Court Opinion

ID: 3075860
Source: CourtListenerOpinion
Date Created: 2015-10-16 01:14:21.287168+00
Date Added: 2024-06-11T09:49:34.744530
License: Public Domain

NO. 12-11-00398-CV

                          IN THE COURT OF APPEALS

                TWELFTH COURT OF APPEALS DISTRICT

G.D. HOLDINGS, INC.,                                    §             APPEAL FROM THE 273RD
APPELLANT

V.                                                     §              JUDICIAL DISTRICT COURT

H.D.H. LAND & TIMBER, L.P.,
APPELLEE                                               §              SHELBY COUNTY, TEXAS

                                                   OPINION
       G.D. Holdings, Inc. (GDH) appeals the trial court’s judgment in favor of H.D.H. Land &
Timber, L.P. (HDH). In one issue, GDH contends that the trial court erred because there is no
evidence, or insufficient evidence, to support the trial court’s contract and promissory estoppel
findings. We affirm.

                                                 BACKGROUND
       On May 29, 2007, John D. Harvey, as general partner of HDH, and Dsirajlal Babaria, as
president of GDH, signed a $300,000.00 real estate contract. John Griffin, an attorney, prepared
the contract, which provided that HDH would sell, and GDH would purchase, nine acres of land in
Joaquin, Shelby County, Texas. The contract also included the following clause:

       Buyer shall pay seller for dozer work and cleanup of property if transaction does not close.

       Harvey signed the contract, which was then sent to Babaria. However, Babaria struck out
the above clause, initialed it, and returned it to Griffin. When Griffin notified Harvey that Babaria
struck out the clause, Harvey refused to initial the change. Harvey stated that Babaria demanded
the property be cleared before the sale closed. He testified that the cost of clearing the property
was the reason Babaria deposited $30,000.00 with Griffin as earnest money. Babaria was unable to
obtain financing for the purchase of the nine acres and the sale did not close. When Babaria
requested that Griffin return the earnest money, Harvey refused to consent because the property
had been cleared and the contractor paid.
       GDH sued HDH for the return of the earnest money. HDH filed an original answer and
counterclaim, alleging that the parties had a valid written contract, that GDH failed to close the
sale without cause or justification, and that HDH was entitled to cancel the contract and receive the
earnest money as liquidated damages. In the alternative, HDH alleged that it was entitled to
recover the monies because it relied upon GDH’s representations. At some point, Griffin tendered
the earnest money into the registry of the court.
       Following a bench trial, the trial court signed a judgment in favor of HDH, awarding it
$27,390.00 in damages with interest at the rate of 5% per annum, and $7,500.00 in attorney’s fees.
At GDH’s request, the trial court filed findings of fact and conclusions of law. This appeal
followed.

                                                 ISSUE PRESENTED
       In one issue, GDH contends that the trial court erred in awarding damages to HDH because
there was no evidence, or insufficient evidence, to support the trial court’s findings that the parties
created a binding written contract or that HDH established the requirements to recover under a
theory of promissory estoppel.1

                                              STANDARD OF REVIEW
       When, as in this case, specific findings of fact and conclusions of law are filed and a
reporter’s record is before the appellate court, the findings will be sustained if there is evidence to
support them, and the appellate court will review the legal conclusions drawn from the facts found
to determine their correctness. Rus-Ann Dev., Inc. v. ECGC, Inc., 222 S.W.3d 921, 925 (Tex.
App.–Tyler 2007, no pet.). Findings of fact in a case tried to the court have the same force and
dignity as a jury’s verdict upon questions. Anderson v. City of Seven Points, 806 S.W.2d 791,
794 (Tex. 1991). The trial court’s findings of fact are reviewable for legal and factual sufficiency
of the evidence to support them by the same standards that are applied in reviewing evidence
supporting a jury’s answer. Main Place Custom Homes, Inc. v. Honaker, 192 S.W.3d 604, 614
(Tex. App.—Fort Worth 2006, pet. denied).

       1
           GDH does not challenge the trial court’s award of attorney’s fees.
                                                           2
       We review a trial court’s conclusions of law de novo. State v. Heal, 917 S.W.2d 6, 9 (Tex.
1996); Potcinske v. McDonald Prop. Inv., Ltd., 245 S.W.3d 526, 529 (Tex. App.–Houston [1st
Dist.] 2007, no pet.). When performing a de novo review, we exercise our own judgment and
redetermine each legal issue. Sembera v. Petrofac Tyler, Inc., 253 S.W.3d 815, 822 (Tex. App.–
Tyler 2008, pet. denied). To make this determination, we consider whether the conclusions are
correct based on the facts from which they are drawn. Potcinske, 245 S.W.3d at 529.
       A party who challenges the legal sufficiency of the evidence to support an issue upon
which it did not have the burden of proof at trial must demonstrate on appeal that there is no
evidence to support the adverse finding. Bright v. Addison, 171 S.W.3d 588, 595 (Tex. App.—
Dallas 2005, pet. denied). When reviewing a ―no evidence‖ issue, we determine ―whether the
evidence at trial would enable reasonable and fair minded people to reach the verdict under
review.‖ City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). In making this determination,
we must credit favorable evidence if a reasonable finder of fact could, and disregard contrary
evidence unless a reasonable finder of fact could not. Id.
       If a party is attacking the factual sufficiency of an adverse finding on an issue on which the
other party had the burden of proof, the attacking party must demonstrate that there is insufficient
evidence to support the adverse finding. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983). In
addressing a factual sufficiency of the evidence challenge, we must consider and weigh all of the
evidence and set aside the verdict only if it is so contrary to the overwhelming weight of the
evidence as to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per
curiam).
       The finder of fact is the sole judge of the credibility of the witnesses and the weight to be
assigned to their testimony. See Canal Ins. Co. v. Hopkins, 238 S.W.3d 549, 557 (Tex. App.—
Tyler 2007, pet. denied) (citing City of Keller, 168 S.W.3d at 819). The finder of fact is free to
believe one witness and disbelieve another, and reviewing courts may not impose their own
opinions to the contrary. Id. Accordingly, we must assume that the finder of fact decided all
credibility questions in favor of the findings if a reasonable person could do so. Id.
       Moreover, it is within the finder of fact's province to resolve conflicts in the evidence.
Canal, 238 S.W.3d at 557 (citing City of Keller, 168 S.W.3d at 820). Consequently, we must
assume that, where reasonable, the finder of fact resolved all conflicts in the evidence in a manner
consistent with the findings. Id. Where a reasonable finder of fact could resolve conflicting
evidence either way, we must presume the finder of fact did so in favor of the findings. Id. Where
                                                  3
conflicting inferences can be drawn from the evidence, it is within the province of the finder of
fact to choose which inference to draw, so long as more than one inference can reasonably be
drawn. Id. Therefore, we must assume the finder of fact made all inferences in favor of the
findings if a reasonable person could do so. Id.

                                 ESSENTIAL TERMS OF CONTRACT
       As part of its sole issue, GDH argues that there was never a contract between the parties for
the sale of the nine acres and therefore, HDH could not recover for breach of contract. We agree.
Applicable Law
       The elements of an enforceable contract are (1) an offer; (2) an acceptance in strict
compliance with the terms of the offer; (3) a meeting of the minds; (4) a communication that each
party consented to the terms of the contract; (5) execution and delivery of the contract with an
intent that it become mutual and binding on both parties; and (6) consideration. Advantage
Physical Therapy, Inc. v. Cruse, 165 S.W.3d 21, 24 (Tex. App.–Houston [14th Dist.] 2005, no
pet.). For a contract to be formed, the minds of the parties must meet with respect to the subject
matter of the agreement and all its essential terms. Argo Data Resource Corp. v. Shagrithaya,
380 S.W.3d 249, 274 (Tex. App.–Dallas 2012, no pet.); see also Potcinske, 245 S.W.3d at 530
(―ʻMeeting of the minds’ describes the mutual understanding and assent to the agreement
regarding the subject matter and the essential terms of the contract.‖).
       The material terms of the contract must be agreed upon before a court can enforce the
contract. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). An
acceptance must not change the terms of an offer; if it does, the offer is rejected. Gilbert v.
Pettiette, 838 S.W.2d 890, 893 (Tex. App.–Houston [1st Dist.] 1992, no pet.). Acceptance must be
identical to the offer in order to make a binding contract. Id. A material change in a proposed
contract constitutes a counteroffer, which must be accepted by the other party. Id. The question of
whether a contract contains all of the essential terms for it to be enforceable is a question of law.
Parker Drilling Co. v. Romfor Supply Co., 316 S.W.3d 68, 74 (Tex. App.–Houston [14th Dist.]
2010, pet. denied). Contracts should be examined on a case by case basis to determine which
terms are material or essential. Id. A contractual provision dealing with payment is always an
essential element or a material term. See id. (citing John Wood Group USA, Inc. v. ICO, Inc., 26
S.W.3d 12, 20 (Tex. App.—Houston [1st Dist.] 2000, pet. denied); BLACK’S LAW DICTIONARY
1510 (8th ed. 2004)).
                                                   4
Analysis
       Here, there is no dispute between the parties that they had not agreed in writing about what
would happen to the earnest money if the sale did not close. Thus, the parties did not have a
―meeting of the minds‖ on an essential term of the contract. See Potcinske, 245 S.W.3d at 530.
Further, when Babaria struck out the term describing his responsibility to pay for clearing the nine
acres, Harvey’s offer was rejected. See Gilbert, 838 S.W.2d at 893. Because Babaria’s change
regarded the earnest money, a material or essential term of the contract, Harvey must have
accepted the change for a contract to be formed. See Parker Drilling Co., 316 S.W.3d at 74.
Harvey did not do so. Therefore, no contract for the sale of the nine acres was ever formed
between GDH and HDH. See Shagrithaya, 380 S.W.3d at 274. Accordingly, we sustain that
portion of GDH’s issue regarding HDH’s breach of contract cause of action.

                                     PROMISSORY ESTOPPEL
       GDH also contends in its sole issue that HDH did not meet the requirements to recover
under the theory of promissory estoppel.
Applicable Law
       The requisites of promissory estoppel are (1) a promise; (2) foreseeability of reliance
thereon by the promissor; and (3) substantial reliance by the promissee to his detriment. English
v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983). When a promissor induces substantial action or
forbearance by another, promissory estoppel prevents any denial of that promise if injustice can be
avoided only by enforcement. In re Weekley Homes, L.P., 180 S.W.3d 127, 133 (Tex. 2005).
Promissory estoppel does not create liability where none otherwise exists, but ―prevents a party
from insisting upon his strict legal rights when it would be unjust to allow him to enforce them.‖
Id. (quoting Wheeler v. White, 398 S.W.2d 93, 96 (Tex. 1965)). Damages recoverable in a case of
promissory estoppel are not the profit that the promisee expected, but only the amount necessary to
restore it to the position it would have been in had it not acted in reliance on the promise. Fretz
Const. Co. v. S. Nat’l Bank, 626 S.W.2d 478, 483 (Tex. 1981).
Findings of Fact and Conclusions of Law
       The trial court made the following findings of fact and conclusions of law regarding
HDH’s recovery of damages based upon promissory estoppel:

                                                 5
                                               FINDINGS OF FACT

       (9) [GDH], or [its] officers, employees, agents or associates, represented to [HDH] that [its]
       purchase of the property was contingent upon [HDH] obtaining an acceptable survey and clearing
       and leveling the property prior to closing.

       (10) Relying upon the representations of [GDH], or [its] officers, employees, agents or associates,
       [HDH] obtained a survey of the property at a cost of $1,500.00.

       (11) Relying upon the representations of [GDH], or [its] officers, employees, agents or associates,
       [HDH] cleared and leveled the property at a cost of $25,890.00.

       (12) [HDH] would not have obtained the survey or cleared and leveled the property but for [GDH’s]
       representation that the same were necessary for the sale of the property to take place and that, if the
       sale did not take place, [HDH] would be reimbursed for the cost.

       (13) Neither the survey nor the clearing and leveling work done by [HDH] increased the value or
       marketability of the property.

                                            CONCLUSIONS OF LAW

       (4) [HDH] is entitled to recover the amounts expended by it for surveying, clearing and leveling in
       reliance upon [GDH’s] requests and representations.

Analysis
       At trial, Harvey testified that while he and Babaria were negotiating the terms of the
contract, Babaria told him that he wanted the nine acres cleared before closing the sale. He stated
that Babaria said he was not in a position to clear the land himself, and requested that Harvey clear
the property prior to closing. Harvey testified that, during the negotiations, he and Babaria met on
the site of the nine acres prior to Griffin’s preparation of the written contract. According to
Harvey, he arranged for Johnny Alford with North Toledo Bend Contractors, whom he hired to
clear the property, to be at his meeting with Babaria. Harvey stated that Alford met Babaria before
unloading his bulldozer to begin clearing the property. Harvey also testified that he told Babaria
that clearing the property would cost approximately $30,000.00, and informed Babaria that this
amount should be the earnest money for the contract. It is undisputed that Babaria tendered
$30,000.00 in earnest money to Griffin, the closing agent for the transaction. Harvey also testified
that Alford completed clearing the property in about two weeks. He stated that the clearing was
substantially completed when he was informed by Griffin that Babaria struck out the clause in the
real estate contract, refusing to pay for the clearing if the sale did not close. According to Harvey,
he paid Alford and a subcontractor for clearing the property.

                                                         6
         Babaria denied that he spoke with Harvey regarding his need for the nine acres to be
cleared prior to closing the sale. He also denied agreeing to pay for the clearing. Babaria testified
that he did not remember seeing Alford. He stated that he believed the clearing began prior to his
meeting with Harvey at the property site. Babaria based his belief on the fact that he saw cut logs
on the property at that time. In rebuttal, Harvey testified that he had had timber cut off the property
approximately six months earlier, and that Babaria saw the remains of that operation.
         The trial court may take into consideration all of the facts and surrounding circumstances in
connection with the testimony of each witness, and accept or reject all or any part of that
testimony. See Santa Fe Petroleum v. Star Canyon Corp., 156 S.W.3d 630, 638 (Tex. App.–Tyler
2004, no pet.). Where enough evidence is before the fact finder that reasonable minds could differ
on the meaning of the evidence, or the inferences and conclusions to be drawn from the evidence,
we may not substitute our judgment for that of the fact finder. See id. Here, Babaria and Harvey
testified to two different versions of the facts. The trial court believed Harvey, and as the trier of
fact, it was within its province to do so in resolving conflicts in the evidence and judging the
credibility and the weight of the witness’s testimony. See Canal, 238 S.W.3d at 557. Thus,
because Harvey’s testimony supported the trial court’s findings of fact and conclusions of law, the
evidence is legally and factually sufficient to support the judgment in favor of HDH’s recovery
based upon the theory of promissory estoppel. Accordingly, we overrule that portion of GDH’s
issue relating to promissory estoppel.

                                                     DISPOSITION
         We have sustained GDH’s sole issue in part and overruled it in part. Because we have held
that the evidence is legally and factually sufficient to support the judgment on the theory of
promissory estoppel, we affirm the judgment of the trial court.

                                                                JAMES T. WORTHEN
                                                                   Chief Justice

Opinion delivered July 24, 2013.
Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.

                                                      (PUBLISH)

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                                COURT OF APPEALS
           TWELFTH COURT OF APPEALS DISTRICT OF TEXAS
                                          JUDGMENT
                                             JULY 24, 2013

                                       NO. 12-11-00398-CV

                                    G.D. HOLDINGS, INC.,
                                           Appellant
                                              V.
                                 H.D.H. LAND & TIMBER, L.P.,
                                          Appellees

_____________________________________________________________________________
                     Appeal from the 273rd Judicial District Court
                  of Shelby County, Texas. (Tr.Ct.No. 08CV-30,268)
_____________________________________________________________________________

                        THIS CAUSE came on to be heard on the appellate record and the briefs
filed herein, and the same being considered, it is the opinion of this court that there was no error
in the judgment.
                        It is therefore ORDERED, ADJUDGED and DECREED that the judgment
of the court below be in all things affirmed, and that all costs of this appeal are hereby adjudged
against the appellant, G.D. HOLDINGS, INC., for which execution may issue, and that this
decision be certified to the trial court below for observance.
                        James T. Worthen, Chief Justice.
                       Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.

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