Leighton v. Rebeles
Dallas Court of Appeals, No. 05-11-01519-CV (April 30, 2013)
Evans (opinion), Francis, and Lang
The Dallas Court of Appeals affirmed a judgment based on jury findings that the parties, who were in a common-law marriage, had also formed a general partnership, and that the wife was entitled to a portion of the assets of the partnership. The Court determined that an agreement in which the wife relinquished her interest in the two businesses operated by the partnership did not release her interest in the assets of the partnership. The Court also reversed the trial court’s JNOV on the husband’s counterclaim for breach of an oral contract, holding that the jury’s findings on that claim were not precluded by its findings regarding the partnership.
Leighton and Rebeles entered a common-law marriage, having lived together and operated two sand and gravel businesses together since the 1980s. In 2006, they separated and entered an agreement that required Rebeles to “relinquish all past, present, and future interest” in the two sand and gravel businesses in exchange for $150,000. Around the same time, Leighton and Rebeles made an oral agreement to continue doing business together and share the profits. Eventually, a dispute arose regarding division of the profits.
Rebeles brought suit, alleging that she had formed a general partnership with Leighton, and seeking a court-supervised division of partnership assets. The case was tried to a jury, which found that the parties formed a general partnership, that an event requiring winding up of the partnership occurred in 2006, and that Rebeles had not released her claim to partnership assets. The jury also found, however, that Rebeles breached the parties’ oral contract. The trial court entered a judgment based on the jury’s verdict, except that it granted JNOV with respect to Leighton’s counterclaim for breach of the oral agreement.
On appeal, Leighton did not challenge the finding that a partnership existed, but contended the 2006 written agreement released Rebeles’s interest in all partnership assets as a matter of law. The court of appeals disagreed, noting that the agreement only named the businesses being operated by the partnership and made no reference to the partnership itself. The Court concluded the agreement was ambiguous and found sufficient parol evidence in the record, including Leighton’s own testimony and post-agreement negotiations over division of partnership property, that the parties did not intend the agreement to have any effect on their joint ownership of the land and minerals owned by the partnership. The Court therefore affirmed the trial court’s judgment with respect to division of partnership property.
However, the Court reversed the JNOV on Leighton’s claim for breach of the parties’ oral agreement. The Court observed that the only basis on which Rebeles challenged the jury’s findings on this claim was that the oral contract was necessarily subsumed within the partnership. The Court disagreed, concluding the jury could have found the oral contract was made outside the scope of the partnership. The Court therefore reversed and rendered judgment for Leighton on his counterclaim for breach of contract.
