Opinion issued December 15, 2016




                                     In The

                              Court of Appeals
                                    For The

                          First District of Texas
                            ————————————
                              NO. 01-15-00920-CV
                           ———————————
                        ZUHAIR HILLAIL, Appellant
                                       V.
   BUSHI BAN INTERNATIONAL LLC AND SYED AHMED, Appellees


                   On Appeal from the 133rd District Court
                            Harris County, Texas
                      Trial Court Case No. 2012-52312


                         MEMORANDUM OPINION

      Appellant, Zuhair Hillail, appeals from a final judgment in favor of

Appellees, Syed Ahmed and Bushi Ban International LLC. In five issues, Hillail

contends that there is legally insufficient evidence supporting Appellees’ claims

for breach of contract, tortious interference with existing contracts, defamation,
and business disparagement; legally insufficient evidence supporting the trial

court’s award of damages; and legally insufficient evidence supporting the trial

court’s award of attorney’s fees. We conclude that none of Appellees’ claims are

supported by legally sufficient evidence. Therefore, we reverse the trial court’s

judgment and render judgment in favor of Hillail.

                      Factual and Procedural Background

      Syed “Zulfi” Ahmed is a professional martial artist. He is the creator of the

Bushi Ban martial arts system and the owner and founder of Bushi Ban

International LLC (“Bushi Ban”).      Bushi Ban owns or franchises Bushi Ban

martial arts schools, many of which are located in and around Houston, Texas.

      Zuhair Hillail is Ahmed’s former business partner. Over the course of their

decades-long relationship, Hillail and Ahmed opened and operated several Bushi

Ban schools in the greater Houston area, including Bushi Ban Clear Lake, Bushi

Ban League City, Bushi Ban Pearland, and Bushi Ban South Houston.

Ahmed and Hillail have a falling out and end their relationship

      In 2009, Ahmed and Hillail had a contentious falling out, marking the

beginning of the end of their business relationship. That October, they entered into

a mediated settlement agreement under which Ahmed and Bushi Ban sold their

ownership interests in Bushi Ban Clear Lake and Bushi Ban League City to Hillail.




                                         2
Hillail assumed responsibility for the two schools, renaming them Tiger’s Dojo

Clear Lake and Tiger’s Dojo League City.

        However, after they executed the settlement agreement, Hillail and Ahmed

remained business partners—they continued to own Bushi Ban Pearland together

with a third owner, Jeff Barley; and they continued to own Bushi Ban South

Houston together with a third owner, Eric Loveless.

        Later, in July 2010, Ahmed and Hillail entered into a second mediated

settlement agreement (the “Pearland Agreement”). The mediation took place on

July 19, 2010, and the Pearland Agreement was executed ten days later, on July 29,

2010.

        Under the Pearland Agreement, Hillail sold his ownership interest in Bushi

Ban Pearland to Ahmed, Barley, and Bushi Ban for $70,000.00. The Pearland

Agreement included a confidentiality provision that prohibited the signatories from

disclosing the terms to third parties:

        The Parties agree that the terms of this Settlement Agreement shall
        remain confidential and shall not be disclosed to any third party (other
        than the Parties’ attorneys and legal counsel; to the spouses and
        immediate family members of a party; to certified public accountants
        or other financial professionals; and any court at law as may be
        required for enforcement of this agreement; and as may be required by
        court order or law).




                                           3
Ahmed comes to suspect interference and sabotage from Hillail, leading
Appellees to file suit

         In 2012, there were three developments that eventually led Ahmed and

Bushi Ban to file this lawsuit against Hillail.

         First, Ahmed learned that Hillail had disclosed the terms of the Pearland

Agreement to Hillail’s former employee, Davis Graham. Ahmed learned this from

Graham himself, who reached out to Ahmed after ending his relationship with

Hillail on very bad terms.1 Graham told Ahmed that, on the evening of the

mediation, Hillail returned to one of his Tiger’s Den schools,2 where Graham was

still working. According to Graham, Hillail proceeded to tell Graham the results of

the mediation and to show him the document that the mediating parties had

prepared. The Pearland Agreement had not yet been formally executed at this

point.

         Second, Educational Funding Company (“EFC”)—a martial arts billing and

consulting company that processes the billing for several Bushi Ban schools and

occasionally pays Ahmed to speak at conventions and seminars—provided Ahmed

1
         Graham testified that he met with Ahmed “probably a few days” after he stopped
         working for Hillail. During their conversation, Graham informed Ahmed that he
         “had been made aware of the mediation and the results of it and a dollar amount.”
         When Graham told him the dollar amount, Ahmed realized that Graham had
         “independent knowledge of the settlement . . . .”
2
         Hillail changed the name of his martial arts schools from Tiger’s Dojo to Tiger’s
         Den.

                                             4
a recording of a phone conversation in which Hillail falsely informed EFC

representatives that Ahmed was going to leave EFC as a client. The recording

indicated that Hillail called EFC, ostensibly to report an allegedly fraudulent

attempted charge on Hillail’s credit card. During the call, Hillail accused EFC of

attempting to steal from him and warned that if EFC did not immediately stop the

alleged misconduct, he would cause “big guns” like Ahmed to leave EFC as

clients. Hillail then told EFC that several of his colleagues had told him that

Ahmed was already leaving EFC as a client and that EFC’s chairman and

management were very upset about it. As a result of Hillail’s call to EFC, Ahmed

received several concerned calls from EFC representatives, who were worried that

Ahmed was going to leave EFC as a client. Ahmed assured them that he had no

intention of leaving EFC, and, in the process of doing so, he told them about his

contentious falling out with Hillail and the disputes that followed.

      Third, three Bushi Ban schools—Bushi Ban Champion Forest, Bushi Ban

South Houston, and Bushi Ban Stafford—shut down. The reasons for the school

closures varied. Bushi Ban Champion Forest closed because of an ownership

dispute between Ahmed and the school’s manager, Eric Logan. Bushi Ban South

Houston closed because Eric Loveless, the school’s manager and part owner,




                                          5
inexplicably disappeared.3 And Bushi Ban Stafford closed because one of school’s

owners, Sam Hogar, pulled his investment for reasons not made clear by the

record. In light of the other developments in 2012, Ahmed suspected that the

school closures were somehow caused by Hillail.

      On September 11, 2012, Appellees filed this lawsuit against Hillail. They

asserted claims for breach of contract, tortious interference with existing contracts,

defamation, and business disparagement. Appellees alleged that Hillail violated

the Pearland Agreement’s confidentiality provision by disclosing the agreement’s

terms to Graham; that Hillail tortiously interfered with Bushi Ban Champion

Forest, Bushi Ban South Houston, and Bushi Ban Stafford by encouraging Logan,

Loveless, and Hogar to end their relationships with Appellees; and that Hillail

defamed and disparaged Appellees by falsely informing EFC representatives that

Ahmed was leaving EFC as a client. Appellees sought attorney’s fees under Civil

Practice and Remedies Code chapter 38 for their breach of contract claim.

      On July 30, 2015, after a one-day bench trial, the trial court signed its final

judgment. The judgment found in favor of Appellees, but did not specify for



3
      Loveless disappeared while a lawsuit he and Ahmed had filed against Hillail was
      still pending. Earlier that year, Ahmed and Loveless had sued Hillail, alleging that
      Hillail had been overpaid under Bushi Ban South Houston’s profit-sharing
      arrangement. After Loveless’s disappearance, the suit went to trial. Loveless did
      not testify or otherwise appear at the trial.

                                           6
which claims.     The judgment ordered that Appellees recover $10,000.00 in

damages, $8,500.00 in attorney’s fees, and court costs.

      On August 31, 2015, Hillail moved for a new trial, which was denied by

operation of law. Hillail timely appealed.

                           Sufficiency of the Evidence

A.    Standard of Review

      The test for legal sufficiency is “whether the evidence at trial would enable

reasonable and fair-minded people to reach the verdict under review.” City of

Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). When reviewing the evidence

for legal sufficiency, we review the evidence in the light most favorable to the

verdict, crediting favorable evidence if a reasonable fact-finder could, and

disregarding contrary evidence unless a reasonable fact-finder could not. Waste

Mgmt. of Tex., Inc. v. Tex. Disposal Sys. Landfill, Inc., 434 S.W.3d 142, 156 (Tex.

2014).

      “A party will prevail on its legal-sufficiency challenge of the evidence

supporting an adverse finding on an issue for which the opposing party bears the

burden of proof if there is a complete absence of evidence of a vital fact or if the

evidence offered to prove a vital fact is no more than a scintilla.” Id. “More than a

scintilla exists when the evidence as a whole rises to a level enabling reasonable

and fair-minded people to have different conclusions.” Id. “However, if the


                                         7
evidence is so weak that it only creates a mere surmise or suspicion of its

existence, it is regarded as no evidence.” Id.

B.    Tortious Interference

      In his second issue, Hillail challenges the legal sufficiency of Appellees’

claim for tortious interference with existing contracts.

      1.     Applicable Law

      To prevail on a claim for tortious interference with an existing contract, the

plaintiff must plead and prove that: (1) the plaintiff has an existing contract subject

to interference; (2) the defendant willfully and intentionally interfered with the

contract; (3) the interference proximately caused the plaintiff’s injury; and (4) the

interference caused the plaintiff to suffer actual damage or loss. Prudential Ins.

Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000); Abetter

Trucking Co. v. Arizpe, 113 S.W.3d 503, 509 (Tex. App.—Houston [1st Dist.]

2003, no pet.).

      To prove the second element, willful and intentional interference, the

plaintiff must show either that the defendant intentionally induced or caused a third

party to breach its contract with the plaintiff or that the defendant intentionally

interfered with the plaintiff’s performance of its contract. Stroud Prod., L.L.C. v.

Hosford, 405 S.W.3d 794, 820 (Tex. App.—Houston [1st Dist.] 2013, pet. denied)

(“To establish the element of an act of willful and intentional interference, the


                                          8
plaintiff must produce some evidence that the defendant was more than a willing

participant and knowingly induced one of the contracting parties to breach its

obligations under the contract.”); Khan v. GBAK Props., Inc., 371 S.W.3d 347,

359–60 (Tex. App.—Houston [1st Dist.] 2012, no pet.) (“Any interference that

makes performance more burdensome or difficult or of less or no value to the one

entitled to performance is actionable.”).

      To prove the third element, proximate cause, the plaintiff must show that

“the evidence, and logical inferences drawn from the evidence, support a

reasonable probability that the defendant’s acts or omissions were a substantial

factor in bringing about injury.” Richardson-Eagle, Inc. v. William M. Mercer,

Inc., 213 S.W.3d 469, 474 (Tex. App.—Houston [1st Dist.] 2006, pet. denied).

      2.     Analysis

      Hillail contends that Appellees failed to present legally sufficient evidence

of their claim for tortious interference with existing contracts.     In response,

Appellees contend that there is legally sufficient evidence that Hillail tortiously

interfered with their contracts with Bushi Ban South Houston, Bushi Ban

Champion Forest, and Bushi Ban Stafford. We consider each instance of alleged

interference in turn.

      First, we consider whether there is legally sufficient evidence that Hillail

tortiously interfered with a contract between Appellees and Bushi Ban South


                                            9
Houston. In 2012, Bushi Ban South Houston closed down after the school’s

manager, Eric Loveless, stopped coming to work and stopped communicating with

Ahmed and other Bushi Ban employees.

      Appellees contend that Hillail intentionally induced or caused Loveless to

quit his job and to end his relationship with Bushi Ban South Houston and

Appellees. In support of their contention, Appellees offered a recording of a phone

conversation between Hillail and Loveless that took place in 2013 and the

testimony of Ahmed. That evidence established the following facts:

    In 2012, Ahmed and Loveless sued Hillail, alleging that Hillail had
     been overpaid under Bushi Ban South Houston’s profit-sharing
     arrangement.

    While Ahmed’s and Loveless’s lawsuit against Hillail was still
     pending, Loveless inexplicably disappeared. As a result of Loveless’s
     disappearance, Bushi Ban South Houston was forced to close down.

    Later, in 2013, Hillail asked Loveless to testify in a different lawsuit
     between Hillail and Ahmed. Specifically, Hillail asked Loveless to
     testify that Ahmed had forced him to join the initial lawsuit over
     Bushi Ban South Houston’s profit-sharing.            In exchange for
     Loveless’s agreement to testify, Hillail said he would sign a release of
     his claims against Loveless.

      These facts fail to establish at least three of the essential elements of a claim

for tortious interference with an existing contract. First, they fail to establish that

there was a valid, enforceable contract between either of Appellees and Loveless or

Bushi Ban South Houston. Second, they fail to establish that Hillail willfully and


                                          10
intentionally interfered with any such contract. Third, they fail to establish that

any such interference proximately caused the closure of the school.

      Appellees never offered a contract between Loveless and themselves or

testified that such a contract ever existed. See Stroud Prod., 405 S.W.3d at 820

(“To prevail on a tortious interference claim, the plaintiff must present evidence

that the defendant interfered with a specific contract.” (emphasis added)).

      At trial, after listening to the recording of the phone conversation between

Hillail and Loveless, Ahmed speculated that Hillail influenced Loveless to stop

working at Bushi Ban South Houston and that the two had some sort of side deal:

      Counsel:     Do you believe that Mr. Hillail was responsible in any
                   way for the Bushi Ban South and Mr. Loveless stopped
                   communication and the school folded?

      Ahmed:       I believe he was an influencing factor.

      Counsel:     In what way?

      Ahmed:       Mr. Loveless looked up to Mr. Zuhair. Mr. Zuhair was
                   Mr. Loveless senior instructor and took a lot of
                   information and cues from Mr. Zuhair and I believe that
                   Mr. Zuhair listening to this recording had probably a side
                   deal with Mr. Loveless. And yes, I believe he influenced
                   Mr. Loveless’s decision.

But Appellees never offered any testimony or other evidence substantiating

Ahmed’s speculation. Appellees never offered any evidence demonstrating that

Hillail knowingly induced Loveless to breach an obligation under a contract with

Appellees.   See id.   We cannot conclude from the evidence, and the logical
                                         11
inferences drawn from it, that there is a reasonable probability that Hillail’s acts or

omissions were a substantial factor in bringing about the closure of Bushi Ban

South Houston. Richardson-Eagle, 213 S.W.3d at 474. We hold that there is

legally insufficient evidence that Hillail tortiously interfered with a contract

between Appellees and Bushi Ban South Houston.

      Second, we consider whether there is legally sufficient evidence that Hillail

tortiously interfered with a contract between Appellees and Bushi Ban Champion

Forest. In 2012, Bushi Ban Champion Forest closed down after its manager, Eric

Logan, quit his job and removed all of his equipment from the school. Appellees

contend that Hillail intentionally induced or caused Logan’s actions.

      In support of their contention, Appellees offered evidence that Logan

currently works for Hillail. This fact is not legally sufficient to support Appellees’

claim for tortious interference with an existing contract: It does not establish that

there was a valid, enforceable contract between either of Appellees and Logan or

Bushi Ban Champion Forest; it does not establish that Hillail willfully and

intentionally interfered with any such contract; and it does not establish that any

such interference proximately caused the closure of the school.

      Moreover, all of the other evidence presented at trial indicated that Logan

began working for Hillail due to a falling out between Logan and Ahmed. At trial,

Logan testified that he started practicing Bushi Ban martial arts when he was ten


                                          12
years old, eventually graduated from student to instructor, and was ultimately hired

as the manager of Bushi Ban Champion Forest. After spending many years at

Bushi Ban Champion Forest, Logan believed that he should have become one of

the owners. Ahmed disagreed and asked Logan to sign an employment agreement

under which Logan would continue to be the manager, but not an owner, of the

school. As a result, Logan quit his job and removed all of his equipment from the

school, forcing the school to shut down.

      In an email to Ahmed, Logan explained that he had decided to end his

relationship with Appellees because he did not receive enough respect from

Ahmed and because he did not believe Ahmed had made him a fair offer.4 Ahmed

sued Logan, and the two eventually settled.

      It was not until July 2014—roughly two years after the closure of Bushi Ban

Champion Forest—that Logan began working for Hillail.               Logan, moreover,

testified that his decision to leave Bushi Ban Champion Forest had nothing to do

with Hillail—the two “weren’t even speaking at the time.”

      We cannot conclude from the evidence, and the logical inferences drawn

from it, that there is a reasonable probability that Hillail’s acts or omissions were a

4
      Logan provided similar testimony at trial, stating: “I just felt like I was very
      disrespected in the organization. I didn’t feel like I was getting the respect that
      was deserved of me somebody that had been there a very, very long time. There
      was an agreement that I was asked to sign that I did not agree with. Ultimately,
      led me and my family making a decision to close down that location.”

                                           13
substantial factor in bringing about the closure of Bushi Ban Champion Forest.

Richardson-Eagle, 213 S.W.3d at 474. The only conclusion that the evidence

supports is that Bushi Ban Champion Forest closed because of an ownership

dispute between Ahmed and Logan. We hold that there is legally insufficient

evidence that Hillail tortiously interfered with a contract between Appellees and

Bushi Ban Champion Forest.

      Third, we consider whether there is legally sufficient evidence that Hillail

tortiously interfered with a contract between Appellees and Bushi Ban Stafford.

Appellees contend that Hillail intentionally induced or caused Sam Hogar to pull

his investment in and support of Bushi Ban Stafford, forcing Appellees to sell the

school at a loss. However, at trial, when asked whether he had to sell Bushi Ban

Stafford because of Hillail’s “interference,” Ahmed gave non-responsive answer:

      Counsel:      Did you have to sell the martial arts school that you had
                    with Mr. Hogar?

      Ahmed:        Yes, sir.

      Counsel:      Was it because of Mr. Hillail's interference?

      Ahmed:        I believe it is because --

Because Appellees offered no other evidence in support of their contention, we

hold that there is legally insufficient evidence that Hillail tortiously interfered with

a contract between Appellees and Bushi Ban Stafford.



                                           14
      Accordingly, we hold that there is legally insufficient evidence supporting

Appellees’ claim for tortious interference with existing contracts. We sustain

Hillail’s second issue.

C.    Business Disparagement

      In his third issue, Hillail contends that there is legally insufficient evidence

that he made a disparaging or defamatory statement about Appellees.

      1.     Applicable Law

      To prevail on a claim for business disparagement, the plaintiff must plead

and prove, among other elements, that the defendant published false, disparaging

information about it. In re Lipsky, 460 S.W.3d 579, 592 (Tex. 2015); Better Bus.

Bureau of Metro. Houston, Inc. v. John Moore Servs., Inc., 441 S.W.3d 345, 358

(Tex. App.—Houston [1st Dist.] 2013, pet. denied). Likewise, to prevail on a

claim for defamation, the plaintiff must plead and prove, among other elements,

that the defendant published to a third party a false and defamatory statement

concerning the plaintiff. In re Lipsky, 460 S.W.3d at 593; Better Bus. Bureau of

Metro. Houston, 441 S.W.3d at 355.

      In an action for business disparagement, the disparaging words must refer to

the plaintiff’s economic interests. Hurlbut v. Gulf Atl. Life Ins. Co., 749 S.W.2d

762, 767 (Tex. 1987). The Restatement of Torts provides the following definition

of disparagement:


                                         15
      A statement is disparaging if it is understood to cast doubt upon the
      quality of another’s land, chattels or intangible things, or upon the
      existence or extent of his property in them, and

      (a)   the publisher intends the statement to cast the doubt, or

      (b)   the recipient’s understanding of it as casting the doubt was
            reasonable.

RESTATEMENT (SECOND) OF TORTS § 629 (1977).

      In an action for defamation, the plaintiff must show that the defendant’s

“words tend to injure the plaintiff’s reputation, exposing it to public hatred,

contempt, ridicule, or financial injury, or if it tends to impeach the person’s

honesty, integrity, or virtue.” Better Bus. Bureau of Metro. Houston, 441 S.W.3d

at 355–56 (citing TEX. CIV. PRAC. & REM. CODE ANN. § 73.001 (West 2011)). To

be defamatory, the defendant’s words “should be derogatory, degrading, somewhat

shocking, and contain elements of disgrace.” Id. at 356. “But a communication

that is merely unflattering, abusive, annoying, irksome, or embarrassing, or that

only hurts the plaintiff’s feelings, is not actionable.”     Id.   “Thus, it is not

defamatory to accuse a person of doing that which he has a legal right to do.”

Means v. ABCABCO, Inc., 315 S.W.3d 209, 214 (Tex. App.—Austin 2010, no

pet.); Associated Press v. Cook, 17 S.W.3d 447, 456 n.8 (Tex. App.—Houston [1st

Dist.] 2000, no pet.) (statement that plaintiff was “exercising a legal right is not

defamatory as a matter of law”).



                                        16
      Whether an unambiguous statement is disparaging or defamatory is a

question of law, which we review de novo. Turner v. KTRK Television, Inc., 38

S.W.3d 103, 114 (Tex. 2000); Better Bus. Bureau of Metro. Houston, 441 S.W.3d

at 356. “When considering whether a statement is defamatory, we construe the

statement as a whole, in light of the surrounding circumstances, based on how a

person of ordinary intelligence would perceive the entire statement.” Means, 315

S.W.3d at 214.

      2.    Analysis

      Appellees based their claims for business disparagement and defamation on

the recording of the phone conversation between Hillail and representatives of

EFC. Although Appellees do not identify any specific statements in the recording

that are disparaging and defamatory, they argue that the recording constitutes

legally sufficient evidence supporting their claims because it shows Hillail falsely

stating that Ahmed was planning on leaving EFC as a client.

      The recording indicates that Hillail called EFC ostensibly to report an

allegedly fraudulent attempted charge on Hillail’s credit card. He began the call by

telling the EFC representative that “yesterday your company attempted to run a

charge of 199 dollars on my Visa card—unauthorized, un-asked for, an absolute

theft.” Hillail told the EFC representative that he was a “big guy in the industry”

with “a tremendous amount of influence and a very loud mouth.” He proceeded to


                                        17
accuse EFC of attempting to steal from him and warned that if EFC did not

immediately stop the alleged misconduct, he would cause “big guns” like Ahmed

to leave EFC as clients:

      I’m a martial artist, respect my request and listen. If you don’t want
      me to go on a negative campaign and truly smear your company more
      than it already has been smeared, and make the big guns that are with
      you like Zulfi Ahmed exit from your deal like they have exited, you
      need to stop this activity immediately. . . . I spent twenty-one years
      with Zulfi Ahmed, and that’s one of the reasons I didn’t join your
      company ever with my schools, because of these issues that keep
      happening over and over.

      Hillail then told the EFC representative that several of his colleagues had

told him that Ahmed was already leaving EFC as a client and that EFC’s chairman

and management were very upset about it:

      Hillail:     What’s the story with Zulfi Ahmed, Ned?

      EFC:         Oh, he’s a very good friend of ours.

      Hillail:     I understand that. . . .

      EFC:         He’s our biggest client and we love him dearly.

      Hillail:     And?

      EFC:         He’s been . . . what’s the ‘and’? I mean, there is no ‘and’.

      Hillail:     Is he leaving you guys?

      EFC:         No way. Why would he be leaving us?

      Hillail:     I understood that the chairman was quite upset about
                   something that had to do with Zulfi.


                                              18
      EFC:          Not at all. Not at all. That’s misled. That’s not true.

      Hillail:      Then there’s negative news going through your company
                    because several of my colleagues received phone calls
                    from high up in your company saying that the chairman
                    and the entire EFC management is quite upset about
                    something that’s going on with Zulfi Ahmed.

      EFC:          Nothing whatsoever. That’s all a foul . . . that’s a lie.

      Hillail:      I tell you there’s a tremendous amount of negative stuff
                    happening. . . . I’m not a client of yours, so it doesn’t
                    really help me or hurt me. . . . You just need to be aware
                    of what’s happening.

It is this final portion of the call that Appellees contend is disparaging and

defamatory. We disagree.

      Hillail’s statements do not directly refer to Appellees’ economic interests;

they cannot be said to “cast doubt upon the quality of [Appellees’] land, chattels or

intangible things, or upon the existence or extent of [their] property in them . . . .”

See RESTATEMENT (SECOND)        OF   TORTS § 629. Hillail’s statements do not, for

example, indicate that Appellees are in a precarious financial position or are

otherwise unable to continue doing business with EFC. Nor do they suggest that

Appellees are untrustworthy or unethical or unscrupulous. Hillail’s statements do

not concern Appellees’ financial position or the character of their business.

      Further, Hillail’s statement cannot be characterized as tending to injure

Appellees’ reputations, exposing them to public hatred, contempt, ridicule, or

financial injury, or as tending to impeach Appellees’ honesty, integrity, or virtue.
                                          19
See Better Bus. Bureau of Metro. Houston, 441 S.W.3d at 355–56. Although

Ahmed testified that Hillail’s statements injured his reputation and the reputation

of Bushi Ban, we do not believe that a person of ordinary intelligence would

perceive such statements as tending to do so. Hillail’s statements, although false,

merely accused Appellees of doing what they had a legal right to do—end their

relationship with EFC. Means, 315 S.W.3d at 214 (“Thus, it is not defamatory to

accuse a person of doing that which he has a legal right to do.”). Therefore, they

are not defamatory as a matter of law. Associated Press, 17 S.W.3d at 456 n.8

(statement that plaintiff was “exercising a legal right is not defamatory as a matter

of law”).

      Construing Hillail’s statements as a whole, in light of the surrounding

circumstances, based on how a person of ordinary intelligence would perceive the

entire statement, we hold that Hillail’s statements are neither disparaging nor

defamatory. We sustain Hillail’s third issue.

D.    Damages for Breach of Contract

      In his fourth issue, Hillail challenges the legal sufficiency of Appellees’

damages award.      Because we have already concluded that there is legally

insufficient evidence supporting Appellees’ claims for tortious interference,

defamation, and business disparagement, we confine our analysis here to the

evidence supporting Appellees’ damages for breach of contract. Thus, we consider


                                         20
whether there is legally sufficient evidence that Appellees suffered $10,000.00 in

damages as a result of Hillail’s alleged breach of the Pearland Agreement.

      1.     Applicable Law

      To recover compensatory damages in an action for breach of contract, “the

plaintiff must prove that he suffered some pecuniary loss as a result of the breach.”

S. Elec. Servs., Inc. v. City of Houston, 355 S.W.3d 319, 324 (Tex. App.—Houston

[1st Dist.] 2011, pet. denied).    The loss “must be the natural, probable, and

foreseeable consequence of the defendant’s conduct.” Id. The plaintiff may not

recover any damages that are too “remote, contingent, speculative, or conjectural.”

Id. “Thus, the absence of a causal connection between the alleged breach and the

damages sought will preclude recovery.” Id.

      2.     Analysis

      Hillail contends that there is legally insufficient evidence that Appellees

suffered $10,000.00 as a result of Hillail’s alleged violation of the Pearland

Agreement’s confidentiality provision.

      The only evidence of breach-of-contract damages that was offered by

Appellees was the testimony of Ahmed and Barley. Ahmed and Barley both

initially testified that the Pearland Agreement’s confidentiality provision had an

independent value of $70,000.00. But they both later admitted that they agreed to




                                         21
pay $70,000.00 to buy Hillail’s ownership interest in Bushi Ban Pearland.5 Their

initial testimony, moreover, directly conflicts with the language of the Pearland

Agreement itself, the recitals of which expressly state that the $70,000.00 was

payment for Hillail’s interest in Bushi Ban Pearland:

      WHEREAS, on July 19, 2010, the parties agreed that Hillail would
      transfer his entire interest in the past, present, and future in BBIP . . .
      in consideration for payment of SEVENTY THOUSAND NO/100
      DOLLARS ($70,000.00) . . . .

We hold that Ahmed’s and Barley’s testimony that the confidentiality provision

was worth $70,000.00 is not evidence that Appellees suffered $10,000.00 in

damages as a result of Hillail’s alleged breach.

      Ahmed and Barley provided no other testimony, and Appellees offered no

other evidence, supporting an award of $10,000.00 for Hillail’s alleged breach.

Ahmed testified that the publication of the terms of the Pearland Agreement could

cause dissent within the Bushi Ban organization or cause issues between Appellees

and other members of the martial arts community. He did not explain how such

publication could cause dissent within the Bushi Ban organization or specify which

issues might arise between Appellees and other members of the martial arts

community.     Nor did not he provide any testimony, other than conclusory



5
      In fact, Ahmed testified that removing Hillail from Bush Ban Pearland was “worth
      much more” than $70,000.00, “but that’s what [they] settled on.”

                                          22
statements, demonstrating that Hillail’s disclosure to Graham actually did cause

such harm.

      Barley, likewise, testified that the confidentiality provision had value

because it prevented third parties—presumably Appellees’ employees and

competitors—from using the information contained in the Pearland Agreement to

their advantage. But neither he nor Ahmed were able to cite to a single example of

Graham or another third party using such information to their advantage or to

Appellees’ detriment.

      Appellees offered no evidence that they paid $10,000.00 for the inclusion of

the confidentiality provision or that the inclusion of the confidentiality provision

was otherwise worth that amount; no evidence that their position would be any

different had Hillail not disclosed the terms of the Pearland Agreement to Graham;

and no evidence that they were otherwise harmed by Hillail’s alleged breach.

      We hold that there was legally insufficient evidence that Appellees suffered

$10,000.00 in damages as a result of Hillail’s alleged breach of the Pearland

Agreement. We sustain Hillail’s fourth issue.

E.    Attorney’s Fees

      In his fifth issue, Hillail contends that there is legally insufficient evidence

supporting the trial court’s award of attorney’s fees.




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       Appellees were awarded attorney’s fees under Texas Civil Practice and

Remedies Code chapter 38. “To recover fees under this statute, a litigant must do

two things: (1) prevail on a breach of contract claim, and (2) recover damages.”

MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 666 (Tex. 2009)

(attorney fee award to copier lessee who prevailed in suit against lessor could not

be based upon breach of contract claim because lessee could not recover damages);

see also Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997) (general

contractor who prevailed on breach of contract claim against subcontractor was not

entitled to award of attorney fees, where contractor was not awarded damages on

that claim).

       We have already held that Appellees failed to offer legally sufficient

evidence of damages. Therefore, we hold that Appellees failed to offer legally

sufficient evidence that they were entitled to recover attorney’s fees. We sustain

Hillail’s fifth issue.




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                                   Conclusion

       We reverse the trial court’s judgment and render judgment in favor of

Hillail.




                                             Evelyn V. Keyes
                                             Justice

Panel consists of Justices Keyes, Higley, and Lloyd.




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