Court Opinion

ID: 4027938
Source: CourtListenerOpinion
Date Created: 2016-08-24 15:20:32.058099+00
Date Added: 2024-06-11T14:36:19.552041
License: Public Domain

In The
                              Court of Appeals
                     Seventh District of Texas at Amarillo
                             ________________________

                                  No. 07-14-00398-CV
                             ________________________

           EXPELLED GRAIN PRODUCTS, LLC AND SCOTT THEIRING,
                             APPELLANTS

                                            V.

                     CORN MILL ENTERPRISES, LLC, APPELLEE

                           On Appeal from the 64th District Court
                                  Castro County, Texas
          Trial Court No. A9678-1311; Honorable Robert W. Kindaid, Jr., Presiding

                                     August 17, 2016

                            MEMORANDUM OPINION
                  Before QUINN, C.J., and CAMPBELL and PIRTLE, JJ.

      Appellants, Expelled Grain Products, LLC and Scott Theiring, appeal from a

judgment entered in favor of Corn Mill Enterprises, LLC in a declaratory judgment and

breach of contract cause of action. By eleven issues, Expelled Grain asserts the trial

court erred by (1) and (2) granting summary judgment declaring that a contractual

agreement existed between Expelled Grain and Corn Mill regarding the parties’
interests in Dimmit Corn Mill, LLC (DCM),1 (3) granting summary judgment when there

was a triable issue of fact concerning whether Expelled Grain’s option to purchase Corn

Mill’s interest in DCM had expired, (4) rendering final judgment in Corn Mill’s favor when

the jury’s answer to Question Number Three was ambiguous, (5) excluding much of

Expelled Grain’s evidence in support of its response to Corn Mill’s motion for summary

judgment, (6) accepting the jury’s answer to Question Number Three when the answer

was ambiguous, (7) allowing Steve Dawson, a fact witness, to testify as an expert at

trial, (8) directing a verdict against Expelled Grain on its counterclaims for breach of

contract, fraud, and declaratory judgment, (9) failing to submit Expelled Grain’s

affirmative defenses of estoppel, promissory estoppel, and prior breach to the jury, (10)

awarding attorney’s fees to Corn Mill when it failed to carry its burden of proof, and (11)

granting judgment based upon legally and factually insufficient evidence.               By two

additional issues, Theiring asserts the trial court erred by (1) striking his Original Petition

in Intervention and (2) finding he did not have a justiciable interest regarding his right to

approve the agreement at issue. We affirm in part and reverse and remand in part.

       THE TERM SHEET

       Corn Mill, Expelled Grain, and Chad Smith were the initial members of DCM, a

Texas limited liability company.      In late 2012 and early 2013, disagreements arose

between Corn Mill and Expelled Grain regarding the governance of DCM and the

respective duties of the parties to one another.          In February 2013, Expelled Grain

placed DCM in a Chapter 11 bankruptcy proceeding.               As a part of the bankruptcy

       1
       Although DCM’s name was subsequently changed to High Plains Milling, LLC, we refer to both
DCM and High Plains throughout the remainder of this opinion as “DCM.”

                                               2
proceedings, the parties agreed to mediate their disputes. In April 2013, Corn Mill and

Expelled Grain engaged in mediation hoping to resolve their differences.                     After

negotiating over the course of three days through their respective counsel, the parties

reached a tentative settlement agreement, and on or about April 19, 2013, they

executed a document referred to as the Final Term Sheet (Term Sheet).2

       One of the critical provisions of the Term Sheet was an option for Expelled Grain

to purchase the interests of Corn Mill and Chad Smith in DCM. The initial option period

was from April 19, 2013 to July 18, 2013. Thereafter, in order to keep the option open

for an additional thirty-day period, Expelled Grain was required to pay certain non-

refundable monetary consideration at specific periodic intervals. Expelled Grain paid

that consideration and the option was extended to August 18, 2013.

       Another important provision of the Term Sheet was the implementation of a

procedure for the verification of funds and property contributed to DCM by Expelled

Grain and its investors and the determination of the extent to which “inappropriate or

unsupported expenditures” were made by or from the assets of DCM to or for the

benefit of Expelled Grain and others. The Term Sheet then set forth the obligation of

Expelled Grain to repay DCM an amount referred to as the “EGP Reimbursement

Obligation.” Finally, the Term Sheet made provision for the modification of Expelled

Grain’s ownership interest in the event it failed to close on the option to purchase Corn

Mill’s interest or pay its Reimbursement Obligation.
       2
           The Term Sheet was signed by Richard Bell, as President and Authorized Manager of DCM,
Jason Smith, as Corn Mill’s Authorized Agent and Member Representative, Richard Bell, as Managing
Member of Expelled Grain, Richard Bell, individually and as a member of the Management Committee of
DCM, Victor Shukla, individually and as a member of the Management Committee of DCM, Rickey Smith,
individually and as a member of the Management Committee of DCM, and Chad Smith, individually.

                                                3
      Specifically, the Term Sheet provided, in pertinent part, as follows:

       1. The “Parties” to this settlement are:
            a. DCM,
            b. [Expelled Grain] and its members and investors,
            c. [Corn Mill] and its members and investors,
            d. Victor Shukla,
            e. Richard Bell,
            f. Rickey Smith,
            g. Chad Smith,
            h. and each of the above successors and assigns, partners,
               parents,      subsidiaries,     affiliates,  agents,       attorneys,
               representatives, servants, officers, directors, members,
               partners,      shareholders,     employees,      heirs,      personal
               representatives, and all persons in privity therewith . . . .

      2. The Parties will enter into a Comprehensive Compromise & Settlement
      Agreement (“Agreement”) which shall provide for the resolution of all
      issues in dispute involving their mutual ownership and interest in DCM and
      shall contain the material terms set forth below. These terms will be
      approved by the Members of [Corn Mill and Expelled Grain] by formal
      resolutions passed and binding upon all members of the respective
      companies.

      3. The Agreement shall be prepared and executed by the representatives
      of [Expelled Grain] and [Corn Mill] no later than April 29, 2013.

      4. An announcement will inform the Court that the pending matters have
      been resolved by a settlement which contemplates immediate dismissal of
      the Chapter 11 case. To the extent necessary, all hearings scheduled to
      be heard by the Bankruptcy Court on Friday, April 19, 2013, will be passed
      until the earliest possible date on or after April 29, 2013, but in no event
      later than the Amarillo docket scheduled for May 16, 2013, although it is
      anticipated that the bankruptcy will be dismissed before that time.

      5. Upon the execution of the Agreement, the DCM Bankruptcy case . . .
      [w]ill be dismissed as soon as possible by an Agreed Order. Such
      dismissal shall be effected based upon the pending motion to dismiss of
      [Corn Mill], and the Management Committee of DCM will instruct its
      attorneys in the Bankruptcy to agree to the dismissal.

      In addition, Paragraph 7 of the Term Sheet set forth the conditions whereby

Expelled Grain was authorized to exercise its option to buyout Corn Mill’s interest in

DCM. Paragraph 7e provided that, if Expelled Grain failed to (1) pay the option fees as

                                            4
specified or (2) complete the buyout contemplated by the option on or before April 29,

2013, DCM’s equity ownership would be reallocated 84% to Corn Mill, 1% to Smith, and

15% to Expelled Grain. It is undisputed that while Expelled Grain did pay the required

option fees, it did not complete the buyout as provided.

       Paragraph 7g(ii) of the Term Sheet provided that Corn Mill would select a CPA

auditor, to be retained by DCM, who would verify funds and property contributed by

Expelled Grain and its investors to DCM and determine “whether and to what extent

inappropriate or unsupported expenditures were made by or from the assets of DCM to

or for the benefit of [Expelled Grain], Bell, Shukla, or any other affiliates . . . including

cash withdrawals and unsupported or undocumented expense reimbursements (the

‘Disputed Expenditures’).”    In the event that the auditor was not able to verify the

Disputed Expenditures “because of the lack of necessary documentation from [Expelled

Grain] or its principals, any unverified expenditures [would] be deemed unauthorized

expenditures . . . .” Expelled Grain would then be obligated to reimburse DCM a “net

amount equal to the Disputed Expenditures plus the amount that the Aggregate

[Expelled Grain] investment is below $3.2 million (the ‘[Expelled Grain] Reimbursement

Obligation’).”

       Paragraph 7g(v) of the Term Sheet further provided that if Expelled Grain’s

Reimbursement Obligation was not paid as provided, in the absence of the closing and

funding of the buyout agreement, Expelled Grain’s equity position would be

proportionately reduced “according to the ratio of (a) 150% of the remaining balance of

the [Expelled Grain] Reimbursement Obligation over (b) $3.2 million.”

                                              5
      In April 2013, Steve Dawson, a certified public accountant and fraud investigator,

met with Chad Smith, a member of DCM’s Management Committee, regarding retention

and the performance of the tasks contemplated by paragraph 7g. Dawson understood

the object of his engagement was to identify the documentation for disbursements made

by or on behalf of DCM to Expelled Grain and whether proof of the disbursement

existed and whether it was appropriate and sufficient to support the identified

disbursements.    Based on his discussion with Chad Smith, Dawson’s company

executed a contract with DCM via its representative, Rickey Smith, for the performance

of the procedures necessary to satisfy the objectives stated in the Term Sheet.

      In July 2013, Dawson’s company issued its Consultation Report. The Report

indicated that a special review was undertaken of DCM’s disbursements for the purpose

of quantifying the disbursements that lacked valid supporting documentation.        The

special review was conducted in accordance with lawful forensic investigation

techniques which included examining DCM’s books and records, interviewing

appropriate personnel, and engaging in other evidence-gathering procedures.         The

Report concluded there were inappropriate and/or unsupported disbursements of more

than $3.5 million made by or from the assets of DCM to or for the benefit of Expelled

Grain, Bell, Shukla, or any others. The validity and/or sufficiency of documentation to

support capital and non-capital items was tested against Internal Revenue standards for

the deductibility of such items and the reasonably prudent person standard which asks

the question, “Would a reasonably prudent person disburse their own funds based on

the documentation provided?”

                                           6
       During this period of time, Expelled Grain paid the option fees required by the

Term Sheet to extend its option to purchase Corn Mill’s equity interest in DCM.

Furthermore, DCM’s Chapter 11 bankruptcy was voluntarily dismissed, Richard Bell (a

manager of Expelled Grain) resigned as President and as a member of DCM’s

Management Committee, Corn Mill obtained two of the three seats on DCM’s

Management Committee, and the state court lawsuit between Expelled Grain and Corn

Mill was dismissed.

       PROCEEDINGS BELOW

       In November 2013, Corn Mill filed its original petition for declaratory judgment

and breach of contract, and in February 2014, filed its Traditional Motion for Partial

Summary Judgment. In March 2014, Theiring, as a member of Expelled Grain, filed his

Original Petition in Intervention alleging the Term Sheet was not a valid contract.

Theiring sought the recovery of money paid to Corn Mill by Expelled Grain. Also in

March, Expelled Grain filed a counterclaim against Corn Mill alleging claims for

declaratory relief, promissory estoppel, and other actions, thereby seeking $500,000 in

reliance damages.      Corn Mill moved to strike Theiring’s petition alleging he lacked

standing to bring Expelled Grain’s claims, and on May 21, 2014, the trial court issued its

order striking Theiring’s petition.

       The trial court sustained Corn Mill’s objections to much of Expelled Grain’s

evidence filed in support of its response to Corn Mill’s motion, and on June 3, 2014,

issued its order granting in part and denying in part Corn Mill’s Traditional Motion for

Partial Summary Judgment. The trial court declared that the Term Sheet was a valid

and enforceable contract, and per the terms of that contract, Expelled Grain’s option to

                                            7
purchase Corn Mill’s interest in DCM terminated as of August 19, 2013. The trial court

also declared that, effective August 19, 2013, Expelled Grain’s ownership interest in

DCM was reduced to 15% in accordance with the provisions of paragraph 7 of the Term

Sheet.

         Thereafter, in July 2014, the trial court conducted a three-day jury trial on the

remaining issues. At the conclusion of that trial, the jury returned a verdict in Corn Mill’s

favor finding Expelled Grain’s Reimbursement Obligation under the Term Sheet was

$7,146,837.61 and that Expelled Grain had not reimbursed Corn Mill any amount

toward that obligation. Thereafter, on August 5, 2014, the trial court entered its Final

Judgment reaffirming its earlier order declaring the Term Sheet to be a valid and

enforceable agreement and declaring Expelled Grain’s ownership interest in DCM was

reduced to 0.00%.

         In addition, Corn Mill was awarded $33,500 actual damages for its breach of

contract claim, $75,000 in attorney’s fees through trial, $10,000 in attorney’s fees in the

event of an appeal to this court, and $10,000 in the event of an appeal to the Texas

Supreme Court. This appeal followed.

         DISCUSSION

         Logic dictates that we decide issues five and seven before the remaining issues

because these issues relate to the exclusion of evidence.           Furthermore, because

several of Expelled Grain’s remaining issues overlap, we will discuss the following

issues together—one and two, and four and six.

                                             8
       ISSUE FIVE

       Nearly all of Expelled Grain’s summary judgment evidence (i.e., certain portions

of Richard Bell’s affidavit and its exhibits) was excluded from consideration due to Corn

Mill’s objections. In its brief, Expelled Grain asserts the trial court improperly excluded

the evidence because Corn Mill’s objections were “obviously baseless.” Nevertheless,

Expelled Grain provides no discussion or legal citation in support of its assertion. The

Texas Rules of Appellate Procedure require adequate briefing. See TEX. R. APP. P.

38.1(i) (“The [Appellant’s] brief must contain a clear and concise argument for the

contentions made, with appropriate citations to authority and to the record.”).

Accordingly, issue five is waived. See ERI Consulting Eng’rs, Inc. v. Swinnea, 318
S.W.3d 867, 880 (Tex. 2010) (holding that failure to provide citation or argument and

analysis as to an appellate issue may waive that issue); Burnett Ranches, Ltd. v. Cano

Petroleum, Inc., 289 S.W.3d 862, 870 (Tex. App.—Amarillo 2009, pet. denied) (citing In

the Interest of M.J.G., 248 S.W.3d 753, 760-61 (Tex. App.—Fort Worth 2008, no pet.))

(holding that conclusory or unexplained arguments without substantive analysis do not

satisfy the requirements of Rule 38.1(i) and result in waiver of the issue). Expelled

Grain’s fifth issue is overruled.

       ISSUE SEVEN

       Expelled Grain further asserts the trial court erred in allowing Corn Mill to use its

fact witness, Steve Dawson, as a testifying expert witness.         During trial, Corn Mill

sought to admit Dawson’s “report” as an expert report. Expelled Grain did not object to

Dawson as a fact witness, but instead, argued that admitting his testimony as an expert

would confuse the jury and prejudice Expelled Grain by implicitly commenting on the

                                             9
weight to be given to his fact testimony.3 Expelled Grain’s objections were overruled

and the report was admitted. Expelled Grain contends Dawson’s credibility as a fact

witness was thus improperly bolstered, causing harm to Expelled Grain. We disagree.

       Assuming, without deciding, that the trial court erred by permitting Dawson to

testify as an expert, we must determine whether the erroneous admission of Dawson’s

“expert” testimony probably (though not necessarily) caused the rendition of an

improper judgment. See TEX. R. APP. P. 44.1(a)(1); Nissan Motor Co. v. Armstrong, 145
S.W.3d 131, 144 (Tex. 2004).           According to the provisions of the Term Sheet, the

parties agreed that a certified public accountant would analyze the financial records of

DCM to determine whether there was sufficient documentation to support certain

expenses and substantiate Expelled Grain’s alleged investment in the mill prior to the

formation of DCM. The Term Sheet provided that Corn Mill was entitled to choose that

person and it chose Dawson, a certified public accountant and certified fraud examiner

with experience in forensic accounting work.              Expelled Grain now complains that

Dawson did not perform an “audit” and that his testimony was “not really an expert

opinion.”

       The Supreme Court has recognized “the impossibility of prescribing a specific

test” for harmless error review. Reliance Steel & Aluminum Co. v. Sevcik, 267 S.W.3d
867, 871 (Tex. 2008) (quoting McCraw v. Maris, 828 S.W.2d 756, 757 (Tex. 1992)).

The standard “is more a matter of judgment than precise measurement.” Nissan Motor

Co., 145 S.W.3d at 144.
       3
          Expelled Grain also asserts Dawson was not an “independent” auditor. The Term Sheet,
however, did not expressly require that Dawson be independent. Instead, the Term Sheet required that
Corn Mill select a certified public accountant as the auditor and the accountant be retained by DCM. As
such, Dawson met the requirements of the Term Sheet.

                                                  10
      Having examined the entire record, we find any error in the designation of

Dawson as an expert witness was harmless. First, the Term Sheet required a financial

analysis be performed by an auditor who was a certified public accountant.           Thus,

evidence of Dawson’s professional status was relevant to the jury’s determination of

whether Corn Mill performed a financial review in compliance with the terms of the Term

Sheet. Furthermore, even though the Term Sheet used the word “audit” once and the

parties frequently used that term in their questions, Dawson testified that his task was

not to perform a financial statement audit to determine if the books and records

complied with Generally Accepted Accounting Principles.            Instead, according to

Dawson’s testimony, his task was to “take the payments, the expenses, the

expenditures that have been made for [DCM], on behalf of [DCM], and compare those

to the supporting documentation . . . .” In that regard, Expelled Grain did not challenge

here, or in the trial court, the methodology or reliability of Dawson’s calculations and/or

conclusions contained in the financial review. Because a technical financial “audit” in

accordance with Generally Accepted Accounting Principles was not the issue, it is

highly probable that this testimony did not cause the rendition of an improper judgment.

Accordingly, Expelled Grain’s seventh issue is overruled.

      ISSUES ONE AND TWO

      By issues one and two, Expelled Grain asserts the trial court erred when it

granted summary judgment in Corn Mill’s favor by declaring that the Term Sheet

constituted an enforceable contract between Corn Mill and Expelled Grain. Expelled

Grain contends the Term Sheet was not a binding contract because a Comprehensive

Compromise and Settlement Agreement was not consummated and its members did

                                            11
not pass a resolution approving such an agreement as purportedly required by

paragraph 2 of the Term Sheet. We disagree. As a matter of law, we find the record

here does not support Expelled Grain’s contention on appeal. See McCalla v. Baker’s

Campground, Inc., 416 S.W.3d 416, 417-18 (Tex. 2013) (holding that an agreement to

enter into a future contract is enforceable, as a matter of law, if it contains all of the

material terms of the contract).

       Our review of a summary judgment is de novo. See Tex. Mun. Power Agency v.

Pub. Util. Comm’n of Tex., 253 S.W.3d 184, 192 (Tex. 2007). Under the traditional

summary judgment standard, the movant must show that no genuine issue of material

fact exists and judgment should be rendered as a matter of law. TEX. R. CIV. P. 166a(c);

Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). We view all evidence

in a light favorable to the nonmovant and indulge every reasonable inference in the

nonmovant’s favor. Id.

       While intent is normally an issue of fact, in some cases, a court may determine

the intention of the parties as a matter of law. Gen. Metal Fabricating Corporation v.

Stergiou, 438 S.W.3d 737, 748-49 (Tex. App.—Houston [1st Dist.] 2014, no pet.) (op.

on reh’g). The actions of the parties may conclusively establish their intention to enter

into a binding agreement even though some terms are left for future agreement. Id.

(citing RESTATEMENT (SECOND)       OF   CONTRACTS § 33(1) cmt. a (1981)) (“[T]he actions of

the parties may show conclusively that they have intended to conclude a binding

agreement, even though one or more terms are missing or are left to be agreed upon.”).

Further, “[a]greements to enter into future contracts are enforceable if they contain all

material terms,” McCalla, 416 S.W.3d at 418, and “[t]he material terms of a contract are

                                               12
determined on a case-by-case basis.” Id. (citing T.O. Stanley Boot Co. v. Bank of El

Paso, 847 S.W.2d 218, 221 (Tex. 1992)).

       The critical issue is whether the parties intended for the Term Sheet to be a

presently binding and enforceable agreement in the absence of a Comprehensive

Compromise and Settlement Agreement or whether they intended for it to have no legal

significance until agreement was reached concerning the remaining issues and a final

formal settlement document was executed. See Mabon Ltd. v. Afri-Carib Enters., Inc.,

29 S.W.3d 291, 300 (Tex. App.—Houston [14th Dist.] 2000, no pet.) (concluding that if

parties do not intend to be bound until other terms are determined or negotiated, or until

execution of a formal document, then “there is no binding contract, but only an

agreement to agree”). In determining the enforceability of a settlement agreement when

future documents need to be prepared, “[t]he key question is whether the parties

intended for a formal document to be executed as a condition precedent to being bound

by contract.” Gen. Metal Fabricating, 438 S.W.3d at 748 (quoting Herring v. Heron

Lakes Estates Owners Ass’n, No. 14-09-00772-CV, 2011 Tex. App. LEXIS 5, at *2 (Tex.

App.—Houston [14th Dist.] Sept. 20, 2011, no pet.) (mem. op.).

       Here, the settlement agreement involved the settlement of a civil suit and a

bankruptcy suit, and the sale of Corn Mill’s interest in DCM. The settlement agreement

contained a clause requiring dismissal of the civil suit and bankruptcy suit as soon as

possible by agreed order after the Term Sheet was executed. The circumstances under

which Expelled Grain could extend an option to purchase Corn Mill’s interest in DCM

and ultimately exercise its option were detailed in the Term Sheet.         In addition, a

certified public accountant was hired to fulfill the financial calculations required by the

                                            13
Term Sheet in accordance with certain deadlines cited therein. The Term Sheet itself

described its terms as “material terms” to be included in a subsequent Comprehensive

Compromise and Settlement Agreement. Importantly, Expelled Grain and Corn Mill

behaved as though the Term Sheet was a binding agreement after its execution—each

completing its respective duties as required by the Term Sheet.        Furthermore, this

mutual performance continued despite the passing of the April 29, 2013 deadline for

executing a Comprehensive Compromise and Settlement Agreement.

      Expelled Grain does not assert there were any material terms upon which an

agreement had yet to be reached when the Term Sheet was executed.                Instead,

Expelled Grain contends the Comprehensive Compromise and Settlement Agreement

was a condition precedent to the enforcement of the terms of the Term Sheet. An

agreement to agree is generally unenforceable under Texas law, see Karns v. Jalapeno

Tree Holdings, LLC, 459 S.W.3d 683, 692 (Tex. App.—El Paso 2015, pet. denied);

however, the execution of the Comprehensive Compromise and Settlement Agreement

was not characterized in the Term Sheet as a condition precedent to the formation of a

contract, i.e., the Term Sheet contained no language indicating there were terms,

material or otherwise, upon which agreement had yet to be reached or any conditional

language such as “subject to.” Gen. Metal Fabricating, 438 S.W.3d at 749-50 (collected

cases cited therein). “The mere fact that additional documents were to be created does

not, alone, create a fact issue as to the parties’ intent to be bound.”       Id. at 750.

Therefore, we conclude the trial court did not err in finding the Term Sheet constituted a

binding and enforceable contractual obligation, as a matter of law.

                                           14
      Having affirmed the trial court’s finding on summary judgment that the Term

Sheet was an enforceable contract as a matter of law, Expelled Grain’s assertion that

Corn Mill’s and Expelled Grain’s members’ approval by resolution of a Comprehensive

Compromise and Settlement Agreement was a condition precedent for the Term

Sheet’s acceptance is moot. Further, individual members of the LLCs were not parties

to the Term Sheet and their approval of the terms of a Comprehensive Compromise and

Settlement Agreement was simply a term of the contract, not a condition precedent to

the formation of the contract.    Accordingly, we overrule Expelled Grain’s first and

second issues. See McCalla, 416 S.W.3d at 417-18.

      ISSUE THREE

      Expelled Grain next asserts that, if the Term Sheet is enforceable, the trial court

erred in granting summary judgment in Corn Mill’s favor by declaring Expelled Grain’s

option to purchase Corn Mill’s interest in DCM had terminated as of August 19, 2013,

when Expelled Grain had made all necessary payments under the Term Sheet to

extend the option deadline. Again, we disagree.

      Neither party disputes that Expelled Grain did not exercise its option to purchase

Corn Mill’s interest in accordance with the provisions of the Term Sheet. Nor do they

dispute the fact that the Term Sheet explicitly provides that the option period may be

“extended for a period of a maximum of 30 days” after July 19, 2013.           However,

Expelled Grain attempted to create an issue of fact whether Expelled Grain was “ready,

willing, and able” to close the sale by a conclusory statement to that effect in Bell’s

affidavit. Other than Bell’s conclusory statement, Expelled Grain did not submit any

admissible evidence in support of its assertion that it was “ready, willing, and able” to

                                           15
exercise the option and close the sale of Corn Mill’s interest in DCM.4 Conclusory

statements do not raise a genuine fact issue that would preclude summary judgment.

See Wadewitz v. Montgomery, 951 S.W.2d 464, 466 (Tex. 1997); Elizondo v. Krist, 338
S.W.3d 17, 22-23 (Tex. App.—Houston [14th Dist.] 2010), aff’d, 415 S.W.3d 259 (Tex.

2013).

         Under the applicable standard of review, the summary judgment evidence did not

raise a genuine issue as to whether the provisions of the Term Sheet caused Expelled

Grain’s option to terminate when Expelled Grain was “ready, willing, and able” to

consummate the sale of Corn Mill’s interest or that it was prevented from closing by the

acts and omissions of Corn Mill. Expelled Grain’s third issue is overruled.

         ISSUES FOUR AND SIX

         Issues four and six assert that the trial court erred by issuing its judgment when

the jury’s answer to Question Number 3 of the jury charge is ambiguous or lacks

explanation, i.e., the answer “No” was marked through, changed to “Yes,” and initialed

by the jury foreman.5 We disagree.

         Texas Rule of Civil Procedure 292 provides that “a verdict may be rendered in

any cause by the concurrence, as to each and all answers made, of the same ten or

more members of an original jury of twelve . . . .” TEX. R. CIV. P. 292(a). Further, Rule

293 states that, “[i]f the verdict is in proper form, no juror objects to its accuracy, no juror

         4
         Much of Bell’s affidavit and the evidence underlying it were excluded by the trial court as
conclusory and/or hearsay.
         5
          The Verdict Certificate indicated that ten of the jurors “agreed to each and every answer and . . .
signed the certificate below.” Per the trial court’s instructions, the presiding juror wrote down the answers
the ten jurors agreed to in the charge and obtained the signatures of the ten jurors.

                                                     16
represented as agreeing thereto dissents therefrom, and neither party requests a poll of

the jury, the verdict shall be entered upon the minutes of the court.” TEX. R. CIV. P. 293.

       Here, at the trial’s conclusion, the trial court read the jury’s verdict without

objection and neither party requested the jury be polled despite a query by the trial

court. The trial court also granted Corn Mill’s oral motion that judgment issue and

pronounced judgment without objection. In addition, Expelled Grain did not argue either

issue four or six in its Motion for a New Trial.

       To preserve a complaint for appellate review, a party must have presented to the

trial court a timely request, objection, or motion that states the specific grounds for the

desired ruling if they are not apparent from the context of the request, objection, or

motion. TEX. R. APP. P. 33.1(a)(1)(A). Furthermore, as a prerequisite to presenting a

complaint for appellate review, the record must show that the trial court ruled on the

request, objection, or motion, either expressly or implicitly; or refused to rule and the

complaining party objected to that refusal to rule. TEX. R. APP. P. 33.1(a)(2). The

purpose of a timely objection is to give the trial court or the opposing party an

opportunity to correct the error or remove the basis for the objection.

       Here, Expelled Grain failed to preserve an error for review by failing to object.

Because Expelled Grain has not preserved any error for review, issues four and six are

overruled. See Osterberg v. Peca, 12 S.W.3d 31, 55-56 (Tex. 2000).

       ISSUES EIGHT AND NINE

       Through issues eight and nine, Expelled Grain contends Corn Mill failed to follow

the Term Sheet by not conducting an audit through an independent certified public

                                              17
accountant, the trial court erred by directing a verdict against Expelled Grain on its

counterclaims for breach of contract, fraud, and declaratory judgment, and the trial court

erred by refusing to issue jury instructions on estoppel, excuse, or prior breach.

Expelled Grain does not explain or cite this court to the record for the propositions that

(1) Corn Mill was required to retain an “independent” certified public accountant per the

Term Sheet, (2) the evidence was sufficient to withstand a motion for directed verdict on

Expelled Grain’s counterclaims, or (3) the evidence created a fact issue regarding its

affirmative defenses of estoppel, excuse, or prior breach in order to justify a jury

instruction. Neither does Expelled Grain cite to any legal authority in support of these

assertions. We are not required to search a voluminous record, with no guidance from

Expelled Grain, to discover possible trial court error. Town of Flower Mound v. Teague,

111 S.W.3d 742, 762 (Tex. App.—Fort Worth 2003, pet. denied).

       Texas Rule of Appellate Procedure 38.1(h) requires that an appellant’s brief

“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(h). “Rule 38 requires [a

party] to provide us with such discussion of the facts and the authorities relied upon as

may be requisite to maintain the point at issue.” Tesoro Petroleum Corp. v. Nabors

Drilling USA, Inc., 106 S.W.3d 118, 128 (Tex. App.—Houston [1st Dist.] 2002, pet.

denied). “This is not done by merely uttering brief conclusory statements, unsupported

by legal citations.” Id. “Issues on appeal are waived if an appellant fails to support his

contention by citations to appropriate authority or cites to a single non-controlling case.”

Morrill v. Cisek, 226 S.W.3d 545, 548 (Tex. App.—Houston [1st Dist.] 2006, no pet.).

Accordingly, issues eight and nine are waived.

                                            18
       ISSUE TEN

       By its tenth issue, Expelled Grain asserts Corn Mill failed to carry its burden of

proving its attorney’s fees because Corn Mill failed to introduce billing records,

statements, or details. Relying on El Apple I, Ltd. v. Olivas, Expelled Grain suggests

Corn Mill’s testimony concerning attorney’s fees was too general and non-specific to

enable a fact finder to meaningfully review whether the tasks performed and hours

expended were reasonable and necessary under the lodestar method (a method of

calculation of attorney’s fees where the number of hours worked is multiplied by the

prevailing hourly rate). See El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 761 (Tex. 2012)

(holding that “a party applying for an award of attorney’s fees under the lodestar method

bears the burden of documenting the hours expended on the litigation and the value of

those hours”).     Corn Mill responds by contending that the heightened lodestar

documentation requirements of El Apple are “only applicable to claims that require the

federal-law-based lodestar method of awarding attorney’s fees and not to awards of

attorney’s fees in [this] case.”

       For more than a century, Texas law has not allowed the recovery of attorney’s

fees unless the award is authorized by statute or contract. Tony Gullo Motors, L.P. v.

Chapa, 212 S.W.3d 299, 310-11 (Tex. 2006); Akin, Gump, Strauss, Hauer & Feld,

L.L.P. v. Nat’l Dev. & Research Corp., 299 S.W.3d 106, 119 (Tex. 2009). Attorney’s

fees are recoverable for breach of contract suits. See TEX. CIV. PRAC. & REM. CODE

ANN. § 38.001(8) (West 2015). That said, the Texas Civil Practice and Remedies Code

provides that where a claim is based upon an oral or written contract, “reasonable

attorney’s fees” may be awarded in addition to the amount of the claim being asserted.

                                           19
Id. The party seeking to recover attorney’s fees carries the burden of proof to show

entitlement to those fees. Llanes v. Davila, 133 S.W.3d 635, 640 (Tex. App.—Corpus

Christi 2003, pet. denied). In order to recover attorney’s fees under section 38.001, a

litigant must (1) prevail on a breach of contract cause of action and (2) recover

damages. MBM Fin. Corp v. Woodlands Operating Co., 292 S.W.3d 660, 666 (Tex.

2009). The Texas Supreme Court has stated that where “attorney’s fees are proper

under section 38.001(8), the trial court has no discretion to deny them” provided,

however, the party seeking to recover attorney’s fees still bears the burden of proving

the amount and reasonableness of those fees. Smith v. Patrick W.Y. Tam Trust, 296
S.W.3d 545, 547 (Tex. 2009). Therefore, because Corn Mill did prevail on its contract

cause of action and is entitled to recover damages, it is also entitled to recover

reasonable and necessary attorney’s fees to the extent they are supported by the

record.

       The reasonableness of an award of attorney’s fees is ordinarily a matter left to

the sound discretion of the fact finder, and a reviewing court may not substitute its

judgment for that of the jury. Barker v. Eckman, 213 S.W.3d 306, 314 (Tex. 2006). In

Arthur Andersen, drawing from Rule 1.04 of the Texas Disciplinary Rules of

Professional Conduct,6 the Supreme Court identified a non-exclusive list of factors to be

considered in determining a reasonableness of a fee. See Arthur Andersen & Co. v.

Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997).                  Those factors include the

following: (1) the time and labor required, the novelty and difficulty of the questions

involved, and the skill required to perform the legal service properly; (2) the likelihood

       6
         TEX. DISCIPLINARY R. PROF. CONDUCT 1.04, reprinted in TEX. GOV’T CODE, tit. 2, subtit. G app.
(STATE BAR RULES, art. X, § 9).

                                                 20
that the acceptance of representation in the case at issue will preclude other

employment by the attorney; (3) the fee customarily charged in the locality for similar

legal services; (4) the amount in controversy and the result obtained; (5) the time

limitations imposed by the client or the circumstances; (6) the nature and length of the

professional relationship with the client; (7) the experience, reputation, and ability of the

lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent

on results obtained or uncertainty of collection before the legal services have been

rendered.

       Fourteen years after Arthur Andersen, the Texas Supreme Court issued its

opinion in El Apple. In that opinion, the court held that a request for attorney’s fees

under the lodestar method must be supported by sufficient details of the work performed

to enable the fact finder to make a meaningful review of the reasonableness of the fee

request. El Apple, 370 S.W.3d at 761. “Sufficient evidence includes, at a minimum,

evidence ‘of the services performed, who performed them and at what hourly rate, when

they were performed and how much time the work required.’” Long v. Griffin, 442
S.W.3d 253, 255 (Tex. 2014) (per curiam) (quoting El Apple, 370 S.W.3d at 764).

Because the testimony in El Apple only included the total number of hours worked and

generalities about discovery and the length of trial, the Supreme Court determined the

evidence in that case was insufficient to support the award of attorney’s fees and it

remanded the case to the trial court for a redetermination of those fees. Id. at 765.

Likewise, in City of Laredo v. Montano, the Supreme Court reversed and remanded the

case to the trial court in order to redetermine attorney’s fees when the attorney testified

to the time expended and the hourly rate but failed to provide evidence of the time

                                             21
devoted to specific tasks. See City of Laredo v. Montano, 414 S.W.3d 731, 736-37

(Tex. 2013) (finding lead attorney offered nothing to document the claim for attorney’s

fees other than generalized testimony about the tasks performed and his belief as to the

number of hours spent preparing and trying the case).

       El Apple involved a claim under the Texas Commission on Human Rights Act

which mandated use of the lodestar method in such cases. El Apple, 370 S.W.3d at

760. See also TEX. CIV. PRAC. & REM. CODE ANN. § 26.003(a) (providing that “the trial

court shall use the [l]odestar method to calculate the amount of attorney’s fees to be

awarded class counsel”). Contrary to the position taken by Corn Mill, the Supreme

Court has held that the El Apple requirements also apply to an attorney’s fee request

under section 38.001 of the Texas Civil Practice and Remedies Code if the party

applying for the award “uses the lodestar method by relating the hours worked for each

of the . . . attorneys multiplied by their hourly rates for a total fee.” Long, 442 S.W.3d at

255; Auz v. Cisneros, 477 S.W.3d 355, 362-63 (Tex. App.—Houston [14th Dist.] 2015,

no pet.) (same conclusion).

       Here, an attorney for Corn Mill testified that he had generally monitored the case

as the “responsible billing attorney” and that in that capacity he had reviewed all the

attorney fee bills and was familiar with the time expended. As an experienced attorney,

he testified generally as to different types of legal work that would go into the

prosecution of a case such as this. He opined that there would be “some type of

investigation,” but he never detailed the investigation actually employed in this case. He

further stated that “a lot of times there are motions that are filed”; however, once again,

no specifics were given. He described the proceedings in this case in broad general

                                             22
terms, only occasionally punctuating his testimony with factual statements relevant to

this particular case. He described how the “hours start piling up,” how “costs start to

rack up,” and how “time gets consumed” in the preparation of a case for trial. When

asked about the specifics of this case, he testified that Corn Mill was billed on an hourly

basis (stating “[s]o it is hours times the billing rate”) and that the hourly rate of the

attorneys working on this case varied between $150 to $345 per hour, depending on the

age, experience, and expertise of the attorney performing the service.          Finally, in

response to the question as to whether he had a general opinion as to a reasonable fee

for Corn Mill’s attorneys in this case, he responded that a “reasonable fee for handling

this case for [Corn Mill] through trial would be not less than $75,000 and probably not

more than about $90,000.” As to a reasonable fee for services rendered on appeal to

this court, the attorney stated “a reasonable fee for handling an appeal . . . would be

between 10 and $15,000.” As to an appeal to the Texas Supreme Court he opined “a

reasonable fee would be in the neighborhood of $10,000.” At no time did the attorney

offer specific testimony concerning the actual services rendered or by whom those

services were rendered.     No bills, statements, or other documentary evidence was

offered.

       Clearly, Corn Mill was using the lodestar method to prove its claim for attorney’s

fees. Because the Texas Supreme Court has made it clear that a party choosing the

lodestar method of proving attorney’s fees under section 38.001 of the Texas Civil

Practice and Remedies Code must provide sufficient evidence to satisfy the

requirements of El Apple, we conclude the evidence presented in this case is factually

insufficient to support the amount of attorney’s fees awarded because the evidence

                                            23
presented does not provide sufficient information for a meaningful review of the lodestar

calculation. Accordingly, issue ten is sustained. As directed by the Texas Supreme

Court under these circumstances, we reverse the judgment of the trial court as to the

issue of attorney’s fees and remand the matter to the trial court for a redetermination of

those fees consistent with this opinion.

       ISSUE ELEVEN

       Expelled Grain asserts the evidence at trial was legally and factually insufficient

to support the jury’s verdict and trial court’s judgment. Again, Expelled Grain has failed

to explain why the evidence was insufficient. Furthermore, it does not present any

arguments or cite to any legal authority to support its position. As such, the complaint is

waived. Town of Flower Mound, 111 S.W.3d at 762. Furthermore, even assuming the

issue was adequately briefed, based upon the appropriate and well-known standard of

review for legal sufficiency,7 we would still find the evidence was legally sufficient to

support the jury’s verdict. Accordingly, we overrule issue eleven.

       THEIRING’S ISSUES

        By two issues, Theiring asserts the trial court erred by (1) striking his Original

Petition in Intervention and (2) finding he did not have a justiciable interest regarding his

right to approve the agreement at issue. In his Original Petition In Intervention, Theiring

brought suit on “behalf of himself and derivatively on behalf of all other members of

Expelled Grain . . . similarly situated, and Expelled Grain . . . .” Like Expelled Grain, he

sought a declaration that the Term Sheet was not a valid enforceable contract and

       7
          The standards by which we conduct a legal sufficiency review are well known and we refer the
parties to City of Keller v. Wilson, 168 S.W.3d 802, 821-22 (Tex. 2005), for a statement of those
standards.

                                                 24
sought the return of nearly $500,000 paid by Expelled Grain to extend its option to

purchase Corn Mill’s interest in DCM in accordance with the Term Sheet. In essence,

he asserted the Term Sheet was not an enforceable contract, and if it were, he and

other members of Expelled Grain had a contractual right to approve its terms under

paragraph 2 of the Term Sheet.

       Having already determined that the trial court properly granted summary

judgment declaring the Term Sheet to be a valid enforceable contract and that

paragraph 2 did not create a condition precedent giving Expelled Grain’s members a

contractual right to approve the terms of that contract, Theiring’s complaints on appeal

are moot. See General Electric Capital Auto Lease, Inc. v. Bloom, No. C14-92-00834,

1993 Tex. App. LEXIS 766, at *13 (Tex. App.—Houston [14th Dist.,] 1993, no pet.)

(mem. op.) (once an appellate court overrules certain issues on appeal for lack of any

supporting evidence of record, similar issues are rendered moot).         Accordingly, we

decline to address Theiring’s issues.

       CONCLUSION

       The trial court’s judgment is reversed as to the award of attorney’s fees and

remanded to the trial court for a redetermination of attorney’s fees consistent with this

opinion. In all other respects, the trial court’s judgment is affirmed.

                                                  Patrick A. Pirtle
                                                     Justice

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