Reported / Citable
Background
Pesca Holding LLC bought Texas Sun & Shade and assets of Vasa Window Coverings from Bengt and Gudrun Skoldeberg. Pesca later alleged that a $344,000 “customer deposits” entry in Vasa’s financial disclosures falsely represented deposits on roughly $688,000 in unfilled customer orders. Pesca contended that the entry instead largely reflected cash advances from Texas Sun & Shade for future orders, and sued for common-law and statutory fraud.
Following a five-day trial, the first jury found no fraud. The Skoldebergs had not offered fee-and-expense evidence or submitted related questions to that jury. More than a month after the jury was dismissed, they sought fees and expenses under the purchase agreement. Over Pesca’s objection, the trial court held a second jury trial, which awarded the Skoldebergs $800,000 in attorney’s fees, $50,000 in expenses, and contingent appellate fees.
The Court’s Holding
The Fourth Court of Appeals affirmed the take-nothing judgment on Pesca’s fraud claims. Evidence supported the jury’s conclusion that the Skoldebergs did not make an actionable misrepresentation or that Pesca could not justifiably rely on one. The record included due-diligence materials expressly identifying cash advances to Vasa for future orders, and Pesca’s owner did not review all of those materials, consult available advisors, or ask the Skoldebergs’ accountant about the financials.
The court reversed and rendered judgment against the Skoldebergs on their fee-and-expense claim. Because the disputed amounts were fact issues, the Skoldebergs waived them by neither presenting supporting evidence nor requesting jury questions before the first jury was dismissed. The record did not contain a clear, unambiguous Rule 11 agreement to try those issues separately, and the trial court could not cure the waiver by convening a second jury after the liability trial ended.
Key Takeaways
- A party seeking contested contractual attorney’s fees and litigation expenses must timely present evidence and obtain jury findings unless there is a valid agreement or proper separate-trial order.
- An asserted agreement to reserve fees for later must be clear and enforceable under Texas Rule of Civil Procedure 11.
- In an arm’s-length transaction, fraud plaintiffs may fail on justifiable reliance when available due-diligence materials reveal information contradicting the alleged misrepresentation.
Why It Matters
The decision underscores that fee claims can be lost through trial-management mistakes even when the claimant prevails on the merits. A court’s recollection that the parties intended to address fees later does not substitute for a clear agreement on the record.
It also reinforces the importance of careful diligence in business acquisitions: a buyer with access to documents that clarify a disputed financial entry may face substantial difficulty proving justifiable reliance on a contrary interpretation.