Affirm in part; Reverse and Remand in part; Opinion Filed February 13, 2013.




                                          0    In The
                                QIintrt uf Apprai.s
                        Fjft1i itrirt rif ixa at La1tai
                                       No. 05-04-01358-CV


     BASIC CAPITAL MANAGEMENT, INC., MVIERICAN REALTY TRUST, INC.,
              TRANSCONTINENTAL REALTY INVESTORS, INC.,
      CONTINENTAL POYDRAS CORP., CONTINENTAL COMMON, INC., AND
                 CONTINENTAL BARONNE, INC., Appellants

                                                 V.

         DYNEX COMMERCIAL, iNC. AND DYNEX CAPiTAL, INC., Appellees


                       On Appeal from the 68th Judicial District Court
                                   Dallas County, Texas
                             Trial Court Cause No. 03-00675


                                OPINION ON REMAND
                   Before Chief Justice Wright and Justices Moseley and Lang
                                  Opinion By Justice Moseley

       Appellants sued appellees for damages resulting from the alleged breach of a commitment

to provide financing totalling $160 million for future real estate investments (the “Commitment”)

and for failing to advance funds under three promissory notes (the “New Orleans Loans”). The trial

court granted appellees’ motion for judgment notwithstanding the jury’s verdict.

       This is the second time this case has been before the Court. In the first appeal, we determined

that appellants American Realty Trust, Inc. (ART) and Transcontinental Realty Investors, Inc.
(TCI/CMET)’ were not direct, third party beneficiaries of the Commitment; that TCIJCMET was not

a direct, third-party beneficiary of the New Orleans Loans; and that appellant Basic Capital

Management, Inc. (“Basic”) could not recover lost profits as consequential damages for Dynex’s

breach of the Commitment because they were not foreseeable. Basic Capital Management v. Dynex

Commercial Inc., 254 S,W.3d 508 (Tex. App.—Dallas 2008, pet. granted, reversed) (Basic I). As

a result, we affirmed the trial court’s judgment.

          The Texas Supreme Court disagreed with each of the above determinations, reversed our

judgment, and remanded the case back to us to address the remaining issues. Basic Capital

Management, Inc. v. Dynex Commercial, Inc., 348 S.W,3d 894, 901, 903 (Tex. 2011) (Basic II).

Those issues hinge upon whether there was legally sufficient evidence to support the jury’s findings.

With one exception, we conclude that there was. We reverse the trial court’s judgment and remand

the cause for determination of interest and entry of judgment for appellants pursuant to the jury’s

findings and this opinion.

          The facts of the case are set out at length in our previous opinion (Basic 1) and in the supreme

court’s opinion (Basic II). As explained in Basic II, Dynex Commercial made the New Orleans

Loans to three single-asset, bankruptcy-remote entities (SABREs) owned by TCJICMET: appellants

Continental Poydras Corp., Continental Common, Inc., and Continental Baronne, Inc. See Basic II,

348 S.W.3d at 896—97 and n,5. There was evidence that the New Orleans Loans transactions were

conditioned on the execution of the Commitment between Dynex Commercial and Basic, a company

that managed publicly-traded real estate investment trusts in which it also owned stock (including

    l
      TCI merged with Continental Mortgage & Equity Trust (CMET) in November 1999, after this suit was filed. TCI was the surviving entity.
The parties refer to this entity as TCI/CMET, as do we.




                                                                  —2—
ART and TCI/CMET). Id. at 897. Under the Commitment, $160 million in loans were also to be

made to other SABREs to be owned by ART or TCI1CMET. Id.

                                                 ISSUES

        Appellants present eight issues. Generally, these issues assert the trial court erred in granting

the motion for judgment notwithstanding the verdict, failing to enter judgment on the jury’s verdict,

disregarding thejury’ s findings, entering judgment for appellees, and failing to award attorney’s fees,

interest, and costs to appellants. In the alternative, appellants contend that the trial court should have

granted a new trial rather than entering a take-nothing judgment.

        In addition, appellees filed cross-points challenging the legal sufficiency of the evidence to

support each of the jury’s findings in favor of appellants. See TEX. R. App. P. 3 8.2(b) (where trial

court renders judgment notwithstanding the verdict on one or more questions, appellee “must bring

forward by cross-point any issue or point that would have vitiated the verdict or that would have

prevented an affirmance of the judgment if the trial court had rendered judgment on the verdict”).

Appellees also contend there is legally insufficient evidence of the material element that Basic

tendered performance under the Commitment, and they specifically challenge the jury’s failure to

find release of the Commitment. Appellees assert that appellants are not entitled to a new trial.

        We note that much of the parties’ briefing was directed to the issues decided by the supreme

court. Because the supreme court determined that ART and TCIJCMET were “entitled to recover for

Dynex’s breach of the Commitment and the New Orleans Agreement.               .   .“   [i.e. the New Orleans

Loans], see Basic II, 348 S.W.3d at 901, we do not include any further discussion of standing,

capacity, privity, agency, or any other issues relating to any defect of parties in the pleading, proof,




                                                   —3—
or re quested jury findings. See id, at 898_901.2 Neither do we consider further the parties’ argument

and briefing on whether consequential damages for breach of the Commitment were foreseeable,

because the supreme court decided this question in the affirmative. See id. at 901—03.

                                                          STANDARD OF REvIEw

           A judgment notwithstanding the verdict is proper when (1) the evidence is conclusive and

one party is entitled to judgment as a matter of law or (2) a legal principle precludes recovery.

Sheehan v. Adams, 320 S.W.3d 890, 895 (Tex. App.—Dallas 2010, no pet.) (citing Tillerv. McLure,

121 S.W.3d 709, 713 (Tex. 2003)); see TEx. R. Civ. P. 301. We review challenges to a trial court’s

ruling on a motion for judgment notwithstanding the verdict under the same legal sufficiency test

applied to appellate no-evidence challenges. City ofKeller v. Wilson, 168 S.W.3d 802, 822—23, 827

(Tex. 2005). The test for legal sufficiency “must always be whether the evidence at trial would

enable reasonable and fair-minded people to reach the verdict under review.” Id. at 827. We view

the evidence in the light most favorable to the verdict, crediting favorable evidence if reasonable

jurors could, and disregarding contrary evidence unless reasonable jurors could not. Id. at 807.

           In that context, the jury is the sole arbiter of disputed testimony, the credibility of the

witnesses, and of the weight to give their testimony. See id. at 819. They may choose to believe one

witness and disbelieve another. Id. A reviewing court may not impose its own opinion to the




    2
       The supreme court stated, “[rjegardless of whether the issue is properly denominated standing, as the parties seemed to think in the trial court,
or capacity, as petitioners have argued on appeal, the substance of Dynex’s assertion     [is] that ART and TCI cannot recover for Dynex’s breaches
of its agreements because they were not parties to the agreements....” Basic II, 348 S.W.3d at 899. Appellees also argue that appellants did not
plead, prove, and/or obtain jury findings on each essential element of recovery for each individual plaintiff entity. We consider these arguments to
have been addressed and resolved by the supreme court as well. See, e.g., id. at 901 (rejecting appellees’ argument that ART’s and TCI/CMET’s
failure to request a jury finding on whether they were thirdparty beneficiaries was fatal to their recovery).




                                                                        -4-
contrary. Id. In reviewing the verdict, we must assume that jurors credited testimony favorable to

the verdict and disbelieved testimony contrary to it, Id.

           We note that during the trial, some two dozen fact witnesses testified before the jury over the

course of more than four weeks. Almost every fact relating to the appellants’ claims and Dynex’s

defenses was hotly contested.
                   3 The parties disagreed not only as to whether contracts were formed

and breached, but also even disputed whether one of the persons involved in the transactions, who

was deceased by the time of trial, was actually working on behalf of Dynex or the appellants.

                                                                 DISCUSSION


A.         Claim for Breach of the Commitment

           In their first issue, appellants contend the trial court erred in failing to enterjudgment in favor

of Basic, ART, and TCIJCMET on the claim for breach of the Commitment. Appellants also argue

in their first and third issues that the jury’s findings regarding the Commitment were supported by

legally sufficient evidence. These findings were: that Basic and Dynex entered into an agreement

regarding the Commitment (Question 1); that Dynex failed to comply with the terms of the

Commitment (Question 2); that Dynex’s failure to comply was not excused (Question 3); and that

there was no agreement to release the Commitment (Question 4). The jury awarded damages to

Basic, ART, and TCL/CMET in response to Question 6. Under Question 6, the jury found Basic

suffered no damages for “increased costs,” but suffered $256,233.25 for “lost opportunity.” The jury

found damages to ART of $1,222,640.27 in increased costs and $14,205,570 for lost opportunity,




     We generally refer to all of the plaintiff entities as “appellants,” and to appellees as “Dynex”
     3




                                                                       —5—
and damages to TCI of $960,646.28 in increased costs and $11,161,520 for lost opportunity. We

review the evidence supporting the jury’s findings.

       1.      Contract and Breach

       The jury found (in response to Questions 1 and 2) that the Commitment existed and that it

was breached by Dynex. Witnesses testified Dynex required appellants’ commitment to borrow

$160 million over a period of 18 months in exchange for financing $37 million to acquire and

rehabilitate three commercial buildings in New Orleans (referred to at trial as the 1010 Commons,

Amoco, and Baronne buildings). There was evidence that a written agreement was signed on behalf

of both parties. There was evidence that the parties agreed on the type of entities that could borrow

under the agreement, the types of properties that could be submitted, the loan amounts, the

amortization periods, the interest rate, the term of the Commitment, and other material terms. There

was evidence that the agreement was approved by TCIJCMET’s board of directors. There was

evidence that a $2 million second mortgage on the New Orleans properties, required by Dynex to

secure the Commitment, was recorded. There was evidence that Dynex loaned the money to

purchase the New Orleans buildings, but did not loan any tenant improvement monies under the

contract. There was evidence that Basic submitted approximately $5 million in loans to Dynex under

the Commitment, and that Dynex then refused to loan any more money under the Commitment.

        As noted above, there was conflicting evidence on almost all of these issues. Dynex disputed

that it intended the series of letters signed by the parties to constitute a contract, and it contended

essential terms were missing from the agreement. Dynex argued that only the New Orleans portion

of the transaction was approved by TCIJCMET’s board of directors, not the Commitment. Dynex




                                                 —6-
also offered evidence that the tenant improvements in the New Orleans buildings were not funded

because the plaintiffs never provided the required documentation.          There was evidence that

appellants did not submit deals to be funded under the Commitment when they promised to do so

and could have done so.

       But the jury was the sole judge of the credibility of the witnesses and the weight to give their

testimony. City of Keller, 168 S.W.3d at 819. The jury resolved these conflicts in the appellants’

favor. There was sufficient evidence to support the jury’s answers to Questions I and 2. See id. at

827.

       2.      Excuse of Performance

       The jury found (in response to Question 3) that Dynex’s failure to comply with the terms of

the Commitment was not excused. The jury was instructed that “[f]ailure to comply by one party

is excused by the other party’s previous failure to comply with a material obligation of the same

agreement.” Dynex asserts a cross-point contending that Basic did not tender performance under the

Commitment, but rather breached the contract first by not submitting applications for loans under

the Commitment. Citing Barnett v. Coppeli North Texas Court, Ltd., 123 S.W.3d 804, 815 (Tex.

App.—Dallas 2003, pet. denied), Dynex argues that Basic failed to produce evidence of its

performance, an essential element of its claim for breach of contract.

       There is evidence appellants borrowed approximately $5 million under the Commitment for

a transaction involving three apartment complexes in Midland and Odessa, Texas. There was also

evidence that Dynex refused to consider further loans under the Commitment after this $5 million

loan was made. One witness testified that a principal of Dynex stated that it would be “a cold day




                                                 —7—
in hell” before the Commitment was funded. There was evidence that the parties agreed that

appellants would have at least 18 months to fulfill the Commitment, and approximately half of this

period remained at the time Dynex refused to make further loans. This was some evidence from

which reasonablejurors could conclude that appellants tendered performance and did not breach the

Commitment first.

         3.     Release

         In the alternative, Dynex argues by cross-point that, despite a jury finding to the contrary (in

Question 4), it established as a matter of law that the parties entered into a legally binding release

of the Commitment. To establish the release as a matter of law Dynex relies on two letters, both

dated January 7, 1999. Dynex argues that Basic drafted the pertinent portion of the letters that

allegedly constitute the release under which Basic would release the Commitment simultaneously

with Dynex’ s completion of three other transactions. Dynex Commercial’s president testified that

Dynex completed the three transactions, and no further documentation was necessary to effectuate

the release. Dynex argues that a release is not ineffective simply because the parties contemplate

later formal documentation, citing Padilla v. LaFrance, 907 S.W.2d 454, 460—61 (Tex. 1995).

Dynex also argues Basic retained the benefits of the completed transactions and is estopped from

challenging the effectiveness of the release, citing Newman v. Link, 889 S.W.2d 288, 289 (Tex.

1994).

         Before trial, both parties moved for summary judgment on the issue of release. The trial

court denied both motions, finding that an issue of fact existed to be resolved by the jury. See Scott

v. Ingle Bros. Pac., Inc., 489 S.W.2d 554, 554—56 (Tex. 1972) (whether parties intended to make




                                                   —8—
contractual agreement is usually fact issue for jury). At trial, both parties offered evidence regarding

the purported release, Appellants contended that three conditions in the release did not obligate

Dynex to do anything it was not already obligated to do. See, e.g., Pasadena Police Officers Ass ‘n

v. Cit ofPasadena, 497 S.W.2d 388, 392—93 (Tex. Civ. App.—Houston [1st Dist.1 1973, writ ref’d

n.r.c.) (when party agrees to do no more than he is already bound to do under existing contract,

consideration insufficient to support supplemental contract or modification). The jury heard hours

of testimony from numerous witnesses regarding whether the three conditions set out in the letters

were already obligations of Dynex. The jury also heard evidence that, unlike the Commitment, the

release was not approved by the board of directors or board of trustees of any of the appellant

entities, and that this approval was required. And there was evidence the parties intended that

additional documents be drafted to effectuate the release of the Commitment.
                                                                 4 The January 7, 1999

letter drafted by Dynex stated that upon Dynex’ s receipt of a signed copy of the letter, “we will

proceed to the drafting of the necessary legal documents to modify or amend the existing

commitments.” There was evidence that a draft release was prepared by Dynex’s lawyer, but never

executed. There was evidence that this draft release was to be effective as of February 26, 1999, not

as of January 7, 1999, the date of the letters on which Dynex relies. From this evidence, the jury

could have concluded that there was no agreement to release the Commitment. See Scott, 489




        In support of their argument that the January 7, 1999 letters were a binding agreement to release the Commitment, Dynex cites several cases
in which settlement agreements were enforced under Rule II, Texas Rules of Civil Procedure, where the parties had entered into written agreements
to settle pending lawsuits, but further documentation was to be drafted. See, e.g., Hardman u. Dault, 2 S.W.3d 378, 380 (Tex. App—San Antonio
 1999, no pet.) (settlement memorandum could be enforced where intent to be bound was clear and unambiguous, even though final documents were
to be drafted to carry out the agreement). These cases recognize, however, that it is a question of fact whether the parties intended the settlement
agreements to be binding. See id. (intent of parties to be bound is often a question of fact).




                                                                       —9—
S,W.2d at 554—56. As a result, Dynex did not prove as a matter of law that the Commitment had

been released.

       4.        Damages

       As noted above, the jury awarded damages to appellants for both “increased costs” (direct

damages) and “lost opportunity” (consequential damages or lost profits) for Dynex’ s breach of the

Commitment. Appellants offered the testimony of Ray Perryman, an economist, in support of both

measures.

                 a.    Direct damages

       For direct damages, Perryman developed an increased cost model to calculate the difference

between the interest rate that would have been charged by Dynex for loans under the Commitment

and the market interest rates that appellants were actually required to pay. Perryman’s model

assumed that no loans would have been financed through Dynex until after September 1, 1998, when

the Dynex-contracted interest rate became favorable for appellants. Because there was conflicting

evidence whether the Commitment was to last 18 or 24 months, Perryman calculated a result for both

time periods. Perryman compiled a list of properties actually acquired by appellants during the

relevant time periods. He conducted a review of the loan files on these properties, and analyzed each

loan. He explained his methodology to the jury, and his report and supporting documents were

admitted into evidence.

        Under the increased cost model, Perryman concluded that appellants paid approximately $4.2

million to $5.2 million more in interest than they would have paid under the Commitment. The jury

awarded appellants a total of $2,183,287 in increased costs. This amount was within the range




                                                —10—
supported by Perryman’ s calculations; it is Perryman’ s 1 8month figure minus his calculation for one

property, the Cliffs of El Dorado Apartments. For this property, the parties had offered conflicting

testimony regarding whether a loan would have been funded under the Commitment.

       Dynex concedes that the measure of direct damages for breach of an agreement to lend is the

difference between the contractual rate of interest and the rate of interest the borrower obtained from

another source. See Investors, Inc., v. Hadley, 738 S.W.2d 737, 739 (Tex. App.—Austin 1987, writ

denied). They contend, however, that the evidence is insufficient to support the jury’s damage award

for increased costs because appellants’ witnesses testified that they actually borrowed money from

other lenders at a lower cost than the interest rate offered by Dynex under the Commitment. The

record shows, however, that the lower costs were incurred before September 1998 when the market

rates changed. The evidence showed that after September 1998, the rate under the Commitment was

below the market rate. Dynex’ s own witnesses conceded that in the fall of 1998, the rate under the

Commitment was no longer favorable to Dynex; Dynex’ s president William Moore testified that he

told appellants “there was no way that we would and/or could close the loans at that spread.” There

is no evidence that after September 1998 there were funds available in the market at a rate lower than

the Commitment rate.

        Dynex also contends that thirty percent of the properties included in Perryman’ s interest cost

model were owned by corporations that were not parties to the lawsuit. There was evidence,

however, that these entities were also managed by Basic. There was also evidence that the parties

contemplated that any of the five public companies managed by Basic could borrow money under

the Commitment and have the amount of the loan credited toward the $160 million total.




                                                 —11—
       The jury’s award of direct damages was within a range supported by the evidence. See

Mayberry v. Texas Dep’t ofAgric., 948 S.W,2d 312, 317 (Tex. App.—Austin 1997, writ denied)

(jury has discretion to award damages within range of evidence presented at trial as long as rational

basis exists for jury’s calculation). We conclude judgment notwithstanding the verdict was not

proper on this issue.

               b.       Consequential damages

        In the appeal of our previous judgment, the supreme court discussed recovery of

consequential damages for breach of a contract to lend money. See Basic II, 348 S.W.3d at 901—03.

The court stated, “[tjo be liable for the consequential damages resulting from a breach of a loan

commitment, the lender must have known, at the time the commitment was made, the nature of the

borrower’s intended use of the loan proceeds but not the details of the intended venture.” Id. at 903.

The supreme court concluded, “[ijn sum, the evidence establishes that Dynex clearly knew how the

Commitment would be used. Indeed, it would be surprising if Dynex had agreed to lend Basic $160

million without such knowledge.” Id. Having concluded that appellants’ damages were foreseeable,

the court remanded the case for our consideration whether there was sufficient evidence to support

the jury’s award of damages. Id. at 903—04.

        Perryman calculated appellants’ alleged lost profits under his “lost opportunity” model.

Although the “lost opportunity” title suggests that appellants were completely unable to secure




                                                —12—
funding for potential deals, and the supreme court may have interpreted it as such,
                                                                              5 Perryman’ s

explanation was somewhat different. According to Perryman, the “opportunity” that was “lost” was

the opportunity to invest the $155 million remaining in the Commitment, borrowed at the attractive

rate offered by Dynex. Perryman did not assume that plaintiffs would not close deals at all, but

rather that they lost the profits that would have resulted from the investment of an additional $155

million in the regular course of their business. Appellants argue they “suffered a lost volume of

investment capital when Dynex repudiated the $160 Million Commitment,” rather than a loss of

specific deals that were priced out of reach.

           Perryman’ s model attempted to determine economic losses “equal to the estimated lost return

earned on the funding that was to be made available by Dynex,” according to Perryman’s report. He

determined the lost return rate by “taking the differential between the estimated total return and the

estimated cost of funds.” Perryman gathered information for his model from a variety of sources,

including financial information, annual reports, SEC filings, real estate reports, real estate loan

documents, and other information he obtained from Basic and its affiliates. He also relied on

relevant industry and market information, including publicly-available information regarding real

estate investment trusts (REIT5). After determining rates of return for TCIICMET and ART over



       In its ruling that consequential damages for a lender’s breach of a commitment to provide financing for future investments are foreseeable,
the court stated,

                      Dynex certainly knew that if market conditions changed and interest rates rose, its refusal to honor the
                      Commitment would leave Basic having to arrange less favorable financing. Because that is in fact what
                      happened, Dynex argues that it had no reason to expect that Basic’s increased financing costs would
                      price some investments beyond reach, resulting in opportunities lost altogether. But we cannot infer
                      from Basic’s ability to arrange for alternate financing in a few instances that it could always do so, and
                      nothing in the record supports such a counterintuitive proposition. Certain that its breach would
                      increase Basic’s costs, Dynex cannot profess blindness to the foreseeability that its breach would also
                      cost Basic business. Which is not to say that it actually did.

Basic II, 348 S.W.3d at 903.




                                                                       —13—
a ten-year period, and comparing those rates to the “historical long-term return for publicly-traded

equity REITs,” Perryman used the lowest of these rates, 12 percent, for the rate of return in his

damages model. He then determined the cost of funds to be 7.1 percent per year, based on published

historical and projected interest rates. Perryman subtracted the cost of funds from the rate of return

to determine m average net rate of return of 4.9 percent, which he applied to the $155 million

remaining in the Commitment. He projected losses over a ten-year period, and discounted the future

dollars to present value using a 12 percent discount rate. After subtracting additional percentages

for fees and expenses, Perryman testified that the total lost opportunity damages were $36,545,012.

        Dynex argues that Perryman’s opinion testimony was based on inaccurate assumptions and

incorrect data, and therefore was no evidence of damages. Specifically, Dynex argues that Perryman

assumed, in conflict with the evidence, that appellants were not able to purchase properties because

the Commitment was unavailable, and that appellants held properties for ten years.

        As appellants point out, Perryman’ s assumptions were consistent with the evidence presented

at trial. The evidence showed that Dynex’s refusal to fund deals under the Commitment resulted

from the rise in market interest rates in the fall of 1998 that made the terms unfavorable to Dynex.

See Basic II, 348 S.W.3d at 897. Mark Nardizzi, a commercial real estate broker who identified real

estate assets for Basic to recommend to the trusts for purchase, testified that he became aware of the

availability of below market rate financing from Dynex in that time period. See Basic I, 254 S.W.3d

at 521. He testified that he could look for “assets that were a little bit more pricey based on the fact

that we could   —   we would have a lower debt service with Dynex.” He explained that he looked for

properties and had “three or four” that were “schooled up and ready to go and also a large portfolio




                                                 -14-
that I was looking at also.” He explained that these properties may have been “out of reach before,

but now we could afford based on the financing.” He testified that the size of the large portfolio was

$257 million. He testified that he then learned that the Dynex financing would not be available, and

no deals closed under it, He testified that he still continued to look for “property acquisition

opportunities” and that there were properties available. Perryman also explained that when interest

rates rose, the market for credit tightened, so that fewer potential buyers could obtain financing.

Those who had a financing source would receive more offers. Perryman testified that appellants

could have done “many times” the $160 million in deals; he stated that “it’s not like a close call” that

appellants would have received more offers from potential sellers during that time.

        As to the assumption that properties would be held for ten years, Dynex contends that in

general, companies affiliated with Basic would sell or refinance properties every two to four years.

Perryman testified that he used a ten year period for several reasons. First, he determined from his

review that Basic’s affiliates held multifamily properties on an average of seven to twelve years.

Second, the Commitment had a mandatory 9½-year “lockout” term (meaning that the loan could not

be paid off in full without penalty until the term had elapsed, to ensure that the lender would receive

a particular rate of return). Appellants also explain that Perryman’s model calculated the present

value of each future year’s lost profits, not the lost profits for ten years in aggregate. And appellants

point out that the jury awarded approximately five years of lost profits rather than the full amount

to which Perryman testified.

        In Holt Atherton Industries, Inc. v. Heine, 835 S.W.2d 80, 84 (Tex. 1992), the court

explained that “[rjecovery for lost profits does not require that the loss be susceptible of exact




                                                 —15—
calculation.” But the amount of the loss “must be shown by competent evidence with reasonable

certainty.” Id. The loll Atherton court explained, “[wihat constitutes reasonably certain evidence

of lost profits is a fact intensive determination.” Id. The court stated, “[a]s a minimum, opinions

or estimates of lost profits must be based on objective facts, figures, or data from which the amount

of lost profits can be ascertained.” Id. Where there is an established business, pre-existing profits

may be used to evidence the amount of loss with reasonable certainty. White v. Southwestern Bell

Tel. Co., 651 S.W.2d 260, 261 (Tex. 1983).

       Here, Perryman’s model was based in part on appellants’ own actual experience doing

business over the course of the relevant time period, and part on the actual experience of similar

companies in the industry, Perryman’s assumption was that appellants, in the business of making

real estate investments, would use the additional $155 million in the same way that it used other

sources of funds. As he explained the lost opportunity model to the jury:

                [Ijf you ask yourself if I would have had access to this money and I
                run a company that knows how to buy these properties and finance
                these properties and manage these properties and gain income of
                these properties and sell these properties what would I do with that
                money, assuming I had the management I needed, personnel I needed,
                equipment I needed, all of this that I had. Assume I had all of these
                projects every year, which I do, what would I have done with that
                money? You would have taken it out and done what you do with all
                of the other money that you have access to. That’s a much more
                common sense type of approach. If you try to ask yourself what
                would I have done with that money if I received it, if you are in that
                business, that’s what you do with that money.

        Dynex also complains that Perryman did not allocate the damages allegedly suffered by

Basic, ART, or TCIJCMET, to any individual company, but instead calculated a single amount of

profit lost to all of the appellant entities. They argue that the separate awards by the jury to specific




                                                 —16—
appellants cannot be the basis forjudgment when Perryman’s testimony did not make any allocation.

We disagree. As we have noted, the amounts awarded by the jury are within the range of the

evidence presented at trial. Perryman valued “the entire lost opportunity to all the entities,” and the

jury awarded a portion of this amount. In addition, appellants offered the testimony of Robert

Waldman, a former general counsel and officer of Basic, regarding the allocation of Perryman’ s

damages calculations among Basic, ART, and TCIJCMET, and the jury followed that allocation in

the verdict. Judgment on the jury’s allocation would have been proper. See Ortiz v. Avante Villa

at Corpus Christi, Inc., 926 S.W.2d 608, 612 (Tex. App.—Corpus Christi 1996, writ denied)

(question of apportionment of damages among plaintiffs was not of concern to defendant and did not

interfere with enforceability of judgment).

        The jury awarded some, but not all, of the damages for which appellants offered evidence.

We conclude that there was sufficient evidence to support the jury’s awards, and judgment

notwithstanding the verdict was not proper. See Sheehan, 320 S.W.3d at 895.

        5.      Conclusion

        As noted by Dynex, the elements of a breach of contract claim are: (i) the existence of a

valid contract between the plaintiff and defendant; (ii) the plaintiff’s performance; (iii) the

defendant’s breach of the contract; and (iv) the existence of damages to the plaintiff as a result of

the breach. See Barnett, 123 S.W.3d at 815. The jury made findings in favor of appellants on each

of these elements, and the findings were supported by legally sufficient evidence. We sustain

appellants’ first and third issues.

B.      Claim for Breach of the New Orleans Loans




                                                 —17—
          In their second issue, appellants contend the trial court erred in failing to enter judgment in

favor of TCIJCMET on the claim for breach of the New Orleans Loans. In their second and fourth

issues, appellants argue that the jury’s findings regarding the New Orleans Loans were supported by

legally sufficient evidence. These findings were that the parties entered into an agreement regarding

the New Orleans Loans (Question 10); that Dynex failed to comply with the terms of the New

Orleans Loans (Question 11); and that TCIJCMET suffered $252,577 in damages for lost

opportunities (Question 12).

          The New Orleans Loans were evidenced by the same set of letters that formed the

Commitment, as well as by formal loan documents admitted into evidence at trial. The evidence

showed that the New Orleans Loans were funded, resulting in the purchase of the buildings. The

point in dispute was whether Dynex was required to reimburse appellants for money spent on tenant

improvements. The loan documents provided for initial advances for purchase of the buildings, and

“future advances” to fund tenant improvements. The future advances would be made if the

borrowers satisfied certain requirements. Both parties offered testimony and exhibits regarding the

sufficiency of the documentation submitted to Dynex to support appellants’ request for the additional

advances. There was also conflicting evidence as to whether the amount of rent appellants could

charge to tenants in the buildings was affected by Dynex’ s failure to lend the amounts spent for the

       6 There was no dispute that Dynex never reimbursed appellants for the
tenant improvements.

expenses, or that TCIICMET paid for the tenant improvements at issue. The jury resolved the

conflicts, and there was evidence to support the jury’s answers to both Questions 10 and 11.

    6
       The jury apparently rejected this testimony, because they awarded zero damages for lost rent in any of the three New Orleans buildings.
Appellants do not complain of these findings on appeal.




                                                                   —18—
       Regarding Question 12, Perryman’s testimony sought to provide evidence supporting the

jury’s award of damages. In a calculation similar to the one undertaken for “lost opportunity” under

the Commitment, Perryman determined the amount of money appellants were required to spend on

tenant improvements in New Orleans and were thus unable to invest or use elsewhere. His report

indicates that for the basis of his calculation, he used amounts spent in tenant improvements

(described as “loan amount affected”) of $675,425 for the 1010 Common building, $637,773 for the

Amoco building, and $279,889 for the Baronne building, for a total of $1,593,087. He then

calculated the net profit appellants could have realized from the investment of these funds, arriving

at the amount of $252,577, which was the amount awarded by the jury in response to Question 12.

        The supreme court’s opinion did not address recovery of damages for breach of the New

Orleans Loans; its discussion of damages for lost profits related to the Commitment. See Basic II,

348 S.W.3d at 903. The court stated: “To be liable for the consequential damages resulting from

a breach of a loan commitment, the lender must have known, at the time the commitment was made,

the nature of the borrower’s intended use of the loan proceeds but not the details of the intended

venture.” Id. at 903. The intended use of the loan proceeds from the New Orleans Loans was

twofold. First, the proceeds were to be used to purchase the three office buildings. Second, Dynex

was to reimburse appellants for improvements made to the buildings.              In contrast to the

Commitment, under which appellants were unable to carry out any “intended ventures” on which

they expected to profit, both of the “intended ventures” of the New Orleans Loans were

accomplished.     The buildings were purchased with funds borrowed from Dynex and the

improvements were made with appellants’ own funds. It is undisputed that Dynex did not reimburse




                                                —19—
appellants for any tenant improvements. But instead of requesting jury findings to recover the

amount spent on tenant improvements, appellants sought only lost profits and lost rents as damages

from Dynex’s breach of the New Orleans Loans. The record reflects that appellants’ proposed jury

charge included an instruction to consider only lost opportunities in determining damages for breach

of the New Orleans Loans, and that Dynex objected to this measure of damages in the charge

conference.

       Under the Commitment, the purpose of the loan was to provide investment capital for large

real estate transactions. The purpose of the New Orleans Loans was different. The parties intended

that the proceeds from the New Orleans Loans would be used for the acquisition and rehabilitation

of three identified commercial buildings. In fact, the evidence established that the Commitment was

negotiated precisely because the acquisition and rehabilitation of the New Orleans buildings was not

Dynex’s core business. See Basic 1, 254 S.W.3d at 511 and n.3 (as part of “intertwined” deal to

finance purchase of New Orleans buildings, two-thirds of loan proposals under the Commitment

would be for purchase of multi-family residential properties, which made up Dynex’ s core business).

Any profit to appellants from the New Orleans Loans would come from the leasing and operation

(or perhaps eventual sale) of the three buildings, not from the prospective investments that were the

basis for Perryman’s lost profit calculations. In their response to Question 12, however, the jury

rejected appellants’ claim for “lost rents” arising from Dynex’s failure to fund the New Orleans

Loans, defined in the jury charge as “loss in value from rents and rental opportunities.” We conclude

that appellants failed to establish that they sustained lost profits as a result of Dynex’s breach of the

New Orleans Loans. See Basic II, 348 S.W.3d at 903 (question whether appellants actually sustained




                                                 —20—
lost profits is different from question whether lost profits were foreseeable). Although the evidence

supported the jury’s findings in response to Questions 10 and 11, the trial court’s judgment

notwithstanding the verdict was proper as to Question 12. We overrule appellants’ second and

fourth issues.

C.      Take-nothing Judgment

        In their fifth issue, appellants contend that the trial court erred by granting Dynex’s “Motion

to Enter Take-Nothing Judgment With Respect to Plaintiffs’ Claims.”               [n our discussion of

appellants’ first four issues, we have concluded that judgment notwithstanding the verdict was not

proper on appellants’ claim for breach of the Commitment. Therefore, the trial court should not have

granted Dynex’s motion to enter a take-nothing judgment. See TEx. R. CIV. P. 301 (trial court may

render judgment non obstante veredicto only if directed verdict would have been proper). We

sustain appellants’ fifth issue.

D.      Attorneys’ Fees

        The jury found $1,950,000 was a “reasonable fee for the necessary services of Plaintiffs’

attorneys in this case” through trial. (The jury also made findings as to the reasonable amount of

appellate attorneys fees.) In their sixth issue, appellants contend there was legally sufficient evidence

to support the jury’s findings on attorneys’ fees, and thus that the trial court erred in entering

judgment notwithstanding the verdict on their request for attorneys’ fees. Within that issue they

begin their argument by stating “Because [appellants I prevailed at trial against Dynex on two breach

of contract claims, they were entitled to recover attorneys’ fees. See TEx. CIV. PRAc. & REM. CODE

§ 38.001(8).”




                                                  —21—
       Appellants presented evidence at trial regarding their reasonable and necessary attorney’s fees

incurred in prosecuting their breach of contract claims. And we have concluded the trial court erred

in not awarding appellants damages for breach of the Commitment based on the jury’s verdict.

However, we have also concluded that the trial court did not err in entering judgment

notwithstanding the verdict on appellants’ breach of contract claim based on the New Orleans Loans.

       There is an interplay between the amount of damages and the amount of attorney’s fees found

by a jury: “[Ulniess an appellate court is ‘reasonably certain that the jury was not significantly

influenced by the erroneous amount of damages it considered,’ the issue of attorney’s fees should

be retried if the damages awarded are reduced on appeal.” Young v. QuaIls, 223 S.W.3d 312,

314—15 (Tex. 2007) (per curiam); see Solar Soccer Club v. Prince of Peace Lutheran Church of

Carroilton, 234 S.W.3d 814, 829 (Tex. App.—Dallas 2007, pet. denied). Indeed, one of the factors

the jury was instructed to consider in determining attorneys’ fees in this case was “the amount

involved and the results obtained.”

        The jury’s award of damages for breach of the New Orleans Loans was significantly less than

the damages for breach of the Commitment. And as described above and in Basic land Basic II, the

two claims were related to some degree. However, the attorneys fees necessary to pursue the two

claims are not identical. We may not parse through the evidence in a retrospective attempt to

determine how much of the appellants’ attorneys’ fees related solely to the claim for breach of the

New Orleans Loans, see Tony Gullo Motors I, L.P. v. Chapa, 212 S.W. 3d 299, 313—14 (Tex. 2006).

Neither do we undertake to guess whether and to what extent the jury’s award of attorneys’ fees




                                                —22—
would have been impacted if it had been instructed to consider only the “amounts involved and

results obtained” with respect to the claim for breach of the Commitment.

       Appellants sought to hold Dynex liable for two different breaches of contract. We agree they

properly prevailed on one of those claims—breach of the Commitment. However, we cannot be

reasonably certain the jury was not influenced by the amount of damages erroneously found with

respect to the breach of the New Orleans Loans. See Young, 223 S.W.3d at 315. As a result, the

issue of appellants’ attorneys fees should be retried. See Solar Soccer Club, 234 S.W.3d at 829. We

sustain appellants’ sixth issue only to the extent of remanding the detennination of the amount of

reasonable and necessary attorney’s fees for a new trial. We reverse the portion of the judgment

denying appellants their reasonable attorneys’ fees related to their claim for breach of the

Commitment and remand that issue to the trial court for further proceedings.

E.     hiterest and Costs

       In their seventh issue, appellants contend they are entitled to recover pre- and post-judgment

interest as well as their costs. Because we have determined that judgment on the jury’s verdict

would have been proper, appellants as the prevailing party may recover interest and costs. TEx. R.

Civ. P. 131; Hasty, Inc. v. Inwood Buckhorn Joint Venture, 908 S.W.2d 494, 502—03 (Tex.

App.—Dallas 1995, writ denied) (successful party to suit shall recover all costs from his adversary

unless trial court states otherwise); Dallas Cnty. v. Crestview Corners Car Wash, 370 S.W.3d 25,

50—51 (Tex. App.—Dallas 2012, pet. denied) (prejudgment interest calculated up to date ofjudgment

and included as part of final judgment; postjudgment interest begins to accrue on entire amount from

date ofjudgment until paid; remanded for trial court to recalculate prejudgment interest). We sustain




                                               —23—
appellants’ seventh issue; however, in light of the change in the amount of damages awarded, the

trial court must recalculate the amount of prejudgment interest.

F.     Rendition or Remand

       In their eighth issue, appellants contend the trial court erred by granting a take-nothing

judgment instead of ordering a new trial. We need not address this issue in light of our disposition

of the previous issues. We are to render the judgment the trial court should have rendered, unless

a remand is necessary for further proceedings. See TEx. R. APP. p. 43.2, 43.3. Judgment for

appellants is appropriate on the jury’s verdict for liability and damages relating to the Commitment.

We remand only for a new trial on the amount of attorney’s fees and for the trial court to determine

the correct amounts of prejudgment and postjudgment interest due appellants. See Dallas Cnty., 370

S.W.3d at 51.

                                            CONCLUSION

        We conclude that the evidence was legally sufficient to support thejury’ s verdict. We sustain

appellants’ issues one, three, five, six, and seven. We reverse the trial court’s judgment and remand

the cause for entry ofjudgment on the jury’s verdict for damages for breach of the Commitment, for

a new trial as to attorneys’ fees, and for costs, prejudgment and postjudgment interest in an amount

to be determined by the trial court




                                                       JIMMOSELEY
                                                       JUSTICE                   /



O4l358rf.pO5




                                                —24—
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                                                         1

                                         JUDGMENT
BASIC CAPITAL MANAGEMENT, INC.,                       Appeal from the 68
                                                                      th
                                                                           Judicial District Court
AMERICAN REAl TY TRUST INC                            of Dallas County, Texas. (Tr, Ct. No. 03
TRANSCON FIN LNTAL REAL F                             00675),
INVLS FURS, INC CONTINEN FAL                          Opinion delivered by Justice Moseley,
POYDRAS CORP C ONTINENTAL                             Chief Justice Wright and Justice Lang,
COMMON, INC., and CONTINENTAL                         participating.
BARONNE INC Appcllants

No. 05-04-01358-CV             V.

DYNEX COMMERCIAL, INC. and
DYNEX CAPITAL, INC., Appellees

In accordance with this Court’s opinion of this date, thejudgment of the trial court is AFFIRMED
IN PART AND REVERSED IN PART. We affirm the portion of the trial court’s judgment
granting judgment notwithstanding the jury’s verdict regarding the New Orleans loans. We
REVERSE the remainder of trial court’s judgment and REMAND the cause to the trial court for
entry of judgment on thejury’s verdict for damages for breach of the $160 million commitment, for
new trial as to attorney’s fees, and for costs and prejudgment and postjudgment interest in an amount
to be determined by the trial court. It is ORDERED that appellants Basic Capital Management, Inc.,
American Realty Trust, Inc., Transcontinental Realty Investors, Inc., Continental Poydras Corp.,
Continental Common, Inc., and Continental Baronne, Inc., recover their costs of this appeal from
Appellees Dynex Commercial, Inc. and Dynex Capital, Inc.


Judgment entered February 13, 2013.




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