aware

before the APA was executed that Rotorcraft intended to close some of its bases.

Bagwell testified that several bases were closed because Rotorcraft had existing

bases nearby, and that no customers were lost as a result of these closures.

According to Bagwell, Evans Operating, the only customer that decided not to

                                         14
continue flying with Rotorcraft because of a base closure, never alleged that

Rotorcraft breached the contract and continued to fly with Rotorcraft on occasion

even after terminating its contract.

      As the trier of fact, it was up to the trial court to judge the witnesses, to

assign the weight to be given their testimony, and to resolve any conflicts or

inconsistencies in the testimony. See BMC Software Belgium, N.V. v. Marchand,

83 S.W.3d 789, 794 (Tex. 2002); Shaw v. County of Dallas, 251 S.W.3d 165, 169

(Tex. App.—Dallas 2008, pet. denied). Here, the trial court had the opportunity to

hear the witnesses and to resolve conflicts and inconsistencies in the testimony.

Based on our review of the record, we find that there was sufficient evidence to

support the trial court’s determination that Rotorcraft fully assumed its obligations

and that Rotorcraft did not breach any of the underlying contracts. We overrule

Helitrans’s fifth and seventh issues.4

                                 B. Motions to Compel

      In its first and second issues, Helitrans contends that the trial court abused its

discretion when it denied Helitrans’s motions to compel the production of (1)

Rotorcraft’s audited financials and tax returns during the years when Helitrans’s

4
       In light of our disposition of Helitrans’s fifth and seventh issues, we need not
       address Helitrans’s sixth issue complaining of the trial court’s determination that
       there were no customer contracts required to be assumed by Rotorcraft under the
       APA. See TEX. R. APP. P. 47.1.

                                           15
assets were generating revenue in light of the earn-out provision between the

parties, and (2) all of the contracts and customer names Rotorcraft had assumed

under the APA executed by the parties.

      We review a trial court’s decision denying discovery for an abuse of

discretion. See TransAm. Natural Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex.

1991). A trial court abuses its discretion when it reaches a decision so arbitrary

and unreasonable as to amount to a clear and prejudicial error of law. BMC

Software Belgium, N.V., 83 S.W.3d at 800.

      In February 2010, Helitrans filed a motion seeking to compel Rotorcraft to

respond to Helitrans’s first requests for production 1-4 and to produce documents

requested in a subpoena duces tecum attached to a deposition notice for a

Rotorcraft corporate representative. As relevant here, the subpoena duces tecum

sought the production of (1) profit and loss statements for Rotorcraft and its

affiliates for 2006, 2007, 2008, and 2009 and (2) tax returns for Rotorcraft and its

affiliates for 2006, 2007, 2008, and 2009. In its motion to compel, Helitrans

argued that evidence of Rotorcraft’s overall revenue would show what income was

generated by the acquired business and whether there were any significant changes

in Rotorcraft’s overall income before, during, and after its acquisition of the

acquired assets.

                                         16
      In its response to the motion, Rotorcraft objected to these requests on the

basis that they were not tailored to the assets of the APA but instead requested

financial information for Rotorcraft as a whole and, as such, were unrelated to the

instant litigation.   Rotorcraft further argued that its tax returns and financial

statements were not broken down by customer, contract, or aircraft, and would

therefore be useless in computing revenue generated by the acquired assets. It also

asserted that revenue information for years 2006 and 2009 were outside of the

relevant two-year period following the APA and were, thus, irrelevant. The trial

court denied Helitrans’s motion to compel.

      The record reveals that, in response to Helitrans’s requests for production 1-

4, seeking financial information regarding the revenue generated by the assets

acquired under the APA, 5 Rotorcraft produced more than 19,000 pages of

documents.     Further, the documents produced by Rotorcraft in response to

Helitrans’s requests for production 3 and 4 were the same documents, summaries,

and spreadsheets that Rotorcraft introduced at trial to establish the revenue

generated by the assets and testified to at trial by Keely Guirard, Rotorcraft’s

accounts manager. Beyond a general assertion that it was unable to develop facts

5
      Specifically, Helitrans’s requests sought every document reviewed by Rotorcraft
      upon which it based its determination that the acquired assets achieved less than
      $30 million for the two-year period after the execution of the APA; copies of the
      flight log books for all aircraft purchased from Helitrans; and all billing records
      produced for all flights flown using any of the aircraft purchased or for any flight
      completed for clients obtained from Helitrans pursuant to the APA.
                                           17
relevant to the presentation of its claims, Helitrans fails to explain why the

documentation produced by Rotorcraft was not responsive to its requests.

Helitrans’s requests for Rotorcraft’s 2006–2009 tax returns and profit and loss

statements for the entire company do not appear reasonably tailored to the assets

acquired under the APA. We conclude that the trial court’s decision to deny

Helitrans’s first motion to compel was not so arbitrary and unreasonable as to

amount to a clear and prejudicial error of law.

      Helitrans also complains that the trial court abused its discretion in denying

its second and third motions to compel (filed in November 2010 and March 2011,

respectively), which were based on its first set of interrogatories and second

requests for production. Helitrans argues that the trial court implicitly denied

Helitrans’s motions to compel when it granted Rotorcraft’s motion to compel on

March 29, 2011. Helitrans’s discovery requests sought the production of all of the

contracts and names of customers Rotorcraft had assumed under the APA executed

by the parties.

      Under Texas Rule of Appellate Procedure 33.1(a)(2)(A), error may be

preserved when the trial court rules on a motion either expressly or implicitly. See

TEX. R. APP. P. 33.1(a)(2)(A). “A ruling is implicit if it is unexpressed but capable

of being understood from something else.” Well Solutions, Inc. v. Stafford, 32
S.W.3d 313, 316 (Tex. App.—San Antonio 2000, no pet.). Further, “[w]hen

                                         18
parties present cross-motions that are opposed and mutually exclusive, an order

that grants one motion may implicitly deny the other.” Gen. Agents Ins. Co. of

Am., Inc. v. El Naggar, 340 S.W.3d 552, 557 (Tex. App.—Houston [14th Dist.]

2011, pet. denied).

      We find nothing in the record showing that the trial court ruled, either

explicitly or implicitly, on Helitrans’s second and third motions.            Helitrans’s

motions to compel and Rotorcraft’s motion to compel Helitrans to supplement its

discovery responses are neither opposed nor mutually exclusive and, therefore, the

trial court’s order granting Rotorcraft’s motion did not implicitly deny Helitrans’s

motions. Further, the record reflects that Helitrans did not seek a ruling on its

motions at trial.6 A party’s failure to obtain a pretrial ruling on discovery disputes

existing before trial begins constitutes a waiver of the issue on appeal.              See

Remington Arms Co., Inc. v. Caldwell, 850 S.W.2d 167, 170 (Tex. 1993); Martin v.

Comm. Metals Co., 138 S.W.3d 619, 623 (Tex. App.—Dallas 2004, no pet.). We

overrule Helitrans’s first and second issues.

6
      Helitrans raised the issue of these motions to compel in its two motions for new
      trial. However, its motions for new trial are insufficient to preserve its complaints
      regarding the motions to compel. See Hallett v. Houston Nw. Medical Ctr., 689
S.W.2d 888, 890 (Tex. 1985) (“A party cannot wait until the trial is finished, then
      seek to reverse an unfavorable verdict by complaining of an error which the trial
      court could have corrected had it been timely informed of the error.”).
                                           19
                     C. Rotorcraft’s Claims for Attorneys’ Fees

      In a cross-claim, Rotorcraft contends that the trial court erred by refusing to

award it (1) the fees expended in the underlying indemnity case with King Flight

and (2) the fees incurred in defending against Helitrans’s claims under the APA.

      At trial, Jason Joy, Rotorcraft’s counsel during the King Flight litigation,

testified that Rotorcraft incurred $50,786.26 in fees defending Rotorcraft against

King Flight’s claims. Rotorcraft argues that it was entitled to recover these fees for

the defense of the King Flight litigation under the indemnity provision of the APA.

This provision states, in relevant part, as follows:

      11.5. Third-Party Claims

      (a) The following procedures shall be applicable with respect to
      indemnification for third-party Claims. Promptly after receipt by the
      party seeking indemnification hereunder (hereinafter referred to as the
      “Indemnitee”) of notice of the commencement of . . . (ii) any action or
      the assertion of any Claim, liability or obligation by a third party
      (whether by legal process or otherwise), against which Claim, liability
      or obligation the other party to this Agreement (hereinafter the
      “Indemnitor”) is, or may be, required under this Agreement to
      indemnify such Indemnitee, the Indemnitee shall, if a claim thereon is
      to be, or may be, made against the Indemnitor, notify the Indemnitor
      in writing of the commencement or assertion thereof and give the
      Indemnitor a copy of such Claim, process and all legal pleadings. The
      Indemnitor shall have the right to (i) participate in the defense of such
      action with counsel of reputable standing and (ii) assume the defense
      of such action by agreeing to assume such defense within ten (10)
      days of transmittal of the notice of the Claim by the Indemnitee in
      writing . . . .
                                    ....

                                          20
      (d) An Indemnitee shall have the right to employ its own counsel in
      any case and the fees and expenses of such counsel shall be at the
      expense of the Indemnitee unless (i) the employment of such counsel
      shall have been authorized in writing by the Indemnitor in
      connection with the defense of such Claim; (ii) the Indemnitor shall
      not have employed counsel in the defense of such Claim after ten
      (10) days notice; or (iii) such Indemnitee sha;; have reasonably
      concluded that there may be defenses available to it which are
      contrary to, or inconsistent with, those available to the Indemnitor; in
      any of the foregoing events such fees and expenses shall be borne by
      the Indemnitor.

      The trial court concluded that (1) Rotorcraft failed to meet the

requirements set forth in the APA concerning third-party claims for which it now

seeks indemnification pursuant to section 11.5 of the APA, and (2) Rotorcraft did

not have any defenses available to it which were contrary to, or inconsistent with,

those available to Helitrans with regard to the claims brought by King Flight in

this suit, required in section 11.5 of the APA as a condition precedent to

Rotorcraft’s employment of its own counsel in defense of the claims brought by

King Flight.

      Rotorcraft acknowledges that the indemnity provision required that

Helitrans be put on notice of a claim for which Helitrans may be required to

defend Rotorcraft.    However, Rotorcraft argues that Helitrans, as a named

defendant, was aware that Rotorcraft had been named as a defendant in the suit.

Thus, Rotorcraft reasons, notice of such a claim would have been superfluous and

                                        21
it was not required to give written notice of the claim against it to Helitrans. We

disagree.

      Section 11.5(a) states that “[p]romptly after receipt by the party seeking

indemnification, of notice of the commencement of any . . . action by a third

party . . . against which claim the other party to this Agreement is, or may be,

required under this Agreement to indemnify such Indemnitee, the Indemnitee

shall, if a Claim thereon is to be, or may be, made against the Indemnitor,

notify the Indemnitor in writing of the commencement or assertion thereof

and give the Indemnitor a copy of such Claim, process and all legal

pleadings” (emphasis added). Thus, Rotorcraft was required to notify Helitrans

in writing of the claims against it and provide Helitrans a copy of such claims.

At trial, however, Rotorcraft’s counsel Jason Joy admitted that Rotorcraft did not

provide written notice to Helitrans.

      The indemnity provision clearly required Rotorcraft to notify Helitrans in

writing of the claims against it and provide Helitrans a copy of such claims, and

the undisputed evidence is that Rotorcraft did not do so. The trial court did not

err in concluding that Rotorcraft failed to meet the requirements for

indemnification under section 11.5.

      Rotorcraft also contends that the trial court erred in denying its request for

attorneys’ fees incurred in defending against Helitrans’s claims under the APA.

                                        22
Rotorcraft argues that, as the prevailing party, it was entitled to attorneys’ fees

under section 12.13 of the APA.

      Section 12.13 of the APA states, in relevant part:

              In any legal action or other proceeding related to this
      Agreement, the agreements contemplated hereby the transactions
      contemplated hereby or thereby or the enforcement of any provision
      of this Agreement or the agreement contemplated hereby is brought
      against any party, the prevailing party in such action or proceeding
      shall be entitled to recover all reasonable expenses relating thereto
      (including attorney’s fees and expenses) from the party against
      which such action or proceeding is brought in addition to any other
      relief to which such prevailing party may be entitled.

      At trial, Walter Gallant, Rotorcraft’s counsel in this suit, testified that

Rotorcraft had incurred $190,927.56 in attorneys’ fees in defending against

Helitrans’s claims. In its judgment, the trial court concluded that “[t]he Asset

Purchase Agreement does not contain any provision that will operate in this case

to award attorney’s fees to Rotorcraft Leasing Co., [LLC].”

      Section 12.13 provides that the prevailing party in a suit related to the APA

is entitled to recover its reasonable expenses, including attorneys’ fees. Because

the APA does not define “prevailing party,” we presume the parties intended that

the ordinary meaning of the phrase applies. See Bhatia v. Woodlands N. Hous.

Heart Ctr., PLLC, 396 S.W.3d 658, 670 n.14 (Tex. App.—Houston [14th Dist.]

2013, pet. denied). In this regard, courts have interpreted “prevailing party” to

mean the party who “successfully prosecutes an action or successfully defends

                                        23
against an action on the main issue.”          Chevron Phillips Chem. Co. LP v.

Kingwood Crossroads, L.P., 346 S.W.3d 37, 72 (Tex. App.—Houston [14th

Dist.] 2011, pet. denied).

      Helitrans alleged causes of action for breach of contract, fraud, fraudulent

inducement, reformation, and promissory estoppel, each of which related to ether

the formation of the APA or the parties’ duties under the agreement. The main

focus of the trial, as in this appeal, is whether Rotorcraft owed additional money,

i.e., $750,000, to Helitrans under the APA.         In its judgment, the trial court

concluded that (1) Rotorcraft did not breach Amendment No. 1 to the APA by

failing to pay Helitrans an earn out; (2) did not breach the APA by failing to

assume Helitrans’s obligations under section 1.2 of the agreement; and (3) did

not fraudulently induce Helitrans into executing the APA.            Thus, Rotorcraft

successfully defended itself against these claims. Rotorcraft was the prevailing

party in this case and, pursuant to section 12.13, was entitled to recover its

reasonable attorneys’ fees. 7 We overrule Rotorcraft’s cross-claim as it relates to

7
      We note that section 12.13 provides that the prevailing party is “entitled to
      recover all reasonable expenses relating thereto (including attorney’s fees and
      expenses) from the party against which such action or proceeding is brought
      . . . .” (emphasis added). Here, Rotorcraft is both the prevailing party and the
      party against which suit was brought. It is well settled that contracts should be
      interpreted so as to avoid an absurd result. See Am. Employers’ Ins. Co. v.
      Taylor, 476 So. 2d 281 (Fla. Dist. Ct. App. 1985) (holding contracts should be
      interpreted so as to avoid an absurd result); see also Sheldon v. Tiernan, 147 So.
2d 167, 169 (Fla. Dist. Ct. App. 1962) (“Words and phrases used in contracts
                                          24
its fees sought under section 11.5 of the APA, but we sustain its cross-claim as it

relates to its fees sought under section 12.13 of the agreement.

                                     Conclusion

      We affirm the portions of the trial court’s judgment (1) concluding that

Rotorcraft did not breach the APA or Amendment No. 1 to the agreement, (2)

denying Helitrans’s motions to compel, and (3) denying Rotorcraft’s request for

attorneys’ fees under section 11.5 of the APA. We reverse the portion of the trial

court’s judgment denying Rotorcraft’s request for attorneys’ fees under section

12.13 of the APA and remand that issue to the trial court for further determination.

                                                Russell Lloyd
                                                Justice

Panel consists of Justices Jennings, Massengale, and Lloyd.

      should be given a natural meaning or the meaning most commonly understood in
      relation to the subject matter and the circumstances; and a reasonable construction
      is preferred to one that is unreasonable.”). To construe section 12.13 to mean that
      Rotorcraft is entitled to recover reasonable expenses from itself is unreasonable,
      absurd, and would lead to results never intended or contemplated by the parties.
      Construction of section 12.13 consistent with the applicable law is that Rotorcraft,
      as the prevailing party, was entitled to recover its reasonable expenses from
      Helitrans.
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