Court of Appeals of Texas, Seventh District, Amarillo
JAMES ROY BRADSHAW, AS TRUSTEE FOR THE ROBERT MEEKS 1998 TRUST, APPELLANT
G&T FARMS, LLC AND GREG FOSTER D/B/A FOSTER REAL ESTATE, APPELLEES
Appeal from the 69th District Court Hartley County, Texas
Trial Court No. 4706H, Honorable Ron Enns, Presiding
QUINN, C.J., and CAMPBELL and PIRTLE, JJ.
T. CAMPBELL, JUSTICE.
James Roy Bradshaw, Trustee of the Robert Meeks 1998 Trust,
appeals from the trial court's money judgment in favor of
appellees, G&T Farms, LLC, and Greg Foster d/b/a Foster
Real Estate. We will reverse and render in part, modify in
part, and otherwise affirm the trial court's judgment.
case arises from a real estate transaction. Bradshaw, as
trustee, contracted in 2011 to sell property owned by the
Robert Meeks 1998 Trust for some $12 million. Foster was the
listing real estate agent for Bradshaw's sale. Bradshaw
sought to locate replacement property to purchase in a
transaction under section 1031 of the Internal Revenue
Code. Foster proposed he acquire an irrigated
1845-acre farm in Hartley County, Texas, owned by G&T
Farms. Bradshaw was interested in G&T's property,
partly because it adjoined a ranch the Meeks trust owned.
negotiations, G&T agreed to sell the Hartley County farm
to Bradshaw for $4.2 million. The agreement was documented by
a Farm and Ranch Contract on a form promulgated by the Texas
Real Estate Commission ("TREC"). The
contract's broker information page, signed by both
parties, lists Foster as an intermediary representing seller
and buyer. It states Foster, on closing, would receive a fee
from seller, G&T. The contract's effective date is
stated as June 23, 2011. It shows each party was represented
by counsel. Bradshaw deposited $420, 000 as earnest money.
contract called for a closing date of the later of November
4, 2011, or seven days after objections made to title were
cured or waived. The remedies available to the non-defaulting
party under the contract's default provisions included
the remedy of terminating the contract and receiving the
earnest money as liquidated damages.
sale under the contract was never closed. On November 23,
2011, G&T sent Bradshaw notice of termination of the
contract and requested he authorize Foster, who held the
earnest money, to release it to G&T. Bradshaw did not
sign G&T's proffered release document, and G&T
filed suit in February 2012.
alleged Bradshaw breached the contract by failing to close by
the closing date, and by failing to sign a release for the
earnest money. By an amended petition, G&T also sought
declaratory relief and expressly sought liquidated damages of
the amount of the earnest money, plus three times the amount
of the earnest money, pursuant to a provision of the contract
authorizing that amount as liquidated damages.
bench trial, the court signed a judgment ordering that Foster
release the earnest money to G&T, and ordering that
G&T recover damages from Bradshaw of $1, 260, 000,
interest and attorney's fees. It denied claims asserted
by Bradshaw, and awarded Foster his attorney's fees.
court later entered findings of fact and conclusions of law
in support of its judgment. On appeal, Bradshaw raises issues
contending that the parties had no enforceable contract, that
no evidence supported a finding Bradshaw defaulted or that
G&T was entitled to the earnest money as liquidated
damages, and that G&T was not entitled to the triple
liquidated damages provided under paragraph 18.D. Other
issues challenge the award of prejudgment interest and
One - Existence of Contract
essential elements of a breach of contract claim are (1) the
existence of a valid contract, (2) the plaintiff performed or
tendered performance, (3) the defendant breached the
contract, and (4) the plaintiff was damaged as a result of
the breach. Davis v. Friedson, No. 14-08-01098-CV,
2010 Tex.App. LEXIS 1818, at *15 (Tex. App.-Houston [14th
Dist.] March 16, 2010, no pet.) (mem. op.) (citing
Winchek v. Am. Express Travel Related Servs. Co.,
232 S.W.3d 197, 202 (Tex. App.-Houston [1st Dist.] 2007, no
pet.)). Findings of fact in a case tried to the court have
the same force and effect as a jury's verdict.
Anderson v. City of Seven Points, 806 S.W.2d 791,
794 (Tex. 1991); Creative Mfg., Inc. v. Unik, Inc.,
726 S.W.2d 207, 210 (Tex. App.-Fort Worth 1987, writ refd
n.r.e.). They are reviewed under the same sufficiency
standards applicable to jury verdicts. Id. When
reviewing legal sufficiency of the evidence, an appellate
court considers the evidence in the light most favorable to
the fact-finder's decision and indulges every reasonable
inference that would support it. City of Keller v.
Wilson, 168 S.W.3d 802, 826 (Tex. 2005). When reviewing
factual sufficiency, appellate courts consider and weigh all
of the evidence and will set aside the verdict only if it is
so against the great weight and preponderance of the evidence
that it is clearly wrong and unjust. Id. at 826. The
trial court evaluates the credibility of the witnesses,
determines the weight to be given their testimony, and
resolves conflicts and inconsistencies in the testimony.
Sw. Bell Media, Inc. v. Lyles, 825 S.W.2d 488, 493
(Tex. App.-Houston [1st Dist.] 1992, writ denied). An
appellate court may not impose its own opinion on these
matters contrary to that of the fact-finder. See City of
Keller, 168 S.W.3d at 819.
other witnesses, the court heard testimony from Foster,
Bradshaw and G&T's only members, brothers Greg and
Todd Hodnett. There was testimony that Foster prepared the
contract and presented it to Bradshaw, who signed it. There
was general agreement in the testimony that G&T made some
handwritten changes to the contract after Foster delivered
it. After making the handwritten changes, G&T executed
the contract and returned it to Foster.
first of G&T's handwritten changes was to the
contract's "special provisions" section. As
originally prepared, the contract contained a special
provision stating, "This contract is subject to all
parties making a 1031 Tax Free Exchange." G&T lined
that sentence out, and wrote in a sentence reading,
"This contract shall give all parties the right to make
a 1031 tax free exchange."
second change was to the contract's earnest money section
which, as prepared, required Bradshaw to deposit $410, 000 as
earnest money. G&T changed that figure to $420, 000.
third change was made in the section describing the property
to be conveyed. That section begins with a paragraph A
describing the land. After the legal description of the land,
the paragraph's pre-printed language continues,
"together with all rights, privileges, and appurtenances
pertaining thereto, including but not limited to: water
rights, claims, permits, strips and gores, easements, and
cooperative or association memberships." Further down,
after paragraphs referring to improvements, accessories and
crops, is paragraph F, in which interests to be reserved by
the seller may be described. It contains pre-printed wording
reading, "Seller reserves the following water, timber,
or other interests:" followed by a blank line. In this
contract, in the blank, Foster put the language, "none
all minerals right, [sic] water rights shall go with
sale." Before G&T signed the contract, it added to
the end of that language, the handwritten words "that
are now owned."
first issue, Bradshaw argues both that no contract was formed
by his exchange of documents with G&T, and that any
contract which was formed was unenforceable because it did
not comply with the statute of frauds.
G&T's contract modifications material?
review of the record, we conclude both of Bradshaw's
arguments depend on his assertion that G&T, by its
handwritten changes, materially altered the terms of the
contract Bradshaw signed. Bradshaw contends that by signing
the contract Foster prepared he extended an offer to buy
G&T's farm but G&T's actions constituted a
rejection and counter offer rather than acceptance of
Bradshaw's offer. "A purported acceptance that
changes or qualifies an offer's material terms
constitutes a rejection and counter offer rather than an
acceptance." Forged Components, Inc. v. Guzman,
409 S.W.3d 91, 100-01 (Tex. App.-Houston [1st Dist.] 2013, no
pet.); see Davis v. Tex. Farm Bureau Ins., 470
S.W.3d 97, 104 (Tex. App.-Houston [1st Dist.] 2015, no pet.)
(material change in a proposed contract constitutes a
counteroffer). G&T argues its changes were not material.
determine their material terms, courts examine contracts on a
case-by-case basis. McCalla v. Baker's Campground,
Inc., 416 S.W.3d 416, 418 (Tex. 2013) (per curiam);
Parker Drilling Co. v. Romfor Supply Co., 316 S.W.3d
68, 74 (Tex. App.- Houston [14th Dist.] 2010, pet. denied)
(both citing T.O. Stanley Boot Co. v. Bank of El
Paso, 847 S.W.2d 218, 221 (Tex. 1992)). We have joined
some other Texas courts in holding that a term is material,
or essential, if the contracting parties would reasonably
regard it as a vitally important element of their bargain.
Domingo v. Mitchell, 257 S.W.3d 34, 40-41 (Tex.
App.-Amarillo 2008, pet. denied); see, e.g., General
Metal Fabricating Corp. v. Stergiou, 438 S.W.3d 737, 744
n.4, 5 (Tex. App.-Houston [1st Dist.] 2014, no pet.).
focuses primarily on the language G&T added to the
contract's reservation language. He points to the
undisputed evidence that the water rights were essential to
the value of G&T's irrigated acreage, and that at
least some of the water rights actually were held by a
corporation owned by Todd Hodnett rather than by G&T
itself. Bradshaw then argues that G&T's addition of
the words "that are now owned" to the end of the
reservation language had the effect of removing those water
rights from the transaction.
a particular contractual term is material is a question of
law. Sharifi v. Steen Auto, LLC,370 S.W.3d 126, 142
(Tex. App.-Dallas 2012, no pet.) (citing Parker
Drilling, 316 S.W.3d at 74). We might agree in principle
that a contract change deleting the water rights from the
sale of irrigated farmland would be a material change. But we
cannot agree with Bradshaw's contention such a change is
involved here. G&T's additional language does not
make the contract's reservation paragraph say G&T was
reserving the water rights or that the water rights would not