Opinion
01-20-00604-CV
08-30-2022
USPLS, LC, Appellant v. PATRICK GAAS AND DANIEL SHANK, Appellees
On Appeal from the 129th District Court Harris County, Texas Trial Court Case No. 2019-42530
Panel consists of Chief Justice Radack and Justices Countiss and Farris.
MEMORANDUM OPINION
April L. Farris, Justice
This appeal arises from a dispute between an employment recruiting agency and two attorneys who sought to transfer to a new law firm employer. Appellant USPLS, LC sued appellees Patrick Gaas and Daniel Shank for breach of contract and fraud. USPLS alleged that it had a written contract—an email exchange—with Gaas and Shank to act as their "exclusive agent" in seeking a new employer from which USPLS would seek compensation, but Gaas and Shank obtained employment without using USPLS as their agent and USPLS was unable to collect its fee from the new employer.
Gaas and Shank asserted a counterclaim against USPLS seeking a declaratory ruling that the email exchange was not a valid, enforceable contract. The parties filed cross-motions for partial summary judgment on USPLS's breach of contract claim. In three separate orders, the trial court denied USPLS's motion, granted Gaas's and Shank's motion on no-evidence grounds, and granted Gaas's and Shank's motion on traditional grounds. The parties nonsuited their remaining claims, and the trial court entered a final agreed judgment.
In a single issue with multiple subparts on appeal, USPLS argues that the trial court erred by denying its motion for summary judgment, by granting Gaas's and Shank's motion for summary judgment on both no-evidence and traditional grounds, and by entering final judgment. We affirm.
Background
Gaas and Shank were employed as attorneys in the construction and litigation practice group of Coats Rose, P.C. The practice group was growing, and Gaas and Shank believed they could find the group "a better fit" at a new law firm. James Wilson, the principal of USPLS, later testified that Gaas and Shank "wanted to keep the group together in their search for a new law firm." Thirty-seven attorneys from the practice group eventually joined the employment search.
One of these attorneys was Charles Conrad, who is not a party to this lawsuit. Gaas, Shank, and Conrad led the employment search. During the search, Conrad spoke with Wilson, his relative. Wilson ran an employment recruiting firm, Partners Legal Search ("PLS"). PLS latter assigned its causes of action in this lawsuit to USPLS.
In January 2017, Gaas, Shank, and Conrad met with Wilson to discuss the group's employment goals. On January 19, Wilson emailed Conrad the following offer:
This confirms that the undersigned—Pat Gaas, Dan [Shank] and Charles Conrad, individually and as representatives of a group of lawyers with whom we currently practice—agree to work with [PLS] exclusively in connection with our group's search for legal employment with a new law firm. PLS will be our exclusive agent with respect to all firms with which we engage in employment discussions for the period of one year from the date hereof, except those firms we have listed below with which we have engaged in direct employment discussions on our own behalf within the past six months.
PLS has advised us that its sole compensation is a contingent fee paid by its law firm client in the event it acquires all or part of our group, and we therefore agree promptly to take whatever steps are necessary or appropriate to acknowledge and confirm the exclusive nature of our agency with PLS.
Wilson's email did not list any law firms that were excepted from the offer.
Conrad responded, "I have spoken with Pat Gaas and Dan Shank, and we have agreed to engage PLS (in a group capacity) and agree to work with PLS exclusively in the terms set forth below." USPLS contends that Wilson's email and Conrad's response create a valid, enforceable contract. Gaas and Shank disagree, based on subsequent communications between the parties.
Early in the search for a new law firm, Wilson emailed Conrad a preliminary list of potential firms to target. Conrad responded with an additional list, putting Kilpatrick Townsend & Stockton ("KTS") at the top. Wilson later testified in his affidavit that, ultimately, there were eight priority firms and fifteen deferred firms. Wilson would not contact the defer firms until authorized to do so. The affidavit did not specify which category KTS fell into, and the parties now dispute whether Wilson was supposed to contact KTS.
Wilson contacted several of the priority law firms on the list and engaged in extensive discussions with two of those firms about employing Gaas, Shank, and Conrad. These two firms submitted non-binding proposals to facilitate further discussion, but neither firm ultimately extended an offer of employment to Gaas or Shank. Wilson never contacted KTS.
Gaas, Shank, and Conrad reached out to other potential employers on their own. Gaas and Shank notified some—but not all—of these firms that PLS was their agent and notified PLS they had contacted these firms. It is undisputed that PLS acted as Gaas's and Shank's agent with respect to the firms that were notified about PLS's agency.
In June 2017, Gaas contacted a personal acquaintance who worked at KTS and inquired about employment. KTS was interested in at least part of the group, and it entered into discussions with Gaas, Shank, and Conrad concerning their employment at the firm. It is undisputed that Gaas and Shank spoke with KTS directly; they did not utilize an agent. In September, Gaas and Shank accepted an offer of employment from KTS. They did not notify KTS that PLS was their employment agent. Nor did they tell Wilson that they were involved in employment discussions with KTS.
Conrad accepted employment at a separate law firm.
In his affidavit, Wilson testified that the parties met at the end of September, after Gaas and Shank had accepted employment at KTS. At this meeting, Wilson learned for the first time that Gaas and Shank had discussed employment with KTS. Gaas told Wilson that KTS "is probably the direction that we are going to go," despite having already accepted an offer of employment from KTS. Gaas testified at his deposition that he never intended to include PLS in his employment discussions with KTS. PLS requested compensation directly from KTS for employing Gaas and Shank, but KTS denied the request because it had no agreement with PLS to pay it a recruiting fee.
USPLS sued Gaas and Shank, asserting causes of action for breach of contract and fraud and seeking attorney's fees. Gaas and Shank filed an answer and asserted a counterclaim for declaratory judgment that the parties' email exchange was not a valid, enforceable contract. Gaas and Shank also sought attorney's fees. All parties filed motions for partial summary judgment on USPLS's breach of contract claim. USPLS argued that it had proved all the elements of its claim as a matter of law.
Gaas and Shank responded to USPLS's motion and filed their own cross motions on traditional and no evidence grounds. They disputed that the email exchange between Wilson and Conrad constituted a valid agreement. Alternatively, they argued that even if a valid contract existed, they did not breach it because the contract did not prohibit them from seeking employment on their own behalf apart from PLS. Also in the alternative, they argued that USPLS presented no evidence of non-speculative damages due to any breach of the agreement.
After a hearing on the motions, the trial court signed three summary judgment orders. The first two orders granted Gaas's and Shank's no-evidence and traditional motions for partial summary judgment. The third order denied USPLS's motion for partial summary judgment. After the trial court entered the summary judgment rulings, the parties filed a joint agreed motion to nonsuit the parties' remaining claims and enter final judgment. The trial court granted the motion and entered an agreed final judgment. USPLS appeals.
Summary Judgment
USPLS challenges the trial court's summary judgment orders on multiple grounds, arguing that a valid contract existed and that Gaas and Shank breached the contract. We affirm the judgment because (1) assuming that the January 19 email exchange was a valid contract, that contract did not preclude Gaas and Shank from engaging in employment negotiations with KTS without utilizing PLS; and (2) alternatively, even if such negotiations could constitute a breach of contract, PLS failed to present any evidence of non-speculative damages resulting from that breach.
A. Standard of Review
We review de novo a trial court's summary judgment ruling. Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018); Title Res. Guar. Co. v. Lighthouse Church & Ministries, 589 S.W.3d 226, 230 (Tex. App.—Houston [1st Dist.] 2019, no pet.). Traditional summary judgment is proper when the movant establishes that no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c); see Title Res., 589 S.W.3d at 230.
After an adequate time for discovery, summary judgment on no-evidence grounds is proper when "there is no evidence of one of more essential elements of a claim or defense on which [the plaintiff] would have the burden of proof at trial." Title Res., 589 S.W.3d at 230 (quoting Tex.R.Civ.P. 166a(i)). If the movant makes this showing, the burden shifts to the nonmovant to present evidence raising a genuine issue of material fact as to each element specified in the defendant's motion. Id. "The court must grant the motion unless the respondent produces summary judgment evidence raising a genuine issue of material fact." Tex.R.Civ.P. 166a(i).
In conducting our summary judgment review, we consider as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve all reasonable doubts in the nonmovant's favor. Title Res., 589 S.W.3d at 230-31. We must determine whether reasonable and fair-minded jurors could differ in their conclusions in light of all the evidence presented. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007) (per curiam); Title Res., 589 S.W.3d at 231. "A genuine issue of material fact exists when there is more than a scintilla of probative evidence on a particular issue." Title Res., 589 S.W.3d at 231. "Evidence that is so weak as to do no more than create a mere surmise or suspicion that the fact exists is less than a scintilla." Id. (quoting Regal Fin. Co. v. Tex Star Motors, Inc., 355 S.W.3d 595, 603 (Tex. 2010)).
When, as here, both parties move for summary judgment and the trial court grants one motion and denies the other, the unsuccessful party may appeal both the grant of the successful party's motion and the denial of its own motion. Holmes v. Morales, 924 S.W.2d 920, 922 (Tex. 1996); Title Res., 589 S.W.3d at 231. We review both parties' summary judgment evidence, determine all questions presented, and render the judgment that the trial court should have rendered. Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118, 124 (Tex. 2010); Title Res., 589 S.W.3d at 231. We may affirm the summary judgment ruling or reverse and render judgment on the unsuccessful party's motion. Holmes, 924 S.W.2d at 922; Title Res., 589 S.W.3d at 231. "When, as here, a summary judgment order does not specify the grounds on which it was granted, we will affirm the judgment if any one of the theories advanced before the trial court is meritorious." Title Res., 589 S.W.3d at 231 (quoting Bowers v. Taylor, 263 S.W.3d 260, 263 (Tex. App.—Houston [1st Dist.] 2007, no pet.)).
B. Governing Law
To establish a breach of contract, a plaintiff must prove: (1) the existence of a valid contract; (2) the plaintiff's performance or tender of performance; (3) the defendant's breach of the contract; and (4) the plaintiff's damages as a result of the breach. Davis v. Nat'l Lloyds Ins. Co., 484 S.W.3d 459, 468 (Tex. App.—Houston [1st Dist.] 2015, pet. denied); Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex. App.—Houston [1st Dist.] 2002, pet. denied). "A breach of contract occurs when a party fails or refuses to do something it has promised to do." AKIB Constr. Inc. v. Shipwash, 582 S.W.3d 791, 806 (Tex. App.—Houston [1st Dist.] 2019, no pet.).
Our objective in interpreting contracts is to ascertain and effectuate the intentions of the parties as expressed in the contract. Yowell v. Granite Operating Co., 620 S.W.3d 335, 353 (Tex. 2020). Courts cannot rewrite the contract or add to its language under the guise of interpretation. Fischer v. CTMI, L.L.C., 479 S.W.3d 231, 239 (Tex. 2016). On the contrary, we must enforce the agreement as written. See BlueStone Nat. Res. II, LLC v. Randle, 620 S.W.3d 380, 387 (Tex. 2021).
To ascertain the parties' intentions, we examine the entire agreement in an effort to harmonize and give effect to all provisions of the contract so that none will be rendered meaningless. Nettye Engler Energy, LP v. BlueStone Nat. Res. II, LLC, 639 S.W.3d 682, 690 (Tex. 2022). Whether a contract is ambiguous is a question of law for the court. ConocoPhillips Co. v. Koopmann, 547 S.W.3d 858, 874 (Tex. 2018). "A contract is ambiguous when its meaning is uncertain and doubtful or is reasonably susceptible to more than one interpretation." Id. When the contract has a certain and definite legal meaning or interpretation, it is unambiguous, and the court construes it as a matter of law. Nettye Engler Energy, 639 S.W.3d at 690.
C. Contract Interpretation
USPLS argues that the January 19, 2017 email exchange constitutes a binding, "exclusive agent" contract that barred Gaas and Shank from engaging in employment discussions with KTS without utilizing PLS. Gaas and Shank dispute that the January 19 email exchange constituted a binding contract. Assuming arguendo that the email exchange was a binding contract, we hold that this exclusive-agency contract did not bar Gaas and Shank from directly engaging in employment discussions with law firms without utilizing PLS.
Our holding turns on the longstanding distinction between contracts that confer an "exclusive agency" benefit and those that confer an "exclusive right to sell." See Alba Tool & Supply Co. v. Indus. Contractors, 585 S.W.2d 662, 664 (Tex. 1979). The Texas Supreme Court has held that exclusive-agency arrangements do not, on their own, prohibit principals from acting on their own behalf. Id. The court explained this distinction in the familiar context of a real estate transaction:
At the outset we recognize that there is a distinction between an "exclusive agency" and an "exclusive right to sell." In an exclusive agency, the principal has a right to sell without the payment of a commission to the agent. Under an exclusive right to sell, the principal must pay a commission to the agent regardless of the fact that the principal has arranged the sale of the product.Id. (internal citations omitted).
In the ensuing decades, Texas intermediate courts have reiterated this distinction both within and outside of the real estate context. See, e.g., Silva v. Reliant Energy Power Generation, Inc., No. 14-09-00809-CV, 2011 WL 782036, at *4 (Tex. App.—Houston [14th Dist.] Mar. 8, 2011, no pet.) (mem. op.) (holding, in context of equipment sale, that "fact that a person is an exclusive agent, by itself, does not deprive the principal of the right to sell without paying a commission to the agent"); Wade Oil & Gas, Inc. v. Telesis Operating Co., 417 S.W.3d 531, 537 (Tex. App.—El Paso 2013, no pet.) ("There is an important distinction between an 'exclusive agency' and an 'exclusive right to sell.' If an owner gives the broker an exclusive right to sell, the owner is precluded from selling the property independent from the broker. . . . In an exclusive agency, the principal has a right to sell without the involvement of the agent and the principal would not be required to pay a commission to the agent.") (citations omitted).
Applying this caselaw to the facts, the January 19 email gives PLS the right to an exclusive agency, but it does not give PLS an exclusive right to negotiate an employment relationship for Gaas and Shank. That email states in relevant part:
This confirms that the undersigned—Pat Gaas, Dan [Shank] and Charles Conrad, individually and as representatives of a group of lawyers with whom we currently practice—agree to work with [PLS] exclusively in connection with our group's search for legal employment with a new law firm. PLS will be our exclusive agent with respect to all firms with which we engage in employment discussions for the period of one year from the date hereof, except those firms we have listed below with which we have engaged in direct employment discussions on our own behalf within the past six months.(Emphasis added). The term "exclusive agent" plainly conveys the parties' intention to create an exclusive agency relationship. By contrast, nothing in this email gives PLS the exclusive right to negotiate an employment relationship for Gaas and Shank—that is, an exclusive right to "sell" their services to a law firm.
No firms were listed below in the offer email from PLS.
USPLS argues that the phrase "PLS will be our exclusive agent with respect to all firms" transforms the contract from a mere exclusive agency agreement into a contract that also confers an exclusive right to negotiate an employment relationship for Gaas and Shank. (Emphasis added). The "all firms" language, however, is a clarification on the extent of the exclusive agency relationship; it does not confer the separate and distinct benefit of an exclusive right to sell.
Likewise, specifically excluding previously contacted firms from the agreement does not transform the exclusive agency contract into an exclusive right to sell. Silva v. Reliant Energy Power Generation, Inc. is instructive on this point. See 2011 WL 782036, at *4. In that case, Silva sued Reliant to recover a commission that Reliant allegedly owed him under a Turbine Brokerage Agreement. Id. at *1. Under the agreement, Reliant appointed Silva as its agent to sell certain turbines and agreed to pay Silva a commission under certain circumstances. Id. During the term of this agreement, Reliant sold the turbines to Turbine Energy Solutions, LLC, and Silva sought a commission from Reliant based on this sale. Id. Silva sent an invoice to Reliant, but Reliant rejected it and refused to pay Silva any commission. Id.
The Turbine Brokerage Agreement stated in relevant part:
This is an exclusive agreement. Notwithstanding such exclusivity, this Agreement does not preclude [Reliant] from selling the Equipment to
any of the parties, or affiliates of the parties set forth in Exhibit 2 without any consent of or obligations to [Silva]. As such, [Reliant] shall be free and without any obligations to [Silva] to advertise, market, solicit, enter into contracts or engage in negotiations with the parties set forth In exhibit 2 or their affiliates regardless of geographical location, and shall be free to consummate a transaction on the sale of the Equipment worldwide with anybody at any time Without notifying [Silva].Id. at *2. Silva argued that Turbine Energy was not listed on Exhibit 2, and therefore he was entitled to a commission on the sale of the turbines by Reliant to Turbine Energy. Id. at *4. The Fourteenth Court of Appeals disagreed that Silva was entitled to a commission even though Turbine Energy was not listed on Exhibit 2 to the agreement. Id. The court determined that the language in the agreement "stating that Reliant can sell to certain entities without owing any compensation to Silva does not necessarily mean that Reliant must pay compensation to Silva upon a sale to any other entity." Id. The court ultimately concluded that the contract was unambiguous on this point. Id. at *5.
USPLS's cases highlight the distinction between contracts that confer a mere exclusive agency—like this one—and those that convey an exclusive right to sell. In Popplewell v. Buchanan, for example, the agent's assignee prevailed because the contract gave the agent not merely an exclusive agency but also the "exclusive right of sale." 204 S.W. 874, 874, 875 (Tex. App.—Fort Worth 1918, writ ref'd). In French v. Love, the agent prevailed because the contract stated that the agent would be compensated "no matter by whom [the] sale is effected." 281 S.W. 301, 302 (Tex. App.—Austin 1926, no writ). Similarly, in Klemp Corp. v. Thompson, the agent prevailed because the contract entitled the agent to a commission on "all sales" of the product "in Houston." 402 S.W.2d 257, 260 (Tex. App.—Waco 1966, no writ). Finally, in Law Realty, Inc. v. Pagliarulo, a real estate broker prevailed because a homeowner agreed in clear and unambiguous language to "refer all others interested in the property to the broker" during the contract period, and "anyone who actually purchased the house would have to be another interested in it." See 385 So.2d 1093, 1094 (Fla. Dist. Ct. App. 1980).
Nothing in the January 19 email entitled PLS to a commission on all employment placements regardless of who negotiated the placement. As such, the contract confers a mere exclusive agency. An exclusive agency—without more— does not preclude the principal from making a sale directly. Nor does it have the legal effect of prohibiting Gaas and Shank from dealing directly with law firms in their employment search. Consequently, there is no breach of contract as a matter of law.
D. Damages
Alternatively, even if the contract did have the legal effect of prohibiting Gaas and Shank from dealing directly with law firms in their employment search, USPLS has not presented any evidence of non-speculative damages.
On appeal, USPLS argues that Gaas and Shank rendered its performance under the contract impossible, which entitles it to the maximum compensation it would have received had the contract been fully performed. USPLS also argues that the fact that it sustained damages is reasonably certain even if the amount of its damages is uncertain. Notably, USPLS explicitly argues that it does not seek to recover a hypothetical fee that KTS would have paid for PLS's services.
Gaas and Shank respond that USPLS has disproven and disclaimed its damages. They argue that USPLS seeks only benefit-of-the-bargain damages, but the bargain was for USPLS's "sole compensation" under the contract to be paid by a third-party law firm client of PLS's that eventually hires Gaas and Shank, not compensation from Gaas and Shank. They argue that there is no record evidence of the fee KTS would have been willing to pay for hiring Gaas and Shank. Rather, Gaas and Shank argue that USPLS's damages theory relies on preliminary, non-binding letters from two other law firms with which PLS negotiated on Gaas's and Shank's behalf but which ultimately did not make an offer to Gaas or Shank. They further argue that USPLS's damages are speculative and legally impermissible.
"The goal in measuring damages for a breach-of-contract claim is to provide just compensation for any loss or damage actually sustained as a result of the breach." AKIB Constr., 582 S.W.3d at 808 (quoting Parkway Dental Assocs., P.A. v Ho & Huang Props., L.P., 391 S.W.3d 596, 607 (Tex. App.—Houston [14th Dist.] 2012, no pet.)). "The normal measure of damages for breach of contract is the expectancy, or benefit of the bargain, measure, which seeks to restore the injured party to the economic position it would have occupied had the contract been fully performed." Id. A party may not recover damages for breach of contract if the damages are remote, contingent, speculative, or conjectural. S. Elec. Servs., Inc. v. City of Houston, 355 S.W.3d 319, 324 (Tex. App.—Houston [1st Dist.] 2011, pet. denied) (op. on reh'g).
USPLS relies on the following provision from the January 19 email as the basis for its damages award:
PLS has advised us that its sole compensation is a contingent fee paid by its law firm client in the event it acquires all or part of our group, and we therefore agree promptly to take whatever steps are necessary or appropriate to acknowledge and confirm the exclusive nature of our agency with PLS.
USPLS's pleadings allege that Gaas and Shank breached this contract by engaging in employment discussions with KTS without using PLS as their agent. Because of this breach, USPLS's pleadings allege that its "damages are the maximum amount of compensation that [it] would have received if [Gaas and Shank] had not rendered [its] performance under the Contract impossible by destroying the subject matter of the Contract and eliminating [USPLS's] entire consideration under the Contract." USPLS makes similar arguments on appeal, contending that it is entitled to damages as if the contract had been fully performed.
Under the parties' agreement, PLS agreed to be Gaas's and Shank's employment agent, and Gaas and Shank agreed to work "exclusively" with PLS as their "exclusive agent with respect to all firms with which [they] engage in employment discussions" during the contract period. Gaas and Shank further agreed "to take whatever steps are necessary or appropriate to acknowledge and confirm the exclusive nature of [their] agency with PLS." Importantly, however, Gaas and Shank did not agree to compensate PLS at all. The email states that PLS's "sole compensation is a contingent fee paid by its law firm client in the event it acquires all or part of our group . . . ." USPLS does not dispute that Gaas and Shank were not required to compensate it for its agency services. Indeed, USPLS emphasizes that Gaas and Shank "are required to pay precisely zero" under the parties' agreement, from which the "amount of Compensation is excluded." Instead, as USPLS acknowledges, PLS's fee for performing its obligations under the agreement with Gaas and Shank would be negotiated in a separate fee agreement with its law firm client, an agreement to which Gaas and Shank would not be parties.
It is undisputed that USPLS seeks only benefit-of-the-bargain damages. Such damages would compensate USPLS for any loss or damage that it actually sustained. See AKIB Constr., 582 S.W.3d at 808. This measure of damages "seeks to restore the injured party to the economic position it would have occupied had the contract been fully performed." Id. Had the parties' agreement been fully performed to USPLS's satisfaction, USPLS's economic position would simply be the possibility of obtaining its "sole compensation" by separate agreement with "its law firm client."
The parties' agreement does not guarantee any compensation to USPLS, much less the maximum amount it might have received. See Trammell Crow Co. No. 60 v. Harkinson, 944 S.W.2d 631, 634 (Tex. 1997) ("The exclusive representation agreement, however, does not require the Hunt defendants, or any party, to pay Harkinson a commission. Accordingly, the Crow defendants' actions did not as a matter of law interfere with any contractual right to a commission."). Thus, USPLS is incorrect that the proper measure of damages is the maximum amount that it would have earned under the agreement. The only compensation that PLS bargained for with Gaas and Shank is the possibility of entering into a separate, future agreement with a law firm that eventually hired them. See id. ("The loss of the opportunity to negotiate exclusively on behalf of Hunt Products in this instance translates only into the loss of the expectancy of receiving a commission at the end of the lease negotiations.").
Although USPLS does not specifically allege damages in the form of lost profits, the parties agree that the reasonable certainty rule generally applicable to lost profits applies here. Benefit-of-the-bargain damages include lost profits that are proved with reasonable certainty. Phillips v. Carlton Energy Grp., LLC, 475 S.W.3d 265, 278 (Tex. 2015). Lost profits may be either direct damages—profits lost on the contract itself—or consequential damages—profits lost on other contracts resulting from the breach. AZZ Inc. v. Morgan, 462 S.W.3d 284, 289 (Tex. App.—Fort Worth 2015, no pet.); Hoppenstein Props., Inc. v. McLennan Cnty. Appraisal Dist., 341 S.W.3d 16, 21 (Tex. App.—Waco 2010, pet. denied).
To recover lost profit damages, a plaintiff must show the loss by competent evidence and with reasonable certainty. Phillips, 475 S.W.3d at 278-80; Peterson Grp., Inc. v. PLTQ Lotus Grp., L.P., 417 S.W.3d 46, 64 (Tex. App.—Houston [1st Dist.] 2013, pet. denied). Whether a party has reasonably certain evidence of lost profits is a fact-intensive inquiry. Phillips, 475 S.W.3d at 279; Peterson Grp., 417 S.W.3d at 65. "As a minimum, opinions or estimates of lost profits must be based on objective facts, figures, or data from which the amount of lost profits can be ascertained." Phillips, 475 S.W.3d at 279 (quoting Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 84 (Tex. 1992)). This proof "need not be exact, but neither can it be speculative." Id. at 278.
All of USPLS's summary judgment evidence focuses on the fee it might have negotiated under a separate agreement with a third-party law firm. USPLS relied on Wilson's deposition in which he testified that Gaas and Shank made it impossible for PLS to perform under the contract. It also relied on Wilson's testimony that PLS's economic damages were $1.2 million. Wilson supported his testimony with fee agreements that PLS supposedly entered into with two other law firms that never made binding offers of employment to Gaas or Shank. The agreements were to pay PLS a percentage of the hired lawyer's starting salary, which differed depending on whether the lawyer was a partner or an associate and whether the firm hired only one or several of the lawyers represented by PLS. The only dollar amount listed in these fee agreements is a cap of $1.2 million in the signed agreement and, in the unsigned one, a stipulation that if "the projected fee for a group exceeds $1,000,000," then the percentages would not apply and instead the firm "will negotiate the amount of the fee." At best, these documents place a cap on what PLS could have earned from either of these law firms if they hired Gaas and Shank.
One of these fee agreements is not signed by the law firm.
USPLS also relied on letters from each of these two law firms listing proposed compensation for Gaas and Shank at each law firm. However, both of these offers expressly purported to be non-binding proposals intended to facilitate further discussion. Moreover, these proposed salaries for both Gaas and Shank differed by nearly $15,000 per year.
These documents do not fill the evidentiary gap. There is no evidence that either firm extended a binding offer to either Gaas or Shank. Likewise, there is no evidence showing that these proposed salaries were in ranges acceptable to Gaas or Shank. Nor is there evidence that these salaries were comparable to their salaries either at their prior law firm or at KTS.
Even if the salaries were comparable, there is no evidence showing that PLS reasonably could have expected to be compensated by multiplying the salaries listed in the non-binding proposals by the percentages listed in PLS's fee agreements with the firms. USPLS presented no evidence of compensation that it had earned in the past under similar circumstances. See Bowen v. Robinson, 227 S.W.3d 86, 97 (Tex. App.—Houston [1st Dist.] 2006, pet. denied) (stating that witness may prove lost profits by, for example, "testifying as to what his profit would have been, based on his knowledge of the cost of performance of each element of the contract and subtracting the total of such costs from the contract price") (citation omitted). There is simply no evidence of objective facts, figures, or data from which PLS's compensation from a third party for services PLS rendered to Gaas and Shank can be ascertained. See Phillips, 475 S.W.3d at 279; Peterson Grp., 417 S.W.3d at 65.
Furthermore, it was possible that USPLS would have earned nothing even for full performance of the contract to its satisfaction. USPLS conceded at oral argument that it would not be entitled to compensation if, for example, a law firm that hired Gaas or Shank had a policy against paying employment recruiting fees. Thus, the economic position that USPLS would have been in had the contract been fully performed to USPLS's satisfaction is uncertain: USPLS could have earned $0 or up to $1.2 million. See AKIB Constr., 582 S.W.3d at 808 (stating that benefit-of-bargain damages seek to restore injured party to economic position it would have occupied had contract been fully performed). Indeed, when pressed about how much of a commission he might have negotiated with KTS, Wilson responded: "I cannot speculate about . . . that."
Far from establishing reasonably certain damages for breach of the contract, USPLS's potential to earn no fee at all for full performance of the contract indicates that it had only a "mere hope for success" in obtaining compensation from a third party for its agreement to represent Gaas and Shank. See Horizon Health Corp. v. Acadia Healthcare Co., 520 S.W.3d 848, 860 (Tex. 2017) ("When the evidence supporting a claim for lost profits damages is largely speculative or a mere hope for success, lost profits have not been established with reasonable certainty."). As such, USPLS's damages are speculative. See id.; Tex. Instruments, Inc. v. Teletron Energy Mgmt., Inc., 877 S.W.2d 276, 279 (Tex. 1994) (stating that "anticipated profits cannot be recovered where they are dependent upon uncertain and changing conditions, such as market fluctuations, or the chances of business, or where there is no evidence from which they may be intelligently estimated").
We hold that there is no evidence of either the fact or the amount of USPLS's damages, an essential element of its breach of contract claim. See Tex. R. Civ. P. 166a(i); Title Res., 589 S.W.3d at 230. Therefore, we conclude that the trial court did not err in granting Gaas's and Shank's motion for partial summary judgment and in denying USPLS's motion for partial summary judgment. We overrule USPLS's issues.
Because our holding is dispositive of this appeal, we decline to consider the parties' remaining issues. See Title Res. Guar. Co. v. Lighthouse Church & Ministries, 589 S.W.3d 226, 231 (Tex. App.—Houston [1st Dist.] 2019, no pet.) (stating that, when summary judgment order does not specify grounds for ruling, we will affirm order if any theory advanced in trial court is meritorious); Tex.R.App.P. 47.1.
Conclusion
We affirm the judgment of the trial court.