Daniel Dror II, Individually and Trustee of the Daniel Dror II Trust of 1998 and Daniel Dror v. Daniel Mushin ( 2013 )

Appellants’ Motion for Rehearing Overruled; Memorandum Opinion of July
23, 2013 Withdrawn; Affirmed and Substitute Memorandum Opinion filed
September 26, 2013.
In The
Fourteenth Court of Appeals
NO. 14-12-00322-CV
DANIEL DROR II, INDIVIDUALLY AND TRUSTEE OF THE DANIEL
DROR II TRUST OF 1998, AND DANIEL DROR, Appellants
V.
DANIEL MUSHIN, Appellee
On Appeal from the 151st District Court
Harris County, Texas
Trial Court Cause No. 2008-02617
SUBSTITUTE MEMORANDUM OPINION
We overrule appellants’ motion for rehearing, withdraw our memorandum
opinion issued July 23, 2013, and issue this substitute memorandum opinion.
Appellants, Daniel Dror II, Individually and as Trustee of the Daniel Dror II
Trust of 1998, and Daniel Dror (collectively “the Drors”), appeal a judgment in
favor of appellee, Daniel Mushin, on his claim for breach of a settlement
agreement.1 In five issues, the Drors challenge the pertinent jury findings on
liability and the trial court’s award of attorney’s fees. We affirm.
I. BACKGROUND
Mushin intervened in the underlying litigation between the Drors and an
unrelated party. The Drors counterclaimed against Mushin. The underlying
dispute arose from Mushin’s purchase of stock in Atlantis International
Corporation (“Atlantis”). Both Dror II and Mushin were officers and directors of
Atlantis, and they owned the majority of its shares. Dror Sr. has an ownership
interest in, and is CEO of, American International Industries, Inc. (“AII”). Dror II
works for AII.
At a deposition on November 18, 2010, the parties announced a settlement
agreement on the record. In summary, the terms of the recited agreement were the
following:
The Drors will pay Mushin $200,000 in cash as follows: $100,000
by November 24, 2010; $5,000 per month for eleven months,
beginning thirty days after the initial payment; and a balloon
payment of $45,000 due one year from the date of closing.
150,000 restricted shares of AII stock will be transferred to
Mushin.
Mushin will convey to AII all stock he owns in Atlantis and resign
as an officer and director of Atlantis.
1
All Dror parties are similarly situated with respect to the claim and judgment against
them and their appellate complaints. Therefore, we will refer to them collectively as “the Drors,”
except when necessary to refer to a party separately as “Dror Sr.” or “Dror II.”
2
The next day, the parties filed in the trial court a written Rule 11 agreement
(“the agreement”), to which they attached the transcript of their announced
settlement. In the agreement, the parties recited that execution of settlement
documents, payment of consideration, and submission of a dismissal order would
occur on or before December 1, 2010. Thus, the parties agree December 1 (not
November 24, as recited on the record) became the date by which to complete the
closing of the settlement and payment of initial consideration.
The settlement was never consummated. Central to the present case is the
dispute over which party breached the agreement. It is undisputed the Drors never
made the cash payments or transfer of AII stock to Mushin, as required under the
agreement. However, the Drors contend they are not liable for breach of the
agreement because Mushin first repudiated by insisting on requirements
inconsistent with the agreement. In contrast, Mushin contends he did not repudiate
and the Drors repudiated by imposing additional requirements.
When the settlement failed to close, Mushin amended his petition to add a
claim for breach of the agreement. A jury found as follows:
The Drors failed to comply with the agreement, and the failure to comply
was not excused by Mushin’s prior repudiation.
Mushin did not fail to comply, tendered performance, and was ready,
willing, and able to perform his obligations within a reasonable time.
$296,000 would fairly and reasonably compensate Mushin for his
damages resulting from the Drors’ failure to comply, defined as “[t]he
value of the settlement (150,000 restricted shares of [AII] stock, plus the
cash) minus the value of the Atlantis Stock in December 2010.”
Mushin’s reasonable and necessary attorney’s fees were $35,500 through
trial and $25,000, $20,000, and $10,000 for various stages of an appeal.
3
The Drors filed a motion to disregard the jury findings and for judgment
notwithstanding the verdict, which the trial court denied. On January 30, 2012, the
trial court signed an amended final judgment, ordering that Mushin recover the
amounts assessed by the jury.2 The Drors filed a motion for new trial and
alternatively motion for remittitur and motion to modify, correct, or reform the
amended final judgment, which the trial court denied. Mushin filed a voluntary
remittitur reducing the amount of attorney’s fees through trial to $33,500 and for
the various stages of appeal to $15,000, $10,000, and $5,000.
II. BREACH-OF-CONTRACT ISSUES
In their first three issues, the Drors contend the evidence is legally and
factually insufficient to support the following jury findings: (1) the Drors’ failure
to comply was not excused by Mushin’s prior repudiation; (2) Mushin tendered
performance and was ready, willing, and able to perform; and (3) the Drors failed
to comply but Mushin did not fail to comply.
When examining a legal-sufficiency challenge, we review the evidence in
the light most favorable to the challenged finding and indulge every reasonable
inference that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 822
(Tex. 2005). We credit favorable evidence if a reasonable fact finder could and
disregard contrary evidence unless a reasonable fact finder could not. Id. at 827.
The evidence is legally sufficient if it would enable a reasonable and fair-minded
person to reach the verdict under review. Id.
The Drors challenge findings that vary on which party bore the burden of
proof. A party challenging legal sufficiency relative to an adverse finding on
2
The trial court amended an original judgment to reduce the amount of the award for
attorney’s fees through trial.
4
which he bore the burden of proof must demonstrate the evidence conclusively
establishes all vital facts in support of the issue. Dow Chem. Co. v. Francis, 46
S.W.3d 237, 241 (Tex. 2001). When a party challenges legal sufficiency relative
to an adverse finding on which he did not bear the burden of proof, we apply the
“no evidence” standard and may sustain the challenge only when the record
discloses one of the following situations: (a) a complete absence of evidence of a
vital fact; (b) the court is barred by rules of law or evidence from giving weight to
the only evidence offered to prove a vital fact; (c) the evidence offered to prove a
vital fact is no more than a mere scintilla; (d) the evidence establishes conclusively
the opposite of the vital fact. Foley v. Capital One Bank, N.A., 383 S.W.3d 644,
646–47 (Tex. App.—Houston [14th Dist.] 2012, no pet.) (citing City of Keller, 168
S.W.3d at 810). The fact finder is the sole judge of witness credibility and the
weight to give their testimony. City of Keller, 168 S.W.3d at 819.
In a factual-sufficiency review, we consider and weigh all the evidence, both
supporting and contradicting the finding. See Mar. Overseas Corp. v. Ellis, 971
S.W.2d 402, 406–07 (Tex. 1998). A party challenging factual sufficiency relative
to an adverse finding on which he bore the burden of proof must demonstrate the
finding is so contrary to the overwhelming weight of the evidence as to be clearly
wrong and unjust. See Francis, 46 S.W.3d at 242; Pool v. Ford Motor Co., 715
S.W.2d 629, 635 (Tex. 1986). A party challenging factual sufficiency relative to
an adverse finding on which he did not bear the burden of proof must demonstrate
the evidence supporting the finding is so weak or so contrary to the overwhelming
weight of the evidence that the finding is clearly wrong and unjust. Ellis, 971
S.W.2d at 407; Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curiam). We
may not substitute our own judgment for that of the trier of fact or pass upon the
credibility of the witnesses. See Ellis, 971 S.W.2d at 407. The amount of evidence
5
necessary to affirm a judgment is far less than that necessary to reverse a judgment.
GTE Mobilnet of S. Tex. L.P. v. Pascouet, 61 S.W.3d 599, 616 (Tex. App.—
Houston [14th Dist.] 2001, pet. denied).
On appeal, neither party challenges the wording of the jury questions at issue
or accompanying instructions, so we will measure sufficiency of the evidence
against the questions as submitted. See Osterberg v. Peca, 12 S.W.3d 31, 55 (Tex.
2000); Texas First Nat. Bank v. Ng, 167 S.W.3d 842, 855–56 (Tex. App.—
Houston [14th Dist.] 2005, pet. granted, judgm’t vacated w.r.m.).
A. Finding the Drors’ breach was not excused by Mushin’s prior
repudiation
Anticipatory repudiation is an affirmative defense to a breach-of-contract
claim. Cook Composites, Inc. v. Westlake Styrene Corp., 15 S.W.3d 124, 139
(Tex. App.—Houston [14th Dist.] 2000, pet. dism’d). Thus, the Drors bore the
burden of proof on this issue. Under this defensive theory, a party is discharged
from its remaining duties to perform under a contract where the other party
repudiates its contractual duty before the time for performance. Id.
The jury answered “No” to jury Questions 2, 4, and 6 (identical questions
but submitted separately for each Dror party) which inquired about this issue as
follows:
Was [the Dror party’s] failure to comply excused?
Failure to comply by [the Dror party] is excused by Daniel Mushin’s
prior repudiation of the same agreement.
A party repudiates an agreement when he indicates, by his words or
actions, that he is not going to perform his obligations under the
agreement in the future, showing a fixed intention to abandon,
renounce, and refuse to perform the agreement.
6
Dror contends the conclusive evidence, or the overwhelming weight of the
evidence, established Mushin first repudiated the agreement by demanding
performance inconsistent with its terms and conditioning his own performance on
those demands. We disagree.
Most of the evidence relevant to the Drors’ breach-of-contract issues
consists of communications between counsel for the parties and AII while
attempting to close the settlement: both testimony regarding oral conversations and
written correspondence.3
The evidence reflects both parties claimed the agreement included additional
terms than those reflected in the agreement announced on the record and reduced
to writing. Before and after the date for closing per the parties’ agreement
(December 1), Mushin’s counsel insisted (1) there was a mutual mistake in the
agreement because Mushin was entitled to $150,000 worth of AII shares (200,000
shares)—not 150,000 shares, and (2) the twelve cash payments (due after the initial
payment) should be made via post-dated checks presented at closing. Further,
Mushin’s counsel forwarded draft settlement documents to the Drors which
included such provisions.4 The Drors and AII insisted (1) due diligence be
performed relative to Mushin’s transfer of his Atlantis stock to AII in exchange for
AII shares; and (2) Mushin make certain representations regarding the Atlantis
3
The Drors’ counsel relative to the settlement was not their primary counsel at trial and
on appeal because he became a witness in the case. Mushin’s counsel relative to the settlement
was deceased by the time of trial. All references to a party’s counsel in this discussion mean the
attorneys relative to the settlement. Further, all references are to 2010 until otherwise noted.
4
At trial, Mushin suggested his counsel was not authorized to represent to the Drors that
Mushin believed the settlement required the transfer of $150,000 worth of shares. The Drors
devote a portion of their appellate brief to arguing counsel’s representations to the Drors were
binding on Mushin. We need not address that issue; even if the statements were binding on
Mushin, the Drors fail to establish the evidence is insufficient to support a finding the
representations did not constitute a repudiation of the agreement excusing the Drors’ breach.
7
stock. The evidence indicates AII’s counsel was expressing these requirements as
of the December 1 date originally contemplated for closing.
We construe the case as presenting a fact question for the jury on whether
each party’s position constituted a repudiation, which party repudiated first, and
whether any repudiation by Mushin excused the Drors’ failure to comply.
According to the testimony of the Drors’ counsel, Mushin’s counsel stated in
telephone conversations that Mushin refused to close if he did not receive
$150,000 worth of shares. Mushin’s counsel was deceased by the time of trial and
thus could not controvert this testimony. Nonetheless, the jury, as sole judge of
witness credibility, was not required to accept the version offered by the Drors’
counsel. Accordingly, we do not construe his testimony as conclusive or
overwhelming evidence in a legal and factual sufficiency review. However, the
written correspondence of Mushin’s counsel is necessarily uncontroverted
evidence of his statements to counsel for the Drors and AII.
As Mushin emphasizes, his counsel never unequivocally stated in this
correspondence that Mushin refused to close if he did not receive $150,000 worth
of shares. Further, the correspondence demonstrates his counsel attempted to push
the matter toward closing without delay. Therefore, the jury could have construed
counsel’s statements as posturing in an attempt to obtain the Drors’ acquiescence
regarding the number of shares or a modification of the agreement, but not a
repudiation. In one correspondence, dated December 15, Mushin’s counsel did
assert Mushin was “not willing” to close unless he received post-dated checks.
However, by that point, AII’s counsel had already expressed the additional
requirements relative to the exchange of AII stock for Atlantis stock. Thus, the
jury could have found the Drors had repudiated before any repudiation by Mushin
via his position regarding the post-dated checks.
8
In this regard, based on all the evidence, the jury could have reasonably
concluded that, irrespective of Mushin’s position, the Drors repudiated the
agreement and it was this action which prevented the closing; i.e., they would not
perform unless Mushin acquiesced in the additional requirements relative to the
exchange of AII stock for Atlantis stock. Specifically, in written correspondence,
AII’s attorney stated AII “required” certain representations by Mushin relative to
due diligence as though they were mandatory for closing. At trial, Dror Sr.
acknowledged AII would not have completed the purchase of Mushin’s Atlantis
shares if due diligence had revealed deficiencies, such as Mushin had encumbered
the shares by borrowing money against them. There is no correspondence in
which the Drors stated they were ready to close but Mushin’s alleged repudiation
was the only obstacle to closing. Additionally, there is no correspondence in
which the Drors expressed they no longer intended to proceed with their
obligations under the agreement because Mushin had first repudiated. Rather, even
while Mushin’s counsel was asserting his position regarding the number of shares,
the Drors continued to discuss the settlement with him, and AII expressed that
Mushin must comply with due diligence steps as though required for closing.
Significantly, on December 15, Mushin’s counsel wrote the Drors’ counsel
expressing he had been authorized by Mushin to proceed to trial on the underlying
claims or for breach of the agreement because he viewed the Drors to be in breach.
The next day, the Drors’ counsel replied, “It is our position that all disputes in this
case have been resolved by the Rule 11 Agreement which has been filed with the
Court. Any delays in the closing of the settlement have been caused by certain
deficiencies in Atlantis which are in the process of being resolved.” (emphasis
added). The Drors’ counsel did not include in this correspondence any statement
that the settlement had not closed because Mushin had repudiated the agreement.
9
At trial, the Drors’ counsel essentially explained he did not mean to represent the
Drors were the only party delaying the settlement. Rather, in response to Mushin’s
position concerning the number of shares, counsel was attempting to express the
Drors were ready to close on their end and there was merely a delay because of due
diligence. However, the jury was entitled to consider the letter based on its actual
contents; it constituted some evidence the additional due diligence requirements
were the only obstacle to closing, even if counsel intended to state otherwise.
The Drors contend that communications from AII’s counsel imposing
additional requirements cannot be attributed to the Drors because AII is a separate
entity. However, Dror Sr. is CEO of AII, and the agreement, signed by the Drors,
contained a requirement that the AII stock be exchanged for the Atlantis stock as
though the Drors had the power to effect the transfer. To the extent the Drors
lacked such power, they entered into a contract in which they promised a third-
party would take certain action. Thus, the Drors assumed the risk the third-party
would not perform. Consequently, the Drors may be considered to have repudiated
the agreement by insisting on additional requirements even if AII made the
demand.
Alternatively, considering the Drors’ failure to close and make the initial
cash payment together with their attempts to impose additional requirements, the
jury could have rationally inferred they were trying to stall the settlement.
Mushin’s counsel responded to AII’s correspondence by asserting the agreement
contained no provision for performance of due diligence or representations by
Mushin. However, at one point, Mushin’s counsel also proposed Mushin might
agree to some due diligence, while holding the shares subject to the agreement in
escrow, if the settlement would close first; but there is no evidence the Drors
agreed to that scenario.
10
In summary, we conclude the evidence is legally and factually sufficient to
support the jury’s finding that the Drors’ failure to comply with the agreement was
not excused by Mushin’s prior repudiation. We overrule the Drors’ first issue.
B. Findings that Mushin tendered performance and was ready, willing,
and able to perform
To prevail on a breach of contract claim, a party must establish the following
elements: (1) a valid contract existed between the plaintiff and the defendant; (2)
the plaintiff tendered performance or was excused from doing so; (3) the defendant
breached the terms of the contract; and (4) the plaintiff sustained damages as a
result of the defendant’s breach. West v. Triple B. Servs., LLP, 264 S.W.3d 440,
446 (Tex. App.—Houston [14th Dist.] 2008, no pet.). Because tender is an
element of a breach-of-contract claim, Mushin bore the burden to prove he
tendered performance. See id.
The jury answered “Yes” to jury Question 12 which inquired about this
issue:
Did Daniel Mushin tender performance under the Rule 11
Agreement?
Tender requires an actual or literal production of the thing to be
delivered coupled with a relinquishment of it for a sufficient period of
time to enable the obligee to reduce it to possession if he so desires.
Tender of performance is excused under certain circumstances, such
as when a tender would be futile or when the defendants have
repudiated the contract.
The Drors argue there was no unconditional tender because Mushin made
his performance conditioned on the Drors’ acquiescence to Mushin’s unilateral
modification of the agreement; i.e., Mushin would not tender performance of his
11
obligations unless he received $150,000 worth of AII shares. The Drors further
argue Mushin was not excused from tendering performance.
We rely on the same evidence discussed above relative to the repudiation
analysis although a different party bore the burden of proof on the tender issue.
Some evidence supports a finding that Mushin’s tender was excused because it
would have been futile and the Drors had first repudiated the contract via their
additional requirements, irrespective of Mushin’s position regarding the $150,000
worth of shares. Additionally, the evidence supporting the finding is not so weak
or so contrary to the overwhelming weight of the evidence that the finding is
clearly wrong and unjust.
In their second stated issue, the Drors challenge only the jury finding
regarding tender; but in their argument, the Drors also briefly challenge the jury’s
affirmative answer to the following question.
Question 13
Was Daniel Mushin ready, willing and able to perform his obligations
under the Rule 11 Agreement within a reasonable time?
Mushin testified he was willing to transfer his Atlantis stock and resign his
position as an officer and director of Atlantis. He had complied with his counsel’s
request to have his Atlantis stock available for transfer, and counsel had prepared a
written resignation. The Drors cite the testimony of a corporate securities attorney,
presented at trial, as explaining the requirements to transfer publicly traded stock:
“the transferor must sign a stock power and a medallion seal placed on the stock
power.” The Drors note Mushin did not expressly testify he was willing to take
this step. Nonetheless, the jury could have inferred that Mushin’s general
willingness to transfer the stock encompassed a willingness to sign the document
12
necessary to effect the transfer and comply with requisite formalities. The Drors
also argue Mushin presented no evidence the stock was unencumbered, which they
contend was necessary to effect the transfer. However, the agreement contained no
such requirement. Accordingly, the evidence is legally and factually sufficient to
support the jury’s finding. We overrule the Drors’ second issue.
C. Findings that the Drors failed to comply but Mushin did not fail to
comply
Finally, the Drors challenge the jury’s findings in response to Questions 1, 3,
and 5 that the Drors failed to comply and its finding in response to Question 7 that
Mushin did not fail to comply. This issue is interrelated with the Drors’ other
issues; they argue Mushin failed to comply by repudiating the agreement and the
Drors are deemed to have tendered performance. Because we have rejected the
Drors’ contentions on the repudiation issue, we also overrule their third issue.
III. ATTORNEY’S FEES
In their fourth and fifth issues, the Drors contend Mushin is not entitled to
recover attorney’s fees because (1) there is no evidence he presented a pre-suit
demand for performance of the agreement, and (2) the evidence is legally and
factually sufficient to support the award.
A. Presentment of demand for performance
To recover attorney’s fees as a successful claimant on a breach-of-contract
action, (1) the claimant must be represented by an attorney, (2) the claimant must
present the claim to the opposing party or to a duly authorized agent of the
opposing party, and (3) payment for the just amount owed must not have been
tendered before the expiration of the 30th day after the claim is presented. Tex.
Civ. Prac. & Rem. Code Ann. § 38.002 (West 2008); see id. § 38.001(8). The
13
claimant bears the burden to plead and prove presentment. See Ellis v.Waldrop,
656 S.W.2d 902, 905 (Tex. 1983); Busch v. Hudson & Keyse, LLC, 312 S.W.3d
294, 300 (Tex. App.—Houston [14th Dist.] 2010, no pet.). Presentment of the
claim is required to provide the other party with an opportunity to pay the claim
before incurring an obligation for attorney’s fees. Brainard v. Trinity Universal
Ins. Co., 216 S.W.3d 809, 818 (Tex. 2006); Busch, 312 S.W.3d at 300.
We review a trial court’s award of attorney’s fees based on breach of
contract for an abuse of discretion. Weaver v. Jamar, 383 S.W.3d 805, 813 (Tex.
App.—Houston [14th Dist.] 2012, no pet.). The test for abuse of discretion is
whether the trial court’s decision was arbitrary or unreasonable. Id.
The Drors argue any presentment of a breach-of-contract claim by Mushin
was an excessive demand for performance of Mushin’s alternate terms which were
inconsistent with the actual terms—Mushin’s position that the Drors were required
to transfer $150,000 worth of AII shares, not 150,000 shares. Therefore, the Drors
contend Mushin failed to present the claim on which he recovered damages—the
claim based on the actual terms of the agreement—and presentment of the
allegedly excessive demand precluded recovery of attorney’s fees.
A creditor who presents an excessive demand to a debtor is not entitled to
attorney’s fees for subsequent litigation required to recover the debt. Beauty Elite
Group, Inc. v. Palchick, No. 14-07-00058-CV, 2008 WL 706601, at *4 (Tex.
App.—Houston [14th Dist.] Mar. 18, 2008, no pet.) (mem. op.) (citing Findlay v.
Cave, 611 S.W.2d 57, 58 (Tex. 1981)). In order to preserve an excessive demand
challenge, the debtor is required to (1) plead excessive demand as an affirmative
defense to the claim for attorney’s fees, and (2) request and obtain findings of fact
regarding the essential elements of excessive demand. Id. at *6. Assuming
14
without deciding the Drors pleaded excessive demand or the issue was tried by
consent, they did not obtain a fact finding on the theory. However, the Drors argue
they may rely on this theory because it was proved as a matter of law. We
disagree.
We conclude the trial court did not abuse its discretion by concluding an
email dated December 15 from Mushin’s counsel to the Drors’ counsel constituted
presentment of a claim for breach of the actual agreement:
My client, Danny Mushin, has instructed me [sic] proceed to trial of
the pending action in view of the failure of the Drors to act in good
faith or to consummate the proposed settlement of the case.
...
The putative settlement agreed upon was not consummated by
November 30, 2010, which breached the agreement. Such failure to
consummate on the date scheduled is wholly due to the actions of the
Drors, and has caused my client substantial additional legal fees.
It is now obvious that the Drors do not intend to correct the parties
[sic] mutual mistake in stating a number of shares of [AII] -150,000-
instead of the dollar amount of $150,000.00, a keystone of the
settlement. My client has instructed his counsel to amend his petition,
adding alternative causes of action to modify the Rule 11 Agreement
to correct the mutual mistake, and (as an alternative to the pending
Fraud, Securities Fraud and Negligent Misrepresentation[)],
enforcement of the Rule 11 Agreement as a contract, and to request
a trial date. In that regard, my client will seek additional reasonable
attorneys [sic] fees as provided under Texas Statutes, if the Rule 11
Agreement is not consummated within 30 days from the date of this
communication.
(emphasis added).
We disagree with the Drors’ contention that Mushin’s counsel made clear
the Drors could comply with the agreement, and thereby avoid payment of
attorney’s fees, only by transferring $150,000 worth of shares. Based on the
15
above-emphasized portions, the email may be construed as a demand the Drors
comply with the actual agreement—“the Rule 11 Agreement”—albeit with a threat
that Mushin would also seek modification of the terms if the Drors failed to
comply. The email may be construed as counsel expressing Mushin would present
alternative positions in a future breach-of-contract action: a claim for breach of the
actual agreement; and a request for modification of the agreement. Accordingly,
the trial court acted within its discretion by concluding Mushin presented the claim
on which he ultimately recovered. Therefore, the Drors did not establish as a
matter of law that Mushin presented an excessive demand by insisting on payment
under the alternate terms advanced by Mushin. We overrule the Drors’ fourth
issue.
B. Sufficiency of the evidence
The Drors contend the evidence is legally and factually insufficient to
support the award of attorney’s fees for two reasons.
First, the Drors contend the evidence is insufficient to support the liability
findings prerequisite to recovery of attorney’s fees, in light of their liability
arguments discussed above. We summarily reject this contention because of our
disposition of the liability issues.
Second, the Drors contend the evidence is insufficient to support the finding
that an award of $33,500 (after voluntary remittitur) for attorney’s fees through
trial was reasonable. The Drors rely on the fact that, when the settlement failed to
close, Mushin amended his petition to add a claim for breach of the settlement
agreement. In the petition, Mushin pleaded the agreement intended to require
transfer of $150,000 worth of AII shares—not 150,000 shares—and it is this
agreement which the Drors breached. Mushin also requested reformation of the
16
agreement to reflect the parties’ purported actual agreement. It was not until two
weeks before trial that Mushin again amended his petition, this time
acknowledging the terms of the agreement as announced on the record but
pleading the Drors breached the agreement. The Drors suggest Mushin was
limited to recovering fees incurred beginning two weeks before trial because any
prior fees were incurred for a claim which was not advanced at trial—Mushin’s
position the agreement should be modified to require transfer of $150,000 worth of
shares. The Drors request a remand for a determination of the amount of
reasonable and necessary fees incurred to advance the claim on which Mushin
recovered.
Although Mushin did not formally amend his petition to allege breach of the
actual agreement until two weeks before trial, the record negates that all attorney
services performed before that date related to the claim for modification. For
instance, the record includes Mushin’s previous motion for summary judgment
requesting damages for breach of the actual agreement. Moreover, since the
settlement failed to close, Mushin has always pleaded breach of the agreement—
whether the agreement as it should allegedly be modified, or the actual agreement.
As discussed above, the evidence supports a finding that the Drors breached the
agreement and committed the first repudiation by imposing additional terms,
irrespective of Mushin’s position regarding the $150,000 worth of shares.
Consequently, the jury could have found Mushin incurred attorney’s fees from the
outset to prove the Drors breached the agreement, irrespective of Mushin’s
vacillating pleadings regarding the number of shares he was entitled to receive.
Accordingly, we reject the proposition that Mushin was entitled only to fees
incurred beginning two weeks before trial.
17
Regardless, the Drors essentially contend Mushin was required to segregate
fees between those incurred on the claim for which he recovered (breach of the
actual agreement) and those incurred on the abandoned claim (for modification).
However, the relevant jury question did not require segregation of the fees incurred
solely to advance the claim for breach of the actual agreement or fees incurred
beginning two weeks before trial. Instead, the question inquired generally about “a
reasonable fee, if any, for the necessary services” of Mushin’s attorney, with no
limitation on the specified “services” or the claim for which they were incurred and
no instruction regarding segregation. The Drors did not object to the lack of any
requirement in the jury charge that attorney’s fees be segregated. Therefore, the
Drors waived their appellate contention that Mushin was required to segregate
fees. See 2001 Trinity Fund, LLC v. Carrizo Oil & Gas, Inc., 393 S.W.3d 442,
459 (Tex. App.—Houston [14th Dist.] 2012, pet. filed) (citing Green Int’l, Inc. v.
Solis, 951 S.W.2d 384, 389 (Tex. 1997); Bencon Mgmt. & Gen. Contracting, Inc.
v. Boyer, Inc., 178 S.W.3d 198, 208 (Tex. App.—Houston [14th Dist.] 2005, no
pet.)).
The Drors attempt to avoid the consequence of failing to object by
characterizing their complaint as a challenge to sufficiency of the evidence
supporting the amount of attorney’s fees awarded. However, we measure
sufficiency of the evidence against the jury question, as submitted. See Osterberg,
12 S.W.3d at 55; Ng, 167 S.W.3d at 855–56. Because the question did not require
segregation, the evidence is sufficient to support the jury’s finding regarding the
amount of reasonable and necessary fees. Accordingly, we overrule the Drors’
fifth issue.
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We affirm the trial court’s judgment.
/s/ John Donovan
Justice
Panel consists of Justices Boyce and Donovan.5
5
Chief Justice Hedges was assigned to the panel for this case and participated during oral
argument and in the memorandum opinion issued July 23, 2013. However, she subsequently retired from
the court and did not participate in this substitute memorandum opinion. See Tex. R. App. P. 41.1(b)
(“After argument, if for any reason a member of the panel cannot participate in deciding a case, the case
may be decided by the two remaining justices.”).
19