Court of Appeals of Texas, Third District, Austin
Language People, Inc. and Deaf Nation Enterprises, Inc., Appellants
Joel Barish, Jed Barish, and DeafNation, Inc., Appellees
THE 126TH DISTRICT COURT OF TRAVIS COUNTY NO.
D-1-GN-16-000042, THE HONORABLE KARIN CRUMP, JUDGE PRESIDING
Chief Justice Rose, Justices Kelly and Smith
ROSE, CHIEF JUSTICE
dispute arises from a proposed corporate merger gone awry.
Appellants Language People, Inc. and Deaf Nation Enterprises,
Inc. (Enterprises) challenge the district court's
final judgment adopting the jury's findings of fraud and
breach of contract and awarding damages and attorneys'
fees to appellees Joel Barish, Jed Barish, and DeafNation,
Inc. Appellants dispute the jury's findings and assert
that the district court made multiple mistakes of law. We
will affirm the district court's judgment.
People is a California corporation that provides commercial
interpretation and translation services, and Enterprises is a
wholly owned subsidiary of Language People. DeafNation is a
Texas corporation jointly owned by brothers Joel and Jed
Barish. DeafNation produces "Expos," conventions
held throughout the United States for individuals with
hearing impairments. In January 2015, Language People entered
into a Memorandum of Understanding (Memorandum) with the
Barishes and DeafNation under which Language People agreed
that it would purchase most of DeafNation's assets and
that it would create Enterprises, a new subsidiary. The
parties also agreed that the Barishes would serve as officers
of Enterprises "or one of the other anticipated newly
formed subsidiary corporations as deemed appropriate,"
each receiving $100, 000 a year and "the same benefits
as Executives are offered at Language People, Inc. at this
time." Under the Memorandum, which was signed by
Language People and the Barishes on behalf of DeafNation,
"[t]he rights to the assets of sale by DeafNation shall
belong to Language People and it will ultimately put those
assets into" Enterprises. In April 2015, Enterprises,
Joel Barish as CEO of DeafNation, and the Barishes as
individuals signed a Purchase Agreement setting out the
specifics of Enterprises' purchase of DeafNation's
assets. Also in April 2015, Enterprises and the Barishes
signed separate Employment Agreements providing each brother
a $100, 000 base salary and other compensation and benefits.
We will refer to the four contracts collectively as the
to the Barishes, Language People promptly created the
Enterprises entity. It also applied for a trademark of the
DeafNation logo, listing itself as owner, without telling the
Barishes or DeafNation. The Barishes testified that Jed moved
to California to begin working for Language People while Joel
remained in Texas to continue coordinating the Expos and to
oversee the transfer of DeafNation's assets to
Enterprises. Language People, however, never completed its
purchase of DeafNation's assets or compensated the Barish
brothers. Jed resigned after three months in California, at
which point Language People notified him that he was in
breach of his contract and threatened to enforce a
non-compete clause against him.
alleged that the Barish brothers commingled personal and
corporate assets and diverted tens or hundreds of thousands
of dollars from the corporate bank accounts for personal use;
never provided the financial documents necessary to proceed
with the Agreement; and refused to allow Language People to
participate in the Expos. Language People threatened to
pursue claims for breach in August of 2015, asserting that
the Barishes had removed corporate property from the Austin
offices and that Jed Barish was planning to start a new
competing entity. Language People's executives instructed
Joel to discontinue any communication with his brother
regarding Language People, Enterprises, and DeafNation.
year passed with no significant progress under the Agreement,
the Barish brothers and DeafNation filed suit in Travis
County, seeking damages and declaratory relief, alleging
claims for fraudulent inducement and breach of the Agreement.
Language People countered with claims sounding in contract,
tort, and equity. The case was tried to a jury with the
assistance of several American Sign Language
translators. The jury found Language People liable
for breach and fraud and found no liability on the part of
the Barish brothers or DeafNation. Based on the jury's
findings and appellees' election of remedies, the
district court rescinded the contract, awarding appellees
over $150, 000 in restitution damages and $334, 741.25 in
attorneys' fees. Language People now appeals.
People argues that there is no evidentiary support for the
adverse jury findings against it and that the district court
made a number of erroneous rulings. We will consolidate the
arguments for discussion. See Tex. R. App. P. 47.1;
Gene Hamon Ford, Inc. v. David McDavid Nissan, Inc.,
997 S.W.2d 298, 304 n.9 (Tex. App.-Austin 1999, pet. denied).
first address Language People's argument that the
district court improperly denied its request for continuance
of trial. We will not disturb an order denying a motion for
continuance unless the trial court has committed a clear
abuse of discretion. Joe v. Two Thirty Nine Joint
Venture, 145 S.W.3d 150, 161 (Tex. 2004). A trial court
abuses its discretion when it "reaches a decision so
arbitrary and unreasonable as to amount to a clear and
prejudicial error of law." Id. In deciding
whether a trial court has abused its discretion in denying a
motion for continuance related to discovery, we consider the
length of time the case was on file, the materiality and
purpose of the discovery sought, and whether the party had
exercised due diligence to obtain the discovery. Id.
February 20, 2018, Language People filed a motion for
continuance, its second,  seeking delay of a February 26,
2018 trial setting. Language People asserted that in a
December 2017 hearing, the district court had orally denied
Language People's motion to compel but had not yet signed
an order to that effect. Language People stated that it
intended to seek review of that ruling through mandamus in
this Court and that a continuance was necessary because it
could not "proceed to trial or effectively pursue
appellate review of the [district court's] rulings in the
absence of a signed and duly entered Order on its Motion to
Compel." On February 22, two separate orders were signed
by different trial judges-one ruling on the motion to compel,
and the other denying Language People's second motion for
continuance. On February 26, Language People filed
a third motion for continuance, asserting that a continuance
was warranted because it had filed in this Court a petition
for writ of mandamus related to the verbal rulings on the
motion to compel. At a pretrial hearing held that same
day, the district court denied Language People's third
motion for continuance, stating that counsel should have
contacted the court to get a signed order on the motion to
compel; that the order on the motion to compel signed on
February 22 was the same order that counsel for both sides
had signed as to form; that this Court had denied Language
People's petition for writ of mandamus that morning; and
that the rulings on the motion to compel appeared to be
correct. Based on this record, Language People has not shown
that the district court abused its discretion in denying the
second and third requests for continuance. See id.
We overrule the issue.
People contends that the district court erred in entering
judgment against it, relying largely on an argument that the
contracts obligate Enterprises-not Language People-to
purchase DeafNation's assets and to pay the Barishes.
generally accepted principles of contract interpretation, all
writings that pertain to the same transaction will be
considered together, even if they were executed at different
times and do not expressly refer to one another."
Burlington Res. Oil & Gas Co. v. Texas Crude Energy,
LLC, 573 S.W.3d 198, 208 (Tex. 2019) (quoting DeWitt
Cty. Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 102 (Tex.
1999)). That rule may apply even if the various contracts are
not between the same parties. Jones v. Kelley, 614
S.W.2d 95, 98 (Tex. 1981); Miles v. Martin, 321
S.W.2d 62, 66 (Tex. 1959); Great Atl. Life Ins. Co. v.
Harris, 723 S.W.2d 329, 333 (Tex. App.-Austin 1987, writ
is no genuine dispute here that the Memorandum, the Purchase
Agreement, and the Employment Agreements all pertain to the
same transaction-i.e., Language People's purchase of
DeafNation's assets-and, indeed, Language People asserts
that the Memorandum, the Purchase Agreement, and the two
Employment Agreements are the "four agreements that
formed the transaction." Instead, Language People argues
that clauses in the Purchase Agreement and Employment
Agreements extinguish any other obligations to which Language
People might be held and that "well established rules
pertaining to the construction of multiple contracts that
comprise a transaction dictate that the [Purchase Agreement]
and Employment Agreements control to the extent of any
conflict" with the terms of the Memorandum.
Purchase Agreement states, "This Agreement . . .
supersede[s] all prior discussions and agreements between the
parties with respect to the subject matter hereof and
thereof, and contain the sole and entire agreement between
the parties hereto with respect to the subject matter hereof
and thereof." The Employment Agreements similarly
provide, "Unless expressly provided hereunder, this
Agreement constitutes the total and complete agreement of the
parties regarding Employee's employment and supersedes
all prior understandings and agreements, and there are no
other representations, understandings or agreements."
However, Language People was not party to either the Purchase
Agreement or the Employment Agreements-Enterprises executed
those contracts pursuant to the terms of the Memorandum.
Thus, those clauses bind Enterprises but do not extinguish
Language People's obligations under the Memorandum.
extent that Language People relies on the merger doctrine,
which provides that "prior or contemporaneous agreements
between the same parties, concerning the same subject matter,
are absorbed into a subsequent agreement," Springs
Window Fashions Div., Inc. v. Blind Maker, Inc., 184
S.W.3d 840, 869 (Tex. App.-Austin 2006, pet. granted,
judgment vacated w.r.m.), under that doctrine, the latter
contract "must be between the same parties as
the first, must embrace the same subject matter, and
must have been so intended by the parties," Fish v.
Tandy Corp., 948 S.W.2d 886, 898-99 (Tex. App.-Fort
Worth 1997, writ denied); see Spring Windows, 184
S.W.3d at 869. As noted, Language People was not party to the
later three contracts containing the merger clauses, nor do
the four contracts comprising the Agreement conflict so that
Language People's obligations in the Memorandum may not
be enforced. See The Courage Co. v. The Chemshare
Corp., 93 S.W.3d 323, 333 (Tex. App.-Houston [14th
Dist.] 2002, no pet.) (in construing multiple documents
together, courts may "in appropriate instances"
construe documents as if "part of a single, unified
instrument," and later contract will prevail "to
the extent that they are inconsistent"; portions of
first contract that do not conflict with second may be
executing the Memorandum, signatories Language People,
DeafNation, and the Barishes "acknowledge[d] and
agree[d] that all of the terms contained in this [Memorandum]
are binding and enforceable" against each party. The
Memorandum sets forth the essential terms of the asset
purchase and the Barishes' employment and expressly
anticipates the execution of the Purchase Agreement and the
Employment Agreements. Language People was bound to comply
with the Memorandum's contractual provisions, which
specifically describe Language People's obligations with
regard to the Barishes and DeafNation. We overrule Language
People's assertions that its liability was extinguished
by the merger clauses contained in the three later agreements
to which it was not a party.
of the Evidence
People next contends the evidence is legally and factually
insufficient to support the jury's findings: 1) that
Language People breached the Agreement; 2) that Language
People committed statutory and common law fraud; and 3) that
DeafNation and the Barishes were not unjustly enriched at
Language People's expense.
a party attacks the legal sufficiency of an adverse finding
on an issue on which it did not have the burden of proof, it
must demonstrate on appeal that no evidence supports the
adverse finding." Graham Cent. Station, Inc. v.
Peña, 442 S.W.3d 261, 263 (Tex. 2014) (per
curiam). With respect to findings on issues on which the
party had the burden of proof at trial, it must
"demonstrate that the evidence establishes, as a matter
of law, all vital facts in support of the issue."
Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex.
2001). In conducting our legal-sufficiency review, "we
credit evidence that supports the verdict if reasonable
jurors could have done so and disregard contrary evidence
unless reasonable jurors could not have done so."
Peña, 442 S.W.3d at 263 (quoting Akin,
Gump, Strauss, Hauer & Feld, L.L.P. v. National Dev.
& Research Corp., 299 S.W.3d 106, 115 (Tex. 2009)).
"The final test for legal sufficiency must always be
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). As for factual sufficiency, if the party did not have
the burden of proof, it must show that there is insufficient
evidence to support the adverse finding. In re Estate of
Matthews III, 510 S.W.3d 106, 117 (Tex. App.-San Antonio
2016, pet. denied). If it had the burden of proof, the party
must demonstrate that the adverse finding is against the
great weight and preponderance of the evidence. Dow
Chem., 46 S.W.3d at 242. We consider all the evidence
and will only reverse "if the evidence is so weak or if
the finding is so against the great weight and preponderance
of the evidence that it is clearly wrong and unjust."
as to the Breach of Contract Claims
People asserts that there is no evidence to support the
jury's finding that it breached the Agreement with
DeafNation and the Barish brothers. See Peña,
442 S.W.3d at 263. A party breaches a contract when it fails
or refuses to do something it has promised to do. Mays v.
Pierce, 203 S.W.3d 564, 575 (Tex. App.-Houston [14th
Dist.] 2006, pet. denied).
jury answered "yes" when asked:
Do you find that the Memorandum of Understanding, the Asset
Purchase and the Employment Agreements together ...