Court Opinion

ID: 4420283
Source: CourtListenerOpinion
Date Created: 2019-07-25 22:55:18.249986+00
Date Added: 2024-06-11T14:51:21.521493
License: Public Domain

Reversed, Rendered, and Remanded and Majority and Dissenting Opinions
filed July 25, 2019.

                                       In The

                     Fourteenth Court of Appeals

                               NO. 14-17-00976-CV

                            KYLE TAUCH, Appellant
                                         V.

VIRGINIA ANGEL, TRUSTEE FOR THE GOBSMACK GIFT TRUST, AS
  ASSIGNEE OF SOUTH STATE BANK, AND SOUTH STATE BANK,
                        Appellees

                    On Appeal from the 127th District Court
                            Harris County, Texas
                      Trial Court Cause No. 2016-33404

                       DISSENTING OPINION

      Our main task in this summary-judgment appeal is to decide whether two
parties formed a contract. The answer turns on the doctrine of implied revocation.
Long-recognized but seldom invoked, the doctrine essentially provides that if the
offeree learns that the offeror has taken some action inconsistent with the offer, the
law deems the offer impliedly revoked, so that the offeree can no longer accept it
to form a contract with the offeror. In today’s case the majority concludes that the
offeror, appellee South State Bank (“Bank”) did not impliedly revoke an offer it
made to appellant Kyle Tauch to settle an outstanding judgment. The summary-
judgment proof and governing legal standard show otherwise.

          While the Bank’s offer to settle the judgment was pending, Tauch learned
that the Bank had agreed to assign the same judgment to a third party, appellee
Virginia Angel, Trustee for the Gobsmack Gift Trust (“Angel”). Tauch then tried
to accept the offer, but the Bank refused. Litigation followed. The Bank and
Angel prevailed in the trial court, arguing Tauch could not accept an impliedly
revoked offer, so the Bank and Tauch could not have formed a contract. Rejecting
the implied-revocation argument, the majority reverses the trial court’s summary
judgment in favor of the Bank and Angel and renders judgment for Tauch. The
law and summary-judgment proof show as a matter of law that the Bank impliedly
revoked its offer, leaving Tauch without the power to accept it or form a contract
with the Bank. With no contract, there could be no breach. The trial court reached
the correct judgment and this court should affirm it. Because the majority reaches
the opposite conclusion, I respectfully dissent.

                            The Implied Revocation Doctrine

          The Supreme Court of Texas first applied the implied revocation doctrine
decades ago in Antwine v. Reed.1 In explaining how the doctrine works, the high
court noted that when an offeror impliedly revokes an offer, the offeree’s power of
acceptance terminates, meaning no contract can be formed.2 The Antwine court set
a low threshold for invoking the doctrine: all the law requires to trigger implied

1
    199 S.W.2d 482, 485 (Tex. 1947).
2
    Id.

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revocation is “that the person making the offer does some act inconsistent with it.”3
Under that standard, the Bank impliedly revoked its offer to Tauch.4

                  The Antwine Standard: Some Act Inconsistent with the Offer

          All the Bank need show to establish implied revocation is an act by the Bank
inconsistent with the offer to Tauch and Tauch’s knowledge of the inconsistent act.
The inconsistent act in Antwine was not a contract with a third party as to the same
subject matter.5 Instead, the inconsistent act that amounted to an implied
revocation of an offer to sell land was the offeror’s advising the real-estate broker
to take the land off the market.6 The real-estate broker in Antwine listed the land
for sale by the offeror, and also acted on behalf of the offeree.7 After the offeror
made a counteroffer to the offeree, but before the offeree took the steps necessary
to accept the counteroffer, the offeror entered into a contract with a third-party for
the sale of the land.8 Yet, the offeror did not notify the offeree of this third-party
contract, nor was there any evidence that the offeree learned about this third-party
contract.9 Because the third-party contract was not communicated to the offeree,
that action could not serve as the inconsistent act.10 But trial evidence did show
that the offeror told the real-estate broker to take the land off the market and that
the broker told the offeree of this instruction before the offeree took the steps

3
    Id. (emphasis added).
4
    Id. at 485–86.
5
    See id.
6
    See id.
7
    See id. at 484.
8
    See id.
9
  See id. (stating that the offeror made no effort to communicate with the offeree with regard to
taking the land off the market, other than the communication with the broker and that the offeror
did not notify the offeree that offeror contracted with a third party for the sale of the land).
10
     See id. at 485.

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necessary to accept the offer.11 Thus, the Supreme Court of Texas did not rely on
the third-party contract as the inconsistent act supporting an implied revocation.12
Instead, the high court held that the evidence proved implied revocation based on
the offeror’s inconsistent act in telling the real-estate broker to take the land off the
market and the offeree’s knowledge of this act.13 The majority indicates that an
agreement between the offeror and a third-party for the sale of the subject matter of
the offer is required for an inconsistent act.14 This conclusion conflicts with the
Antwine precedent.15

           If the high court viewed this single communication as an act inconsistent
with a proposed land purchase, then surely we must view the larger action of
agreeing to assign the Bank’s interest in a judgment to a third party as inconsistent
with releasing the same judgment in favor of Tauch. Likewise, if the Antwine
offeree’s knowledge of the seller’s instruction to the broker sufficed as notice to
the Antwine offeree that the offeror had revoked the proposed contract to the
Antwine offeree, then surely Tauch’s receipt of the assignment agreement sufficed
to put Tauch on notice of the Bank’s implied revocation of its offer to settle the
judgment. 16 The Antwine court held that in light of the offeror’s inconsistent act,
the offeror was deemed to have impliedly revoked the offer, so the court found the
parties did not form a contract when the offeree later took the steps to accept the
offer.17

11
     See id. at 485–86.
12
     See id.
13
     See id.
14
     Ante at 12.
15
     See Antwine, 199 S.W.2d at 485–86.
16
     See id.
17
     See id.

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          Applying Antwine to today’s case, the Bank impliedly revoked its offer to
Tauch when Tauch learned the Bank had agreed to assign the judgment to Angel.18
Before Tauch communicated an acceptance to the Bank, Angel (through counsel)
informed Tauch (through counsel) that the Bank had agreed to assign its interest in
the judgment to Angel. That action was inconsistent with the Bank’s offer to settle
with Tauch.19 Even if the parties to the assignment agreement agreed that it was
not to take effect until the day after Tauch learned of it, the parties already had
executed the agreement, and Tauch has not shown that the Bank would have been
able to rescind the assignment agreement unilaterally before the agreement took
effect the next day.

          Before Tauch communicated his acceptance to the Bank, Angel sent a copy
of the assignment agreement to Tauch. That agreement was inconsistent with the
Bank’s offer to settle with Tauch.20 And, Tauch received notice of the inconsistent
action before he sent the April 13 email purporting to accept the Bank’s offer. At
that point, having learned of the inconsistent action, Tauch could not have accepted
the Bank’s offer because Tauch’s power of acceptance came to an end the moment
he received notice of the inconsistent act — before he sent the email acceptance.21
Simply stated, when Tauch learned that the Bank had executed the assignment
agreement, the law deemed the Bank’s offer to Tauch revoked. 22

18
     See id.
19
     See id.
20
     See id.
21
     See id.
22
     See id.

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                    An Act Inconsistent with the Bank’s Offer to Tauch

          The majority relies heavily upon its conclusion that because the Bank’s
assignment to Angel did not become effective until after Tauch sent the email
acceptance, the offer could not have been impliedly revoked. By focusing
exclusively on the effective date of the assignment agreement, the majority misses
the core inquiry — whether the Bank took some action inconsistent with the offer
to release the judgment in Tauch’s favor. The question is not whether Angel could
enforce the assignment on April 13 or even whether the assignment had become
executory; rather, the question is whether the Bank’s act of agreeing to assign the
judgment to Angel (effective the next day) was inconsistent with releasing the
same judgment to Tauch.23 Whether the assignment’s effective date was a day
later, a week later, or a month later, agreeing to assign the judgment to Angel was
an action inconsistent with releasing the judgment in Tauch’s favor.

          Agreeing to assign the judgment to Angel is incompatible with releasing
the judgment as to Tauch. One cannot be reconciled with the other. Agreeing to
assign the judgment to Angel effective April 14 is inconsistent with releasing the
judgment as to Tauch on April 13. Any agreement to assign the judgment to Angel
is an act inconsistent with releasing the judgment as to Tauch.

           The law provides that as soon as Tauch learned of the inconsistent act —
the Bank’s signing of the assignment agreement — Tauch’s power to accept the
Bank’s offer terminated.24 Tauch’s knowledge of the inconsistent act operated in
law as an implied revocation of the Bank’s settlement offer.25 A revoked offer

23
     See id.
24
     See id.
25
     See id.

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cannot be accepted.26 So, Tauch’s April 13 email purporting to accept the Bank’s
offer could not and did not form a contract.27 The legal standard in section 43 of
the Restatement (Second) of Contracts is substantially similar to the supreme
court’s legal standard in Antwine, so the result would be the same if section 43
applied to this case.28

           By taking a definite action inconsistent with its offer to settle with Tauch,
the Bank impliedly revoked that offer.29 Neither Tauch nor the majority offer any
explanation of how the next-day effective date makes the assignment consistent
with the offer. That the assignment would not become effective until the next day
does not somehow make the act of agreeing to assign the judgment consistent with
releasing it as to Tauch. Whether the assignment took effect on April 13 or April
14, assigning the judgment to Angel was an act inconsistent with the offer to
Tauch.

           The majority reasons that the Bank and Angel “did not have an effective
contract at the time Tauch accepted”30 and the Bank “had not yet assigned its
interest in the judgment to Angel at the time Tauch accepted the bank’s offer to
settle.”31 At the very least, the Bank and Angel had formed an executory contract
— and Tauch had learned of it, seen it, and even read it — before he purported to

26
     See id.
27
     See id.
28
  Under Restatement section 43 “[a]n offeree’s power of acceptance is terminated when the
offeror takes definite action inconsistent with an intention to enter into the proposed contract and
the offeree acquires reliable information to that effect.” Restatement (Second) of Contracts § 43
(1981).
29
     See id.
30
     Ante at 12.
31
     Id.
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accept the Bank’s offer. Promising to assign the judgment to Angel is an act
inconsistent with releasing it as to Tauch.

          The majority concludes that entering into an assignment on April 13 that
would not take effect until the next day “is not an action that would prevent the
bank’s April 11 offer to Tauch from materializing into a contract with Tauch
should he accept the proposal before April 14, which he did.”32 But action that
would prevent the offer from materializing into a contract is not the supreme
court’s standard.33 All the Bank needed to show was an act inconsistent with the
Tauch offer and Tauch’s knowledge of that action,34 and the Bank did. As a matter
of law the Bank impliedly revoked its offer to Tauch before Tauch attempted to
accept it via the April 13 email.35 The implied revocation killed the offer, so that
email could not and did not constitute an acceptance of it. 36 The Bank and Tauch
did not form a settlement agreement. Without a contract, Tauch cannot possibly
prevail on a breach-of-contract claim.

                             Scope of Implied Revocation Doctrine

          The majority dubs Antwine a “real estate case” and questions whether the
implied revocation doctrine applies outside the real estate context. But nothing in
the Antwine court’s application or discussion of the doctrine limits it to real-estate
transactions or restricts its application to any particular context. 37 Tauch urges this
court not to “extend” the implied revocation doctrine beyond the real-estate

32
     Ante at 13.
33
     See Antwine, 199 S.W.2d at 485–86.
34
     See id.
35
     See id.
36
     See id.
37
     See id. at 484-86.

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context, but neither today’s case nor the doctrine itself presents that choice.
Because the supreme court has not limited the doctrine to real-estate cases,
applying it in today’s case hardly amounts to an extension. Quite the opposite,
because the high court has not limited the implied revocation doctrine to any
particular genre of cases, we would have no legitimate basis for doing so.38

                                           Conclusion

       The trial court correctly granted Angel’s motion for summary judgment and
correctly denied Tauch’s motion for summary judgment. The trial court acted
properly in signing a final judgment that Tauch take nothing on his claims against
Angel and the Bank, and the trial court correctly awarded Angel and the Bank their
attorney’s fees. Because Tauch should not prevail on appeal, he should not recover
his fees from Angel and the Bank.

                                              /s/       Kem Thompson Frost
                                                        Chief Justice

Panel consists of Chief Justice Frost and Justices Jewell and Bourliot (Jewell, J.,
majority).

38
   The majority concludes that the implied revocation doctrine “typically, if not exclusively,
applie[s] in real-estate cases.” But the comment to the Restatement (Second) of Contracts § 43
does not support that conclusion. See ante at 10-11, n.2. Comment b merely observes that “The
rule of this Section has been applied most frequently to offers for the sale of an interest in land.”
Restatement (Second) of Contracts § 43 cmt. b.

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