JEFFREY V. BROWN, Justice.
We originally issued our opinion affirming the trial court's judgment on March 14, 2013. Appellant Marcus Hiles filed a motion for rehearing. We deny the motion for rehearing, vacate our earlier judgment, withdraw our previous opinion, and issue this substitute opinion in its place. The disposition of the case remains unchanged.
Hiles appeals from a trial-court judgment incorporating a jury verdict in favor of Arnie & Company, P.C., in Arnie's suit on a sworn account. On appeal, Hiles complains that he filed suit against Arnie in Dallas County before Arnie filed suit in Harris County, and because the Dallas County court had dominant jurisdiction, the trial court erred in refusing to transfer, abate, or dismiss Arnie's suit. Hiles also contends that the trial court erred by refusing Hiles's tendered jury instruction concerning whether Arnie's prior material breach excused Hiles's performance. For the reasons explained below, we affirm.
Hiles is a real-estate investor and developer who lives in Fort Worth and offices in Grand Prairie. Hiles became involved in litigation arising out of a partnership dispute over a large real-estate project in Tyler known as the Cascades. Hiles believed he was losing millions of dollars on the Cascades project and suspected his partners had engaged in some kind of "funny business." Hiles's counsel, the law firm of Coats, Rose, Yale, Ryman & Lee, L.L.P., and its partner, Bill Short, recommended retaining Arnie & Company, located in Houston, to conduct a forensic accounting review of the Cascades's records. Arnie's president, Dennis Arnie, is a CPA and certified fraud examiner. Dennis had worked with Coats Rose on many other cases.
Hiles agreed that Coats Rose could retain Arnie to assist in the Cascades litigation. Coats Rose and Hiles each signed an engagement letter Arnie drafted. Hiles also modified the letter, interlineating "and/or Hiles" at the end of the sentence "Your engagement of [Arnie] is at the will and discretion of Coats Rose." The engagement letter set out the hourly rates for Arnie personnel, provided for an "evergreen" retainer of $20,000, and reflected that Hiles was "solely liable for any fees incurred in this matter." The engagement letter also included a venue-selection clause specifying that the venue of any litigation or arbitration "SHALL LIE SOLELY AND EXCLUSIVELY IN HARRIS COUNTY, TEXAS[,] UNLESS MANDATORY VENUE RULES OR LAWS PROVIDE THAT VENUE MUST LIE IN ANOTHER COUNTY."
Arnie personnel conducted an extensive review of the Cascades's records and determined, as Hiles suspected, that his partners were committing fraud. The damage model amounted to about $10 million. But Coats Rose and Hiles disagreed on the best way to make use of Arnie's work. Short did not want Arnie to prepare a report, preferring instead to surprise the adverse parties with Arnie's opinions at trial; Hiles, however, instructed Dennis to prepare a report that Hiles could use as leverage at mediation. On April 29, 2010, Dennis met with Hiles at his office to discuss the details of the report and to drop off some unpaid invoices. Dennis also gave Hiles the option of either a short report highlighting a few significant transactions or a detailed report describing every allegedly fraudulent transaction discovered.
Hiles did not immediately decide which report he wanted, but the next day he left Dennis a voicemail directing him to prepare
On May 12, Dennis delivered a draft of the report, titled "Analysis of Economic Damages and Related Events," to Hiles.
In early June, Arnie sent Hiles the bill for its work during the month of May in the amount of $76,199.74. Less than two weeks later, Hiles responded to Arnie's bill by filing suit against Arnie in Dallas, alleging breach of contract and seeking declaratory relief.
On July 8, 2010, after Arnie was served with Hiles's suit, Arnie filed suit against Hiles in Houston for unpaid bills totaling $364,502.00 on a sworn-account theory. After substituted service of citation was ordered in September, Hiles answered Arnie's suit subject to a motion to transfer venue.
At the end of the trial, the jury returned a verdict in Arnie's favor. On October 7, 2011, the trial court rendered judgment on the jury's verdict, awarding Arnie actual damages of $364,502.41 and attorney's fees in excess of $200,000. This appeal followed.
In his first issue, Hiles contends that the trial court erred in refusing to transfer, abate, or dismiss the Harris County suit. Hiles makes three primary arguments: (1) the venue-selection clause in Arnie's engagement letter is unenforceable; (2) Hiles filed suit first in a proper venue and
Section 15.002(a)(1) of the Civil Practices and Remedies Code provides that venue for an action is proper in the county in which "all or a substantial part of the events or omissions giving rise to the claim occurred." Tex. Civ. Prac. & Rem.Code § 15.002(a)(1). Venue may be proper in more than one county under the venue rules. See Wilson v. Tex. Parks and Wildlife Dep't, 886 S.W.2d 259, 260 (Tex.1994); Moveforfree.com, Inc. v. David Hetrick, Inc., 288 S.W.3d 539, 542 (Tex. App.-Houston [14th Dist.] 2009, no pet.). In general, plaintiffs are allowed to choose venue first, and when the county in which the plaintiff files suit is at least a permissive venue and no mandatory provision applies, the plaintiff's venue choice should not be disturbed. KW Constr. v. Stephens & Sons Concrete Contractors, Inc., 165 S.W.3d 874, 879 (Tex.App.-Texarkana 2005, pet. denied); Chiriboga v. State Farm Mut. Auto. Ins. Co., 96 S.W.3d 673, 678 (Tex.App.-Austin 2003, no pet.). Thus, "[t]he court in which suit is first filed generally acquires dominant jurisdiction to the exclusion of other courts if venue is proper in the county in which suit was first filed." Gonzalez v. Reliant Energy, Inc., 159 S.W.3d 615, 622 (Tex.2005) (emphasis in original) (citing Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245, 248 (Tex. 1988)).
Filing a plea in abatement is the proper method for drawing a court's attention to another court's possible dominant jurisdiction. In re Puig, 351 S.W.3d 301, 305 (Tex.2011) (per curiam); Wyatt, 760 S.W.2d at 247-48; Curtis v. Gibbs, 511 S.W.2d 263, 267 (Tex.1974). Generally, the plea in abatement must be granted when an inherent interrelation of the subject matter exists in the two pending lawsuits. Perry v. Del Rio, 66 S.W.3d 239, 252 (Tex. 2001); Wyatt, 760 S.W.2d at 247. Abatement of a suit due to the pendency of a prior suit is based on the principles of comity, convenience, and the necessity for an orderly procedure in the trial of contested issues. Miles v. Ford Motor Co., 914 S.W.2d 135, 138 (Tex.1995) (per curiam); Wyatt, 760 S.W.2d at 248.
But exceptions to this "first-filed" rule may apply when its justifications fail, as when the first court does not have the full matter before it, when conferring dominant jurisdiction on the first court will delay or even prevent a prompt and full adjudication, or "when the race to courthouse was unfairly run." Perry, 66 S.W.3d at 252. Thus, a plaintiff who filed the first suit may be estopped from asserting the dominant jurisdiction of the first court if it is found that he is guilty of inequitable conduct. Wyatt, 760 S.W.2d at 248; V.D. Anderson Co. v. Young, 128 Tex. 631, 101 S.W.2d 798, 800 (1937).
Texas courts have found parties guilty of inequitable conduct and applied the estoppel exception to the first-filed rule when the plaintiffs in the first-filed suit (1) filed suit merely to obtain priority, without a bona fide intention to prosecute the suit; or (2) prevented their adversaries from filing the subsequent suits more promptly by fraudulently representing that they would settle. In re Henry, 274 S.W.3d 185, 191 (Tex.App.-Houston [1st Dist.] 2008, pet. denied). Courts have also found inequitable conduct when the plaintiffs in the first-filed suit affirmatively represented to the court in the second-filed suit that it had jurisdiction, Howell v. Mauzy, 899 S.W.2d 690, 698 (Tex.App.-Austin 1994, writ denied), or manipulated the courts by sitting in silence while sister courts issued conflicting orders regarding the same subject matter. Grimes v. Harris, 695 S.W.2d 648,
When raised, estoppel is a fact issue that must be determined by the second court in which the plea in abatement is filed. Curtis, 511 S.W.2d at 267; In re Henry, 274 S.W.3d at 191; see also Parr v. Hamilton, 437 S.W.2d 29, 31 (Tex.Civ. App.-Corpus Christi 1968, no writ) ("The question of good faith, fraud and conduct of a party relating to the matter of estoppel is a fact issue that must be finally determined by the court hearing the plea in abatement."). If the second court denies the plea in abatement, it assumes dominant jurisdiction and its ruling postpones the action in the first court until the second court finally disposes of the case. 4M Linen & Unif. Supply Co. v. W.P. Ballard & Co., Inc., 793 S.W.2d 320, 322 (Tex.App.-Houston [1st Dist.] 1990, writ denied).
A party also must raise a plea in abatement in a timely manner or it is waived. Wyatt, 760 S.W.2d at 248; Howell, 899 S.W.2d at 698. If the second court has jurisdiction over the subject matter and a party does not file a plea in abatement in the second court at the proper stage, the second court can determine the issues before it and a judgment in the second court may have preclusive effect on the pending proceeding in the other court. Mower v. Boyer, 811 S.W.2d 560, 563 n. 2 (Tex.1991).
We review a trial court's ruling on a motion to abate under an abuse-of-discretion standard. See Wyatt, 760 S.W.2d at 248. An abuse of discretion occurs when a trial court acts without reference to any guiding rules and principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985).
In his motion to abate, Hiles asserted that the Harris County suit should be abated because he filed and served the Dallas County suit first, the Dallas County suit remained pending, and both suits involved many of the same parties and issues.
In response to Hiles's motion to abate, Arnie did not dispute Hiles's assertions that Hiles filed suit first and the two actions were interrelated. Arnie did argue, however, that Hiles was estopped from abating the Harris County suit because he contractually agreed to venue in Harris County, he evaded service in the Harris County suit, and he waived abatement by not filing the motion to abate for five months.
After an oral hearing, the trial court denied the motion to abate. No record of the hearing appears in the appellate record.
On appeal, Hiles contends that the estoppel exception to dominant jurisdiction does not apply in this case because (1) it was not inequitable for Hiles to have signed Arnie's engagement letter containing the venue-selection clause specifying Harris County because that clause is unenforceable; (2) the allegation that he evaded service is not relevant to the equities involved in his earlier filing of the Dallas County suit; and (3) Hiles did not waive abatement. Arnie responds that it raised factual issues supporting estoppel and inequitable conduct in opposing Hiles's motion to abate, and the trial court did not abuse its discretion in resolving these fact issues in Arnie's favor.
As an initial matter, Arnie argues that this court cannot overturn the trial court's discretionary decision in the absence of a record of the hearing on Hiles's motion to abate. According to Arnie, the record supports the conclusion that the hearing was evidentiary, and therefore it was Hiles's burden to present the record of that hearing. In the absence of such a record, Arnie argues, this court must presume that evidence existed to support the trial court's decision. Arnie also claims that its counsel made unsworn, factual statements and representations in the hearing, which "can constitute evidence supporting a trial court's ruling."
In Michiana Easy Livin' Country, Inc. v. Holten, the supreme court instructed that appellate courts should presume that pretrial hearings are non-evidentiary unless the proceeding's nature, the trial court's order, the party's briefs, or other indications show that an evidentiary hearing took place in open court. 168 S.W.3d 777, 783 (Tex.2005). Only if the hearing was evidentiary is a complaining party required to present a record of that hearing to establish harmful error. Id. The trial court's order denying Hiles's motion to abate provides no affirmative indication of an evidentiary hearing, reflecting only that the court considered Hiles's motion and Arnie's response, as well as "any further replies or responsive pleadings, the discovery on file, the pleadings, the evidence, and the arguments of counsel, if any...." Further, nothing else in the record suggests an evidentiary hearing took place. We conclude, therefore, that Hiles was not
Turning to Hiles's arguments, we first consider Hiles's contention that the venue-selection clause was unenforceable and therefore his agreement that venue was proper in Harris County should not be considered when balancing the equities. Hiles is correct that venue-selection clauses are generally unenforceable in Texas unless the contract evinces a "major transaction" as defined in the venue rules. See In re Tex. Ass'n of Sch. Bds., 169 S.W.3d 653, 660 (Tex.2005) (venue-selection clause in contract that was not a major transaction unenforceable); Yarber v. Iglehart, 264 S.W.2d 474, 476 (Tex.Civ.App.-Dallas 1953, no writ) (real-estate agent committed no actionable wrong in contract or in tort by refusing to perform an unenforceable oral agreement); see also Tex. Civ. Prac. & Rem.Code § 15.020 (venue may be specified by written agreement in a "major transaction" in which "a person pays or receives, or is obligated to pay or entitled to receive, consideration with an aggregate stated value equal to or greater than $1 million").
But Hiles did not argue that the engagement letter's venue-selection clause was unenforceable in response to Arnie's motion to abate. Because Hiles never objected to the trial court's consideration of the venue-selection clause in ruling on abatement, Hiles may not raise this argument on appeal. See, e.g., In re Am. Optical Corp., 988 S.W.2d 711, 714 (Tex.1998) (per curiam). Therefore, the trial court could have considered Hiles's conduct in contractually agreeing to venue in Harris County and then filing suit in Dallas County contrary to his agreement when weighing whether his conduct was inequitable.
Hiles maintains, however, that he raised the argument that the venue-selection clause was unenforceable in connection with his motion to transfer venue. In Hiles's first motion to transfer venue, he argued that he filed suit against Arnie in Dallas County before Arnie filed suit against him in Harris County, the Dallas County suit related to the identical facts and circumstances as the Harris County suit, and Arnie had actual notice of it before filing the Harris County suit. Hiles mentioned the venue-selection clause briefly, arguing that "the venue-selection clause is, at most, a basis for permissive venue," and stating that the first-filed Dallas County suit took precedence over Arnie's selection of Harris County. In response, Arnie argued, among other things, that the general venue rules supported venue in Harris County and that Hiles contractually agreed to venue in Harris County. Hiles filed a reply brief in which he argued, for the first time, that the venue-selection clause was unenforceable. In a surreply, Arnie argued that Hiles had not shown that Harris County was an improper venue or that venue was mandatory in another county, and further asserted estoppel based on the contractual venue-selection clause. The trial court denied the motion to transfer.
On appeal, Hiles argues that the trial court should have construed his motion to transfer venue as a motion to abate, citing Texas Rule of Civil Procedure 71 and cases directing courts to look to the substance of the relief requested and not merely the title of the pleading. Rule 71 provides that when a party has mistakenly designated any plea or pleading, "the court, if justice so requires, shall treat the plea or pleading as if it had been properly designated." Tex.R. Civ. P. 71. However, Hiles's motion to transfer venue explicitly requested the relief of transfer, not abatement. See Tovias v. Wildwood Props.
Moreover, Hiles's request for a transfer of venue was not the proper method for drawing a court's attention to another court's possible dominant jurisdiction. See, e.g., In re Puig, 351 S.W.3d at 306 (holding that because "the relators should have filed a plea in abatement" the "district court's denial of the relators' plea to the jurisdiction, therefore, did not constitute an abuse of discretion"); Tovias, 67 S.W.3d at 529 (holding that trial court erred in granting plea to the jurisdiction when plea in abatement was proper procedure for asserting dominant jurisdiction). Therefore, we disagree that the trial court should have concluded that Hiles's motion to transfer was really a motion to abate and treated it as such.
Next, Hiles argues that the allegation that he evaded service cannot be relevant to the equities involved in his earlier filing of the Dallas County suit, because "[t]ime moves forward, not backwards." But the court could have considered Hiles's actions in evading service as further evidence of inequitable conduct directly relevant to venue, because the evidence supports a conclusion that not only did Hiles file suit in Dallas County after agreeing to venue in Harris County, he sought to unfairly delay the Harris County suit by deliberately evading service while moving forward with his suit in Dallas County. Taken together, Hiles's actions could be seen as demonstrating contempt for legal process and a willingness to unfairly manipulate the system to his advantage. Moreover, in the briefing before the trial court, Hiles offered no contradicting evidence or explanation for his actions.
Additionally, Arnie suggests that the trial court could have considered whether Hiles's failure to file the motion to abate for four months was inequitable and constituted waiver. The record shows that Arnie filed suit July 8, 2010, and after substituted service was ordered in September, Hiles answered Arnie's suit on October 10. Arnie filed his motion to abate on January 21, 2011, and obtained a hearing on the motion in February. Hiles offers no explanation for his failure to file the motion to abate earlier other than pointing to his previously filed, procedurally incorrect
In sum, Arnie presented the trial court with evidence that Hiles contractually agreed to venue in Harris County for any litigation arising between himself and Arnie, but despite this contractual agreement Hiles filed suit against Arnie in Dallas County. Hiles then evaded service of the Harris County suit, further delaying Arnie's prosecution of its suit in the agreed-upon venue. Hiles also did not move to abate the Harris County suit for four months.
In his second issue, Hiles contends that the trial court erred in refusing to submit Hiles's tendered jury question on prior material breach. Hiles contends he properly preserved this issue and he presented evidence in support of this affirmative defense. Arnie responds that Hiles did not preserve the issue and no evidence exists of a prior material breach to support the submission of the proposed question. Arnie also argues that no reversible error resulted from the trial court's refusal to submit Hiles's requested question because the sworn-account questions on services "in accordance with an agreement" and the finding that the "account [was] due, owing and unpaid" fairly submitted the breach issue.
A party is entitled to a jury question, instruction, or definition if the pleadings and evidence raise an issue. Tex.R. Civ. P. 278. If there is some evidence to support the submission, the trial court commits reversible error if it fails to submit the instruction. 4901 Main, Inc. v. TAS Auto., Inc., 187 S.W.3d 627, 631 (Tex. App.-Houston [14th Dist.] 2006, no pet.). We review a trial court's decision to refuse a particular jury question or instruction under an abuse-of-discretion standard. See Shupe v. Lingafelter, 192 S.W.3d 577, 579 (Tex.2006) (per curiam). A trial court's error in refusing an instruction is reversible if it "probably caused the rendition of an improper judgment." Tex. R.App. P. 44.1; 4901 Main, Inc., 187 S.W.3d at 631.
Initially, we consider Arnie's argument that Hiles failed to preserve this issue. According to Arnie, Hiles's proposed jury instructions on material breach were multifarious and inadequately explained to the trial court.
When determining whether a complaint of charge error is preserved, we ask whether the complaining party "made the trial court aware of the complaint, timely and plainly, and obtained a ruling." See State Dep't of Highways & Pub. Transp. v. Payne, 838 S.W.2d 235, 241 (Tex.1992). On this record, we conclude Hiles has sufficiently preserved his complaint that the trial court refused to submit a question concerning prior material breach. See id; see also Alaniz v. Jones & Neuse, Inc., 907 S.W.2d 450, 451-52 (Tex.1995) (per curiam) ("While Payne does not revise the requirements of the rules of procedure regarding the jury charge, it does mandate that those requirements be applied in a common sense manner to serve the purposes of the rules, rather than in a technical manner which defeats them.").
A party breaches a contract when it neglects or refuses to perform a contractual obligation. Mays v. Pierce, 203 S.W.3d 564, 575 (Tex.App.-Houston [14th Dist.] 2006, pet. denied). If the breach is material, the other party is excused from further performance of the contract. Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004) (per curiam) (citing Hernandez v. Gulf Grp. Lloyds, 875 S.W.2d 691, 692 (Tex.1994)). Generally, the issue of whether a breach rises to the level of a material breach that will render the contract unenforceable presents a dispute for resolution by the trier of fact. See Cont'l Dredging, Inc. v. De-Kaizered, Inc., 120 S.W.3d 380, 394-395 (Tex.App.-Texarkana 2003, pet. denied). But the materiality of a breach and the resulting unenforceability of the agreement can present questions for the court to resolve as a matter of law. See Mustang Pipeline Co., 134 S.W.3d at 199-200 (concluding that when contract stated time was of the essence and one party
Hiles argues that he presented evidence that he was overcharged and not timely billed for the services rendered. The evidence Hiles points to includes the engagement letter's provision that Arnie's work would be "at the will and discretion of Coats Rose and/or Hiles" and Hiles's "understanding" that he would receive a monthly bill for his approval.
The evidence shows that Hiles signed Arnie's engagement letter in August 2009. In the engagement letter, Arnie agreed to provide consulting and expert services on financial issues relating to the partnership litigation. Hiles agreed to be solely liable to pay Arnie's hourly rates and expenses, as well as a $20,000 retainer. The letter specified the hourly rates to be charged for shareholders, associates, and other staff. The letter also recited that it "constitutes the only agreement of the parties" and "may not be altered or amended except in writing signed by all of the parties" to the agreement. The evidence shows that Hiles paid the retainer' and one of Arnie's monthly invoices that had been included in a Coats Rose bill. Although Arnie generally forwarded its invoices to Coats Rose rather than directly to Hiles, the engagement letter did not specify that Hiles was to receive Arnie's invoices directly, and there is no evidence that Hiles complained about not receiving them directly.
The engagement letter also specified that invoices were due and payable within thirty days, and if Arnie was terminated, Hiles remained liable for the bill. But the engagement letter did not require Arnie to submit invoices on a particular date or at specific intervals. Nor did it require pre-approval or authorization of the amounts that Arnie would bill Hiles. Most of Hiles's testimony concerning Arnie's alleged prior material breach is based on Hiles's understanding of the contract, not the contract itself. "If the parties have expressly stated the terms of their agreement, they have created an express contract and are bound by it to the exclusion of conflicting implied terms." Malallah v. Noble Logistic Servs., Inc., No. 14-08-01030-CV, 2010 WL 343487, at *2, (Tex.App.-Houston [14th Dist.] Feb. 2, 2010, pet. denied) (quoting Emmer v. Phillips Petroleum Co., 668 S.W.2d 487, 490 (Tex.App.-Amarillo 1984, no writ)) (internal quotation marks omitted); see also David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450 (Tex.2008) (per curiam) (declining to hold that a written attorney-fee agreement which specified only hourly rates may be modified by evidence of an oral capping agreement).
We conclude, therefore, that the trial court did not abuse its discretion in refusing to submit Hiles's proposed question to the jury, and we do not reach Arnie's argument that any error in failing to submit the question to the jury was harmless.
We overrule Hiles's issues and affirm the trial court's judgment.
