Auto Excel Lube Center, Inc. v. Midstate Environmental Services, Llc

Citation: Not availableDocket: 13-07-00424-CV

Court: Court of Appeals of Texas; August 25, 2008; Texas; State Appellate Court

Original Court Document: View Document

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Appellant Auto Excel Lube Center, Inc. appeals a bench trial judgment favoring Appellee Midstate Environmental Services, LLC. Auto Excel raises three issues on appeal: 1) the trial court's denial of its motion to transfer venue, 2) the sufficiency of evidence regarding contractual liability, and 3) alleged abuse of discretion in awarding attorney’s fees. The court affirmed the trial court's decision.

The underlying dispute began with a contract established on January 6, 2003, where Midstate was to collect used motor oil, filters, and antifreeze from Auto Excel. The contract specified no charges for used oil collection but included charges for filters and antifreeze. A handwritten clause indicated Midstate would supply oil tanks for Auto Excel's use. Payments were to be made to a Corpus Christi post office box, although Midstate’s principal business was in Waco. The contract allowed either party to terminate with thirty days' written notice but did not specify a duration.

In February 2005, a conflict arose when Auto Excel allegedly prevented Midstate from collecting used oil, leading Midstate to seek retrieval of its tanks. On May 24, 2005, Midstate filed suit against Auto Excel for breach of contract, quantum meruit, and conversion, asserting proper venue in Nueces County. Auto Excel responded on July 26, 2005, claiming its need to contract with another environmental service was due to Midstate's failure to collect used oil. Auto Excel subsequently filed a motion to transfer venue to Tarrant County. 

The trial court scheduled the trial for August 28, 2006, but Auto Excel's counsel withdrew due to illness, necessitating a continuance. A new trial date was set for September 16, 2006, but no trial occurred on that date. A hearing on the venue transfer was held on November 7, 2006, after which the trial court denied Auto Excel's motion. The bench trial commenced on February 5, 2007.

Sturges testified that Midstate converts used motor oil into number five diesel fuel for heating asphalt in road construction and sells this fuel to paving companies. Midstate contracted with service stations, including Auto Excel, under an "oil-for-free" agreement. As part of this contract, Midstate provided two metal tanks for Auto Excel’s used oil, which were picked up bi-monthly by Midstate drivers. Issues arose when Wehbe of Auto Excel refused further pickups and prevented Midstate employees from accessing the property, leading to three unsuccessful retrieval attempts of the tanks. An invoice indicated Midstate spent $2,434 on the tanks, which were valued by Hendrick, a partial owner, at $3,500 each due to their condition and market demand. Hendrick confirmed that Midstate had not received any complaints from Auto Excel regarding service and had never received a termination notice. Between June 2003 and February 2005, Midstate averaged 907 gallons of used oil pickups monthly. Hendrick calculated that from March 2005 to January 2007, Auto Excel withheld 20,861 gallons, resulting in lost profits of $3,546.37 for Midstate. Attorney Paul Dodson testified regarding legal fees, stating that Midstate incurred $10,947.50 for pre-trial services, with trial costs estimated at $15,747.50 and additional fees for appellate processes. Despite Auto Excel’s objections, the court admitted Dodson’s timesheet and invoices. Wehbe claimed that Midstate's inconsistent pickups forced Auto Excel to hire another environmental service due to disruptions in their operations.

Wehbe testified to an agreement with Sturges for weekly pickups of used oil by Midstate, which initially complied but later picked up oil sporadically starting in 2004. This inconsistency forced Wehbe to use his own barrels to manage overflow and redirect Auto Excel employees’ time to handle oil storage, impacting customer service. After notifying Sturges of the issue without resolution, Wehbe believed Midstate abandoned the contract by 2005 and subsequently contracted with another company.

The trial court ruled against Auto Excel, awarding $3,547.37 for lost profits, $7,000 for tanks, and substantial attorney’s fees totaling $44,747.50, alongside court costs and interest. The judgment allowed for the $7,000 for tanks to be satisfied if returned to Midstate. 

Auto Excel appealed, arguing that the trial court improperly denied its motion to transfer venue, stating there was insufficient evidence for venue in Nueces County. Specifically, Auto Excel contended that its obligation to make payments to a Corpus Christi post office box did not fulfill the performance requirements of section 15.035 of the civil practice and remedies code. Midstate countered that the remittance provision was adequate and claimed Auto Excel waived its venue objections through various motions and delays.

The appellate court reviews venue denial de novo, upholding the trial court's ruling if any evidence supports the venue's propriety. Section 15.035(a) stipulates that if a written contract specifies performance in a certain county, legal action can be taken in that county or where the defendant resides. Venue is deemed appropriate where a contract outlines performance locations, including payments for services.

The trial court did not provide factual findings when it denied Auto Excel’s motion regarding venue, but there is sufficient evidence to support its decision. The contract mandated that Auto Excel pay Midstate in Corpus Christi, and both parties adhered to this agreement for about 21 months before Auto Excel prohibited Midstate’s trucks from accessing its property. Auto Excel's claim that the contract designates Midstate's principal place of business in Waco is irrelevant since the contract's performance occurred in Nueces County. Additionally, the court cannot conduct a factual sufficiency review of the evidence supporting the venue decision. 

Regarding Auto Excel's challenge to the existence of a valid contract due to an alleged lack of mutual obligation, the court's findings of fact from the bench trial are treated as a jury’s verdict. Legal sufficiency is evaluated by determining if reasonable evidence supports the finding, while factual sufficiency requires weighing all evidence, setting aside findings only if they are clearly unjust. 

A valid contract requires mutuality of obligation, which is defined as a bargained exchange of promises. The court found that a valid contract existed between Midstate and Auto Excel as of January 6, 2003. Midstate provided two tanks valued at $2,434 each and agreed to collect used motor oil, while Auto Excel received free disposal of its used motor oil, establishing mutual benefits and obligations. Consequently, the court ruled that sufficient evidence supported the existence of a valid contract, overruling Auto Excel's second issue.

Auto Excel challenges the sufficiency of evidence supporting an award of attorney's fees in a breach of contract case. Under Texas law, reasonable attorney's fees are recoverable, and their determination is a factual matter for the trial court, which has discretion in setting the amount. The court must consider several factors, including the time and labor required, the lawyer's skill, customary fees, the results obtained, any time limitations, the nature of the client relationship, the lawyer's reputation, and whether fees are fixed or contingent. 

In this case, the trial court reviewed invoices showing that attorney Van Huseman charged $300 per hour and provided detailed billing for various months, totaling significant amounts, including paralegal fees. Testimony indicated that Midstate had already paid a portion of the legal fees and estimated future costs for a full trial. The court found sufficient evidence to uphold the fee award, ruling against Auto Excel's claims. Consequently, the trial court's judgment is affirmed.