Preview
Electronically Filed
5/15/2019 10:18 AM
Hidalgo County District Clerks
Reviewed By: Andria Garcia
C
L1
~onzalez
- - - - - -Attorneys
Castillo, LLP
at Law
Steven M. Gonzalez 13 17 E. Quebec Avenue juan H. Gonzalez
Boord Certified Personal Injury Trial Low
McAllen, Texas 78503 Eduardo Moya
Advocate, American Boord of Trial Advocates
Edward J. Castillo
(956) 618-0115 I Fax: (956) 618-0445 Linda M. Cavazos
Board Certified Personal Injury Trial Low Email: law@valleyfirm.com C . Brandon Holubar
Board Certified Family Low
Website: www. valleyfirm.com
May 15,2019
VIAE-FILING SERVICE
and HAND DELIVERY
Hon. Ro berto "Bobby" Flores
100 N. Closner
Edinburg, Texas 78539
Re: Cause No. C-6851-13-C; Jose A. Solis v. Vipers Basketball, LLC d/b/a Rio Grande Valley
Vipers; In the 139th Judicial District CoUJt, Hidalgo County, Texas
Judge Flores:
Pu rsua ntto your request , please a II ow this letter briefto outIi ne the applicable case law that
supports Defendant, Vipers Basketball, LLC d/ b/ a Rio Grande Va lley Vipers' ("Vipers") Motion for
Entry of Take Nothing Judgment. As addressed at the hearing on April 29, 2019, the jury's verd ict
and answers at tria l do not support any damage claim sought by the Plaintiff. Thus, Plaintiff cannot
recover from Defendant, and Defendant is entitled to a Take Nothing Judgment.
As can be seen from his live plead ing, Plaintiff Jose Solis brought this action against t he
Vipers alleging three ca uses of action: (1) breach of the settlement agreement; (2 ) breacll of the
unilateral contract; and (3 ) common law fraud. The first cause of action was abandoned before trial
and the breach of settlement agreement claim was not submitted to the jury.
The second cause of action, breach of contract, was submitted to the jury, but because of
the instructions in the Court's Charge, which were suggested by Plaintiff, no findings as to breach
of contra ct were made. Importantly, there was no find ing by the jury that a valid unilateral contract
or agreement existed between Plaintiff and Defenda nt, nor was there a finding by the jurytllatsuch
un ilateral contract or agreement was breached. Therefore, any claims for damages based on
Plaintiff's second ca use of action, breach of t il e unilateral contract, have also been waived.
Electronically Filed
5/15/2019 10:18 AM
Hidalgo County District Clerks
Reviewed By: Andria Garcia
Hon. Roberto "Bobby" Flores
May 15,2019
Page 2
That leaves only the fraud claim. While the jury did make a finding offraud, the only way to
recover damages for fraud in the inducement of a contract ("benefit of the bargain damages") is
for Plaintiff to prove the existence of an enforceable contract or agreement. No such finding was
made by the jury. Therefore, there can be no recoverable damages for the jury's finding of fraud
in the inducement. While out-of-pocket damages are also available under a common law fraud
finding, there were no questions submitted to the jury as to out-of-pocket damages, and Plaintiff
did not plead nor request any out-of-pocket damages.
As far back as 1984, the Texas Supreme Court has recognized only two types of fraud
damages-
Texas recognizes two measures of direct damages for common-law fraud: the
out-of-pocket measure and the benefit-of-the-bargain measure. Arthur Andersen &
Co. v. Perry Equip. Corp., 945 S.W.2d 812, 817 (Tex.1997); W.O. Bankston Nissan,
inc. v. Waiters, 754 S.W.2d 127, 128 (Tex.1988); Leyendecker & Assocs., inc. v.
Wechter, 683 S.W.2d 369, 373 (Tex.1984). The out-of-pocket measure computes
the difference between the value paid and the value received, while the
benefit-of-the-bargain measure computes the difference between the value as
represented and the value received. Arthur Andersen, 945 S.W.2d at 817;
Leyendecker, 683 S.W.2d at 373.
Formosa Plastics Corp. USA v. Presidio Engineers and Contractors, Inc., 960 S.W.2d 41, 49
(Tex.,1998).
More recently, in Zorria v. Aypco Construction /1,L.L.C., 469 S.W.3d 143 (Tex. 2015), the
Texas Supreme Court held that, based upon the type of damages submitted to the jury (benefit of
the bargain damages, as in this case), the only viable fraud claim was a fraudulent inducement
claim. Zorria, 469 S.W.3d at 152. The Texas Supreme Court again reiterated that a fraudulent
inducement claim requires the existence of an enforceable contract. Zorria, 469 S.W.3d 153.
Absent a finding of an enforceable contract, a verdict on fraud alone cannot be affirmed. /d.
(emphasis added)
Electronically Filed
5/15/2019 10:18 AM
Hidalgo County District Clerks
Reviewed By: Andria Garcia
Hon. Roberto "Bobby" Flores
May 15, 2019
Page 3
Finally, last month, the 13““ Court oprpeals followed the above—noted precedentand noted
that
the Texas Supreme Court has held that “the Statute of Frauds bars a fraud claim t0
the extent the plaintiff seeks t0 recover as damages the benefit of a bargain that
cannot otherwise be enforced because itfails to comply with the Statute of Frauds.”
Haase v. Glazner, 62 S.W.3d 795, 799 (Tex. 2001). But Ayala does not seek
benefit—of~the—bargain damages in this case, nor does he complain that he was
fraudulently induced into agreeingto the contract.
Peso} v.D (9:CJewelry Shop, Ina, 2-019 WL 1474678, at *5 (Tex.App.—Corpus Christi, 2019, no pet.
h.). In the Peso! case, while there was not an enforceable 00ntract 0r agreement found by thejury,
but only a fraud u lent misrepresentation finding, damages were allowed because Pasol only sought
out—of—pocket expenses. Therefore, thejudgmen't for out—ofn pocket expenses was affirmed.
Analogously, and inaccordance with all the case law cited above, Plaintiff,Jose Solis’ verdict
for benefit ofthe bargain fraud damages inthis case cannot be upheld absent ajury finding 0f an
enforceable contract. However, there was no finding by the jury In this case that an agreement 0r
contract even existed, let alone that the agreement 0r contract was enforceable or b'reaChed.
Instead, in the instant case, while IVIr.Solis did obtain a common—Iaw fraud misrepresentation
finding, he obtained n0 finding of out of pocket expenses?
As a brief aside, it is also clear that, while'the jury in this case found an amount 0f
attorney’s fees, absent a finding of breach of contract, attorney’s fees are not recoverable.
Attorney’s feesare not recoverableforcommon lawfraud “We. .reitef'ated that[att0rney’s]fees
are not allowed fortorts like fraud.
”
MBM Financial Corp V. Woodlands Operating Co. L. P.,292
S. W. 3d 660 667 (Tex. 2009).
In summary, a take—nothingjudgmen't is mandated by thejury's verdict. The above cases
Clearly illustrate that without a finding that a contract or agreement existed and was enforceable,
any damages other than “out of pocket” damages, are not recoverable. This long standing
Supreme Court precedent leads to only one conciusion: Defendant’s Take NothingJudgment must
be entered by this Court. A proposed Take Nothing Judgment is also attached.
Should the Court require any additional briefing and/or information, please let me know.
|have attached a copy of each 0f the referenced cases for the Court’s review.
1
At best, Solis' out of pocket expenses would have been the price of his ticket to the game,
ifhe could prove that he only went to
thegame with thehope 0f getting picked
tobe a contestant.
Electronically Filed
5/15/2019 10:18 AM
Hidalgo County District Clerks
Reviewed By: Andria Garcia
Hon.
Hon. Roberto
Roberto "Bobby" Flores
Flores
May 15,
15, 2019
Page 4
Thank you.
you.
Respectfully,
Respectfully,
Tl LLO, LLP
Electronically Filed
5/15/2019 10:18 AM
Hidalgo County District Clerks
Reviewed By: Andria Garcia
CAUSE NO. 0—6851-13—0
JOSE A. SOLIS IN THE DISTRICT COURT
v. 139W JUDICIAL DISTRICT
mmmmmm
VIPERS BASKETBALL, LLC D/BIA RIO
GRANDE VALLEY VIPERS H IDALGO COU NTY, TEXAS
FINAL JUDGMENT
On this clay came on to be heard and considered Defendant'é Motion for Entry of a
Take-Nothing Judgment in the above—styled and numbered cause. The Court, having
considered said motion, after reviewing the file and the jury verdict, and after reviewing
applicable case faw, isofthe opinion that the motion ismeritorious and should be granted.
Itis therefore
ORDERED, ADJUDGED and DECREED that Plaintiff JOSE A. SOLIS take nothing
against DefendantVlPERS BASKETBALL, LLC DIB/A RIO GRANDE VALLEYVIPERS, and
that such Defendant is hereby RELEASED, ACQUITTED and DISCHARGED 0f any and all
liability toPlaintiff. Itis further
ORDERED, ADJUDGED and DECREED that allcosts herein be taxed against the
Plaintiff.
All other relief not expressly granted herein is DENIED. Th-is i3 a final appealable
judgment, resolving all issues between all parties.
SIGNED on thisthe day offlwmwmw 2019.
Judge Presiding
Electronically Filed
5/15/2019 10:18 AM
Hidalgo County District Clerks
Reviewed By: Andria Garcia
APPROVED AS TO FORM AND CONTENT:
Steven M. Gonzalez
Edward J‘Castillo
C. Brandon Holubar
GONZALEZ CASTILLO, LL P
1317 E. Quebec Avenue
McAllen, Texas 78503
Telephone: (956) 618-01 15
Telecopier: (956) 618-0445
E-Mail: law@val£eyfirm.com
By:
Steven IV].Gonzalez
SBN: 08131900
Edward J. Castillo
SBN: 24040658
C. Brandon Hoiubar
SBN: 24041124
ATTORNEYS FOR DEFENDANT,
VIPERS BASKETBALL, I_.L.C. DIBIA
RIO GRANDE VALLEY VIPERS
COPY TO:
Steven M. Gonzalez Joseph R. Corteguera
Edward J. Castillo Jeffrey M. Stern
C. Brandon Hoiubar STERN LAW GROUP
GONZALEZ CASTILLO, LLP 4909 Bissonnet, Suite 100
131? Quebec Avenue Bellaire. Texas 77401
McAllen, Texas: ?8503 E—Mail: EnortegueraCcigstem-Iawgmuacorn
E-Mail: |awgcz)va!legfirm.uom E—Mail: esewicejrcfiizsi'ernwlawgz‘euplcom
M2 U.PEN-FLLBSOL- WPLPLD
FINALJUDGMENT -PAGE 2OF 2
Electronically Filed
5/15/2019 10:18 AM
Hidalgo County District Clerks
Reviewed By: Andria Garcia
MGM Financial Corp. v.Woodlands Operating Co.. L.P.. 292 S.W.3¢l 660 (2009)
52 Tex. 1221
Slip. Ct. J.
Karen D. Smith, Kirby D. Hopkins and Rachael
Negative Treatment
KeyCile Yellow Flag
— McDonell Rolon, Drucker. Rutledge & Smith, L.L.P.,
Mikob
Declined lo Extend by The Woodlands,
Properties, Inc. v. Joachim. Tcx.App.- for Respondent.
May
Dallas. l9.2015
292 S.W.3d 660 Opinion
Supreme Court 0f Texas.
*663 Justice BRISTER delivered the opinion ol'the
'
MBM FINANCIAL Court.
CORPORATION, et aL, Petitioners,
I
Since Jnrndyce v.Jarmb'ce, there have bccn charges that
v.
some cases benefit the lawyers more than [he But
clients.
The WOODLANDS OPERATING
suits cannot be maintained solely for the attorney'sfees;
COMPANY, L.P.,Respondent.
a client must gain something before attorney'sfccscan
No. 08—0390. be awarded. While making losing parties bear their own
may add injury to insult, the American Rule
attorney‘s fccs
|
Argued March 12,2009. has long been that each party paysitsown lawyers.
|
Decided Aug. 28, 2009. ajudgmenl
In this case, the plaintiff obtained for $1,000
in damages and almost $150,000 in attorney'sfees.But
Synopsis there was no evidence lo support the amount of the $1 ,000
Background: Equipment lesseebrought action against award, and itistoo large to constitute nominal damages.
lessor for declaratory breach
relief, of contract, and As the award must be
to the client sel aside, the attorney's
fraud with respect lo lease and maintenance agreements. fee award must also.Accordingly, we reverseand render
Following a bench trial,the 9H1 District Court, a take-nolhing judgment.
Montgomery County, Frederick E. Edwards, 1.,awarded
$1,000 in damages and $145,091.59 in attorney fees.
Lessor appealed. Thc Beaumont Court of Appeals,
I.Background
Steve McKcithen, C.J., 251 S.W.3d 174,aff'1rmcd iu part,
and reversed and remanded
reversed and rendered in part, The Woodlands Operating Company leased the l9 copiers
in part. Lessor's petition for discretionary reviewwas
at issue here from MBM Financial Corporation2 and
granted.
installedthem in late2000 and early 2001. Each machine
was covered by a separate four-year lease,with annual
renewals thereafter unless notice was sent between 90 and
Holdings: The Supreme Court, Brister, J., held (hat: 180 days before the end of the existing term. The leases
required theWoodlands to return lhe copiers lo a location
damages were not sustainable as actual or nominal, and MBM specified.
lessee could notrecover attorney under Declaratory
l'ces The Woodlands decided not to renew the leases in
Judgments Act. mid—2004 and asked MBM for the end-of-term dates
and instructionsfor return. MBM employees provided
the dates and approved a draft termination letter from
Reversed and rendered. the Woodlands. But when theactual termination lcttcr
arrived (viewing the evidence. in the lightfavorable to
Attorneys nml Law Finns the court'sjudgmenl),
[rial
3
M BM's president unilaterally
changed the dates so the notice would bc untimely and
*662 Jennifer Bruch Hogan, Richard P. Hogan Jr.and demanded rent for another year. To bolster MBM's
Matthew E. Coveler, Hogan & Hogan, L.L.P., Phillip position.hc signed theleasesand insertedcommencement
R. Livingston and Deanna H. Livingston, Livingston & dates for the first lime after the Woodlands filed suit. Until
Livingston, LLC, Houston, forPemioncrs.
WM.“ {\W '-'
JH |'!Ihvlm‘wn Ix‘unlmu Nu ulmm 1n ulumml l): (‘uuwumn'nl Wt uk". ‘I
Electronically Filed
5/15/2019 10:18 AM
Hidalgo County District Clerks
Reviewed By: Andria Garcia
MBM Woodlands Oparmlng
Financial Corp. v. 292 s.W.3d 660 (2009)
(20., L.P..
$2 Tex. Sup. 1221
Cl. J.
suit was filed,MBM also refused to designate a return Rcstatcments,8 Williston,9 Corbin,'° and Black's Law
location for(11cbulky equipment. H
Dictionary. While more generous damage measures
make nominal damages rare,and some judges have
The Woodlands sued. asserting claims for breach
[2
of contracl, fraud, and declaratory relief. MBM questioned the reason behind them. we agree that
nominal *665 damages may be recovered for breach of
counterclaimed for additional rent of $160,000, thoughil
contract.
laterdropped that claim. After a two-day bench trial,the
trialcourt rendered judgment awarding the Woodlands
But $1 .000isnot nominal damages. “[T]he usual meaning
$l,000 in damages and $l45,09l.59 in attorney's fccs
of lhc phrase ‘nominal damages’ refers to an award ol'one
through trial.The court of appeals affirmed thc damages
13
and purl of thefee award.
4
On appeal, MBM challenges dollar." Despite substantial changes over llw centuries
both.
in what a dollar will buy,
itremains Ihe standard award in
federal cases,
M and in Texas cases uswell.
15
A fcw cases
'6
have awarded nominal damages of $10 and cvcn $100,
II.Nominal Damages & Breach of Contract but nominal damages arc supposed to bc a “trifling
u l7 [8
sum, and $1,000 hardly category.
falls in lhal
At lhc Woodlands requested only nominal damages.
trial,
The judgment describes the $1,000 award as “actual
11appears from lhc record that the court awarded
trial
damages," but the findings and conclusions
trial court's
rough
$1,000 as compensation forthe wasted film: the
describethem as "actual damages in lhcform of nominal
Woodlands incurred. But nominal damages arc not for
damages.” *664 We agree with MBM that no evidence
compensation; they are for cases in which thcrc are no
supports $1,000 as either. l9
damages, or none lhal could cvcr be proved. While
mentioned wasted a few older cases hold otherwise,” in recent decades
Thc only damages at trialrelatedto
time Ihe Woodlands spent trying to gel MBM's lhe rule in Texas has been that nominal damages are
cooperation. But therewas no evidence about the value not available when the harm isentirelyeconomic and
of that time——either quantity
llle or the cost of it.The subject lo proof (as opposed lo non~economic harm lo
21
Woodlands blamed this gap on lhe difficulty of tracking civilor property rights). Thus. inGulmerm Urilln'es
the losltime, bu! never explainedwhy itcould not have *666 Co. v.Law, wc rejected nominal damages because
been estimated. Iflhe difficulty ofproofalways discharged actual damages had been incurred, ycl the plaintiff failed
the burden of proof, many liliganlswould simply not
to prove thc amount.” “While mathematical precision
bother.5 While the Woodlands could have estimated the is not required to establish the extent or amount of
value of wasted lime,
itcould not ask the court lo pull
trial one'sdamages, one must bring forward the best evidence
a figurefrom lhiu air.
of lhc damage of which the situation udmils....“230n
this record, the$1,000 damage award to theWoodlands
Nevertheless. thc Woodlands argues lhe award was
cannot bc sustained as cilhcr actual or nominal damages.
justified as nominal damages. We agrcc nominal damages
available breach ol‘contract, as thisCourt has
are for
remand new when
While we normally for a trial
stated m least a dozen times. 6
As we wrote in 1853: there issome evidence to support an amount of actual
24
damages, in thiscase lhcrc was uo evidence about the
amount ofdamagcs at nll. Aud “whcrc 1|1c record shows as
The law is,that if lhc contract
isproven to be broken,
a matter oflaw that lhe plaintiffis enlilled only to nominal
the law would give some damage, sufficient lo authorize
damages, the appellate courtwill nol reverse merely to
n vcrdic! for the plaintiff, although,
in the absence of
25
proof of special loss,the damages would be nominal enable him to recover such damages." Accordingly,we
must render judgment that the Woodlands take nolhing
only.7
asdamages on itsbreach of contract claim.
Wc arc hardly alone in recognizing nominal damages
for breach of contract; so do the First and Second
WI AW
'--ll v? Hmmann
'r’fll‘i Hunhil'. Nu whim in unuilml l'?'-
llnvnumu-nl ‘."'.’mh~
Electronically Filed
5/15/2019 10:18 AM
Hidalgo County District Clerks
Reviewed By: Andria Garcia
MBM Flnanclnl Corp.v.Woodlands Oporaling Co., L.P..292 S.W.3d 660 (2009)
52 Tex. Sup.Ct. J.1221
32
files pleadings in bad faith or abuses the discovery
III.Attorney's Fees: Breach of Contract process.” But the Woodlands filed no motion l‘or
sanctions pursuant tothose rules.Itsfee claim was not
Chapter 38 of the Civil Practices and Remedies Code based on MBM'S litigation conduct but on its pre-liligalion
allows recovery of attorney's fees inbreach of contract
conduct; such fees arerecoverable only ifa contracl or
cases:“A person may recover reasonable attorney's fees
skamte so provides. As the Woodlands cannot recover fees
amount of a valid claim and
in addition to thc costs, if the
based on contract or fraud, allegationsthat lhc breach
26
claim isfor an oral or writlcu contract.“ To recover was inbad vexmious do not change that
faith or the fraud
feesunder must do two
this statute, a litigant things: (1) result.
prevail on a breach of contract claim, and (2)recover
27
damages. The second requirement isimplied from the
be "iu addition to
statute's language: for a fee recovery to
VI. Attorney's Fees: Declaratory
the amount of a valid claim,”the claimant must recover Judgment 8:Breach of Contract
some amount on that claim.
The court of appeals affirmed part of lllc attorney's
While some damages arc necessary to recover feesunder fee award based on the Declaratory Judgments Act.“
thisstatute,” this Court has never said whether nominal MBM asserts four reasons why declaratory relief was
damages are enough. Bul as the Woodlands can recover improper and cannot support a fec award. We disagree
neither actual nor nominal damages, that question isnot that declaratory reliefwas improper but agree itcannot
before us. Accordingly, the Woodlands‘ award cannot
l‘ee support the fee award here.
be affirmed based on Chapter 38.
First,MBM argues that declaratory reliefisnot available
for contract claims (like those here) that are “Fully
matured and predicated upon a terminated relationship."
IV. Attorney's Fees: Fraud
But the Act says relief available
1's
in contraci cases
ArisingFrom Breach of Contract
n 35
"before 0r after thcrc has bccn a breach, so a matured
Alternatively, the Woodlands argues it is entitled to
breach is explicitly covered by the Act.” Funher,
attorney's feesbased on fraud arisingfrom a breach of
declaratory relief is often available after a relationship has
contract, pointing to this Court‘s reference lo such an concerning noncompetilion
been terminated, as in cases
29
award in Gill Savings Ass'uv. Chair *667 King. But 7
covenants signed by former employees} or offsetting
in Gillwe merely reinstatedbankruptcy and appellate
award
judgments bctwccn former
38
litigants. MBM notes llml
fees;wc did not address the court of appeals' of
we justified declaratory relief in *668 BIIP Petroleum
fees forboth contract and fraud on the basisthat they
Co. v.Millard by referring lo an “ongoing and continuing
wcrc inextricablyintertwined.” We explicitlyrejected
relationship,” but that was solely lo show that the
exception
this intertwining inTony Gullo Motors I. LJ’. v.
defendant's counterclaim (relatingto the parties'future
Clmpa and reiterated that fees are not allowed for torts like
rights)went beyond the plaintiffs claim (relating to past
3'
fraud. Thus. even ifthe Woodlands' fraud claim arose 39
We disagree that a party can immunizc
damages alone).
from a breach ofcontract, thatisno basis for an attorney's against declaratory relief by simply terminating any
itself
fee award. ongoing relationship.
Second, MBM urges that declarations of non-liability
V. Attorney's Fees:Bad Faith & Vexatious Conduct should be barred in contract cases, just as they are in tort
cases.As wc said in Abor v.Black:
The
1‘
Woodlands also argues itis entitledto attorney‘s
fees because MBM "has acted in bad faith, vcxaliously,
wantonly, or For oppressive reasons.” The rules of civil
procedure allow fees as a sanction against a party who
WK‘JTIAW v 0
7m!) Ihnnrmn KuIm-Iu Nu chill]In uligflunl1| (Zuvmnmunt Wunkn
i'l. S
Electronically Filed
5/15/2019 10:18 AM
Hidalgo County District Clerks
Reviewed By: Andria Garcia
MBM Financial Corp. v.Woodlands Opomtlng
'"
Cm 292 S.W.3ci 660
l...P.. (2.809)
52'TeRL'"S'utiféffiJf’l'fi'z‘i"
Shortly afterthe Legislature passed the Act in 1943,45
thisCourt adopted exactly the opposite rule, stating that
“the existence of another adequate remedy docs not bar
Because [the Act]appears to give the
the right t0 maintain an action for
declamtoryjudgment”
courts jurisdiction over declarations
and finding" supported by “better reasoning?“
this r1129
0F 11on~liabilityof a potential
The federai courts follow thesame rule,as Federal Rule
(lefendant in a tort action, we
0f Civil Procedure 57 makes clear:“Th
Preview
Electronically Filed 5/15/2019 10:18 AM Hidalgo County District Clerks Reviewed By: Andria Garcia C L1 ~onzalez - - - - - -Attorneys Castillo, LLP at Law Steven M. Gonzalez 13 17 E. Quebec Avenue juan H. Gonzalez Boord Certified Personal Injury Trial Low McAllen, Texas 78503 Eduardo Moya Advocate, American Boord of Trial Advocates Edward J. Castillo (956) 618-0115 I Fax: (956) 618-0445 Linda M. Cavazos Board Certified Personal Injury Trial Low Email: law@valleyfirm.com C . Brandon Holubar Board Certified Family Low Website: www. valleyfirm.com May 15,2019 VIAE-FILING SERVICE and HAND DELIVERY Hon. Ro berto "Bobby" Flores 100 N. Closner Edinburg, Texas 78539 Re: Cause No. C-6851-13-C; Jose A. Solis v. Vipers Basketball, LLC d/b/a Rio Grande Valley Vipers; In the 139th Judicial District CoUJt, Hidalgo County, Texas Judge Flores: Pu rsua ntto your request , please a II ow this letter briefto outIi ne the applicable case law that supports Defendant, Vipers Basketball, LLC d/ b/ a Rio Grande Va lley Vipers' ("Vipers") Motion for Entry of Take Nothing Judgment. As addressed at the hearing on April 29, 2019, the jury's verd ict and answers at tria l do not support any damage claim sought by the Plaintiff. Thus, Plaintiff cannot recover from Defendant, and Defendant is entitled to a Take Nothing Judgment. As can be seen from his live plead ing, Plaintiff Jose Solis brought this action against t he Vipers alleging three ca uses of action: (1) breach of the settlement agreement; (2 ) breacll of the unilateral contract; and (3 ) common law fraud. The first cause of action was abandoned before trial and the breach of settlement agreement claim was not submitted to the jury. The second cause of action, breach of contract, was submitted to the jury, but because of the instructions in the Court's Charge, which were suggested by Plaintiff, no findings as to breach of contra ct were made. Importantly, there was no find ing by the jury that a valid unilateral contract or agreement existed between Plaintiff and Defenda nt, nor was there a finding by the jurytllatsuch un ilateral contract or agreement was breached. Therefore, any claims for damages based on Plaintiff's second ca use of action, breach of t il e unilateral contract, have also been waived. Electronically Filed 5/15/2019 10:18 AM Hidalgo County District Clerks Reviewed By: Andria Garcia Hon. Roberto "Bobby" Flores May 15,2019 Page 2 That leaves only the fraud claim. While the jury did make a finding offraud, the only way to recover damages for fraud in the inducement of a contract ("benefit of the bargain damages") is for Plaintiff to prove the existence of an enforceable contract or agreement. No such finding was made by the jury. Therefore, there can be no recoverable damages for the jury's finding of fraud in the inducement. While out-of-pocket damages are also available under a common law fraud finding, there were no questions submitted to the jury as to out-of-pocket damages, and Plaintiff did not plead nor request any out-of-pocket damages. As far back as 1984, the Texas Supreme Court has recognized only two types of fraud damages- Texas recognizes two measures of direct damages for common-law fraud: the out-of-pocket measure and the benefit-of-the-bargain measure. Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 817 (Tex.1997); W.O. Bankston Nissan, inc. v. Waiters, 754 S.W.2d 127, 128 (Tex.1988); Leyendecker & Assocs., inc. v. Wechter, 683 S.W.2d 369, 373 (Tex.1984). The out-of-pocket measure computes the difference between the value paid and the value received, while the benefit-of-the-bargain measure computes the difference between the value as represented and the value received. Arthur Andersen, 945 S.W.2d at 817; Leyendecker, 683 S.W.2d at 373. Formosa Plastics Corp. USA v. Presidio Engineers and Contractors, Inc., 960 S.W.2d 41, 49 (Tex.,1998). More recently, in Zorria v. Aypco Construction /1,L.L.C., 469 S.W.3d 143 (Tex. 2015), the Texas Supreme Court held that, based upon the type of damages submitted to the jury (benefit of the bargain damages, as in this case), the only viable fraud claim was a fraudulent inducement claim. Zorria, 469 S.W.3d at 152. The Texas Supreme Court again reiterated that a fraudulent inducement claim requires the existence of an enforceable contract. Zorria, 469 S.W.3d 153. Absent a finding of an enforceable contract, a verdict on fraud alone cannot be affirmed. /d. (emphasis added) Electronically Filed 5/15/2019 10:18 AM Hidalgo County District Clerks Reviewed By: Andria Garcia Hon. Roberto "Bobby" Flores May 15, 2019 Page 3 Finally, last month, the 13““ Court oprpeals followed the above—noted precedentand noted that the Texas Supreme Court has held that “the Statute of Frauds bars a fraud claim t0 the extent the plaintiff seeks t0 recover as damages the benefit of a bargain that cannot otherwise be enforced because itfails to comply with the Statute of Frauds.” Haase v. Glazner, 62 S.W.3d 795, 799 (Tex. 2001). But Ayala does not seek benefit—of~the—bargain damages in this case, nor does he complain that he was fraudulently induced into agreeingto the contract. Peso} v.D (9:CJewelry Shop, Ina, 2-019 WL 1474678, at *5 (Tex.App.—Corpus Christi, 2019, no pet. h.). In the Peso! case, while there was not an enforceable 00ntract 0r agreement found by thejury, but only a fraud u lent misrepresentation finding, damages were allowed because Pasol only sought out—of—pocket expenses. Therefore, thejudgmen't for out—ofn pocket expenses was affirmed. Analogously, and inaccordance with all the case law cited above, Plaintiff,Jose Solis’ verdict for benefit ofthe bargain fraud damages inthis case cannot be upheld absent ajury finding 0f an enforceable contract. However, there was no finding by the jury In this case that an agreement 0r contract even existed, let alone that the agreement 0r contract was enforceable or b'reaChed. Instead, in the instant case, while IVIr.Solis did obtain a common—Iaw fraud misrepresentation finding, he obtained n0 finding of out of pocket expenses? As a brief aside, it is also clear that, while'the jury in this case found an amount 0f attorney’s fees, absent a finding of breach of contract, attorney’s fees are not recoverable. Attorney’s feesare not recoverableforcommon lawfraud “We. .reitef'ated that[att0rney’s]fees are not allowed fortorts like fraud. ” MBM Financial Corp V. Woodlands Operating Co. L. P.,292 S. W. 3d 660 667 (Tex. 2009). In summary, a take—nothingjudgmen't is mandated by thejury's verdict. The above cases Clearly illustrate that without a finding that a contract or agreement existed and was enforceable, any damages other than “out of pocket” damages, are not recoverable. This long standing Supreme Court precedent leads to only one conciusion: Defendant’s Take NothingJudgment must be entered by this Court. A proposed Take Nothing Judgment is also attached. Should the Court require any additional briefing and/or information, please let me know. |have attached a copy of each 0f the referenced cases for the Court’s review. 1 At best, Solis' out of pocket expenses would have been the price of his ticket to the game, ifhe could prove that he only went to thegame with thehope 0f getting picked tobe a contestant. Electronically Filed 5/15/2019 10:18 AM Hidalgo County District Clerks Reviewed By: Andria Garcia Hon. Hon. Roberto Roberto "Bobby" Flores Flores May 15, 15, 2019 Page 4 Thank you. you. Respectfully, Respectfully, Tl LLO, LLP Electronically Filed 5/15/2019 10:18 AM Hidalgo County District Clerks Reviewed By: Andria Garcia CAUSE NO. 0—6851-13—0 JOSE A. SOLIS IN THE DISTRICT COURT v. 139W JUDICIAL DISTRICT mmmmmm VIPERS BASKETBALL, LLC D/BIA RIO GRANDE VALLEY VIPERS H IDALGO COU NTY, TEXAS FINAL JUDGMENT On this clay came on to be heard and considered Defendant'é Motion for Entry of a Take-Nothing Judgment in the above—styled and numbered cause. The Court, having considered said motion, after reviewing the file and the jury verdict, and after reviewing applicable case faw, isofthe opinion that the motion ismeritorious and should be granted. Itis therefore ORDERED, ADJUDGED and DECREED that Plaintiff JOSE A. SOLIS take nothing against DefendantVlPERS BASKETBALL, LLC DIB/A RIO GRANDE VALLEYVIPERS, and that such Defendant is hereby RELEASED, ACQUITTED and DISCHARGED 0f any and all liability toPlaintiff. Itis further ORDERED, ADJUDGED and DECREED that allcosts herein be taxed against the Plaintiff. All other relief not expressly granted herein is DENIED. Th-is i3 a final appealable judgment, resolving all issues between all parties. SIGNED on thisthe day offlwmwmw 2019. Judge Presiding Electronically Filed 5/15/2019 10:18 AM Hidalgo County District Clerks Reviewed By: Andria Garcia APPROVED AS TO FORM AND CONTENT: Steven M. Gonzalez Edward J‘Castillo C. Brandon Holubar GONZALEZ CASTILLO, LL P 1317 E. Quebec Avenue McAllen, Texas 78503 Telephone: (956) 618-01 15 Telecopier: (956) 618-0445 E-Mail: law@val£eyfirm.com By: Steven IV].Gonzalez SBN: 08131900 Edward J. Castillo SBN: 24040658 C. Brandon Hoiubar SBN: 24041124 ATTORNEYS FOR DEFENDANT, VIPERS BASKETBALL, I_.L.C. DIBIA RIO GRANDE VALLEY VIPERS COPY TO: Steven M. Gonzalez Joseph R. Corteguera Edward J. Castillo Jeffrey M. Stern C. Brandon Hoiubar STERN LAW GROUP GONZALEZ CASTILLO, LLP 4909 Bissonnet, Suite 100 131? Quebec Avenue Bellaire. Texas 77401 McAllen, Texas: ?8503 E—Mail: EnortegueraCcigstem-Iawgmuacorn E-Mail: |awgcz)va!legfirm.uom E—Mail: esewicejrcfiizsi'ernwlawgz‘euplcom M2 U.PEN-FLLBSOL- WPLPLD FINALJUDGMENT -PAGE 2OF 2 Electronically Filed 5/15/2019 10:18 AM Hidalgo County District Clerks Reviewed By: Andria Garcia MGM Financial Corp. v.Woodlands Operating Co.. L.P.. 292 S.W.3¢l 660 (2009) 52 Tex. 1221 Slip. Ct. J. Karen D. Smith, Kirby D. Hopkins and Rachael Negative Treatment KeyCile Yellow Flag — McDonell Rolon, Drucker. Rutledge & Smith, L.L.P., Mikob Declined lo Extend by The Woodlands, Properties, Inc. v. Joachim. Tcx.App.- for Respondent. May Dallas. l9.2015 292 S.W.3d 660 Opinion Supreme Court 0f Texas. *663 Justice BRISTER delivered the opinion ol'the ' MBM FINANCIAL Court. CORPORATION, et aL, Petitioners, I Since Jnrndyce v.Jarmb'ce, there have bccn charges that v. some cases benefit the lawyers more than [he But clients. The WOODLANDS OPERATING suits cannot be maintained solely for the attorney'sfees; COMPANY, L.P.,Respondent. a client must gain something before attorney'sfccscan No. 08—0390. be awarded. While making losing parties bear their own may add injury to insult, the American Rule attorney‘s fccs | Argued March 12,2009. has long been that each party paysitsown lawyers. | Decided Aug. 28, 2009. ajudgmenl In this case, the plaintiff obtained for $1,000 in damages and almost $150,000 in attorney'sfees.But Synopsis there was no evidence lo support the amount of the $1 ,000 Background: Equipment lesseebrought action against award, and itistoo large to constitute nominal damages. lessor for declaratory breach relief, of contract, and As the award must be to the client sel aside, the attorney's fraud with respect lo lease and maintenance agreements. fee award must also.Accordingly, we reverseand render Following a bench trial,the 9H1 District Court, a take-nolhing judgment. Montgomery County, Frederick E. Edwards, 1.,awarded $1,000 in damages and $145,091.59 in attorney fees. Lessor appealed. Thc Beaumont Court of Appeals, I.Background Steve McKcithen, C.J., 251 S.W.3d 174,aff'1rmcd iu part, and reversed and remanded reversed and rendered in part, The Woodlands Operating Company leased the l9 copiers in part. Lessor's petition for discretionary reviewwas at issue here from MBM Financial Corporation2 and granted. installedthem in late2000 and early 2001. Each machine was covered by a separate four-year lease,with annual renewals thereafter unless notice was sent between 90 and Holdings: The Supreme Court, Brister, J., held (hat: 180 days before the end of the existing term. The leases required theWoodlands to return lhe copiers lo a location damages were not sustainable as actual or nominal, and MBM specified. lessee could notrecover attorney under Declaratory l'ces The Woodlands decided not to renew the leases in Judgments Act. mid—2004 and asked MBM for the end-of-term dates and instructionsfor return. MBM employees provided the dates and approved a draft termination letter from Reversed and rendered. the Woodlands. But when theactual termination lcttcr arrived (viewing the evidence. in the lightfavorable to Attorneys nml Law Finns the court'sjudgmenl), [rial 3 M BM's president unilaterally changed the dates so the notice would bc untimely and *662 Jennifer Bruch Hogan, Richard P. Hogan Jr.and demanded rent for another year. To bolster MBM's Matthew E. Coveler, Hogan & Hogan, L.L.P., Phillip position.hc signed theleasesand insertedcommencement R. Livingston and Deanna H. Livingston, Livingston & dates for the first lime after the Woodlands filed suit. Until Livingston, LLC, Houston, forPemioncrs. WM.“ {\W '-' JH |'!Ihvlm‘wn Ix‘unlmu Nu ulmm 1n ulumml l): (‘uuwumn'nl Wt uk". ‘I Electronically Filed 5/15/2019 10:18 AM Hidalgo County District Clerks Reviewed By: Andria Garcia MBM Woodlands Oparmlng Financial Corp. v. 292 s.W.3d 660 (2009) (20., L.P.. $2 Tex. Sup. 1221 Cl. J. suit was filed,MBM also refused to designate a return Rcstatcments,8 Williston,9 Corbin,'° and Black's Law location for(11cbulky equipment. H Dictionary. While more generous damage measures make nominal damages rare,and some judges have The Woodlands sued. asserting claims for breach [2 of contracl, fraud, and declaratory relief. MBM questioned the reason behind them. we agree that nominal *665 damages may be recovered for breach of counterclaimed for additional rent of $160,000, thoughil contract. laterdropped that claim. After a two-day bench trial,the trialcourt rendered judgment awarding the Woodlands But $1 .000isnot nominal damages. “[T]he usual meaning $l,000 in damages and $l45,09l.59 in attorney's fccs of lhc phrase ‘nominal damages’ refers to an award ol'one through trial.The court of appeals affirmed thc damages 13 and purl of thefee award. 4 On appeal, MBM challenges dollar." Despite substantial changes over llw centuries both. in what a dollar will buy, itremains Ihe standard award in federal cases, M and in Texas cases uswell. 15 A fcw cases '6 have awarded nominal damages of $10 and cvcn $100, II.Nominal Damages & Breach of Contract but nominal damages arc supposed to bc a “trifling u l7 [8 sum, and $1,000 hardly category. falls in lhal At lhc Woodlands requested only nominal damages. trial, The judgment describes the $1,000 award as “actual 11appears from lhc record that the court awarded trial damages," but the findings and conclusions trial court's rough $1,000 as compensation forthe wasted film: the describethem as "actual damages in lhcform of nominal Woodlands incurred. But nominal damages arc not for damages.” *664 We agree with MBM that no evidence compensation; they are for cases in which thcrc are no supports $1,000 as either. l9 damages, or none lhal could cvcr be proved. While mentioned wasted a few older cases hold otherwise,” in recent decades Thc only damages at trialrelatedto time Ihe Woodlands spent trying to gel MBM's lhe rule in Texas has been that nominal damages are cooperation. But therewas no evidence about the value not available when the harm isentirelyeconomic and of that time——either quantity llle or the cost of it.The subject lo proof (as opposed lo non~economic harm lo 21 Woodlands blamed this gap on lhe difficulty of tracking civilor property rights). Thus. inGulmerm Urilln'es the losltime, bu! never explainedwhy itcould not have *666 Co. v.Law, wc rejected nominal damages because been estimated. Iflhe difficulty ofproofalways discharged actual damages had been incurred, ycl the plaintiff failed the burden of proof, many liliganlswould simply not to prove thc amount.” “While mathematical precision bother.5 While the Woodlands could have estimated the is not required to establish the extent or amount of value of wasted lime, itcould not ask the court lo pull trial one'sdamages, one must bring forward the best evidence a figurefrom lhiu air. of lhc damage of which the situation udmils....“230n this record, the$1,000 damage award to theWoodlands Nevertheless. thc Woodlands argues lhe award was cannot bc sustained as cilhcr actual or nominal damages. justified as nominal damages. We agrcc nominal damages available breach ol‘contract, as thisCourt has are for remand new when While we normally for a trial stated m least a dozen times. 6 As we wrote in 1853: there issome evidence to support an amount of actual 24 damages, in thiscase lhcrc was uo evidence about the amount ofdamagcs at nll. Aud “whcrc 1|1c record shows as The law is,that if lhc contract isproven to be broken, a matter oflaw that lhe plaintiffis enlilled only to nominal the law would give some damage, sufficient lo authorize damages, the appellate courtwill nol reverse merely to n vcrdic! for the plaintiff, although, in the absence of 25 proof of special loss,the damages would be nominal enable him to recover such damages." Accordingly,we must render judgment that the Woodlands take nolhing only.7 asdamages on itsbreach of contract claim. Wc arc hardly alone in recognizing nominal damages for breach of contract; so do the First and Second WI AW '--ll v? Hmmann 'r’fll‘i Hunhil'. Nu whim in unuilml l'?'- llnvnumu-nl ‘."'.’mh~ Electronically Filed 5/15/2019 10:18 AM Hidalgo County District Clerks Reviewed By: Andria Garcia MBM Flnanclnl Corp.v.Woodlands Oporaling Co., L.P..292 S.W.3d 660 (2009) 52 Tex. Sup.Ct. J.1221 32 files pleadings in bad faith or abuses the discovery III.Attorney's Fees: Breach of Contract process.” But the Woodlands filed no motion l‘or sanctions pursuant tothose rules.Itsfee claim was not Chapter 38 of the Civil Practices and Remedies Code based on MBM'S litigation conduct but on its pre-liligalion allows recovery of attorney's fees inbreach of contract conduct; such fees arerecoverable only ifa contracl or cases:“A person may recover reasonable attorney's fees skamte so provides. As the Woodlands cannot recover fees amount of a valid claim and in addition to thc costs, if the based on contract or fraud, allegationsthat lhc breach 26 claim isfor an oral or writlcu contract.“ To recover was inbad vexmious do not change that faith or the fraud feesunder must do two this statute, a litigant things: (1) result. prevail on a breach of contract claim, and (2)recover 27 damages. The second requirement isimplied from the be "iu addition to statute's language: for a fee recovery to VI. Attorney's Fees: Declaratory the amount of a valid claim,”the claimant must recover Judgment 8:Breach of Contract some amount on that claim. The court of appeals affirmed part of lllc attorney's While some damages arc necessary to recover feesunder fee award based on the Declaratory Judgments Act.“ thisstatute,” this Court has never said whether nominal MBM asserts four reasons why declaratory relief was damages are enough. Bul as the Woodlands can recover improper and cannot support a fec award. We disagree neither actual nor nominal damages, that question isnot that declaratory reliefwas improper but agree itcannot before us. Accordingly, the Woodlands‘ award cannot l‘ee support the fee award here. be affirmed based on Chapter 38. First,MBM argues that declaratory reliefisnot available for contract claims (like those here) that are “Fully matured and predicated upon a terminated relationship." IV. Attorney's Fees: Fraud But the Act says relief available 1's in contraci cases ArisingFrom Breach of Contract n 35 "before 0r after thcrc has bccn a breach, so a matured Alternatively, the Woodlands argues it is entitled to breach is explicitly covered by the Act.” Funher, attorney's feesbased on fraud arisingfrom a breach of declaratory relief is often available after a relationship has contract, pointing to this Court‘s reference lo such an concerning noncompetilion been terminated, as in cases 29 award in Gill Savings Ass'uv. Chair *667 King. But 7 covenants signed by former employees} or offsetting in Gillwe merely reinstatedbankruptcy and appellate award judgments bctwccn former 38 litigants. MBM notes llml fees;wc did not address the court of appeals' of we justified declaratory relief in *668 BIIP Petroleum fees forboth contract and fraud on the basisthat they Co. v.Millard by referring lo an “ongoing and continuing wcrc inextricablyintertwined.” We explicitlyrejected relationship,” but that was solely lo show that the exception this intertwining inTony Gullo Motors I. LJ’. v. defendant's counterclaim (relatingto the parties'future Clmpa and reiterated that fees are not allowed for torts like rights)went beyond the plaintiffs claim (relating to past 3' fraud. Thus. even ifthe Woodlands' fraud claim arose 39 We disagree that a party can immunizc damages alone). from a breach ofcontract, thatisno basis for an attorney's against declaratory relief by simply terminating any itself fee award. ongoing relationship. Second, MBM urges that declarations of non-liability V. Attorney's Fees:Bad Faith & Vexatious Conduct should be barred in contract cases, just as they are in tort cases.As wc said in Abor v.Black: The 1‘ Woodlands also argues itis entitledto attorney‘s fees because MBM "has acted in bad faith, vcxaliously, wantonly, or For oppressive reasons.” The rules of civil procedure allow fees as a sanction against a party who WK‘JTIAW v 0 7m!) Ihnnrmn KuIm-Iu Nu chill]In uligflunl1| (Zuvmnmunt Wunkn i'l. S Electronically Filed 5/15/2019 10:18 AM Hidalgo County District Clerks Reviewed By: Andria Garcia MBM Financial Corp. v.Woodlands Opomtlng '" Cm 292 S.W.3ci 660 l...P.. (2.809) 52'TeRL'"S'utiféffiJf’l'fi'z‘i" Shortly afterthe Legislature passed the Act in 1943,45 thisCourt adopted exactly the opposite rule, stating that “the existence of another adequate remedy docs not bar Because [the Act]appears to give the the right t0 maintain an action for declamtoryjudgment” courts jurisdiction over declarations and finding" supported by “better reasoning?“ this r1129 0F 11on~liabilityof a potential The federai courts follow thesame rule,as Federal Rule (lefendant in a tort action, we 0f Civil Procedure 57 makes clear:“Th