Montgomery County jurors settled a dispute over dirt with a $52,150 verdict, but the Ninth District Court of Appeals in Beaumont has ordered a new trial.
The second jury can award damages to Jackey Derryberry, who prevailed at trial against Allamon Tool Company of Conroe, but the second jury can't award nearly as much money as the first.
Justice David Gaultney wrote in a Nov. 8 opinion that jurors found a breach of contract where no contract existed. He called the document an agreement to agree.
Derryberry, doing business as Fairway Construction, arranged in 2003 to deliver 1,000 loads of dirt to Allamon Tool at a site on Freeport Road, for $25 a load.
After he started delivering dirt, he gave Lee Gardner of Allamon Tool a document that read, "Fairway Construction will supply labor and materials to include, but not limited to, fill, rip rap, select fill, form sand, base materials, drainage pipes, machine hours and labor."
They signed and dated it.
Soon their agreement broke down and Gardner fired Derryberry.
Derryberry brought a load anyway. Gardner would not let him unload.
Allamon Tool sued Derryberry, claiming fraud and deceptive trade practices. Allamon Tool alleged that Derryberry didn't deliver full loads.
Derryberry filed a counterclaim for breach of contract. He claimed he sold the dirt at a low price so Gardner would let him perform other site work.
Kent Lisenby of Conroe represented Derryberry. James Cox of Houston and Terry Joseph of The Woodlands represented Allamon Tool.
At trial last year, Allamon Tool abandoned its claims and concentrated on defense.
Derryberry explained the deal by testifying, "There's going to be tons of select fill needed, tons of crushed concrete. I will do this price if you give me the rest of it."
Jurors upheld Derryberry and awarded him $31,250 for breach of the written contract and $8,050 for breach of the original oral contract.
Montgomery County 9th District Judge Fred Edwards entered judgment awarding $12,600 in attorney fees.
Allamon Tool appealed, successfully.
Gaultney wrote, "As a matter of law, the document is not an enforceable contract. We reverse and render a take-nothing judgment on that claim."
He wrote, "For an agreement to be legally binding, the contract's terms must be sufficiently definite to enable a court to understand what the promisor undertook."
He wrote, "If the court is unable to determine the parties' rights and obligations, there is no enforceable contract."
He wrote that a contract can't leave an essential item open for future negotiation.
He wrote that Edwards had no authority to ask the jury to supply an essential contract term that the parties were unable to complete.
He wrote that the agreement did not set out dates, quantities, quality or price.
Courts have implied terms when circumstances left little doubt as to the intentions of the parties, he wrote, but he added, "We cannot do that here. The document is essentially an agreement to agree."
The appeals court did not reject Derryberry's damage claim on the oral contract, but Gaultney wrote that evidence was insufficient to support the $8,050 verdict.
He also sliced the legal fees, holding that Lisenby should have segregated fees for work on claims that prevailed from fees for work on claims that failed.
He wrote that Judge Edwards can't award the full $12,600 in legal fees but he can use that amount as evidence of the amount of the segregated fee.
Chief Justice Steve McKeithen and Justice Charles Kreger joined the opinion.