Court of Appeals of Texas, Second District, Fort Worth
Appeal from the 442nd District Court Denton County, Texas
Trial Court No. 15-09569-442
Gabriel, Birdwell, and Bassel, JJ.
case involves a dispute about whether Appellees Gregory
Gideo; Southern Underground, LLC; AGL Constructors-Joint
Venture (AGL); Archer Western Contractors, LLC; Granite
Construction Company; and The Lane Construction Corporation
improperly and without authorization utilized land owned by
Appellant Lennon II Family Limited Partnership (Lennon II) by
removing approximately 170, 000 cubic yards of select fill
soil and then dumping approximately 68, 000 cubic yards of
steel-reinforced concrete and asphalt millings and rubble
without permission from Lennon II's principal, Chelsey
Everett Lennon (Mr. Lennon).
case proceeded to trial. After Lennon II's case-in-chief,
the trial court granted a directed verdict on Lennon II's
fraud claims. The jury charge included questions on, inter
alia, Lennon II's claims for trespass and conversion and
on Gideo's counterclaim for breach of contract. The jury
found that Gideo and AGL had not trespassed but that they had
converted Lennon II's property. However, when asked to
assess the fair market value of the converted property, the
jury answered "$0.00." On Gideo's counterclaim,
the jury found that there was an agreement but that Lennon II
had not breached it. In accordance with the jury's
verdict, the trial court rendered final judgment that Lennon
II and Gideo take nothing on their respective claims and
II raises five issues on appeal, which we will resolve as
• The trial court did not err by directing a verdict on
Lennon II's fraud claims. The record contains no evidence
of an affirmative misrepresentation or of facts that would
create the duty necessary to support a claim of fraud by
nondisclosure. Likewise, there is no evidence of reliance.
• The jury's assessment of "$0.00" damages
on the conversion claim reflected the failure of Lennon II to
present evidence of the fair market value of the converted
• The jury's zero finding on conversion damages
renders Lennon II's challenge to AGL's status as a
bona fide purchaser moot.
• The evidentiary mix does not support Lennon II's
claim that the jury's negative finding on its trespass
claim was against the great weight and preponderance of the
• Lennon II contends that the refusal of the trial court
to submit proper jury charge instructions permitted the jury
to find that Lennon II stood in breach of a legally
unenforceable contract. But the jury found no breach of the
contract; thus, the trial court's failure to instruct the
jury as Lennon II wanted was harmless. Further,
unenforceability of the contract does not mean that actions
taken in reliance on it constitute a trespass.
Gideo meets Mr. Lennon and they make their first
II is a Texas limited partnership that was created in 1995.
Lennon, LLC is Lennon II's general partner with a 1%
ownership interest. At all relevant times, Mr. Lennon was
Lennon, LLC's manager, as well as one of Lennon II's
limited partners. Since 1995, Lennon II has been the owner
of approximately 38 acres (the Property) in Denton County.
There is no dispute that Mr. Lennon had legal authority to
act on behalf of Lennon II with regard to the
has been in the excavation and dirt business since the early
1980s, often doing business as Southern Underground, LLC, a
company formed, owned, and operated exclusively by Gideo. At
trial, Gideo explained that he often does work for trade or
barter, such as in exchange for dirt. Thus, Gideo said that
he accumulates dirt and holds it to be sold at a later date.
testified that he met Mr. Lennon in the fall of 2007. Gideo
said that he would see Mr. Lennon walking the Property, so he
decided to ask Mr. Lennon if his cows could graze there. Mr.
Lennon and Gideo ultimately agreed to let Gideo's cows
graze there, and Mr. Lennon let Gideo move his travel trailer
onto the Property, and in exchange Gideo would look after the
Property and clean up refuse that had been dumped on it
(Cattle-Grazing Agreement). Gideo testified that Mr. Lennon
and he "made a cattle grazing contract out there on the
-- at the [Property] one day, made a couple of copies. We
both signed it." The contract was handwritten, and Gideo
testified that it was "definitely" Mr. Lennon's
idea to have something in writing, but at trial Gideo could
not find his copy of the contract.
testified that from 2008 through 2015, he and Mr. Lennon
became such good friends that Gideo could show up at Mr.
Lennon's house unannounced. They would often go out to
eat at McDonald's or IHOP®, and Gideo said
that Mr. Lennon came over to his house for Thanksgiving one
year and that it was "probably the happiest time I ever
saw him." Gideo testified that he "[n]ever,
never" lied to Mr. Lennon.
estimated that over the course of their relationship, he and
Mr. Lennon had walked the Property "a hundred
times." During these walks, Gideo said that Mr. Lennon
talked a lot about his desire to develop the Property. Gideo
testified that Mr. Lennon loved seeing the adjacent
land-which belonged to Mr. Lennon's sister-in-law-being
developed into a subdivision and that he would frequently ask
questions about aspects of development. According to Gideo,
Mr. Lennon wanted to develop the Property in a similar
fashion to the residential development on the adjacent land.
Gideo averred that Mr. Lennon wanted a
7-Eleven® included in the development but he
also wanted to leave some of the trees for a residential
development and that he even wanted to have the first street
on the Property named "Lennon Lane." During one of
these conversations in the summer of 2013, Gideo informed Mr.
Lennon that it would cost approximately $1 million to grade
and clear the Property for development. Mr. Lennon, as Gideo
testified, did not want to spend his money to grade and clear
Gideo and Mr. Lennon make their second deal, which allowed
Gideo to execute a contract with J.D. Abrams to use the
Property and borrow dirt from it.
around the summer of 2013, Gideo had become aware of a road
project near the Property to be performed by J.D. Abrams, LP,
which would require about 20, 000 cubic yards of dirt. Gideo
negotiated an agreement with J.D. Abrams to pay $2, 000 per
month to Lennon II to use a corner of the Property as a
"lay-down area" and to pay Gideo $25, 000 to
"put up all the fence," install a "storm sewer
across the lot," run a water line "up to their
office," and install "all new gates." Finally,
J.D. Abrams would borrow 20, 000 cubic yards of dirt that it
would have to fill back in.
trial, Gideo introduced a handwritten document dated July 3,
2013. The document contained two hand-drawn ovals with
"Borrow?" written inside of each. Gideo testified
that these represented the two areas on the Property where
J.D. Abrams would be able to borrow dirt. Gideo also
testified that the document was "all" Mr.
Lennon's drawing and that such a drawing was what Mr.
Lennon did for all of his agreements with Gideo:
Q. Back off from that a little bit. And this is a -- this is
a handwritten agreement. Tell us whose idea it was to have a
A. It was [Mr. Lennon's].
Q. And there's a drawing. There's a drawing of the
land. Whose idea was it to make this agreement in the form of
A. It's all [Mr. Lennon]. I mean, that's the way
all three of them were, even -- even the cattle grazing. I
mean, this is what this guy does.
I mean, he wants to sit with you, talk it through. He'll
mark what he feels like, and he's in control. He
doesn't -- if you -- if he -- if you try to say something
that he don't like, it's struck. It doesn't
Q. Okay. So as you were doing this handwritten agreement in
the form of this map, just give us an idea of how it would
be. He's got some writing on it; you've got some
writing on it. Tell us how that would happen.
A. He -- he would -- he would -- he'd get a piece of
paper, and he would get one piece of paper. And he'd get
a pen, and he'd say, okay, draw it like the -- what the
property -- he called it the property. I called it the farm.
He'd say, draw the, like, perimeter on it. I'd say,
well, I'm going to put the creek through here. I'll
draw the barbecue stand here and J.D. Abrams over here, and
here's where we want to borrow. And I made them two
And then he would take the pencil, and he would write what he
wanted, like Goldfield Road and 2181. He would write whatever
he wanted. [Emphasis added.]
this July 3, 2013 document, Gideo signed a "property
usage and release agreement" with J.D. Abrams (J.D.
Abrams Contract), which among other things, allowed J.D.
Abrams to set up a concrete batch plant on 7.5 acres of the
Property. Although Gideo was listed as the owner of the
Property,  Gideo testified that he did not hide
anything from Mr. Lennon and that he was authorized by Mr.
Lennon to enter into the J.D. Abrams Contract because of the
July 3, 2013 handwritten document. Indeed, Gideo testified
that Mr. Lennon "didn't want to deal with [J.D.]
Abrams. He wanted to deal with me. We made our deal. And I
told him, you know, now that I know where we can take the
borrow, I'll go to [J.D.] Abrams." At trial, Lennon
II did not challenge the terms of, or Gideo's authority
to enter into, the J.D. Abrams Contract and made no claim
against Gideo or his company based on that agreement.
Gideo attempts to broker a deal with AGL.
2014, AGL had a contract with the Texas Department of
Transportation (TxDOT) to begin a road construction project
(I-35 Express Project), which was described at trial as a
"design/build project." In March 2014, Gideo
approached AGL to inquire about supplying dirt and leasing
the Property for AGL to use for a concrete batch
plant. A series of text messages between Gideo
and Andy Svehla, AGL's assistant project manager on the
I-35 Express Project, showed that AGL wanted a written
agreement with Lennon II. Yet without any written agreement
from Lennon II, in August 2014, Gideo and AGL entered into an
agreement whereby Gideo sold 50, 000 cubic yards of his own
"Select Borrow Fill Material" at $4.00 per
cubic yard ($200, 000 total) (AGL Contract). The AGL Contract
recited, inter alia, that Gideo would be responsible for
loading the select fill into AGL's trucks and obtaining
any required permits.
who was involved in negotiating the deal, testified
extensively as to how the $4.00 per cubic yard price was
negotiated and what the price included. Svehla testified that
the price included not just the select fill dirt, but also
Gideo's services for excavating and loading the dirt.
This testimony went as follows:
Q. And you evaluated how much it cost per cubic yard.
A. Right. Not just material, but the labor and the trucking
combined as well.
Q. So to get to the total costs per cubic yard, you had to
look at whether y'all had to go pick it up and excavate
Q. You had to look at whether you had to haul it.
Q. And that -- then the price of the dirt gave you the total
cost per cubic yard.
Q. Now, in this particular case, when AGL went to the Lennon
property, did AGL ever excavate the dirt?
Q. Did AGL load the dirt onto its trucks?
Q. So if we look at the Lennon/Gideo property, we see that
you picked up C1 material, dirt.
Q. And you paid $4 a cubic yard.
Q. It included the cost of loading.
Q. And then you all had to pay the truckers to drive it to
wherever you needed it. Fair?
Q. Now, the total there is $8.69. But if we look at your
material costs, Andy, you paid $4 a cubic yard for this dirt
to Mr. Gideo, and if you had purchased it from the Denton
landfill, you only paid $1.60.
Q. Why did you pay more money for this dirt?
A. That's a good question.
Q. Well, this dirt includes the fact -- the load cost is
included in the price that you pay Mr. Gideo, correct?
A. Right. Yes, correct. We didn't have to provide the
equipment or the labor to load it.
Q. In your opinion, in evaluating what you all paid for dirt,
did you pay a fair market value for the dirt you purchased
from this property?
A. On the high end of the market value.
testified that the 50, 000 cubic yards of select fill in the
August 2014 AGL Contract was his own soil that he had moved
onto the Property, so after the first 50, 000 cubic yards of
select fill was exhausted, he "asked [Mr. Lennon] if we
could have some dirt from the [Property]."
September 2014, when AGL began considering purchasing
additional fill from the Property, it did "not want to
write a change order until [it got] something from the
owner." At trial Svehla clarified AGL's September
Q. (BY [LENNON II'S COUNSEL]) Bates 10 -- Mr.
Svehla, do you have some concerns about Mr. Gideo's
authority from the owner in September -- on September 26th of
2014, authority to sell another 100, 000 cubic yards of
A. What was the date?
Q. September of 2014, September 26th.
A. I wouldn't call them concerns, but I was doing my due
diligence to make sure that Mr. Gideo and Mr. Lennon were
both on the same page as far as the additional 100, 000 cubic
Q. Mr. Svehla, why -- after receiving the first 50, 000 cubic
yards of dirt that was in this stockpile, why did AGL want to
enter into a secondary agreement to buy more dirt?
A. Because we needed more dirt on the project.
Q. And did -- what was the purpose in -- was there a
different purpose? Since the first purpose was a stockpile
and the second purpose of the contract involved some
excavation, were there different concerns with that?
A. Well, the first 50, 000 belonged to Mr. Gideo, and then
the next 100, 000 that we entered into the agreement was
coming directly from the [P]roperty.
October 2014, AGL and Gideo communicated about the amount of
select fill to be purchased and the status of Gideo's
communications with the "landowner." At the end of
October 2014, AGL provided Gideo a change order to discuss
with the "owner, and try to get him to approve it."
Also at the end of October 2014, AGL drafted an agreement
between Gideo and the landowner (AGL's Proposed
Agreement) that AGL viewed as protecting its interests.
The November 3, 2014 meeting and commencement of the AGL
of AGL did meet with Mr. Lennon. On November 3, 2014, there
was a meeting on the Property with Mr. Lennon, Gideo, Svehla,
and AGL's truck manager on the I-35 Express Project, Kody
Swesey. Gideo testified that the purpose of the meeting was
so "AGL could meet [Mr.] Lennon and also get an idea of
where we were going to excavate and what the next step of our
work would be." According to Gideo, he met Mr. Lennon
that morning, they drove around the Property and met with AGL,
and after the meeting everyone "had a game plan"
about what was going to happen next:
Q. All right. And you -- can you tell us briefly what
happened at the meeting there with the AGL people and Mr.
A. [Mr. Lennon] met me that morning over by the barn or the
camper. We drove around the property. We met the AGL group.
We talked, drove around --
Q. All right.
A. -- discussed what the plans were.
Q. Okay. And at the end of the meeting, did you have an
understanding about whether AGL was satisfied with the
meeting with Mr. Lennon?
A. I do.
Q. And what was your idea about that?
A. We had -- me, [Mr. Lennon, ] and AGL had a game plan of
what our next step would be.
testified that at the meeting he told Mr. Lennon that
"it's lucky that we need this particular material
while you're developing, or it would cost you $8 to $10 a
cubic yard to remove it." Swesey noted that Mr. Lennon
was actively involved at the meeting, including mentioning
that he wanted to keep some of the trees. So Swesey left the
meeting believing that Mr. Lennon was aware of and
comfortable with the project and that he had given Gideo
authority to act on the project:
Q. Okay. Do you recall Mr. Lennon being adamant about leaving
the trees on the Swisher Road frontage?
Q. Do you recall him being adamant about leaving the trees on
the west side of the property?
A. Not all the trees, but some trees.
Q. And is there anything that happened during your
drive-around that gave you the impression that Mr. Gideo did
not have Mr. Lennon's authority to be out there directing
traffic and doing this work?
Q. In fact, it was your impression that Mr. Lennon knew what
was going on and had given Mr. Gideo that authority;
isn't that true?
did acknowledge that there was no specific discussion at the
meeting about AGL's Proposed Agreement or the additional
100, 000 cubic yards of select fill. At trial, Svehla did not
testify to any statements he made to Mr. Lennon during the
meeting, nor did Lennon II offer testimony that any
statements were made.
after the November 3, 2014 meeting, AGL communicated
internally by e-mail about what AGL and Gideo wanted in a
change order. The e-mail stated that Gideo was
"currently working with an engineer to design the
property for a future development, so he wants to know how
much material we will actually be using." Svehla was
told to "[l]ock it down as a purchase, not borrow, for
days later, Gideo reported to AGL that Mr. Lennon would not
sign AGL's Proposed Agreement. Instead, Gideo stated that
he and Mr. Lennon had drawn up another handwritten agreement.
That handwritten agreement (Development Plan) was a central
focus at the trial. Specifically, Gideo testified that he and
Mr. Lennon met at Mr. Lennon's home where Mr. Lennon
instructed Gideo to use different color ink pens to
memorialize their agreement. Gideo testified that the
Development Plan contained a date "11/12/14," which
was the day that the work would start. The Development Plan
stated that Gideo would remove or uproot "all
interior" trees and mulch them, remove a minimum of six
inches of top soil, cut a new grade that drained the Property
to the west, and seed the Property with grass. The
Development Plan also stated that "[a]t [c]ompletion
Lenoun [sic] gets his property ready for development[;] Gideo
gets trees/mulch borrow/soil and use of property." Gideo
testified that "Gideo gets borrow/soil" meant that
Mr. Lennon had given him permission to take the soil and sell
it to AGL. The Development Plan also contained the
PROJECT AGREEMENT DATE
C.E. Lennon (Owner)
[Gideo's signature] (Contractor) Greg Gideo
Gideo testified that Mr. Lennon handwrote this portion of the
Development Plan, except the last line where Gideo had signed
it, wrote contractor, and printed his name. Finally, the
Development Plan provided, "Estimated completion for
Lennon is 12/2015."
II's trial representative agreed that the Development
Plan contained Mr. Lennon's handwriting and his
signature. Gideo believed that the Development Plan was an
agreement to go forward clearing trees and mulch and selling
soil to AGL to offset his costs of preparing the Property for
development. In addition to this document, Gideo directly
testified that Mr. Lennon had given him permission to sell
dirt to AGL. So on November 12, 2014, Gideo, as Southern
Underground, signed a "contract change order" with
AGL for an additional 100, 000 cubic yards of select fill at
$4.00 per cubic yard ($400, 000).
trial, Lennon II highlighted an e-mail from the lawyer who
worked for AGL who had drafted AGL's Proposed Agreement
that Mr. Lennon would not sign, in which the lawyer stated
that Mr. Lennon's refusal to sign AGL's Proposed
Agreement "[m]akes me worried." The lawyer then
articulated his two concerns: "The two big (and really
only) things I had on there protecting us is 1) the owner
warrants that he owns the property, and 2) that it is
understood that we are not obligated to bring back all the
material. Regarding 2, its [sic] not to say that we won't
bring it back, but we don't want to be liable for
refilling his hole . . . ." Finally, the lawyer was
critical of whoever was helping Mr. Lennon: "On a
separate note, if the property owner's lawyer drafted up
what you attached, I feel sorry for the property owner . . .
on the same e-mail chain, Svehla addressed these two
concerns. He provided a Denton County Appraisal District link
that apparently indicated Lennon II's ownership of the
Property, and he stated that he had confirmed that AGL would
not be responsible for bringing the select fill back to the
The additional ...