Court Opinion

ID: 2855272
Source: CourtListenerOpinion
Date Created: 2015-09-04 18:38:58.787957+00
Date Added: 2024-06-11T11:34:11.109533
License: Public Domain

COURT OF APPEALS
                        SECOND DISTRICT OF TEXAS
                             FORT WORTH

                             NO. 2-06-249-CV

PLAYOFF CORPORATION, DONRUSS                               APPELLANTS AND
PLAYOFF, L.P., DONRUSS LLC, AND                                  APPELLEES
ANN (BLAKE) POWELL

                                       V.

LAWRENCE BLACKWELL                                             APPELLEE AND
                                                                 APPELLANT

                                   ------------

        FROM THE 141ST DISTRICT COURT OF TARRANT COUNTY

                                   ------------

                       OPINION ON REHEARING

                                   ------------

      After reviewing appellee/cross appellant, Lawrence Blackwell’s motion for

rehearing and/or motion for en banc reconsideration, we deny the motions. We

withdraw our December 11, 2008 opinion and judgment and substitute the

following.
      This is a breach of employment-contract case. The key issue is whether

the oral employment contract in question is unenforceably indefinite as a matter

of law. We hold that it is, and we affirm the trial court’s take-nothing judgment

notwithstanding the verdict on Lawrence Blackwell’s breach of contract claim

against Playoff Corp., Donruss Playoff, L.P., Donruss LLC, and Ann Powell

(collectively, “the defendants”). We also affirm the trial court’s denial of the

defendants’ motion for attorney’s fees under the Texas Commission on Human

Rights Act.

                                  Background

      The jury heard six days of testimony from fourteen witnesses, and the

trial court admitted approximately 1,200 pages of exhibits into evidence. The

following summary reflects only the evidence essential to our resolution of this

appeal.

      Powell founded Playoff Corp., a sports trading-card company, in 1992.

In 1997, Playoff hired Blackwell as a consultant for $1,500 per day. A few

months later, Powell and Blackwell began a romantic relationship, which

continued until February 2002.

      In December 1999, Playoff hired Blackwell as an employee, and Powell

appointed him to serve as Playoff’s president.       The terms of Blackwell’s

                                       2
employment agreement are the crux of this case. According to Blackwell, he

and Powell orally agreed to the following eight terms:

      1.    Playoff would employ Blackwell;

      2.    Playoff would not pay Blackwell $600,000 in consulting fees
            that it allegedly owed to him;

      3.    Playoff would pay Blackwell a lower salary than he would
            have earned as a consultant;

      4.    Blackwell would not engage in business opportunities with
            other companies or organizations in which he, in reasonable
            probability, would otherwise have had an opportunity to
            engage;

      5.    Blackwell would loan money to Playoff          and   entities
            contemplated to be formed by the parties;1

      6.    Blackwell would sign personal guaranties for loans made to
            Playoff and entities contemplated to be formed by the
            parties;

      7.    Playoff and Powell would pay Blackwell 25% of the proceeds
            from the sale of Playoff or entities contemplated to be
            formed by the parties, if any, after reducing the proceeds
            from the sale by $5,000,000.00 (Playoff’s agreed fair market
            value at the time of the alleged employment agreement); or
            25% of the fair market value of Playoff or entities
            contemplated to be formed by the parties, if any, after
            reducing the fair market value by $5,000,000.00, on the last
            day of his employment if Playoff or any entity contemplated
            to be formed by the parties terminated Blackwell’s
            employment; and

      1
      … The “entities contemplated to be formed” are, according to Blackwell,
Donruss Playoff, L.P. and Donruss LLC (collectively, “Donruss”).

                                      3
         8.      Playoff and Powell would pay Blackwell 25% of any
                 distributions made by Playoff or any entity contemplated to
                 be formed by the parties after payment of taxes owed by
                 Powell arising from the operation of Playoff or any entity
                 contemplated to be formed by the parties, if any.

Blackwell testified that he and Powell shook hands over the deal but did not

memorialize the agreement in writing.         Powell denied the existence of any

agreement whatsoever, calling Blackwell’s testimony regarding the handshake

deal “a complete lie.”

         Blackwell continued to work for Playoff and related entities until

November 2002, during which time the Playoff entities greatly increased in

value.        The parties hotly contested whether Blackwell resigned or Powell

terminated his employment.

         Blackwell sued the defendants for sexual harassment under the Texas

Commission on Human Rights Act (TCHRA), alleging that Powell terminated him

when he refused to rekindle their romantic relationship. He later added claims

for breach of contract, fraud, and breach of fiduciary duty and nonsuited his

TCHRA claims. The defendants filed a motion for attorney’s fees and costs

under TCHRA. The parties tried Blackwell’s claims to a jury and submitted the

issue of TCHRA attorney’s fees to the court.

         The trial court granted a directed verdict in favor of Donruss on

Blackwell’s breach of contract claim and in favor of all the defendants on his

                                          4
fraud claim. The jury found that Blackwell and Powell agreed to the eight terms

set forth above and that Playoff and Powell failed to comply with the

agreement. It also found that Blackwell did not resign and did not engage in

any misconduct that justified his termination. With regard to breach of contract

damages, the trial court instructed the jury to consider only the following

element:

      Twenty-five (25%) of the fair market value of Playoff Corporation,
      Donruss Playoff, LP and Donruss LLC (after reducing the fair market
      value by $5,000,000.00) on the last day of Lawrence Blackwell’s
      employment, if any, with Donruss, LLC, Donruss Playoff, LP, or
      Playoff Corporation.

The jury returned a verdict on breach of contract damages of $6,100,000.

      The trial court first rendered judgment for Blackwell for $6,100,000, but

then granted Powell and Playoff’s motion for judgment notwithstanding the

verdict and rendered a take-nothing judgment. In the order granting Powell and

Playoff’s motion for judgment notwithstanding the verdict, the trial court

stated,

      [T]he court is of the opinion that Plaintiff Blackwell should take
      nothing by way of his claims against any Defendant. The alleged
      oral agreement found by the jury in Question 1 is legally
      unenforceable. In particular, but not by way of limitation, the Court
      finds that the alleged oral agreement found by the jury in Question
      1 is insufficiently definite as a matter of law. The jury’s finding in
      Question 1 cannot support a recovery in favor of Plaintiff Blackwell
      against any Defendant.

                                        5
The trial court also denied the defendants’ motion for attorney’s fees under

TCHRA. Blackwell appeals from the judgment not withstanding the verdict, and

the defendants appeal from the trial court’s denial of their motion for TCHRA

attorney’s fees.

                              Blackwell’s Appeal

1.    Standard of review.

      A trial court may disregard a jury verdict and render judgment

notwithstanding the verdict (“JNOV”) if no evidence supports the jury findings

on issue necessary to liability or if a directed verdict would have been proper.

See Tex. R. Civ. P. 301; Tiller v. McLure, 121 S.W.3d 709, 713 (Tex. 2003);

Fort Bend County Drainage Dist. v. Sbrusch, 818 S.W.2d 392, 394 (Tex.

1991). A directed verdict is proper only under limited circumstances: (1) when

the evidence conclusively establishes the right of the movant to judgment or

negates the right of the opponent; or (2) when the evidence is insufficient to

raise a material fact issue. Prudential Ins. Co. v. Fin. Review Servs., Inc., 29
S.W.3d 74, 77 (Tex. 2000); Ray v. McFarland, 97 S.W.3d 728, 730 (Tex.

App.—Fort Worth 2003, no pet.).

      To determine whether the trial court erred by rendering a JNOV, we view

the evidence in the light most favorable to the verdict under the well-settled

standards that govern legal sufficiency review. See W al-Mart Stores, Inc. v.

                                       6
Miller, 102 S.W.3d 706, 709 (Tex. 2003).         The standard for reviewing a

judgment notwithstanding the verdict, like all other motions rendering judgment

as a matter of law, requires a reviewing court to credit evidence favoring the

jury verdict if reasonable jurors could and disregard contrary evidence unless

reasonable jurors could not.    Cent. Ready Mix Concrete Co. v. Islas, 228
S.W.3d 649, 651 (Tex. 2007).

2.    Is the alleged employment contract unenforceably indefinite?

      In his fourth issue, Blackwell argues that the trial court erred by granting

judgment notwithstanding the verdict because—contrary to the trial court’s

statement in the order granting Powell’s motion for JNOV—the alleged

employment contract is not too indefinite to enforce. The defendants argue

that eight indefinite terms in the agreement, including “fair market value,”

render the whole unenforceably vague.

      A contract is legally binding only if its terms are sufficiently definite to

enable a court to understand the parties’ obligations. Fort Worth ISD v. City

of Fort Worth, 22 S.W.3d 831, 846 (Tex. 2000). “The rules regarding

indefiniteness of material terms of a contract are based on the concept that a

party cannot accept an offer so as to form a contract unless the terms of that

contract are reasonably certain.” Id.

                                        7
      A contract is sufficiently definite if a court is able to determine the

respective legal obligations of the parties. T.O. Stanley Boot Co. v. Bank of El

Paso, 847 S.W.2d 218, 221 (Tex. 1992). Contract terms are reasonably

certain “if they provide a basis for determining the existence of a breach and

for giving an appropriate remedy.” Restatement (Second) of Contracts § 33(2)

(1981). If an alleged agreement is so indefinite as to make it impossible for a

court to fix the legal obligations and liabilities of the parties, it cannot constitute

an enforceable contract. See id.

      An agreement to make a future contract is enforceable only if it is

“specific as to all essential terms, and no terms of the proposed agreement may

be left to future negotiations.” Fort Worth ISD, 22 S.W.3d at 846 (quoting

Foster v. Wagner, 343 S.W.2d 914, 920–21 (Tex. Civ. App.—El Paso 1961,

writ ref’d n.r.e.)).   “It is well settled law that when an agreement leaves

material matters open for future adjustment and agreement that never occur,

it is not binding upon the parties and merely constitutes an agreement to

agree.” Id.

      Whether an agreement fails for indefiniteness is a question of law to be

determined by the court. COC Servs., Ltd. v. CompUSA, Inc., 150 S.W.3d
654, 664 (Tex. App.—Dallas 2004, pet. denied); see also T.O. Stanley Boot

Co., 847 S.W.2d at 222.

                                          8
      The question here is whether the term “fair market value” as used in the

alleged agreement is unenforceably indefinite; that is, whether “the fair market

value of Playoff Corporation or entities contemplated to be formed by the

parties, if any . . . on the last day of [Blackwell’s] employment” is reasonably

certain and provides a basis for giving an appropriate remedy.2                See

Restatement (Second) of Contracts § 33(2). Several Texas courts have held

that the fair market value of a company is a measure of damages to be resolved

by the fact finder. See Willis v. Donnelly, 199 S.W.3d 262, 275 n.24 (Tex.

2006) (holding fair market value of stock shares is the appropriate measure of

damages when employer breaches agreement to compensate employee with

stock); Miga v. Jensen, 96 S.W.3d 207, 215 (Tex. 2002) (same); Bowers

Steel, Inc. v. De Brooke, 557 S.W.2d 369, 371 (Tex. Civ. App.—San Antonio

1977, no writ) (same). The pattern jury charge also uses the term “value” in

an instruction on benefit-of-the bargain contract damages. See Comm. on

Pattern Jury Charges, State Bar of Texas, Texas Pattern Jury Charges:

Business, Consumer, Insurance, Employment PJC 110.3 (2006). Courts in

some other jurisdictions have held that “fair market value” is sufficiently definite

      2
      … Blackwell suggests that the meaning of fair market value and the
method of calculating same are merely ancillary aspects of the alleged
agreement. We disagree because the 25% of the companies’ fair market value
dwarfs the other consideration due under the alleged agreement.

                                         9
as a price term in an option contract to support an action for specific

performance. See, e.g., Coodwest Rubber Corp. v. Munoz, 216 Cal. Rptr. 604,

604–05 (Cal. Ct. App. 1985) (collecting cases from several states).

      But just because “fair market value” is an appropriate measure of

damages to be determined by the jury in some cases and sufficiently definite

as a contract term in some contexts does not mean that every contract

containing the phrase is sufficiently definite to be enforced. In the context of

this case, the only evidence of an alleged agreement containing the phrase “fair

market value” came from Blackwell’s testimony.

      Blackwell acknowledged that they did not have an understanding as to

how market value was to be determined in 1999. And the evidence shows that

even Blackwell realized the parties needed to agree on a valuation method

during later negotiations. In a document dated March 27, 2002, and titled

“Proposals for a Working Arrangement for Larry Blackwell and Ann Blake,”

Blackwell wrote,

      If company is sold or I am no longer with the company for any
      reason: Receive 25% of sale amount or value as determined by
      formula (formula or methodology still needs to be determined) on
      an after-tax basis, less the amount of $1,250,000.00 (which
      equals 25% of the $5 million threshold).

[Emphasis added.] Likewise, in an email dated October 25, 2002, Blackwell

wrote, “[I] believe this is where we left off [the employment contract

                                      10
discussions] some time ago, with the major unresolved element being the

valuation methodology at the time of my departure.” [Emphasis added]

      Blackwell characterized the documents and emails in 2000 and 2002 as

proposing “replacement deals,” not as describing the 1999 oral agreement. He

said they “shook hands” on the 1999 oral agreement, and, although Powell had

said she would put it in writing, she never did. In 2000, he explained, Powell

had become more comfortable with the “equity” concept3 and thus asked him

to call Playoff’s attorneys and see if they could reach a “replacement deal.”

Another reason for a “replacement deal,” he said, was for potential tax

advantages for Powell. In 2002, he said, Powell wanted to pull money out of

the business and delay payment of his 25 percent. It wasn’t that she did not

      3
          … From the time of his initial interview with Powell, Blackwell
acknowledged, he wanted to pursue some “upside” as well as an “equity
interest” in Playoff, and his discussions with Powell in that regard continued
both before and after they reached the oral agreement of 1999 as found by the
jury. Blackwell acknowledged that the oral agreement did not give him an
equity interest. Some three months after the handshake deal as found by the
jury, he was again proposing an equity deal. He emailed Playoff’s lawyers on
March 23, 2000, proposing a limited partnership with an equity interest for
himself, with the value of Playoff to be determined “by appraisal.”
       Blackwell’s efforts continued through the next two years with proposals
to accountants and lawyers of the companies to provide him with an equity
interest in the Playoff entities as well as alternative bonus plans for payment of
25 percent of after-tax distributions on sale or termination, virtually identical to
the 1999 agreement terms.

                                        11
want to pay him, Blackwell said, but that she wanted to “postpone it for some

time.”

      Except for the provisions of the proposals that would have provided

Blackwell some equity interest, nothing in the documents, emails, or Blackwell’s

testimony indicates that the proposed “replacement” agreements were any

different from the 1999 oral agreement with respect to valuing the entities.

And the documents and emails are uncontradicted. It is inescapable that even

Blackwell contemplated that fair market value of the entities would be

determined by a specific formula yet to be determined by additional negotiation

and agreement between the parties.

      Though the evidence that the method of valuation remained to be

determined might be considered contrary to the jury’s verdict, neither a

reasonable jury nor a court could ignore it. See Cent. Ready Mix Concrete Co.,
228 S.W.3d at 651 (citing City of Keller v. Wilson, 168 S.W.3d 802, 821 (Tex.

2005) (holding court must consider evidence that jury could not disregard that

is contrary to verdict in no-evidence review)).         Moreover, Blackwell’s

uncontroverted admissions in these statements are not contrary to and do not

conflict with the jury’s finding of the agreement in answer to Question No. 1.

Instead, his admissions establish that, in addition to the terms agreed upon, the

agreement would ultimately contain an additional term on which the parties had

                                       12
not yet reached an agreement–how to determine fair market value of the

companies in the event his employment was terminated. “Evidence is not

conflicting just because the parties cannot agree to it. For example, . . .

evidence showing the terms of one loan does not conflict with undisputed

evidence that the parties never reached an agreement regarding the terms of

another.” City of Keller, 168 S.W.3d at 821 (citing T.O. Stanley Boot Co., 847
S.W.2d at 222)).

      In other words, Blackwell’s admissions show that, at most, the alleged

agreement left a material matter open for future adjustment and agreement that

never occurred.    See Fort Worth ISD, 22 S.W.3d at 846.           Because this

evidence established that the parties never reached an agreement on an

additional material term, the agreement fails for “indefiniteness” as a matter of

law. See T.O. Stanley Boot Co., 847 S.W.2d at 222.

      The Tennessee court of appeals held an agreement too indefinite to

enforce under similar facts in Four Eights, LLC v. Salem, 194 S.W.3d 484

(Tenn. Ct. App. 2005). There, the parties entered into a lease agreement with

an option to purchase the leased premises for “its then fair market value.” Id.

at 486. The lease further provided that “[t]he Fair Market Value must be

determined by the Lessor and Lessee, negotiating in good faith . . . .” Id.

When the lessee sued the lessor to enforce the purchase option, the trial court

                                       13
ruled that the agreement was too indefinite to enforce. Id. The court of

appeals affirmed, holding that while “fair market value” has a common

meaning, the lease provision that fair market value must be determined through

good-faith negotiation was an unenforceable agreement to agree:

      [I]f the parties had simply utilized the term “fair market value,” then
      the Court could have ascertained the same based on common
      usage. By adding the provision that “Fair Market Value must be
      determined by the Lessor and Lessee, negotiating in good
      faith” . . . , the parties basically made an “agreement to agree” to
      something in the future, and such agreements have generally been
      held unenforceable, both in this jurisdiction and others.

Id.; see also Connor v. Harless, 626 S.E.2d 755, 758 (N.C. Ct. App. 2006)

(holding lease agreement with option to purchase premises at “fair market

value” based on two appraisals too indefinite to enforce because agreement did

not contain additional provisions stating how to proceed if appraisals produced

vastly different values).

      Blackwell argues that the term “fair market value” is sufficiently definite

because the term is defined by an IRS revenue ruling and because expert

testimony defined the term at trial.4 Contracts are presumed to incorporate

      4
        … Blackwell also argues—in two sentences—that the defendants waived
any indefiniteness in fair market value because they invited error by requesting
a jury question containing the term—a question identical to the one the trial
court actually submitted. This argument fails because even if the jury found (as
it did) that Blackwell and Powell entered into an employment agreement that
referenced the fair market value of the companies, whether the agreement is

                                        14
regulations and laws existing at the time of execution. Houston Lighting &

Power Co. v. R.R. Comm’n of Tex., 529 S.W.2d 763, 766 (Tex. 1975).

Blackwell points to Revenue Ruling 56-60 as defining the term “fair market

value.”   See Rev. Rul. 56-60, 1959 -1 C.B. 237.         Revenue Ruling 56-60

concerns the valuation of closely held corporations for estate and gift tax

purposes. Id. §1. Although Blackwell contends that ruling 56-60 defines the

term “fair market value,” it is more accurate to say that ruling 56-60 provides

an approach to or guidelines for determining fair market value. See id. § 3

(captioned “Approach to Valuation”). Section 2.02 notes that the Estate Tax

Regulations and the Gift Tax Regulations “define fair market value, in effect, as

the price at which the property would change hands between a willing buyer

and a willing seller when the former is not under any compulsion to buy and the

latter is not under any compulsion to sell, both parties having reasonable

knowledge of relevant facts.” Id. § 2.02. But section 3.01 goes on to observe

that “[n]o formula can be devised that will be generally applicable to the

multitude of different valuation issues,” and section 7 notes that “valuations

cannot be made on the basis of a prescribed formula” and that “there is no

means whereby the various applicable factors in a particular case can be

unenforceably indefinite remains a question of law for the court. See COC
Servs., Ltd.,150 S.W.3d at 664.

                                       15
assigned mathematical weights in deriving the fair market value.” Id. §§ 3.01,

7.

     As in Four Eights, LLC, had the parties simply utilized the term “fair

market value” in the alleged agreement, then the court and jury could have

ascertained the same based on its common meaning. See Four Eights, LLC,
194 S.W.3d at 486. But Blackwell acknowledged that he an Powell did not

have an understanding of how fair market value would be calculated with

regard to the 1999 agreement, and the parties’ later negotiations—as

established by Blackwell’s own written admissions—show that the method of

valuation was a “major unresolved element.” Without an agreed method of

calculating fair market value, the 1999 agreement as found by the jury was

unenforceably indefinite as a matter of law. See Fort Worth ISD, 22 S.W.3d

at 846; COC Servs., Ltd., 150 S.W.3d at 664. We therefore hold that the trial

court did not err by granting JNOV, and we overrule Blackwell’s fourth issue.

Having overruled his fourth issue, we need not consider his other issues, in

which he attacks the alternative bases for JNOV asserted in the defendants’

JNOV motion. See Tex. R. App. P. 47.1.

                   Powell, Playoff, and Donruss’s Appeal

     In a single cross-issue, the defendants argue that the trial court abused

its discretion by denying their motion for attorney’s fees under TCHRA.

                                     16
      TCHRA provides that “[i]n a proceeding under this chapter, a court may

allow the prevailing party, other than the commission, a reasonable attorney’s

fee as part of the costs.” Tex. Lab. Code Ann. § 21.259(a) (Vernon 2006)

(emphasis added).     When a statute states that a trial court “may” award

attorney’s fees, such an award is discretionary and we review the trial court’s

ruling under the abuse of discretion standard. Smith v. McCarthy, 195 S.W.3d
301, 304 (Tex. App.—Fort Worth 2006, pet. denied); Winters v. Chubb & Son,

Inc., 132 S.W.3d 568, 580 (Tex. App.—Houston [14th Dist.] 2004, no pet.).

A trial court abuses its discretion when it acts without reference to any guiding

rules and principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238,

241–42 (Tex. 1985), cert. denied, 476 U.S. 1159 (1986).

      Texas courts of appeals that have addressed attorney’s fees under

TCHRA have followed federal precedent, under which an employer may recover

attorney’s fees if the plaintiff’s claims were frivolous, meritless, or unreasonable

or the plaintiff continued to litigate after it became clear that his claim was

frivolous. See, e.g., Elgaghil v. Tarrant County Junior College, 45 S.W.3d 133,

145 (Tex. App.—Fort Worth 2000, pet. denied).            Attorney’s fees are not

appropriate under TCHRA simply because the plaintiff loses his case. Id. (citing

Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 420, 98 S. Ct. 694, 700

(1978)). Rather, to show that a lawsuit was without merit, the defendant must

                                        17
establish that the case was groundless or without foundation. Id. (affirming

trial court’s award of attorney’s fees to TCHRA defendant when defendant

established that plaintiff’s claims were groundless as a matter of law). Under

the equivalent federal law, a defendant is not a prevailing party when a plaintiff

voluntarily dismisses his claim, unless the defendant can demonstrate that the

plaintiff withdrew to avoid a disfavorable judgment on the merits. Dean v.

Riser, 240 F.3d 505, 511 (5th Cir. 2001); see also Butler v. MBNA Tech. Inc.,

No. Civ. 3:02-CV-1715-H, 2004 WL 389101, at *4–5 (N.D. Tex. March 1,

2004) (awarding attorney’s fees under Title VII when plaintiff nonsuited claims

in face of motion for summary judgment).

      In Dean, the fifth circuit court of appeals, bemoaning the “small and

almost infinitesimal universe of reported cases in which civil rights plaintiffs

voluntarily dismiss their claims to avoid judgment on the merits,” offered the

following guidance to aid federal district courts in determining whether such

dismissals warrant an award of attorney’s fees:

      Upon the defendant’s motion, the court must determine that the
      plaintiff’s case was voluntarily dismissed to avoid judgment on the
      merits. Once this affirmative determination has been made, the
      defendant must then establish that the plaintiff’s suit was frivolous,
      groundless, or without merit. Ordinarily, these inquiries can be
      resolved from the record developed in the case before the court,
      supplemented by affidavits and, only if necessary, testimonial
      evidence. Additional relevant evidence includes but is not limited
      to information concerning discovery delays and abuses, slothful

                                       18
      prosecution, negative rulings, and sanctions against the plaintiffs.
      Upon reaching the above two conclusions, the district court may
      then in its discretion award the defendant attorney’s fees under
      § 1988.

Dean, 240 F.3d at 511.

      Blackwell sued the defendants under TCHRA for sexual harassment in the

form of unwanted sexual advances, requests to engage in a sexual relationship,

requests for sexual favors, and improper questions regarding his activities and

relationships outside the office; retaliation; and sex      discrimination.   He

nonsuited his TCHRA claims the day before a hearing on the defendants’

motion for summary judgment on his TCHRA claims. The defendants filed a

motion for attorney’s fees under TCHRA some months later.

      During trial, the trial court heard extensive testimony about both the

employment and romantic relationships between Blackwell and Powell.

Blackwell and Powell both testified that they had an exclusive, sexual

relationship and lived together from shortly after Powell hired Blackwell in 1997

until February 2002. They both testified about several instances when they

renewed their romantic relationship after February 2002, but they disagreed

about who instigated the reconciliations.      Blackwell testified that Powell

terminated his employment in November 2002 when she learned that he was

romantically involved with another woman. Powell testified that she did not fire

                                       19
Blackwell. When asked, “[I]f [Blackwell] was still in a personal relationship with

you, he’d still be working there, right?” she answered, “As far as I would be

concerned, that opportunity would still be available.”

      After the jury trial on Blackwell’s claims, the trial court held a hearing on

the defendants’ motion for attorney’s fees. The defendants offered evidence

of attorney’s fees incurred in defending against Blackwell’s TCHRA claims in

the amount of $618,554. When the trial court granted JNOV as to Donruss,

it also awarded $618,554 in attorney’s fees to Donruss under TCHRA and

made findings of fact and conclusions of law in support of the award. But after

hearing additional arguments, the trial court vacated its prior judgment and

findings of fact and conclusions of law, rendered a final take-nothing JNOV in

favor of all defendants, and denied the defendants’ motion for TCHRA

attorney’s fees. Because the trial court vacated its findings of fact, we must

assume that it found all facts necessary to support its denial of the defendants’

motion for attorney’s fees. See Pharo v. Chambers County, 922 S.W.2d 945,

948 (Tex. 1996).

      The defendants argue that the trial court abused its discretion by denying

their motion for attorney’s fees because they were the prevailing parties on

Blackwell’s TCHRA claims. Blackwell responds that his nonsuit of the TCHRA

                                       20
claims was a strategic decision, not an effort to avoid an adverse judgment on

the merits.

      Although this court has not previously reviewed a trial court’s denial of

a defendant’s motion for attorney’s fees under TCHRA, we have previously

reviewed the denial of attorney’s fees under another statute that gives a trial

court the discretion to award fees to a prevailing party. In Smith v. McCarthy,

the appellant argued that the trial court abused its discretion by denying the

appellant’s motion for attorney’s fees under civil practice and remedies code

section 16.034(a), which provides:

      In a suit for the possession of real property . . . , if the prevailing
      party recovers possession of the property from a person unlawfully
      in actual possession, the court may award costs and reasonable
      attorney’s fees to the prevailing party.

Tex. Civ. Prac. & Rem. Code Ann. § 16.034(a) (Vernon 2002) (emphasis

added); Smith, 195 S.W.3d at 304. We held that the appellant did not meet

his burden of showing that the trial court abused its discretion by denying his

request for attorneys’s fees because the trial court’s basis for denying

attorney’s fees was unclear. Smith, 195 S.W.3d at 304. We further noted

that because section 16.034(a) makes the award of fees discretionary —just

like TCHRA—the trial court could have determined that the appellant was the

                                        21
prevailing party as a matter of law but, in its discretion, decided to deny

attorney’s fees anyway. Id.

      Likewise, in this case the basis for the trial court’s denial of attorney’s

fees is unclear.   Under the Dean guidelines, the trial court could have

determined that Blackwell did not voluntarily dismiss his TCHRA claims to avoid

judgment on the merits; or it could have determined that Blackwell’s TCHRA

claims were not frivolous, groundless, or without merit; or—even if it found the

two foregoing factors in the defendants’ favor—it could have decided, in its

discretion, not to award attorney’s fees. See Dean, 240 F.2d at 511. Because

the trial court’s resolution of all three factors, much less the basis for those

resolutions, is unclear, the defendants have not carried their burden of showing

an abuse of discretion. See Smith, 195 S.W.3d at 304.

      The defendants argue that the reasoning in Smith is inapplicable to this

case because our interpretation of TCHRA, unlike our interpretation of the civil

practice and remedies code, must be guided by existing federal case law on the

equivalent federal statute. But none of the federal or Texas cases cited by the

defendants involved the situation presented here, namely, appellate review of

a trial court’s discretionary denial of attorney’s fees when the basis for the

denial is not clear from the record. See, e.g., Butler, 2004 WL 389101, at

*6–7 (explaining why the trial court was exercising its discretion in favor of

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awarding fees); Elgaghil, 45 S.W.3d at 144–45 (reviewing trial court’s exercise

of discretion to award attorney’s fees under TCHRA). In the absence of other

controlling or persuasive authority applicable to the case before us, it is fitting

that we turn to our own precedent, Smith, for guidance.

      We hold that the defendants have not shown that the trial court abused

its discretion by denying their motion for TCHRA attorney’s fees, and we

overrule their sole issue.

                                   Conclusion

      Having overruled Blackwell’s fourth issue, not having reached his

remaining issues, and having overruled Powell, Playoff, and Donruss’s sole

issue, we affirm the trial court’s judgment.

                                             ANNE GARDNER
                                             JUSTICE

PANEL: DAUPHINOT, GARDNER, and MCCOY, JJ.

DELIVERED: October 29, 2009

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