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Date: 02-04-2005

Case Style: Interstate Investment Corporation v. Rodolfo Rillo, et al.

Case Number: 01-03-00818-CV

Judge: Tim Taft

Court: Texas Court of Appeals, First Distrcit On Appeal from the 129th District Court Harris County, Texas

Plaintiff's Attorney:

Jerry L. Schutza, Dallas, Texas

Defendant's Attorney:

Ben R. King and Charles Heard of Ben R. King & Associates, Inc., Houston, Texas


Appellant, Interstate Investment Corporation ("IIC"), appeals from a take-nothing judgment rendered against it, after a bench trial, on its cause of action for breach of contract against appellees, United Crescent Corporation ("United"), Rodolfo Rillo, Bella Rillo (together, "appellees"). We affirm.


Our background facts come from the trial court's fact findings, which IIC does not challenge and which have evidentiary support in the record. See McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex. 1986) (holding that unchallenged findings of fact are binding unless contrary is established as matter of law or there is no evidence to support finding).

Rudolfo Rillo was the record owner of three condominium properties ("the properties"). His wife, Bella Rillo, had a community-property interest in the properties. In 1997, Rudolfo executed a power of attorney ("POA") that appointed his brother as attorney-in-fact to sell the properties and that made Bella alternate attorney-in-fact only if the brother was absent.

Around March 15, 2000, Bella signed an earnest-money contract with IIC to sell the properties ("the IIC contract"), with a sale price of $12,000. Although both of the Rillos were listed as sellers in the IIC contract, only Bella signed it, and her signature did not indicate that she was signing on behalf of anyone else. IIC presented no evidence concerning Rodolfo's brother's whereabouts during any time relevant to the events underlying this lawsuit.

After having executed the IIC contract, but before the closing date on it, Bella signed an earnest-money contract with United ("the United contract"), with a sale price of $16,000. On April 12, 2000, when Rodolfo returned from a trip outside the country, he, too, signed the United contract. The Rillos closed on the United contract before the closing date set for the IIC contract, precluding IIC's purchase of the properties.

IIC sued the Rillos and United for breach of the IIC contract and sought specific performance of the IIC contract by cancellation of the deed to United and declaration that IIC was "the fee simple owner" of the properties. Footnote Alternatively, IIC sought damages, which at trial it explained were either the $12,000 sale price, the properties' fair-market value, or the $4,000 more that the Rillos had made by selling to United. IIC did not plead alternatively that the alleged contract should be enforced to the extent of, or that damages should be awarded for that value of, Bella's undivided community interest in the properties.

After a bench trial, the trial court rendered a take-nothing judgment against IIC and entered fact findings and legal conclusions. The trial court found, among other things, that the IIC contract was not binding because Rodolfo had not signed it and Bella had not signed on his behalf, by virtue of the POA or otherwise.

Standard of Review

On appeal, IIC challenges only certain legal conclusions. We review the trial court's legal conclusions drawn from the facts to determine their correctness. BMC Software Belgium v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). Our review is de novo, and we will uphold the legal conclusions if the judgment can be sustained on any legal theory supported by the evidence. Id.

Challenges to Legal Conclusions

In its sole issue, IIC challenges the following legal conclusions:

●The [IIC contract] was not a binding contract, because it was not signed by Rodolfo Rillo, and there was no indication in the document as executed by Bella Rillo that she intended to sign the agreement for Rodolfo Rillo or on his behalf.

●Bella and Rodolfo Rillo did not have a binding contract to sell [the properties] to [IIC]; Bella and Rodolfo Rillo did not breach any contract with [IIC] to sell [the properties].

●Plaintiff [IIC] is not entitled to specific performance of [the properties]; nor is it entitled to money damages for breach of contract or attorney's fees incurred in pursuing its causes of action.

Specifically, IIC argues that

The only reason stated that the [IIC] contract is not valid is because it was not signed by Rodolfo Rillo. The law in Texas has long evolved past the requirement that a husband has to sign before a wife can sell her property. Bella Rillo owned one-half of the [properties] and was free to sell her one half for whatever she wanted. If she wanted to sell her interest to IIC for $12,000 she was free to do so. The facts of this case simply did not establish any reason or excuse for Bella Rillo to not sell her one half interest in the [properties] to IIC.

(Emphasis added.) That is, IIC argues that the trial court erred in concluding that IIC had no breach-of-contract action because Bella allegedly had agreed to sell her community-property interest in the properties to IIC for $12,000.

We reject IIC's challenge for three reasons. First, IIC did not plead a breach-of-contract theory based upon a conveyance of only Bella's interest in the properties; rather, its claim was based on the sale of the properties in fee simple. See Tex. R. Civ. P. 47 (requiring that pleading set forth "a short statement of the cause of action sufficient to give fair notice of the claim involved"); Tex. R. Civ. P. 301 ("The judgment of the court shall conform to the pleadings, the nature of the case proved and the verdict, if any . . . ."). Additionally, nothing shows that this "partial-conveyance" theory of IIC's was tried by consent, Footnote and IIC did not move to amend its pleadings to assert this theory. Tex. R. Civ. P. 67 (allowing for trial by consent and for amendment of pleadings through time of submission to cause pleadings to conform to evidence); Tex. R. Civ. P. 307; Latch v. Gratty, Inc., 107 S.W.3d 543, 546 (Tex. 2003) (holding that judgment could not be affirmed on claim that was neither pleaded nor tried by consent); compare Southwestern Resolution Corp. v. Watson, 964 S.W.2d 262, 264 (Tex. 1997) (holding that unpleaded affirmative defense of payment on note was tried by consent when opposing party did not object to conflicting testimony that payment was made or to submission of issue to jury). IIC made statements during closing argument that, for the first time, might have reflected this theory, but those statements did not result in trial by consent. Compare Watson, 964 S.W.2d at 264.

Second, the trial court's fact findings and legal conclusions did not address this theory, and no fact finding found that Bella contracted to sell only her interest in the properties. See Tex. R. Civ. P. 299 ("The judgment may not be supported upon appeal by a presumed finding upon any ground of recovery or defense, no element of which has been included in the findings of fact . . . ."). IIC did not request additional or amended fact findings or legal conclusions. See Tex. R. Civ. P. 298. Nor does IIC complain of any fact findings entered by the trial court.

Third, to prevail on a breach-of-contract claim, the plaintiff must prove, among other things, the existence of a valid contract. Valero Mktg. & Supply Co. v. Kalama Int'l, L.L.C., 51 S.W.3d 345, 351 (Tex. App. - Houston [1st Dist.] 2001, no pet.). It is the plaintiff's burden to prove that the defendant has obligated himself under the contract; accordingly, IIC had to prove a valid contract to sell only a partial interest in the properties. See Cannon v. ICO Tubular Servs., Inc., 905 S.W.2d 380, 392 (Tex. App. - Houston [1st Dist.] 1995, no writ), abrogated on other grounds by Lane Bank Equip. Co. v. Smith S. Equip., Inc., 10 S.W.3d 308, 313 (Tex. 2000); see also Vance v. My Apartment Steak House of San Antonio, Inc., 677 S.W.2d 480, 482 (Tex. 1984). No evidence established such a contract. Accordingly, even had IIC pleaded a cause of action based on such a contract, and even had the trial court made findings and conclusions relevant to it, the court would have had to reject that theory for total lack of evidentiary support.

We overrule IIC's sole issue.

Outcome: Affirmed

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: None

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