Full opinion text
OPINION EVA M. GUZMAN, Justice. In this commercial dispute, we are asked to determine questions regarding standing and capacity, the proper scope of declaratory relief, and the application of the express-negligence rule, as well as traditional sufficiency challenges to certain evidence. The appellant, an aircraft engine manufacturer, contracted with a forging company for the production of crankshaft forgings made to the manufacturer’s specifications. After a series of crankshaft failures, an affiliate of the forging company sued the engine manufacturer, alleging that the manufacturer wrongfully concealed information about the failures, fraudulently induced the forging company to extend the contract, and obtained the execution of a contract extension by deception. The affiliate also sought a ruling that the manufacturer was not entitled to contractual indemnity. The jury found in favor of the affiliate on its fraud claims and awarded it damages for increased insurance premiums and fees for expert witnesses, together with attorneys’ fees, costs, and more than $86 million in exemplary damages. We conclude that the affiliate has standing to assert the claims at issue, but the evidence is legally insufficient to support the actual damages awarded. We therefore reverse and render judgment that the affiliate take nothing, but we affirm the trial court’s conclusion that the contractual indemnity provision at issue is unenforceable under both Texas and Pennsylvania law. We remand solely for the determination of the appropriate amount of attorneys’ fees and costs, if any, to award to either party in light of our rulings on the dispositive issues. I. FACTUAL AND PROCEDURAL BACKGROUND A. The Master Supply Agreement Appellant Textron Lycoming Reciprocating Engine Division of AVCO Corporation (“Lycoming”) manufactures aircraft engines, but does not manufacture all of the component parts. On May 4, 1995, Lycoming entered into a Master Supply Agreement (“MSA”) to obtain crankshaft forgings from Wisconsin corporation Interstate Forging Industries, Inc. (“IFI”). The forgings were to be made to Lycom-ing’s specifications, and the MSA provides that IFI “will not delegate or subcontract any of the work or duties to be performed hereunder without the prior written consent” of Lycoming. The MSA also includes asymmetrical indemnification provisions. Section 5.3, paragraph 1 of the MSA provides: Buyer [Lycoming] shall indemnify, reimburse, and hold Seller [IFI] harmless, its subsidiaries and affiliates and then-respective officers, directors and employees from and against any and all losses, liabilities, claims, costs, demands, judgements [sic], penalties, fines, interest, expenses or monetary damages of any kind (including, without limitation, court costs, reasonable fees, expense[s] and disbursements of attorneys and consultants) (collectively “Damages”) asserted against, imposed upon or incurred by Seller, as a result of claims or lawsuits by third parties, (including any such claim or lawsuit for personal injury or property damage) where liability is based solely on a defect in design and/or a defect in the warnings and instructions provided by Buyer without any negligence on the part of Seller. (emphasis added). The second paragraph of section 5.3 requires IFI to indemnify Lycoming for such “Damages”: asserted against, imposed upon or incurred by Buyer [Lycoming], whether or not involving liability to any third party, resulting from or arising out of any claim, lawsuit ... recall, retrofit or government investigation or proceeding against Buyer relating to performance or defects (including without limitation, manufacturing defects), or the breach of any express or implied warranty for any Products manufactured by Seller [IFI] pursuant to this Agreement, except to the extent that such Damages are directly caused by the negligence of the Buyer. (emphasis added). B. The Assignment and Assumption Agreement Between IFI and ISW Before producing any crankshaft forgings, IFI executed an “Assignment and Assumption Agreement” (“Assignment Agreement”) in October 1996 to accomplish three stated purposes. First, IFI assigned all the assets of its “Interstate Southwest division” to Interstate Southwest, Ltd. (“ISW”). The assigned assets included the physical plant in Navasota, Texas where the crankshaft forgings were to be produced. According to ISW, IFI’s contract with Lycoming was also assigned to ISW. In exchange for its assets, IFI received a 98% partnership interest in ISW. IFI did not obtain Lycoming’s consent to the transfer or inform Lycoming of the arrangement, and Lycoming contends it had no knowledge of the Assignment Agreement between IFI and ISW until this suit was filed. Second, the Assignment Agreement designated ISW the “true and lawful attorney” for IFI with “full power of substitution, for [IFI] ... in its name and stead or otherwise.... ” It similarly authorized ISW to “prosecute in the name of [IFI] or otherwise ... any and all proceedings ... which [ISW] may deem proper in order to collect, assert or enforce any claim, right or title of any Division Assets, and do all other acts and things in relation thereto as [ISW] ... shall deem desirable.... ” Third, the Assignment Agreement required ISW to indemnify IFI. Under this provision, ISW “assumes, holds [IFI] harmless from, and agrees to pay and satisfy and fulfill, the Division Liabilities.” ISW further agreed “absolutely and unconditionally to defend, indemnify and hold [IFI] harmless from all claims arising directly or indirectly from or with respect to the Division Liabilities, against or with respect to [ISW] or [IFI], or both, and to satisfy and pay same.... ” On the same day that it executed this agreement, IFI assigned its partnership interest in ISW to ISW’s limited partner, a Delaware corporation known as ISW Texas Corporation. IFI owns that company. ISW’s general partner, Texas Steel Corporation, is wholly owned by Citation Corporation (“Citation”), as is IFI. Thus, both IFI and ISW are affiliated with Citation. Ed Buker, Citation’s Chief Executive Officer, is also the chairman of both IFI and ISW. C. Changes in Specifications and Manufacture Lycoming received the first shipment of crankshaft forgings on March 4, 1997. On November 16, 1998, Lycoming issued an engineering change order requiring the vanadium content of the forgings to be “controlled” to 0.07% to 0.11%. The change order further provided, “This material modification ensures a 2nd tempering temperature of 1100° F or higher (at least 100° F higher than the 1st tempering temperature) for 5 hours to meet the engineering drawing hardness requirements .... ” (capitalization normalized). Beginning the following month, forgings were manufactured in a different furnace that was generally operated manually rather than by using the temperature controls outside of the furnace. D. The Crankshaft Failures 1. Failure to Heat-Treat Forgings Beginning in 1999, a number of crankshaft failures occurred. In some instances, the cause of the failure is undisputed. For example, on July 27, 1999, Lycoming notified IFI of an engine failure due to the forging facility’s failure to heat-treat the crankshaft forgings. Similar failures followed. On May 15, 2000, Lycoming wrote IFI regarding 54 crankshaft forgings that lacked heat treatment; the consequences of this “quality escape” included two inflight failures. Lycoming wrote that IFI “must recognize [its] liability” and asked that IFI notify its insurance carrier of the problem. Lycoming further opined that the defects were caused by “inadequate process controls to ensure proper heat treatment.” IFI subsequently reached a settlement with Lycoming regarding these failures. As part of this settlement, the parties agreed to a change in the forging process. Specifically, Lycoming accepted IFI’s offer to “build press-tooling or hammer-tooling to put the parts on the press....” 2. Subsequent Crankshaft Failures Other engine failures occurred for which the cause was not readily apparent, and Lycoming instructed its employee, Dr. Yoon Kim, to investigate. The crankshafts at issue have six crankpins, and the failures that are the basis of this litigation generally originated below the outer nitride casing of the crankshaft near or between the fifth and sixth crankpins. On June 28, 2000, a Lycoming engine failed after approximately 100 hours of service. In his report dated July 27, 2000, Dr. Kim concluded that a connecting rod bearing had failed, and the resulting stresses caused a subsurface fracture to the crankshaft between the fifth and sixth crankpins. On May 31, 2000, a crankshaft failed in a Lycoming engine after 262 hours of service, but the report on that failure, which occurred in Australia, was not completed until September 21, 2000. A surface fracture was observed on this crankshaft, and this failure was also attributed to a bearing failure. A third failure occurred on August 29, 2000. In his report dated October 25, 2000, Dr. Kim attributed the surface fracture in front of the sixth crankpin to the shifting of a bearing. In each of these three failures, the crankshaft forgings had been heat-treated. IFI was not immediately informed of the failure of these heat-treated crankshafts. Although Lycoming met with IFI on November 29 and 30, 2000 regarding costs for three other failed crankshafts that had not been heat-treated, Lycoming did not disclose at this time that the three heat-treated crankshafts described above had also failed. E. The Second Addendum to the MSA By this time, the original five-year MSA had expired, but Lycoming continued to order and receive crankshaft forgings, ostensibly from IFI. To renew the MSA, Lycoming and IFI negotiated a Second Addendum signed by IFI on April 26, 2001 and by Lycoming on July 17, 2001. ISW is not a signatory to and is not mentioned in the Second Addendum, which extended the MSA for another five years. F. The Crankshaft Failures Continue After the Second Addendum was successfully negotiated, Dr. Kim continued to analyze additional failures. He completed another failure analysis on July 3, 2001. This was the first instance in which Dr. Kim concluded that a crankshaft failed due to subsurface fatigue from abnormally high stresses of unknown cause. On October 19, 2001, Dr. Kim wrote to IFI that a crankshaft had failed after 886.8 hours of service. According to Dr. Kim, the failed crankshaft included 0.08% vanadium and contained a microscopic “honeycomb” structure. Concerning this structure, Dr. Kim wrote: We do not know the cause of its formation nor its effect on the mechanical properties^] especially on the fatigue property. You can do whatever you want to do with the impact test sample to determine the cause of the honeycomb structures. Please let me know your findings as soon as possible. On December 11, 2001, Lycoming and IFI personnel met concerning ten crankshaft failures. Two days later, Lycoming prepared an engineering order requiring vanadium to be limited to .01% and the second heat tempering to be conducted at temperatures not exceeding 1150° F. Lycoming had previously consulted an outside engineering firm regarding the failure of the heat-treated crankshafts, and on December 19, 2001, James M. Hilts of Kingsway Engineering Services completed his report to Lycoming. Hilts wrote that “the metallagraphieal [sic] evidence indicates that the crack could have started as an elliptical!-] shaped (football) inclusion roughly 0.005 x 0.01 inches lying 0.011 inches below the 0.026[-] inch thick nitride case.” Although Hilts tested material that was “not the exact form, strength or heat treatment as the failed material,]” he concluded that “[i]f the maximum cyclic stresses are truly in the range of 33 to 54 ksi[,][] no surface crack would have initiated on the surface” of the crankshaft. Thus, he reasoned, “[i]nitiation of a surface crack would require stresses well over 70 ksi[;][t]herefore, there must have been a pre-existing defect.” Lycoming then began to recall crankshafts that were already in service. On February 1, 2002, Lycoming issued a mandatory service bulletin recalling crankshafts manufactured under the MSA that were used in Lycoming’s six-cylinder turbocharged engines. Ten days later, the Federal Aviation Administration (“FAA”) issued a similar Airworthiness Directive concerning all Lycoming turbocharged TIO-540 and LTIO-540 engines of 300 hp or higher that were manufactured from March 1997 to February 2002. Lycoming provided an update to IFI on February 19, 2002, informing it of seven confirmed and six unconfirmed crankshaft failures. In this letter, Brock A. Spigel-myer, Design Engineer for Lycoming, wrote that Lycoming’s “investigation has been focusing primarily on the presence of honeycomb-like features found on the fracture surfaces” because “[t]he investigation has ruled out the possibility of any dimensional or machining[-]related problems and the design itself has been substantiated by 20 or more years of reliable service.” G. The Release and Indemnity Agreement and the Replacement Crankshaft Agreement Additional recalls followed in August and September 2002. Lycoming attempted to negotiate an agreement under which IFI would produce replacement crankshafts, but IFI refused to do so unless Lycoming agreed to indemnify it for past and future crankshaft failures. Thus, Ly-coming entered into the following pair of agreements on October 14, 2002, to address the need for replacement crankshafts. These are the only agreements in the record between Lycoming and ISW concerning the production of crankshaft forgings. 1. The Release In the Release and Indemnity Agreement (the “Release”), Lycoming, Citation, IFI, and ISW agreed that “the Parties have a dispute concerning whether [IFI] is required to produce the Replacement Crankshafts pursuant to the terms of the [MSA] made as of May 4, 1995, as amended, and are entering into this [Release] without prejudice to their respective positions on that issue....” They further agreed that: [The Release] will not amend, alter, or modify the terms of the MSA, except to the extent specifically set forth in this [Release], reserving to ISW, [IFI], and Citation their contention that the MSA is invalid and reserving to ... Lycoming [its] opposition to that contention and [its] damage claims, if any, except as limited by this [Release]. Under the terms of the Release, ISW agreed to produce replacement crankshafts subject to a Replacement Crankshaft Production Agreement (“Replacement Crankshaft Agreement”) attached as an exhibit to the Release and incorporated by reference. Lycoming released and agreed to indemnify IFI, ISW, and Citation for costs, losses, and damages these entities incurred “as a result of claims or lawsuits of any kind by any third party or [Lycoming] relating to the Replacement Crankshafts.” 2. The Replacement Crankshaft Agreement In the Replacement Crankshaft Agreement, Lycoming and ISW acknowledged the contemporaneous execution of the Release and agreed that: [T]his [Replacement] Agreement is separate from, and not governed by, the [MSA] between the parties, and [the parties] have further agreed that this [Replacement] Agreement will not amend, alter, or modify the terms of the MSA, except to the extent specifically set forth in this [Replacement] Agreement, reserving to ISW its contention that the MSA is invalid and reserving to Lycoming its opposition to that contention and its damage claims, if any, except as limited by this [Replacement] Agreement and the attached Release .... Neither the Release nor the Replacement Crankshaft Agreement mentions any assignment of rights or assets, delegation of duties, or the existence of an attorney-in-fact relationship between IFI and ISW. Although the record does not reveal any failures of crankshafts produced pursuant to the Replacement Crankshaft Agreement, liability for failures of crankshafts produced pursuant to the MSA and its Addenda remained unresolved. For example, less than a week before the Release and Replacement Crankshaft Agreements were executed, Lycoming and IFI were sued in federal court for damages arising from one or more of the failures of crankshafts produced pursuant to the MSA and its Addenda (the “Flying Frog litigation”); executives of IFI and ISW were concerned that Lycoming would seek indemnification for its own losses as well as for damages to third parties. Eventually, both ISW and Lycoming attempted to resolve the indemnification question by bringing suit in their respective home states. H. The Texas Suit ISW filed the instant lawsuit in Grimes County on April 23, 2003, asserting causes of action for (1) business disparagement, (2) breach of contract based in part on Lycoming’s failure to inform ISW earlier of the crankshaft failures, (3) contractual contribution and indemnity under section 5.3 of the MSA, (4) declaratory judgment concerning the indemnity provisions of the MSA, and (5) attorneys’ fees and costs pursuant to Section 37.009 of the Texas Civil Practice and Remedies Code. ISW asked the trial court to hold that the paragraph of the MSA regarding IFI’s duty to indemnify Lycoming was unenforceable because it was against public policy and a contract of adhesion. At the same time, ISW asked the trial court to declare that ISW was entitled to contractual indemnification from Lycoming under the MSA. Although ISW incorporated the MSA and its addenda by reference in its original petition, the pleading contained no allegations that IFI had assigned the MSA to ISW or that ISW was acting in a representative capacity. I. The Pennsylvania Lawsuits The day before it answered this suit, Lycoming sued IFI and Citation — but not ISW — in a Pennsylvania state court on May 22, 2003. In that suit, Lycoming sought indemnification for its losses arising from the crankshaft failures. In a separate Pennsylvania lawsuit, Lycoming agreed with IFI and Citation to the entry of an Agreed Order for Preliminary Injunction on June 12, 2003. The injunction required IFI and Citation to “produce and provide all crankshaft forgings ordered by [Lycoming] pursuant to the [MSA].” Although the Texas trial court granted ISW a temporary anti-suit injunction to prevent Lycoming from prosecuting the Pennsylvania actions, this court reversed the trial court’s order and dissolved the injunction. AVCO Corp. v. Interstate Sw., Ltd., 145 S.W.3d 257, 260 (Tex.App.-Houston [14th Dist.] 2004, no pet.). J. The Texas Causes of Action On June 26, 2003, ISW filed its First Amended Original Petition in this case. This petition contains ISW’s first mention of the Assignment Agreement. The pleadings were amended several more times, and the case was eventually tried on ISW’s Sixth Amended Original Petition, filed June 1, 2004, and its First Trial Amendment, filed February 7, 2005. In its live pleadings, ISW alleges that Lycoming concealed the crankshaft failures from IFI and ISW, but privately attributed the failures to deficiencies in the forging process. According to ISW, “Lycoming and IFI, with the full knowledge and consent of ISW (and on behalf of ISW) executed the Second Addendum to the MSA in the early summer of 2001” and at that time, Lycom-ing (1) had no intention of performing under the MSA; (2) knew the crankshafts were under-designed, and knew that IFI and ISW did not know this; and (3) knew that IFI and ISW had no knowledge of the additional crankshaft failures. ISW also asserted causes of action for fraud, fraudulent inducement of the MSA and Second Addendum, violation of Section 2.306 of the Texas Business and Commerce Code, and breach of contract. In addition, ISW sought rescission of the MSA and its Addenda and asked the trial court to return the parties “to the position they were in prior to the MSA and its Addenda.” ISW also sought the declaratory relief discussed below. 1. Declaratory Judgment Regarding the Assignment and Standing In its first request for declaratory judgment, ISW asked the trial court to declare that: (a) the Assignment Agreement validly transferred and assigned to ISW the MSA and all rights and obligations thereunder; (b) ISW assumed and was assigned the liabilities and obligations of IFI concerning the MSA; (c) the Assignment Agreement irrevocably appointed ISW as IFI’s attorney-in-fact, thereby assigning to ISW the right to prosecute and defend litigation concerning the MSA; (d) because IFI assigned the MSA to ISW, ISW had standing to assert the claims in this suit; (e) ISW was the real party in interest in this litigation and had a personal stake in its outcome; (f) ISW was authorized to assert the claims in this lawsuit in its own right as well as on behalf of IFI; and (g) ISW had standing because it produced all the crankshafts. 2. Declaratory Judgment Regarding the MSA Under the heading of “Declaratory Judgment — MSA,” ISW asked the trial court to issue a declaratory judgment that (a) the crankshaft failures and the resulting lawsuits, settlements, groundings, and recall, including all resulting damages for losses suffered by Lycoming, were directly caused by Lycoming’s negligence; (b) the failures were not caused by the acts or omissions of ISW or IFI; (c) the failures were not caused by performance or defects or the breach of any express or implied warranty of any forgings produced under the MSA; (d) the failures did not relate to “the seller’s performance” under the MSA or defects of the crankshaft forgings; (e) Lycoming failed to comply with the notice provisions of the MSA, and this material breach resulted in the MSA’s termination; (f) because it failed to follow the MSA’s express terms, Lycoming could not enforce the indemnity provisions of the MSA; (g) the agreement to indemnify Lycoming under the MSA was unenforceable as a matter of law, was against public policy, and was a contract of adhesion; and (h) the indemnity agreement was limited to the negligence, if any, “of the seller under the MSA in relation to the forging process and does not cover” the negligent acts or omissions of Lycoming or other parties under Lycoming’s control. 3. Trial Amendment Finally, ISW filed a trial amendment asserting claims for exemplary damages and alleged that, because Lycoming secured the execution of the Second Addendum by deception, the statutory limitation on exemplary damages did not apply. K.Pre-Trial and Trial Rulings Lycoming challenged ISW’s standing and capacity to bring its claims, and the trial court granted partial summary judgment, holding that ISW had both standing and capacity. Lycoming does not challenge the partial summary judgment on appeal. The case was tried between December 6, 2004 and February 15, 2005. Before trial, Lycoming filed a unilateral “stipulation” that it was not seeking indemnification from ISW, but ISW opposed the stipulation. After the start of trial, the court struck the stipulation and refused to allow Lycoming to inform the jury that such a stipulation had been offered. The trial court also excluded documents and testimony offered to show that a division of the FAA attributed the crankshaft failures to overheating. In addition, the trial court excluded evidence that the data Lycoming collected as part of its own root cause investigation of the crankshaft failures included information that overheating of forgings caused similar failures in the engines of a competitor. Lycoming challenges each of these rulings on appeal. Lycoming also contends the trial court erred in refusing to give certain jury instructions concerning punitive damages, and complains of the trial court’s failure to sustain Lycoming’s objections to portions of ISW’s closing arguments on the grounds of relevance and improper argument. L. The Directed Verdict After ISW completed its case-in-chief, Lycoming successfully moved for a partial directed verdict on several of ISW’s claims. ISW appeals the trial court’s dismissal with prejudice of ISW’s claims under section 2.B06 of the Business and Commerce Code. M. Jury’s Findings Over Lycoming’s objection, the trial court refused to submit separate jury questions concerning IFI and ISW but instead submitted jury questions regarding Lycoming’s conduct to “Interstate” and damages “Interstate” incurred. In the charge, “Interstate” was defined to include both ISW and IFI. The trial court further instructed the jury “that the court has determined as a matter of law that [ISW] may bring its claims and the claims of [IFI] against Lycoming, including claims against Lycoming relating to the MSA.” The MSA was defined to include both Addenda. By a vote of ten to two, the jury found that “Lycoming fraudulently induce[d] the extension of the MSA through the Second Addendum to the MSA” and “commit[ted] fraud on Interstate[.]” The jury was then asked to find the sum of money that would compensate “Interstate” for damages proximately caused by either act, and was told to limit its finding to two specific categories of damages. First, the jury was asked for “[t]he increase in aviation products liability insurance premiums sustained in the past”; it assessed this amount at $1.7 million. Second, the jury was asked to find the “[reasonable and necessary expert expenses incurred in the investigation of the crankshaft failures”; it assessed this amount at $2,715,623.17. The jury also found by clear and convincing evidence that “the harm to Interstate resulted from fraud or malice” and “from a specific intent by Lycoming to cause substantial injury to Interstate!.]” In addition, the jury found that Lycoming secured the execution of the Second Addendum to the MSA by deception, and determined that the reasonable fees for the necessary services of “Interstate’s” attorneys was $4,760,027.80 for preparation and trial, $350,000 for an appeal to a court of appeals, $30,000 for filing or responding to a petition for review in the Texas Supreme Court, and $170,000 for briefing and argument on the merits in the Texas Supreme Court. The jury further found that a defect in Lycoming’s crankshaft design was the sole cause of the failures. In separate instructions, the jury was asked to determine the amount that should be assessed against Lycoming and awarded to “Interstate” as exemplary damages. The trial court overruled Lycoming’s objections that the charge for exemplary damages was incomplete and insufficient under the Texas and United States constitutions, and the jury unanimously assessed punitive damages at $86,394,763. N. The Judgment After the jury returned its verdict, ISW submitted a proposed judgment, and the trial court signed the judgment without any change. The court rendered judgment for ISW “for the claims asserted on its own behalf as well as those claims asserted on behalf of [IFI] ” in the amounts found by the jury, together with court costs, interest, and contingent awards of attorneys’ fees for various appeals. In connection with the jury’s findings, the trial court: 1. Rescinded “the indemnification provision of Section 5.3 of the [MSA] and its Addenda, which requires the Seller to indemnify the Buyer” due to “the jury’s finding of fraud and fraudulent inducement....” The trial court further held that as a result of the rescission, this provision “cannot be enforced against [ISW], [IFI], or their successors and assigns”; 2. Held “that the jury’s findings entitle [ISW] to recover the entire amount of exemplary damages awarded by the jury even if it is later found that only nominal actual damages were recoverable”; 3. Concluded that, due to the jury’s findings, the exemplary damages awarded are not subject to a statutory damage cap; and 4. Found that, based on the jury’s factual findings, the award of attorneys’ fees and costs are equitable and just as those terms are used in Section 37.009 of the Texas Civil Practice and Remedies Code. 0. Declaratory Relief The trial court’s rulings concerning ISW’s requests for declaratory relief are contained in six numbered paragraphs, which we refer to as Declaratory Judgments 1-6: 1. The Bill of Sale and Assignment Assumption Agreement (“Assignment Agreement”) validly assigned the [MSA] to [ISW]; the Assignment Agreement irrevocably appointed [ISW] as [IFI’s] attorney-in-fact, with full power to, among other things, initiate legal proceedings in the name of [ISW] or [IFI], and to collect, assert, or enforce any claim or right in connection with any transferred asset, including the [MSA] with [Lycoming], thereby assigning to [ISW], the right to prosecute and defend litigation related to the [MSA] and [IFI]; [ISW] has standing to prosecute and defend claims related to the [MSA]; and [ISW] is authorized to assert the claims in this lawsuit, in its own right as well as on behalf of [IFI]. 2. A defect in [Lycoming]’s design of the crankshafts was the sole cause of the crankshaft failures and the resulting service bulletins, airworthiness directives, crankshaft recall and grounding of aircraft with Lycoming engines; 8. Because a defect in [Lycoming’s] design of the crankshafts was the sole cause of the crankshaft failures and the resulting service bulletins, airworthiness directives, crankshaft recall and grounding of aircraft with Lycoming engines, [Lycoming] cannot recover, in whole or in part, any losses, liabilities, claims, costs, demands, judgments, penalties, fines, interest, expense or monetary damages of any kind, (including court costs, reasonable fees, expenses and disbursements to attorneys and consultants) (collectively “DAMAGES”) that have been, or may be, asserted against, imposed upon, incurred, or suffered by [Ly-coming] as a result of any claim or lawsuit (including claims and lawsuits for personal injury and property damage), recall, retrofit, grounding, or government investigation relating in any way to, or arising out of, the crankshaft failures and the resulting service bulletins, airworthiness directives, crankshaft recall and grounding of aircraft with Lycoming engines from [ISW] and/or [IFI] and/or their successors or assigns under the [MSA] or its Addenda, Section 5.3 of the [MSA], or any other legal theory that would impose liability on [ISW] and/or [IFI] and/or their successors or assigns, regardless of whether [Lycoming] asserts the right to recover such DAMAGES, if any, under the common law, case law, statute, rule or otherwise, including but not limited to claims for contribution, implied or express indemnity, negligence, strict liability or breach of any express or implied contract or warranty.... Using the same broad language, the trial court stated in Declaratory Judgment 4 that, because a design defect was the sole cause of the crankshaft failures, the failures and the consequences of the failures “were not related to or caused by [ISW] and/or [IFI], including any act and/or omission in the forging process and/or the overheating of the steel in the forging process (regardless of whether such act and/or omission constitutes negligence),” and thus, Lycoming could not recover damages under any legal theory. In Declaratory Judgment 5, which also was predicated on the finding that a design defect was the sole cause of the failures, the trial court declared that: [The failures] were not related to or caused by: (1) [ISW]’s and/or [IFI] ’s and/or the Seller’s performance of the MSA or its Addenda; (2) the performance of the crankshaft forgings provided under the MSA or its Addenda ...; (3) defects (including manufacturing defects) in the crankshafts and crankshaft forgings manufactured or provided to [Lycoming] under the MSA or its Addenda; or (4) [ISW]’s and/or [IFI] ’s and/or the Seller’s breach of any express or implied warranty for any crankshafts or crankshaft forgings manufactured or provided to [Lycoming] under the MSA or its Addenda.... The trial court again concluded that Ly-coming could not recover any damages from IFI or ISW under any legal theory. In Declaratory Judgment 6, the trial court declared that the indemnification provision in the second paragraph of Section 5.3 of the MSA “is unenforceable as a matter of law because it does not meet the legal requirements for indemnification agreements under Texas or Pennsylvania law....” This appeal timely ensued. II. ISSUES PRESENTED In a total of twenty-seven issues, Ly-coming challenges ISW’s standing and the legal sufficiency of the evidence supporting the judgment in virtually all respects. Lycoming also challenges the attorneys’ fees award; contends the actual damages are not legally cognizable; and alleges that the punitive damage award exceeds constitutional bounds. Finally, Lycoming asserts various evidentiary and jury charge errors. In two cross-points, ISW challenges the directed verdict on its claim for breach of contract. We address only those issues that are dispositive of this appeal. TEX.R.APP. P. 47.1. III. STANDING Before reaching the merits of this appeal, we must address issues of standing. In its first issue, Lycoming contends that ISW lacks standing to assert any of the claims at issue because ISW is not a party to the MSA or its Addenda. In its third issue, Lycoming argues that ISW lacks standing to sue Lycoming on its own behalf because Lycoming offered a formal stipulation before trial that it had never and would never seek indemnification from ISW for the crankshaft failures. Lycom-ing similarly argues in its sixteenth issue that ISW lacks standing to pursue its claims for declaratory relief because the offered stipulation eliminated any dispute or basis for granting ISW relief. A. Governing Law A party’s standing to pursue a cause of action is a question of law we review de novo. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex.1998); Emmett Props., Inc. v. Halliburton Energy Servs., Inc., 167 S.W.3d 365, 371 (Tex. App.-Houston [14th Dist.] 2005, pet. denied). The general test for standing in Texas requires that there be a real controversy between the parties that will be actually determined by the judicial declaration sought. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993). Specifically, a plaintiff has standing to sue if: (1) the plaintiff has sustained, or is immediately in danger of sustaining, some direct injury as a result of a eom-plained-of wrongful act; (2) there is a direct relationship between the alleged injury and the claim asserted; (3) the plaintiff has a personal stake in the controversy; (4) the challenged action has caused the plaintiff some injury in fact; or (5) the plaintiff is an appropriate party to assert both its own interest and the public interest in the matter. El Paso Cmty. Partners v. B&G/Sunrise Joint Venture, 24 S.W.3d 620, 624 (Tex.App.-Austin 2000, no pet.). Generally, the pleader must allege facts that affirmatively demonstrate the court’s jurisdiction to hear the case. In re Forlenza, 140 S.W.3d 373, 376 (Tex.2004) (orig. proceeding). The alleged injury must be concrete, particularized, fairly traceable to the defendant’s allegedly unlawful conduct, and likely to be redressed by the requested relief. Brown v. Todd, 53 S.W.3d 297, 305 (Tex.2001). In reviewing the trial court’s ruling on the issue of standing, we construe the pleadings in the plaintiffs favor and consider the pleader’s intent. County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex.2002). In addition, courts “may consider evidence and must do so when necessary to resolve the jurisdictional issues raised.” Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex.2000). Standing is not to be confused with capacity. “A plaintiff has standing when it is personally aggrieved, regardless of whether it is acting with legal authority; a party has capacity when it has the legal authority to act, regardless of whether it has a justiciable interest in the controversy.” Nootsie, Ltd. v. Williamson County Appraisal Dist, 925 S.W.2d 659, 661 (Tex. 1996). Capacity concerns “a party’s personal right to come into court,” while standing concerns “the question of whether a party has an enforceable right or interest.” Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex.2005) (quoting 6A Charles Alan Wright, Arthur R. Miller, and Mary Kay Kane, Federal Practice and Procedure: Civil 2d § 1559, at 441 (2d ed.1990)). Thus, a plaintiff with no legally cognizable interest in the outcome of the case lacks standing to sue on its own behalf, but may be authorized to sue on behalf of another. See Nootsie, 925 S.W.2d at 661; see also Neeley v. W. Orange-Cove Consol. Indep. Sch. Dist., 176 S.W.3d 746, 776 (Tex.2005) (“[A] party’s standing to assert a claim does not depend on its ability or willingness to look out for interests other than its own.”). B. Pleadings at Issue Because our analysis of standing begins with the plaintiffs pleadings, we must first address Lycoming’s argument concerning which pleadings are determinative. In its fourteenth issue, Lycoming argues that the Texas trial court should have refused to exercise jurisdiction over ISW’s amended claim for declaratory judgment interpreting the MSA and its Addenda because, by the time the amended petition was filed, ISW’s requests for declaratory relief addressed claims that were already pending in the Pennsylvania actions. In substance, Lycoming asks us to treat the Pennsylvania actions as “first-filed” suits with regard to ISW’s requests for declaratory judgments. Here, ISW originally filed suit first for breach of contract, contribution, contractual indemnity, and declaratory judgment regarding the MSA. The original petition incorporated the MSA and its Addenda by reference, but as Lycoming correctly points out, ISW is not a party to these agreements. This is shown by the documents themselves, and because these documents are incorporated by reference in the petition, the face of the pleading shows that ISW is not a party to these agreements. See Cockrell v. Estevez, 737 S.W.2d 138, 141 (Tex.App.-San Antonio 1987, no writ) (“When an inspection of an exhibit referred to in the pleadings shows facts contradictory to the pleadings, the exhibit, not the allegation of the pleadings, must control.”). Moreover, the documents show that IFI’s duties under the contract cannot be delegated to ISW without Ly-coming’s prior written consent, and ISW did not initially allege that such consent had been obtained or waived. As noted, before ISW amended its petition, Lycoming had filed its Pennsylvania lawsuits. Lycoming therefore argued that ISW lacked standing to prosecute its declaratory judgment claims because, inter alia, those claims were primarily defenses to Lycoming’s Pennsylvania claims. On appeal, Lycoming supports this argument with a statement made by this court when the case was last before us: Regarding choice of forum, Texas courts generally favor the plaintiffs choice when deciding intrastate venue questions. However, the mere fact that a plaintiff chose a Texas forum and the defendant subsequently filed a mirror image suit in a sister state does not by itself support issuance of an anti-suit injunction; both suits may continue unabated. Additionally, in the present case, many of ISW’s claims are defensive in nature, seeking declaratory judgment that would defeat Lycoming’s affirmative claims. The nature of ISW’s claims weighs against a general policy favoring a Texas venue. AVCO, 145 S.W.3d at 266 (citations omitted). Lycoming relies on the quoted language and on cases holding that “[t]he Declaratory Judgments Act is ‘not available to settle disputes already pending before a court.’ ” BHP Petroleum Co., Inc. v. Millard, 800 S.W.2d 838, 841 (Tex.1990) (quoting Heritage Life Ins. Co. v. Heritage Group Holding Corp., 751 S.W.2d 229, 235 (Tex.App.-Dallas 1988, writ denied); see also Abor v. Black, 695 S.W.2d 564, 566 (Tex.1985) (stating that the trial court should not exercise jurisdiction over a suit for declaration of non-liability by a potential negligence defendant); Space Master Int’l, Inc. v. Porta-Kamp Mfg. Co., Inc., 794 S.W.2d 944, 948 (Tex.App.-Houston [1st Dist.] 1990, no writ) (noting that a trial court may properly dismiss a suit for declaratory judgment when the court’s exercise of jurisdiction would “deprive the plaintiff of the ability to select the appropriate forum” to hear the case); Mission Ins. Co. v. Puritan Fashions Corp., 706 F.2d 599, 602 n. 3 (5th Cir.1983) (“Anticipatory suits are disfavored because they are an aspect of forum-shopping.”)). Assuming that a plaintiff’s request for defensive declaratory relief raises questions of standing, this argument does not apply here. Unlike the parties in the cases on which Lycoming relies, the parties are not the same in the various lawsuits at issue here. Cf Hawkins v. Tex. Oil & Gas Corp., 724 S.W.2d 878, 891 (Tex.App.-Waco 1987, writ refd n.r.e.) (stating that a trial court should refuse to entertain a declaratory judgment action if another action is pending involving the same parties and in which the same issues may be adjudicated). Moreover, ISW’s claims for declaratory judgment were not pending in another court when the Texas suit was filed; ISW filed this lawsuit before Lycoming sued IFI and Citation in Pennsylvania, and when Lycoming challenged ISW’s standing, ISW amended its pleadings to assert additional jurisdictional facts. Lycoming did not specially except, object, or move to strike the amended pleading, which effectively relates back and replaces the original pleadings of ISW’s first-filed suit. See TEX.R. CIV. P. 65 (a substituted pleading takes the place of the prior pleading); Brown, 80 S.W.3d at 555 (stating that if the petition does not affirmatively demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency and the plaintiff should be afforded the opportunity to amend); Tex. Ass’n of Bus., 852 S.W.2d at 446 (noting that litigant can amend pleadings to allege facts conferring standing); see also Lovato, 171 S.W.3d at 852 (post-limitations substitution of a plaintiff asserting the same cause of action in a different capacity relates back). We therefore overrule Lycoming’s fourteenth issue, and we determine whether ISW has standing to pursue the adjudicated claims asserted in its Sixth Amended Original Petition and First Trial Amendment. C. ISW’s Claims Considered Separately from IFI’s Claims In considering ISW’s claims, we are mindful that a plaintiff may have standing to litigate some of the claims raised but lack standing to litigate others. See Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 392 (Tex.2000) (holding that the plaintiff had standing to litigate all of his asserted claims with the exception of claims requiring consumer status); Mazon Assocs., Inc. v. Comerica Bank, Tex., 195 S.W.3d 800, 803 (Tex.App.-Dallas 2006, no pet.) (“The determination of whether a plaintiff possesses standing to assert a particular claim depends on the facts pleaded and the cause of action asserted.” (quoting Everett v. TK-Taito, L.L.C., 178 S.W.3d 844, 853 (Tex.App.-Fort Worth 2005, no pet.))). We are required to dismiss only those claims over which we lack jurisdiction. Thomas v. Long, 207 S.W.3d 334, 338-39 (Tex.2006). Thus, we consider the adjudicated claims separately to determine whether ISW possessed standing for each. See Casteel, 22 S.W.3d at 392; SCI Tex. Funeral Servs., Inc. v. Hijar, 214 S.W.3d 148, 153 (Tex.App.-EI Paso 2007, pet. denied) (op. on reh’g) (“When standing is placed at issue, the question is whether the person whose standing is challenged is a proper party to request an adjudication of a particular issue and not whether the issue itself is justiciable.”) (emphasis added) (citing Flast v. Cohen, 392 U.S. 83, 99-100, 88 S.Ct. 1942, 1952, 20 L.Ed.2d 947 (1968)). D. Extent of Standing I. Declaratory Judgment Lycoming correctly points out in its first issue that ISW is not a party to the MSA or its Addenda, and argues that ISW therefore lacks standing to seek declaratory judgment regarding these agreements. We disagree. Reviewing the jurisdictional evidence de novo, we note that the first paragraph of section 5.3 of the MSA provides that Lycoming must indemnify IFI and IFI’s affiliates and hold them harmless from losses and costs incurred by IFI in certain circumstances. Here, ISW is an affiliate of IFI and a potential indem-nitee under the terms of the MSA. See Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex.1993) (stating that an indemnity agreement “creates a potential cause of action in the indemni-tee against the indemnitor”). In addition, the Assignment Agreement requires ISW to indemnify IFI, and Lycoming has requested indemnity from IFI. Thus, ISW has a justiciable interest in determining the validity and effect of the indemnity provisions of the MSA. See TEX. CIV. PRAC. & REM.CODE ANN. § 37.004 (Vernon Supp.2007) (a person “interested” under a written contract or whose rights are affected by a contract may have questions of contract construction or validity determined by the court); cf. Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931, 939-40 (Tex.1991) (“ ‘[A] party to or interested in a contract may, by legal proceedings or otherwise in good faith, interfere with the execution of the contract where there is a bona fide doubt as to his rights under it.’ ” (quoting Hardin v. Majors, 246 S.W. 100, 102 (Tex.Civ.App.-Amarillo 1922, no writ))). We conclude that, as IFI’s affiliate and potential indemnitor and as Lycoming’s potential indemnitee, ISW has standing to seek declaratory relief on behalf of both IFI and ISW. Our analysis is not affected by Lycoming’s argument that it eliminated the justiciable controversy between the parties — and thus, ISW’s standing — by offering to stipulate that Lycoming would not seek indemnification from ISW. Because ISW’s asserted claims are not dependent on allegations that Lycoming may seek indemnification directly from ISW, its standing is not affected by Lycoming’s proposed unilateral stipulation. We therefore overrule Lycoming’s sixteenth issue, and we overrule its first and third and issues as they pertain to ISW’s requests for declaratory judgment. 2. Tort Claims a. Claims Asserted on Behalf of IFI In its pleadings, ISW alleges, inter alia, that it asserts IFI’s claims as IFI’s attorney-in-fact pursuant to the Assignment Agreement. Lycoming argues that ISW fails to satisfy the conditions under which an agent has standing to maintain a suit in its own name. However, the cases on which Lycoming relies are distinguishable in that the agents in those proceedings prosecuted or defended actions solely in their own names but not on behalf of the principal. See, e.g., Perry v. Breland, 16 S.W.3d 182, 187 (TexApp.-Eastland 2000, pet. denied) (car dealer’s agent brought suit in his own name; no indication he sued on behalf of dealer); Wilson County Peanut Co. v. Hahn, 364 S.W.2d 468, 470 (Tex.Civ.App.-San Antonio 1963, no writ) (holding that seed purchaser lacked standing to sue seller’s agent); Tinsley v. Dowell, 87 Tex. 23, 27-28, 26 S.W. 946, 948 (1894) (holding that real estate agent who brought suit in his own name lacked standing to sue land purchaser who failed to complete transaction); see also Emmett Props., Inc., 167 S.W.3d at 371 (holding that intervening stockholders did not have an independent right to bring action for damage to corporation’s property and noting that stockholders did not intervene on behalf of the corporation); cf. Wilkinson v. Wilkinson, 956 S.W.2d 821, 822-23 (Tex-App.-Houston [1st Dist.] 1997) (holding that mother who did not bring suit as next friend had standing to assert minor son’s right to an accounting because she pleaded her status as managing conservator), op. withdrawn on reh’g, No. 01-96-00219-CV, 1998 WL 175885 (TexApp.-Houston [1st Dist.] April 2, 1998, no pet.) (prior opinion rendered moot when minor son reached the age of eighteen). Here, ISW specifically pleaded that it asserted claims on IFI’s behalf, and Lycoming does not dispute that IFI has a justiciable interest in these claims. In addition, the Assignment Agreement authorizes ISW to bring suit in its own name to assert certain claims on IFI’s behalf. The scope of that authority is a question of capacity, and no challenge to ISW’s capacity is before the court on appeal. We therefore agree with ISW that it has standing as IFI’s attorney-in-fact to litigate IFI’s tort claims. We conclude that ISW has standing to assert IFI’s tort claims as IFI’s putative attorney-in-fact; thus, we do not reach the remaining bases for ISW’s standing to assert IFI’s tort claims. b. Claims Asserted on Behalf of ISW Lycoming also contends that ISW lacks standing to assert its own claims of fraud and fraudulent inducement because ISW is neither a party nor a third-party beneficiary to the Second Addendum, and therefore cannot be the party defrauded. In support of this argument, Lycoming relies in part on Nobles v. Marcus, in which the Texas Supreme Court stated: It is a fundamental rule of law that only the person whose primary legal right has been breached may seek redress for an injury.... Without breach of a legal right belonging to the plaintiff[,] no cause of action can accrue to his benefit.... A party who was not defrauded by the conveyance has not suffered an invasion of a legal right and therefore does not have standing to bring suit based on that fraud. 533 S.W.2d 923, 927 (Tex.1976). Here, however, ISW alleges in its live pleadings that “IFI and ISW provided Lycoming with direct and constructive notice” that IFI had transferred the MSA and the forging facilities to ISW. ISW further alleges that IFI executed the Second Addendum on ISW’s behalf. After construing the pleadings liberally and considering the pleader’s intent, we conclude that ISW has alleged sufficient facts to confer standing to assert its claims of fraud and fraudulent inducement. Finally, Lycoming asserts that ISW lacks standing because neither ISW nor IFI suffered actual injury as a result of the fraudulent conduct alleged. But causation and damage are matters of proof, and the determination of standing does not require a plaintiff to “put on its case” simply to establish jurisdiction. See Bland Indep. Sch. Dist., 34 S.W.3d at 554. In determining standing, “a court may not weigh the claims’ merits but must consider only the plaintiffs’ pleadings and the evidence pertinent to the jurisdictional inquiry.” Brown, 80 S.W.3d at 555. Consideration of causation and damages goes beyond the jurisdictional inquiry and into the merits of the claims; but if a party lacks standing to assert a claim, the trial court has no jurisdiction over the merits, and the cause of action must be dismissed, leaving the merits undecided. Bell v. Moores, 832 S.W.2d 749, 753-54 (TexApp.-Houston [14th Dist.] 1992, writ denied). Because review of such matters would require consideration of evidence discussed infra that “goes to the heart of the merits,” we recognize ISW’s standing to pursue its claims to judgment. See CHCA E. Houston, L.P. v. Henderson, 99 S.W.3d 630, 633-34 (TexApp.-Houston [14th Dist.] 2003, no pet.) (finding standing for a putative successor-in-interest to assert a claim for breach of contract because “deciding who should pay whom on a contract goes to the heart of the merits, while standing is generally a question of law to be determined by the court from the pleadings”). We overrule the remainder of Lycoming’s first and third issues. IV. LEGAL SUFFICIENCY OF FRAUD DAMAGE EVIDENCE A. Standard of Review In its eighth issue, Lycoming challenges the legal sufficiency of the evidence supporting the actual damages the jury found were caused by Lycoming’s fraud or fraudulent inducement. To determine whether the evidence is legally sufficient to support the judgment, we review the entire record, crediting favorable evidence if reasonable jurors could and disregarding contrary evidence unless reasonable jurors could not. See City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.2005). We assume that jurors decided questions of credibility or conflicting evidence in favor of the verdict if they reasonably could do so. Id. at 819, 820. We do not substitute our judgment for that of the trier-of-fact if the evidence falls within this zone of reasonable disagreement. Id. at 822. If the evidence would enable reasonable and fair-minded people to differ in their conclusions, then it is legally sufficient to support the verdict. Id. B. Insufficient Evidence of Harm The jury was advised that, to find Ly-coming liable for fraud or fraudulent inducement, it must find that “Interstate” was injured as a result of its reliance on Lycoming’s misrepresentations or non-disclosures. But the only damages the jury found were caused by Lycoming’s fraudulent conduct are (1) the increase in aviation products liability insurance premiums sustained in the past, and (2) reasonable and necessary expert expenses incurred in the investigation of the crankshaft failures. For the reasons stated below, we conclude that neither category of damages is recoverable by ISW on its own behalf or on behalf of IFI. 1. Increased Aviation Products Liability Insurance Premiums On appeal, Lycoming argues that the record does not support an award of actual damages consisting of the unreim-bursed increase in “Interstate’s” aviation products liability insurance premiums, and moreover, such damages are not legally cognizable. ISW contends that the increase in insurance premiums was foreseeable and directly traceable to Lycoming’s fraud. The evidence in support of this damage award consists almost entirely of the testimony of Ed Buker, who is the president and CEO of Citation and the chairman of both IFI and ISW. Buker testified that the insurance premiums increased because “Interstate” made an insurance claim in the summer of 2002 as a result of Lycom-ing’s demand for indemnity. Specifically, Buker testified that the insurance premiums were $90,000 in June 2002, $795,000 in November 2002, $1,175 million in November 2003, and $1,051 million in November 2004. At trial, ISW argued that this amounted to a $2.7 million increase in insurance premiums above the $90,000 baseline. According to Buker, “Interstate” passed on $1 million of this increase to Lycoming by increasing the price of crankshaft forgings produced pursuant to the Replacement Crankshaft Agreement, leaving an unreimbursed insurance premium increase of $1.7 million. We conclude there is legally insufficient evidence to support this damage award. Initially, we note there is no evidence that Lycoming’s demand for contractual indemnity would have been a covered claim under the relevant insurance policy. Moreover, Buker testified only that the insurance premiums increased after “Interstate” informed its insurer of Lycoming’s claim for indemnity, but in our review of the record, we have not discovered evidence indicating when this demand was made. Although the record contains Ly-coming’s demands for indemnity from IFI in connection with the forgings that were not heat-treated, this claim was settled, and was not at issue in this lawsuit. The record also reflects Lycoming’s demands for indemnity as asserted in the Pennsylvania actions against IFI and Citation, but those demands were made after this suit was filed and after “Interstate’s” insurance premiums had increased. In our review of the record, we have discovered no evidence that Lycoming demanded indemnity from ISW, and no acts by Lycoming that would result in an increase in “Interstate’s” insurance premiums in the summer of 2002. In addition, Buker’s testimony does not link the premium increase with Lycoming’s fraudulent conduct; instead, his testimony indicates he simply inferred that the premiums were increased because “Interstate” informed its insurer that Ly-coming requested indemnity. But damages “cannot be based on mere speculation and hypothesis.” McMillin v. State Farm Lloyds, 180 S.W.3d 183, 202 (TexApp-Austin 2005, pet. denied) (citing Formosa Plastics Corp. USA v. Presidio Engineers & Contractors, Inc., 960 S.W.2d 41, 49-50 (Tex.1998)). ISW bore the burden to establish that Lycoming’s fraud or fraudulent inducement caused damages, not that Lycoming’s demand for indemnity was harmful. And ISW produced no evidence that the premium increase was the result of Lycoming’s fraud or of the fraudulently-induced Second Addendum. There also is no evidence that a premium increase was foreseeable. In fact, IFI successfully negotiated for the deletion of the provision in the MSA that would have required IFI to maintain insurance. And it is uncontroverted that the same policy insured an affiliated company, Rancho Cu-camonga, which also manufactured aviation products. Indeed, ISW offered uncontro-verted testimony that Citation is the policyholder, and the policy affords coverage to Citation and all of its subsidiaries. Finally, it is uncontroverted that the premiums were paid by Citation. Citation is not a party to the MSA, its Addenda, or this lawsuit, and ISW asserted no claims on Citation’s behalf. Thus, there is no evidence to support the award of damages to ISW, on its own behalf or on behalf of IFI, for Citation’s increased aviation products liability insurance premiums. Lycoming argues that the absence of evidence tracing the premium increase to Lycoming’s conduct illustrates one of the primary problems with recognizing such a category of damages: increased insurance premiums result from many concurring factors, including market forces and the internal financial practices of the carrier. See Higbie Roth Constr. Co. v. Houston Shell & Concrete, 1 S.W.3d 808, 812-13 (TexApp.-Houston [1st Dist.] 1999, pet. denied) (citing Whirley Indus., Inc. v. Segel, 316 Pa.Super. 75, 82, 462 A.2d 800, 804 (1983) (per curiam)); cf. Moiel v. Sandlin, 571 S.W.2d 567, 571 (Tex.Civ.App.-Corpus Christi 1978, no writ) (stating that the increased insurance premiums in a malicious prosecution case are “more analogous to a prepayment for attorney’s fees and expenses incurred in defending ... cases which are an incident of defending any civil suit .... [and are] not necessarily attributable solely” to the defendant’s wrongful suit). ISW argues that “Interstate’s premiums rose solely because of Lycoming’s indemnity claim — excluding the influence of any market factors.” But the record contains no evidence concerning these factors or the carrier’s assessment of risk posed by any of the various companies covered by the policy. Even assuming that the premium increases were linked to Lycoming’s demand for indemnity, the record contains no evidence that Lycoming’s fraud or fraudulent inducement was the cause of the premium increase. Instead, the uncontroverted evidence establishes that the policy and the premiums were the responsibility of Citation, and there is no allegation that Ly-coming defrauded Citation. To the contrary, Citation’s interests are not at issue in this case. Because we conclude there is less than a scintilla of evidence that Ly-coming’s fraudulent conduct injured ISW or IFI by causing them increased aviation products liability insurance premiums, we do not reach Lycoming’s argument that “opening the door to these damages would enter a field with no sensible stopping point.” See Vogel v. Liberty Mut. Ins. Co., 214 Wis.2d 443, 451, 571 N.W.2d 704, 708 (Wis.App.1997). 2. Expert Witnesses’Fees Lycoming also contends that the fees paid to expert witnesses whose work was performed in preparation for litigation are not recoverable as damages. See Stanley Stores, Inc. v. Chavana, 909 S.W.2d 554, 568 (Tex.App.-Corpus Christi 1995, writ denied) (holding the trial court erred in making an equitable award of expert witness fees absent statutory authorization); Richards v. Mena, 907 S.W.2d 566, 571 (Tex.App.-Corpus Christi 1995, writ dism’d by agr.) (holding that costs of experts “are incidental expenses in preparation for trial and not recoverab