Opinion
No. 07-19-00302-CV
09-17-2020
ALSAY, INCORPORATED, APPELLANT v. GICON PUMPS & EQUIPMENT, INC., APPELLEE
On Appeal from the 237th District Court Lubbock County, Texas
Trial Court No. 2017-526,370, Honorable Les Hatch, Presiding
MEMORANDUM OPINION
Before PIRTLE and PARKER and DOSS, JJ.
In this breach of contract case, appellant Alsay, Incorporated, appeals from the final judgment rendered from a jury verdict in favor of appellee Gicon Pumps & Equipment, Inc. In its sole issue on appeal, Alsay contends the trial court erred by giving an ambiguity instruction to the jury and allowing the jury to interpret contractual language. We affirm the decision of the trial court.
Background
Gicon, a pump and motor supplier for the water service industry, and Alsay, a water service equipment installation and repair company, had an established business relationship. In May of 2015, Alsay requested a quote from Gicon for the purchase of specialized industrial motors for a pump station project for the City of Galveston. Gicon then requested a quote from General Electric ("GE") to build the motors sought by Alsay. GE returned its quote, with detailed information on the motors, to Gicon. GE's quote included a requirement for a 94-day lead time to manufacture the motors. Gicon, in turn, sent its quote to Alsay.
On September 24, 2015, Alsay sent Gicon a purchase order for the motors. The "description" section of the purchase order reflected an order for four 500-horsepower, 2300-volt, three-phase, 1800 RPM, horizontal TEFC (totally enclosed, fan cooled) motors from GE, with a required-by date of February 1, 2016, for a total price of $183,348. It also included the hand-written notation "Full Submittals per Specifications." To account for GE's 94-day lead time and meet Alsay's February 1 due date, Gicon acted quickly; within five days of receiving the purchase order, Gicon ordered the four motors from GE. GE proceeded with production.
In late December of 2015, Alsay informed Gicon that the motors would be too large for the project. Alsay needed 400-horsepower, 4160-volt motors, rather than 500-horsepower, 2300-volt motors. By that time, however, the motors Gicon had ordered from GE were going through final testing and preparing to ship. Gicon received the motors from GE in early January of 2016 and promptly paid GE's $154,450 invoice. Alsay instructed Gicon not to ship the motors to Alsay.
From early 2016 through the spring of 2017, Gicon and Alsay attempted to resolve the problem. At Alsay's request, Gicon asked GE if it would accept a return of the motors. GE responded that, because the motors were custom-made and already completed, there would be a 100 percent restocking fee. Alsay and Gicon considered an arrangement under which Alsay would trade the 500-horsepower motors in for a $7,500 credit as part of the purchase of 400-horsepower motors from Gicon, but no such deal materialized. Eventually, Gicon shipped the 500-horsepower motors to Alsay, but Alsay refused receipt of the motors. Alsay later purchased the 400-horsepower motors from another company for $217,837.
Gicon filed this lawsuit in July of 2017, alleging breach of contract and promissory estoppel. Gicon took the position that it had fulfilled the terms of the parties' agreement and that Alsay breached it by failing to pay for the motors it ordered. Alsay filed counterclaims under the same theories, contending that Gicon had breached the agreement by ordering the motors prematurely and that Alsay was damaged by paying a higher price for the motors it had to order elsewhere.
The case proceeded to a jury trial, which focused on Alsay and Gicon's dispute over whether the motors were intended to be on hold or in production under the "Full Submittals per Specifications" notation on the purchase order. Gicon contended that the purchase order did not place the order on hold pending approval, while Alsay asserted that "Full Submittals per Specifications" meant that Gicon should not have gone forward with production without Alsay's approval.
Both Alsay and Gicon submitted proposed jury charges with breach of contract questions. However, at the charge conference, the trial court made the legal determination that the language "Full Submittals per Specifications" was ambiguous as a matter of law. Consequently, the trial court submitted the interpretation of those words to the jury. Question 1 of the court's charge to the jury read:
It is your duty to interpret the following language of Purchase Order 2984:
"Full Submittals per Specifications"
Does this mean that Gicon was required to receive engineer[-]approved submittals from Alsay before Gicon ordered the motors from GE?
In deciding what the parties understood this to mean, you may consider what they said and did in light of the surrounding circumstances, including any earlier course of dealing. You may not consider the parties' unexpressed thoughts or intentions.
Answer "Yes" or "No."
Counsel for both parties objected to the submission of Question 1, essentially on the same ground. Gicon objected on the bases that no evidence supported it, no pleading supported its submission, and that the issue was not tried by consent. Alsay likewise objected on the grounds that ambiguity was neither pleaded by the parties nor tried by consent. Both parties' objections were overruled.
The jury answered "No" to Question 1. In response to the two questions that followed, the jury found that Alsay's failure to comply with Purchase Order 2984 was material and that Gicon was entitled to $251,261.65 in damages.
In this appeal, Alsay contends that the trial court abused its discretion by submitting Question 1 to the jury over the timely objections of both parties and without supporting pleadings, which Alsay claims resulted in an improper judgment against it. In response, Gicon asserts that the trial court was not procedurally prohibited from submitting Question 1 to the jury because the parties tried the ambiguity issue by consent and that, even if the question was improper, Alsay was not harmed by it.
Standard of Review
"We review a trial court's decision to submit or refuse a particular instruction under an abuse of discretion standard of review." In re V.L.K., 24 S.W.3d 338, 341 (Tex. 2000). The trial court has considerable discretion in determining necessary and proper jury instructions. Id. An instruction is proper if it assists the jury, accurately states the law, and finds support in the pleadings and evidence. Columbia Rio Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 855-56 (Tex. 2009).
We will not reverse a judgment for jury charge error in the absence of harm. See Lone Star Gas Co. v. Lemond, 897 S.W.2d 755, 756-57 (Tex. 1995) (per curiam); Friday v. Spears, 975 S.W.2d 699, 700 (Tex. App.—Texarkana 1998, no pet.) ("Error in the jury charge is reversible only if it probably caused the rendition of an improper verdict."). To determine whether an alleged error in the jury charge is reversible, we must consider the pleadings of the parties, the evidence presented at trial, and the charge in its entirety. Island Recreational Dev. Corp. v. Republic of Tex. Sav. Ass'n, 710 S.W.2d 551, 555 (Tex. 1986).
Analysis
Jury Charge Error
Alsay argues that Question 1 should not have been submitted to the jury because neither party pleaded ambiguity, the parties did not try the issue by consent, and both parties objected to the question. "A clear abuse of discretion exists when the trial court submits a jury question that is neither supported by the pleadings nor tried by consent." Crowson v. Bowen, 320 S.W.3d 486, 488 (Tex. App.—Fort Worth 2010, no pet.). Both Alsay and Gicon acknowledge that the parties' pleadings did not raise the issue of ambiguity. We agree that the issue of ambiguity is not raised by the pleadings. See Crozier v. Horne Children Maint. & Educ. Trust, 597 S.W.2d 418, 421 (Tex. Civ. App.—San Antonio 1980, writ ref'd n.r.e.) ("A person seeking to establish ambiguity under a written contract must specifically plead such ambiguity."). We thus turn to the question of whether ambiguity was tried by consent.
At trial, the meaning of the term "Full Submittals per Specifications" was contested by the parties. Gicon elicited testimony that the request for submittals meant that Alsay wanted information about the motors to be provided when the motors themselves were delivered. Mark Durham, the chief operating officer of Gicon, testified that the term meant Alsay wanted data on the motors, i.e., "everything that the specifications had that we quoted that we would provide." Scott Freeman, the Alsay employee who submitted the purchase order, testified that when he wrote "Full Submittals per Specifications" on the purchase order, he meant that he "need[ed] to get submittal information from them based on the specifications I sent them." Freeman stated that he would not use the phrase to indicate a hold on production. He stated that he would write "hold for approval" or "full submittals per approval" if he wanted a vendor to wait on production. Freeman said the order "should have said, quote, hold for, end quote, dash, quote, hold for approval, end quote" to indicate a hold. Two other witnesses testified that the language in the purchase order from Alsay did not indicate a hold. The jury also heard evidence that Alsay's purchase order form now includes a checkoff option providing, "purchase order is contingent upon approval of submittals," indicating a hold on production. On the other hand, Alsay presented testimony from its president, Joe Slavik, who testified, "It's an engineered job, and you need to have approved submittals." In his opinion, "Full Submittals per Specifications" was the equivalent of saying "hold" or "do not release" the product until the engineer approved it. However, Slavik admitted that he would use more specific language to indicate that an order was on hold for engineer approval. Evidence of these competing interpretations was admitted without objection.
On appeal, Gicon submits that the parties tried the issue of ambiguity by consent. Gicon notes that several Texas courts have held that the question of a contract's meaning can be tried by implied consent in the absence of a pleading of ambiguity. See, e.g., Sage St. Assocs. v. Northdale Constr. Co., 863 S.W.2d 438, 445 (Tex. 1993) (holding that a court may conclude a contract is ambiguous and submit a jury question on interpretation where parties did not plead ambiguity but presented several witnesses who testified as to their conflicting interpretations of the contract at issue, and both sides vigorously advanced their positions). Alsay, meanwhile, urges that the issue was not tried by consent, because both parties made timely objections to the trial court's inclusion of Question 1 in the jury charge.
We agree with Alsay. Texas courts have long held that trial by consent does not occur when the complaining party properly objects to the submission of issues not raised by the pleadings. See Harkey v. Tex. Employers' Ins. Ass'n, 208 S.W.2d 919, 922 (Tex. 1948) ("although the complaining party does not object to the testimony on the issues but does object to their submission on some tenable ground, he cannot be regarded as impliedly consenting that they be tried when not raised by the pleadings, as contemplated by Rule 67"). That is, trial by consent is precluded when a proper objection is made on the record before submission of the issue to the jury. Tex. Indus., Inc. v. Vaughan, 919 S.W.2d 798, 803 (Tex. App.—Houston [14th Dist.] 1996, writ denied).
For example, in the breach of contract case Media Brokers Inc. v. A.H. Belo Corp., neither party pleaded that the contract was ambiguous, but they presented witnesses with conflicting interpretations of certain contractual terms, and the trial court submitted a question requiring the jury to construe the agreement. No. 05-98-00076-CV, 2000 Tex. App. LEXIS 8371, at *6 (Tex. App.—Dallas Dec. 15, 2000, pet. denied). The plaintiff, Media Brokers, objected to the question, contending that contract ambiguity had not been raised in the pleadings. Id. On appeal, Belo, like Gicon in the present case, relied on the Supreme Court's decision in Sage Street as authority for its position that the question was proper because the trial court was permitted to conclude that the contract was ambiguous even in the absence of a pleading. Id. at *11-12. The Fifth Court of Appeals disagreed, noting that Sage Street "did not resolve the question of whether a trial court errs in submitting the issue of the construction of the contract to the jury when the ambiguity of the contract was not tried by consent." Id. at *12. The appellate court then concluded that, because Media Brokers objected to the jury question, the issue of ambiguity was not tried by consent and the trial court abused its discretion in submitting the question. Id. at *13.
In Sage Street, the parties did not object to the question submitted. The Supreme Court stated, "Because we hold that ambiguity was tried by consent, we need not address what action a court should take when faced with an ambiguous contract in a case in which the issue was neither pled nor effectively tried by implied consent." Sage St., 863 S.W.2d at 445 n.12.
In the cases cited by Gicon, we see only one, Noble Drilling Corp. v. Fulton, in which the appellate court concluded that an issue had been tried by consent despite the parties' objection to inclusion of a question on the issue in the court's charge to the jury. No. 14-98-01063-CV, 2001 Tex. App. LEXIS 1607, at *19 (Tex. App.—Houston [14th Dist.] Mar. 8, 2001, pet. denied). In our view, the facts of Noble Drilling are distinguishable from the present case. Noble Drilling involved a former employee's claim for payment under a severance agreement. Id. at *1-2. At trial, the parties advanced their differing views of the meaning of a "termination event" in the context of the severance agreement. After the charge conference, both parties contended that they were entitled to judgment as a matter of law, and argued that the trial court should construe the severance agreement and render judgment. Id. at *7. Over the parties' objections, the trial court submitted the charge to the jury. The charge instructed the jury to interpret the language of the severance agreement, and the jury answered only one question: "Did Noble Drilling Corporation fail to comply with the Severance Agreement when it did not pay Robert Fulton a severance payment?" Id. at *7-8. The jury answered the question affirmatively. On appeal, Noble Drilling again asserted that the trial court should have rendered judgment as a matter of law under the unambiguous language of the contract. As the appellate court remarked, "Noble Drilling objected to submitting any of the case to the jury." Id. at *19 (emphasis added). Observing that the trial presented an issue of material fact for the jury, the appellate court concluded that the trial court had properly submitted the breach issue. Id.
The parties had stipulated to the amounts of any damages.
We find Gicon's reliance on Sage Street and Noble Drilling misplaced. We are inclined to follow the reasoning of Harkey and Media Brokers. Because both Alsay and Gicon timely objected to the ambiguity question's inclusion in the charge to the jury, we cannot conclude that the ambiguity issue was tried by consent. See also Marine Creek Partners, Ltd. v. Caldwell, 926 S.W.2d 793, 796 (Tex. App.—Fort Worth 1996, no writ) (whether a contract is ambiguous cannot be regarded as tried by consent where the appealing party objects to the submission of the jury question). Consequently, we conclude that the trial court abused its discretion in submitting the contract ambiguity question to the jury.
Harm to Alsay
Having found the trial court erred in submitting the question, we must next determine whether Alsay was harmed by the error. See Island Recreational Dev. Corp., 710 S.W.3d at 555 (error in the jury charge only requires reversal if, after consideration of the pleadings, the evidence, and the charge in its entirety, the error amounted to such a denial of a party's rights as was reasonably calculated to, and probably did, cause rendition of an improper verdict). Alsay, as the appellant, bears the burden to demonstrate how the error in the charge caused the rendition of an improper judgment. In re Marriage of Scott, 117 S.W.3d 580, 584 (Tex. App.—Amarillo 2003, no pet.) (per curiam). We will not reverse the trial court's judgment in the absence of such a showing. Id.
In its brief, Alsay contends that it was harmed by Question 1 because the question was an improper comment on the weight of the evidence and improperly provided direction to the jury in its fact deliberation process. Texas Rule of Civil Procedure 277 prohibits a trial court from directly commenting on the weight of evidence in the charge. See TEX. R. CIV. P. 277. A court violates this prohibition when a question, definition, or instruction suggests to the jury the court's opinion on a matter to be decided by the jury. See Rowe v. Rowe, 887 S.W.2d 191, 199 (Tex. App.—Fort Worth 1994, writ denied).
We first note that Alsay's objection to Question 1 at trial was that an ambiguity question was not supported by the pleadings and that the issue of ambiguity had not been tried by consent. Alsay did not object that the question submitted by the trial court constituted an improper comment on the weight of the evidence. Therefore, this complaint has arguably been waived. See TEX. R. APP. P. 33.1(a) (requiring the complaint to be made to the trial court); Moser v. Davis, 79 S.W.3d 162, 169 (Tex. App.—Amarillo 2002, no pet.) (an issue is waived when the objection on appeal does not comport with the objection made at trial). However, even if we broadly construe Alsay's objection in the trial court to preserve the complaint raised now on appeal, we nonetheless reject Alsay's argument.
Here, Question 1 instructed the jury to interpret the term "Full Submittals per Specifications." The Question asked, "Does this mean that Gicon was required to receive engineer[-]approved submittals from Alsay before Gicon ordered the motors from GE?" Alsay contends that the question "only asks the jury for a confirmation of what the Court has told the jury it may mean. Such a question gives the jury direction in its fact deliberation process and is clearly in violation of [Rule] 277 and established case law."
Alsay has not developed, and it cites no authority in support of, its argument that the way the question was worded constituted a comment on the weight of the evidence. In fact, Alsay's president had testified that the phrase meant exactly what the definition set forth in Question 1 suggested it might mean. And in his closing argument, counsel for Alsay emphasized, "Full submittals per specifications means you have to go through the entire engineering process . . . . It means you don't order the motors until you have the submittal data you submitted to us approved, and we've told you it's approved. That's what it means." Moreover, at the charge conference, after Alsay objected to Question 1, it proposed a question that included the following:
In order to find a breach by Gicon, you must find by a preponderance of the evidence that the condition precedent alleged by Alsay—namely, that Gicon was not to release the 500-HP motors for production until after Gicon received approved submittals from Alsay—was required under the terms of PO-2984.
Thus, Alsay presented evidence, argument, and a proposed question all suggesting that the meaning of the phrase was that Gicon was required to receive engineer-approved submittals from Alsay before Gicon ordered the motors. Inasmuch as the trial court charged the jury to either confirm Alsay's definition with a "yes" answer, or to reject it with a "no," we cannot agree that the question was unfair to Alsay. See also Dallas Area Rapid Transit v. Agent Sys., Inc., No. 02-12-00517-CV, 2014 Tex. App. LEXIS 12797, at *10 (Tex. App.—Fort Worth Nov. 26, 2014, pet. denied) (mem. op.) ("Because the submitted question does not differ in substance from appellants' requested instruction, but merely in wording, the trial court did not err."); TEX. R. CIV. P. 278 ("A judgment shall not be reversed because of the failure to submit other and various phases or different shades of the same question.").
The concurring opinion expresses concern that the parties' intentions might not be determined unless they are addressed by the factfinder. We note that, in this case, the jury could have implicitly determined the parties' intentions by determining which party breached the contract. That is, had the jury answered the breach of contract questions proposed by the parties, it would have been required to determine the proper interpretation of the purchase order. In answering the ambiguity question, the jury impliedly found that Gicon met its obligations under the purchase order and Alsay did not.
Alsay has failed to meet its burden to demonstrate that the error in the charge caused the rendition of an improper judgment. Therefore, we overrule Alsay's sole issue on appeal.
Conclusion
Having concluded that Alsay was not harmed by the trial court's submission of an ambiguity question to the jury, we affirm the judgment of the trial court.
Judy C. Parker
Justice Doss, J., concurring.