Adrian James v. Kirby Hiscox ( 2015 )

ACCEPTED
03-15-00256-CV
6983697
THIRD COURT OF APPEALS
AUSTIN, TEXAS
9/18/2015 5:13:36 AM
JEFFREY D. KYLE
CLERK
No. 03-15-00256-CV
FILED IN
In the Third Court of Appeals 3rd COURT OF APPEALS
AUSTIN, TEXAS
Austin, Texas 9/18/2015 5:13:36 AM
JEFFREY D. KYLE
Clerk
ADRIAN JAMES
Appellant
V.
KIRBY HISCOX
Appellee
APPEAL FROM CAUSE NO. C-1-CV-14-008643
COUNTY COURT AT LAW NO. 1, TRAVIS COUNTY, TEXAS
HON. TODD T. WONG, PRESIDING
BRIEF OF APPELLEE
LAW OFFICES OF HENRY J. NOVAK
Henry J. Novak
State Bar No. 15120000
11782 Jollyville Road
Austin, Texas 78759
(512) 577-5380
(512) 532-6008 (Fax)
henry@henrynovak.com
Counsel for Appellee
ORAL ARGUMENT NOT REQUESTED
TABLE OF CONTENTS
Index of Authorities ................................................................................................. iii
Guide to Citations ......................................................................................................v
Statement of the Case.................................................................................................1
Statement Regarding Oral Argument ........................................................................2
Issues Presented and Restated ....................................................................................2
1. The Contract is Unambiguous and Appellee’s theory of the case
is the only reasonable interpretation.
2. Appellant’s Interpretation of Par. 4 as a Liquidated Damage
Clause is without Merit.
3. Appellant should be Judicially Estopped from Arguing the
Contract is Ambiguous.
4. This Court should affirm the summary judgment on de novo
review.
Statement of Facts ......................................................................................................3
Summary of the Argument.........................................................................................4
Argument and Authorities..........................................................................................5
I. The Contract is Unambiguous. Appellee’s theory of the case is
the only reasonable interpretation of the Contract. ...............................5
II. Appellant’s Interpretation of Par. 4 as a Liquidated Damage
Clause is without Merit .........................................................................7
III. Appellant should be Judicially Estopped from Arguing the
Contract is Ambiguous ..........................................................................8
IV. This Court should affirm the summary judgment on de novo
review ..................................................................................................11
i
Conclusion and Prayer .............................................................................................12
Certificate of Compliance ........................................................................................13
Certificate of Service ...............................................................................................14
ii
INDEX OF AUTHORITIES
Cases Page(s)
Arthur’s Garage, Inc. v. Racal-Chubb Sec. Sys., Inc.,
997 S.W.2d 803 (Tex. App.—Dallas 1999, no pet.) .......................................7
Carr v. Brasher,
776 S.W.2d 567 (Tex. 1989) .........................................................................11
Cincinnati Life Ins. Co. v. Cates,
927 S.W.2d 623 (Tex. 1996) .........................................................................11
Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd.,
940 S.W.2d 587 (Tex. 1996) .......................................................................6, 7
DeWoody v. Rippley,
951 S.W.2d 935 (Tex. App.—Fort Worth 1997, writ dism’d by
agr.) ................................................................................................................11
Ergo Science, Inc. v. Martin,
73 F.3d 595 (5th Cir. 1996) ............................................................................11
Ferguson v. Bldg. Materials Corp. of Am.,
295 S.W.3d 642 (Tex. 2009) .........................................................................10
Phillips v. Phillips,
820 S.W.2d 785 (Tex. 1991) ...........................................................................7
Pickett v. Tex. Mutual Ins.,
239 S.W.3d 826 (Tex. App.—Austin 2007, no. pet.) ....................................11
Pleasant Glade Assembly of God v. Schubert,
264 S.W.3d 1 (Tex. 2008) .............................................................................10
Provident Life & Accident Co. v. Knott,
128 S.W.3d 211 (Tex. 2003) ................................................................. 11, 12
Sheshunoff v. Sheshunoff,
172 S.W.3d 686 (Tex. App.—Austin 2005, pet. denied) ..............................12
Star-Telegram, Inc. v. Doe,
915 S.W.2d 471 (Tex. 1995) .........................................................................12
iii
Valence Operating Co. v. Dorsett,
164 S.W.3d 656 (Tex. 2005) .....................................................................7, 11
iv
GUIDE TO CITATIONS
References to the Clerk’s Record are shown as (“CR”) followed by page
number, e.g., “(CR 15)”; and references to the Reporter’s Record are shown as
“(RR)”, followed by page number. References to Appellant’s brief will be shown
as “(App. Br., at___)”.
v
TO THE HONORABLE THIRD COURT OF APPEALS:
Kirby Hiscox, Appellee, files this Appellee’s Brief and respectfully shows
the Court the following:
STATEMENT OF THE CASE
Appellee sued Appellant in Travis County Court at Law No. 1 for breach of
contract. The parties filed cross-motions for summary judgment.
Appellee offered summary judgment evidence in the form of his own
affidavit. Appellant offered no evidence.
On February 5, 2015, a hearing on the motions was held before the Hon.
Todd T. Wong, judge presiding. The court granted Appellee’s motion, denied
Appellant’s motion, and entered a general summary judgment order. The order
awarded Appellee actual damages of $28,000.00, attorneys’ fees of $7,805.00,
through trial, and court costs of $257.00. In addition, the court awarded $3,500.00
for legal services if appealed to the Court of Appeals by Appellant and successfully
defended by Appellee; $5,000.00 for legal services in the event application is made
for Writ of Error to the Texas Supreme Court by Appellant and is denied; and
$7,500.00 for legal services in the event Writ of Error is granted by the Texas
Supreme Court and successfully defended by Appellee. The summary judgment
hearing was not transcribed by a court reporter.
Appellant filed a timely motion for new trial.
1
On April 16, 2015, the motion for new trial was presided over by Hon. Eric
M. Sheppard, judge of Travis County Court No. 2. Judge Sheppard denied the
motion. The hearing on the motion for new trial was transcribed by a court reporter
and the reporter’s transcript is part of the record in this Court.
Appellant filed timely Notice of Appeal, and this case is properly before this
Court.
STATEMENT REGARDING ORAL ARGUMENT
This is an appeal from a summary judgment, followed by a motion for new
trial. Appellant offered no evidence at either hearing, and the trial courts’ orders –
granting summary judgment for Appellee and overruling Appellant’s motion for
new trial – do not specify the grounds on which they are based. Well-settled
principles of law will therefore determine the outcome of this appeal. Appellee
does not believe oral argument would aid the Court in deciding this appeal.
However, if the Court decides oral argument is necessary, Appellee requests the
opportunity to participate.
ISSUES PRESENTED AND RESTATED
1. The Contract is Unambiguous and Appellee’s theory of the case is the only
reasonable interpretation.
2. Appellant’s Interpretation of Par. 4 as a Liquidated Damage Clause is
without Merit.
3. Appellant should be Judicially Estopped from Arguing the Contract is
Ambiguous.
2
4. This Court should affirm the summary judgment on de novo review.
STATEMENT OF FACTS
On November 19, 2012, Appellant, a producer, and Appellee, an actor,
entered into a written contract pursuant to which Appellee made himself available
to render certain acting services to Appellant over a six–month period of time (the
“Contract”). (CR 19 –21)
Appellee’s standard, daily rate for his acting services was $1,500.00, a rate
with which Appellant was familiar from previous business dealings between the
two men. This contract gave Appellant the option to pay a lesser rate.
The parties negotiated a clause whereby Appellant specifically guaranteed to
provide Appellee with 20 days of acting work (“shoot days”) over the six–month
term of the contract, in consideration for which Appellee gave Appellant the option
to pay a daily rate of $1,000 if he scheduled all 20 guaranteed shoot days within
the first four months of the contract, or a rate of $1,500 a day if he choose to
spread the shoot days over the entire six–month term of the Contract. (CR 19, Par.
4) It was a win–win for both men: Appellant could save $10,000.00 over the life
of the contract if he scheduled all 20–shoot days in the first four months, and
Appellee could receive the benefit of having the assurance of $20,000.00 in hand
in after only four months. However, Appellee had no say as to when the 20 days
were scheduled; the schedule was left entirely to Appellant’s discretion.
3
As it turned out, Appellant scheduled two shoot days during the first four
months and never scheduled another day. Appellee rendered his acting services for
those two days for which Appellant paid him the lesser rate of $1,000 per day, a
total of $2,000. Appellee remained ready, willing and able to render his services to
Appellant throughout the entire six–month term of the Contract.
Appellee sued Appellant to recover the agreed-upon, higher daily rate of
$1,500 for all 20 guaranteed days of work; i.e., $27,000 for 18 days at $1,500, and
$500.00 a day for the two-days’ work that were completed and paid for at the
lower rate of $1,000.
SUMMARY OF THE ARGUMENT
1. The compensation terms of the contract sued upon are unambiguous.
In awarding judgment for Appellee, the trial court properly calculated damages as
provided for in the contract.
2. Appellee argued only one theory of contractual interpretation in the
proceedings below, and in ruling in favor of Appellee both Judge Wong at the
hearing on the Motion for Summary Judgment and Judge Sheppard at the hearing
on the Motion for New Trial, accepted Appellee’s theory of the case. It is
Appellant’s burden to show that this theory has not merit, and he has failed to
sustain that burden.
4
3. Appellant’s theory that Par. 4 of the Contract is a liquidated damages
clause lacks merit.
4. The summary judgment in favor of Appellee must be affirmed on de
novo review by this Court.
ARGUMENT AND AUTHORITIES
I. The Contract is Unambiguous. Appellee’s theory of the case is the only
reasonable interpretation of the Contract.
The only summary judgment evidence was Appellee’s affidavit. In his
affidavit, Appellee testified that he had worked as a professional actor and host
for Appellant on several productions prior to November 2012 and that Appellant
had been pleased with his work.
In November 2012, Appellant contacted Appellee and asked if he would be
interested in hosting another video project that would involve 30 or more days of
shooting over a six-month period of time.
Appellant was familiar with Appellee’s $1,500 per day rate and asked him
if he would be willing to reduce that rate to $1,000 if Appellant guaranteed him a
minimum of 20 filming days in the first four months of the contract and, if
Appellant didn’t schedule all 20 days of filming within those first four months, he
would pay Appellee’s full daily rate of $1,500 for all 20 days of filming,
regardless of when they were filmed. Appellee accepted Appellant’s offer and
wrote up the contract that is the subject matter of this lawsuit.
5
Paragraph 4 of the contract specifies the terms of compensation. The first
sentence sets forth Appellant’s 20-day guarantee, as follows:
4. MINIMUM GUARANTEED SHOOT DAYS. In
exchange for Actor's agreement to reduce his fees to
those stated above [$1,000 per day], the Producer
guarantees to Actor a minimum of twenty (20) Shoot
Days of filming, equivalent to $20,000.00 to be paid to
Actor.
This guarantee is unequivocal and unconditional. There is no language anywhere
in the Contract relieving Appellant of the guarantee obligation.
The second sentence sets forth the contingency for the increase of the daily
rate to $1,500.00:
In the event that the twenty (20) Shoot Days are not met
within the first four (4) months of the Agreement, the
effective rate of $1,000.00 . . . will revert to $1,500.00
per day rate and be paid retroactively for all completed
Shoot Days and become due and payable within fourteen
days after the end of the fourth (4th) month of this
Agreement.
This sentence relates only to the contingency for the increase in the daily rate to
be paid by Appellant. It does not modify or dilute the guarantee in any way.
Appellant cannot point to any language in the contract that relieves him of the
guarantee.
A contract is unambiguous if it can be given a definite or certain legal
meaning, Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d
6
587, 589 (Tex. 1996), and the meaning put forth by Appellee and accepted by
Judges Wong and Sheppard is the only reasonable meaning of the Contract.
II. Appellant’s Interpretation of Par. 4 as a Liquidated Damage Clause is
without Merit.
In his response to Appellee’s Motion for Summary Judgment, Appellant
argued that the contract was unambiguous and that Paragraph 4 of the Contract was
a liquidated damage provision by virtue of which he owes Appellee only the
additional sum of $3,000.00 not $28,000.00. (See, Defendant’s Response to
Motion for Summary Judgment, CR 37)
A contractual liquidated damages clause estimates in advance the just
compensation a party will receive if the other party fails to perform. Valence
Operating Co. v. Dorsett, 164 S.W.3d 656, 664 (Tex. 2005). Whether a contractual
provision is an enforceable liquidated damages provision or an unenforceable
penalty is a question of law for the court to decide. Phillips v. Phillips, 820 S.W.2d
785, 788 (Tex. 1991).
Courts will enforce a liquidated damages clause only on the presence of two
conditions: (1) the harm caused by the breach must incapable or difficult of
estimation; and (2) the amount of liquidated damages must be a reasonable forecast
of just compensation. Phillips, 820 S.W.2d at 788. If either element is lacking, the
liquidated damages clause is unenforceable. Arthur’s Garage, Inc. v. Racal-Chubb
Sec. Sys., Inc., 997 S.W.2d 803, 810 (Tex. App.—Dallas 1999, no pet.).
7
Paragraph 4 fails as an enforceable liquidated damage provision. The harm
suffered by Appellee as a result of Appellant’s default is easily capable of
determination, as Appellee has shown above.
III. Appellant should be Judicially Estopped from Arguing the Contract is
Ambiguous.
Appellant devotes four of his five points of error to arguing that the
contract sued upon is, essentially, ambiguous, is susceptible of differing
interpretations and that the trial court did not construe the contract in the way he
thinks it should have been constructed. Appellant should be barred from making
any of these arguments.
At the hearing on the cross–motions for summary judgment before Judge
Wong, Appellant took the position that the contract was unambiguous and
claimed the same in his Motion for Summary Judgment:
Defendant contends that Paragraph 4 of the Agreement
is unambiguous and it contains a specifically negotiated
liquidated damage provision that dictates the
consequence if twenty days of shooting at the reduced
rate were not met. The unambiguous provision provides
that the actor would be paid at his regular rate for all
completed shoot days, or in other words at $1,500 for
two days of service, or $3,000.
Defendant objects to Plaintiff’s affidavit in support of his
Motion for Summary Judgment as it is in admissible
Parole Evidence. The Agreement is unambiguous and
therefore any parole evidence is inadmissible. (CR 34)
8
Judge Wong agreed with Appellant that the Contract was unambiguous and
verbally sustained his objection to the use of the affidavit as evidence of the
meaning of the Contract. Furthermore, a week after the entry of the order granting
summary judgment, Appellant presented a formal order to the court sustaining his
objection to the affidavit. Judge Wong signed the order (CR 48).
Having gained the advantage of excluding summary judgment evidence by
arguing the contract was unambiguous in the earlier proceeding, Appellant should
not now be permitted to argue the contract is ambiguous and thereby broaden the
scope of his challenge to the summary judgment, notwithstanding the fact that such
challenges lack merit.
Counsel for Appellant recognized the inconsistency of the position he was
arguing before Judge Sheppard on his motion for new trial and attempted to
explain it away. What took place in his dialogue with the court pointedly illustrates
that Judge Sheppard fully understood Appellee’s position:
MR. ESCOVER: I recognize I am arguing an
inconsistent position than I did in the original proceeding
before Judge Wong. At that point and time I read the
words as they are written here without any interpretation.
And if interpretation was needed, then the Rules --
THE COURT: I am not sure what interpretation you
would need to say the producer guarantees to actor a
minimum of 20 shoot days of filming.
MR. ESCOVER: What's the rate that he should be paid at
if the 20 days aren't met.
9
THE COURT: Here is my problem.
MR. ESCOVER: Sure.
THE COURT: We keep conflating the two, that's part of
the problem. Was he guaranteed 20 shoot days, yes or no.
What the rate was is entirely a different subject.
MR. ESCOVER: I would say, no, he wasn't Your Honor.
THE COURT: What does the word mean when it says
guarantees minimum of 20 shoot days.
MR. ESCOVER: Up until the point you get to in the
event. It spells out contingency, if 20 shoot days are not
met here is your remedy. You have negotiated, you put
this in here.
THE COURT: Doesn’t that go back to the rate of pay.
Mr. Novak's argument is all we are talking about there is
how much he is getting paid for the days he shot. I
guarantee you 20. If less than 20, this is how you are
getting paid. How much you’re getting paid, not how,
cause we already decided that. We decided in sentence
one that it's 20 days. The question is how much are we
paying you for those. The discount we get is 1000.00
front load, no problem. If we don't have -- if we have 19
days then all of a sudden it becomes a different story.
(RR p. 18, line 6 – 19, line 13)
Judicial estoppel precludes a party who successfully maintains a position in
one proceeding from later adopting a clearly inconsistent position in another
proceeding to obtain an unfair advantage. Ferguson v. Bldg. Materials Corp. of
Am., 295 S.W.3d 642, 643 (Tex. 2009); Pleasant Glade Assembly of God v.
Schubert, 264 S.W.3d 1, 6 (Tex. 2008). The elements of judicial estoppel are (1) a
10
party’s position in an existing proceeding is inconsistent with its position in a prior
judicial proceeding; (2) the successful maintenance of the contrary position in the
prior action; (3) the absence of inadvertence, mistake, fraud, or duress in the
making of the prior statement; and (4) the statement was deliberate, clear, and
unequivocal. See, DeWoody v. Rippley, 951 S.W.2d 935, 944 (Tex. App.—Fort
Worth 1997, writ dism’d by agr.). As stated by the Fifth Circuit in Ergo Science,
Inc. v. Martin, 73 F.3d 595, 598 (5th Cir. 1996).
[I]t is within the court’s discretion to utilize judicial
estoppel and prevent [a party] from playing “fast and
loose” with the court by “changing positions based upon
the exigencies of the moment.”
IV. This Court should affirm the summary judgment on de novo review.
Because the trial court's order does not specify the grounds for the summary
judgment, this court must affirm the summary judgment if any of the theories
presented to the trial court and preserved for appellate review are meritorious.
Provident Life & Accident Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003);
Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex. 1996); Carr v.
Brasher, 776 S.W.2d 567, 569 (Tex. 1989).
This Court succinctly stated the applicable rule in Pickett v. Tex. Mutual
Ins., 239 S.W.3d 826, 840 (Tex. App.—Austin 2007, no. pet.).
We review the [trial] court’s summary judgment de novo.
Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661
(Tex. 2005). When the trial court does not specify the
11
basis for its summary judgment, the appealing party must
show it is error to base it on any ground asserted in the
motion. Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473
(Tex. 1995). We must affirm the summary judgment if
any of the grounds presented to the [trial] court are
meritorious. Provident Life Accident Ins. Co. v. Knott,
128 S.W.3d 211, 216 (Tex. 2003); Sheshunoff v.
Sheshunoff, 172 S.W.3d 686, 692 (Tex. App.—Austin
2005, pet. denied).
Paragraph 4 is clear: there was a guarantee of 20 days of work that was not
rendered, resulting in damages to Appellee of $28,000, as calculated by the terms
of the second sentence of Paragraph 4. The judgment of the trial coutt should be
affirmed.
CONCLUSION AND PRAYER
For all of the reasons set forth above, Appellee respectfully requests that this
Court affirm the trial court’s Summary judgment, and the this Court
1. Render judgment against Appellant and Appellant’s cash supersedes
bond (CR 257) for the performance of the judgment, attorney’s fees, and for costs
pursuant to TEX. R. APP. P. 24.1(d) and 43.5; and
2. Render judgment against Appellant for $3,500.00 for attorney’s fees
as awarded to Appellant in the Summary Judgment.
12
Respectfully submitted,
LAW OFFICES OF HENRY J. NOVAK
11782 Jollyville Road
Austin, Texas 78759
(512) 577–5380 (Telephone)
(512) 532-6008 (Fax)
________________________________
Henry J. Novak
State Bar No. 15120000
henry@henrynovak.com
Counsel for Appellee
CERTIFICATE OF COMPLIANCE
This document complies with the typeface requirements of Texas Rule of
Appellate Procedure 9.4(e) because it has been prepared in a conventional typeface
no smaller than 14-point for text and 12-point for footnotes. This document also
complies with the word-count limitations of Rule 9.4(i), if applicable, because it
contains 2,782 words, excluding any parts exempted by Rule 9.4(i)(1).
Henry J. Novak
13
CERTIFICATE OF SERVICE
On September 18, 2015, in compliance with Texas Rule of Appellate
Procedure 9.5, I served this document by e-service, e-mail, facsimile, or mail to:
Via e-Service
Via Email: John@Escoverlaw.com
John W. Escover
THE LAW OFFICES OF JOHN W. ESCOVER, LLP
401 Ranch Road 620 South, Suite 350
Austin, Texas 78734
Counsel for Appellant Adrian James
Henry J. Novak
14