Opinion
No. 01-03-00924-CV
Opinion Issued October 6, 2005.
On Appeal from the County Civil Court at Law No. 2, Harris County, Texas, Trial Court Cause No. 750,537.
Panel consists of Justices NUCHIA, JENNINGS, and ALCALA. Justice ALCALA, dissenting.
MEMORANDUM OPINION ON REHEARING
We deny the parties' motion for rehearing. Tex.R.App.P. 49.3. We withdraw our June 2, 2005 opinion, substitute this opinion in its place, and vacate our June 2, 2005 judgment.
Appellee, L.M.S.C., Inc., d/b/a The Dental Solution (TDS), sued appellants, Mary Williams, D.D.S. (Mary) and Russell Williams, D.D.S. (Russell), for breach of contract and, alternatively, in quantum meruit, to recover an unpaid placement fee. A jury found that Mary and Russell had breached the contract and were also liable in quantum meruit and, therefore, awarded TDS $6,269.82 in actual damages, $3,212.55 in prejudgment interest, and $14,652.50 in attorney's fees. The trial court rendered judgment on the verdict. In six issues, Mary and Russell challenge the legal sufficiency of the evidence supporting the verdict.
Although Mary and Russell state seven issues for our review, they present their arguments in the body of their brief in six issues, and we address them accordingly.
We affirm.
Factual and Procedural Background
TDS, a business owned by Lisa Carter, is a placement service that places dental personnel with dentists. Mary and Russell, who are related by marriage, practiced dentistry together at 1003 Wirt Road, Houston, Texas, under an "office-sharing arrangement" during the time periods pertinent to this case. On December 4, 1997, Mary signed a "Placement Agreement" (the "Agreement) with TDS. The first paragraph of the Agreement, provided, in part:
This agreement is made as of the date indicated below by and between THE DENTAL SOLUTION (hereinafter referred to as "TDS") . . . and the undersigned Dentist(s), Partnership of Dentists, Professional Corporation, or owners of a Dental Office (hereinafter referred to as "CLIENT"). . . . TDS is in the business for referring for temporary and permanent employment — DENTAL HYGIENISTS, DENTAL ASSISTANTS or FRONT DESKS (DENTAL ASSISTANTS and FRONT DESKS hereinafter referred to as "DENTAL ASSISTANTS"). . . . DENTAL HYGIENISTS AND DENTAL ASSISTANTS referred to CLIENT by TDS shall sometimes be collectively referred to as "SERVICE PROVIDERS."
The Agreement also provided for (1) the amount of the daily compensation that a TDS client must pay to the dental hygienists, assistants, and administrative employees who are placed by TDS with the client, and (2) the amount of the placement fee owed to TDS for the temporary placement of dental hygienists, dental assistants, and administrative workers for an eight-hour day and for a four-hour day. Furthermore, Paragraph 9 provided for the amount of the placement fee owed to TDS for the permanent placement of TDS employees and stated, in part:
In the event CLIENT employs, joint ventures with, associates with or in any manner affiliates with a SERVICE PROVIDER or enters into any contractual relationship with a SERVICE PROVIDER referred to the CLIENT by TDS directly or indirectly through any TDS placement, on a full time basis during the term of this Agreement and for a period of one (1) year after the date of termination of this Agreement, CLIENT agrees to pay TDS a placement fee equal to twelve (12%) of the yearly gross compensation to be paid to the SERVICE PROVIDER. For purposes of this Agreement, "Gross Compensation" shall include all of the following paid to DENTAL HYGIENIST or DENTAL ASSISTANT: (1) all salary, (2) bonuses, and (3) the value of all benefits taken in lieu of salary. There will be a guaranteed ninety (90) day pro-rated return of the PLACEMENT FEE if the permanent employment of DENTAL HYGIENIST or DENTAL ASSISTANT is terminated prior to ninety (90) days after permanent employment is commenced. The permanent PLACEMENT FEE will be due in full prior to the commencement of permanent employment. In the event a placement fee is earned by TDS for a permanent placement, CLIENT is not entitled to any credit for placement fees previously paid to TDS for temporary placements of the SERVICE PROVIDER in question.
Moreover, Paragraph 16 provided:
The Compensation Rates and Placement Fees are subject to change. TDS will provide CLIENT with thirty (30) days written notice of a change in Compensation Rates or Placement Fees. In the event CLIENT does not terminate this Agreement within thirty (30) days of TDS sending such notice to CLIENT, this Agreement will automatically be deemed to be amended to include the new Compensation Rate or Placement Fees.
Lisa Carter, the owner of TDS, testified that, following the procedure set forth in Paragraph 16, TDS and Mary and Russell amended the Agreement when TDS sent two revised fee schedules to Mary and Russell, which were effective May 1, 1998, and June 1, 1999, respectively.
The two fee schedules stated that they "serve as an addendum to any existing contract" and provided for the fees due to TDS for the placement of "DENTIST[S]," as well as for the fees owed for the placement of dental hygienist and assistants. Additionally, the May 1, 1998 fee schedule stated that the "PERMANENT PLACEMENT FEE" was "12% yearly gross," and the June 1, 1999 fee schedule stated that the "PERMANENT PLACEMENT FEE" fee was "13% yearly gross." Neither Russell nor Mary terminated the Agreement within 30 days after receiving the schedules.
After the Agreement was signed, beginning in December 1997, TDS began to place dental workers at the Wirt dental office, for which Russell testified that he held the lease in only his name from 1985 to 2001. TDS first placed Diana Flanagan at the Wirt dental office on a temporary basis as a dental hygienist beginning in June 1998. Thereafter, TDS placed Flanagan at the Wirt dental office eight more times as a dental hygienist on a temporary basis. It is undisputed that, from June 1998 to August 1999, Russell paid all the placement fees due to TDS for the temporary placement of Flanagan as a dental hygienist. It is also undisputed that, after TDS sent the two revised fee schedules to the Wirt office, Russell paid the increased placement fees to TDS for the placement of temporary dental workers. Russell testified that Mary received both revised fee schedules, that he was aware of the fee schedules, and that he paid under the new terms of the fee schedules.
From 1997 to 2000, TDS placed over 60 temporary dental workers at the Wirt office.
Carter testified that, around August 31, 1999, Flanagan called her to explain that Flanagan would no longer be available to be placed by TDS because she was going to work permanently for Russell and Mary beginning August 31, 1999. Russell testified that Flanagan's last day working as a dental hygienist at the Wirt office was August 19, 1999, because she had become licensed to practice as a dentist on or about September 1, 1999. Thereafter, Flanagan practiced at the Wirt office as a dentist, not as a dental hygienist. Russell testified that, after August 1999, he had a contract with Flanagan for her to practice at the office as a dentist, that Flanagan had the same type of expense-sharing agreement he had with his other dentists practicing in his office, and that, from August 31, 1999, to August 31, 2000, he paid Flanagan about $48,383.28 for the work that she performed as a dentist.
Carter testified that, during a phone conversation that occurred some time in August 1999, Russell told her that Mary had a contract with TDS, but that he did not, and that, therefore, he was not obligated to pay any permanent placement fee. Furthermore, Carter explained that Russell told her that, after Flanagan had told him that a permanent placement fee would be involved in hiring Flanagan as a permanent candidate because TDS had originally sent her to the office, Russell requested copies of the Agreement so that his attorney, who was also his brother-in-law, could "review them, to see if there is a loophole to avoid the fee." Carter further explained that, because Flanagan had gone to work at Russell's and Mary's office on a permanent, full-time basis, TDS was no longer able to place Flanagan for her services.
Regarding the Agreement and the two fee schedules, Carter testified that the Agreement and the revised fee schedules had always applied to the placement of dentists. On cross-examination, Carter agreed that, although the Agreement mentioned the word "dental hygienist" 40 times and the word "dental assistant" 37 times, the Agreement did not "contemplate or mention the word placement of a dentist."
Russell testified that he had first seen the Agreement some time after August 1999, that he had not understood that the two fee schedules were a part of the original contract, and that he had thought the daily placement fees for temporary placements were paid pursuant to an oral agreement between TDS and Mary. However, Russell also testified that, to pay TDS its fees, he used invoices sent by TDS, the two revised fee schedules, and Mary's explanation of the fees. However, Russell later testified that he only learned of the "addenda" through discovery, and that, before Flanagan became licensed to practice as a dentist, he paid the daily placement fees to TDS and Flanagan's wages based on what he had learned from Mary and from invoices that he had received from TDS.
Regarding Russell's and Mary's relationship, Carter testified that she had understood the contract to be between TDS and the "association of Dr. Russell and Mary Williams." Regarding his professional relationship with the other dentists practicing in his dental office, including Mary and Flanagan, Russell testified that he had "some type of contract with everyone," that all the services performed from the office were billed in his name, and that it was his practice to retain 60 percent of revenues from services performed to pay expenses for the office and to disburse 40 percent of revenues back to the dentists practicing in his office. However, regarding his professional relationship with Mary, Russell testified that he became "affiliated" with Mary after she graduated from dental school around 1996 or 1997 when Mary began her dental practice in his dental office. Russell further testified that he had never had a partnership agreement with Mary, that he did not form a professional corporation with her, that Mary had no ownership interest in his dental office or practice, that Mary had maintained her own malpractice insurance, and that Mary never had authority to sign checks for his office. However, he also explained that he and Mary had an expense-sharing agreement and that he had the same type of agreement with all his associates.
Mary testified that, although she signed the Agreement, she did not sign it on Russell's behalf and that she and Russell had not formed a partnership. However, during cross-examination, Mary indicated that, before she left the office in 2001, she and Russell had had an agreement "to share income and expenses," but she explained that she was "just an associate" and not a partner. Furthermore, Mary testified that, when she called TDS for temporary placements, she was calling "on behalf of the office."
The case was submitted to the jury in broad form questions. Question Number One asked the jury, "Did any of the following fail to comply with the terms of the agreement with The Dental Solution?," to which the jury answered, "Yes," for both Mary and Russell. Question Number Three asked the jury, "Did The Dental Solution provide compensable work for Russell Williams?," to which the jury answered, "Yes." The trial court rendered judgment on the verdict. Mary and Russell filed motions to disregard the jury's findings, for judgment notwithstanding the verdict, and for a new trial. The trial court overruled the motions.
Waiver
We note that, initially, TDS argues that Russell and Mary waived their complaints as to all the findings against them by failing to object to the submission of those issues. However, "[a] claim that the evidence was legally or factually insufficient to warrant the submission of any question may be made for the first time after verdict. . . ." Tex. R. Civ. P. 279. It is well settled that an attack based on legal sufficiency of evidence to support a jury finding may be preserved for appeal in any of five ways: (1) objection to the charge; (2) motion for directed verdict; (3) motion to disregard the finding; (4) motion for judgment notwithstanding the verdict; or (5) motion for new trial. Cecil v. Smith, 804 S.W.2d 509, 510-11 (Tex. 1991). Here, Russell and Mary challenged the legal sufficiency of the evidence after the verdict in their motions to disregard the jury's findings, for judgment notwithstanding the verdict, and for a new trial. Accordingly, we hold that Russell and Mary properly preserved their issues for our review.
Standard of Review
When the party without the burden of proof challenges the legal sufficiency of the evidence, we consider all of the evidence in the light most favorable to the prevailing party, indulging every reasonable inference in that party's favor. Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 285-86 (Tex. 1998); Ned v. E.J. Turner Co., Inc., 11 S.W.3d 407, 408 (Tex.App.-Houston [1st Dist.] 2000, pet. denied). If there is more than a scintilla of evidence to support the finding, we must uphold it. Formosa Plastics Corp. USA v. Presidio Eng'rs Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998). "When the evidence offered to prove a vital fact is so weak as to do no more than create a mere surmise or suspicion of its existence, the evidence is no more than a scintilla and, in legal effect, is no evidence." Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004) (quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)). However, if the evidence supplies some reasonable basis for differing conclusions by reasonable minds as to the existence of a vital fact, then there is some evidence. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003).
The Agreement
In their first three issues, Mary and Russell argue that there is "[n]o evidence and legally insufficient evidence to support the jury answers" because (1) "the contract covers only the placement of dentist assistants and hygienists and not dentists"; (2) the May 1, 1998 fee schedule "sent seven months post-signing of contract cannot be enforced since no new or additional consideration was given for the modification and there existed no meeting of the minds concerning its terms"; and (3) the "`Placement Service Agreement' is unenforceable since it fails to spell out essential terms."
Terms of Placement Agreement
In their first issue, Mary and Russell argue that "[t]he jury finding of breach of contract should be reversed and rendered in favor of Appellants" because "it is undisputed that the underlying contract, sought to be enforced, applied only to the placement of dental hygienists and/or assistants and not to dentists" and that "[t]he plain language of the contract spells out only the amounts due for [Flanagan's] work as a dental hygienist."
When a court concludes that contract language can be given a certain or definite meaning, then the language is not ambiguous, and the court is obligated to interpret the contract as a matter of law. DeWitt County Elec. Co-op., Inc. v. Parks, 1 S.W.3d 96, 100 (Tex. 1999); Markert v. Williams, 874 S.W.2d 353, 354 (Tex.App.-Houston [1st Dist.] 1994, writ denied). The trial court must enforce an unambiguous contract as written. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). The rules of contract interpretation require us to give the language in an agreement its plain grammatical meaning unless to do so would defeat the intent of the parties. Parks, 1 S.W.3d at 101; Dorsett v. Cross, 106 S.W.3d 213, 219-20 (Tex.App.-Houston [1st Dist.] 2003, pet. denied).
Here, Paragraph 9 of the Placement Agreement discusses TDS's right to a permanent placement fee upon a full-time arrangement between a TDS employee with a TDS client. Paragraph 9 expressly provides that a TDS client agrees to pay to TDS a permanent placement fee whenever a TDS client employs, joint ventures with, associates with or in any manner affiliates with a service provider or enters into any contractual relationship with a service provider referred to the client by TDS directly or indirectly through any TDS placement, on a full time basis during the term of this Agreement and for a period of one (1) year after the date of termination of this Agreement. . . .
The introductory paragraph defines "service provider" as either a dental hygienist or dental assistant and also provides that "TDS is in the business for referring for temporary and permanent employment — dental hygienists, dental assistants or front desks. . . ." The Agreement does not specifically include a "dentist" a "service provider." However, the two fee schedules, which provide that they are addenda to any existing contract, do provide for the fees due to TDS for the placement of dentists, as well as for the fees due for placement of dental hygienists and assistants. Additionally, both the Agreement and the fee schedules provide for a percentage of a service provider's gross compensation to be paid to TDS upon permanent placement with a TDS client. Therefore, we conclude that the Placement Agreement with the addenda provide for the placement of dentists.
Modification of the Agreement
In their second issue, Russell and Mary argue that the two fee schedules did not modify the Agreement because "no new consideration was given for the fee schedules." Moreover, Russell argues that there was no "meeting of the minds" between himself and TDS.
Parties having the power to make a contract have the power to modify the contract. Hathaway v. Gen. Mills, Inc., 711 S.W.2d 227, 228 (Tex. 1996). A modification is a change or alteration that introduces new elements into details or cancels some of them. Moser Co. v. Awalt Indus. Props., Inc., 584 S.W.2d 902, 906 (Tex.Civ.App.-Amarillo 1979, no writ). A modification requires that there exists a meeting of the minds of the parties, and the terms of the original contract cannot be unilaterally remade by one of the parties. Mandril v. Kasishke, 620 S.W.2d 238, 244 (Tex.Civ.App.-Amarillo 1981, writ ref'd n.r.e.). Furthermore, the modification must be supported by new consideration. Walden v. Affiliated Computer Servs., Inc., 97 S.W.3d 303, 315 (Tex.App.-Houston [14th Dist.] 2003, pet. denied). A party relying on a modification has the burden of affirmatively pleading and proving the modification and its acceptance by the other party. Stowers v. Harper, 376 S.W.2d 34, 39 (Tex.Civ.App.-Tyler 1964, writ. ref'd n.r.e.). Whether a contract has been modified is a question of fact. Hathaway, 711 S.W.2d at 228-29.
We note, initially, that TDS argues that Russell and Mary waived their lack-of-consideration argument because they did not file a verified denial in support of their answer. See TEX. R. CIV. P. 93(9). However, absence of a verification is a defect that is waived if not raised in the trial court. Wetzel v. Sullivan, King Sabom, P.C., 745 S.W.2d 78, 80 (Tex.App.-Houston [1st Dist.] 1988, no writ). Here, there is no evidence in the record that TDS brought the lack of verification to the trial court's attention.
Consideration may consist of a benefit that accrues to one party or, alternatively, a detriment incurred by the other party. Roark v. Stallworth Oil Gas, Inc., 813 S.W.2d 492, 496 (Tex. 1991); Iacono v. Lyons, 16 S.W.3d 92, 94 (Tex.App.-Houston [1st Dist.] 2000, no pet.). Mary and Russell note that Lisa Carter testified that she did not "pay either Mary Lyn Williams or Dr. Russell Williams" for any change to the Agreement. On the other hand, TDS contends that "the consideration occurred when neither Mary nor Russell terminated the placement agreement within thirty (30) days of their receipt of either new fee schedule[s] as required by Paragraph 16 of the placement agreement or by the mutual exchange of performances under each fee schedule."
Here, we hold that TDS gave additional consideration to support the changes made to the Agreement. The consideration provided by TDS was the additional service of the temporary and permanent placement of dentists with Mary and Russell. The Agreement itself expressly notes that TDS "is in the business of referring for temporary and permanent employment" service providers for its clients. In exchange for TDS's additional service of placing dentists, the two addenda plainly provide for the daily and half-day compensation rates to be paid to placed dentists, the daily fees due to TDS for the daily placement of dentists, and, more importantly, the fee due to TDS for all permanent placements of dentists. Furthermore, as noted above, Carter explained that, because Russell and Mary hired Flanagan on a permanent basis, TDS was no longer able to place Flanagan with others for her services.
Meeting of the Minds
Regarding meeting of the minds, Russell asserts that he "never even knew about the proposed sweeping changes in the contract — much less consent[ed] to them." However, he further asserts that "[w]hen he first learned about the changes, he made clear that he did not agree to the terms."
The determination of whether there was a "meeting of the minds" is based upon an objective standard of what the parties said and did, and not on their alleged subjective states of mind. Addams v. Petrade Int'l, Inc., 754 S.W.2d 696, 717 (Tex.App.-Houston [1st Dist.] 1988, writ denied). Here, the record shows that both Mary and Russell were aware of the revised fee schedules and their terms. Both Carter and Russell testified that, after TDS sent both revised fee schedules to Mary and Russell, Russell paid the fees, pursuant to the new terms of the revised fee schedules, for the temporary placement of dental assistants and dental hygienists, including for the placement of Flanagan. See Joiner v. Elrod, 716 S.W.2d 606, 610 (Tex.App.-Corpus Christi 1986, no writ) (actual notice and consent to modification may be implied from behavior of parties when that behavior clearly establishes notice and consent). Furthermore, Russell testified that, in order to pay TDS its fees, in addition to the invoices sent by TDS, he (1) had used the revised fee schedules that were given to Mary by TDS and (2) had used Mary's explanation to him of what the fees were. This evidence contradicts Russell's assertions that he "never even knew" of the changes and "did not agree to the terms," and supports a reasonable inference, and the jury's implied finding, that Russell assented to the addenda's changes. Because there is more than a scintilla of evidence to support the jury's implied finding, we hold that the evidence was legally sufficient to establish a meeting of the minds between Russell and TDS in regard to the changes.
Essential Terms
In their third issue, Mary and Russell argue that the "Agreement is unenforceable since it fails to spell out essential terms." Specifically, Mary and Russell argue that the Agreement is unenforceable because (1) it "never contemplated the referral by [TDS] of dentists"; (2) "the contract remained silent with respect to the amount of the fee or how it would be calculated for a dentist placed in the office"; (3) "[i]n the unanticipated scenario where the agency made a referral of a dentist, the contract likewise failed to explain the minimum hourly compensation or the minimum number of hours that the Appellants could offer the dentist for each day of practice"; (4) "the contract failed to identify what the placement fee would be in the event that the Appellants hired the dentist on a permanent basis"; and (5) "[e]ven by combining the employment agreement with the unilaterally imposed fee schedule (which [TDS] contend[s] modified the contract), no way exists to calculate the fee due the agency given that Diana Flanagan, D.D.S. practiced dentistry independently under an office sharing agreement."
To be valid and binding, a contract must contain all essential terms and be sufficiently certain so as to define the parties' legal obligations. T.O. Stanley Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992); Nickerson v. E.I.L. Instruments, Inc., 874 S.W.2d 936, 939 (Tex.App.-Houston [1st Dist.] 1994, writ denied). An essential term is "one that the parties would have reasonably regarded, at the time of contracting, as a vitally important ingredient in their bargain." See Nelly v. Bankers Trust Co. of Texas, 757 F.2d 621, 628 (5th Cir. 1985) (applying Texas law).
In this case, the Agreement and the two revised fee schedules included the following terms: (1) a TDS client must pay the specified compensation to the dentists and dental hygienists who are placed by TDS; (2) a TDS client must pay the specified placement fees due to TDS for the placement of dentists, dental hygienists, dental assistants, and administrative workers for an eight-hour and four-hour day; (3) a TDS client must pay the temporary placement fees to TDS on a monthly basis; (4) TDS will provide monthly invoices to a TDS client; (5) a TDS client owes permanent placement fees to TDS when a TDS client provides full-time, permanent employment to a service provider; and (6) the permanent placement fee is due in full before the commencement of permanent employment. The terms noted above provide for the amount and for the due dates for the fees owed to TDS for the temporary and permanent placement of TDS employees with TDS clients. Thus, we hold that the Placement Agreement, as modified by the two revised fee schedules, contained the essential terms to constitute an enforceable contract.
Accordingly, we hold that there was legally sufficient evidence to support the existence of an agreement between TDS and Mary and Russell, which provided that a permanent placement fee would be owed to TDS if a TDS client "employ[ed], joint venture[d] with, associate[d] with or in any manner affiliated with . . . or enter[ed] into any contractual relationship on a full-time basis" with a TDS service provider. Furthermore, however, the evidence was undisputed that neither Mary nor Russell paid a permanent placement fee to TDS when Flanagan began to practice as a dentist on a full-time, permanent basis after August 31, 1999, at the Wirt dental office. We further hold that the evidence was legally sufficient to support the jury's finding that Mary and Russell breached their agreement with TDS.
We overrule Mary's and Russell's first, second, and third issues.
Attorney's Fees and Prejudgment Interest
In their fourth issue, Mary and Russell contend that, "[a]lternatively, the award for attorney's fees and prejudgment interest should be set aside given the ambiguity in the contract and the fact that the contract fails to specify when the annual placement fee (determined by the jury) was due." Specifically, they argue that TDS "has failed to establish the requisites for the recovery of attorney's fees or pre-judgment interest spelled out in Tex. Civ. Prac. Rem. Code § 38.002" because (1) "the judgment, signed by the trial court, simply ran the `contractual' interest starting thirty (30) days from the one-year anniversary date of the start of Diana Flanagan, D.D.S.' first year of dental practice," and (2) "the trial court's mixing of the initial contract with the supposed subsequent fee schedule and jury findings to arrive at a start date for running the interest represents a one, two, three punch to [Mary and Russell] who should not also now be required to pay for [TDS's] atttorney's fees and interest."
First, section 38.001(3) provides that a party may recover reasonable attorney's fees if the claim is for an oral or written contract. Tex. Civ. Prac. Rem. Code Ann. § 38.001(8) (Vernon 1997). Here, because we have concluded that the evidence was legally sufficient for the jury to determine that Mary and Russell breached their written contract with TDS, we hold that TDS, as the prevailing party, was entitled to an award of reasonable attorney's fees.
Second, a complaint regarding prejudgment interest must be preserved in the trial court, usually by a motion to amend or correct the judgment or by a motion for new trial. See Tex.R.App.P. 33.1(a); Allright, Inc. v. Pearson, 735 S.W.2d 240, 240 (Tex. 1987) (error regarding award of prejudgment interest must be preserved); Miller v. Kendall, 804 S.W.2d 933, 945 (Tex.App.-Houston [1st Dist.] 1990, no writ) (motion to amend or correct judgment or motion for new trial is proper vehicle for preserving error in judgment). In their brief, Mary and Russell do not explain how the trial court was made aware of their complaint regarding prejudgment interest. There is no evidence in the record that Mary and Russell filed a motion to amend or correct the judgment. Mary and Russell, in their motion for new trial, did note that TDS "merely plucked out of thin air" a date for prejudgment interest to begin to run. However, this comment, which does not comport with their argument on appeal, was made in a footnote and did not adequately make the trial court aware of their specific complaint regarding prejudgment interest. See Tex.R.App.P. 33.1(a). Thus, we hold that Mary and Russell waived their complaint regarding the calculation of prejudgment interest.
We overrule Mary's and Russell's fourth issue.
Causation
In their fifth issue, Mary and Russell argue that "[n]o evidence or insufficient evidence exists that any breach of the contract by Mary Williams, D.D.S. was a producing cause of damages given the uncontroverted testimony that she neither paid or received any money/benefit from Diana Flanagan, D.D.S.'s first year of dental practice."
In an action for a breach of contract, actual damages may be recovered when the loss is the natural, probable, and foreseeable consequence of the defendant's conduct. Mead v. Johnson Group, Inc., 615 S.W.2d 685, 687 (Tex. 1981); Winograd v. Clear Lake City Water Auth., 811 S.W.2d 147, 156 (Tex.App.-Houston [1st Dist.] 1991, writ denied). Here, the record shows that Mary signed the Placement Agreement with TDS. Furthermore, it is undisputed that neither Mary nor Russell paid TDS a permanent placement fee after Flanagan began practicing as a full-time dentist at Mary's and Russell's office. Therefore, we hold that there was sufficient evidence that Mary's breach of the Agreement, as modified by the fee schedules, was a cause of TDS's injury.
We overrule Mary's and Russell's fifth issue.
Quantum Meruit
In their sixth issue, Mary and Russell argue that "[n]o evidence or insufficient evidence exists that Russell Williams, D.D.S. or [Mary] Williams, D.D.S. was unjustly enriched by Diana Flanagan, D.D.S.' first year of dentistry."
Generally, when a valid, express contract covers the subject matter of the parties' dispute, there can be no recovery under a quasi-contract theory. Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 684 (Tex. 2000); Atlantic Lloyds Ins. Co. v. Butler, 137 S.W.3d 199, 227 (Tex.App.-Houston [1st Dist.] 2004, pet. denied) (op. on reh'g). When a valid agreement already addresses the matter, recovery under an equitable theory is generally inconsistent with the express agreement. Fortune Prod. Co., 52 S.W.3d at 684; Atlantic Lloyds Ins. Co., 137 S.W.3d at 227. Here, because we have concluded that a valid contract covers the subject matter of the parties' dispute, we need not address Mary's and Russell's issue regarding the legal sufficiency of the evidence to support the jury's findings concerning quantum meruit.
Conclusion
We affirm the judgment of the trial court.
DISSENTING OPINION
The undisputed evidence shows that placement fees for dentists were neither part of, nor contemplated by, the original agreement, and that the agency unilaterally amended that agreement to include those fees by means of addenda to the agreement. I therefore respectfully dissent from the majority opinion's holding that the evidence is legally sufficient to show that there was a meeting of the parties' minds that (1) placement of dentists was a matter encompassed by the written agreements and that (2) consideration supported modification of the agreement to add fees for placement of dentists. I would therefore sustain the Williamses' second issue on appeal.
No evidence in the record shows that a meeting of the minds occurred on what is clearly an essential, material term: that, in addition to placement fees for dental hygienists and dental assistants, the parties' agreement encompassed placement fees for dentists. See T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992) (holding that mutual assent, i.e., "meeting of the minds" concerning material, essential terms is prerequisite to formation of binding contract that court will enforce); Continental Cas. Co. v. Fina Oil Chem. Co., 126 S.W.3d 163, 169 (Tex.App.-Houston [1st Dist.] 2003, no pet.) (same); Neeley v. Bankers Trust Co., 757 F.2d 621-628 (5th Cir. 1985) (stating that, under Texas law, essential, or material, terms are those that parties would reasonably regard as vitally important elements of their bargain). No one disputes that the issue concerning whether the Williamses agreed to pay a fee for the placement of dentists was an essential, material term of the agreement.
Section 16 of the original agreement, which addressed modification of "compensation rates and placement fees," stated as follows:
(16) The Compensation Rates and Placement Fees are subject to change. TDS will provide CLIENT with thirty (30) days written notice of a change in Compensation Rates or Placement Fees. In the event CLIENT does not terminate this Agreement within thirty (30) days of TDS sending such notice to CLIENT, this Agreement will automatically be deemed to be amended to include the new Compensation Rate or Placement Fees.
Although this provision of the agreement recognizes modification of rates and fees, any modification necessarily pertained only to placement of personnel contemplated by the agreement, specifically, dental hygienists and dental assistants. It is undisputed that dentists were not a category of employees covered by the original agreement.
The original written agreement stated as follows:
. . .
TDS is in the business of referring for temporary and permanent employment — DENTAL HYGIENISTS, DENTAL ASSISTANTS or FRONT DESKS (DENTAL ASSISTANTS and FRONT DESKS hereinafter referred to as "DENTAL ASSISTANTS"). . . . DENTAL HYGIENISTS or DENTAL ASSISTANTS referred to CLIENT by TDS shall sometimes hereinafter be collectively referred to as "SERVICE PROVIDERS[.]" Therefore in consideration of the foregoing and the agreements of each party herein, it is agreed by and between TDS and CLIENT as follows:
(1) CLIENT agrees to pay DENTAL HYGIENISTS, and DENTAL ASSISTANTS referred to CLIENT by TDS, compensation at the following Compensation Rates. . . .
(2) CLIENT shall pay the compensation rate listed above to each DENTAL HYGIENIST or DENTAL ASSISTANT that provides services to CLIENT
. . . .
(4) TDS will provide referrals of DENTAL HYGIENISTS or DENTAL ASSISTANTS, subject to their availability. . . .
(5) CLIENT shall pay TDS a placement fee for each day that a DENTAL HYGIENIST or DENTAL ASSISTANT referred to CLIENT by TDS performs services for CLIENT. . . .
(7) CLIENT shall pay the placement fee to TDS on a monthly basis. . . . CLIENT agrees that the placement fee is an unconditional obligation of CLIENT which is due and owing to TDS upon referral by TDS of a DENTAL HYGIENIST or DENTAL ASSISTANT to CLIENT, and commencement of services by DENTAL HYGIENIST or DENTAL ASSISTANT for CLIENT.
(8) CLIENT is obligated to notify TDS of each day a DENTAL HYGIENIST or DENTAL ASSISTANT referred to CLIENT by TDS, continues to be employed after the initial day of placement or is later employed by CLIENT during the term of this Agreement and for a period of one year after the termination of TDS's services to CLIENT.
(9) In the event CLIENT employs, joint ventures with, associates with or in any manner affiliates with a SERVICE PROVIDER or enters into any contractual relationship with a SERVICE PROVIDER referred to the CLIENT by TDS directly or indirectly through any TDS placement, on a full time basis during the term of this Agreement and for a period of one (1) year after the date of termination of this Agreement, CLIENT agrees to pay TDS a placement fee equal to twelve (12%) of the yearly gross compensation to be paid to the SERVICE PROVIDER. For purposes of the Agreement, "Gross Compensation" shall include all of the following paid to DENTAL HYGIENIST or DENTAL ASSISTANT: (1) all salary, (2) bonuses, and (3) the value of all benefits taken in lieu of salary. There will be a guaranteed ninety (90) day pro-rated return of the PLACEMENT FEE if the permanent employment of DENTAL HYGIENIST or DENTAL ASSISTANT is terminated prior to ninety (90) days after permanent employment is commenced. The permanent PLACEMENT FEE will be due in full prior to the commencement of permanent employment. In the event a placement fee is earned by TDS for a permanent placement, CLIENT is not entitled to any credit for placement fees previously paid to TDS for temporary placements of the SERVICE PROVIDER in question. . . .
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(13) This Agreement shall remain in effect until terminated by either party by written notice of termination delivered to the other party. However, the obligation of CLIENT to pay the PLACEMENT FEE for DENTAL HYGIENIST OR DENTAL ASSISTANT referred to CLIENT . . . shall continue for a period of one (1) year after termination. . . .
Fees for placement of dentists were addressed first in the fee schedule that became effective May 1, 1998, and later in the fee schedule that became effective June 1, 1999. Both fee schedules stated that, "This fee schedule serves as addendum to any existing contract." By adding a new category of personnel, the addenda clearly attempted to modify the original agreement by including fees for placement of dentists, rather than fees for placing only dental hygienists and dental assistants. See Moser Co. v. Awalt Indus. Props., Inc., 584 S.W.2d 902, 906 (Tex.Civ.App.-Amarillo 1979, no writ) (stating that modification is change or alteration that introduces new elements into details or cancels some of them). No evidence in the record, however, shows that the Williamses ever agreed to modify their original agreement with the agency to include a new category of employees.
Concerning the placement of dentists, the first addendum stated as follows:
The majority opinion holds that some evidence shows that a meeting of the minds occurred to include payment of fees for placing dentists because the Williamses paid placement fees for dental hygienists and dental assistants according to the terms requested by the addenda. The majority opinion also emphasizes that the Williamses did not terminate the original agreement after they received the addenda. I would hold that paying increased fees for placement of dental hygienists and dental assistants according to the terms of the addenda — and as contemplated by section 16 of the original agreement — is no evidence that the Williamses agreed to pay placement fees for dentists. It is undisputed that the Williamses complied with the terms of their agreement with the agency, as amended by the addenda by paying all required placement fees for dental hygienists and dental assistants. It is also undisputed that the Williamses never paid the agency any placement fees for dentists. Specifically, the Williamses paid for Flanagan's work as a dental hygienist, from June 1998 to August 1999, according to the terms of the original agreement, as modified by the addenda pursuant to section 16 of the original agreement. But, the record conclusively establishes that the agency had never placed a dentist at the Williamses' offices. Flanagan became licensed to practice as a dentist on or about September 1, 1999 and began working at the Williamses' offices on or about August 31, 1999, but as a dentist, and no longer as a dental hygienist. At that point, the Williamses refused to pay any placement fee for Flanagan's work as a dentist. Accordingly, evidence that the Williamses paid placement fees for dental hygienists and dental assistants in compliance with the addenda is no evidence that they agreed to comply with the unilaterally added terms that required fees for the placement of dentists. Therefore, the record does not support any implied finding by the jury that the Williamses had a meeting of the minds concerning the payment of fees for the placement of dentists. See Mandril v. Kasishke, 620 S.W.2d 238, 244 (Tex.Civ.App.-Amarillo 1981, writ ref'd n.r.e.) (stating that modification requires meeting of minds of parties, and that one party may not unilaterally reformulate contract).
The majority opinion also relies on the Williamses' failure to terminate their original agreement within 30 days of receipt of the addenda as some evidence that they agreed to the terms of the addenda. Having previously agreed to modifications of placement of personnel contemplated by the original agreement, dental hygienists and dental assistants, and having no dentists placed by the agency, the Williamses had no basis for terminating their original agreement simply because the agency unilaterally added new terms to that agreement without the Williamses' consent and without negotiating a modification that encompassed dentists placed by the agency. See id. Evidence that the Williamses did not terminate their original agreement, which encompassed dental hygienists and dental assistants only, is no evidence that the Williamses agreed or consented to the terms unilaterally added by the addenda. I would hold that the Williamses' mere knowledge of these fees, by receipt of the agency's addenda, is no evidence that they agreed to pay a placement fee for dentists. I would hold, therefore, that the addenda are no evidence of any agreement by the Williamses to pay a placement fee for the placement of dentists.
I would further hold that nothing in the record supports modification of the agreement to include a fee for the placement of a dentist, because there is no evidence of the requisite consideration. See Roark v. Stallworth Oil Gas, Inc., 813 S.W.2d 492, 496 (Tex. 1991) (holding that consideration may consist of benefit that accrues to one party or, alternatively, detriment incurred by other party); Walden v. Affiliated Computer Servs., Inc., 97 S.W.3d 303, 315 (Tex.App.-Houston [14th Dist.] 2003, pet. denied) (holding that modification of agreement must be supported by new consideration).
The majority opinion relies on the terms of the modification that included a quid pro quo by providing that the placement agency would receive the benefit of the placement fees for dentists, and that the Williamses would receive the benefit of having dentists placed for employment at their office. The fallacy in this reasoning is that the agency unilaterally added these terms, and the Williamses did not comply with them by paying fees for Flanagan's work as a dentist. Because the Williamses never agreed to the terms and neither gave nor received consideration for the modification, no consideration by the Williamses supports the alleged modification. See Roark, 813 S.W.2d at 496 (stating that, "The detriment must induce the making of the promise and the promise must induce the incurring of the detriment.").
For these reasons, not more than a scintilla of evidence supports the jury's finding that the Williamses breached the agreement by failing to pay the agency's permanent placement fee for the placement of Flanagan as dentist. I would, therefore, hold that the evidence is legally insufficient to support the breach of contract claim.
FEE SCHEDULE Effective May 1, 1998 POSITION Daily Compensation ½ Day Compensation T.D.S. Fee DENTIST $360.00-8 hr day $180.00-4 hr day $50.00-8 hr day $43.00-4 hr day Concerning the placement of dentists, the second addendum stated as follows: FEE SCHEDULE Effective June 1, 1999 POSITION Daily Compensation ½ Day Compensation T.D.S. Fee DENTIST $360.00-8 hr day $180.00-4 hr day $52.00-8 hr day $45.00-4 hr day