Steve Allen v. Gene Komar and Florence Komar--Appeal from 55th District Court of Harris County

Reversed and Rendered and Memorandum Opinion filed September 15, 2005

Reversed and Rendered and Memorandum Opinion filed September 15, 2005.

In The

Fourteenth Court of Appeals

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NO. 14-04-00525-CV

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STEVE ALLEN, Appellant

V.

GENE KOMAR AND FLORENCE KOMAR, Appellees

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On Appeal from the 55th District Court

Harris County, Texas

Trial Court Cause No. 01 54528

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M E M O R A N D U M O P I N I O N

Appellant, Steve Allen, appeals a judgment in favor of appellees, Gene Komar and Florence Komar, on the grounds that: (1) the evidence is legally and factually insufficient to prove damages or causation, and (2) the evidence conclusively showed Allen was an agent for a contracting party; consequently he did not tortiously interfere with the party=s contract. Finding the evidence legally insufficient to support the jury=s damage award, we reverse and render a take-nothing judgment.

Background

Gene Komar and Dennis Sizemore decided in late 2000 to enter into a tanning salon business together. They both asked their mothers, Florence Komar and Jackie Sizemore, to finance the business. On January 26, 2001, Florence and Jackie signed a three-year lease for 3,300 square feet of space in a shopping center. The parties also entered into an agreement to lease twelve tanning beds at $1,700 per month. The parties agreed that Florence would make the lease payment of $3,307.86 per month on the business space, and Jackie would pay the lease on the tanning beds and purchase nutritional supplements to be sold in the salon. The Sizemores and the Komars entered into an oral agreement to divide the costs and profits evenly. Prior to the opening of the business, the Komars and Sizemores contributed approximately $90,000 each.

The tanning salon opened for business in April 2001. Gene Komar testified that from April 2001 to October 2001, the business operated at a profit only two months, but the business was improving prior to October 2001. On August 20, 2001, an attorney representing the Sizemores sent a letter to the Komars notifying them that as of September 1, 2001, the Sizemores would no longer contribute toward the operation of the tanning salon. The Komars attempted to buy the Sizemores= interest in the business, but the parties were unable to reach an agreement.

On October 13, 2001, Steve Allen entered the tanning salon and took control of the business. Allen testified he had a management agreement with Jackie Sizemore to manage her part of the business. As part of their agreement, Allen planned to change the character of the business, and Jackie agreed that he would receive all of any profit the business earned. On October 13, Gene Komar attempted to enter the business, but was told by Allen to leave the premises. Allen told Komar that because his name was not on the lease, Komar could not remain on the property. Komar left, but returned later that day to retrieve his personal belongings. Komar testified that he attempted to enter the business the next day, but found the doors to the salon were chained and padlocked.

Florence Komar testified that she attempted to work with Allen to keep the business open, but Allen was unwilling to work with her. The lease agreement originally signed by Florence and Jackie was a three-year lease. Gene Komar testified that he advised his mother to make lease payments after Allen took control of the business for three months because the lease agreement required her to pay the first year=s lease before she could be released from the remaining two years on the lease. Florence testified she spent an additional $16,000 after Allen took over the business. Florence spent $9,923.58 in lease payments for three months, but did not testify as to how the additional $6,076.42 was allocated.

The Komars sued Allen for conversion, wrongful eviction, and tortious interference with a contract. The trial court granted a directed verdict on the conversion and wrongful eviction causes of action. Prior to submission of the charge to the jury, Allen objected to the charge because there was no evidence of any damages caused by his conduct. The trial court overruled his objection to the charge. On the tortious interference cause of action, the jury found Allen intentionally and willfully interfered with the Komars= contractual rights and caused damages in the amount of $106,000. Following the jury=s verdict, Allen filed a motion for judgment notwithstanding the verdict in which he alleged the jury=s verdict was not supported by any evidence that he had caused the Komars= damages. The trial court overruled Allen=s motion and rendered judgment on the jury=s verdict. In his first two issues, Allen contends the evidence is legally and factually insufficient to prove actual damages were incurred or that his actions caused the damages. In his third issue, Allen contends he could not have interfered with the contract because he was Jackie Sizemore=s agent.

Damages

In his first issue, appellant contends the evidence is legally and factually insufficient to support the jury=s award of damages. In his second issue, appellant contends the evidence is legally and factually insufficient to support the jury=s finding as to the causation of damages. When both legal and factual sufficiency challenges are raised on appeal, the court must first examine the legal sufficiency of the evidence. Glover v. Tex. Gen. Indem. Co., 619 S.W.2d 400, 401 (Tex. 1981). In conducting a legal sufficiency review, we view the evidence in a light that tends to support the disputed finding and disregard any evidence and inferences to the contrary. Wal-Mart Stores, Inc. v. Canchola, 121 S.W.3d 735, 739 (Tex. 2003). We will sustain a legal insufficiency point when (a) there is a complete absence of evidence of a vital fact; (b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (c) the evidence offered to prove a vital fact is no more than a mere scintilla; or (d) the evidence conclusively establishes the opposite of a vital fact. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997).

A plaintiff in an action for tortious interference with a contract must prove that he or she suffered actual damages. KTRK TV, Inc. v. Fowkes, 981 S.W.2d 779, 790 (Tex. App.CHouston [1st Dist.] 1998, pet. denied). The basic measure of actual damages in an action for tortious interference with a contract is the same as the measure of damages for breach of the contract at issue. American Natural Petroleum Co. v. Transcontinental Gas Pipe Line Corp., 798 S.W.2d 274, 278 (Tex. 1990). One who is liable to another for interference with a contract is liable for damages for (a) the pecuniary loss of the benefits of the contract; (b) consequential losses for which the interference is a legal cause; and (c) emotional distress or actual harm to reputation, if they are reasonably to be expected to result from the interference. Browning-Ferris, Inc. v. Reyna, 852 S.W.2d 540, 549 (Tex. App.CSan Antonio 1992), rev=d on other grounds, 865 S.W.2d 925 (Tex. 1993).

Our review of the record reveals a complete absence of evidence of pecuniary loss of the benefits of the contract, consequential loss for which the interference was a legal cause, or emotional distress to be reasonably expected to result from the interference. The jury found appellees suffered $106,000 in damages as a result of appellant=s tortious interference with the contract. In support of the damage award, appellees presented evidence that Florence Komar contributed $90,000 at the time the business started and $16,000 after appellant took control of the business. The original $90,000 was invested at least nine months before appellant took control of the business. Further, Florence testified that most of the $16,000 spent following appellant=s take-over was spent to pay the monthly lease on the business. Appellees presented no evidence that appellant=s interference caused them to invest $106,000 into the business.

Appellees contend appellant=s interference caused the loss of their interest in the business. Appellees contend their damages are the lost value of the business because they lost the entire business. For this proposition, appellees cite Sawyer v. Fitts, 630 S.W.2d 872, 874B75 (Tex. App.CFort Worth 1982, no writ). In Sawyer, the Fort Worth Court of Appeals held that the proper measure of damages for destruction of a business is measured by the difference between the value of the business before and after the injury or destruction. Appellees presented no evidence of the value of the business before or after appellant=s interference. They presented evidence that Florence contributed $106,000 toward the business and that the business showed a profit during part of the time the business was open. The record contains no evidence of the business=s bank or accounting records. Appellees are correct in their assertion that the amount of damages in a case such as this cannot be easily measured, but some evidentiary basis is required to support the jury=s award. See Armendariz v. Mora, 553 S.W.2d 400, 404 (Tex. Civ. App.CEl Paso 1977, writ ref=d n.r.e.) (actual damage or loss is an essential element of a claim for tortious interference.) Appellant=s first and second issues are sustained.

Agency

In appellant=s third issue, he contends the trial court should have granted his motion for judgment notwithstanding the verdict because, as an agent of a contracting party, appellant did not interfere with the contract. The elements of tortious interference with an existing contract are (1) an existing contract subject to interference, (2) a willful and intentional act of interference with the contract, (3) that proximately caused injury, and (4) actual damages or loss. Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000). Because we found no evidence of the elements of causation and damages, we need not address whether appellant was an agent of a contracting party.

Conclusion

Because the evidence is legally insufficient to support the jury=s award of damages, we reverse and render judgment that appellees take nothing.

/s/ Charles Seymore

Justice

Judgment rendered and Memorandum Opinion filed September 15, 2005.

Panel consists of Justices Edelman, Seymore, and Guzman. (Edelman, J., dissenting without an opinion.)