Medical Imaging Solutions Group, Inc. of Texas v. Westlake Medical of Austin, Ltd. D/B/A the Hospital at Westlake Medical Center, WLMA, LC, Westlake Surgical, LP D/B/A/ the Hospital at Westlake and WS GP, LLC ( 2017 )


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  •                                                                                ACCEPTED
    04-17-00285-CV
    FOURTH COURT OF APPEALS
    SAN ANTONIO, TEXAS
    9/25/2017 3:43 PM
    NO. 04-17-00285-CV
    FILED IN
    4th COURT OF APPEALS
    SAN ANTONIO, TEXAS
    09/25/2017 3:43:14 PM
    IN THE COURT OF APPEALS        KEITH E. HOTTLE
    CLERK
    FOR THE FOURTH DISTRICT OF TEXAS
    SAN ANTONIO, TEXAS
    MEDICAL IMAGING SOLUTIONS GROUP, INC. OF TEXAS,
    Appellant,
    v.
    WESTLAKE SURGICAL, LP D/B/A THE HOSPITAL AT WESTLAKE
    MEDICAL CENTER AND WS GP, LLC,
    Appellees.
    ORIGINAL BRIEF OF APPELLEES
    WESTLAKE SURGICAL, LP D/B/A THE HOSPITAL AT
    WESTLAKE MEDICAL CENTER AND WS GP, LLC
    ON APPEAL FROM THE 224TH JUDICIAL DISTRICT COURT
    OF BEXAR COUNTY, TEXAS
    TRIAL COURT CAUSE NO. 2014-CI-06112
    Date: September 25, 2017
    {1737446;}
    DAVID L. BRYANT
    State Bar No. 24084344
    dbryant@gablelaw.com
    GABLEGOTWALS
    113 Pleasant Valley Drive, Suite 204
    Boerne, Texas 78006
    (830) 336-4810
    (918) 595-4990 (facsimile)
    R. CHAD GEISLER
    State Bar No. 00793793
    cgeisler@germer-austin.com
    GERMER BEAMAN & BROWN, LLC
    301 Congress Avenue, Suite 1700
    Austin, Texas 78701
    (512) 472-0288
    (512) 472-0721 (facsimile)
    ATTORNEYS FOR APPELLEES
    WESTLAKE SUGICAL, LP D/B/A THE
    HOSPITAL AT WESTLAKE MEDICAL
    CENTER AND WS GP, LLC
    {1737446;}
    TABLE OF CONTENTS
    Index of Authorities .................................................................................................. ii
    I.       Statement of the Case ...................................................................................... 2
    II.      Statement of Facts............................................................................................ 2
    III.     Summary of the Argument ............................................................................ 11
    IV.      Argument and Authority ................................................................................ 12
    A.       Response to Point of Error No. 2 and No. 3........................................ 13
    B.       Response to Point of Error No. 4 and No. 5........................................ 19
    C.       Response to Point of Error No. 6 ........................................................ 22
    D.       Response to Point of Error No. 1 ........................................................ 25
    V.       Conclusion and Prayer ................................................................................... 30
    Certificate of Compliance ........................................................................................ 32
    Certificate of Service ............................................................................................... 32
    {1737446;}                                                  i
    INDEX OF AUTHORITIES
    Cases
    Baytown State Bank v. Don McMillan Leasing Co.,
    
    551 S.W.2d 771
    (Tex. App.-Houston [14th Dist.] 1977, writ
    ref’d n.r.e.) .....................................................................................................18
    Bed, Bath & Beyond, Inc. v. Urista,
    
    211 S.W.3d 753
    (Tex. 2006) ...................................................... 30, 31, 32, 33
    Bodiford v. Parker, 
    651 S.W.2d 338
    (Tex. App.-Fort Worth 1983, no
    writ) ................................................................................................................27
    Boyles v. Kerr,
    
    855 S.W.2d 593
    (Tex. 1993) .........................................................................16
    Continental Cas. Co. v. Boerger,
    Tex.Civ.App, 
    389 S.W.2d 566
    ......................................................................18
    Continental Homes of Texas, L.P. v. City of San Antonio,
    
    275 S.W.3d 9
    (Tex. App.-San Antonio 2008, pet. denied) ...........................17
    Crosstex Energy Servs., L.P. v. ProPlus, Inc., 430S.W.3d 384 (Tex.
    2014) ..............................................................................................................27
    Crown Life Ins. Co. v. Casteel,
    
    22 S.W.3d 378
    (Tex. 2000) .............................................................. 32, 33, 34
    El Paso Refining, Inc. v. Scurlock Permian Corp.,
    
    77 S.W.3d 374
    (Tex. App.-El Paso 2002, pet. denied) .......................... 13, 33
    Ford Motor Co. v. Castillo,
    
    444 S.W.3d 616
    (Tex. 2014) .........................................................................32
    G.H. Bass & Co. v. Dalsan Properties-Abliene,
    
    885 S.W.2d 572
    (Tex. App.-Dallas 1994, no writ) .......................................27
    Hammer v. Dallas Transit Co.,
    
    400 S.W.2d 885
    (Tex. 1966) .........................................................................18
    Hampton v. Minton,
    
    785 S.W.2d 854
    (Tex. App.-Austin 1990, writ denied) ......................... 18, 19
    {1737446;}                                                    ii
    Harris County v. Smith,
    
    96 S.W.3d 230
    (Tex. 2002) .................................................................... 31, 32
    Henry v. Masson,
    
    333 S.W.3d 825
    (Tex. App.-Houston [1st Dist.] 2010, pet
    denied) ...........................................................................................................19
    Hodge v. Smith,
    
    856 S.W.2d 212
    (Tex. App.-Houston [1st Dist.] 1993, writ
    denied) ...........................................................................................................16
    In Interest of M.G.N.,
    
    491 S.W.3d 386
    (Tex. App.-San Antonio 2016, pet. denied) .......................17
    Interceramic, Inc. v. South Orient R.R. Co., Ltd.,
    
    999 S.W.2d 920
    (Tex. App.-Texarkana 1999, pet. denied) ..........................26
    Kellogg Brown & Root Int’l, Inc. v. Altanmia Commercial Mktg. Co.
    W.L.L.,
    No. H-07-2684, 
    2008 WL 5114962
    (S.D. Tex. Dec. 3, 2008,
    not reported in F.Supp.2d) .............................................................................23
    Larsen v. FDIC/Manager Fund,
    
    835 S.W.2d 66
    (Tex. 1992) ...........................................................................26
    Massachusetts Bonding & Ins. Co. v. Orkin Exterminating Co.,
    
    416 S.W.2d 396
    (Tex. 1967) .........................................................................26
    McGowan v. Pasol,
    
    605 S.W.2d 728
    (Tex.App-Corpus Christi 1980, no writ) ..................... 27, 29
    Missouri-Kansas-Texas R. Co. v. Alvarez,
    
    703 S.W.2d 367
    (Tex. App.-Austin 1986, writ ref’d n.r.e.)
    (Smith, J., dissenting) ....................................................................................15
    New York Party Shuttle, LLC v. Bilello,
    
    414 S.W.3d 206
    (Tex. App.-Houston [1st Dist.] 2013, pet.
    denied .............................................................................................................19
    Okemah Constr., Inc. v. Barkley-Farmer, Inc.,
    
    583 S.W.2d 458
    (Tex. App.-Houston [1st Dist.] 1979, no writ) ............. 23, 24
    {1737446;}                                                  iii
    Reinhart v. Young,
    
    906 S.W.2d 471
    (Tex. 1995) .........................................................................33
    Roark v. Allen,
    
    633 S.W.2d 804
    (Tex. 1982) .........................................................................10
    Seaureau v. Tanglewood Homes Ass’n, Inc.,
    
    694 S.W.2d 119
    (Tex. App.-Houston [14th Dist.] 1985, writ
    ref’d n.r.e.) .....................................................................................................16
    Southwestern Bell Tele. Co. v. Garza,
    
    164 S.W.3d 607
    (Tex. 2004) .........................................................................17
    State Dep’t of Highways & Pub. Transp. v. Payne,
    
    838 S.W.2d 235
    (Tex. 1992) .........................................................................13
    State of Cal. Dep’t of Mental Hygiene v. Bank of Southwest Nat’l
    Ass’n,
    
    354 S.W.2d 576
    (Tex. 1962) .........................................................................22
    Stone v. Lawyers Title Ins. Corp.,
    
    554 S.W.2d 183
    (Tex. 1977) .................................................................. 14, 15
    Syrian American Oil Corp., S.A. v. Pecten Orient Co.,
    No. 01-15-00424-CV, 
    2017 WL 1955403
    (Tex. App.-Houston
    [1st Dist.] May 11, 2017, no pet.)...................................................................16
    T.O. Stanley Boot Co., Inc. v. El Paso,
    
    847 S.W.2d 218
    (Tex. 1992) .................................................................. 14, 22
    The Huff Energy Fund, L.P. v. Longview Energy Co.,
    
    482 S.W.3d 184
    (Tex. App.-San Antonio 2015, pet. granted) ......................15
    Thota v. Young,
    
    366 S.W.3d 678
    (Tex. 2012) .........................................................................32
    United Concrete Pipe Corp. v. Spin-Line Co.,
    
    430 S.W.2d 360
    (Tex. 1968) .........................................................................24
    Other Authorities
    BLACK’S LAW DICTIONARY 1303 (6th ed. 1990) ......................................................16
    {1737446;}                                                  iv
    Rules
    TEX. R. APP. P. 38.2(a)(2) ........................................................................................12
    TEX. R. APP. P. 61.1(a) .............................................................................................26
    TEX. R. CIV. P. 274 ...................................................................................................13
    TEX. R. CIV. P. 277 ...................................................................................................26
    TEX. R. CIV. P. 278 ...................................................................................................26
    TEX. R. CIV. P. 45, 47 ...............................................................................................14
    TEX. R. CIV. P. 71 .....................................................................................................15
    TEX. R. CIV. P. 90 & 91............................................................................................10
    {1737446;}                                                  v
    NO. 04-17-00285-CV
    IN THE COURT OF APPEALS
    FOR THE FOURTH DISTRICT OF TEXAS
    SAN ANTONIO, TEXAS
    MEDICAL IMAGING SOLUTIONS GROUP, INC. OF TEXAS,
    Appellant,
    v.
    WESTLAKE SURGICAL, LP D/B/A THE HOSPITAL AT WESTLAKE
    MEDICAL CENTER AND WS GP, LLC,
    Appellees.
    TO THE HONORABLE COURT OF APPEALS:
    Appellees, Westlake Surgical, LP d/b/a The Hospital at Westlake Medical
    Center and WS GP, LLC (collectively “Westlake”), respectfully submit their
    Original Brief in response to the Original Brief of Appellant Medical Imaging
    Solutions Group, Inc. of Texas (“MIS”) filed herein on August 24, 2017, and request
    the Court of Appeals to AFFIRM the take-nothing Judgment entered by the 224th
    Judicial District Court of Bexar County, Texas (“Trial Court”) in Cause No. 2014-
    CI-06112. In the proceedings below, MIS was the Plaintiff, and Westlake was the
    Defendant/Counterclaimant. Westlake shows this Honorable Court as follows:
    {1737446;}                               1
    I.       STATEMENT OF THE CASE
    1.    Westlake submits this Statement of the Case to correct a misstatement
    in MIS’s statement. MIS suggests that the Jury found against Westlake on both its
    breach of contract and fraud counterclaims. See Appellant Br. at 2, ¶ 1 (“The jury
    also found against Westlake on its counterclaims.”). However, in Question No. 2 of
    the Jury Charge, the Jury determined that MIS had breached the Asset Management
    Agreement (CR 2992). Westlake proffered evidence of its damages arising from
    MIS’s breach (DX 55). The remainder of MIS’s Statement of the Case fairly reflects
    the litigation history.
    II.      STATEMENT OF FACTS
    MIS’s Statement of Facts is supplemented with the additional facts below,
    which are relevant to the Court’s consideration of the six purported errors raised in
    MIS’s brief:
    2.    On March 11, 2011, MIS and Westlake executed an Asset Management
    Contract (“Agreement”) under which MIS was designated the “exclusive” service
    provider for equipment covered under the Agreement (DX 1 [WLP 193,200]).
    Westlake elected to cover its MRI, nuclear medicine camera, and Philips Brilliance
    16 CT under the Agreement (DX 1[WLP 201]). The Agreement obligated MIS to
    maintain the equipment in compliance with original equipment manufacturer
    (“OEM”) specifications (DX 1 [WLP 193, 195]). The monthly cost for the service
    {1737446;}                                2
    was $16,729. The Agreement required MIS to charge interest on delinquent
    payments (DX 1 [WLP 195-96]). Delinquent payments were an event of default
    under the Agreement (DX 1[WLP 196]). The Agreement also provided that “[n]o
    waiver, alteration or modification of any of the provisions hereof shall be binding
    upon MIS unless in writing and signed on its behalf by MIS Executive Officers”
    (DX 1 [WLP 200]).
    3.   Contrary to the “exclusive” service provider provision of the
    Agreement, MIS contracted with a bevy of third-party vendors to provide service to
    Westlake’s equipment during the term of the Agreement (DX 38-42). Although MIS
    claims Westlake’s payment under the Agreement was delinquent from its execution,
    MIS did not declare a default until Westlake declined to accede to MIS’s wrongful
    demand for an unnecessary part replacement (RR Bates, v.7, p.92; DX 34), and never
    charged interest as required by the Agreement.
    4.   Almost immediately after executing the Agreement, MIS required the
    assistance of Philips, as the OEM, to repair Westlake’s CT, which was covered under
    the scope of the Agreement (RR Hagan, v.4, pp.168-74;DX 2 [MIST 100-103]).
    Philips charged Westlake $35,761.04, excluding tax, for this covered repair (DX 2
    [MIST 407-410]). MIS made payment to Philips for this repair of the CT (DX 2
    [MIST 431]).
    {1737446;}                              3
    5.   Under the term of the Agreement, Westlake’s payment was owed on
    the first day of the month (DX 1[WLP 195]). In an email dated December 17, 2013,
    MIS’s Vice President, Robert “Bobby” Hagan, informed Westlake that 60-day
    payment terms were acceptable to MIS (DX 21 [MIST 458-59]). In correspondence
    dated December 23, 2013, MIS’s CFO, Vivian Bates, confirmed Mr. Hagan’s prior
    communication that 60-day payment terms were acceptable to MIS (DX 23 [WLP
    39-40]). On December 23, MIS claimed that Westlake owed $58,898.94 under the
    Agreement (DX 23 [WLP 39-40]). Between December 23 and February 11, 2014,
    Westlake paid MIS $61,228.41 (RR Jefferson, v.5., pp.118-20; DX 48). In an email
    dated January 16, 2014, with a subject line stating “RE: Hospital of Westlake
    Payment Plan Agreement 01-13-2013,” Mr. Hagan again informed Westlake that
    60-day payment terms were acceptable to MIS (DX 24 [MIST 450-51]; RR Bates,
    v.7, pp.141-42). Based on these communications from two MIS executives,
    Westlake understood that the payment terms under the Agreement were 60 days (RR
    Jefferson, v.5, pp.91-93). The 60-day payment terms did not change thereafter (RR
    Jefferson, v.5, p.99).
    6.   Mr. Hagan’s January 16 communication also proposed a payment plan
    of approximately $5,500 per week (DX 24 [MIST 450-51]). Westlake accepted and
    confirmed the payment plan proposal in an email communication dated January 21,
    2014, stating: “We should be able to pay the $5500 per week beginning this week.
    {1737446;}                              4
    Our check runs are on Thursdays each week” (DX 24 [WL 2895]). On the following
    day, Westlake confirmed acceptance of the payment plan: “I will be paying $5575
    per week until we are current” (DX 24 [MIST 1014]). Westlake subsequently made
    payments of: (a) $5,575.00, received by MIS on January 30, 2014; (b) $5,575.00,
    received by MIS on February 5, 2017; and (c) $5,579.13, received by MIS on
    February 11, 2014 (DX 48 [MIST 741]). At trial, Mr. Hagan confirmed Westlake’s
    acceptance and performance of the payment plan (RR Hagan, v.4, pp.100-01).
    7.   On January 21, 2014, MIS responded to a call on Westlake’s Philips
    Brilliance 16 CT, which had gone down. (DX 26 [MIST 398]). On January 23, 2014,
    MIS replaced the anode power module (“APM”) on the CT—a repair covered under
    the Agreement (DX 26 [MIST 396]). After the repair, the CT was functional for a
    few days before crashing again on January 27, 2014 (DX 26 [MIST 399]). MIS told
    Westlake that the x-ray tube on the CT would need to be replaced (RR Jefferson,
    v.6, p.38). The cost of an x-ray tube was approximately $90,000 to $200,000,
    depending on the condition of replacement tube (i.e., refurbished versus new) (RR
    Hagan, v.4, p.190). Because the x-ray was outside the scope of the Agreement,
    Westlake sought a second opinion from Philips, regarding the need for a new x-ray
    tube (RR Jefferson, v.6, pp.40-41). MIS was aware of Westlake’s desire to obtain a
    second opinion on the tube issue and requested to have someone present (RR
    Jefferson, v.6, pp.40-44).
    {1737446;}                              5
    8.   Philips determined that the APM installed by MIS on January 23, 2014,
    was defective, that Westlake did not need a new x-ray tube, and that the proper repair
    was installation of a non-defective APM—a part and repair covered under the
    Agreement (RR Jefferson, v.6, p.40-44; DX 31 [WLP 593]). Notwithstanding the
    OEM’s recommendation, MIS refused to replace its defective APM, unless Westlake
    agreed to unnecessary replacement of the x-ray tube (RR Hagan, v.4, pp.141-46).
    On January 30, 2014, Philips replaced MIS’s defective APM, charging Westlake
    $49,564.23 for the repair (RR Jefferson, v.5, p.149; DX 26 [MIST 400]; DX 31).
    Westlake informed MIS that, if Philips’ recommendation corrected the problem,
    Westlake expected payment from MIS for cost of the covered repair (RR Jefferson,
    v.6, p. 43). MIS inspected the CT on February 3 and 4, 2014, confirming on both
    occasions, “System is fully functional and meets OEM specification” (DX 26 [MIST
    399, 402]).
    9.   Throughout the term of the Agreement, MIS consistently expressed to
    Westlake how it valued the “good relationship” with Westlake (DX 14 [MIST 511]).
    As of late-January 2014, MIS still recognized the value of the “good relationship”
    with Westlake (DX 24 [MIST 1014]) (RR Hagan, v.4, pp.179-80). However, MIS
    did not perform any other service on Westlake’s equipment after the late-January
    “blowup” over the CT repair (RR Hagan, v.4, pp.138, 217-19). MIS’s refusal to
    perform service was not conditioned on receipt of any payment from Westlake, but
    {1737446;}                                6
    rather on Westlake’s agreement to the unnecessary x-ray tube replacement (RR
    Jefferson, v.5, pp.55, 59-62). Westlake made payments on the agreed payment plan
    after the “blowup” (RR Jefferson, v.6, p. 30; DX 48).
    10.   On February 28, 2014, Westlake requested MIS to pay the $49,564.23
    charged by Philips for the covered repair to the CT, as MIS had done with the
    Philips’ similar repair at the beginning of the parties’ relationship (DX 47). Westlake
    also informed MIS, “We will continue with the agreed upon weekly payments of
    $5,575.00 until current” (DX 47).
    11.   At trial, Mr. Hagan acknowledged his prior deposition testimony that
    recommendation and insistence of an unnecessary repair would be a breach of MIS’s
    obligations under the Agreement (RR Hagan, v.4, pp.200-01). The Jury heard Mr.
    Hagan’s testimony regarding MIS’s response to Westlake’s February 28 request for
    reimbursement for the covered repair performed by Philips: (a) “Nah, we’re just
    done” (RR Hagan, v.4, p.131); (b) “You know, this is it. I mean, we get a letter
    saying this is what you’re gonna do, and we’re crediting this, we just had it” (RR
    Hagan, v.4, p.132); (c) “we just need to end it,” referring to the Agreement (RR
    Hagan, v.4, p.122); (d) “We’re done” (RR Hagan, v.4, p. 184); and (e) “That’s it,
    we’re just done” (RR Hagan, v.4, p. 218). Mr. Hagan testified that MIS took this
    position “right after [MIS] had made the determination that that’s [referring to
    {1737446;}                                7
    Philips’ replacement of the defective APM] not what’s going to fix the problem”
    with the CT (RR Hagan, v.4, p.133).
    12.   On Sunday, March 2, 2014, the computer/graphics card on Westlake’s
    CT went down, and Westlake requested service from MIS, which was entered into
    MIS’s system as Ticket No. 023920 (RR Jefferson, v.5, pp.97-98; DX 36). On
    Monday, March 3, Westlake followed up on the status of Ticket No. 023920, again
    informing MIS, that “[s]hould MIS decide to resume service, WLMC [Westlake]
    will resume the agreed upon weekly payments until caught up” (RR Jefferson, v.5,
    pp.97-98; DX 35). MIS did not respond to Westlake’s request for service in Ticket
    No. 023920 on Sunday or in the follow up communication on Monday (RR
    Jefferson, v.5, pp.97-98).1
    13.   Instead, MIS sent Westlake a rapid succession of letters. On March 3,
    2014, Vivian Bates, CFO, sent a letter alleging a past due balance of $87,276.02 (DX
    46). MIS’s service manager, Eyad Albakri, sent a second letter to Westlake on March
    3, asserting that the “tube might be the cause of the problem” with the CT in January
    and refusing to pay the Philips’ invoice (DX 33). On March 4, 2014, Ms. Bates sent
    a default notice to Westlake, again asserting that Westlake was delinquent in the
    amount $87,276.02 for charges through March 1, 2014 and accelerating the agreed
    1
    Philips subsequently made the repair at a cost of $7,836.22 to Westlake (RR Jefferson, v.5,
    p.98).
    {1737446;}                                    8
    60-day payment terms to a mere ten days to avoid legal action (RR Bates, v.7, p.92;
    DX 34).2 The March 4 correspondence was MIS’s first default notice during the term
    of the Agreement, coming approximately one month after MIS informed Westlake
    that it would not service Westlake’s equipment (RR Hagan, v.4, p.217-19).
    14.   After MIS’s refusal to service Westlake’s equipment, commencing
    with its refusal to replace the defective APM installed on January 23, 2014, Westlake
    paid Philips $368,050.94 to service its equipment between January 2014 and
    February 2016 (DX 55).
    15.   MIS initiated litigation against Westlake in the Trial Court on April 16,
    2014 (CR 18-35). Westlake’s Original Answer and Counterclaim to Plaintiff’s
    Amended Original Petition was filed August 22, 2014 (CR 95-106). Westlake’s
    Supplemental Answer to Plaintiff’s Third Amended Petition and Defendant’s
    Original Counterclaim, filed August 3, 2015 (CR 1221-1233), alleged that MIS,
    inter alia, failed to service Westlake’s equipment up to OEM standards (CR 1224,
    2
    On December 23, 2013, MIS claimed that Westlake owed $58,898.94. Westlake would have
    been billed for monthly services of $16,729 from January through March 2014, adding an
    additional $50,187.00 to the total. From December 23 through mid-February, Westlake paid MIS
    $61,228.41. The math in the March 4 default notice does not work: $58,898.04 + $50,187.00 -
    $61,228.41 = $48,856.63. Of the $48,856.63, the monthly service fees for February and March
    were not then due under the 60-day payment terms agreed by the parties, leaving a balance of
    $14,398.63. However, MIS owed Westlake $49,564.23 for Philips’ repair of the CT in late-
    January. On March 4, MIS actually owed Westlake the difference between the Philips’ and the
    purportedly “past due” balance of $14,398.63. Alternatively, ignoring the 60-day payment terms
    (as MIS did in its March 4 demand), the parties were effectively even on March 4. At trial, the
    Jury heard similar testimony from MIS’s expert (RR Erickson, v.8, pp.153-54, 159-61, 163, 165-
    67, 172-73, 175-76).
    {1737446;}                                    9
    1230) and refused to perform repairs within the scope of the Agreement (CR 1227,
    1230).3
    16.   After the close of evidence, MIS’s objection to the repudiation defense
    in Question No. 3 was limited to the purported lack of pleading the issue: “There is
    not pleading to support prior repudiation …,” omitting any evidentiary challenge to
    the issue (RR Shelton, v. 9, p.115). MIS did not expressly object to the waiver or
    modification defenses contained in Question No. 3, instead limiting its objection the
    purported lack of evidence in support of a generic “excuse” defense (RR Shelton,
    v.9, p.115-18).
    17.   During Westlake’s closing argument, counsel made express reference
    to MIS’s refusal to provide service under the Agreement: “You may think, well, the
    breach is a few weeks later—a few days later when they said, ‘We’re not going to
    come back until you replace the CT tube’” (RR Geisler, v.9, pp.202-03).
    18.   After weighing the evidence, the Jury determined in Question No. 1
    that Westlake had failed to comply with the Agreement (CR 2992), in Question
    No. 2 that MIS had failed to comply with the Agreement (CR 2992), and in Question
    No. 3 that Westlake’s failure to comply was excused (CR 2993). MIS’s appeal is
    limited exclusively to purported errors in Question No. 3. See Appellant Brief at 3.
    3
    MIS never specially excepted to Westlake’s pleadings or affirmative defenses. See TEX. R.
    CIV. P. 90 & 91; Roark v. Allen, 
    633 S.W.2d 804
    , 810 (Tex. 1982) (waiving any defect in the
    pleadings not specially excepted).
    {1737446;}                                   10
    III.     SUMMARY OF THE ARGUMENT
    19.   Repudiation was properly included in Question No. 3, excusing
    Westlake’s non-performance of the Agreement. By definition, repudiation is a
    party’s unjustified refusal to perform its obligations under the parties’ contract.
    MIS’s unjustified refusal to perform its obligations under the Agreement was an
    issue in the parties’ dispute from the very beginning. Westlake’s pleading and other
    filings in the case contained allegations regarding MIS’s refusal, and the refusal
    issue was actively litigated.
    20.   Although MIS did not challenge the sufficiency of the evidence in the
    Trial Court supporting its repudiation of the Agreement, the record contains
    evidence from which the Jury could have reasonably concluded that MIS repudiated
    the Agreement, refusing to perform services covered under the Agreement both in
    January and March 2014.
    21.   MIS did not expressly object to the modification defense in the Trial
    Court, instead making a broad objection to “excuse” issues. Accordingly, MIS did
    not raise either its current objections, based on a purported lack of consideration or
    lack of evidence, in the Trial Court. Notwithstanding MIS’s waiver of the new
    arguments raised on appeal, the evidence demonstrates that the parties’ January 2014
    payment plan modification was supported by an MIS’s offer, Westlake’s acceptance,
    an exchange of consideration, and Westlake’s performance.
    {1737446;}                                11
    22.   Similarly, MIS did not make an express objection to the waiver issue
    included in Question No. 3, subsuming it into the “excuse” objection. Nonetheless,
    the record contains evidence from which the Jury could have reasonably concluded
    that MIS waived—both expressly and by implication—the payment term provisions
    of the Agreement.
    23.   Question No. 3 was properly submitted for the Jury’s consideration and
    did not result in an improper verdict or judgment. The Casteel challenge made by
    MIS on appeal was not made in the Trial Court. The circumstances present in this
    matter do not support a finding of presumptive error under Casteel. Instead, each of
    the issues contained in Question No. 3 was legally valid, within the scope of
    Westlake’s pleadings, and supported by competent evidence at trial.
    IV.      ARGUMENT AND AUTHORITY
    Although TEX. R. APP. P. 38.2(a)(2) expresses a preference for the appellee’s
    brief to address the appellant’s points of error in the order presented, such ordering
    is not practicable in this particular case, because the MIS’s Point of Error No. 1 is
    premised upon its other five putative errors. Accordingly, Point of Error 1 will be
    addressed last. The other points will be addressed in the order in which they appear
    in MIS’s brief.
    With regard to each putative error, Westlake contends MIS waived any
    objection to Question No. 3 by failing to specifically object to issues contained in
    {1737446;}                                 12
    Question No. 3 in the Trial Court (RR Shelton, v.9, pp.115-17) and for raising new
    issues for the first time on appeal. See State Dep’t of Highways & Pub. Transp. v.
    Payne, 
    838 S.W.2d 235
    , 242 (Tex. 1992) (“An objection to the charge must
    distinctly point out the objectionable matters and grounds of the objection. An
    objection is insufficient to preserve error if it fails to adequately explain why an
    instruction is legally incorrect.”); El Paso Refining, Inc. v. Scurlock Permian Corp.,
    
    77 S.W.3d 374
    , 383 (Tex. App.-El Paso 2002, pet. denied) (noting that a “party is
    confined to the jury instruction made at trial; any variant complaint on appeal is
    waived”); TEX. R. CIV. P. 274.
    A.    RESPONSE TO POINT OF ERROR NO. 2 AND NO. 3
    The Trial Court did not err in submitting the repudiation issue to the Jury.
    Repudiation of a contract is a refusal of a party to perform its obligations under the
    contract. Westlake’s pleadings in this case contained allegations that MIS refused to
    perform its obligations under the Agreement. These allegations were supported at
    trial by evidence4 that MIS refused to perform its obligations, unless Westlake
    agreed to an unnecessary $200,000 part for its CT. MIS’s refusal to perform was a
    4
    As noted above, MIS’s objection to the repudiation issue was limited to its contention that
    Westlake did not plead the issue (RR Shelton, v. 9, pp.115). If the issue was not waived by MIS,
    in reviewing a no evidence point of error, the Court should consider only the evidence that supports
    the jury’s take-nothing verdict, ignoring all contrary evidence. See T.O. Stanley Boot Co., Inc. v.
    El Paso, 
    847 S.W.2d 218
    , 221 (Tex. 1992).
    {1737446;}                                      13
    repudiation of the Agreement. Accordingly, the repudiation issue was properly
    included in Question No. 3.
    24.   MIS’s reliance on the trial by consent doctrine is misplaced. “Pleadings
    are sufficient under the Rules of Civil Procedure if they give fair and adequate notice
    to their adversary.” Stone v. Lawyers Title Ins. Corp., 
    554 S.W.2d 183
    , 186 (Tex.
    1977). The adversary must simply be given fair notice of the issues in the lawsuit.
    See TEX. R. CIV. P. 45, 47. “The general rule is that broad pleadings to which no
    special exceptions have been properly lodged are to be given a liberal construction.”
    Missouri-Kansas-Texas R. Co. v. Alvarez, 
    703 S.W.2d 367
    , 376 (Tex. App.-Austin
    1986, writ ref’d n.r.e.) (Smith, J., dissenting); see 
    Stone, 554 S.W.2d at 186
    (noting
    that, “in the absence of special exceptions, the petition will be construed liberally in
    the pleader’s favor”); The Huff Energy Fund, L.P. v. Longview Energy Co., 
    482 S.W.3d 184
    , 221-22 (Tex. App.-San Antonio 2015, pet. granted) (Chapa, J.
    dissenting) (explaining that theories not expressly pled are not waived under notice
    pleading standards). As noted above (see discussion, supra, note 3), MIS did not
    specially except to Westlake’s pleadings, thereby requiring Westlake’s pleadings to
    be liberally construed. In such event, the pleadings should be upheld as to any issue
    “that may be reasonably inferred from what is specifically stated.” Boyles v. Kerr,
    
    855 S.W.2d 593
    , 601 (Tex. 1993).
    {1737446;}                                 14
    25.   Furthermore, the trial court may treat a counterclaim as an affirmative
    defense. See Seaureau v. Tanglewood Homes Ass’n, Inc., 
    694 S.W.2d 119
    , 120 (Tex.
    App.-Houston [14th Dist.] 1985, writ ref’d n.r.e.) (citing TEX. R. CIV. P. 71); see
    Hodge v. Smith, 
    856 S.W.2d 212
    , 214 n.1 (Tex. App.-Houston [1st Dist.] 1993, writ
    denied) (noting that the trial court is “to look at the substance of the pleading and
    proceedings to determine what actually occurred”). Findings by the Jury may
    “support both a cause of action and an affirmative defense to enforcement of a
    contract.” Syrian American Oil Corp., S.A. v. Pecten Orient Co., No. 01-15-00424-
    CV, 
    2017 WL 1955403
    , at *11 (Tex. App.-Houston [1st Dist.] May 11, 2017, no pet.)
    (recognizing fraudulent inducement as a claim and defense).
    26.   Trial by consent applies only to trial of issues omitted from the parties’
    pleadings. See Continental Homes of Texas, L.P. v. City of San Antonio, 
    275 S.W.3d 9
    , 16 (Tex. App.-San Antonio 2008, pet. denied). The refusal/repudiation issue was
    alleged in Westlake’s pleadings and litigated from the beginning of the dispute. See
    Southwestern Bell Tele. Co. v. Garza, 
    164 S.W.3d 607
    , 616-17 (Tex. 2004). The
    Jury heard extensive evidence on the issue of MIS’s refusal to perform its obligations
    under the Agreement. Cf. In Interest of M.G.N., 
    491 S.W.3d 386
    , 406 (Tex. App.-
    San Antonio 2016, pet. denied). Likewise, Westlake’s closing argument directed the
    Jury’s attention to MIS’s unjustified refusal to perform (RR Geisler, v.9, pp.202-03).
    See Continental 
    Homes, 275 S.W.3d at 16
    . MIS cannot reasonably argue that it did
    {1737446;}                                  15
    not have fair notice of refusal/repudiation issue or that it was surprised by it. See
    Hammer v. Dallas Transit Co., 
    400 S.W.2d 885
    , 889 (Tex. 1966).
    27.   A contract may be repudiated expressly or by a party’s material breach
    of the contract. See Hampton v. Minton, 
    785 S.W.2d 854
    , 858 (Tex. App.-Austin
    1990, writ denied). “Repudiation may consist of words or actions that indicate an
    intention not to perform in the future.” Baytown State Bank v. Don McMillan
    Leasing Co., 
    551 S.W.2d 771
    , 774 (Tex. App.-Houston [14th Dist.] 1977, writ ref’d
    n.r.e.); see BLACK’S LAW DICTIONARY 1303 (6th ed. 1990) (“Such consists in such
    words or actions by contracting party as indicate that he is not going to perform his
    contract in the future. Continental Cas. Co. v. Boerger, Tex.Civ.App, 
    389 S.W.2d 566
    , 568)”.
    28.   Repudiation is in the nature of a breach of contract manifested by a
    refusal to perform contractual obligations without just cause. See New York Party
    Shuttle, LLC v. Bilello, 
    414 S.W.3d 206
    , 216 (Tex. App.-Houston [1st Dist.] 2013,
    pet. denied). A party may be found to have repudiated a contract where the other
    party has previously breached it: “If the non-breaching party continues to insist on
    performance by the party in default, the previous breach by the breaching party is
    not an excuse for non-performance by the non-breaching party and the contract
    continues in full force.” Id.; see Henry v. Masson, 
    333 S.W.3d 825
    , 840-41 (Tex.
    {1737446;}                                16
    App.-Houston [1st Dist.] 2010, pet denied); Hampton v. Minton, 
    785 S.W.2d 854
    ,
    858 (Tex. App.-Austin 1990, writ denied).
    29.   MIS cannot reasonably contend that Westlake did not plead the
    hallmark of repudiation, being MIS’s unjustified refusal to perform its obligations
    under the Agreement, or that the parties did not consent to litigation of an issue
    central to the parties’ dispute. The genesis of this matter was MIS’s refusal to
    perform a covered repair of Westlake’s CT recommended by the OEM, Philips.
    These allegations were asserted throughout litigation of the parties’ dispute,
    including without limitation: (a) Westlake’s Responses to Plaintiff’s First Set of
    Interrogatories (CR 253-270); (b) Westlake’s Third Party Original Petition (CR 883-
    888); (c) Westlake’s Fourth Supplemental Response to Plaintiff’s Request for
    Disclosure and Expert Designation (CR 2140-2149); and (d) Westlake’s Motion for
    Directed Verdict (CR 2913-2925).
    30.   The Agreement obligated MIS to maintain Westlake’s equipment in
    accordance with OEM requirements (DX 1 [WLP 193]). At trial, the Jury heard
    testimony that MIS refused to make an OEM-recommended repair to Westlake’s CT
    and did not service Westlake’s equipment after the late-January 2014 “blowup” over
    the refused repair (RR Hagan v.4, pp.138, 217-19). At the time of the CT incident,
    Westlake had accepted MIS’s payment plan modification and was prepared to
    continue its performance (DX 24; DX 47; DX 48).
    {1737446;}                              17
    31.   MIS chose a different direction. Mr. Hagan informed the Jury that MIS
    thereafter determined that it was, in his unequivocal words, through with the
    relationship: (a) “Nah, we’re just done” (RR Hagan, v.4, p.131); (b) “You know, this
    is it. … we just had it” (RR Hagan, v.4, p.132); (c) “we just need to end it,” referring
    to the Agreement (RR Hagan, v.4, p.122); (d) “We’re done” (RR Hagan, v.4, p. 184);
    and (e) “That’s it, we’re just done” (RR Hagan, v.4, p. 218). In other words, MIS
    repudiated performance of its obligations under the Agreement and repudiated the
    agreed upon payment plan (DX 24; DX 47; DX 48).
    32.   There was also evidence at trial that MIS repudiated the parties’
    contract by refusing to service Westlake’s equipment in March 2014, thereby
    breaching the contract. On March 2, 2014, well into the modified payment plan,
    Westlake submitted a service report to MIS related to the CT machine at Westlake.
    (DX 36). The graphics card in the CT had failed and required replacement. Ms.
    Jefferson followed up the service report submission with an email dated March 3,
    2014, in which she asked Mr. Hagan to dispatch an MIS technician to Westlake to
    repair and replace the graphics card. (DX 35). When MIS failed to do so, Westlake
    paid Philips to repair the CT and replace graphics card at a cost of $7,836.22. (DX
    35).
    33.   The repudiation issue in Question No. 3 was present in the litigation
    since its inception. Evidence was submitted by both parties at trial from which the
    {1737446;}                                18
    Jury could have reasonably concluded that MIS refused continued performance
    under the Agreement without just cause, excusing Westlake’s breach of the
    Agreement.
    B.    RESPONSE TO POINT OF ERROR NO. 4 AND NO. 5
    MIS contends that the Trial Court erred in submitting Question No. 3 to the
    Jury, because there purportedly was neither consideration nor evidence to support
    Westlake’s modification defense. MIS did not raise the lack of consideration issue
    in the Trial Court, whether orally at trial, in its pleadings, or through its post-trial
    motions, thereby waiving appellate review of its Point of Error No. 4. See State of
    Cal. Dep’t of Mental Hygiene v. Bank of Southwest Nat’l Ass’n, 
    354 S.W.2d 576
    ,
    581 (Tex. 1962). Point of Error No. 5 should be disregarded, because the evidence
    at trial was sufficient to support the Jury’s finding that the Agreement was modified.
    See T.O. Stanley Boot Co., Inc. v. El Paso, 
    847 S.W.2d 218
    , 221 (Tex. 1992).5
    34.   MIS contends that consideration supporting a contract modification
    must be “separate and apart from the consideration from the initial contract.”
    5
    Throughout its brief, and especially in Points of Error No. 4 through No. 6, MIS attempts to
    equate the Jury’s response to Question No. 3 as the Jury’s absolution of Westlake’s obligation to
    make payment under the Agreement. Question No. 3 merely asked the Jury to determine, “Was
    Westlake’s failure to comply [with the terms of the Agreement] excused?” (CR 2993). In other
    words, was Westlake’s breach of the Agreement, as found by the Jury in Question No. 1, excused?
    The Jury found that Westlake’s breach was excused. Subsequent Jury questions, addressing the
    parties’ damages on competing breach claims, and evidence before the Jury explain the take-
    nothing verdict. See discussion, infra, ¶ 50. However, MIS’s appeal is limited solely to Question
    No. 3.
    {1737446;}                                     19
    Appellant Br. at 23, ¶ 44 (citing Kellogg Brown & Root Int’l, Inc. v. Altanmia
    Commercial Mktg. Co. W.L.L., No. H-07-2684, 
    2008 WL 5114962
    , at *17 (S.D.
    Tex. Dec. 3, 2008, not reported in F.Supp.2d)). The Kellogg court actually states, “A
    valid contract modification must be supported by consideration separate from the
    consideration of the initial contract. Consideration may consist of a benefit to one
    party or a detriment to the other party.” Kellogg, 
    2008 WL 5114962
    , at *17. Under
    this consideration principle, the parties’ modification of the Agreement was
    supported by consideration.
    35.   Under the original Agreement, MIS was not entitled to receive weekly
    payments from Westlake, and Westlake was not entitled to make payments on 60-
    day payment terms. This exchange of benefit and detriment between the parties,
    offered by MIS and accepted by Westlake, was consideration for the modification
    to the Agreement. See Okemah Constr., Inc. v. Barkley-Farmer, Inc., 
    583 S.W.2d 458
    , 460 (Tex. App.-Houston [1st Dist.] 1979, no writ) (noting that to give effect to
    a modification, “it must have been offered by one party and accepted by the other”).
    36.   MIS contends that Westlake did not agree to a modification of the
    Agreement, but its contention is focused on incompetent opinion evidence from fact
    witnesses and general obfuscation of the material evidence in the record. As
    summarized above, between December 2013 and January 2014, MIS extended 60-
    day payment terms to Westlake, with the last such offer accompanied by a payment
    {1737446;}                               20
    plan obligating Westlake to make weekly payments to MIS of approximately $5,500
    (exceeding the $16,729 otherwise owed under the Agreement by over $5,000 per
    month). This offer was made by Mr. Hagan in an email communication dated
    January 16, 2014 (DX 24), and it was accepted in an email communication from
    MIS dated January 21, 2014 (DX 24). Thereafter, Westlake performed the modified
    Agreement, making the weekly payments (DX 35; DX 47; DX 48), and MIS
    accepted them without objection. See Okemah 
    Constr., 583 S.W.2d at 460
    (noting
    that a modification requires “a meeting of minds”); United Concrete Pipe Corp. v.
    Spin-Line Co., 
    430 S.W.2d 360
    , 364 (Tex. 1968) (noting “performance of that act
    which the offeree was requested to promise to perform may constitute a valid
    acceptance”).
    37.   Whether: (a) Ms. Jefferson was of the opinion that the Agreement had
    been modified, or (b) anyone from Westlake signed the document attached to Mr.
    Hagan’s January 16 email, is irrelevant to the modification issue. The exhibits cited
    above were admitted into evidence and available for Jury consideration of the
    modification defense in Question No. 3. These exhibits evince MIS’s offer to modify
    the Agreement, Westlake’s acceptance of the offer, and Westlake’s performance of
    the modified Agreement. The Jury heard testimony from MIS’s expert that, during
    the period prior to MIS’s default notice, Westlake’s purported delinquency was
    within the 60-day payment terms of the modified Agreement (RR Erickson, v.8, pp.
    {1737446;}                               21
    153-54, 159-61, 163, 165-67, 172-73, 175-76). Accordingly, the trial record contains
    evidence sufficient to support the Jury’s conclusion that the Agreement was
    modified.
    C.    RESPONSE TO POINT OF ERROR NO. 6
    The Trial Court did not err in submitting Westlake’s waiver defense to the
    Jury as part of Question No. 3. The trial record contains sufficient evidence from
    which the Jury could have concluded that MIS waived portions of the Agreement,
    excusing Westlake’s breach. In its prior challenges to the waiver defense, MIS
    focused exclusively on Paragraph T of the Agreement, which it contended required
    the assent of both parties to affect a waiver of any provision of the Agreement (CR
    3036-3045; RR Shelton, v.9, pp.116-17).6 MIS has abandoned its objections made
    in the Trial Court in favor of entirely new arguments not raised below. See Larsen
    v. FDIC/Manager Fund, 
    835 S.W.2d 66
    , 74 (Tex. 1992) (noting inability of court of
    appeals to reverse based on new argument raised for first time on appeal).
    38.   “[W]aiver is essentially unilateral in its character; … no act of the party
    in whose favor it was made is necessary to complete it.” Massachusetts Bonding &
    Ins. Co. v. Orkin Exterminating Co., 
    416 S.W.2d 396
    , 401 (Tex. 1967). Waiver may
    6
    The plain language of the Agreement (and the extant authority cited herein) recognizes waiver
    as MIS’s unilateral act: “No waiver, alteration or modification of any of the provisions hereof shall
    be binding upon MIS unless in writing and signed on its behalf by MIS Executive Officers” (DX
    1 [WLP 1]).
    {1737446;}                                       22
    be an express renunciation of a right, or it may arise from a party’s silence or inaction
    over a period of time. Interceramic, Inc. v. South Orient R.R. Co., Ltd., 
    999 S.W.2d 920
    , 926 (Tex. App.-Texarkana 1999, pet. denied).
    39.   Texas law recognizes an “implied waiver of the requirement of
    punctual payments by acceptance of payments made past the due date.” Bodiford v.
    Parker, 
    651 S.W.2d 338
    , 339 (Tex. App.-Fort Worth 1983, no writ). This implied
    waiver limits the ability of a party to declare default based on untimely payments,
    without prior advanced notice to the payor. See McGowan v. Pasol, 
    605 S.W.2d 728
    ,
    732 (Tex.App-Corpus Christi 1980, no writ).
    40.   Where reasonable minds could differ on the issue of waiver, the jury
    resolves the question of fact. See Crosstex Energy Servs., L.P. v. ProPlus, Inc.,
    430S.W.3d 384, 394 (Tex. 2014); G.H. Bass & Co. v. Dalsan Properties-Abliene,
    
    885 S.W.2d 572
    , 578 (Tex. App.-Dallas 1994, no writ).7
    41.   The evidence proffered at trial was undisputed that MIS had accepted
    late payments from Westlake on numerous occasions throughout the term of the
    Agreement. In fact, MIS concedes that it accepted late payments from Westlake from
    7
    MIS cites the G.H. Bass case for the proposition that waiver—like most issue reserved for jury
    determination—is difficult to prove as a matter of law. Appellant Br. at 29, ¶ 57. The G.H. Bass
    case involved a motion for summary judgment and the moving party’s request to find waiver as a
    matter of law. The same is true for Global Financial Services (
    2008 WL 372521
    ) case, the Vessels
    (
    823 S.W.2d 762
    ) case, and the Bancoklahoma (
    641 S.W.2d 400
    ) cases cited in Point of Error No.
    6, all of which sought a determination of waiver as a matter of law. See Appellant Br. at 30, ¶ 61.
    However, Westlake has not asserted that it was entitled to a finding of waiver as a matter of law
    and the waiver issue was not decided by the Trial Court as a matter of law.
    {1737446;}                                      23
    the commencement of the parties’ relationship under the Agreement in early 2011.
    See Appellant Br. at 4, ¶ 4. The payment terms in the Agreement provided, “Each
    Monthly Payment Shall [sic] be due upon the 1st of each month .... Any payment not
    received After [sic] the 5th of the month will be considered delinquent and will accrue
    interest at the rate of 1.5% per month until paid in full” and be considered an event
    of default (DX 1 [WLP 195]). MIS did not charge Westlake interest during the term
    of the Agreement. MIS did not declare the Agreement in default until after the
    January 2014 “blowup” over its refusal to make the OEM-recommended repair to
    Westlake’s CT (RR Hagan, v.4, pp.217-19; RR Bates, v.7, p.92; DX 34).
    42.   On multiple occasions, MIS expressly informed Westlake that it would
    be in compliance with its obligations under the Agreement, if it maintained payment
    terms of 60-days. Mr. Hagan renunciated the payment term provision of Agreement
    in his December 17, 2013, email communication informing Westlake that 60-day
    payment terms were acceptable (DX 21). Vivian Bates, the MIS CFO, expressly
    waived the payment term provision in her correspondence of December 23, 2013,
    again informing Westlake that 60-day payment terms were acceptable (DX 23).
    Finally, Mr. Hagan’s email of January 16, 2014, informed Westlake that it was
    relieved of the payment term provision of the Agreement so long as it stayed within
    the 60-day window (DX 24).
    {1737446;}                                24
    43.   Westlake was not on the verge of default during these periods as
    claimed by MIS. Instead, the Jury heard Mr. Hagan testify that MIS had a good and
    valued relationship with Westlake during this period (DX 14; DX 24). During the
    period between Mr. Hagan’s January 2016 email and Ms. Bates’ March 2014 default
    notice demanding 10-day payment terms, MIS never informed Westlake that its late
    payment of any amount owed under the Agreement would result in Westlake’s
    default of the Agreement. Cf. 
    McGowan, 605 S.W.2d at 732
    .
    44.   Under the facts, the Jury could have reasonably determined that MIS
    waived the payment term provision of the Agreement, which MIS claims was the
    Westlake’s breach of the Agreement. See Appellant Br. at 4, ¶ 4. The evidence before
    the Jury demonstrated that MIS accepted late payments under the Agreement from
    the beginning of the Agreement. The evidence also demonstrated that MIS expressly
    relieved Westlake from the payment terms in the Agreement. Accordingly, the Trial
    Court did not err in submitting the waiver issue to the Jury in Question No. 3.
    D.    RESPONSE TO POINT OF ERROR NO. 1
    The Trial Court did not err in submitting a broad-form issue on Question
    No. 3. As demonstrated above, each of the issues included in Question No. 3 were
    supported by the pleadings and the evidence proffered during trial. The Jury could
    have reasonably concluded that MIS modified and/or waived provisions of the
    Agreement or repudiated it by refusing to service Westlake’s equipment without
    {1737446;}                               25
    justification. Accordingly, nothing in Question No. 3 “probably caused the rendition
    of an improper judgment” in the Trial Court, requiring reversal of the take-nothing
    Judgment. TEX. R. APP. P. 61.1(a); see Bed, Bath & Beyond, Inc. v. Urista, 
    211 S.W.3d 753
    , 754 (Tex. 2006) (finding harmless error where record does not support
    probable improper judgment).
    45.   “[T]he trial court’s duty is to submit only those questions, instructions,
    and definitions raised by the pleadings and the evidence.” Harris County v. Smith,
    
    96 S.W.3d 230
    , 236 (Tex. 2002); see TEX. R. CIV. P. 278. Consistent with applicable
    law, see TEX. R. CIV. P. 277, the trial court exercises this duty through a
    “fundamental commitment to broad-form submission,” as was employed by the Trial
    Court in the proceedings below. Harris 
    County, 96 S.W.3d at 235
    . As forecasted by
    the Harris court, MIS has used the broad-form submission to complain about
    “potential” errors in the charge submitted to the Jury. See 
    id. at 235.
    The purpose of
    the broad-form submission is to simplify the charge process and “provide more
    comprehensible questions for the jury.” 
    Id. However, MIS’s
    contention “that such a
    simple instruction will ‘nudge’ jurors toward a defense verdict reflects a very low
    opinion of their intelligence. … [T]hey are not cattle who will be stampeded to an
    improper verdict by something like this.” 
    Urista, 211 S.W.3d at 760
    (Medina, J.,
    dissenting).
    {1737446;}                                  26
    46.   Nonetheless, MIS contends that Question No. 3 was a presumptive
    reversible error under the rule set forth in Crown Life Ins. Co. v. Casteel, 
    22 S.W.3d 378
    (Tex. 2000). See 
    Casteel, 22 S.W.3d at 388
    . Under Casteel, reversible error
    arises only in such cases that “the appellate court cannot determine whether the jury
    based its verdict on an invalid theory.” Harris 
    County, 96 S.W.3d at 233
    . “Casteel
    issues do not arise in every situation where a jury has more than one legal theory to
    choose from when answering a single question.” Ford Motor Co. v. Castillo, 
    444 S.W.3d 616
    , 621 (Tex. 2014); see Thota v. Young, 
    366 S.W.3d 678
    (Tex. 2012)
    (declining to extend scope of Casteel rule to defensive theory of contributory
    negligence).
    47.   For reversible error, the “invalid theory” must be the “‘sole basis for
    the jury’s finding.’” 
    Urista, 21 S.W.3d at 756
    (quoting Crown Life Ins. Co. v.
    Casteel, 
    22 S.W.3d 378
    , 389 (Tex. 2000)); see El Paso Refining, Inc. v. Scurlock
    Permian Corp., 
    77 S.W.3d 374
    , 386 (Tex. App.-El Paso 2002, pet. denied) (noting
    “remand is only required when a theory should never has been presented to the jury
    because there was no valid legal, as opposed to factual, basis for the submission”).
    Absent such a finding, the appellate court is to “apply traditional harmless error
    analysis.” 
    Urista, 21 S.W.3d at 757
    . Under the traditional analysis, reversal is
    required “only if [the jury instruction] ‘was reasonably calculated to and probably
    {1737446;}                                27
    did cause the rendition of an improper judgment.’” 
    Id. (quoting Reinhart
    v. Young,
    
    906 S.W.2d 471
    , 473 (Tex. 1995)).
    48.   Each of the issues included in Question No. 3 was legally valid, within
    the scope of Westlake’s pleadings, and supported by competent evidence. MIS has
    never argued that repudiation, modification, or waiver8 are legally invalid theories.
    MIS’s objection at trial to the repudiation was limited to its contention that the issue
    was purportedly outside the scope of Westlake’s pleadings (RR Shelton, v. 9, p.115).
    MIS did not expressly object to the modification and waiver issues, incidentally
    referring to them during argument in support of its broad “excuse” objection (RR
    Shelton, v. 9, p.116). Similarly, MIS did not challenge the legal validity of any of
    the Question No. 3 issues (or mention any purported Casteel issue) in its post-trial
    motion, requesting a new trial (CR 3102-3111). The circumstances do not support a
    presumptive reversible error under Casteel.
    49.   The traditional error analysis likewise does support a finding of
    reversible error. Question No. 3 was submitted to the Jury based on issues raised in
    Westlake’s pleadings and supported by the evidence and, thus, was properly
    submitted to the Jury within the Trial Court’s discretion. The record does not contain
    any support for the (unasserted) contention that Question No. 3 was reasonably
    calculated to result in an improper verdict or judgment.
    8
    MIS proposed waiver instructions applicable to both itself and Westlake (CR 2250, 2262).
    {1737446;}                                    28
    50.   The Jury’s ultimate determination, resulting in the take-nothing
    Judgment, is supported by the evidence unaided by speculation.9 The jury found that
    MIS breached its obligations under the Agreement (CR 2992). Westlake submitted
    evidence of its damages of approximately $368,000 (DX 55), incurred because of
    MIS’s refusal to perform its obligations under the Agreement after the x-ray tube
    issue. The Jury found that Westlake did not comply with the Agreement, but that the
    breach was excused (CR 2992-2993). At trial, MIS’s economics expert testified that
    MIS’s total damages were in the range of approximately $310,000 (RR Erickson,
    v.8, pp.111-14) to $429,000 (RR Erickson, v.8, pp. 89-90),10 which represented
    amounts purportedly owed at the time MIS commenced litigation through expiration
    of the 5-year term of the Agreement. The Jury could have reasonably concluded, as
    it did (CR 2995, 2996), that the parties’ damages were an offsetting wash, with
    9
    In paragraphs 24 and 25 of its brief, MIS asks the Court to speculate regarding the significance
    of an inquiry made by the Jury regarding its answer to Question No. 3 (CR 2987). MIS suggests
    that this inquiry is evidence of an improper basis for the Jury’s verdict. Question No. 3 contained
    four issues: repudiation, modification, waiver, and fraud. The Jury determined that MIS did not
    defraud Westlake. The less speculative explanation of the Jury’s inquiry is that it was trying to
    determine whether it could answer Questions No. 3 in the affirmative, if it found that the fraud
    issue was not supported by the evidence.
    10
    The midpoint between the expert’s (disputed) damages estimates is $369,500.
    {1737446;}                                      29
    neither party entitled to damages from the other.11 Accordingly, Question No. 3 did
    not result in an improper judgment.
    V.       CONCLUSION AND PRAYER
    MIS did not preserve the six putative errors for which it seeks appellate
    review. MIS’s arguments in support of these contentions were not raised in the Trial
    Court and should not be considered for the first time on appeal. Ignoring the
    procedural deficiencies, MIS’s points of appeal are without merit. Each of the issues
    included in Question No. 3 were legally sufficient excuses of Westlake’s non-
    performance under the Agreement. Based on the evidence at trial, the Jury could
    have reasonably concluded that MIS repudiated performance of its obligations under
    the Agreement after modifying and waiving the payment term provision of the
    Agreement. Thus, the Jury’s finding in Question No. 3 does not amount to a
    reversible error.
    WHEREFORE, Appellees, Westlake Surgical, LP d/b/a The Hospital at
    Westlake Medical Center and WS GP, LLC, request this Court to AFFIRM the
    Judgment of the Trial Court and to grant Appellees such other relief to which they
    may be justly entitled.
    11
    Notwithstanding its challenge on Question No. 3, MIS’s complaint appears to be that it was not
    awarded damages by the Jury. See Appellant Br. at 33, ¶ 68 (requesting remand only on issue of
    damages and attorney fees). MIS submitted its own proposed jury instructions and questions (CR
    2232-2263), including instructions on its purported damages (CR 2238-2243). MIS has not
    appealed the Trial Court’s exclusion of these damages instructions.
    {1737446;}                                    30
    Respectfully submitted,
    By: /s/ David L. Bryant
    David L. Bryant
    State Bar No. 24084344
    dbryant@gablelaw.com
    GABLEGOTWALS
    113 Pleasant Valley Drive, Suite 204
    Boerne, TX 78006
    (830) 336-4810
    (918) 595-4990 (facsimile)
    AND
    R. Chad Geisler
    State Bar No. 00793793
    cgeisler@germer-austin.com
    GERMER BEAMAN & BROWN, LLC
    301 Congress Avenue, Suite 1700
    Austin, TX 78701
    (512) 472-0288
    (512) 472-0721 (facsimile)
    ATTORNEYS FOR APPELLEES
    WESTLAKE SUGICAL, LP D/B/A THE
    HOSPITAL AT WESTLAKE MEDICAL
    CENTER AND WS GP, LLC
    {1737446;}   31
    CERTIFICATE OF COMPLIANCE
    I certify that this document was produced on a computer using Microsoft
    Word and contains 8,465 words as determined by the computer software’s word-
    count function, including all sections, even those that may be excluded according to
    TEX. R. APP. P. 9.4(i)(1).
    By: /s/ David L. Bryant
    CERTIFICATE OF SERVICE
    I certify that on this 25th day of September, 2017, I forwarded a true and
    correct copy of the foregoing document to all parties listed below:
    VIA EFILE                                    VIA EFILE
    Mr. Craig L. White                           Mr. R. Chad Geisler
    Craig L. White, P.C.                         Germer Beaman & Brown, PLLC
    111 West Olmos Drive                         301 Congress Avenue, Suite 1700
    San Antonio, Texas 78212                     Austin, Texas 78701
    VIA EFILE                                    VIA EFILE
    Mr. Jay M. Rosenberg                         Wade B. Shelton
    Conley Rosenberg & Mendez                    Shelton & Valadez
    5080 Spectrum Drive, Suite 850 E             600 Navarro Street, Suite 500
    Addison, TX 75001                            San Antonio, Texas 78205
    By: /s/ David L. Bryant
    {1737446;}                              32