Escaped Fraud But Stuck With Higher Attorney’s Fees

In a commercial dispute concerning a furniture liquidation sale, the trial court awarded appellees damages for breach of contract and fraud, and attorney’s fees, but reduced the jury’s attorney’s fee award by nearly $425,000.  Among other issues, appellants challenge the trial court’s $100,000 judgment against Lavercombe based on fraud, and appellees challenge the trial court’s reduction of attorney’s fees.

The court of appeals reversed the trial court’s judgment with respect to the fraud claim.  The court found no evidence in the record showing that Lavercombe made a material misrepresentation as to the quantity and availability of upholstery products with an intent to deceive and with no intention of performing as represented.  The court of appeals also reinstated the jury’s higher award of attorney’s fees because there was more than a scintilla of evidence in the record supporting the jury’s award.  In all other respects, the court of appeals affirmed the trial court’s judgment.

Broyhill Furniture Indus. v. Murphy, No. 05-11-01545-CV

Judgment Against Sister Affirmed

The court affirmed the trial court’s judgment declaring Wilhoite’s quitclaim deed void and awarding Sims damages and attorney’s fees. The parties are sisters that each inherited a half interest in their grandfather’s house. In 2007, Sims signed a quitclaim deed transferring the interest in the property to Wilhoite for no consideration. Sims testified they agreed that after the house was sold, they would share the money from the sale equally; Wilhoite testified that Sims gifted her interest. Sims performed repairs on the house in 2008 and moved into the house in 2010 and performed maintenance. Sims testified that Wilhoite agreed to put those costs towards Sims’s interest in the house. In 2011, Wilhoite attempted to evict Sims for unpaid rent. Sims filed suit in district court seeking a declaratory judgment that the quitclaim deed was voidable and claims for statutory fraud and breach of contract. The jury found that Sims did not gift the property, that Wilhoite committed statutory fraud, and that Wilhoite breached her agreement to reimburse Sims for one-half of her repair and maintenance expenses.

The court first held that Wilhoite did not have adverse possession of the house by mere color of title through the quitclaim deed, and therefore the court was correct in refusing to apply a three-year limitations period. Second, neither agreement – to share in the proceeds from sale or reimburse for expenses – were contracts for the sale of real estate, so both were outside of the statue of frauds. Next, the court held that the declaratory judgment was proper, despite Sims’ failure to pursue a trespass to try title action, because the it merely canceled the deed and made no determination of title to the property. Finally, Sims’ counsel’s statement that her son was “protecting us in Afghanistan” was not an incurable argument. Thus, the court affirmed.

Wilhoite v. Sims, No. 05-12-00228-CV

Statute of Frauds Bars Claim for Soccer Scholarship

When Emily Hairston was a high school sophomore, the women’s soccer coach at Southern Methodist University, Brent Erwin, sought to recruit her to play on SMU’s team when she graduated. In May 2007, Erwin verbally offered Hairston a “100%” scholarship if she came to play at SMU. Over the next few years, Hairston and the coach communicated about the SMU soccer program, and Erwin even encouraged Hairston to try to graduate early from high school, which Hairston did. Hairston enrolled at SMU in early 2009, and joined the women’s soccer team. In February 2009, Hairston was told that she needed to pay $25,000 in tuition for that semester. Surprised, Hairston spoke with Erwin, who informed her that she did not, in fact, have an athletic scholarship. After some further discussion, Erwin and her father sued SMU and Erwin for, among other things, breach of contract. The trial court dismissed the case in SMU’s favor on summary judgment.

On appeal, the Court found that the statute of frauds barred Hairston’s breach of contract claim in at least two ways. First, to the extent Hairston claimed the scholarship was for all four years of her college career at SMU, the oral agreement could not be performed within a year of acceptance and, thus, had to be in writing under the statute of frauds. Alternatively, the Court noted that Hairston purported to accept the offer in May 2007, when she was a sophomore in high school. Because she could not have realistically enrolled in SMU within a year of her sophomore year of high school, the statute of frauds required the contract to be in writing. As a result, the Court affirmed the trial court’s decision.

Hairston v. SMU

Statute of Frauds Primer

The court of appeals has issued an opinion that serves as a useful primer on the statute of frauds.  The appellant, Michael Kalmus, sue to recover for unpaid commissions after his employment was terminated.  The appellee, Financial Necessities Network, defended the case with the statute of frauds, claiming that the oral agreement alleged by Kalmyus was essentially an agreement for lifetime employment that could not be enforced in the absence of a signed writing.  The court of appeals reversed and remanded, holding that the evidence showed the agreement was terminable at will, and therefore could have been concluded within a year’s time.  In the course of announcing that decision, the opinion collects and recites much of the black-letter law regarding the statute of frauds, making it a useful source of future citations on the topic.

Kalmus v. Oliver, No. 05-11-00486-CV

Par, for the Course

The court affirmed the trial court’s summary judgment dismissing a plaintiff’s claims against his former employer for breach of the employment contract. Twin Lakes Golf Course hired Holloway to move from Illinois and serve as its head pro for three years. After further negotiations in July 2008, Twin Lakes and Holloway orally agreed to an employment term lasting one year with an agreement to extend for another three years based on his performance. Holloway started working on August 5, 2008, and soon after Twin Lakes presented a written contract, dated July 23, containing the terms of the agreement. Holloway signed the document but Twin Lakes never did. Holloway was fired eight weeks later and he sued for breach of contract and fraudulent inducement. The trial court granted summary judgment in favor of Twin Lakes.

On appeal, the court determined that the agreement was not enforceable because, as an agreement that could not be performed within one year, it fell within the statute of frauds. The court noted that the contract was negotiated in July 2008 and the document that Holloway signed was dated July 23. Thus, the agreement was made in July 2008 and performance was to end in August 2009 – over one year. Additionally, Holloway’s employment was to last from August 5, 2008 to August 5, 2009 – one year and one day. The court also held that Holloway’s affidavit testimony stating that the agreement could be performed within one year was conclusory. Finally, his partial performance did not remove the agreement from the statute of frauds because he was compensated. Thus, the agreement was unenforceable and Holloway’s claims failed as a matter of law.

Holloway v. Dekkers and Twin Lakes Golf Course, Inc., 05-10-01132-CV