Court Opinion

ID: 9929755
Source: CourtListenerOpinion
Date Created: 2024-02-04 09:14:01.105491+00
Date Added: 2024-06-11T10:51:03.700802
License: Public Domain

Reversed and Rendered in Part and Affirmed in Part and Memorandum
Opinion filed February 1, 2024.

                                      In The

                     Fourteenth Court of Appeals

                               NO. 14-23-00124-CV

  TCB ELITE FLEET, LLC; CHAD GATLIN; AND TABITHA GATLIN,
                          Appellants
                                         V.

                               JAY ICET, Appellee

                    On Appeal from the 344th District Court
                           Chambers County, Texas
                     Trial Court Cause No. 18-DCV-0702

                          MEMORANDUM OPINION

      Appellants TCB Elite Fleet, LLC (TCB), Chad Gatlin, and Tabitha Gatlin
appeal from an adverse judgment on appellee Jay Icet’s breach of contract claim. In
their first issue appellants challenge the sufficiency of the evidence to support the
trial court’s finding of joint and several liability.1 In their second issue appellants
challenge the sufficiency of the evidence to support the trial court’s damage award.

          We conclude the record contains legally and factually sufficient evidence to
support the trial court’s finding of TCB and Chad Gatlin’s joint and several liability.
Because we conclude there is legally insufficient evidence that Tabitha Gatlin
entered into an agreement with Icet, we sustain that portion of appellants’ first issue
and reverse that portion of the judgment finding Tabitha Gatlin jointly and severally
liable. We further conclude the evidence is legally sufficient to support the damage
award. Accordingly, we reverse that portion of the judgment that awards joint and
several liability against Tabitha Gatlin and render judgment that Tabitha Gatlin is
not jointly and severally liable. We affirm the remainder of the trial court’s judgment
as challenged on appeal.

                                               BACKGROUND

          Appellee Jay Icet testified that he and appellant Chad Gatlin entered into an
oral agreement to start a construction business. The agreement was to “split the
company 50/50,” which Icet explained meant they would share in the profits and
losses of the company equally. Chad represented to Icet that he owned a trucking
company called TCB Elite Fleet, LLC and they would use that entity to start their
construction business. Icet understood that he was acquiring a fifty percent interest
in TCB. Icet understood that Tabitha Gatlin would keep the company’s books but
that she would not be an owner. Icet testified that he never discussed anything with
Tabitha “in the initial setup.” Subsequently, the Gatlins had business cards for TCB
printed and listed Icet as an owner. The first construction work done by TCB began

          1
              Although appellants filed a joint brief, their first issue is only asserted by TCB and Tabitha
Gatlin.

                                                       2
in 2016.

      After working with Chad in the construction business for a couple of years
Icet suspected that he was not being paid fifty percent of the profits. When the
business began Icet thought that a portion of his share of the profits was being
retained for the benefit of the company and even agreed to such a retention.
Eventually, Icet realized that was not the case and requested an accounting from
Chad. Chad refused the accounting. Subsequently Icet sent a formal demand for an
accounting through his attorneys. At that time Icet ceased working for TCB.

      After Chad refused Icet’s request for an accounting, Icet hired an accounting
firm to produce an accounting of TCB and address what he was owed. A forensic
analysis was conducted by Autumn Kraus of Whitley Penn accounting firm. Kraus’s
report was admitted into evidence without objection. Icet learned that a number of
TCB’s purported expenditures were actually personal expenditures of the Gatlins.
Kraus concluded that Icet’s damages were $328,114. Icet described that damage
amount as “conservative” because there were a few construction jobs of which he
had personal knowledge that were not turned over to Kraus by the Gatlins.

      At the conclusion of testimony, the trial court stated on the record that there
was a “meeting of the minds” between Icet and Chad to form a partnership and split
profits evenly. The final judgment stated that Icet was entitled to recovery against
“Defendants for breach of contract.” The term “Defendants” included all three
appellants. The judgment awarded damages of $193,000 to be recovered jointly and
severally from the “Defendants.” The trial court timely filed findings of fact and
conclusions of law. Appellants TCB, Chad Gatlin, and Tabitha Gatlin filed this
appeal.

                                         3
                                      ANALYSIS

      In two issues appellants assert the trial court erred in (1) rendering judgment
jointly and severally against all three appellants; and (2) awarding damages of
$193,000. In both issues appellants challenge the legal and factual sufficiency of the
evidence to support certain of the trial court’s findings of fact.

I.    Standard of review and applicable law

      We review the trial court’s decision for legal sufficiency of the evidence using
the same standards applied in reviewing the evidence supporting a jury’s finding.
Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). We review the evidence in
the light most favorable to the challenged finding and indulge every reasonable
inference that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex.
2005). We credit favorable evidence if a reasonable factfinder could and disregard
contrary evidence unless a reasonable factfinder could not. Id. at 827.

      We sustain a legal sufficiency or “no evidence” challenge only when (1) the
record discloses a complete absence of evidence of a vital fact; (2) the court is barred
by rules of law or of evidence from giving weight to the only evidence offered to
prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a
mere scintilla; or (4) the evidence establishes conclusively the opposite of a vital
fact. Marathon Corp. v. Pitzner, 106 S.W.3d 724, 727 (Tex. 2003); Vast Constr.,
LLC v. CTC Contractors, LLC, 526 S.W.3d 709, 719 (Tex. App.—Houston [14th
Dist.] 2017, no pet.). When a party challenges the legal sufficiency of the evidence
on a finding on which it did not bear the burden of proof, the party must show that
no evidence supports the finding. Exxon Corp. v. Emerald Oil & Gas Co., L.C., 348
S.W.3d 194, 215 (Tex. 2011).

      We apply these standards mindful that the factfinder is the sole judge of the

                                           4
credibility of the witnesses and the weight to be given to their testimony, and we
indulge every reasonable inference in support of the factfinder’s findings. See City
of Keller, 168 S.W.3d at 819, 822. When, as here, there is a complete reporter’s
record of the trial, the trial court’s findings of fact will not be disturbed on appeal if
there is any evidence of probative force to support them. See Tendeka, Inc. v. Nine
Energy Serv. LLC, No. 14-18-00018-CV, 2019 WL 6872942, at *5 (Tex. App.—
Houston [14th Dist.] Dec. 17, 2019, no pet.) (mem. op.); Barrientos v. Nava, 94
S.W.3d 270, 288 (Tex. App.—Houston [14th Dist.] 2002, no pet.).

      For a factual-sufficiency review, we examine the entire record and consider
evidence favorable and contrary to the challenged finding. Cain v. Bain, 709 S.W.2d
175, 176 (Tex. 1986) (per curiam). We may set aside the trial court’s finding only if
it is so contrary to the overwhelming weight of the evidence as to be clearly wrong
and unjust. Id.

II.   The evidence is legally and factually sufficient to support joint and
      several liability against Chad and TCB, but not Tabitha.

      In TCB and Tabitha’s first issue they assert the evidence is legally and
factually insufficient to support the trial court’s finding of joint and several liability
for breach of contract. TCB and Tabitha concede that Chad Gatlin and Icet entered
into an oral agreement, but assert there is no evidence that TCB or Tabitha Gatlin
entered into a contract with Icet.

      To recover on a breach of contract claim, a claimant must prove: (1) the
existence of a valid contract; (2) the claimant performed or tendered performance;
(3) the other party breached the contract; and (4) the claimant was damaged as a
result of the breach. USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479, 502 n.21
(Tex. 2018). Defendants are jointly and severally liable for breaches of contracts to
which they are a party. Z.M. Shayjayadam3, LLC v. Omnova Sols., Inc., No. 14-19-

                                            5
00623-CV, 2020 WL 6278615, at *10 (Tex. App.—Houston [14th Dist.] Oct. 27,
2020, no pet.) (mem. op.). Joint and several liability is appropriate in contract cases
when two or more persons promise the same performance. Id.; Bluestar Energy, Inc.
v. Murphy, 205 S.W.3d 96, 99 (Tex. App.—Eastland 2006, pet. denied). When an
obligation is joint and several, any one of the obligors may be held liable. Z.M.
Shayjayadam3, 2020 WL 6278615, at *10.

      The trial court filed findings of fact, in which it determined:

      1.     In or around 2015, Plaintiff and Defendants entered into an oral
      contract to start a construction company using the name TCB Elite
      Fleet, LLC (“TCB”), which was an existing Texas limited liability
      company (the “Business”).
      2.    Plaintiff and Defendants agreed that [sic] to be equal partners in
      the Business and split the profits of the business 50/50.
                                        *****
      7.     A preponderance of the evidence shows that Defendants
      breached the agreement with Plaintiff and failed to pay Plaintiff 50%
      of the profits of the Business.
Appellants challenge the sufficiency of the evidence to support the above findings
asserting that the evidence is insufficient to show that all three defendants entered
into an agreement.

      For an agreement to be enforceable, there must be a meeting of the minds with
respect to its subject matter and essential terms. Wal-Mart Stores, Inc. v. Lopez, 93
S.W.3d 548, 556 (Tex. App.—Houston [14th Dist.] 2002, no pet.). The
determination of a meeting of the minds, and thus offer and acceptance, is based on
the objective standard of what the parties said and did—and not on their subjective
state of mind. Angelou v. African Overseas Union, 33 S.W.3d 269, 278 (Tex. App.—
Houston [14th Dist.] 2000, no pet.). In determining mutual assent, the court
considers the communications between the parties and the acts and circumstances

                                          6
surrounding those communications. Lopez, 93 S.W.3d at 556.

      In this case, it is undisputed that an oral contract was formed between Chad
and Icet. The record does not reflect a meeting of the minds between Tabitha Gatlin
and Icet. Specifically, Icet testified that his agreement was only with Chad. On cross-
examination Icet was asked about his “agreement with the Gatlins[.]” Icet
responded, “When you say ‘Gatlins,’ would you be more specific? I only had an
agreement with one Gatlin.” Icet testified that he had an agreement to create a
company with Mr. Gatlin, and never discussed anything with Ms. Gatlin during the
initial setup. The record contains no evidence of a meeting of the minds between
Tabitha Gatlin and Icet.

      The evidence supports the trial court’s findings that Chad and Icet formed a
binding agreement. We turn now to Icet’s assertions that TCB and Tabitha can be
held jointly and severally liable with Chad.

      A.     Chad’s purported authority to represent TCB

      Icet asserts that Chad had apparent authority to bind TCB to an oral
agreement.

      Apparent authority is based on estoppel and arises either (1) from a principal
knowingly permitting an agent to hold himself or herself out as having authority, or
(2) by a principal’s actions that lack such ordinary care as to clothe an agent with the
indicia of authority, thus leading a reasonably prudent person to believe that the
agent has the authority he or she purports to exercise. Gaines v. Kelly, 235 S.W.3d
179, 182 (Tex. 2007). The principal’s full knowledge of all material facts is essential
to establish a claim of apparent authority. Id. Only the conduct of the principal is
relevant. Id. The standard is that of a reasonably prudent person using diligence and
discretion to ascertain the agent’s authority. Id. at 182–83. “Thus, to determine an

                                           7
agent’s apparent authority we examine the conduct of the principal and the
reasonableness of the third party’s assumptions about authority.” Id. at 183;
Amerigroup Tex., Inc. v. True View Surgery Ctr., L.P., 490 S.W.3d 562, 566 (Tex.
App.—Houston [14th Dist.] 2016, no pet.).

      The trial court found that “Chad Gatlin and Tabitha Gatlin represented to
Plaintiff, and others in the community, that Plaintiff was an owner of TCB Elite
Fleet, LLC.” We conclude the evidence is not legally or factually insufficient to
support this finding.

      Icet testified that he and Chad entered into an agreement to create a
construction company using TCB, a company Chad represented he owned. Chad
represented to Icet that he and his father operated a trucking company under the
name TCB Elite Fleet, LLC. When Icet asked Chad what portion of the company
Chad’s father owned, Chad responded that he owned the company. At that time Icet
did not know that Tabitha had any ownership in TCB. Icet later learned that at the
time he and Chad agreed to start a business, Chad had zero ownership in TCB.
Tabitha and her mother owned TCB until May 2017 when Tabitha’s mother gave
her portion of TCB to Chad. In 2016, when Icet and Chad agreed to start the
construction company, Chad owned no interest in TCB.

      The record further supports the trial court’s finding that Tabitha represented
to others in the community that Icet was an owner of TCB but did not inform Icet
that Chad lacked authority to bind TCB. Tabitha permitted Chad to represent to Icet
that he owned TCB. Tabitha had business cards printed with both Icet and Chad’s
names listed as owners of TCB.

      Viewing the above evidence in the light most favorable to the trial court’s
findings, the record reflects that Chad held himself out as an owner and agent of
TCB at the time he and Icet entered into a contract. The evidence further supports
                                         8
that Tabitha willingly participated in allowing Icet to believe that Chad was an owner
of TCB. Icet could have formed a reasonable belief that Chad had authority to
represent TCB as a party to the contract. Accordingly, when viewed cumulatively
and in the light most favorable to Icet, the evidence at trial is legally sufficient to
support the trial court’s implied finding that Chad had apparent authority to enter
into a contract on behalf of TCB. Viewing all of the evidence, both that in favor of
the trial court’s finding and that against the finding, if any, we conclude the trial
court’s finding is not so contrary to the overwhelming weight of the evidence as to
be clearly wrong and unjust.

       B.     Tabitha’s purported ratification of the contract

       Icet asserts for the first time on appeal that while his agreement was with Chad
and TCB, Tabitha ratified the agreement. The record reflects, however, that Icet
failed to plead ratification or obtain a finding of fact that Tabitha ratified the contract.

       Ratification is the adoption or confirmation by a person with knowledge of all
material facts of a prior act which did not then legally bind that person and which
that person had the right to repudiate. BPX Operating Co. v. Strickhausen, 629
S.W.3d 189, 196 (Tex. 2021). Generally, ratification is a plea in avoidance, which,
absent trial by consent, must be affirmatively pleaded or it is waived. Land Title Co.
v. F. M. Stigler, Inc., 609 S.W.2d 754, 756 (Tex. 1980). Whether a person has ratified
an act is essentially a question of fact, to be determined from all the circumstances
in evidence. Jerry L. Starkey, TBDL, L.P. v. Graves, 448 S.W.3d 88, 102 (Tex.
App.—Houston [14th Dist.] 2014, no pet.).

       In Icet’s live pleading he alleged that he and Chad started a construction
company, agreed to use the entity TCB, and to split profits and losses equally. Icet
alleged that, “[w]hile no written contract memorializing this agreement was
executed, Icet, [TCB], Tabitha Gatlin, and Chad Gatlin operated under these terms
                                             9
until 2018.” Icet alleged a breach of contract claim against TCB, Chad, and Tabitha,
in which he alleged that his agreement to split net profits was with both Chad and
Tabitha. Icet’s live pleading did not contain an allegation that Tabitha ratified Chad
and Icet’s agreement.

       Not only did Icet fail to plead ratification, but he failed to obtain a finding of
fact on the issue. While omitted findings can be presumed if an element of the ground
of recovery was included in the findings of fact, Tex. R. Civ. P. 299, and if the
omitted finding is supported by the evidence, here the trial court made no findings
on any elements of ratification. Even if the theory of ratification had been raised by
the pleadings and evidence, since the trial court made findings of fact, but no finding
on ratification, on appeal, the ratification theory has been waived. MCG Drilling
Investments, LLC v. Double M Ranch, Ltd., No. 11-14-00299-CV, 2018 WL
2022590, at *5 (Tex. App.—Eastland Apr. 30, 2018, no pet.); see also Pinnacle
Homes Inc. v. R.C.L. Offshore Eng’g Co., 640 S.W.2d 629, 630 (Tex. App.—
Houston [14th Dist.] 1982, writ ref’d n.r.e.).

       Viewing the evidence in the light most favorable to the trial court’s findings,
we conclude the evidence does not support ratification of an oral agreement between
Icet and Tabitha. In that regard, Tabitha, not having agreed to promise performance,
cannot be held jointly and severally liable. See Z.M. Shayjayadam3, 2020 WL
6278615, at *10. We sustain that portion of appellants’ first issue that challenges the
sufficiency of the evidence to support joint and several liability for Tabitha. We
overrule the remainder of appellants’ first issue.

III.   The accounting expert’s testimony was not conclusory.

       In appellants’ second issue they assert the trial court erred in awarding
damages of $193,000 because the evidence is legally and factually insufficient to

                                           10
support the award.2 Specifically, appellants assert Icet’s accounting and damages
expert, Autumn Kraus, “conjured an opinion” based on expenses that “may have
been expended for personal use,” job breakdown sheets that made it “impossible to
match to earnings in a given year, or to determine if all sheets have been provided,”
and “lack of complete foundational data.” Appellants further contend that Kraus
made a “self-serving assumption that certain undesignated payments were made to
Chad Gatlin and that Plaintiff is entitled to 50% of those undesignated payments.”
Other than challenging Kraus’s report, appellants do not challenge any other aspect
of the damages award.

       Kraus’s forensic accounting report was admitted into evidence without
objection. Kraus attached as exhibits to her report her curriculum vitae and the
documents she reviewed for the report. Those documents included the following:

       TCB Elite Fleet, LLC
            1. General ledgers for years 2016-2018
            2. Trail [sic] balances for years 2016-2018
            3. Federal income tax returns for years 2016 and 2017
            4. Job breakdown sheets
       Chad and Tabitha Gatlin
            1. Personal income tax returns of each party for years 2016 and
            2017
            2. Closing documents for the purchase of the Dogwood Lane
            property

       In challenging the legal and factual sufficiency of the evidence to support the
trial court’s damages finding, appellants limit their attack to the conclusory nature

       2
         The trial court made the following conclusion of law: “Plaintiff is entitled to recover
actual damages in the amount of $193,000.00 for breach of the Promissory Note.” The trial court’s
reference to a promissory note appears to be a clerical error. In its final judgment, the trial court
accurately awarded damages of $193,000 for breach of contract.

                                                 11
of Kraus’s report. Because appellants failed to object to the expert’s report they
cannot complain of the reliability of Kraus’s report or her underlying methodology,
technique, or foundational data. See Coastal Transp. Co., Inc. v. Crown Cent.
Petroleum Corp., 136 S.W.3d 227, 233 (Tex. 2004).

      Examination of the expert’s underlying methodology, technique, or
foundational data as part of a reliability challenge is “a task for the trial court in its
role as gatekeeper, and [is] not an analysis that should be undertaken for the first
time on appeal.” Id. When a scientific opinion is admitted in evidence without
objection, it may be considered probative evidence even if the basis for the opinion
is unreliable. City of San Antonio v. Pollock, 284 S.W.3d 809, 818 (Tex. 2009). But
if no basis for the opinion is offered, or the basis offered provides no support, the
opinion is merely a conclusory statement and cannot be considered probative
evidence, regardless of whether there is no objection. Pike v. Tex. EMC Mgmt., LLC,
610 S.W.3d 763, 786 (Tex. 2020). In this regard, when the challenge is that the
expert testimony is speculative or conclusory on its face, then a party may challenge
the legal sufficiency of the evidence even in the absence of any objection to its
admissibility. See Coastal Transp. Co., 136 S.W.3d at 233. Expert testimony is
conclusory (and an objection unnecessary) “if no basis for the opinion is offered”; it
is likewise conclusory if “the basis offered provides no support” for the opinion. Id.
at 787; see also Burrow v. Arce, 997 S.W.2d 229, 236 (Tex. 1999) (holding affidavit
conclusory and explaining that qualified expert “cannot simply say, ‘Take my word
for it, I know’” because credentials do not supply a basis for opinion).

      “A conclusory statement asserts a conclusion with no basis or explanation.”
Windrum v. Kareh, 581 S.W.3d 761, 768 (Tex. 2019). An expert’s statement or
opinion is conclusory when: (1) she asks the factfinder to take her word that her
opinion is correct but offers no basis for her opinion or the bases offered do not

                                           12
actually support the opinion; or (2) she offers only her word that the bases offered
to support her opinion actually exist or support her opinion. Id. at 769.

      Because Kraus’s report was admitted into evidence without objection, we
review her report to determine whether it asserts a conclusion with no basis or
explanation. While appellants challenge both the legal and factual sufficiency of the
evidence to support the damages award, in the absence of an objection to the expert’s
report we review only the legal sufficiency of the evidence. See Coastal Transp. Co.,
136 S.W.3d at 233 (permitting challenge to legal sufficiency of evidence in absence
of objection to admissibility of expert report). The report begins with a description
of Kraus’s qualifications and a summary of the background of the case as described
to Kraus. Kraus stated that she and her firm, Whitley Penn, reviewed the accounting
records provided to them by TCB, including the general ledger and trial balances for
2016-2018, tax returns, and job sheets. To ascertain the amounts owed to Icet, Kraus
analyzed the books and records of TCB and made adjustments sufficient to put Icet
in the position he would have been in had the company been operated in the manner
to which the parties agreed.

      In the first section of Kraus’s report, she listed several capital account
corrections, which included personal expenses of the Gatlins. Kraus explained that
Chad and Tabitha did not have any personal bank accounts, and appeared to be using
the TCB account for their personal expenses. Kraus reviewed the general ledger
detail and identified expenses that “may have been expended for [the Gatlins’]
personal use instead of for TCB business purposes.” Specifically, Kraus reported
that TCB paid $26,355 from 2016 to 2018 for rent expense on a residence that was
used by Chad and/or Tabitha as their personal residence. From February 9, 2018
through December 24, 2018, Tabitha paid $500 per week to herself and recorded
those payments as professional fees. Kraus noted that absent any agreement

                                          13
permitting a salary or guaranteed payment for Tabitha, this amount could be
considered an inappropriate expenditure. Finally, the following personal expenses
were noted as needing adjustment from the operational results of TCB: (1) a
recreational vehicle purchased with company funds; (2) charges to retail stores such
as Wal-Mart and Target that were not substantiated as business expenses; and (3)
non-business-related restaurant expenses, hotel, and rental car charges “for the
personal enjoyment of Mr. and Mrs. Gatlin.” The personal expenses portion of
Kraus’s report was supported by an exhibit attached to her report in which she listed
the above referenced personal expenses in detail.

      Kraus’s report also listed “personal draws” totaling $63,321 that were not
directly attributable to any particular capital account with another $11,031
attributable to amounts paid to either Tabitha or Chad. Of the unallocated capital
draw amount, $60,513 was recorded as “online transfer debit,” and $2,808 was for
“items such as fast food, nail salons, furniture stores, and entertainment venues.”
There were no personal draws allocated to Icet.

      This portion of Kraus’s report was supported by an exhibit, which listed
several “online transfer debit” draws in addition to personal draws for Enterprise
Rent-A-Car, Liquor Hut, Aramark NRG Stadium, Kolache Donut Express, Biggys
Meat Market, Chick-Fil-A, Wendys, Curves Brow Bar, Chambers Nail Salon, Jack
In The Box, LoveSac, and Arcade City.

      Kraus adjusted the retained earnings of TCB by the cumulative effect of
personal expenses, personal draws, and capital contributions. The result left Icet with
an adjusted capital account balance of $144,950 and Chad with an adjusted balance
of $24,443. Kraus explained that “if the personal expenses had not been paid out of
the business, there would be additional net income that would flow to retained
earnings.”

                                          14
      In determining a “commission true-up” owed to Icet, Kraus noted the
following:

         • Mr. Gatlin received, on average, 18.8% of total profit;
         • Mr. Icet received, on average, 4.9% of total profit;
         • On many jobs, Mr. Gatlin received 20% commission while Mr.
           Icet received 0%;
         • The job breakdown sheets are not dated or numbered in any
           way—making it impossible to match to earnings in a given year,
           or to determine if all sheets have been provided; and
         • The job breakdown sheets do not appear to be the total
           population of jobs completed by TCB as they do not tie out to
           the total revenue for any year, or all years combined.
Recognizing that not all customer contracts, entity tax returns, and bank statements
were provided, Kraus concluded that Icet was owed $73,808 “as true-up payment
for commissions.” The “commission true-up” was supported by a document listing
each commission paid by TCB from August 2, 2016 through December 28, 2018.

      Kraus further reviewed a parcel of real property purchased by TCB, known as
the “Dogwood Property.” This property was purchased for $43,561 using TCB
funds, but was not listed as an inventory asset in the financial records of TCB. The
deed for the “Dogwood Property,” while purchased with TCB funds, was titled in
the name of Chad Gatlin. TCB personnel were employed at TCB expense to repair
and remodel the Dogwood Property. Relying on research from three real estate
websites, Kraus estimated a sales price for the Dogwood Property at $236,446. This
portion of Kraus’s report was supported by printed screenshots from three real estate
websites listing the value of the Dogwood Property at $241,200, $235,538, and
$232,600 respectively. A copy of the cashier’s check for $43,561.49 used to
purchase the property was also attached as an exhibit.

      Citing this court’s opinion in Hong v. Integrated Applications Eng’g, Inc., No.
                                         15
14-06-00579-CV, 2008 WL 660650, at *6 (Tex. App.—Houston [14th Dist.] Mar.
11, 2008, pet. denied) (mem. op.), appellants assert that Kraus’s “expert report as to
Plaintiff’s damages is incompetent opinion testimony and cannot support the
judgment.” In Hong, as in this case, no objection was made to the expert’s testimony.
We reviewed the sufficiency of the evidence to support damages that relied on expert
testimony to determine whether the expert’s opinion was conclusory, and therefore
incompetent evidence. Id. In Hong, the expert testified to amounts of damages, but
no exhibits were introduced to show how the expert had reached his conclusions. Id.
at *4. The expert in Hong filed a report, which referenced documents that would
support his conclusions. Id. at *5. However, the expert failed to attach those
documents to his report or otherwise provide supporting evidence for his
conclusions. Id. Concluding that the expert’s testimony did not explain how he
reached his conclusions, was inconsistent with the calculations and conclusions
presented in his expert reports, and lacked factual substantiation in the record, we
held the evidence in that case was legally insufficient to support the damage award.
Id. at *6.

       We conclude Kraus’s report and the supporting documentation is factually
distinguishable from the report and testimony by the expert in Hong. In this case,
Kraus did not testify but noted in her report that she reviewed all records that were
provided by TCB and the Gatlins. Appellants focus on Kraus’s statement that her
report was a preliminary analysis based on limited information. Appellants take
Kraus’s statement out of context. Kraus’s full statement, quoted below, noted that
the information she received was limited because there was no assurance that all
financial records had been provided:

       Without additional information, including all customer contracts, entity
       tax returns, and all bank statements with deposit tickets and cancelled
       checks, among other documents, we cannot determine whether or not

                                         16
      we have fully quantified the total amounts owed to Mr. Icet. Our
      analysis is currently a preliminary analysis based upon the limited
      information we have received.

      Appellants cannot demonstrate a lack of sufficient evidence by pointing to the
limited resources available to Kraus in making her report. Appellants were in control
of their books and the record reflects that not every construction job was recorded in
the information turned over to Kraus. Kraus’s report contained the calculations she
used in calculating the profits earned by TCB after subtracting personal expenses
and capital contributions. Unlike the expert in Hong, Kraus supported each of her
conclusions with documentation.

      As to Kraus’s valuation of the Dogwood Property, at bottom, appellants ask
this court to “evaluate the underlying methodology, technique, or foundational data
used by the expert . . ..” Coastal Transp. Co., 136 S.W.3d at 233. Appellants did not
object before or during trial on grounds that Kraus’s foundation or methodology was
flawed. Because appellants did not object to Kraus’s methodology before or during
trial, they cannot attack her methodology or the foundation supporting her opinions
on appeal by way of a legal sufficiency challenge predicated on asserted flaws in the
methodology. See id. The trial court was entitled to rely on Kraus’s report in
assessing damages incurred by Icet.

      Considering the evidence in the light most favorable to the verdict, we
conclude there is more than a scintilla of evidence to support the trial court’s finding
of $193,000 in damages. The evidence is legally sufficient; we therefore overrule
appellants’ second issue.

                                    CONCLUSION

      Having sustained a portion of appellants’ first issue we reverse that portion of
the judgment that awards joint and several liability against Tabitha Gatlin and render

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judgment that Tabitha Gatlin is not jointly and severally liable. Having overruled
appellants’ remaining issues, we affirm the judgment as challenged on appeal.

                                      /s/    Jerry Zimmerer
                                             Justice

Panel consists of Justices Bourliot, Zimmerer, and Spain.

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