Opinion By Justice FITZGERALD.
Dallas City Limits Property Co., L.P. ("DCL") appeals a take nothing judgment in this suit on a Stock Purchase Agreement (the "Agreement"). In three appellate issues, DCL contends the trial court erred by refusing to allow a requested trial amendment and by failing to award DCL
In August 2005, Longhorn Downs, Inc. was a wholly owned subsidiary of AJC. Longhorn Downs' sole asset was a Class 2 Racetrack License (the "License") issued by the Texas Racing Commission. DCL entered into the Agreement to purchase all of the capital stock of Longhorn Downs (the "Stock") from AJC.
The parties initially thought the transfer could be accomplished in approximately one year. However, DCL encountered a number of difficulties during its process of applying for approval, especially in obtaining an appropriate site for the prospective racetrack. When DCL procured an option to buy a suitable property, AJC asked the Racing Commission to place DCL's application on its agenda for approval. But during the time it took for DCL's application to come before the Commission, DCL lost the option on that property.
DCL sued AJC, and AJC counterclaimed against DCL.
Finally, we acknowledge that the relationship between these parties has spawned a number of additional suits and administrative proceedings in forums across the State. We address those proceedings only when necessary to resolve the appeal before us.
After briefing was complete but before submission, AJC moved to dismiss this appeal as moot. In one of the additional proceedings we referred to above,
As trial began, AJC's pleadings contained a number of counterclaims against DCL, including an action for declaratory judgment. AJC sought a two-part declaration from the trial court:
In short, AJC pleaded for a declaration that its termination of the Agreement was justified when DCL breached the Agreement by failing to obtain the approval of the Racing Commission. AJC also counterclaimed against DCL for breach of contract on a number of grounds, one of which was its "[f]ailure to obtain governmental approvals, including the Texas Racing Commission's approval, of transfer of ownership of the Capital Stock in Longhorn Downs, Inc. from [AJC] to [DCL] as required by [listed sections] of the Stock Purchase Agreement."
After the close of evidence, each party moved orally for a directed verdict on various claims of its opponent. When DCL began to address AJC's declaratory judgment claim, counsel for AJC interrupted to announce that AJC was non-suiting that claim. Counsel for DCL objected, stating "[w]e're entitled to a declaration that we did not breach, and that their notice of termination is ineffective." The trial court ruled AJC could non-suit any claim it had brought and did not need the court's permission to do so. Counsel for DCL immediately asked for a trial amendment stating:
The court did not rule at that time; it turned instead to a question concerning another claim addressed by DCL's motion for directed verdict. At the end of the proceeding, the court stated that it would reserve its ruling on the directed verdict issues until the charge was drawn up and would make its rulings before submitting the charge to the jury. But the court did not rule on any of the matters raised during the directed verdict hearing, including DCL's request for a trial amendment.
After the jury's verdict, but before the trial court ruled on post-verdict motions, DCL filed a written motion renewing its request for a trial amendment. DCL asked specifically for permission to amend its pleadings to include a request for declaratory judgment that "Austin Jockey Club's termination of the Stock Purchase Agreement was wrongful and ineffective."
Trial amendments are governed in the first instance by rule 66:
TEX.R. CIV. P. 66. A court may not refuse a trial amendment unless (1) the opposing party presents evidence of surprise or prejudice, or (2) the amendment asserts a new cause of action or defense, and thus is prejudicial on its face. Blue Star Operating Co. v. Tetra Tech., Inc., 119 S.W.3d 916, 919-20 (Tex.App.-Dallas 2003, pet. denied). Thus, we review the trial court's ruling first to determine whether allowing the amendment was mandatory; if it was not mandatory, then we review the ruling for an abuse of discretion. See id. at 920. In this case, AJC contends the amendment was not mandatory both because it asserted a new cause of action and because it would have unfairly surprised and prejudiced AJC. We reject both arguments.
At the outset, we conclude DCL's requested trial amendment did not assert a new cause of action. An amendment adds a new cause of action and is prejudicial on its face when: (1) it asserts a new substantive matter that reshapes the nature of the trial itself; (2) the opposing party could not have anticipated the new substantive matter given the development of the case up to the time the amendment was requested; and (3) the amendment would detrimentally affect the opposing party's presentation of its case. Ritchie v. Rupe, 339 S.W.3d 275, 305-06 (Tex.App.-Dallas 2011, pet. denied). DCL's requested trial amendment did not add any new substantive matter. Throughout trial, AJC had maintained the same request for declaratory relief, i.e., it sought specific
We conclude DCL's requested trial amendment did not surprise or prejudice AJC for all the same reasons. The burden of showing surprise or prejudice rests on the party resisting the amendment. State Bar of Tex. v. Kilpatrick, 874 S.W.2d 656, 658 (Tex.1994). But AJC could not have been surprised by DCL's request: the issue of DCL's breach and the validity of AJC's termination had been at the forefront of the case throughout its development. And AJC did not carry its burden to identify any way this trial amendment would cause AJC unfair prejudice. The factual premise of the declaration sought was always before the jury. Indeed, only one factor in the case changed when DCL asked for its trial amendment the first time: where before AJC had asked the court to declare the legal effect of the jury's findings on its termination of the Agreement, now DCL was asking the court to declare the legal effect of the jury's findings on AJC's termination of the Agreement.
AJC contends the amendment was inappropriate as a matter of law. It correctly states that declaratory relief will not be granted where the cause of action has fully matured and invokes a remedy at law. See Adams v. First Nat'l Bank of Bells/Savoy, 154 S.W.3d 859, 873 (Tex. App.-Dallas 2005, no pet.). That rule would govern our decision if DCL were seeking a declaration that AJC breached the Agreement or a declaration that DCL did not breach the Agreement. Those issues had fully matured and were decided by the jury; there was no need for a declaration of breach by either party. However, once AJC non-suited its declaratory judgment action, there was no assurance that the trial court would include within its judgment the legal effect of the jury's breach findings on the termination of the Agreement. And, in fact, the court's judgment did not address that issue. Accordingly, it was not redundant to seek the trial court's ruling on the legal question of the effect of the jury's findings on the termination of the Agreement. See Tri v. J.T.T., 162 S.W.3d 552, 563 (Tex. 2005) (is for court to decide legal effect of jury's finding).
Given our resolution of this first issue, we need not address DCL's second issue. We address below its third issue, concerning the award of attorney's fees. Because we have sustained DCL's first issue, we address AJC's conditional cross-points.
In its first two cross-points, AJC contends the trial court erred by denying its motion for JNOV on two grounds. According to AJC, the evidence at trial did not support the jury's findings (1) that DCL did not breach the Agreement, or (2) that AJC did breach the Agreement. We review a trial court's ruling on a motion for JNOV under a no-evidence standard, meaning we credit evidence favoring the jury verdict if reasonable jurors could, and disregard contrary evidence unless reasonable jurors could not. Tanner v. Nationwide Mut. Fire Ins. Co., 289 S.W.3d 828, 830 (Tex.2009). We will uphold the jury's finding if more than a scintilla of competent evidence supports it. Id. Thus, to prevail on its motion for JNOV, AJC was required to show that the evidence conclusively proved DCL breached the Agreement, AJC did not breach the Agreement, and no reasonable jury could conclude otherwise. See id.
AJC contends the overwhelming evidence at trial establishes that DCL did breach the Agreement. Specifically, AJC charges DCL breached the Agreement by not performing in a timely manner. The evidence on this issue is mixed. The Agreement itself contains no deadline for DCL to obtain the necessary governmental approvals. The Agreement does say that time is of the essence. There was evidence the parties expected the process to be accomplished in about a year. However, there was evidence that DCL encountered a number of difficulties as it sought a potential site for the racetrack. There was also evidence that — beginning the year the Agreement was signed — a change in the leadership of the Racing Commission led to a much more laborious process for applicants, including DCL. Indeed, Michael Burleson, formerly the Deputy Director of Racing, testified that the process of approving a change of ownership of a racing license before 1995 "probably required 10 percent of the time and effort it does now." We conclude there was more than a scintilla of evidence that DCL efforts were not unreasonably untimely given the circumstances.
AJC relies on Mustang Pipeline Co., Inc. v. Driver Pipeline Co., Inc., 134 S.W.3d 195 (Tex.2004), for the proposition that "[w]hen a contract specifies that time
Questions of reasonableness are inherently issues for the jury. Hunsucker v. Omega Indus., 659 S.W.2d 692, 698 (Tex.App.-Dallas 1983, no writ). Having concluded there was more than a scintilla of evidence supporting the jury's failure to find a breach by DCL based on untimeliness, we will not substitute our judgment for the jury's.
AJC also charges the evidence establishes that DCL breached the Agreement by not using its reasonable best efforts to obtain all necessary governmental approvals. AJC declares that if DCL had used its best efforts, it would have succeeded in obtaining land and securing the approval of the Racing Commission "in substantially less time than four years." But there is no evidence to this effect. DCL offered testimony that whether successful or not, there was a continuing effort to obtain a site. And it offered detailed testimony describing the efforts. Again, the reasonableness of DCL's efforts was for the jury to decide. See id. And we conclude there was more than a scintilla of evidence supporting the jury's finding.
We conclude the evidence was sufficient to support the jury's finding that DCL did not breach the Agreement. The trial court did not err in refusing to grant AJC's motion for JNOV on this ground. We decide AJC's first cross-point against it.
In its second cross-point, AJC contends insufficient evidence supports the jury's finding that it breached the Agreement. Again, if there was more than a scintilla of evidence supporting the jury's finding, then the evidence is sufficient. See Tanner, 289 S.W.3d at 830. DCL contended in its pleading that AJC had breached the Agreement in two ways: by wrongfully terminating the Agreement and by engaging in negotiations to sell the Stock to a party other than DCL. Evidence of either of these claims would support the jury's findings.
The Agreement included a representation by AJC that it had not and would not "enter into any agreement with respect to a sale, transfer or encumbrance of ... the [Stock]." But it is undisputed that AJC signed its contract with KTAGS
We conclude there is more than a scintilla of evidence supporting the jury's finding that AJC breached the Agreement. Thus, the trial court did not err in refusing the grant AJC's motion for JNOV on this ground as well. We overrule AJC's second cross-point.
In its third cross-point, AJC argues the trial court erroneously submitted a jury question on DCL's defense of laches to AJC's claim of negligent misrepresentation. We review the trial court's submission of jury questions for an abuse of discretion. MRT, Inc. v. Vounckx, 299 S.W.3d 500, 505 (Tex.App.-Dallas 2009, no pet.). The trial court must submit a question that is raised by the written pleadings and evidence. TEX.R. CIV. P. 278; Park N. Serv. Ctr., L.P. v. Applied Circuit Tech., Inc., 338 S.W.3d 719, 721 (Tex.App.-Dallas 2011, no pet.).
The jury found that DCL made a negligent misrepresentation on which AJC relied. It then found that AJC had "unreasonably delayed in asserting its rights" and that DCL had "made a good faith and detrimental change in position because of the delay." AJC contends that this defense is inconsistent with DCL's argument that four years was not an unreasonably long time for its own performance under the Agreement. AJC confuses a reasonable time to perform under a contract with a reasonable time to assert a claim for wrongdoing. DCL claims that AJC's conduct for four years was not consistent with the claims of wrongdoing and misrepresentation it now makes. Throughout this time period, AJC acknowledges it supported DCL's efforts to obtain the License. Under these facts — where AJC outwardly supported DCL and refrained from asserting claims of wrongdoing it now claims to have possessed throughout the time period — a jury could have concluded that AJC had, in effect, "slumbered" on its rights. See Rivercenter Assocs. v. Rivera, 858 S.W.2d 366, 367 (Tex.1993). And as to making a good faith and detrimental change in position because of AJC's conduct, DCL paid a yearly inactive license fee of up to $100,000 on AJC's behalf through 2009.
DCL's written pleadings raised its laches defense, and some evidence supports the defense in this case. We discern no abuse of discretion in the trial court's submission of this issue to the jury for resolution. See Park N. Serv. Ctr., 338 S.W.3d at 721. We overrule AJC's third cross-point.
Because we are remanding the case for further proceedings, we also remand the issue of attorney's fees. Both parties pleaded to recover their fees.
We reverse the trial court's judgment. We remand this case to the trial court with the following instructions: