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Sjw Property Commerce, Inc. N/K/A Lease Holding, Inc. and Property Commerce Development Company N/K/A Development Holding, Inc. v. Southwest Pinnacle Properties, Inc., Jackson I Corp., Palmer Enterprises, Inc., and G.J. Palmer, Jr., Individually
Citation: Not availableDocket: 13-08-00268-CV
Court: Court of Appeals of Texas; September 23, 2010; Texas; State Appellate Court
Original Court Document: View Document
The Court of Appeals for the Thirteenth District of Texas addresses a rehearing request from appellants SJW Property Commerce, Inc. (SJW) and Property Commerce Development Company (PCDC) regarding a previous opinion issued on April 28, 2010. The court denies the rehearing but vacates the original opinion and judgment, replacing it with a new ruling. The case involves property development agreements for Jackson Palmer Crossing in McAllen, Texas, with disputes arising over commission payments for tenant acquisition. Key outcomes of the jury verdict include: 1) SJW was awarded $126,903.73 against Southwest Pinnacle Properties, Inc. (SPP) and Palmer Enterprises (PE), and $38,400 against SPP and Jackson I Corp. for unpaid commissions. 2) Palmer received $709,587 in actual damages from SJW and PCDC, alongside $376,397 and $2,000,000 in punitive damages against PCDC and SJW respectively, due to claims of breach of fiduciary duty and fraud. 3) SJW was awarded $55,767.91 in attorney's fees, while appellees received a total of $390,152.23 in trial-level fees, plus $30,000 for this appeal and another $30,000 for a potential Texas Supreme Court appeal, totaling $100,570.23 in expenses. SJW and PCDC raise four issues on appeal, questioning SPP's standing, the sufficiency of evidence for intentional interference claims, the assessment of exemplary damages, and the award of attorney's fees to Palmer. Conversely, appellees contest the sufficiency of evidence for the commission-related damage award. The court affirms some aspects of the jury's findings while reversing and rendering others. The court also outlines the factual backdrop of the development, noting Palmer's early interactions with SJW regarding property development and the role of SJW as a broker for leasing and sales pertaining to the Jackson Palmer Crossing project. The 'Exclusive Leasing and Sales Listing Agreement' (Listing Agreement) between the parties commenced on June 30, 1999, and expired on June 30, 2000. Under this agreement, Palmer was obligated to pay SJW a 6% sales commission, a 4% commission for the total lease rental for the first ten years, and a 2% commission for the total rental for the subsequent ten years of each lease if SJW was the sole source of tenants. During the agreement's term, SJW secured Fashion Bug and Staples as tenants for the Jackson Palmer Crossing shopping center. Notably, on July 3, 2000, shortly after the agreement's expiration, SJW secured Factory 2-U as a tenant. Following this, on July 6, 2000, Palmer requested a thirty-day extension of the Listing Agreement, to which SJW responded with a new agreement extending the term to June 30, 2001. However, this extension was signed only by SJW’s president, Jay Williams, and not by Palmer. Separately, Palmer began discussions regarding a second development project, the Trenton Project, located at the northeast corner of 10th Street and Trenton Road in McAllen. Although no formal brokerage agreement was executed, Palmer claims that Stanley and Jay Williams agreed to act as his brokers for this project. Palmer enlisted local realtor Butch Schwartz to help assemble the property, which included various tract owners, primarily descendants of the Robinson family. SJW allegedly began providing key services for the Trenton Project in 1998, contacting major retailers like Albertson's. Palmer attended the International Counsel of Shopping Centers (ICSC) convention in 1999, where he and the Williams brothers discussed the project. Additionally, Jay Williams and Clay Trozzo invited Palmer to a hunting trip to further discuss the project's progress, during which they indicated renewed interest from Albertson's in becoming the anchor tenant for the Trenton Project. Jarvios informed the parties of his recent resignation from Albertson's and new role at Lowe's but was permitted to stay and hunt with them. Subsequently, after discovering Albertson's had lost interest in a property, Jay Williams and Trozzo sought a new anchor tenant, successfully attracting Target. On March 15, 2000, Trozzo sent a letter of intent indicating PCDC's intent to purchase 13.34 acres at the northeast corner of 10th Street and Trenton for $2.3 million, with Palmer responsible for a 6% commission to SJW. Palmer aimed to consolidate the land for Target's development. On March 17, Palmer proposed selling approximately 18.85 acres to SJW for $4.9 million, also including a 6% commission. Although Palmer lacked contracts for the land at this time, he planned to secure it through earnest money contracts for sale to SJW, who would sell to Target. On March 21, Trozzo countered with an offer for 13.34 acres at $2.6 million and a commission. Palmer initiated earnest money contracts to assemble the land, which typically included a feasibility period and exclusive purchase rights, expiring on April 15, 2000. He successfully secured contracts for all necessary tracts except a critical 3.7-acre parcel owned by Dr. Kilgore, jeopardizing the project. During negotiations, Stanley and Jay Williams invited Palmer to discuss the project at the 2000 ICSC convention, where he disclosed confidential pricing and acknowledged lacking a contract with Dr. Kilgore. Afterward, Trozzo facilitated a letter of intent from Dr. Kilgore for PCDC's purchase while misleading Palmer about the status of the contract. As Palmer's earnest money contracts neared expiration, concerned landowners questioned the project's viability. Palmer communicated with Trozzo to provide updated pricing information, notify him of expiring earnest money contracts, and request a letter of intent from Dr. Kilgore regarding the sale of his property to SJW or PCDC. Palmer believed that SJW and PCDC were acting as his broker to secure a contract with Dr. Kilgore, which would encourage landowners to extend their contracts with him for the Trenton Project. However, Jay Williams informed Palmer that Dr. Kilgore was not under contract, and the landowners, including Wayne Allen, attempted to reach Dr. Kilgore for clarification but were ignored, as Dr. Kilgore was reportedly under contract with PCDC. Shortly before Palmer's contracts expired, Trozzo contacted the landowners to confirm their contractual status, as reflected in a letter dated September 7, 2000. Palmer alleged that Trozzo, SJW, and PCDC were aware of his contracts and sought to induce the landowners to breach them, allowing SJW and PCDC to secure contracts for their own benefit. On September 6, 2000, Opal Baldwin notified Palmer that her contract was terminated, followed by a similar termination letter from Harlon and Mary Robinson on September 8, 2000. On September 13, 2000, Trozzo requested evidence of Palmer's control over the property, warning that failure to provide documentation would result in SJW and PCDC negotiating directly with the landowners. Feeling betrayed after receiving the termination letters and Trozzo's communication, Palmer accused Trozzo, SJW, and PCDC of tortious interference with his contracts, claiming their actions harmed his reputation and caused significant financial losses. In response, Palmer withheld commissions owed to Jackson Palmer Crossing and declined to renew his Listing Agreement with SJW, believing they were undermining his interests. Subsequently, he hired Trammell Crow Company as his new broker for the Trenton Project, which successfully encouraged the landowners to renew their earnest money contracts with him to pursue a deal with Target or another anchor tenant. Target, Home Depot, and SJW allegedly pressured Trammell Crow to cease its brokerage role for Palmer, directing landowners to negotiate directly with SJW and PCDC. Subsequently, Jarvios from Lowe's indicated interest in developing the site, allowing Palmer to secure a new 180-day contract with the landowners. An aggressive call from Target to Jarvios sought to thwart Lowe's development. Jarvios suggested collaboration between Lowe's and Target, but excluded SJW and PCDC due to their ties with Home Depot. Target did not respond. In May 2001, Stanley Williams from Target contacted Palmer to address issues regarding the Trenton Project. Palmer agreed to meet, under the condition that Trozzo and Jay Williams, whom he believed were deceptive, would not be involved. After this meeting, Palmer assigned the landowners' property to Target without profit, receiving a conditional reciprocal easement agreement (REA) in exchange. This REA was critical for Palmer's development plans for adjacent land owned by Eugene J. Kayser Jr., as it facilitated necessary access. Palmer alleged that Stanley Williams knew the REA's significance and leveraged it to obtain the property assignment. Despite Palmer's insistence, Trozzo was involved in ongoing negotiations, secretly attempting to purchase the Kayser tract for $3 million, significantly higher than Palmer's previous bid of $1,960,000. Palmer believed this was an effort to inflate the Kayser tract's price and undermine the REA's value. Additionally, Stanley and Jay Williams established McAllen Shopping Center, Ltd. to acquire a portion of the Trenton Project, which was later sold to Chick-Fil-A. Ultimately, the Trenton Project was developed with Target as the anchor tenant, who purchased the property for much less than earlier offers. Palmer claims that the actions of SJW and PCDC prevented him from profiting from the land assembly for Target and rendered the REA worthless. Conversely, SJW and PCDC assert they became aware of the development opportunities at the site around 1999 or 2000 when they noticed a for-sale sign. Schwartz's sign prompted SJW and PCDC to inquire about purchasing the property, leading to a letter of intent from Dr. Kilgore for the sale to them. They began assembling properties for a future sale to Target but argued on appeal that PCDC was not involved in the transactions and that no written brokerage agreement existed between SJW and Palmer related to the Trenton Project. SJW and PCDC claimed they competed with Palmer for development in the area. The record indicates that Trozzo, Jay Williams, and Stanley did not inform Palmer that SJW and PCDC were not his brokers. Additionally, SJW and PCDC contended that Palmer's earnest money contracts with landowners were invalid due to non-deposit of earnest money and asserted that Palmer could not recover damages on contracts not presented in evidence. Throughout the case, SJW and PCDC denied wrongdoing concerning the Trenton Project, attributing contract terminations to coincidence. In the procedural history, SJW filed a breach of contract petition on December 2, 2003, against SPP, Jackson, PE, and Palmer, claiming commissions owed under the Listing Agreement for Jackson Palmer Crossing properties. SJW argued that Jackson and PE were SPP's assigns, and Palmer owned all entities, making them collectively liable. The Palmer companies countered on February 9, 2004, denying allegations and asserting defenses, including lack of liability in their sued capacity and counterclaims for breach of fiduciary duty, malicious interference, and fraud against SJW. SJW amended its petition on May 13, 2004, adding a fraud claim against Palmer. The Palmer companies filed an amended answer and counterclaim on November 8, 2005, again denying allegations, raising defenses, contesting Jackson's liability, and requesting attorney's fees and exemplary damages while reaffirming their claims of fiduciary duty breaches and tortious interference. On June 23, 2006, the Palmer companies filed a second amended answer and counterclaim, including PCDC as a third-party defendant and alleging negligent misrepresentation against both SJW and PCDC. On September 11, 2006, the Palmer companies submitted a third amended answer and counterclaims, contending that the Listing Agreement lacked sufficient property identification to establish commission entitlement for SJW and PCDC, and that SJW and PCDC breached their duties of loyalty and good faith, barring their claims. SJW responded with a second amended petition on September 15, 2006, reasserting breach of contract and common-law fraud claims, alleging civil conspiracy, and seeking exemplary damages. On the same day, SJW and PCDC filed original answers denying the Palmer companies' claims and asserting affirmative defenses, including limitations and a request for attorney's fees under the Listing Agreement. Subsequently, on November 28, 2006, SJW added a statutory fraud cause of action in a third amended petition. On February 13, 2007, the Palmer companies filed a fourth amended answer and counterclaims, denying SJW's commission entitlement concerning the Factory 2-U lease. The trial commenced on April 16, 2007, with SJW and PCDC resting their case-in-chief, after which the trial court directed a verdict against their common-law fraud claim, leaving only the breach of contract claim and counterclaims for jury determination. The jury delivered a split verdict, confirming agreements for commissions on the Staples and Fashion Bug leases, but not on the Factory 2-U lease. The jury found that both Southwest Pinnacle Properties and Palmer Enterprises failed to comply with their agreements regarding the Staples and Fashion Bug leases, with no excused failures. The jury awarded SJW $128,903.72 for the Staples lease and $38,400 for the Fashion Bug lease. Additionally, the jury recognized a relationship of trust between SJW and G.J. Palmer concerning North 10th, Trenton, but determined that SJW did not fulfill its fiduciary duty to G.J. Palmer, Jr. SJW Property Commerce, Inc. was found to have intentionally interfered with G.J. Palmer's earnest money contracts in multiple instances, including with individuals such as Opal Baldwin and B.W. B.R. Whisenant. In each case, it was determined that SJW did not have a good-faith belief in its right to interfere. G. Palmer should have discovered the interference by August 8, 2000, and SJW was found to have committed fraud against him, which Palmer should have discovered by September 8, 2000. The jury awarded G. Palmer $376,397 for lost profits from the Robinson tract deal, $207,926 for lost rental revenue, and $125,264 for property sale delays, totaling $709,587. Additionally, the jury determined that the harm to G. Palmer resulted from malice, awarding $376,397 in exemplary damages against Property Commerce Development (PCDC) and $2 million against SJW Property Commerce, Inc. Following the trial, both parties filed various post-judgment motions, which the trial court denied when it adopted the jury's findings on February 7, 2008. SJW then filed a motion for a new trial, claiming insufficient evidence for the damages awarded and arguing that limitations barred all claims by Palmer's companies. In response, Palmer's companies contested the sufficiency of evidence for commissions owed to SJW. Both SJW’s and Palmer’s motions were overruled by operation of law. Subsequently, SJW and PCDC appealed, while Palmer's companies filed a cross-appeal. Additionally, SJW and PCDC questioned the standing of SPP to assert counterclaims, claiming SPP was not damaged regarding actions at 10th Street and Trenton Road, and argued that even if SPP had standing, its claims were barred by limitations. SJW and PCDC contend that SPP's counterclaim is unrelated to SJW's commission claims. In contrast, the Palmer companies assert SPP had standing to sue and that their counterclaims are valid under sections 16.068 and 16.069 of the Texas Civil Practice and Remedies Code, arguing SPP is an aggrieved party. Standing requires a plaintiff to have a significant relationship to the lawsuit for a justiciable interest, while capacity focuses on the legal qualifications of a party to litigate. A plaintiff is considered to have standing when personally aggrieved, and capacity is determined by legal authority to act. The Palmer companies maintain they timely filed their counterclaims and argue that SJW and PCDC's challenge pertains to capacity, which they believe was waived due to the absence of a verified plea. Initially, SJW filed its lawsuit on December 2, 2003, and the Palmer companies responded with counterclaims on February 9, 2004, naming SPP as the sole Counter-Plaintiff. On November 8, 2005, the Palmer companies amended their counterclaims to designate Palmer as 'Counter-Plaintiff' in place of SPP, without introducing new causes of action. SJW and PCDC asserted that SPP was involved in the Jackson Palmer Crossing dispute but not in the Trenton Project dispute. However, the court determined that the claims were significantly interconnected, satisfying the logical relationship test, which assesses whether the facts underlying the claims are relevant to both. Evidence indicated that the brokerage relationship between Palmer and SJW originated from dealings at Jackson Palmer Crossing, where SPP was a party to the Listing Agreement. Witnesses confirmed that SJW acted as Palmer's broker for both projects, and SJW acknowledged multiple discussions regarding both developments occurring concurrently. A statement by Jay Williams, linking commissions owed from Jackson Palmer Crossing to contract assignments related to the Trenton Project, further underscored the interrelation of the disputes. Consequently, the court concluded that SPP had a justiciable interest and standing in the matter. Despite this, the court found that SPP lacked the capacity to sue SJW and PCDC for damages related to the Trenton Project, as SPP was not involved in its negotiations. SPP lacked the capacity to sue for damages related to the Trenton Project, prompting the Palmer companies to substitute Palmer as the proper 'Counter-Plaintiff' without introducing new causes of action. Texas courts recognize misnomer as a valid reason for a party substitution when it does not mislead or disadvantage any party involved. The relation-back doctrine allows claims to be preserved against limitations if the nature of the suit remains unchanged. The essential questions for misnomer analysis include whether a judgment on the original pleading would bar recovery under the amended pleading, if the same evidence supports both pleadings, if the measure of damages is consistent, and whether the allegations are subject to the same defenses. In this case, Palmer, as president and personal representative of SPP, was properly substituted, maintaining the same causes of action against SJW as in the original counterclaims. Neither SJW nor PCDC objected to this substitution or demonstrated any prejudice from it. Consequently, the substitution of Palmer did not constitute a new suit, and the claims were not barred by limitations under the relation-back doctrine. The Palmer companies’ counterclaims against SJW include allegations of tortious interference with contracts and business relations, breach of fiduciary duty, and fraud, which are assessed under sections 16.068 and 16.069 of the civil practice and remedies code. SJW and PCDC contend on appeal that the Palmer companies' counterclaims are time-barred and should be treated as third-party actions, which would prevent section 16.069 of the civil practice and remedies code from tolling the limitations period. The statute of limitations for breach of fiduciary duty and fraud is four years, commencing when the injured party discovers the fraud—determined by the jury to be September 8, 2000. The Palmer companies filed their original counterclaims on February 9, 2004, well within the limitations period. However, they designated SPP as 'Counter-Plaintiff,' who lacked the capacity to assert these claims. Palmer was substituted as 'Counter-Plaintiff' on November 8, 2005, over a year after the limitations period lapsed. Without tolling, the claims would be barred. The Palmer companies argue that the relation-back doctrine under section 16.068 tolls the limitations period, as it allows amendments to pleadings related to timely filed causes of action unless based on a new transaction. This doctrine is intended to prevent the loss of claims due to limitations and is to be liberally construed. It functions as an equitable remedy to ensure justice while maintaining logical consistency in legal proceedings. The relation-back doctrine can address capacity issues in legal claims but cannot retroactively establish personal jurisdiction over parties. In Texas, the Supreme Court has permitted a personal representative in probate cases to seek court approval to represent an estate post-litigation initiation, as seen in Lovato and Lorentz cases. However, new pleadings cannot grant a trial court jurisdiction over new parties retroactively from the initial suit filing, as established in Armes and Covington. The doctrine allows amendments to pleadings to correct capacity issues or change facts, provided the original claims were timely filed and the amendments do not introduce a new transaction or occurrence. In this matter, it was determined that the Palmer companies' claims for breach of fiduciary duty and fraud were timely filed against SJW, that SPP had standing to bring the suit concerning actions related to the Trenton Project, and that disputes surrounding the Jackson Palmer Crossing shopping center and the Trenton Project were interconnected. Consequently, the Palmer companies could substitute Palmer as "Counter-Plaintiff" without losing their claims due to limitations, as their amendments relate back to the original timely claims. Additionally, the statute of limitations for tortious interference with contracts is two years, not four, as clarified in various cases. The jury found that Palmer could have reasonably discovered SJW's alleged tortious interference by August 8, 2000, marking the start of the limitations period. The jury determined that the Palmer companies' tortious interference claims against SJW would have been time-barred as of August 8, 2002, unless the limitations period was tolled. According to Section 16.069 of the Texas Civil Practice and Remedies Code, a party may file a counterclaim arising from the same transaction as an action even if it would be barred by limitations, provided it is filed within 30 days of the answer's due date. This provision aims to prevent plaintiffs from waiting until valid claims are barred before asserting their own. The Palmer companies' counterclaims include some that are timely (breach of fiduciary duty and fraud) and others that are not (tortious interference). The disputes regarding the Jackson Palmer Crossing shopping center and Palmer's Trenton Project are deemed related and part of the same transaction, allowing the Palmer companies to assert the tortious interference claims despite their potential expiration. SJW and PCDC did not contest the Palmer companies' compliance with the timeliness requirement of section 16.069(b). Furthermore, SJW and PCDC's assertion that the counterclaims are third-party actions lacks supporting authority and contradicts the precedent set in J.M.K. 6, which ruled that third-party actions are not covered under section 16.069. The review of civil procedure rules indicates that the Palmer companies' claims against SJW are classified as counterclaims rather than third-party actions. A defending party, acting as a third-party plaintiff, may serve a citation and petition on a non-party who may be liable for some or all of the plaintiff's claims, as per Rule 38. Conversely, Rule 97(b) allows for counterclaims against an opposing party, regardless of whether they arise from the same transaction as the original claim. In this case, SJW sued the Palmer companies, including SPP and Palmer individually. The Palmer companies’ counterclaims filed on February 9, 2004, did not involve claims against a non-party but instead arose from the same transaction regarding commissions at Jackson Palmer Crossing, thus qualifying as counterclaims under Rule 97(b). Definitions from case law characterize counterclaims broadly, including those that would defeat a judgment in favor of the plaintiff. Concerning the claims against PCDC, SJW and PCDC argue that since PCDC was added to the lawsuit on June 23, 2006, the claims against it are barred by limitations and are classified as a third-party action, which does not benefit from tolling under sections 16.068 and 16.069. The Palmer companies counter that PCDC had adequate notice of their claims and could not claim prejudice from its inclusion. They also assert that the claims against PCDC stem from the same transaction as those against SJW. PCDC was not part of the original petition, and its joinder occurred six years after the claims accrued, leading to the conclusion based on Texas Rule of Civil Procedure 38 that the claims against PCDC were indeed a third-party action. The claims by the Palmer companies against PCDC were determined to be third-party actions, not counterclaims, leading to the conclusion that they were time-barred under sections 16.068 and 16.069 of the Texas Civil Practice and Remedies Code. Key findings include: 1) the Jackson Palmer Crossing and Trenton Project disputes are interconnected, representing a single transaction; 2) SPP had standing to file counterclaims against SJW; 3) Palmer was appropriately identified as "Counter-Plaintiff" in the amended answer; 4) claims against SJW were classified as counterclaims; 5) these counterclaims were tolled by the relevant code sections, thus relating back to the timely February 9, 2004 counterclaims; and 6) claims against PCDC were third-party actions, which did not toll limitations periods. Consequently, SJW and PCDC's first issue was partially overruled and partially sustained. Regarding the second issue, SJW and PCDC contended that evidence for the jury's findings of intentional interference, breach of fiduciary duty, and fraud was insufficient. However, since the Palmer companies' claims against PCDC were time-barred, the court found no need to consider the sufficiency of evidence regarding PCDC. The legal sufficiency standard requires evidence to support vital facts, and the jury's credibility assessments must be respected. In factual sufficiency reviews, evidence is considered neutrally to determine if the finding is against the overwhelming weight of the evidence. Evidence supporting the jury's verdict must be detailed if found factually insufficient, clarifying how contrary evidence outweighs supporting evidence. The elements for tortious interference with a contract include the existence of a contract, intentional interference, proximate causation of damage, and actual damage. SJW argues the jury's verdict on tortious interference claims by the Palmer companies lacks sufficient evidence, asserting Palmer failed to prove essential elements. Specifically, SJW claims there is no evidence of contracts with certain landowners in April 2000, that Palmer's earnest money contracts were not closed due to failure to deposit earnest money, and that delays in selling property were caused by Palmer's own greed rather than SJW's actions. Palmer testified he had contracts with most landowners, including Whisenant and the Allens, with supporting documentation for these contracts. The Whisenant contract indicates a payment of $467,712.50 but lacks a specified effective date. While the Kayser tract was not under contract in April 2000, Palmer confirmed subsequent negotiations led to a contract later that year. The jury was not specifically asked to determine the existence of contracts as of April 2000 but whether SJW interfered with Palmer's contracts. SJW did not object to the jury charge, thereby waiving any complaints regarding the timing of the contracts. SJW argues that Palmer's earnest money contracts are unenforceable because the earnest money checks were not deposited with the title company, which should negate the Palmer companies' tortious interference claims. However, precedent from the Texas Supreme Court indicates that even unenforceable contracts can support tortious interference claims, provided they are not void. Specifically, the court stated that until a contract is terminated, it remains valid, and third parties cannot interfere with it. Palmer testified that he issued earnest money checks, which Schwartz acknowledged receiving but did not deposit with the title company. Despite this, both Palmer and the landowners believed they had valid contracts, supported by extensions granted for project feasibility. The contracts did not specify that failure to deposit earnest money invalidated them; instead, they were voidable, allowing the landowners the option to terminate, which only a couple exercised after SJW's involvement. The contracts were deemed valid at inception, as they were not void due to illegality. Consequently, there is sufficient evidence for a jury to determine that Palmer had valid contracts with the involved parties, despite the lack of earnest money deposit with the title company. The tortious interference with contract claim against SJW hinges on the requirement of "willful and intentional interference." Texas case law establishes that interference is tortious only when there is direct evidence of a party's intentional acts to induce a breach of contract. A party must knowingly induce a contracting party to breach its obligations rather than merely being a willing participant. In this case, Palmer Companies had earnest money contracts with several landowners through September 2000. As these contracts were nearing expiration, Trozzo, representing SJW, contacted the landowners to inquire about their contractual status, documented in a September 7, 2000 letter. Palmer contended that SJW was aware of his contracts and that Trozzo's inquiries aimed to persuade the landowners to terminate their agreements with Palmer in favor of SJW. Dr. Kilgore corroborated this, stating that Trozzo had approached him to secure a contract to block Palmer's development efforts until the existing contracts expired. The elderly landowners, influenced by Trozzo's actions, sent Palmer letters terminating their contracts. This led to increased anxiety among the remaining landowners, who sought assurances from Palmer about securing Dr. Kilgore's contract to facilitate a sale to Target. In a response to SJW, Palmer expressed awareness of SJW's attempts to induce breaches and claimed these actions harmed his reputation and caused substantial damages, which were assessed by his damages expert, Bill Abington. Abington determined that the Palmer companies incurred $376,397 in damages due to the delayed sale of the Robinson tract to Target, which included $207,926 in lost rental income among other damages. Palmer claimed he had negotiated a contract with Kayser for $1.96 million for the land, although no documentation of this contract exists. During a May 2001 meeting with Stanley Williams, Palmer agreed to assign his earnest money contracts for the Trenton Project to Target for no profit in exchange for a REA to aid in developing the Kayser tract. It is suggested that Palmer would not have sought the REA without having the Kayser tract under contract or confidence in acquiring it swiftly. Palmer alleged that Trozzo subsequently offered Kayser $3 million for the land, despite Palmer's claimed prior agreement with Kayser for $1.96 million. Palmer believed Stanley Williams informed Trozzo about the REA's significance, leading Trozzo to increase the price and attempt to induce Kayser to breach his agreement with Palmer. Ultimately, Palmer claimed he was compelled to purchase the Kayser tract in 2002 for $3.5 million, significantly more than the alleged original amount. SJW presented evidence to counter Palmer's claims, but the jury favored Palmer's account, and their conclusions were deemed reasonable. The jury found that SJW intentionally interfered with Palmer's contracts, resulting in actual damages. The evidence supporting the jury's finding of tortious interference was legally and factually sufficient. Regarding the breach of fiduciary duty, the jury's exemplary damage award could be upheld through Palmer's tortious interference claims. To establish a breach of fiduciary duty, a plaintiff must demonstrate the existence of a fiduciary relationship, a breach of that duty by the defendant, and an injury to the plaintiff or benefit to the defendant resulting from the breach. A plaintiff must demonstrate each element of a breach of fiduciary duty claim. Fiduciary relationships can arise as a matter of law in formal contexts, but informal or confidential fiduciary relationships may also exist based on moral, social, domestic, or personal trust prior to any contractual agreement. Such a relationship must predate the agreement that serves as the basis for the lawsuit, indicating a betrayal of trust in subsequent dealings. Trust is established when one party has consistently relied on another's judgment or advice over a long-term relationship, which can encompass both business and personal connections. However, mere subjective trust does not suffice to establish a fiduciary duty. The excerpt discusses an appeal where SJW claims it acted as Palmer's agent in one project but merely as a competitor in another, emphasizing that agency relationships, which are inherently fiduciary, can be implied through the parties' conduct rather than necessitating formal designation. An agency relationship can be established through circumstantial evidence reflecting the parties' interactions and the nature of their relationship. In this case, the jury found that SJW breached a fiduciary duty to Palmer, concluding that Palmer was the principal and SJW was his agent. Although there was no explicit contract imposing this fiduciary duty, the parties' conduct suggested its existence. Palmer had requested SJW, represented by Stanley and Jay Williams, to act as his broker for the Trenton Project, similar to their previous arrangement at the Jackson Palmer Crossing. Evidence showed that they engaged in multiple discussions regarding confidential project details, indicating a broker-client relationship. Expert testimonies supported the notion that SJW owed a fiduciary duty to Palmer, with one attorney affirming this duty based on the exchange of confidential information. Another expert noted that if SJW did not intend to act as Palmer's broker for the Trenton Project, it should have clearly stated so, especially given their past dealings. SJW presented letters from March 2000 indicating a competitive relationship, which contradicted the testimonies of Palmer and the experts. However, the jury was tasked with reconciling the conflicting evidence, and its decision to uphold the existence of a fiduciary duty was reasonable. Thus, the jury rejected SJW’s argument regarding the competitive nature of the relationship and the claim of breach of fiduciary duty will be further analyzed. SJW obtained confidential information from Palmer about the Trenton Project and used it to secure a contract with Dr. Kilgore, which hindered Palmer's ability to develop the project. SJW also encouraged the landowners under contract with Palmer to breach their agreements, allowing SJW to consolidate the land for sale to Target. Furthermore, SJW concealed from Palmer that it had Dr. Kilgore's crucial land parcel under contract and was waiting for Palmer's contracts to expire before proceeding with development. As a result of these actions, Palmer suffered $709,587 in actual damages and was compelled to assign properties to Target in exchange for a Real Estate Agreement (REA). Subsequently, SJW, through Trozzo, inflated the price of the neighboring Kayser tract, undermining the value of the REA and increasing Palmer’s development costs. The jury reasonably determined that SJW breached its fiduciary duty to Palmer and that the evidence supporting this verdict was legally and factually sufficient. Regarding the fraud claim, the jury found that SJW committed fraud against Palmer, who should have discovered the fraud by September 8, 2000. Palmer testified that he frequently met with SJW to discuss confidential information about the project and was misled by SJW’s assurances that they were working to secure Dr. Kilgore's tract while providing updates on pricing and contracts. The elements of fraud were identified, including the requirement that a false material representation was made with intent to deceive, reliance by Palmer, and resultant injury. A mere failure to perform a contract does not constitute fraud unless there was no intention to fulfill the promise at the time it was made. The jury's conclusions in both claims were supported by substantial evidence. Palmer believed SJW was acting as his broker for a project, but unbeknownst to him, SJW had already secured Dr. Kilgore under contract and intended to either wait for Palmer's agreements with landowners to expire or provoke breaches of those contracts to pursue the project independently. Palmer later learned that Trozzo and Jay Williams misled him by claiming they were negotiating for Dr. Kilgore's benefit, when in reality, they were securing the contract for SJW's advantage. After discovering this deception, Palmer received assurances from Stanley Williams that Trozzo and Jay Williams would no longer be involved, leading him to assign landowners' property to Target in exchange for a real estate agreement (REA) contingent on his purchase of the Kayser tract within a year. However, Trozzo continued to influence the project and attempted to inflate the price of the Kayser tract, undermining the REA's value. The evidence supports a jury's conclusion that SJW committed fraud against Palmer, as SJW representatives falsely assured him they were acting in his interest, which was material to the transactions. These statements were likely known to be false or made recklessly. Palmer relied on these misrepresentations, leading to actual damages of $709,587, justifying the jury's verdict of fraud against SJW. The evidence supporting the jury's verdict on Palmer's fraud claim is deemed both legally and factually sufficient. The court maintains that the jury's decision is not contrary to the overwhelming weight of evidence, thus it is not clearly wrong or unjust. SJW's challenge to the jury's damage awards includes claims that the calculations by Palmer's expert, Abington, are speculative and that the jury improperly found malice in SJW's alleged interference with Palmer's contracts. The Palmer companies counter that SJW did not object to Abington's testimony during trial and assert that the punitive damages cap is inapplicable. Regarding the jury's award of actual damages, SJW's appeal focuses on the sufficiency of evidence supporting these damages. The court outlines that actual damages are necessary to justify any exemplary damages. Since SJW did not object to the jury charge related to damages, the sufficiency of evidence is evaluated based on the submitted charge. The jury was tasked with determining the compensation amount for Palmer's damages resulting from SJW's conduct, which could relate to multiple claims including fraud and tortious interference. Ultimately, the jury concluded that Palmer sustained damages. Damages awarded include $376,397 for lost profits due to a delay in the Robinson tract, $207,926 for lost rental revenue delays on the Kayser tract, and $125,264 for delays in property sales also on the Kayser tract, totaling $709,587 in actual damages. The jury's calculation of these damages is based on evidence from the Palmer companies regarding lost profits, which are defined as the loss of net income measured with reasonable certainty. Legal precedents emphasize that lost profits must be proven through objective data rather than subjective opinions, and while exact calculations are not required, estimates should be grounded in factual information. Testimony from Abington, supported by spreadsheets admitted into evidence, confirmed the damages. Abington's assessment for the Robinson tract delay relied on earnest money contracts, assuming all were effective on April 15, 2000, and assigned to Target with no profit on June 15, 2001, reflecting a fourteen-month delay. The courts have indicated that a lack of prior profit history does not prevent a new business from claiming future lost profits, as long as damages can be demonstrated with reasonable certainty. Abington determined the land’s sales price to be $2,950,101 based on Target's indicated maximum payment of $4.50 per square foot for 15.05 acres. After subtracting costs Palmer agreed to pay landowners and closing costs, including a 6% commission, total costs equaled $2,573,704, resulting in a net profit of $376,397. Abington also calculated damages for delayed rental income from the Kayser tract, assuming a twelve-month delay instead of the actual nineteen-month delay. He estimated that Palmer lost $3,326,823 in rental income due to SJW's wrongful actions, leading to a final loss of $207,926 after deducting property management expenses. Additionally, he assessed losses from sales of portions of the Kayser tract to Bank of America, Jack-in-the-Box, and Logan's Roadhouse, which totaled $2,004,222. Applying a conservative 6.25% cost of capital to this amount, he calculated damages of $125,264. The jury's award aligned with Abington's calculations, indicating their agreement with his analysis. Abington provided sufficient documentary and testimonial evidence to substantiate the damages, and SJW did not contest his calculations or evidence. While damages calculations always involve some subjectivity, the Palmer companies' evidence was deemed sufficiently concrete and not speculative, justifying the jury's decision. The jury's award of actual damages is upheld as it was not contrary to the overwhelming evidence, and the challenge to this award by SJW is overruled. For exemplary damages, a clear and convincing evidence standard applies, which is higher than the preponderance standard used in civil cases but lower than the reasonable doubt standard in criminal cases. SJW contends that the evidence for the jury's finding of malice was insufficient and that the "cap buster" provisions under section 41.008 of the civil practice and remedies code were improperly pleaded, leading to an excessive exemplary damages award. In reviewing the malice finding, all evidence is examined favorably to the jury's decision, considering contrary facts. The jury found clear and convincing evidence of malice, defined as SJW's intent to cause substantial harm to G.J. Palmer, Jr., leading to a $2 million exemplary damages award. The trial court’s judgment adopted this jury award. Stanley, Jay Williams, and Trozzo were linked to SJW, and their actions were central to the Palmer companies' legal claims. Stanley claimed to have retired years before the dispute and stated he only facilitated the Trenton Project's development. However, he contradicted this by revealing he frequently consulted with Jay Williams, SJW's president, about deals. Palmer accused Stanley of being actively involved in the Trenton Project's development, asserting he directed Jay Williams and Trozzo and negotiated assignments of Palmer's earnest money contracts for the REA. Notably, Stanley had previously agreed to exclude Jay Williams and Trozzo from the project, yet Trozzo subsequently inflated the price of the Kayser tract, undermining Palmer's REA. Evidence indicated that Jay Williams played a significant role in the Trenton Project, attending meetings and signing key documents. Trozzo, as an independent contractor for SJW, reported to Jay Williams. Testimony from Dr. Kilgore suggested SJW sought to contract with him to secure the Trenton Project before Palmer's contracts expired, while Wayne Allen noted Trozzo's efforts to persuade landowners to terminate agreements with Palmer in favor of SJW. Throughout this, Palmer, Schwarz, and the landowners believed SJW was acting as Palmer's broker. Expert testimonies from Porter and Mark Freeland established that an agency relationship existed between SJW and Palmer, despite SJW's claims to the contrary. The jury ultimately sided with Palmer, affirming the existence of this agency relationship. Additionally, the record showed Palmer shared confidential pricing and contractual details with Stanley and Jay Williams, despite SJW's trial assertions that they were competitors, and SJW never informed Palmer of this supposed competitive status or requested the cessation of confidential discussions. Evidence indicates that SJW authorized or ratified the malicious acts of Stanley and Jay Williams and Trozzo, with particular involvement from Jay Williams, SJW's president, in wrongful actions at the Trenton Project. A corporation can be held liable for exemplary damages if it either authorizes or ratifies an agent's malicious conduct, maliciously hires an unfit agent, or acts with malice through a vice principal. The term "vice principal" includes corporate officers and those with significant management authority. The jury reasonably concluded that SJW's actions were malicious based on the evidence. Texas Civil Practice and Remedies Code Section 41.008 permits recovery of double economic damages and additional non-economic damages up to $750,000, with the trier of fact having discretion in determining the amount. Relevant factors for assessing exemplary damages include the nature of the wrongdoing, the wrongdoer's culpability, and the defendant's net worth, among others. SJW invoked the exemplary damages cap shortly before the trial commenced, leading to opposition from the Palmer companies, who argued the filing was prejudicial. Texas courts require that any punitive damages cap must be both pleaded and proved by the defendant, as it is considered a defense that must be established. Section 41.008's cap on exemplary damages is an affirmative defense that must be pleaded. Failure to raise this defense in a timely manner—more than seven days before trial—without court permission results in surprise and prejudice, denying the plaintiff fair notice. In this case, SJW did not receive permission to amend its pleadings to include the exemplary damages cap, and the jury was not instructed on this cap, awarding $709,587 in actual damages and $2 million in exemplary damages. The jury's award exceeded the statutory limit, which restricts exemplary damages to twice the amount of economic damages plus a maximum of $750,000 for non-economic damages. Consequently, the court concluded that the jury was unaware of the damages cap, and SJW's late pleading created an unfair surprise for the Palmer companies. The evidence supported the jury's exemplary damages award due to SJW's malicious conduct. Regarding attorney's fees, SJW contends that the Palmer companies cannot recover fees for a tortious interference claim, as only actual damages are recoverable, and they did not prevail on the commission claim under the Listing Agreement. The Palmer companies seek attorney's fees from the jury's award based on their success with counterclaims and a relevant provision in the Listing Agreement that allows for such fees to the prevailing party in related actions. Attorney's fees awards are subject to an abuse of discretion standard, where the trial court's actions are evaluated against established legal principles. Under the American Rule, fees are recoverable only if supported by statute or contract. Specifically, Texas Civil Practice and Remedies Code Section 38.001 permits recovery for various claims if the party prevails and recovers damages. The parties had agreed on the submission of attorney's fees calculations to the court. The "invited error" doctrine prevents a party from requesting a court ruling and then contesting it on appeal. Upon review, it was determined that the Listing Agreement did not justify the attorney's fees for the Palmer companies, as its clear language pertains only to the Jackson Palmer Crossing site. The disputes related to the Jackson Palmer Crossing and the Trenton Project were seen as part of a single transaction focused on the parties' interactions, not expanding the agreement's scope to other properties. The argument for attorney's fees in tortious interference was not sufficiently supported by case law. The case Browning-Ferris, Inc. v. Reyna is cited to establish that it does not address the appropriateness of awarding attorney's fees for a tortious interference claim, hence it is not persuasive on that issue. The disputes regarding Jackson Palmer Crossing and the Trenton Project are interconnected, focusing on SJW's provision of brokerage services to the Palmer companies, which is covered under Texas Civil Practice and Remedies Code section 38.001. The trial court's award of attorney's fees to the Palmer companies is upheld as SJW is estopped from contesting the award due to their prior agreement and the Palmer companies’ success on their counterclaims related to brokerage services. SJW argues that Palmer should not recover attorney's fees since his counterclaim was for tortious interference. However, the court distinguishes this case from Alma Group, where fees were denied due to a lack of proven damages. In this instance, Palmer did prevail on multiple causes of action, including fraud and breach of fiduciary duty, justifying the award of fees. The court finds no relevance in the Alma Group ruling, thus rejecting SJW's contention. Regarding the Palmer companies' claim that the jury's award for commissions related to Jackson Palmer Crossing lacks sufficient evidence, they argue the Listing Agreement is unenforceable due to inadequate property description. SJW counters that evidence supports the jury's finding of owed commissions, bolstered by Palmer's admissions during trial, and asserts the Palmer companies' argument regarding the contract’s enforceability is unfounded. The Palmer companies argue the Listing Agreement is unenforceable based on Texas Occupations Code section 1101.806(c), which mandates that contracts for real estate commissions must be in writing and signed by the relevant party. They claim that because "Exhibit A," a site plan for the Jackson Palmer Crossing development, was not presented at the time of signing, the Listing Agreement lacked a sufficient property description, rendering it unenforceable. However, the Listing Agreement explicitly states that the property is described as "Exhibit A" and includes details about its location in McAllen and Pharr, Texas. The court notes that "Exhibit A" was included in the version admitted as evidence and that the property description was sufficiently clear. The requirement for a writing does not necessitate a metes and bounds description, as long as the property can be identified with reasonable certainty. The Palmer companies’ contention that the absence of "Exhibit A" at the signing invalidates the agreement is rejected, particularly since Palmer did not raise this issue until trial and clearly recognized the property in question. The jury was tasked with reconciling conflicting claims regarding whether "Exhibit A" was presented to Palmer when he signed the Listing Agreement on behalf of the Palmer companies. The admitted version of the Listing Agreement included references to "Exhibit A" and a property description, leading the jury to determine that the agreement was enforceable and that "Exhibit A" was indeed provided at signing. The Palmer companies failed to present evidence beyond Palmer's own testimony to challenge the jury's conclusions about the leases at Jackson Palmer Crossing, so the jury's implicit finding that "Exhibit A" was presented at signing was upheld. Furthermore, the statute requires that a real estate agreement be in writing and signed by the party against whom an action is brought, which undermines the Palmer companies' claim of the Listing Agreement's unenforceability due to an inadequate property description. The evidence supported the jury's verdict, as both SJW and SPP signed the Listing Agreement, and Palmer acknowledged his obligation to pay commissions to SJW for work done at the shopping center, despite withholding payment due to prior disputes. The agreement was valid from June 30, 1999, to June 30, 2000, during which SJW secured leases from Staples and Fashion Bug. Ultimately, the jury's decision that the Palmer companies owed commissions to SJW was deemed reasonable. The jury's findings regarding the evidence were not deemed contrary to the overwhelming weight of the evidence, leading to the conclusion that the evidence was both legally and factually sufficient. The Palmer companies' cross-issue was overruled. The court reversed the jury's $376,397 punitive damages award against PCDC, ruling that the Palmer companies take nothing from PCDC. However, since SJW and PCDC were found jointly and severally liable for the jury's actual damages award, the damages against SJW were affirmed, along with the rest of the trial court's judgment. Additional context includes the relationships among parties involved: Stanley J. Williams, who controls SJW and PCDC, and his son Jay Williams, who consults with him frequently. The Palmer companies operate multiple entities, including SPP, Jackson, and PE. Evidence presented in the trial included a Development Consultant Agreement where SJW secured Home Depot as an anchor tenant, earning a $74,100 fee. Testimony about various earnest money contracts highlighted discrepancies in land prices, influenced by proximity to high-traffic areas. There was also an extension of the contract expiration date, allowing Palmer extra time to evaluate the Trenton Project's feasibility. Dr. Kilgore was approached by Palmer for land sales but preferred negotiating directly with Target, ultimately being offered $1,128,204 for his land. Palmer communicated with Trozzo regarding the acquisition of Dr. Kilgore's land, emphasizing the urgency of the matter. Wayne Allen's deposition revealed that SJW and PCDC encouraged landowners, still under contract with Palmer, to breach their agreements, but many declined due to a preference against working with SJW and PCDC. Dr. Kilgore, also deposed, recounted Trozzo's approach, where Trozzo misrepresented his affiliation as being from Target, despite Dr. Kilgore's prior preference for direct dealings with Target. Trozzo expressed intent to secure Dr. Kilgore's contract and delay until Palmer's earnest money contracts lapsed for SJW and PCDC to proceed with development. Trammell Crow, representing Palmer, communicated with Schwartz about the Trenton Project, where assurances were made regarding contract assignments contingent on Palmer's payment of owed commissions. Palmer mentioned an email from SJW's architect, Charles Thompson, instructing avoidance of sharing plans with Palmer to prevent him from accessing sensitive information. Although Palmer submitted earnest money for contracts, the title company did not acknowledge receipt. Palmer’s testimony about submitting the earnest money was supported by Schwartz, who confirmed receipt but could not clarify the lack of deposit with the title company. Landowners did not terminate contracts with Palmer until approached by SJW and PCDC. Article 6.04 of the Listing Agreement stipulates that the prevailing party in legal disputes can recover associated costs. SJW and PCDC subsequently abandoned their civil conspiracy claims against multiple parties, and SJW's statutory fraud claim was dismissed. The jury awarded $709,587 in actual damages, with the trial court holding SJW and PCDC jointly and severally liable for this amount, citing relevant case law. Wrongdoers can be held jointly and severally liable if a victim demonstrates that one party breached a fiduciary duty while the other knowingly participated in that breach. In a February 7, 2008 judgment, the trial court awarded attorney's fees of $55,767.91 to SJW and $289,582 to the Palmer companies, along with $100,570.23 in expenses. The timeliness of the Palmer companies' counterclaims was not contested; they asserted their claims were timely, and SJW and PCDC did not respond to this assertion. No authority was cited to support applying the relation-back doctrine to time-barred claims against a third party that are closely related to those involving a properly named party. The Palmer companies' claims against PCDC were deemed time-barred, leading to SJW being referenced as the appellant for remaining issues. The court highlighted that for a tortious interference claim, the plaintiff must show the defendant actively persuaded a party to breach a contract, not merely aware of existing obligations. SJW acted as Target's agent and assigned its interest in a land parcel after the Palmer companies agreed to assign their contracts, indicating that SJW's claim of Palmer's greed hindering profits was unsubstantiated. A purchase agreement from SJW to Kayser for $2,213,719.20 was noted but was unsigned. The court did not need to address the Palmer companies' claims of tortious interference with prospective business relations, as sufficient evidence supported their claim of tortious interference with a contract. The jury was asked if SJW intentionally interfered with Palmer's earnest money contracts, but SJW did not contest the jury charge regarding actual damages in the trial court, which results in waiver of any complaints about the charge's wording. Abington, a damages expert, testified that he lacked contracts for two landowners effective in April 2000, contradicting other testimonies. He used prices from October 2000 contracts, adjusting them to estimate April 2000 prices. Target acquired the property for about $3.98 per square foot. SJW argued that the exemplary damage award was erroneous, but as the Palmer companies' claims against PCDC are time-barred, this issue was not addressed. The trial started on April 16, 2007. The Palmer companies claimed they could not specifically plead "cap busting" theories due to SJW's late filings and noted SJW did not object to any related charge questions. They submitted affidavits for $289,582 in attorney's fees and $100,570.23 in expenses, which SJW did not challenge. A jury charge question regarding G.J. Palmer, Jr.'s failure to pay commissions was answered negatively, with specific conditions under which compliance would be excused. The Palmer companies sought to declare the Listing Agreement unenforceable for commission payments while simultaneously using its provisions to claim attorney's fees. SJW did not assert a claim for commissions related to the Factory 2-U lease at the Jackson Palmer Crossing shopping center.