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Win Shields Productions, Inc. v. Greer

Court of Appeals of Texas, Fifth District, Dallas

June 27, 2017


         On Appeal from the 191st Judicial District Court Dallas County, Texas Trial Court Cause No. DC-13-13903

          Before Justices Evans, Stoddart, and Boatright



         Win Shields Productions, Inc. (WSP) and Winfred L. Shields appeal an adverse judgment for damages for breach of contract and fraudulent inducement following a jury trial. In twelve issues, appellants complain the evidence is legally insufficient to support the fraudulent inducement finding against Shields, the evidence is factually insufficient to support the damage findings for breach of contract and fraudulent inducement, the judgment allows a double recovery for a single injury, the evidence of attorney's fees was not properly segregated, and the trial court erred by allowing improper closing argument and calculating prejudgment interest.

         For the following reasons, we affirm the trial court's judgment as to breach of contract damages, but reverse the trial court's judgment as to fraudulent inducement liability and damages and as to attorney's fees. We remand the case for a new trial on the claim for fraudulent inducement and on attorney's fees. It will be necessary for the trial court to assess prejudgment interest based on the outcome of the new trial and appellee's election.


         Sernerick Greer sued WSP for breach of contract and Shields for fraudulent inducement. WSP is a television production company formed by Shields in 1992. Shields is the executive producer and president of WSP. In 2013, Shields contacted Greer to act in a television pilot WSP was filming. In September of 2013, after the pilot was finished, Shields asked Greer to join WSP as an audio producer. Greer testified that Shields told him WSP was funded, "they had millions, and we were ready to roll."

         Greer signed a contract with WSP on September 19, 2013. He quit his existing jobs and went to work for WSP on September 30, 2013. The contract provided that Greer would be paid $3, 000 a week, receive 3, 500 shares of stock in WSP, and have twenty-five paid days off each year. Additionally, WSP would pay expenses for business-related meals.

         Shields hired Gary Garza to be the CEO of WSP in September of 2013. Garza testified he met Shields while Garza was working at Boy Scouts of America. Garza was looking for a change, but did not want to leave his nineteen-year career at Boy Scouts unless it was to work for someone he knew and trusted. Shields told Garza the money was in place and he was ready to go with building the company. Garza left Boy Scouts and went to work for WSP.

         Jonathan Miller worked on the pilot for WSP in August of 2013. He testified that Shields approached him in September about working full time for WSP. Miller wanted to be sure before he signed a two-year contract that the company had funding. According to Miller, Shields "said he had the funding in place to bring on a full-time staff, " "the company was funded, we had money in the bank, " and the company had "$6 million in the bank to cover salaries for [] two years for everyone, regardless of whether we actually sold a show or a film." Miller signed a contract similar to the one Greer signed and went to work for WSP on September 30, 2013.

         Greer and the other employees were not paid on the first payday after September 30, 2013. Shields sent an e-mail to the employees explaining there was a problem transferring money into the correct account because the address on the account was not the corporate address. The money would not be transferred until it could be verified the account was not compromised. Shields said this would make the checks late, but he hoped to straighten it out "so you can all get your checks by Friday at least." Greer never received a check.

         The next week, Shields sent an e-mail to Greer and the other employees stating that he was going to Austin to transfer enough money to cover corporate wages until the end of the year. He stated that even if there was a hold on the money, they would be able to pay the first three weeks by October 22, 2013 and the pay the rest of the year on time. On October 23, 2013, Shields sent an e-mail stating that the "funding I have been working on has not been done the way I was led to believe it would." He continued,

One of the mistakes I have made is to relate as fact what I was told. Thereby causing great disappointment. So, I'll refrain from making any more statements about anything until after it has happened. I'm still working every day on this issue and after we are funded, I will contact you immediately.

         Greer worked for WSP for four weeks, but was never paid. Garza and Miller also testified they were never paid by WSP. On October 28, 2013, Greer's attorney sent a demand letter to WSP for payment of the four-week's salary due Greer plus expenses, and for the 3, 500 shares in the company. Greer filed suit against WSP for breach of contract on November 21, 2013 and later amended his petition to add a claim for fraudulent inducement against Shields, individually.

         The jury found: (1) liability and damages on the breach of contract and fraudulent inducement claims; (2) Greer's reasonable and necessary attorney's fees; and (3) exemplary damages against Shields on the fraudulent inducement claim. Greer moved for entry of judgment on both theories of liability and the damages found by the jury. Appellants opposed the motion, raising the same issues they raise on appeal. The trial court rendered judgment on the jury's verdict for damages and attorney's fees on the breach of contract claim against WSP and for damages and exemplary damages on the fraudulent inducement claim against Shields. The trial court denied appellants' motion for new trial.

         Standard of Review

         When reviewing the legal sufficiency of the evidence, we determine "whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review." City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). We review the evidence in the light most favorable to the verdict, crediting favorable evidence if a reasonable juror could, and disregarding contrary evidence unless reasonable jurors could not. Id. A challenge to the legal sufficiency of the evidence will be sustained when, among other things, the evidence offered to establish a vital fact does not exceed a scintilla. Kroger Tex. Ltd. P'ship v. Suberu, 216 S.W.3d 788, 793 (Tex. 2006). Evidence is more than a scintilla if it "rises to a level that would enable reasonable and fair-minded people to differ in their conclusions." Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004). However, evidence does not exceed a scintilla if it is so weak as to do no more than create a mere surmise or suspicion that the fact exists. Serv. Corp. Intern. v. Guerra, 348 S.W.3d 221, 228 (Tex. 2011).

         When reviewing the factual sufficiency of the evidence, we consider all the evidence and will set aside the verdict only if the evidence supporting the jury finding is so weak or so against the overwhelming weight of the evidence that the finding is clearly wrong and unjust. Crosstex N. Tex. Pipeline, L.P. v. Gardiner, 505 S.W.3d 580, 615 (Tex. 2016).


         A. Fraudulent Inducement

         In his fourth issue, Shields argues there is no evidence to support the finding of fraudulent inducement. To establish a claim for fraudulent inducement of a contract, a plaintiff must prove (1) the defendant made a material representation, (2) the representation was false and was either known to be false when made or made without knowledge of its truth, (3) the representation was intended to be and was relied upon by the injured party, and (4) the injury complained of was caused by the reliance. Nat'l Prop. Holdings, L.P. v. Westergren, 453 S.W.3d 419, 423 (Tex. 2015) (per curiam).

         Greer alleged Shields misrepresented that WSP had "millions" when in fact it did not. Shields argues there is no evidence to support a finding that the misrepresentation was material. However, Greer testified he would not have signed the contract if he knew the company was not funded. Specifically, Greer testified he had a family and bills to pay and would not "have left three jobs for something that offered nothing or for a hope." A rational jury could conclude from this evidence that Shields's representation that WSP already had funding to pay salaries and move forward with its business was a material representation inducing Greer to enter into the contract.

         Shields also argues there is no evidence he knew that WSP had no intent to perform at the time it entered into the contract. However, a misrepresentation may be either a false statement of fact or a promise of future performance made with an intent not to perform as promised. See Bus. Staffing, Inc. v. Jackson Hot Oil Serv., 401 S.W.3d 224, 238 (Tex. App.-El Paso 2012, pet. denied). The jury was so instructed in this case. Therefore, the jury's finding of fraud is supported by the evidence that Shields made a false statement of fact that WSP had funding in place regardless of the state of the evidence relating to promissory fraud.

         We overrule Shields's fourth issue.

         B. Damages for ...

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