Citations
- 562 S.W.3d 451
Full opinion text
Memorandum Opinion by Chief Justice Valdez
This appeal arises from a judgment entered in favor of appellee Carduco, Inc.
d/b/a Cardenas Metroplex (Carduco) and against appellants Mercedes-Benz USA, LLC; Jack L. Holt, a Mercedes Regional Franchise Manager; Craig W. Dearing, a Mercedes After-Sales Operations Manager; and Frank J. Oswald Jr., a Mercedes After-Sales Operations Manager, (collectively "MBUSA") in a suit for fraud in the inducement and negligent misrepresentation. By nine issues, MBUSA contend: (1-2) the reliance element of Carduco's claims was not established as a matter of law because (a) the alleged misrepresentations, whether oral representations or non-disclosures, conflicted with the terms of the parties' contract, and (b) Carduco contractually promised that it was not relying on any representations; (3) appellants did not owe a duty to disclose to Cardenas; (4) charge errors occurred; (5) the trial court abused its discretion by admitting evidence that MBUSA is indemnifying the individual defendants; (6) the trial court abused its discretion by refusing to require Carduco's counsel to fully open his jury argument; (7) cumulative error probably caused the rendition of an improper verdict; (8) no evidence, or at least factually insufficient evidence, supports the award of punitive damages; and (9) the punitive damages awards are excessive and unconstitutional. We affirm as modified.
I. BACKGROUND
The facts giving rise to this case involves the following car dealerships and distributor: (1) Carduco, owned by Renato C. Cardenas, Sr. (Renato); (2) Autoplex Harlingen a/k/a Cardenas Autoplex, Inc. Harlingen (Autoplex), owned by Renato's son, Renato G. Cardenas (Rene), and later purchased by Carduco; (3) Heller-Bird Motors, owned by Ron Heller and Bill Bird; and (4) MBUSA, the North American distributor for Mercedes products, which is a wholly owned subsidiary of Daimler AG.
It is undisputed that from 1993 through 2009, Rene owned and operated a Mercedes-Benz dealership in Harlingen as part of Autoplex. It is also undisputed that in 2007 MBUSA encouraged Autoplex to relocate to McAllen, Texas, a location shown by MBUSA's studies to be the optimal location for customer convenience and for maximizing sales in the Rio Grande Valley. According to Renato, he personally knew that "the Mercedes people were there with Rene making plans to move it" because he was to do the construction on his son's new location in McAllen and had met with Rene and "Mercedes people" regarding the move. However, in the spring of 2008, MBUSA sent Rene a termination notice because, as Holt explained, Autoplex "was not meeting any [MBUSA's] performance standards." Autoplex had also failed to file a required IRS form on the sale of a single car in 2005 and received a corporate felony conviction.
The termination proceedings were mooted in April 2008 when Carduco entered into an asset-purchase agreement with Rene for Autoplex. The purchase was conditioned on, among other things, Carduco receiving MBUSA's approval to become a franchised dealer. On May 8, 2008, Carduco applied to Mercedes-Benz for the Mercedes-Benz Harlingen franchise. According to Renato, he believed that MBUSA's approval of moving his franchise from Harlingen to McAllen was "a foregone conclusion." He based this understanding on the history MBUSA had with Rene, on Renato's own discussions and meetings with Dearing, and Oswald as the parties reviewed the selection of a location for Renato's new franchise in McAllen, and on MBUSA's alleged non-disclosure of certain information-that MBUSA was working to put another dealer in the McAllen area and had sent a final letter of intent to Heller-Bird Motors for the McAllen-area dealership.
On September 23, 2008, MBUSA's president and chief executive officer Ernst Lieb and General Manager Tracey Matura executed a binding letter of intent with Heller-Bird Motors to open a Mercedes-Benz dealership in San Juan, Texas. Lieb and Matura then approved Carduco's application to become a franchised Mercedes-Benz dealer in December 2008. On June 2, 2009, Carduco completed its purchase of Autoplex's assets. And on June 24, 2009, after Carduco received its state motor vehicle dealer license, Carduco and MBUSA executed the Mercedes-Benz Passenger Car Dealer Agreement that incorporated a number of other agreements (the Dealer Agreement).
In August 2009 Holt met with Carduco and other Texas Mercedes-Benz dealers to report that MBUSA was appointing Heller-Bird to a new dealership near McAllen. Within days of that meeting, Carduco formally requested a relocation of its Mercedes-Benz dealership to the McAllen area. In October, MBUSA rejected the request. In December 2010, Heller-Bird opened Mercedes-Benz of San Juan, and in March 2011, MBUSA informed Carduco that it was "implementing a realignment of certain zip codes," including the realignment of certain demographic areas of the Harlingen dealership's Area of Influence ("AOI") to Heller-Bird.
Carduco sued MBUSA, Holt, Oswald, and Dearing for fraud in the inducement and Oswald and Dearing for negligent misrepresentation. Carduco alleged that MBUSA induced it to acquire Autoplex and a Mercedes-Benz franchise in Harlingen with the expectation of relocating and operating a Mercedes-Benz dealership in the McAllen area. Carduco claimed, among other things, that "Oswald and Dearing represented to Autoplex and Carduco that MBUSA had no plans to put another dealership in the McAllen, Texas sales area and that Carduco should submit plans to MBUSA to construct and operate an Autohaus facility in McAllen, Texas." After the trial court heard evidence that MBUSA had failed to preserve emails from potential witnesses after becoming aware of possible litigation in this case and had not instructed witnesses to preserve those emails after learning of Carduco's suit, the trial court granted Carduco's request for a spoliation instruction in the jury charge.
The jury found Mercedes-Benz, Holt, Oswald, and Dearing liable for fraud in the inducement and found Dearing and Oswald liable for negligent misrepresentation. It awarded Carduco $15,307,722 in benefit-of-the-bargain damages and $6,085,195 in out-of-pocket damages. In addition, the jury found by clear and convincing evidence that the harm to Carduco resulted from fraud or malice. It then found beyond a reasonable doubt that each defendant engaged in conduct defined as the felony of securing execution of a document by deception. The jury assessed punitive damages of $100 million against MBUSA, $10 million against Holt, $2.5 million against Dearing, and $2.5 million against Oswald. The trial court rendered judgment on the verdict. This appeal ensued.
II. SUFFICIENCY OF THE EVIDENCE
By its first issue, relying on Playboy Enterprises, Inc. v. Editorial Caballero, S.A. de C.V., 202 S.W.3d 250, 258 (Tex.App.-Corpus Christi 2006, pet. denied), MBUSA challenges, as a matter of law, the reliance element of Carduco's fraudulent inducement and negligent misrepresentation claims, including any claim based on a non-disclosure theory. MBUSA direct this Court to the following terms of the Dealer Agreement that it assert directly conflict with Carduco's claims of misrepresentation and non-disclosure.
Dealer ... understands that its appointment as a Dealer (i) does not grant it an exclusive right to sell Mercedes-Benz Passenger Car Products in its Area of Influence [AOI] or any other geographic area ....
....
Unless otherwise provided in the Dealer AOI Space Analysis Addendum, MBUSA hereby approves the location(s) of the Dealership Facilities identified in the Final Paragraph for the exclusive purpose of: (i) showroom and sales facility for Mercedes-Benz Passenger Cars; (ii) service and parts facility for Mercedes-Benz Passenger Cars; (iii) facilities for display and sale of pre-owned Mercedes-Benz vehicles; and (iv) if applicable, other facilities for such other purpose(s) as may be identified in the Final Paragraph.... Dealer shall not move, relocate or change the designated usage of function of the Approved Location(s) or any of the Dealership Facilities without the prior written consent of MBUSA....
MBUSA has attempted to limit our analysis of the jury's finding of justifiable reliance on two alleged misrepresentations or non-disclosures. Specifically, MBUSA argues that the jury found that it had either misrepresented only the following: (1) that Carduco had a right to relocate; and/or (2) that Carduco had the right of exclusivity in its AOI. Therefore, according to MBUSA because the terms of the Dealer Agreement directly contradict these findings, as a matter of law, the evidence is insufficient to support the jury's finding of justifiable reliance. For the reasons explained further below, we conclude that the jury's finding of fraud was not limited to only these two grounds.
In its jury charge, the trial court defined the term misrepresentation and stated that a non-disclosure could also form the basis of a fraud claim if all of the elements of fraud were proven. However, the jury was not instructed that it was limited to finding fraud only if it determined that MBUSA either (1) told Carduco that it could move to McAllen or (2) failed to tell Carduco that it would not be the exclusive dealership in its AOI. Instead, the jury was free to come to its own conclusion concerning what MBUSA misrepresented or failed to disclose to Carduco based on the evidence presented at trial. Therefore, if the jury found that MBUSA made other misrepresentations or non-disclosures that do not directly contradict the Dealer Agreement, then Playboy does not apply, and MBUSA could not meet its appellate burden of proving that, as a matter of law, Carduco could not have justifiably relied on the misrepresentations or non-disclosures.
And, as explained further below, another basis exists for the jury to have found that MBUSA misrepresented, failed to disclose, or actively concealed a material fact that did not directly contradict the Dealer Agreement's terms cited by MBUSA on appeal. In addition, even if MBUSA's misrepresentations and nondisclosures related to exclusivity or permission to move to McAllen, this case is wholly distinguishable from Playboy. See Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 179 (Tex.1997) (explaining that fraud vitiates a contract when the fraud constitutes "something more than merely oral representations that conflict with the terms of the written contract" and instead the fraud "prevents the coming into existence of any valid contract at all.").
A. Applicable Law
Causes of action for fraudulent inducement and negligent misrepresentation require proof of reliance. Miller Global Props., LLC v. Marriott Int'l, Inc., 418 S.W.3d 342, 347 (Tex.App.-Dallas 2013, pet. denied) (citing Haase v. Glazner, 62 S.W.3d 795, 798 (Tex.2001) ; Fed. Land Bank Ass'n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex.1991) ). "[R]eliance upon an oral representation that is directly contradicted by the express, unambiguous terms of a written agreement between the parties is not justified as a matter of law." Playboy Enterprises, Inc., 202 S.W.3d at 258 ; see DRC Parts & Accessories, L.L.C. v. VM Motori, S.P.A., 112 S.W.3d 854, 858 (Tex.App.-Houston [14th Dist.] 2003, pet. denied) (op. on reh'g) (en banc) (setting out that in order to negate justifiable reliance in this way, the extra-contractual misrepresentation must be "directly contradicted by the express, unambiguous terms of a written agreement between the parties"). We apply these principles to fraud claims based on alleged non-disclosures because reliance is also an element of fraud by non-disclosure or fraud by omission. See Horizon Shipbuilding, Inc. v. Blyn II Holding, LLC, 324 S.W.3d 840, 850 (Tex.App.-Houston [14th Dist.] 2010, no pet.) (listing the elements of fraud by non-disclosure or fraud by omission as: (1) the defendant failed to disclose facts to the plaintiff when the defendant had a duty to disclose such facts; (2) the facts were material; (3) the defendant knew of the facts; (4) the defendant knew that the plaintiff was ignorant of the facts and did not have an equal opportunity to discover the truth; (5) the defendant was deliberately silent and failed to disclose the facts with the intent to induce the plaintiff to take some action; (6) the plaintiff relied on the omission ; and (7) the plaintiff suffered injury as a result) (emphasis added) ).
B. The Evidence
At trial, Holt, MBUSA's central regional manager, testified that prior to termination of Rene's Mercedes-Benz franchise, it had been MBUSA's desire that Rene move the dealership to McAllen due to a market analysis showing that the McAllen location would be optimal for Mercedes-Benz sales and that as far back as 2005, studies showed that the best strategy in the Rio Grande Valley would have been to relocate the Harlingen dealership to McAllen. Holt agreed that in 2005, the market study concluded that the Rio Grande Valley only required one dealership performing at the national average of sales and that the Mercedes-Benz brand had been performing above the average. Holt testified that in 2005, he believed that Rene was moving the dealership to McAllen and had asked Rene to "[o]btain a site location that is approved by" MBUSA. Holt stated that when MBUSA asked Rene to move to McAllen, Rene still had to formally get approval from MBUSA to move, but that the move would not have been denied because it was within the dealership's AOI. When asked by Carduco's trial counsel whether he had previously testified that "Autoplex had been approved to move to McAllen, but the specific site that they would have been permitted to move into still needed to be approved," Holt replied, "Yes. I will admit, I know where you're going there, and I wasn't accurate there. I was wrong. Was he preapproved in 2007 to relocate his store? Not without approval." Holt continued, "I was wrong, okay. I'm not denying that." During Holt's testimony, Carduco's trial counsel read portions of Holt's deposition into the record wherein Carduco's trial counsel asked, "The spot needed to be approved, not the concept of moving, right?" Holt responded, "You're right, we would have approved it."
The jury heard evidence that upon hearing that Rene was selling the dealership, Holt was very excited and stated to a Mercedes-Benz employee, Fred Newcomb, "You made my day." However, when he discovered that Renato had agreed to buy Rene's dealership, Holt and Newcomb concluded that the sale was a "sham" and told others that MBUSA would "try to work around this" sale. Newcomb told Holt, "the proposed purchaser appears to be [Rene's] father," and Holt replied, "So much for this buy/sell" and asked, "[l]s this legal? Can he sell it to his father to avoid this termination" and "Can we exercise right of first refusal in this case?" Holt then stated, "I think you agree we need to find a new dealer for this area." Holt did not specifically explain why he dreaded a sale of Autoplex by Rene to his father, Renato. However, Holt testified that, at the time, he believed that Renato and Rene were engaging in some sort of sham.
Subsequently, Newcomb sent an email to Holt stating, "Mark Kelly [one of MBUSA's in-house lawyers] has sent this buy/sell to Buddy Ferguson [an outside lawyer] to research if this sham buy/sell has to be honored." This occurred one day after the buy/sell agreement had been received by MBUSA. Holt agreed that in this situation, he had determined that Rene's sale of the dealership was a sham. Newcomb also agreed that for a reason he could not recall, he had also concluded that the buy/sell was a sham. MBUSA's former employee, Damon Blakemore sent an email to Holt stating, "[Newcomb's] note mentioned the sale to Renato Cardenas, Sr. It sounds as if they're trying to keep it in the family or am I missing something?" Holt replied, "We will try to work around this. We still want to terminate or find a good partner."
The jury heard evidence that despite a clause in their dealer agreement giving MBUSA the right of first refusal, under Texas law, MBUSA could not block Rene's sale of the dealership to Carduco and that because they had "the same last name," MBUSA considered Rene and Renato to be "one and the same" and considered the entire Cardenas family to be "all the same people." Holt stated, "There is no God" after discovering that the right of first refusal clause in the dealer agreement could not be enforced and that MBUSA could not prevent the sale of the dealership. Again, Holt did not explain his reaction to Rene's sale of Autoplex to Renato other than to state he believed it to be some sort of sham.
Newcomb testified that he received the buy/sell agreement from Carduco on May 13, 2008. According to Newcomb, he considered the buy/sale agreement a sham, and on May 16, 2008, Newcomb attended a "Network Review Committee" meeting with Tracey Matura, MBUSA's general manager, Frank Berenz, MBUSA's general counsel, and Ernst Lieb, MBUSA's president and chief executive officer. An email written by an MBUSA employee documents that the committee discussed approaching Ron Heller about the McAllen site and that Heller would be required to make efforts to purchase the Harlingen dealership if it came up for sale within five years. The trial court admitted a July 2008 draft of a letter of intent written by MBUSA for Heller-Bird to sign stating, "Heller-Bird agrees to use its best efforts to acquire the Mercedes-Benz dealership in Harlingen, Texas. If acquired, Heller-Bird will consolidate both the McAllen and Harlingen operations into one location at the McAllen location."
Newcomb acknowledged that he had written "notes to [himself] of [the] potential steps in the process if [MBUSA] were adding a new [dealership] in McAllen" and that the process included providing "courtesy notification" to Renato/Carduco of the new dealership. Newcomb testified that this "courtesy notification" was never made. When asked by MBUSA's trial counsel, Newcomb denied that it was MBUSA's expectation that Carduco would fail and that Heller-Bird would then "swoop in and pick up the pieces." Newcomb explained that MBUSA's "expectation always is that we will gain additional business, not business from any of our existing dealers, gain additional business, serve the customers better, both in terms of customer convenience as well as additional services capacity, sales capacity...." Newcomb said that when a new dealer is added, MBUSA's intent is not for the new dealership to take business away from an existing franchise. Newcomb emphasized that MBUSA did not want to take business from existing Mercedes-Benz dealers but instead wanted to take business from its competitor manufacturers. However, evidence was presented that the Heller-Bird dealership in Pharr did take away business from Carduco in Harlingen.
During Newcomb's testimony, Carduco's trial counsel played excerpts from Newcomb's deposition. In one excerpt, Carduco's trial counsel asked, "Would you agree with me that the [market] analysis would reflect that there would be a substantial impact in any effectiveness analysis with respect to the Harlingen AOI after the addition of the" Heller-Bird dealership? Newcomb replied, "Yes."
The jury heard evidence that on September 24, 2008, Renato, Frank Oswald, and Craig Dearing attended a meeting where Dearing took notes entitled "buy/sell discussions." Evidence was presented that the notes were circulated to and edited by MBUSA's executives who were not present during the meeting so that they could "be comfortable" with the reflected conversations and that once the edited "memorialization" had been approved by MBUSA's executives, Dearing instructed everyone to destroy any earlier drafts of the notes "to ensure that no conflicting documents existe[d]." Specifically, Holt testified that Oswald and Dearing took written notes at their meeting with Renato, that Dearing typed his notes, sent the typed version to Holt, among others, asked if Holt was "comfortable" with the notes, indicated that other MBUSA employees who were not present at the meeting had revised his originally circulated notes, and then stated, "The previous document, please destroy, delete to ensure no conflicting documents exist." Holt agreed that the "original document" was destroyed. However, even the edited notes showed that Renato intended to move Carduco to McAllen.
Dearing testified that although he used the term "buy/sell discussions" in his type-written notes, he was not familiar with that term. Carduco's trial counsel played a portion of Dearing's deposition where he was asked which MBUSA employee is usually responsible for engaging in buy/sell discussions with prospective dealers, and Dearing replied, "That, typically speaking, is somebody that's in charge of franchise development at the regional level and is also at the national level." During his deposition, Dearing responded that, at that time, Newcomb was in charge nationally for franchise strategy and that he could not recall who was responsible regionally. After playing these portions of the deposition, Carduco's trial counsel asked if Dearing took it upon himself to engage in buy/sell discussions with Renato. Dearing replied, "No, I wasn't involved in buy/sell discussions. What I was involved with was doing a special tool and equipment survey...."
During Dearing's testimony, Carduco's trial counsel referred to plaintiff's exhibit 21, a letter dated July 21, 2008, and addressed to Carduco's attorney at the time from Tom Waters, an MBUSA employee.
The letter from Waters stated, "We need the opportunity to speak with [Renato] to discuss his plans for conducting Mercedes-Benz operations in the dealership facility. Please advise if we can contact him directly to schedule this conference." Dearing testified that he was not aware that MBUSA wanted to speak to Renato regarding his plans for the facility. Dearing did not know who at MBUSA would have conducted this interview of Renato that MBUSA requested. Dearing denied that he had conducted said interview and that he had communicated with Waters regarding such an interview. Dearing agreed that he first went to Harlingen and conducted a special tools inventory before he traveled to Brownsville to meet with Renato in his office to discuss the inventory.
Dearing acknowledged that his typed notes indicated that one of his questions to Renato was "what are your present plans for the dealership?" Dearing could not recall taking notes during his meeting with Renato but "surmise[d]" that he had "probably had done it on paper ...." and "most likely" taken handwritten notes. Dearing testified that eventually he typed his notes. Dearing testified that he has not attempted to find his handwritten notes taken during the meeting with Renato. Dearing acknowledged that he revised the notes he took at his meeting with Renato and that he circulated a copy of the revised typed notes to Holt, among others. Dearing "could not say" how many revisions he made when he transcribed his handwritten notes into a word processing document. Dearing claimed that generally, he only keeps the final version of his notes so that he does not become confused. When asked if he told the recipients of the revised notes to destroy the previous document, Dearing said, "I'm sure I did." Dearing testified that he asked MBUSA employees who had not attended the meeting with Renato for comments on his notes because he wanted to ensure that "everyone receives and is comfortable with the information that's going to be conveyed, especially to a prospective new dealer." Dearing agreed that the purpose of the notes was to convey to MBUSA what Renato had communicated to Dearing during the meeting. Dearing testified that he documented that Renato was told that MBUSA wanted to be transparent and agreed that meant being open and honest. Dearing testified that he did not include everything that was discussed at the meeting with Renato in his notes and that the notes were not "intended to go ahead and be all encompassing." Carduco's trial counsel asked, "Buy/sell discussions[ ] that was your term, right, Mr. Dearing?" Dearing replied, "It was, and it was inaccurate. By reading this today, that was an inaccurate statement on my part."
Dearing denied knowing that Heller-Bird was opening a new dealership in the McAllen area and claimed that all he knew was that MBUSA was conducting "open point discussions." The trial court admitted an August 5, 2008 email from Holt to Dearing and Oswald stating, "The buy/sell is still going forward with Rene and his father. We are still working on adding a new point in McAllen. This is not to be made public." Dearing testified that although the email does not state "open point," from his perspective, when Holt said "new point," he was referring to an open point, which is not the same as opening a new dealership.
According to Dearing, prior to his meeting with Renato, he flew to Chicago and met with Holt to discuss his special tool and equipment survey and during his conversation with Holt, he learned that an "open point" existed in McAllen. Dearing testified that he then asked Holt whether he should tell Renato about this open point in the McAllen area. Portions of Dearing's deposition were then played for the jury, which included the following colloquy:
Q: Did you ever suggest to anybody that Carduco, Inc. should be informed about the decision to award the Heller-Bird dealership in the McAllen area prior to Carduco, Inc.'s closing on its acquisition of the Harlingen dealership?
A: Yes.
Q: Who did you make that suggestion to?
A: Jack Holt.
Q: When did you make that suggestion?
A: Probably prior to when I went down to do the special tool analysis.
Q: What did Mr. Holt say in response?
A: He said 'no.'
Carduco's trial counsel also played the following portion of Dearing's deposition:
Q: When you informed Mr. Holt that Carduco shouldn't be made aware of this possibility, he informed you, that Mercedes-Benz would not be letting Carduco know of that fact [that a new dealership was planned in the McAllen area], correct?
A: What I was trying to state is that I don't know during that time frame one way or another whether or not it was Heller-Bird, other than there was some buy/sell discussions of a new point in the McAllen area, and that was the limitations of what-
Dearing stated that he instructed Renato to develop two plans based on his desire to move to McAllen in the future. Dearing acknowledged that because he is not familiar with the process of relocating a dealership, he did not tell Renato exactly what he needed to do in order to get approval from MBUSA to move Carduco to McAllen. Dearing did not tell Renato that a point had opened in the McAllen area.
Rene and Renato testified that Oswald and Blakemore traveled with Rene to look at sites Renato believed would be good locations to move Carduco into the McAllen area. Holt testified that although Heller-Bird had already signed its dealership agreement with MBUSA to open its dealership in McAllen, neither Oswald nor Blakemore told Renato or Rene about the Heller-Bird dealership. Instead, Renato was instructed to present the sites to Holt for his final approval. During his testimony, Holt agreed with Carduco's trial counsel that it would have been misleading for Oswald to travel to sites in the McAllen area with Carduco's representatives and withhold that Heller-Bird had already been approved in McAllen.
Ernest Manuel, Ph.D., Carduco's expert regarding the car dealership business, testified that an AOI is assigned to one dealership in the auto industry, and that once Heller-Bird opened, MBUSA defined separate "AOIs for Harlingen and for San Juan, as part of the process, [MBUSA] decided apparently to give [the Starr County] zip code" to the Laredo Mercedes-Benz dealership. Regarding Carduco's and Heller-Bird's AOI, Dr. Manuel testified that MBUSA "divided the market between Harlingen and San Juan" and MBUSA
"pulled out" one zip code that went to Laredo and then they divided the valley into two parts. Dr. Manuel testified that after MBUSA reassigned some of the zip codes in Carduco's AOI to Heller-Bird, Heller-Bird's AOI included 66.4% of the total population of the Rio Grande Valley and that in his opinion, those customers would more than likely shop at the dealership-Heller-Bird-that was closer to them and more convenient. Regarding the higher income households, that is, those who make at least $100,000 per year, Dr. Manuel stated that two-thirds of those households were within Heller-Bird's AOI, while only one-third was in Carduco's AOI.
Dr. Manuel testified that as far as sales were concerned, sixty-five percent of the Mercedes-Benz buyers were located in Heller-Bird's AOI and the other one-third were in Carduco's AOI. Dr. Manuel explained that based on an analysis of Carduco's sales before and after Heller-Bird's opening, he created several maps showing a decline in Carduco's sales to customers from the west side of the Rio Grande Valley where Heller-Bird was located. Dr. Manuel said that prior to the Heller-Bird dealership, Carduco sold the majority of its Mercedes-Benz vehicles to customers from the McAllen and Mission, Texas areas. However, once Heller-Bird opened, Carduco's sales to customers from the west side of the Valley had "very much thinned out" in the first nine months of 2011. Dr. Manuel said, "[Heller-Bird] of San Juan is taking all of that business over there." Dr. Manuel specified that in 2010, Carduco sold sixty-three Mercedes-Benz vehicles to customers from the east side of its AOI and ninety-two to west-side customers, but once Heller-Bird opened in 2011, although Carduco's sales to customers from the east side went up slightly to eighty-five, it's sales to customers from the west side of the Valley went from ninety-two to thirty-one, down by 66.3 percent. Dr. Manuel opined, "Overall, in that first nine months, Carduco's sales declined twenty percent even though the market was going up. The market was better in 2011 than 2010, so even despite that, Carduco's sales went down almost 20 percent just in the first nine months." According to Dr. Manuel, for the full year, Carduco's sales to customer from the "San Juan side" were "down to almost 70, 69.85" percent. Dr. Manuel said, "So, in other words, the impact was growing over time."
Dr. Manuel testified that the same decline occurred to Carduco's repair and services department after Heller-Bird opened. Dr. Manuel explained, "The inference, the logical inference that you would make is people who had Mercedes-Benz [vehicles] and lived on the west side of the market found it more convenient to take their car into San Juan [Heller-Bird] and get it serviced there rather than drive over to Harlingen and get it serviced in Harlingen. So a big chunk of that service business just disappeared." According to Dr. Manuel, Carduco's service business for customers from the San Juan area declined by 76.85 percent. Dr. Manuel said, "So more than three-fourths of the Mercedes-Benz on that side of the market that Carduco had been servicing the prior year went to [Heller-Bird] of apparently went to [Heller-Bird] because there's no-the business just disappeared." According to Dr. Manuel, due to losing customers from the west side of the Valley, overall Carduco's service business declined by 51.86 percent in the nine months after Heller-Bird opened in San Juan compared to the nine months before it opened. Dr. Manuel said, "It's a very obvious impact from the San Juan store on Harlingen because two-thirds of the high-income households are on that west side of the market."
Dr. Manuel opined "that the reason [Carduco's] sales fell off in 2011 and 2012 to a reasonable degree of certainty is that it was caused by the opening of" Heller-Bird in San Juan at the end of 2010. When asked if that surprised him, Dr. Manuel said, "No. Given the demographic data that I looked at at the beginning where the market was carved up and two-thirds going to the west side [ (Heller-Bird side) ] and one-third going to the east side [ (Carduco side) ], that followed pretty much the way I expected it would." Dr. Manuel disagreed with MBUSA's witnesses who had testified that the impact of opening Heller-Bird in the Valley to Carduco would only have a short-term effect and said, "This is over two years now. We had 2010, and this 2011, 2012. So for at least two years now we have a significant loss." Dr. Manuel testified that MBUSA would have the same standards he used in determining Heller-Bird's impact to Carduco and that under those standards, "we're talking about roughly between 180 and 200 lost sales per year in those two years" to Carduco.
Dr. Manuel testified that MBUSA has only 352 dealerships in the United States, and "[t]hat's about one Mercedes-Benz dealer for every 3.5." Dr. Manuel stated that he did not think that the Valley could support more than one Mercedes-Benz dealership. On cross-examination by MBUSA's trial counsel, when asked whether the dealer agreement stated that MBUSA could alter or adjust a dealer's AOI at any time, Dr. Manuel replied, "That's what it says, but it's not true. It's not a true statement.... [T]hat provision is constrained by Texas law" and "I'm just saying that the agreement is constrained by Texas law in its operation as what Mercedes-Benz can and cannot do to the AOI and the dealer network." Although Dr. Manuel agreed that Texas law does not give a dealer an "exclusive right to an AOI," he explained, "[i]t gives the dealer a right to protest a change in the AOI or the addition of another dealer or relocation of another dealer within the-within certain geographic parameter of the existing dealer." Dr. Manuel stated that although the dealer agreement stated that there was no guarantee that Carduco would be the only dealer in the Valley, "Texas law does have provisions protecting the rights of dealers from market power of manufacturers. That's why the law exists."
Dr. Manuel disagreed with MBUSA's trial counsel, who stated that when MBUSA adds another dealer in an existing dealer's AOI in a different county more than fifteen miles away, the existing dealer could not protest. Dr. Manuel responded, "I disagree with the hypothetical because if you were to put another dealer in your AOI, just like we saw in this instance, when they [MBUSA] wanted to put [Heller-Bird] in the [Valley] AOI ... what did [MBUSA] do? They carved it up into two pieces. Part of the AOI went to [Heller-Bird] and part went to [Carduco]." Dr. Manuel concluded "you couldn't put a new dealer into an existing dealer's AOI without changing the AOI. You have to give the new dealer a territory."
MBUSA's trial counsel asked, "But if a dealer is added into a market before changing the AOI, that's not changing the dealer agreement, is it?" Dr. Manuel replied, "But you can't really do that because you couldn't put a dealer in without giving them a franchise agreement and the franchise agreement calls for them to have an AOI. So how [could you] put a dealer into an existing AOI without giving them an AOI in the first place? It would violate their own standard provisions. It can't happen." MBUSA's trial counsel asked, "Dr. Manuel, you say that can't happen, but it did happen, didn't it?" Dr. Manuel replied
Because [MBUSA] didn't assign an AOI to the new dealer until after it was in, which would be in violation of its own contractual provisions about assigning AOI's. It says right here 'MBUSA will assign the dealer a geographic area consisting of a collection of zip codes or census tracks that is called an area of influence.
[MBUSA] didn't do that at first when it put [Heller-Bird] in. It violated its own contract provision. Later on, it finally did carve out that AOI.
When asked by Carduco's trial counsel, "Did anything in the evidence [you reviewed] indicate to you anything other than that [MBUSA's] plan was to have one dealership in the Valley," and Dr. Manuel responded, "No. The [MBUSA] documents were fairly consistent about that, one dealership,-[Heller-Bird] was to buy out [Carduco], The draft letter of intent said buy out Harlingen and close it. So the market studies, one dealership, so it was fairly consistent."
C. The Jury's Basis for Fraud
Viewing the evidence in the light most favorable to the jury's verdict, crediting favorable evidence that reasonable jurors could have, and disregarding contrary evidence unless reasonable jurors could not, the evidence supports a finding that the Rio Grande Valley, Carduco's AOI, could only support one Mercedes-Benz dealership and MBUSA was aware that opening the Heller-Bird dealership in the McAllen area would have a negative effect on Carduco's business. See City of Keller v. Wilson, 168 S.W.3d 802, 808 (Tex.2005) (explaining that in reviewing the jury's verdict for legal sufficiency, an appellate court considers all of the evidence in the light most favorable to the prevailing party, "crediting favorable evidence if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not"). Holt asked his superior, Bob Neis, whether he could tell Renato about the Heller-Bird deal prior to Renato's purchase of Autoplex because according to Holt "[the Heller-Bird dealership] could affect the buy/sell between Rene and his father." However, Neis told Holt, "Hold off, Hold, off ... do not do anything ... let's talk ... Repeat ... do nothing ... hold off." Rene testified that MBUSA "informed" him that based on a market study, MBUSA "would not put another dealer" in Autoplex's AOI, which included the entire Rio Grande Valley "because the market could only support one dealer." Evidence was presented that despite market studies that the Rio Grande Valley could only support one Mercedes-Benz dealership, MBUSA encouraged Heller-Bird to open its dealership in McAllen within days of Carduco's intended purchase of Autoplex and also encouraged Heller-Bird to purchase Carduco if it became available for sale. In addition, although there is no evidence that the draft letter of intent had been presented to Heller-Bird, MBUSA stated in the letter that Heller-Bird would be required to purchase the Harlingen dealership, consolidate it with the McAllen dealership, and then close the Harlingen dealership.
Moreover, although MBUSA claimed that it could not tell Carduco about the Heller-Bird dealership due to concerns about privacy, Holt agreed that once the Heller-Bird dealership contract had been signed, there was no reason not to tell Renato. The evidence showed that even after Heller-Bird signed its dealer agreement, MBUSA failed to tell Renato about the Heller-Bird deal-at which time, Renato had not yet signed the buy/sell contract. And, although Holt believed that the Heller-Bird deal could affect the buy/sell of Autoplex and Renato had not yet signed the agreement, MBUSA failed to tell Renato about the Heller-Bird deal.
Rene testified that although he no longer owned the Mercedes-Benz dealership, MBUSA asked that he be present for a meeting that occurred on August of 2009 with Holt. Rene questioned why MBUSA requested his presence at this meeting given that he no longer owned Autoplex. At this meeting, Holt informed Renato and Rene that Carduco would not be allowed to move to McAllen and that another Mercedes-Benz dealership would be opening in McAllen. Based on, among other things, Holt's reaction to the sale from Rene to Renato, the jury could have reasonably inferred that Holt wanted Rene present to see his reaction and to send a message to Renato and Rene that he believed that their in-family sale to be a "sham."
Evidence was presented that once the Heller-Bird Mercedes-Benz dealership was completed and operating, MBUSA informed Carduco that it was "implementing a realignment of certain zip codes," and it reassigned the most affluent demographic areas of Carduco's AOI to Heller-Bird. It was also shown that MBUSA knew that Carduco's business in Harlingen would decline significantly once the Heller-Bird dealership started selling Mercedes-Benz vehicles, and that is exactly what occurred.
Thus, because the evidence supports a finding that the fraud in this case was more than merely oral representations that directly contradicted the terms of the contract and prevented the coming into existence of a valid contract, Playboy does not apply. See Schlumberger Tech. Corp., 959 S.W.2d at 179. Moreover, the jury could have based its finding of fraud on a reasonable inference that because MBUSA could not prevent the sale of Autoplex from Rene to Renato, MBUSA "tr[ied] to work around this" sale by devising a scheme to negatively affect Carduco's business in an effort to "terminate" what MBUSA viewed as "the Cardenas's" dealership, which was "a sham." In addition, because the evidence is conflicting regarding whether MBUSA had already approved Autoplex's move to McAllen and that therefore Carduco merely needed to get Holt's approval for a site, the evidence supports the jury's implied finding that MBUSA had already approved a move to McAllen. And, the dealer agreement does not state that once a relocation had been approved, MBUSA could revoke its permission.
Moreover, the spoliation instruction given to the jury stated that it could presume that evidence that MBUSA destroyed, lost, or failed to produce "would have been unfavorable to" MBUSA. Although this less severe spoliation instruction does not shift the burden of proof to the spoliating party, it "at least allows an inference to support facts that the missing evidence would have established." Wackenhut Corr. Corp. v. De La Rosa, 305 S.W.3d 594, 594, 626 (Tex.App.-Corpus Christi 2009, no pet.), overruled on other grounds by Zorrilla v. Aypco Constr. II, LLC, 469 S.W.3d 143, 151-52 (Tex. 2015). We have held that this less severe spoliation instruction "allows a nonspoliating party to withstand a legal sufficiency challenge to the elements that the spoliated evidence would have proved, because the instruction itself allows an inference of the facts that evidence would have proved." Id. at 626. In addition, the jury heard evidence that MBUSA intended for Heller-Bird to purchase Carduco from Renato, then consolidate the Harlingen dealership with the McAllen dealership, and shut down the Harlingen site. This would thus leave only one dealership in the Rio Grande Valley, which further supports the jury's implied finding that when it entered into the Dealer Agreement with Carduco, MBUSA sought to "work around" the sale by attempting to negatively affect Carduco's business by reneging on its approval of the Harlingen dealership's move to McAllen, by adding another dealership in McAllen, by awarding the more affluent area codes to Heller-Bird, and by negatively affecting Carduco's business.
The alleged non-disclosure regarding exclusivity and getting written permission to move matter not if the jury found that MBUSA failed to disclose that MBUSA had entered the dealer agreement with the intent to "work around" the sale and "terminate" Carduco's dealership by allowing Heller-Bird to open a second dealership in McAllen when the market in the area could not sustain more than one dealership in order to force Carduco to sell its franchise to Heller-Bird.
Moreover, Carduco presented evidence that although Renato knew that Carduco's business would possibly suffer if another dealership opened in Carduco's AOI, MBUSA failed to disclose its plan to open the Heller-Bird dealership in McAllen and instructed Oswald to tell Chappell he was unaware of any deals. Thus, the jury was free to believe that MBUSA would have achieved its goal of "working around" the sale by opening the Heller-Bird dealership and negatively affecting Carduco's business. If the jury determined that MBUSA signed the Dealer Agreement with the intent to cause Carduco harm, it could have found that MBUSA committed fraud on that basis alone. See Aquaplex, Inc. v. Rancho La Valencia, Inc. , 297 S.W.3d 768, 774 (Tex.2009) ("A promise of future performance constitutes an actionable misrepresentation if the promise was made with no intention of performing at the time it was made."); see also TEX. OCC.CODE ANN. § 2301.478 (West, Westlaw through 2015 R.S.) (providing that franchisor owes franchisee a duty of good faith and fair dealing that is actionable in tort); Subaru of Am., Inc. v. David McDavid Nissan, Inc. , 84 S.W.3d 212, 225-26 (Tex.2002) ("[T]he Legislature expressly provided a statutory duty of good faith and fair dealing among parties to a car dealership franchise agreement. And, the Legislature made this duty 'actionable in tort.' ").
Newcomb agreed that the process for bringing Heller-Bird into Carduco's AOI included providing notification to Carduco of the new dealership. And, there was evidence that although MBUSA had decided to award the McAllen area dealership to Heller-Bird, MBUSA instructed Oswald to tell Chappell he was unaware of any other dealerships opening in Autoplex's AOI. In deposition testimony played for the jury, Carduco's trial counsel asked, "For Mr. Oswald to inform the dealer that he is not aware of decisions being made by MBUSA in this direction [adding a new McAllen area dealership], that statement is true or untrue?" Newcomb replied, "In this context untrue, I suppose." From Holt's August 2008 email to Oswald and Dearing, the jury could have reasonably inferred that Oswald and Dearing were aware of the Heller-Bird deal prior to Chappell's phone call. Oswald testified that after Chappell inquired about the new McAllen-area dealership, Oswald spoke to Holt on the phone. According to Oswald, Holt said, "I [Oswald] wasn't aware of any decisions and I [Oswald] didn't need to know about that stuff." Thus, it is possible that the jury made an implied finding that MBUSA misled Carduco about the Heller-Bird deal, and that constituted a misrepresentation. And, because this finding of misrepresentation does not contradict the terms of the dealer agreement that MBUSA has cited on appeal, Playboy does not apply. Therefore, the jury's finding that Carduco justifiably relied on this misrepresentation is not insufficient as a matter of law.
D. The Dealer Agreement
We also disagree that the alleged misrepresentations and non-disclosures as MBUSA claims the jury found directly contradict the contract. Although the contract does not grant Carduco the right to sell the cars exclusively in its AOI, it does not state that MBUSA could add another dealership to Carduco's AOI even if that area was unable to economically maintain more than one dealership, and if doing so would cause Carduco to fail, as the evidence shows MBUSA intended. In other words, although the contract did not give Carduco the right of exclusivity, it did not prohibit MBUSA from agreeing that, if the market could not support more than one dealership, MBUSA would not place another dealership in the AOI, especially given that evidence was presented that doing so would negatively affect Carduco. Thus, to the extent that the jury may have found that MBUSA misrepresented to Carduco that it would not open a new dealership in its AOI because the market could not support a second dealership, there is no direct contradiction.
Moreover, Holt agreed that either Rene or Renato had a statutory right to protest the Heller-Bird deal, if, prior to Heller-Bird signing the dealer agreement, either one discovered MBUSA's intent to give Heller-Bird the McAllen site. Thus, if the jury found that MBUSA had implied that although MBUSA had the right to assign other dealers to Carduco's AOI, MBUSA would not do so because the market could not support more than one dealer and that it would harm Carduco's business, there is no direct contradiction with the contract. In fact, Holt testified that as the regional franchise manager, his "sole position is to try and assist [MBUSA's] dealers to perform the best they can, have [the] dealerships be in the best location...." The jury could have reasonably found that MBUSA does not usually grant a franchise to one owner and then place a second franchise in that AOI if doing so would cause either franchise to fail. Dr. Manuel's testimony supports such a finding because if MBUSA understood that it had the right to place more than one dealership in Carduco's AOI, MBUSA would not have then created a second AOI for Heller-Bird.
Thus, unlike in Playboy, there was evidence in this case that exclusivity in an AOI depended on certain factors, which included whether the AOI could have supported more than one dealership without negatively affecting the other dealership's business. In Playboy, the issue was not whether Playboy Enterprises sought to push the plaintiff out of business but was whether Playboy Enterprises had the contractual right to revoke permission from the plaintiff to sell its magazines in the United States, a right that the contract absolutely gave to Playboy Enterprises. Playboy Enters., Inc., 202 S.W.3d at 258.
Moreover, Rene testified that the asset purchase agreement did not contain a provision that Carduco would move to Hidalgo County because such a provision would only be necessary "if you had another existing dealer in that county that was able to protest" and Carduco's AOI included the entire Rio Grande Valley, which MBUSA had already determined could only support one dealer. Thus, the jury could have determined that based on Rene's experience of buying and selling dealerships, this was the custom and practice of automobile dealerships. There was also evidence through Rene's testimony that the only approval from MBUSA that Renato needed to move Carduco to McAllen was site-approval from Holt. In addition, Holt testified that MBUSA already had approved the move to McAllen, pending approval of the specific site. From this evidence, the jury could have reasonably inferred that MBUSA intended for Renato to believe that he had prior permission to move Carduco to McAllen because there would be no need for MBUSA to approve any site in McAllen if MBUSA intended to deny permission to move or if he did not already have the requisite prior permission. And, the contract required prior written permission to actually relocate a dealership. There is no evidence in the record that MBUSA would not have given written approval for the move, especially given that MBUSA requested that the Harlingen dealership move to McAllen. Thus, if the jury found that MBUSA had already granted permission to move, it could have reasonably inferred that the permission would have been given in writing as set out in the dealer agreement. Or, the jury could have reasonably found that the written permission would be forthcoming because according to the terms of the agreement, Carduco needed written permission to actually move or relocate. Here, Carduco had not actually moved or relocated. Moreover, based on Holt's testimony that Autoplex already had approval to move, the jury could have reasonably inferred that it had been provided to Autoplex in writing.
Misrepresenting to Renato that Carduco already had prior written permission to move to McAllen does not contradict the contract's clause that Carduco could only move with prior written permission, especially given that the contract does not state that MBUSA could deny Carduco permission to move. In fact, at his deposition, which was played for the jury, Newcomb testified that the "reason" MBUSA did not approve Carduco's move to McAllen was because MBUSA "had plans, other plans, and-to put a dealership in San Juan, Heller-Bird, yes." When Carduco's trial counsel asked, "There is no other reason that you know of for denying Carduco's application to relocate to McAllen, correct," Newcomb said, "That's how I testified, yes, sir." According to Renato, he and MBUSA were in the process of moving Carduco to McAllen-which the evidence showed requires final approval by Holt of the purposed site. The contract does not address the process of acquiring written permission to move a dealership. It may well be as Rene and Holt explained that once the dealer asks to move in its AOI, permission is not denied. Moreover, here, the evidence supports a finding that MBUSA asked Rene to move the dealership to McAllen. Therefore, whether MBUSA could or could not deny the requested move is a question of fact for the jury to have determined. Further, based on the spoliation instruction, the jury could have reasonably inferred that Blakemore's and Neis's missing emails contained evidence that, at the meeting with Dearing and Oswald and when MBUSA representatives accompanied Renato and Rene to look at potential sites to move Carduco, Renato believed that Carduco had its approval to move to McAllen because MBUSA had already provided such permission to Rene and that Renato merely needed Holt to approve the chosen site. The jury could have reasonably found that Renato was aware that the contract did not give MBUSA the ability to unreasonably withhold written permission. And, MBUSA acknowledged that it was standard to approve a dealership's move from one site to another within its AOI. Thus, the jury was free to believe that MBUSA would not have been able to deny Carduco's request to move as there was no reason to deny it absent the Heller-Bird deal.
In Playboy, we concluded that the plaintiff could not have justifiably relied on an oral representation that the plaintiff could sell its Spanish magazines in the United States because the contract directly contradicted that representation by stating that the plaintiff needed prior written approval that Playboy Enterprises could revoke at any time. Playboy Enters., Inc., 202 S.W.3d at 258. We did not explain the reason for our conclusion in the opinion, but the contract in Playboy allowed Playboy Enterprises to revoke the prior written permission at any time. Id. Here, there is no clause allowing MBUSA to revoke permission once it was given. In addition, the jury heard evidence that under Texas law, MBUSA could not unreasonably withhold permission from Carduco to move. Thus, there is no direct contradiction with the jury finding that MBUSA had already approved the Harlingen dealership's move to McAllen and the contract's clause stating that Carduco needed prior written permission to move because Carduco had not yet moved to McAllen.
In addition, the contract required for MBUSA to have acted in a manner that would not have harmed its dealers' businesses. See TEX. OCC.CODE ANN. § 2301.478 (providing that franchisor owes franchisee a duty of good faith and fair dealing that is actionable in tort); Subaru of Am., Inc., 84 S.W.3d at 225-26 ("[T]he Legislature expressly provided a statutory duty of good faith and fair dealing among parties to a car dealership franchise agreement. And, the Legislature made this duty 'actionable in tort.' "). Reading the contract as granting MBUSA the right to alter Carduco's AOI or to add new dealerships in a manner that would harm Carduco's business and cause it to suffer substantial losses condones acts that the jury found constituted fraud by entering into an agreement with the sole purpose of sabotaging a franchisee, which Playboy does not allow. See Id. And, such a finding is supported by evidence that MBUSA wanted to "work around" the sale and terminate Carduco. In addition, MBUSA's non-disclosure that it planned on bringing in a second dealership for the sole purpose of forcing Carduco out of business is not directly contradicted by the contract because the contract does not address such an issue.
Finally, MBUSA asks this Court to interpret the contract in a manner that it did not prove is allowed under Texas law. MBUSA argues that the contract allowed it the absolute right to deny Carduco written permission to move to McAllen, and that Renato could not rely on any oral representations that Carduco could move to McAllen. However, as Carduco points out, automobile dealerships are heavily regulated in Texas, and the Texas Occupations Code governs relocation of dealerships. Under the Texas Occupations Code, MBUSA could not deny Carduco's relocation request unless it had proven, among other things, it had reasonable grounds to deny the relocation. See TEX. OCC.CODE ANN. § 2301.464(2) ("If the applicant files a protest with the board, the board makes a determination of reasonable grounds."). And, no evidence was presented that MBUSA would have protested Carduco's move or that reasonable grounds existed for MBUSA to deny Carduco's move prior to MBUSA's deal with Heller-Bird. Thus, even though Renato was aware that he was required to receive MBUSA's prior written permission to move to McAllen, the law in Texas did not allow MBUSA to deny the move absent reasonable grounds. Here, MBUSA subsequently denied Carduco's request to move to McAllen because it had already signed a dealer agreement with Heller-Bird after allowing Renato to believe that Carduco would be moving to McAllen and had failed to tell Renato that it was negotiating with Heller-Bird to open its dealership in McAllen.
A finding by the jury that Texas law trumps the contractual language was further supported by evidence that, although the standard provisions of the dealer agreements gave MBUSA the right of first refusal, under Texas law, MBUSA could not prevent Rene's sale of Autoplex to Renato, causing Holt to say, "There is no God." Moreover, the jury was free to infer from MBUSA's conduct that it could not have relied on the contract's clause to deny Renato's request to move to McAllen because it did not have a reasonable basis and that is the reason MBUSA secretly entered into the Heller-Bird deal. Given that there was evidence that the dealer agreement's contractual terms must comply with Texas law and that Texas law trumps any terms that do not comply, we conclude that it was MBUSA's burden to prove at trial and on appeal that the cited-to contractual terms regarding relocation and exclusivity comply with Texas statutory law. And, because they did not do so, the evidence is sufficient to support the jury's implied findings. We overrule MBUSA's first issue.
III. DISCLAIMER OF RELIANCE
By a second issue, MBUSA contends that Carduco's contractual promise that it was not relying on any oral representations negates the reliance element of its claims as a matter of law. MBUSA points to language in the Dealer Agreement stating that Carduco promised that (1) "no representations outside of the contract were made by MBUSA and its agents," and (2) "no such representations or statements were relied upon by Carduco in executing the contract." MBUSA further argues that the subject of relocation had been discussed by the parties, Carduco was represented by counsel in an arm's length transaction, and Renato is an experienced, sophisticated party with many successful decades of experience in the car business.
First, we must determine whether there was "a clear and unequivocal disclaimer-of-reliance clause." Once we have determined that the contract contains a clear and unequivocal disclaimer-of-reliance clause, "our analysis would then proceed to 'the circumstances surrounding [the contract's] formation,' in order to determine whether such a provision is binding on the parties involved." Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 337 n.8 (Tex.2011).
"This would include an analysis of whether 'the terms of the contract were negotiated, rather than boilerplate;' during negotiations 'the parties specifically discussed the issue which [became] the topic of the subsequent dispute;' 'the complaining party was represented by counsel;' 'the parties dealt with each other in an arm's length transaction;' and 'the parties were knowledgeable in business matters.' "
In the pivotal case of S