                        COURT OF APPEALS
                         SECOND DISTRICT OF TEXAS
                              FORT WORTH

                             NO. 02-10-00045-CV


JPD GUAM COMPANY, INC. AND                                        APPELLANTS
JOHNNY C. REYES

                                         V.

DEMETRIUS A. REYES                                                   APPELLEE


                                      ----------

          FROM THE 78TH DISTRICT COURT OF WICHITA COUNTY

                                      ----------

                        MEMORANDUM OPINION1
                                      ----------

                                   I. Introduction

      In one issue, Appellants JPD Guam Company, Inc. and Johnny C. Reyes

(collectively, JPD Guam) appeal the trial court‘s judgment for Appellee Demetrius

A. Reyes on JPD Guam‘s breach of fiduciary duty claim. We affirm.




      1
       See Tex. R. App. P. 47.4.
                     II. Factual and Procedural Background

      The sole issue before us is whether Demetrius, Johnny‘s nephew, owed a

fiduciary duty to JPD Guam and Johnny, JPD Guam‘s president, in the sale of

three tracts of real property.

      JPD Guam and Johnny sued Demetrius for breach of fiduciary duty, fraud,

fraud in real estate transaction, fiduciary self-dealing, and unjust enrichment. At

trial, Johnny argued that he had agreed to let Demetrius sell the three tracts for

10% of the tracts‘ sale prices as a finder‘s fee, and Demetrius countered that

JPD Guam‘s sales of the property to him were arm‘s-length transactions. There

were no written agreements between JPD Guam and Demetrius with regard to

any commission or finder‘s fee. The trial court ordered that JPD Guam take

nothing on any of its claims and made the following findings of fact pertinent to

JPD Guam‘s sole issue on appeal:

      1. Demetrius A. Reyes was not an agent of JPD Guam Company,
      Inc. or of Johnny C. Reyes in regard to any of the transactions at
      issue in this case. Demetrius A. Reyes did not agree to act as an
      agent for JPD Guam Company, Inc. in regard to any of the
      transactions at issue.

      2. A formal or informal fiduciary relationship did not exist between
      Demetrius A. Reyes and JPD Guam Company, Inc. or Johnny C.
      Reyes in regard to any of the transactions at issue in this case.
      Demetrius A. Reyes did not owe a fiduciary duty to either JPD Guam
      Company, Inc. or Johnny C. Reyes.

The trial court then concluded that Demetrius did not breach a fiduciary duty to

either JPD Guam or Johnny as to the transactions at issue.            This appeal

followed.


                                        2
                                 III. Fiduciary Duty

      In this factual sufficiency challenge, JPD Guam complains that the trial

court erred by determining that there was no fiduciary duty between the parties

based on agency, arguing that the record contains multiple instances of

Demetrius acting on behalf of and under the control of JPD Guam in the course

of selling the real property at issue.

A. Standard of Review

      Findings of fact entered in a case tried to the court have the same force

and dignity as a jury=s answers to jury questions. Anderson v. City of Seven

Points, 806 S.W.2d 791, 794 (Tex. 1991). The trial court=s findings of fact are

reviewable for legal and factual sufficiency of the evidence to support them by

the same standards that are applied in reviewing evidence supporting a jury=s

answer. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996); Catalina v. Blasdel,

881 S.W.2d 295, 297 (Tex. 1994).

      When reviewing an assertion that the evidence is factually insufficient to

support a finding, we set aside the finding only if, after considering and weighing

all of the evidence in the record pertinent to that finding, we determine that the

credible evidence supporting the finding is so weak, or so contrary to the

overwhelming weight of all the evidence, that the answer should be set aside and

a new trial ordered. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986)

(op. on reh‘g); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965). But when, as

here, the party with the burden of proof appeals from a failure to find, the party


                                         3
must show that the failure to find is against the great weight and preponderance

of the credible evidence. Cropper v. Caterpillar Tractor Co., 754 S.W.2d 646,

651 (Tex. 1988); see Gonzalez v. McAllen Med. Ctr., Inc., 195 S.W.3d 680, 681–

82 (Tex. 2006). When conducting a factual sufficiency review, a court of appeals

must not merely substitute its judgment for that of the trier of fact. Golden Eagle

Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003). The trier of fact is

the sole judge of the credibility of witnesses and the weight to be given to their

testimony. Id.

B. Agency

      To prevail on a breach of fiduciary duty claim, a plaintiff must first prove the

existence of a fiduciary relationship between the plaintiff and the defendant. See

Lundy v. Masson, 260 S.W.3d 482, 501 (Tex. App.—Houston [14th Dist.] 2008,

pet. denied). ―[A] fiduciary duty arises out of agency law based upon a special

relationship between the two parties.‖ In re Bass, 113 S.W.3d 735, 743 (Tex.

2003) (orig. proceeding) (citing Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d

193, 200 (Tex. 2002)); see also Shands v. Tex. State Bank, 121 S.W.3d 75, 77

(Tex. App.—San Antonio 2003, pet. denied) (stating that an agency relationship

creates a fiduciary relationship as a matter of law). An agent is a person who is

authorized to act for another and is subject to the control of the other. SITQ E.U.,

Inc. v. Reata Rests., Inc., 111 S.W.3d 638, 652 (Tex. App.—Fort Worth 2003,

pet. denied) (noting that agency is generally a question of fact and that the trial

court, as factfinder, was free to resolve any inconsistencies in the conflicting


                                          4
testimony to support its implied finding of agency). ―Texas law does not presume

agency, and the party who alleges it has the burden of proving it.‖ IRA Res. Inc.

v. Griego, 221 S.W.3d 592, 597 (Tex. 2007); Tex. Cityview Care Ctr., L.P. v.

Fryer, 227 S.W.3d 345, 352 (Tex. App.—Fort Worth 2007, pet. dism‘d) (same).

C. Evidence

      The three tracts of land at issue in this case are (1) a 6-acre tract sold by

JPD Guam to Demetrius, who then sold four of the acres to the Burkburnett

Independent School District (the BISD property); (2) an 11.6-acre tract sold by

JPD Guam to Demetrius, who then sold it to SKB Energy LLC (the SKB

property); and (3) a 17.522-acre tract sold by JPD Guam to Demetrius, who sold

it to Trinity Hughes LLC (the Trinity Hughes property).

      Demetrius, age forty-five at trial, had taken some business and real estate

classes at a junior college but did not yet have a real estate license during the

transactions at issue.   His prior real estate experience involved a residential

home construction and remodeling business—PennRey Homes—that he started

in the mid-1990s. Demetrius said that prior to the BISD transaction, neither he

nor any entity that he had worked for had ever sold or been involved in the

purchase or sale of land for commercial use.              Demetrius compared his

knowledge of commercial property to Johnny‘s as ―zero to one hundred,‖ and

Johnny acknowledged having considerably greater real estate experience than

his nephew.




                                         5
      By trial, Johnny, age sixty-nine, had spent eleven years in the military as a

data analyst and then spent the subsequent years building up his property

development business. JPD Guam started operating in 1985; Johnny had been

its president since 1991 or 1992.

      Johnny testified that JPD Guam, which has held assets of around $20

million, buys land for development into commercial or residential property; that it

develops land for hotels, high-rise condominiums, and golf courses; and that it

has done business in Guam, Hawaii, and foreign countries. 2          Johnny‘s old

business card from around 1985, with his title ―President,‖ was admitted in

evidence. It lists, among eight others, the following companies: ―Tonko Reyes,

Inc.‖; ―JPD Guam Co., Inc.‖; ―RUCR Tex. Co., Inc.‖; ―RUMC, Inc.‖; and ―UCRC,

Inc.‖ Johnny testified that Tonko Reyes, Inc. built retail shopping complexes and

that RUMC, Inc. and UCRC, Inc. were real estate businesses.

      Johnny testified that prior to November 2002, he felt that he and Demetrius

were close, that he could trust Demetrius, and that he relied on Demetrius to be

truthful during their transactions. Demetrius testified that he and Johnny did not

have a close relationship and that during the time period at issue here (2000–

2005), he ―[f]elt it was more business than anything.‖ Johnny‘s wife Kathrina was

designated JPD Guam‘s corporate representative during the trial.




      2
       At the time of the trial, JPD Guam owned only one condominium.


                                        6
1. Events Prior to and During 2000

      In 1991, RUCR Tex. Co., Inc., a corporation owned in part by Johnny and

his brother Joe—Demetrius‘s father—acquired an 86.937-acre tract in Wichita

County that included the three tracts at issue here. JPD Guam financed the

construction of utilities, streets, and other infrastructure on RUCR‘s land, and

from 1991 to 2002, RUCR tried to develop and market this property.

      Demetrius wanted to acquire all of RUCR‘s property. In 2000, he bought

30.913 acres of the property from RUCR for $170,000, after negotiating with

Johnny and offering what his father told him to offer.

2. Events in 2002

      In March 2002, Demetrius and Johnny, acting for JPD Guam, entered into

a contract for sale of RUCR‘s remaining property, including the three tracts at

issue here, for $175,000.3    The contract‘s closing date was August 1, 2002.

Demetrius testified that he negotiated with Johnny through his father.

      In April 2002, Demetrius had some of the property appraised to determine

its market value. The appraiser concluded that the value of the 12.29-acre tract

adjacent to the John G. Tower Elementary School was $153,600, or

approximately $12,500 per acre.      The same appraiser estimated the market

value of an additional 29.6 acres—three tracts located near Interstate 44—was


      3
      Johnny did not sign this sales contract, but he initialed the bottom of each
page. The sales price included a note for $87,500 payable to Johnny in three
annual installments.


                                         7
$444,000, or $15,000 per acre; he billed Demetrius $985. Demetrius never told

Johnny or anyone from JPD Guam about the appraisal, and Johnny was

unaware of the appraisal during the sale of all three tracts at issue here.

However, Johnny acknowledged that he knew how to obtain property appraisals

and that he had done so over the years for other property.

      In June 2002, JPD Guam foreclosed on RUCR‘s note and obtained

RUCR‘s remaining 34.195 acres via trustee deed. 4 Billy Elder, a Wichita County

attorney, was RUCR‘s bankruptcy trustee. On June 14, 2002, Elder sent Johnny

a letter setting out the following:

      Pursuant to your instructions I have foreclosed on the property
      owned by RUCR Tex Co., Inc., in favor of JPD Guam Company, Inc.
      (―JPD‖). Enclosed you will find a copy of that Foreclosure Sale
      Deed. Therefore, for you to sell this property to Dee, the Contract
      must be signed by JPD rather than RUCR Tex Co., Inc. For that
      reason I am enclosing three (3) copies of an Unimproved Property
      Contract which must be initialed by you on each page and signed on
      the last page by you as President of JPD. Please sign these
      Contracts and return them to our office as soon as possible so that
      Dee can get his loan approved and we can set up the closing.
      [Emphasis added.]

Johnny was Elder‘s client at the time. Demetrius and JPD Guam entered a new

contract with the same price ($175,000) and terms as the original contract and

with the same August 1, 2002 closing date. The contracted-for property had the




      4
       Johnny testified that he asked JPD Guam‘s board—which he said was, at
the time, him, his partner, and a Japanese firm—for permission to buy the land
and that the property‘s asking price was $300,000, but he paid only $195,000.


                                        8
same legal description as the 34.195-acre property foreclosed upon by JPD

Guam.

      Johnny testified that there were no negotiations between him and

Demetrius involving RUCR‘s land and that he was not involved in the earnest

money contracts for it, but he also stated:

      Billy [Elder] always told me that Dee is trying to buy the property. I
      said okay. Now, yes, I signed this [Defendant‘s Exhibit 4, the
      earnest money contract] because Billy wants me to sign the
      documents because Dee wants to take it to the finance to—
      company to get his money to buy it.

Johnny acknowledged that his signature was on Defendant‘s Exhibit 4 and that,

by signing the earnest money contract, JPD Guam was agreeing to sell all of the

land to Demetrius for $175,000.

      On June 26, 2002, Johnny sent a letter to Elder stating that the ―enclosed

documents have been signed and forwarded for you and Dee‖ and that Johnny

would be forwarding the directors‘ resolution on the sale per Elder‘s request.

Johnny said that he did not present the earnest money contract to JPD Guam‘s

directors to approve its terms; however, on July 1, 2002, Johnny sent Elder a fax

entitled ―Resolution,‖ with an attachment stating,

                RESOLUTION OF BOARD OF DIRECTORS OF
                         JPD GUAM CO., INC.

             RESOLVED, that Johnny C. Reyes, the President of JPD
      Guam Co., Inc., authorized in the name of and for the account of this
      Corporation and such terms and conditions as he may deem proper
      for the sale of a tract of UNIMPROVED PROPERTY, out of A.R.




                                         9
      Collins Survey, Abstract No. 414, Wichita County, Texas.[5] To do
      and perform all acts and sign all agreements, obligations, pledges,
      and/or other instruments necessary or required by all agreement
      transactions for its protection in its dealing with this Corporation.

             RESOLVED, FURTHER, that any interested buyer be
      furnished with a copy of these resolutions, and it be authorized to
      deal with the officer herein above named under said authority until
      expressly notified in writing to the contrary.

The resolution is signed by Lawrence J. Teker, Secretary, on June 25, 2002.

Johnny testified that Teker was an attorney.

      Demetrius testified that after entering the earnest money contract, he tried

to find buyers for the property by contacting all of the realtors he knew to tell

them about the property. Paul Harris became Demetrius‘s realtor for the BISD

property.    Demetrius    asked    Harris    to   contact   Danny   Taylor,   BISD‘s

superintendant, about the property adjacent to the elementary school.

      On July 27, 2002, Harris sent a letter to Taylor that stated that he

represented PennRey Homes, ―who currently owns the 12.29-acre tract of land

directly south of John Tower Elementary and adjacent to Hooper Road,‖ and that

PennRey Homes proposed to sell the land to the school district for $175,000, or

divided for $17,500 an acre, with a 6-acre minimum. Below Harris‘s signature,

Demetrius signed the letter for PennRey Homes. Demetrius testified that Harris




      5
      All of the land at issue here is out of the A.R. Collins Survey, Abstract No.
414, Wichita County.


                                        10
sent the letter to Taylor on Demetrius‘s behalf, even though PennRey Homes did

not yet own the 12.29-acre tract at the time.6

        Demetrius‘s earnest money contract with JPD Guam expired on August 1,

2002, when he could not find the money to complete the transaction. However,

on August 9, 2002, Harris sent another letter to Taylor, stating that ―Mr. Reyes‖

proposed to sell approximately 4 acres to the school district at $17,500 per acre,

for a total price of $70,000. A handwritten note on Harris‘s letter indicates that

the school district‘s board of trustees approved the purchase on September 19,

2002.

        Dennis Probst, an engineer and surveyor, testified that Elder called him on

September 30, 2002, and ordered a survey of the 6-acre tract that included the

BISD property. Probst met with Harris and Demetrius to establish the property‘s

exact dimensions, and they tried to configure the property ―in the best way to not

impact the rest of the property unfavorably.‖

        JPD Guam offered, and the trial court admitted, the September 30, 2002

minutes from JPD Guam‘s shareholders‘ annual meeting. The ―Shareholders

Present‖ section reflects that Johnny, as president, and Kathrina, as secretary,




        6
      Taylor testified that BISD‘s board of trustees rejected the initial offer
because BISD could not buy all twelve acres.


                                         11
were present, as well as Daniel Reyes by proxy. 7 The minutes, which Johnny

testified were prepared on September 30, 2002, state that

      [t]he President informed the stockholders that the Corporation‘s R-2
      lot consisting of 12 acres in Wichita Falls, Texas, of which 6 acres is
      under consideration for sale to John Towers School for $50,000 as
      suggested by Dee Reyes reflecting the current fair market value.
      Johnny Reyes made an agreement with Dee Reyes, nephew, to sell
      the property and offered him a finder‘s fee of up to 10% of the value
      since he is not a licensed real estate agent. Although Dee Reyes is
      not a licensed real estate agent, he has a builder‘s business license
      under Penn[R]ey dealing with buying and selling houses and
      property. He builds new houses and refurbishes dilapidated houses
      for resale. The target date will take place sometime in November or
      by the end of the calendar year.

      In November 2002, Elder sent Johnny a letter enclosing a warranty deed

for two tracts of land from JPD Guam to Demetrius Reyes d/b/a PennRey

Homes. The letter states, ―It is our understanding that you will execute this Deed

and any consideration to be paid you for such will be handled outside of our

office after Demetrius Reyes sells the properties.‖         Handwritten, below the

signature line, Elder wrote, ―Dee said he has talk [sic] to you about this.‖

      On November 25, 2002, Johnny, on behalf of JPD Guam, executed a deed

for two tracts of land—a 4-acre tract and a 2.02-acre tract—to Demetrius and

PennRey Homes. Demetrius testified that he paid JPD Guam $55,000 for the

property.   Elder said that there was no formal closing from JPD Guam to

Demetrius on this property and that that there was no settlement statement for


      7
      The minutes reflect that Johnny held 199,998 shares, Kathrina held 1,000
shares, and Daniel held 1 share.


                                         12
the sale from JPD Guam to Demetrius because it was ―one of those situations

where Dee came in and said, [‗]Johnny will come in and sign it, just do a deed.[‘]‖

Elder stated that he did not know what took place outside of his office, other than

that the deed was sent to Guam for Johnny to sign and that it was signed by

Johnny.

       On December 4, 2002, BISD closed with Demetrius on the 4-acre tract for

$70,000. On December 5, 2002, Demetrius received $63,421.12 from BISD and

then sent a wire transfer of $55,000 to Johnny. Demetrius received confirmation

from the bank that day that the $55,000 had been credited to Johnny‘s bank

account in the ―branch in [T]amuning[,] [G]uam,‖ and the bank‘s confirmation was

entered in evidence.

       Demetrius testified that JPD Guam and Johnny did not complain about the

$55,000 purchase until Johnny filed the lawsuit.8 Johnny testified that, to his

knowledge, he had never received the $55,000 wire transfer, and Kathrina

testified that she could not confirm receipt of that money and denied that they

had received it. However, Johnny made the following allegation in paragraph 8

of his original petition:



       8
       The September 20, 2003 minutes from JPD Guam‘s shareholders‘ annual
meeting, admitted as Defendant‘s Exhibit 25, noted, ―The sale of the 6 acres in
Wichita Falls, Texas to John Tower School has not materialized yet. No word
from Dee Reyes.‖ The ―Shareholders Present‖ section is the same as the 2002
minutes, showing Johnny, as president, Kathrina, as secretary, and Daniel Reyes
by proxy, with the same share distribution.


                                        13
      In November 2002, the Defendant telephoned Mr. Reyes at his
      place of business in Guam and informed Mr. Reyes that Defendant
      had secured a Buyer for the Plaintiff‘s property for a sale price of
      $50,000.00. Defendant informed Mr. Reyes that Plaintiff would need
      to sign a Deed conveying title to the property to Defendant in order
      to facilitate the sale. Defendant forwarded to Mr. Reyes in Guam
      closing documents for Mr. Reyes to sign. Mr. Reyes signed the
      closing documents on Plaintiff’s behalf, selling the property for
      $50,000.00.      Afterward, Plaintiff received the $50,000.00 sale
      proceeds. Mr. Reyes requested copies of the closing documents,
      but has never received them. On information and belief, Plaintiff
      represents to the Court that the Defendant intentionally
      misrepresented the terms of the sale to Mr. Reyes[] and conveyed
      only 4 acres of the property to a third party Buyer in this transaction.
      [Emphases added.]

During cross-examination, Johnny said that the statement in his pleading about

receiving the sales proceeds was probably incorrect; on redirect, he stated that

he had not been able to verify the deposit yet but acknowledged that he probably

did receive payment.      Kathrina testified that the pleading was based on a

chronology that she had prepared for their first attorney in this case.

      Johnny testified that he was in Guam when Demetrius called him and

asked him if he could sell JPD Guam‘s property for Johnny. Johnny said that he

asked Demetrius if he had a real estate license, that Demetrius said no, and that

he offered to pay Demetrius 10% as a finder‘s fee. Johnny admitted that there is

no written agreement to document this arrangement. Johnny acknowledged that

he could have had Teker, JPD Guam‘s corporate secretary, draw up an

agreement for the parties at any time.

      Johnny stated that, with regard to the BISD property, Demetrius called him

around the end of July or the beginning of August, told him that he had found a


                                         14
buyer and that he was negotiating, and told him that the property‘s market value

was $50,000. Demetrius never showed Johnny the property appraisal or told him

that he was selling the land for $70,000. Demetrius told Johnny that he would

send him the warranty deed to sign when Demetrius was ready to sell, that

Johnny should sign it but not date it, and that Demetrius would fill in the date at

closing.

      Demetrius testified that he called Johnny about the BISD property, but he

denied that he asked Johnny for permission to sell the property on JPD Guam‘s

behalf or that he acted in any capacity as Johnny‘s or JPD Guam‘s agent, and he

testified that he did not sell the BISD property on JPD Guam‘s behalf. Demetrius

said that he probably did not tell Johnny or anyone from JPD Guam that he had

sold the BISD property for $70,000 and that he did not tell Johnny or anyone at

JPD Guam that he intended to combine the 2.02-acre tract with his other

property to add an entire row of lots, which he later sold to the Wichita County

Board of Commerce and Industry (BCI) for $205,000.          After the BISD sale,

Demetrius continued to try to work deals involving the remaining land owned by

JPD Guam, stating, ―I‘d go out and make sure all the realtors knew that property

was available. And when somebody expressed interest, I‘d call my uncle and

we‘d go back and forth on negotiating a price.‖

3. Events in 2003

      In November 2003, Demetrius and SKB Energy LLC, a company

represented by Trinity Hughes‘s chief executive officer Dave Lilley, agreed to the


                                        15
sale of 11.6 acres—described as Lot 16, Block 4, Guam Estates—from

Demetrius to SKB for $120,000, to close on December 15, 2003.

      Demetrius testified that he contracted with JPD Guam for the SKB property

in late 2003 by calling Johnny.     Demetrius described their conversation as,

―Generally it would be I‘d call him up, ask him how much he wanted for it, he‘d

give me a price, I‘d counter offer, he‘d counter offer, and we‘d go back and forth

until we both agreed on a price.‖ Demetrius stated that this was the same sort of

negotiation that went on with regard to the BISD and Trinity Hughes properties

and that there was never any discussion between him and Johnny about working

for JPD Guam on commission.

      Demetrius agreed to pay JPD Guam $75,000 for the SKB property—

$50,000 in cash and $25,000 in a promissory note that could be forgiven. On

December 5, 2003, Elder‘s office sent Johnny a letter referencing the SKB

property and stating that an original settlement statement, warranty, and

promissory note were enclosed; Anne Thompson, Elder‘s legal assistant, signed

the letter.9 Johnny acknowledged that he signed the settlement statement on the

property, which reflects a sale price of $75,000, including a $25,000 loan from

seller to buyer.

      Demetrius stated that he never told Johnny or anyone from JPD Guam that

he had a sale lined up for $120,000. JPD Guam and Johnny did not complain


      9
       The enclosures were not included in the trial exhibit.


                                        16
about the sale until 2005, when Johnny filed the lawsuit. Demetrius stated that

they never demanded payment on the $25,000 note until filing the lawsuit.

      Johnny testified that, as before, Demetrius called to tell him that he was

negotiating a deal on the property, ―and, you know, he‘s—he‘s gonna be buying it

for [$]120,000.‖   According to Johnny, he agreed to $120,000, and then

Demetrius called him back and said that the buyer only wanted to pay $75,000.

Johnny stated that the arrangement between JPD Guam and Demetrius was the

same as before: JPD Guam would pay Demetrius 10% to sell the property. But

Johnny again acknowledged that they had no writing to memorialize this

agreement. As before, Johnny did not know the property‘s appraisal value.

      Johnny gave contradictory testimony about when he found out Demetrius

was selling the property for $120,000:

      Q. . . . At any point in time did he tell you that he was gonna get—
      that he had entered into an agreement to sell it for [$120,000]?

      A. Yes, in the beginning, you know.

      Q. Before the sale consummated, did he ever tell you that he was
      actually gonna get that much?

      A. No.

      James Norseworthy, a realtor and real estate broker, testified that he had

been involved in the sale of the SKB property and that Demetrius had

approached him and some other realtors when Demetrius began subdividing

land into three parcels. Norseworthy became the realtor for the SKB property;




                                         17
two other realtors received the other tracts, and they listed all of the tracts around

the same time.

      Norseworthy initially testified that      he ―believe[d] [Demetrius] was

representing his uncle,‖ before he added, ―I‘m not for sure, but I think that‘s the

way it was.‖ He then replied, when asked whether Demetrius indicated to him

that Demetrius was representing his uncle, ―Yes, that‘s correct.‖                 But

Norseworthy also stated that he thought Demetrius represented Johnny when

RUCR, not JPD Guam, owned the property. After JPD Guam acquired RUCR‘s

land, Demetrius never called Norseworthy to tell him that he was not

representing Johnny.

      On December 15, 2003, Johnny, on behalf of JPD Guam, executed a deed

for 11.66 acres to Demetrius.      The settlement statement of the JPD Guam-

Demetrius sale shows that Johnny sold the SKB property to Demetrius for

$75,000, with a $25,000 loan from seller to buyer.        On December 15, 2003,

Demetrius made a promissory note payable to Johnny for $25,000. The note

contains the following language:

      NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE
      CONTRARY, IT IS AGREED AND UNDERSTOOD THAT IF ALL
      OR PART OF LOT NO. TWENTY (20), BLOCK FIVE (5) AND LOT
      TWENTY-ONE (21), BLOCK NINE (9) OF THE REVISED
      PRELIMINARY PLAT OF GUAM ESTATES DATED JULY 11,
      1994, AS MORE FULLY DESCRIBED ON THE EXHIBIT “A”, ARE
      SOLD FOR $200,000.00 OR MORE, THIS PROMISSORY NOTE
      SHALL BE NULL AND VOID.         IN ADDITION TO THE
      FOREGOING, IF SUCH LOTS ARE SOLD FOR MORE THAN
      $200,000.00[,] MAKER SHALL BE ENTITLED TO RETAIN ALL
      NET PROCEEDS IN EXCESS OF $200,000.00.


                                         18
Demetrius testified that the two lots referred to in the promissory note comprised

the Trinity Hughes property and that he and Johnny included this provision as

part of their negotiation process.    Elder testified that he drafted the $25,000

promissory note from Demetrius to Johnny, that the paragraph in bold,

capitalized letters was something that Demetrius and Johnny had agreed upon,

and that he was instructed to put the paragraph in the note. Elder stated that he

was not acting as attorney for either side when he drafted the note but rather just

as a closing agent for that transaction.

      At trial, Johnny claimed that the promissory note was due.10 Johnny also

testified that he was not familiar with the note‘s bolded, all-caps paragraph and

that, prior to signing the note, he was never told about the property‘s April 2002

appraisal. Johnny also stated that although he signed and approved the note, he

did not remember reading it. With regard to documents that he signs, Johnny




      10
       The September 21, 2004 minutes from JPD Guam‘s shareholders‘
annual meeting were admitted in evidence and reflect that

           The commercial lot of approximately 11 acres in Wichita Falls,
      Texas sold for $75,000[,] of which $50,000 was received in
      December 2003, the balance of $25,000 was loaned to Dee Reyes.
      Dee said he needed to borrow the money and will pay it back in six
      months. To date, Dee Reyes has not paid back the money per
      agreement. Johnny Reyes to follow-up on status of payment.

They also show that Johnny was still president, Kathrina was still secretary,
Daniel Reyes was still present by proxy, and the share distribution remained the
same as 2002 and 2003.


                                           19
stated, ―They just put it in front of me and I trust my people that are doing it so I

just sign it.‖ He clarified that ―they‖ meant his employees.

4. Events in 2004

      At Elder‘s office on October 20, 2004, JPD Guam sold some property to

BCI, Demetrius sold his RUCR property to BCI, and Demetrius purchased the

Trinity Hughes property from JPD Guam.

             a. BCI Property Transactions

      Demetrius testified that he was contacted about the property BCI wanted

to purchase and that he contacted Johnny and told him what BCI wanted to buy.

He stated that he did not try to acquire JPD Guam‘s land to sell to BCI, that JPD

Guam sold its land to BCI directly, and that Johnny was fully involved in the

process.

      Tim Chase, the president of the Wichita Falls Chamber of Commerce and

Industry (formerly BCI), testified that he had no dealings with either Johnny or

Demetrius other than the purchases of their tracts of land. Chase was unsure

exactly with whom he had dealt, stating, ―You know, I‘m not even sure if it was

Johnny or who, it was just the Reyes family was involved with the sale of the

land. I‘d have to look back through the records to see the name specifically of

the people involved.‖

      On March 24, 2004, Johnny, on behalf of JPD Guam, executed an earnest

money contract with BCI for 8 acres for $115,000. Paragraph 24 of the earnest

money contract, entitled ―Adjacent Property,‖ contains the following:


                                         20
      Concurrently with the submission of this Contract by Seller to Buyer,
      Buyer has submitted an earnest money contract to Demetrius A.
      Reyes and Darlene P. Reyes, (the “Adjacent Owner”) relating to the
      purchase of 36 acres, more or less, located adjacent to the Property
      (the “Adjacent Property”).    Buyer‘s purchase of the Adjacent
      Property is essential to the Buyer‘s proposed use of the Property,
      and Buyer does not intend to purchase the Property unless Buyer is
      able to purchase the Adjacent Property at or near the same time.
      [Emphasis added.]

      On May 27, 2004, BCI sent Demetrius a letter referencing their March 15,

2004 earnest money contract and stating that an environmental site assessment

raised some concerns and that it would exercise its right to terminate the contract

subject to remediation.    On the same day, BCI sent JPD Guam a letter

referencing their March 24, 2004 earnest money contract, which included the

same environmental site assessment and remediation language.

      Kathrina testified that in June 2004, she and Johnny asked Demetrius what

was happening with the sale to BCI and that he told them that it was on hold

pending an environmental study. Kathrina said that Demetrius asked them ―to go

in half and half on the expenses‖ for the environmental cleanup. Kathrina said

that they also asked Demetrius about the acreage involved, because the contract

they received listed 8 acres, and they thought they only had 6 acres to sell.

Kathrina said that Demetrius avoided answering that question.




                                        21
Demetrius testified that because of BCI‘s environmental concerns, he had to

clean up the property, including having the property surveyed. 11 BCI reinstated

both Demetrius‘s and JPD Guam‘s contracts in July 2004, and both contracts

closed on October 20, 2004.

            b. Trinity Hughes Transactions

      In mid-to-late summer 2004, Lilley (Trinity Hughes‘s CEO) and Demetrius

negotiated over the Trinity Hughes property. Lilley testified that Demetrius never

provided him with proof that he owned the property or talked with him about who

owned it.   On May 5, 2004, Demetrius (d/b/a Short Skirts Management and

Holdings, L.L.C. (Short Skirts)) agreed to sell 18.2 acres ―more or less‖ to Trinity

Hughes for $588,000, with a closing date of July 23, 2004. 12

      Demetrius testified that he called Johnny, told him that he had a possible

buyer for the property, and discussed a $200,000 price with him but that Johnny

wanted more. They negotiated back and forth until they could agree on a cash

purchase of $207,000 between Demetrius and Johnny.              On May 14, 2004,

Johnny, on behalf of JPD Guam, signed a contract with Demetrius for $207,575

for the Trinity Hughes property, to close July 23, 2004. Demetrius said that he

had expected his closing with JPD Guam and his closing with Trinity Hughes to

      11
        Probst testified that he surveyed both parcels of land for the BCI sales.
Demetrius‘s property contained 32.198 acres (31.779 net), and JPD Guam‘s
property contained 7.010 acres (6.541 net).
      12
       Trinity Hughes‘s October 20, 2004 certificate of resolution shows that it
resolved to purchase 11.752 acres and 5.77 acres for $588,000.


                                        22
both occur in August but that Trinity Hughes had problems with its financial

backers and postponed closing.

      Johnny testified that, as before, Demetrius called him and told him that he

was negotiating a deal to sell the property, this time, to a California company,

and that Johnny agreed to the same 10% finder‘s fee.           Johnny said that

Demetrius told him that the property‘s market value was $200,000 to $250,000.

When Johnny and his family lived with Demetrius during June 2004, Demetrius

never mentioned the April 2002 appraisal or his agreement with Trinity Hughes to

sell the property for $588,000.

      Demetrius‘s notes were admitted in evidence; the notes are undated, and

Demetrius indicated that some of the writing is not his. The notes have two

prices lined out, ―Sale Price $238,500,‖ and ―Contract Price $213,500,‖ before

$207,575 is left unlined on the same line as ―Contract Price.‖       The following

figures listed on the page reveal how the $207,575 was calculated:

                     238,500

                     -11,925 COMM

                     -25,000 DEE

                     +6,000 EARNEST/OPTION

                     207,575

                     -? CLOSING COST




                                       23
$11,925 is 5% of $238,500; Demetrius testified that the $11,925 might be the

realtor commission and that the $25,000 is ―the promissory note.‖

      On June 28, 2004, Elder‘s office sent to the title company a letter that

attached copies of the settlement statement, an affidavit to debts and liens, and

the warranty deed for the Trinity Hughes property and included the following

statement:

      It is my understanding that Demetrius Reyes is selling this property
      on July 23, 2004 and this closing is supposed to happen at the same
      time. Demetrius Reyes has asked that Guarantee Title cut a check
      to Fudge and Elder for $206,776.93 and we will disburse the funds
      as described on the Settlement Statement enclosed. We will
      forward a filestamped photocopy of the Warranty Deed once it has
      been recorded.

The attachments were not included in the exhibit admitted at trial. Thompson

signed the letter.   However, Demetrius and JPD Guam amended their sales

contract on July 22, 2004, to reflect a higher price of $211,575, with a new

closing date of September 23, 2004.

      The warranty deed from JPD Guam to Demetrius was filed on July 29,

2004.13 An additional warranty deed, from Demetrius‘s transfer of the Trinity

Hughes property to Short Skirts, was filed on the same day. Elder testified that

Thompson handled the closing and filed the documents at Demetrius‘s

instruction.   Thompson testified that Demetrius instructed her to prepare the

      13
        Elder stated that it was extremely unusual to file a warranty deed before
closing and that it probably should not have been done in this transaction ―except
for what had gone on in the past with Dee coming in and telling us what he and
Johnny had talked about and done and do this.‖


                                       24
deeds—which she did—and that Demetrius told her to file them, which she filed

simultaneously.   Thompson brought the situation to Elder‘s attention after

Demetrius‘s check for the filing fees bounced, and at some later point, Elder told

her not to prepare any more deeds without his review. Thompson testified that

she never received any instructions from Johnny.

      Demetrius testified that although the settlement statement between JPD

Guam and Demetrius shows that they closed on July 23, 2004, they actually

closed on October 20, 2004.      Elder stated that Demetrius could not buy the

property on July 23 because he did not have the money for it.

      The September 21, 2004 minutes from JPD Guam‘s shareholders‘ annual

meeting, which were admitted in evidence, state,

      The President informed the stockholders that he entered into a
      verbal agreement with Dee Reyes, nephew, to sell the Corporation‘s
      commercial lot of approximately 17 acres to Trinity Hughes for
      $211,575. Dee Reyes suggested the fair market value is between
      $200,000 and $250,000. The tax roll showed an assessment value
      of $101,430. Closing on July 23rd did not materialized [sic] but was
      extended to September 23, 2004.

Johnny said that the sale from JPD Guam to BCI was not included in the minutes

because he did not know at the time if the sale would go through. He attempted

to explain why Trinity Hughes was mentioned in the minutes, stating that

although he did not know that it would be sold to Trinity Hughes,

      This is—when—when this started out, when they were gonna close,
      I don‘t know who it is. And when it is Trinity Hughes, we—we—we
      have our meeting in September and say, you know, that probably it‘s
      Trinity Hughes because Dave Lill[e]y was Trinity Hughes. But we‘re



                                        25
      not sure so I‘m putting in Trinity Hughes so that—to tell us that that‘s
      the name of the company. We don‘t know who it‘s gonna be.

Johnny acknowledged that JPD Guam‘s sale to BCI and the third sale were in

the same status at the time, i.e., waiting to see if everything could be done to

close them.

      In a letter dated September 20, 2004, Elder informed Lilley that his firm

had been retained to represent Demetrius with regard to the earnest money

contract, that Demetrius expected Trinity Hughes to close on the eighteen acres

under contract, and that failure or refusal to close would ―cause [Demetrius] to

lose the property and any profit that he would have made on the sale‖ because

Demetrius‘s ―interest in the property will be forfeited by him if this closing does

not occur by September 23, 2004.‖ In a letter dated September 22, 2004, Lilley

stated that Trinity Hughes still wanted to come to terms on the eighteen acres

under contract but had not received a response about its desire to renegotiate

some terms of the original contract. JPD Guam and Demetrius did not amend

their contract again when the September 23 closing date passed.

              c. October 2004 Closings

      On October 20, 2004, Demetrius sold a 31.779-acre tract to BCI for

$205,000, and JPD Guam sold to BCI a 6.541-acre tract for $115,000.14 The

closings took place at Elder‘s office.


      14
        The minutes of the JPD Guam board of directors meeting show
authorization to sell 6.541 acres of real property to BCI for $115,000, signed by
Johnny on October 20, 2004.

                                         26
Kathrina testified that she was at the BCI closings and described the following:

             When we first arrived there, they were working on closing the
      BCI deal with Demetrius Reyes. So we just sat there at the table
      and we just waited until they did their closing with Demetrius Reyes.
      And then after the closing, they turned it over to us. And my
      husband just signed whatever papers they wanted him to sign for
      the closing with BCI.

             Then Demetrius—we stood up, and Dave Lill[e]y and another
      one of his associates—I don‘t really know who he is, but other two
      people with him, they got up and they walked over to a separate
      room. We were in the main area of Billy‘s—I don‘t know what they
      call it—common area—and they were walking into a separate room,
      and Dee stood up and said to us, I will handle everything from here.
      Just wait for me out here.

             So I looked at my husband and I said, you know, aren‘t we
      going to go in there? And he just looked at me and said that‘s okay.
      . . . So we sat back down and we waited, and then in about five
      minutes he came out and he handed us a check—two checks, in
      fact. One was for the BCI, and the other one was for the down
      payment. And then he walked us out the building, and, you know,
      he even walked us out to our car. And, you know, and he says, you
      know, I‘ll take care of it. And that was it.

      Demetrius testified that he salvaged the sale to Trinity Hughes by financing

it himself, that Johnny financed the sale of the land to him, and that Demetrius‘s

out-of-pocket costs were almost $50,000.15 Johnny demanded 20% down and

8.5% interest to finance the sale to Demetrius, so for Demetrius to close the

Trinity Hughes deal, he had to first obtain cash from his BCI sale. On October

20, 2004, a check made payable to ―JPD Guam Company, Inc. and/or Johnny C.


      15
         The exhibits show that JPD Guam financed $169,260 of its sale of the
Trinity Hughes property to Demetrius and received a ―note secured by collateral
transfer of note and lien‖ for $169,260.


                                        27
Reyes‖ was written on Fudge & Elder‘s escrow account for $41,066.93, ―for

proceeds from 7/23/04 closing‖—referencing the original closing date of the JPD

Guam-Demetrius sale. Elder testified that this check was the proceeds from the

sale of the Trinity Hughes property from JPD Guam to Demetrius.

      A collateral transfer of note and lien dated October 20, 2004, shows that

Demetrius was indebted to JPD Guam for $191,575, that a $580,000 note

executed by Trinity Hughes was collateral for Demetrius‘s debt, and that the debt

was on 17.522 acres. The collateral transfer of note and lien document was

subsequently amended to change the debt amount from $191,575 to $169,260,

and to reflect that the debtor was Short Skirts, not Demetrius. Demetrius testified

that he never sent either the original collateral transfer of note and lien or the

corrected one to any representative of JPD Guam and that he did not know if

Johnny or anyone at JPD Guam received them. However, he also testified that

he expected the collateral transfer of note to be presented to JPD Guam and that

he never conspired with Elder to hide it or anything else from Johnny or JPD

Guam.

      Elder described his conversations with Demetrius and Johnny about the

Trinity Hughes property as follows:

      Well, as I understand it, Dee was saying that he made a deal to buy
      the properties at [$]211,575 and that deal was made back in June.
      Dee was not able to come up with the cash to close it. And part of
      the reason was because what he had sold it for, they were supposed
      to pay cash, couldn‘t come up with the money. . . . And I had
      several conversations with Dee about, well, do I still sell it to these
      guys because it‘s too good of a deal not to sell it to them. And my


                                        28
      response to him was owner finance it. That way you‘ve at least got
      the property. If they don‘t pay you, you get the property back. But
      that‘s a good price to sell it for.

            But Dee was taking the position from back in June that he‘d
      made the deal with JPD for $211,000. Well, he didn‘t get the money
      to pay the $41,000 on the property until he closed on the transaction
      and JPD closed on the transaction with BCI which, if you‘ll notice,
      took place on or about that same day in October.

             And so there was—there was a lot of haranguing and going
      back and forth that Dee and Johnny had between June and October
      because Dee couldn‘t come up with the money and he was
      supposed to. And so how many times the deal changed, I can tell
      you it changed all the way up until the day—October 20th, the day
      they signed this. We made changes to the papers and that‘s why
      some of these had to be corrected is because it was such a rush job
      that they wanted changes made that day on October 20th. So the
      deal was changing all the way up till October 20th.

             Now, did—did Johnny know what Dee had sold it for to Trinity
      Hughes? I have no idea if he knew back in June or July when Dee
      made the deal with him to sell it to him for 211. But on October 20th,
      that day he knew . . . because he got a Collateral Transfer of the
      note and Deed of Trust as collateral. . . . I discussed it with him in
      detail and distinguished the difference with—the difference between
      a Deed of Trust and a Collateral Transfer of Note and Lien because
      Johnny kept saying, well, I‘m going to have a lien on this property.
      And my response to him and continued to be at closing, Johnny,
      you‘re gonna have a lien on the note, not the property. But if they
      don‘t pay the note, then you will have in a round about way a lien on
      the property. And we discussed that in detail . . . on the 20th.

      Johnny testified that he never received a copy of either the collateral

transfer of note or corrected collateral transfer of note and that neither he nor

Kathrina was ever told of the $588,000 sale to Trinity Hughes. Johnny denied

that Elder ever went over the collateral transfer of note with him and stated that

he never saw it before 2005. Kathrina stated that the closing took no more than



                                       29
thirty minutes, that there was no closing for JPD Guam with regard to 18 acres

on October 20, 2004—the approximate amount of property in the Trinity Hughes

sale—and that Elder never discussed the collateral transfer of note with them.

      Elder testified that the closing between Demetrius and Trinity Hughes did

not occur until October 21, 2004, and the deed of trust between Demetrius (as

Short Skirts) and Trinity Hughes shows that it was not signed until that day.

Trinity Hughes‘s $580,000 note is dated October 20, 2004, but it does not

indicate when it was signed. Elder testified that the deed of trust and note would

have been signed at the closing on October 21, 2004. Johnny testified that he

was not in the same room when the Trinity Hughes documents were being

signed.

5. Events of 2005

      Johnny had knee surgery in November 2004; Kathrina was in charge of

JPD Guam while he was recuperating. Demetrius testified that about six months

after the Trinity Hughes property closed, Kathrina called him, wanting to

renegotiate. Johnny testified that around February or March 2005, he mentioned

to Kathrina that they had not received any money or documents, and she called

Elder to find out what was going on. Kathrina said that Elder gave them the

documents in March and that Elder‘s office staff claimed that they had not known




                                       30
where to send the documents, even though Johnny had left a forwarding address

in Guam.16

      Kathrina testified that she and Johnny called Elder because they wanted to

know ―what was going on with the properties,‖ and when they arrived at Elder‘s

office, she asked him for the closing documents for the sale of JPD properties.

Kathrina stated that the first time she learned of the $580,000 sale was when she

asked Elder about the closing documents.        However, on cross-examination,

Kathrina admitted that, in the chronology that she had prepared in October 2005

and produced during the course of the litigation, she noted that Johnny learned of

the $580,000 sales price on October 20, 2004.

      Elder testified that in 2005, he became aware of the controversy with

regard to the Trinity Hughes property in connection with an income tax question

by Johnny and Kathrina. He stated that Johnny and Kathrina‘s copies of the

documents, ―a set of documents which included all the Collateral Transfers and

everything,‖ were sent to Guam and that Johnny and Kathrina did not make any

complaints to him about the transactions involving the BISD or SKB properties.


      16
         Norma Toliver, the chief deputy in the Wichita County Clerk‘s Office,
testified that her records showed that a transfer of deed of trust was recorded on
October 26, 2004, from Demetrius A. Reyes to JPD Guam Co., Inc., and returned
to Johnny Reyes in Tamuning, Guam. Her records showed that the document
was mailed from the clerk‘s office to Guam on November 8, 2004, and she stated
that there were no notations in her system to show that the postal service
returned it to the clerk‘s office. Kathrina testified that the clerk mailed the
document to suite 102 but that the correct address was suite 101. Suite 102 is
down the hall from suite 101.


                                       31
      On May 6, 2005, Kathrina, on Johnny‘s and JPD Guam‘s behalf, sent a

letter to Trinity Hughes, LLC, informing Trinity Hughes that JPD Guam was

invoking section D.2.a. of the October 20, 2004 collateral transfer of note and lien

and wanted all payments sent directly to Johnny, with all checks made payable to

―JPD Guam, Inc. and/or Johnny C. Reyes.‖            However, as of May 6, 2005,

Demetrius was not in default to JPD Guam. Lilley testified that prior to receiving

JPD Guam‘s demand letter, he was unaware of JPD Guam‘s claim to the sale

proceeds.17

      The trial court admitted in evidence Elder‘s July 26, 2005 letter to Johnny,

Kathrina, and Demetrius, in which Elder informed them that his firm could no

longer represent JPD Guam or Demetrius due to their conflict; that, until March 8,

2005, when Kathrina and Johnny came to his office, he was unaware of any

conflict; and that, in May 2005, it became clear that no agreement or compromise

in settling the dispute was possible. Elder then set out his understanding of the

events precipitating the dispute:

             It is my understanding that Dee takes the position that he
      negotiated a sales price on the purchase of the 11.752 acre tract
      and the 5.77 acre tract from JPD for the cash purchase price of
      $211,575.00. This was negotiated in April or May of 2004. We were
      instructed by Dee to prepare a cash deed which was given to
      Johnny, who signed it and returned it for filing. Title was then
      transferred from Dee to his company, Short Skirts Management and


      17
         In April 2005, Lilley sent a letter to Elder referring to Demetrius as Elder‘s
client and stating, ―[W]e continue to honor the commitment we made to your
client to vigorously work to sell and/or develop 18 Acre [sic] to each of our
benefit.‖

                                          32
     Holdings, LLC. At no time were we ever instructed to hold either
     Deed in escrow.

     When Dee discovered that Trinity Hughes could not obtain the
     necessary financing and its financial backer withdrew, it was
     necessary for Dee to renegotiate his agreement with JPD because
     he would not have the cash to purchase the property outright. I do
     not know what conversations took place during this renegotiation
     period, but I do know from conversations with Johnny that if Dee
     paid at least 20% down, JPD would finance the balance. The
     closing statement shows July 23, 2004, for the effective date of sale,
     but it was not finally consummated until October when Dee actually
     had the money to pay the 20% down and had closed on Short Skirts‘
     sale of the property to Trinity Hughes.

     Since the property had already been placed into the name of Dee
     and then from him into Short Skirts by cash deeds, filed in July of
     2004, it was necessary to secure JPD‘s note with the Trinity Hughes
     Note and Deed of Trust. All of which was done as evidenced by the
     endorsement of the Note and the Collateral Transfer of the Trinity
     Hughes Note and Deed of Trust. If Dee were trying to hide the value
     of the Trinity Hughes sale, it certainly was not reasonable for him to
     pledge such note as collateral.

     It is my understanding that JPD has taken the position that Dee was
     their agent and as such should have obtained the best price
     possible. JPD claims that Dee is the one [who] set the value of the
     property at $211,000.00, and thus the reason the property was sold
     to him for that price. When the principals in Guam discovered from
     the Collateral Transfer that Dee had resold the same property for
     $580,000.00, they became disgruntled because he was only given
     the authority to make a $100,000.00 profit rather than $368,425.00
     profit. I do not know what knowledge Johnny had as to the amount
     of profit being made by Dee, but I do know that he was present at
     the signing of the HUD-1 in October of 2004. [Emphasis added.]

     Elder testified that ―the $100,000 that Johnny had said was okay for Dee to

make on the deal was considerably more than what a normal realtor would




                                      33
make,‖ and he stated that in one of the earlier transactions, he made a comment

to Johnny that Demetrius was ―flipping‖ the properties.18 Elder testified,

      And I had a personal conversation with Johnny to let him know that
      he was flipping these because I wasn‘t going to be a party to
      simultaneous closing where two clients are sitting there and one is
      making a huge profit while the other one doesn‘t know about it.

      And Johnny‘s response to me was, well, he‘s making a little bit more
      profit, I‘m just trying to help him get started in business. And from
      that point on, I didn‘t question when Dee came in and said, I‘ve
      talked to Johnny and this is what we‘re gonna do. I just assumed
      that Dee was speaking for Johnny then.

      Elder stated that this conversation took place in or around 2002, the first

time that he was involved in a transaction between Johnny and Demetrius.

      Elder testified that he had always been under the impression that Johnny

owned 100% of JPD Guam based on what Johnny had told him but that when

the Trinity Hughes documents reached Guam, Johnny and Kathrina were asked

questions about the profit between Demetrius‘s sale to Trinity Hughes and the

sale from JPD Guam to Demetrius. The big issue for Kathrina and Johnny was

whether it looked like Johnny was getting a kickback from Demetrius, not

whether the documents had ever been sent. Elder stated,

            And, in fact, I prepared an affidavit on one closing for the BCI
      closing for Dee to sign and send back to JPD Guam to explain to my

      18
         Elder explained that what he called ―flipping‖ was Demetrius buying
property, waiting for it to close, and using the money he sold it for to close the
first transaction, and he said that he would not participate in flipping-type
transactions unless everyone knew what was going on, which is why he told
Johnny that Demetrius was flipping the properties ―and selling them for
considerably more than what he [was] buying them from [Johnny] for.‖


                                        34
      knowledge there was not one. And Dee‘s affidavit said that there
      was not one and explained the reason why there was a $65,000 fee
      on the BCI closing.[19] And that seemed to satisfy that—on that
      closing.

             But then the question arose at tax time back in April or so of
      ‘05 when whoever it was back in JPD saw this large sale because
      they looked at the Collateral Transfer documents and could see that
      the collateral for the $169,000 note was a $580,000 note which
      would clearly indicate it sold for a whole lot more. . . .

      But Johnny knew that in October. He knew that. We went over that
      in detail because I had to explain to him why he wasn‘t getting a
      Deed of Trust on the property, he was getting a note secured by
      Collateral Transfer.[20]
      19
         Elder referred to a $65,000 ―commission‖ that Demetrius received, but he
noted that Demetrius was not a licensed real estate agent at the time of this sale.
The BCI-JPD Guam settlement statement reflects that the sale price to JPD
Guam was $115,000 but with a $65,000 ―Total Reduction Amount Due to Seller.‖
Demetrius testified that because of BCI‘s environmental concerns, he had to
clean up the property, including getting a backhoe to dig ditches to prove there
was not a trash dump underneath, and that he had to have the property
surveyed. The record does not reflect what Demetrius had to pay for these
activities.
      20
        Elder elaborated, stating,

              Well, Johnny—Johnny seemed to want to make sure he had a
      lien on the property. He kept asking—if he asked that once, I bet he
      asked it three times. I‘m gonna have a lien on this property. And I‘d
      have to go back and say every time, no, Johnny, you‘re gonna have
      a round-about lien, but you‘re not gonna have a lien on the property
      itself. What you‘re gonna have a lien on is a note. Now, that note is
      secured by a lien on the property.

             And I went through this and I could tell that he really wasn‘t
      understanding because I had to explain it to him more than once.
      And I‘m not sure—to be quite honest with you, I‘m not sure he really
      ever understood what I was trying to tell him. But there‘s a big
      difference between taking a lien on real estate and taking a lien on a
      note secured by real estate. But that was how that transaction
      changed from June to October.


                                        35
      . . . My belief is [Johnny] had no idea until October 20th until we
      went into that closing because he acted at that point like he didn‘t
      know it was selling for so much. And I could tell he didn‘t like it at
      that time, but he went ahead and closed on it because he said that‘s
      what he had agreed to on this. But—but he knew on October 20th.
      Now prior to that, I don‘t know [sic] think he knew is my opinion.

      Elder testified that his usual practice in conducting real estate closings was

to use the earnest money contract as a roadmap to the closing.            However,

according to Elder,

      from the very beginning Dee would come in and say, this is what I‘m
      gonna do, send a deed to Johnny, he‘ll sign it and send it back to
      you. I‘ve already talked to him about it. Well, we did this for
      probably two years. And I don‘t know how many transactions took
      place in that regard but that was the normal transaction with them.

Elder stated, in both his letter and at trial, that he thought the parties‘

memorandum of understanding (MOU) fairly resolved the differences between

the parties but that he was not sure whether it had been fully agreed to in any

particular form. The trial court admitted the MOU as Plaintiff‘s Exhibit 12 for the

limited purpose of construing the document, but it admitted the MOU as

Defendant‘s Exhibit 9 without any limitation.

      The MOU memorializes that on July 23, 2004, Demetrius purchased the

Trinity Hughes property from JPD Guam for $211,575, with JPD Guam financing

$169,260; that Demetrius transferred the property to Short Skirts, which then sold


Elder explained that what Johnny did not understand was the distinction between
a lien on real estate and a lien on a note secured by real estate but that Johnny
finally understood that he was getting collateral for his note and that it was in
some way related to that land.


                                        36
the property to Trinity Hughes for $588,000 and assigned to JPD Guam the note

and lien as collateral for the $169,260 loan; and that the parties agreed to

renegotiate to establish a different value for their interests in the Trinity Hughes

property and note.      The MOU then contains the following terms of the

renegotiation:

   1. REYES agrees to endorse the TRINITY Note outright [(]and not as
      collateral) to JPD, save and except a twenty per[cent] interest
      therein, which shall be retained by REYES. In exchange for such
      interest, the Reyes Note to JPD shall be forgiven.

   2. In the event TRINITY pays such Note and does not default under the
      terms of the Note and Deed of Trust, REYES shall receive Twenty
      Six and Three tenths Per Cent (26.3%) of each Note payment
      (principal and accrued interest) made and JPD shall receive the
      remainder of each note payment made, being Seventy-three and
      Seven Tenths Per Cent (80%) thereof.

   3. In the event TRINITY defaults, a foreclosure becomes necessary
      and JPD acquires title at foreclosure, it is agreed and understood
      that:

         A. The title to the property shall be reconveyed to REYES,
            subject to a Real Estate Lien Note payable to JPD in the
            amount of $169,200.00 amortized at 8.5% over 15 years,
            secured by a Deed of Trust containing a provision that REYES
            shall be prohibited from using the property as collateral for any
            indebtedness other than the debt owed to JPD. In addition to
            the debt, Reyes shall be liable to JPD for a prepayment
            penalty of 15% of the selling price from REYES to any other
            party, if the property is sold by Reyes within 5 years from the
            date of the note.

         B. REYES shall not receive the return of his down payment of
            $41,534.93.

         C. REYES may pursue TRINITY for any damages incurred by
            REYES as a result of its default, one-half (1/2) of which shall
            be paid to JPD upon request.


                                        37
      Demetrius testified that there was agreement on some parts of the MOU,

that he signed it on April 22, 2005, and that the MOU was the result of ―constant

pressure from Kathrina and [his] uncle.‖ Demetrius testified that, under the April

MOU, he would be released from the ―160 something thousand‖ that he owed

JPD Guam, that he would not be entitled to his 20% earnest money, and that the

MOU would be a settlement of all claims.

      After Demetrius signed the MOU on April 22, 2005, JPD Guam proposed

other versions of the MOU. Demetrius testified that he did not agree to the May

6, 2005 MOU (Defendant‘s Exhibit 10) in which Kathrina had tried to change his

indebtedness from $169,200 to $191,575. Kathrina testified that Demetrius orally

agreed to the change, which she made on May 5, 2005.

      Johnny acknowledged that he told Elder that his investors were unhappy

when they learned of the terms of the $588,000 transaction. However, he also

testified that JPD Guam‘s shareholders were himself, Kathrina, his son, and one

of his other nephews. Johnny stated that there had been other investors in JPD

Guam in the past but not from 2000 to 2009, then corrected himself, stating that

Teker, JPD Guam‘s secretary, had one share. Johnny also testified that the

distribution of shares as reflected in the 2002, 2003, and 2004 minutes was

correct. The investors he referred to as being unhappy were ―[t]he whole family.‖

      Demetrius testified that prior to March 2005, no one from JPD Guam

complained about his purchase price from JPD Guam for the Trinity Hughes




                                       38
property. With regard to all three sales from JPD Guam to Demetrius, Demetrius

testified:

       Q. JPD received 55,000 on the first sale; is that correct?

       A. Yes.

       Q. 50,000 on the second sale?

       A. Yes.

       Q. And 211,000 on the third sale?

       A. Yes.

       Q. For a total of 311,000?

       A. Yes.

       Q. Which is almost 140,000 more than what they agreed to sell it to
       you earlier?

       A. Yes.

       Q. And that sale would also include the land that went to BCI?

       A. Yes.

       Q. So in regard to these transactions that closed in 2002, 2003,
       2004, JPD came out with more money than they would have had
       you bought the land back in 2002?

       A. Yes.

Johnny acknowledged that Demetrius was the grantee on all of the deeds he

issued, but he claimed that he did not intend to sell any of the property to




                                         39
Demetrius. Johnny admitted that he did not have any documents to show that

JPD Guam did not intend to sell the three properties to Demetrius. 21

D. Analysis

      JPD Guam argues that the great weight of the documentary and

testimonial evidence establishes that the parties entered into a consensual

agreement under which Demetrius would act on JPD Guam‘s behalf in locating

buyers for JPD Guam‘s properties and in making arrangements for the sale of

these properties to such buyers under JPD Guam‘s direction and control. In

support of its argument, JPD Guam points us to four items of evidence:

      The $25,000 promissory note from Demetrius to Johnny made in
      their SKB property transaction, which states that the note will be
      forgiven if the Trinity Hughes property sells for over $200,000;

      Demetrius‘s testimony that he called Johnny to tell him that he had
      located ―a possible buyer‖ for the Trinity Hughes property;

      Norseworthy‘s and Elder‘s testimonies with regard to Demetrius
      ―speaking for‖ Johnny; and

      The MOU provisions that entitle Demetrius ―only to an interest and
      commission payment equal to approximately 26% of the entire value
      paid by Trinity Hughes‖ and that limit Demetrius‘s ability to recover in
      the event Trinity Hughes defaults.

      Demetrius responds that all of the documentary evidence supports his

position, that the three transactions were just a continuation of prior purchase


      21
        Demetrius is not the only family member who Johnny has sued in a land
dispute. Johnny sued his daughter Velma for ―cheating‖ him. He issued a
warranty deed to Velma in her name and told her not to file it until he died. She
ignored his instructions and filed the deed, and he disowned her.


                                        40
agreements between Demetrius and Johnny, and that the testimonial evidence

boils down to a ―swearing match‖ between the parties.

      We first note that ―[t]he critical element of an agency relationship is the

right to control, and the principal must have control of both the means and details

of the process by which the agent is to accomplish his task in order for an agency

relationship to exist.‖ McAfee, Inc. v. Agilysys, Inc., 316 S.W.3d 820, 829 (Tex.

App.—Dallas 2010, no pet.) (stating that the ―mere fact that one party to a

relationship subjectively trusts the other does not indicate the existence of a

fiduciary relationship‖). The documentary evidence and testimony, as set out in

extensive detail above, supports the trial court‘s findings that Demetrius was not

JPD Guam‘s or Johnny‘s agent and that a fiduciary relationship did not exist

between them: Nothing in the record demonstrates that JPD Guam controlled

the prices that Demetrius charged BISD, SKB, or Trinity Hughes for the land

Demetrius sold to those entities or that JPD Guam told Demetrius how to sell the

land to those entities. See Seaway Prods. Pipeline Co. v. Hanley, 153 S.W.3d

643, 651 n.10 (Tex. App.—Fort Worth 2004, no pet.) (describing the ―right to

control test,‖ under which a court examines whether the alleged principal had the

right to determine the details of the agent‘s work in determining whether an

individual is an agent or actually an independent contractor). Rather, Demetrius

initially placed all of the land under contract with Johnny and then began

marketing it, paying to have it appraised prior to the expiration date of the first

earnest money contract with JPD Guam. Johnny did not tell Demetrius to have


                                        41
the land appraised; rather, Johnny testified that he did not know anything about

the appraisal.

      Further, the documentary evidence reflects that JPD Guam sold all three

properties at issue directly to Demetrius, who then sold the properties to the third

parties at a profit, and both Lilley—who participated in two of the transactions—

and Taylor testified that they believed they were dealing only with Demetrius. Cf.

Fryer, 227 S.W.3d at 353 (describing apparent authority as acts of participation,

knowledge, or acquiescence by the principal that clothe the agent with the indicia

of authority in the agent‘s transactions with third parties).

      And although the debt forgiveness language in the promissory note

requires the Trinity Hughes property to sell for more than $200,000, all this

reference clearly shows is that Johnny wanted at least $200,000 for that land

(and for which price he subsequently contracted with Demetrius—first for

$207,575 and later for $211,575 when closing was delayed).              The note‘s

language is not inconsistent with Demetrius‘s theory at trial that the considerably-

more-experienced Johnny wanted to help Demetrius get started in business.

Demetrius testified that he and Johnny included the language in the note in their

negotiations, that when he found a possible buyer for the Trinity Hughes

property, he called Johnny and told him, and that they agreed on a cash

purchase of $207,000 by Demetrius from JPD Guam.

      Additionally, Norseworthy‘s testimony—as set out above—was ambiguous,

showing that he really had little idea if Demetrius had ever represented Johnny,


                                          42
particularly when he stated that he thought Demetrius had represented Johnny

when RUCR owned the property. In contrast, the documentary evidence showed

that Demetrius tried repeatedly to acquire all of the property at issue, first from

RUCR (as opposed to representing RUCR) and then from Johnny and JPD

Guam. And with regard to Elder‘s ―speaking for‖ testimony—which is set out in

its entirety above—this testimony was also ambiguous in that immediately before

this statement, Elder said that he told Johnny that Demetrius was flipping the

properties and that Johnny told him that he was trying to help Demetrius get

started in business. Demetrius testified that he was not acting as Johnny‘s or

JPD Guam‘s agent, and Johnny testified that Demetrius was; the trial court was

the sole judge of their credibility and the weight to be given their testimonies.

See Golden Eagle Archery, 116 S.W.3d at 761.

      Finally, while the MOU provisions—had they been accepted by both

parties—would have limited Demetrius‘s profit, they also set out a recitation of

the facts that is consistent with Demetrius‘s theory: Demetrius purchased the

Trinity Hughes property from JPD Guam for $211,575 with JPD Guam financing

$169,260, and Demetrius transferred the property to Short Skirts, which then sold

the property to Trinity Hughes for $588,000 and assigned to JPD Guam the

$580,000 note and lien as collateral for the $169,260 loan. The MOU contains

nothing about Demetrius acting as Johnny‘s or JPD Guam‘s agent in this

transaction. Having reviewed the entire record, we conclude that Johnny and

JPD Guam have failed to show that the trial court‘s no-agency finding is against


                                        43
the great weight and preponderance of the evidence. And the credible evidence

supporting the finding is not so weak, or so contrary to the overwhelming weight

of all the evidence that the finding should be set aside and a new trial ordered.

See Gonzalez, 195 S.W.3d at 681–82; Cropper, 754 S.W.2d at 651; Pool, 715

S.W.2d at 635. We overrule Johnny and JPD Guam‘s sole issue.

                                IV. Conclusion

      Having overruled Johnny and JPD Guam‘s sole issue, we affirm the trial

court‘s judgment.



                                                 BOB MCCOY
                                                 JUSTICE

PANEL: LIVINGSTON, C.J.; MCCOY and GABRIEL, JJ.

DELIVERED: July 21, 2011




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