TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-24-00201-CV
Meritage Homes of Texas, LLC, Appellant
v.
Walther Family Limited Partnership; Clarendor Capital Ltd.; Sparrow Fields
Properties, Ltd.; and BigSky Capital, Ltd., Appellees
FROM THE 425TH JUDICIAL DISTRICT COURT OF WILLIAMSON COUNTY
NO. 22-0032-C245, THE HONORABLE BETSY F. LAMBETH, JUDGE PRESIDING
OPINION
In this contract case involving claims and counterclaims of breach, the briefing and
arguments before us have proceeded from a mistaken assumption about the jury’s answer to a
question about appellant Meritage Homes of Texas, LLC. In the charge, the jury was asked, “Did
Meritage fail to comply with the Contract?”1 The jury answered, “No.” Meritage has presented
this appeal under the assumption that this “No” amounts to an affirmative finding that it performed
its obligations under the Contract. The assumption is wrong because in Texas practice, a jury’s
“no” answer to a question about a claimant’s alleged failure to perform its obligations under a
contract does not amount to an affirmative finding that the claimant performed but is simply a
1 The “Contract” is the March 29, 2021 Purchase and Sale Agreement and Joint Escrow Instructions between Meritage and appellee Walther Family Limited Partnership. The latter’s rights and obligations under the Contract were, with Meritage’s approval, assigned to appellees Clarendor Capital Ltd.; Sparrow Fields Properties, Ltd.; and BigSky Capital, Ltd. failure to find a failure to comply. See Boerschig v. Rio Grande Elec. Coop., __ S.W.3d __, 2026
WL 1468464, at *7–8 & nn.14, 16 (Tex. May 22, 2026) (explaining underlying principle and collecting cases); In re Commitment of Jones, 602 S.W.3d 908, 912 n.5 (Tex. 2020) (per curiam)
(“[A] negative answer to a charge question means only that the party bearing the burden of proof
has failed to carry that burden and is not a positive finding of the converse of the question.”);
Grenwelge v. Shamrock Reconstructors, Inc., 705 S.W.2d 693, 694 (Tex. 1986) (per curiam) (“The
jury’s failure to find that Shamrock breached the contract merely means that the Grenwelges failed
to carry their burden of proving the fact. It does not mean the reverse, that Shamrock substantially
performed the contract.”); Arbor Windsor Ct., Ltd. v. Weekley Homes, LP, 463 S.W.3d 131, 141
(Tex. App.—Houston [14th Dist.] 2015, pet. denied) (“The jury did not, however, find that Arbor
complied with the Agreement. The jury found that Arbor did not fail to comply with the Agreement. In Texas law, this is a distinction with a difference. A negative answer to a jury question
on ‘failed to comply with a contract’ is not a positive finding that such party ‘complied with a
contract.’” (citing Grenwelge, 705 S.W.2d at 694)).
This principle regarding jury “no” answers colors much of the analysis required of
us to answer the questions that the parties have presented in this appeal. Those questions are
grouped most easily by the underlying relief that each side sought in the trial court. First is the
remedy of specific performance of the Contract, which Meritage sought and for which Meritage
seeks a reversal of the portion of the trial court’s judgment ruling that Meritage take nothing by its
request for specific performance on its contract claim. (Meritage did not seek contract damages.)
Second is a release of the earnest money that has been on deposit with the Contract’s escrow
agent—Meritage asks that the portion of the court’s judgment ordering the earnest money released
2
to Walther2 be reversed. Third is attorneys’ fees and expenses. The judgment awards Walther
attorneys’ fees, but Meritage says that the award should be reversed and judgment rendered awarding Meritage attorneys’ fees and expenses because only it is the true prevailing party in this suit.
We affirm the judgment in all respects. As to specific performance, Meritage neither obtained a necessary finding on nor conclusively proved at least one element of its request for
specific performance on its contract claim. As to the earnest money, the judgment properly ordered
it released to Walther because it was included in the damages that Walther requested for its contract
counterclaim and all elements of Walther’s counterclaim were proved—two were undisputed, and
the other two, we conclude, Walther proved as a matter of law. And as to attorneys’ fees and
expenses, Meritage’s failure in this appeal and Walther’s success on an appellate cross-point mean
that Walther is the proper prevailing party and thus is entitled to the award that it received.
I
A
Under the Contract, Meritage was to buy a tract from Walther (the Property). Meritage intended to develop the Property as a residential subdivision. Meritage paid Walther the earnest money required by the Contract and in spring 2021 shared with Walther a draft Concept Plan,
a document designed to give a general sense of the residential units that Meritage would build.
The Contract contemplated a pre-closing period for Meritage to secure approvals
from governments, special-purpose districts, utility providers, and the like. The Property, which
is what Meritage was to buy from Walther, was the middle portion of an overall tract owned by
Walther that had long been used by its owners’ family for farming. The rest of the Walther tract,
2 We use “Walther” to refer collectively to all the appellees.
3
which Meritage would not be buying, is referred to in the Contract as the “Seller Retained Land.”
The following graphic shows the Property—the middle portion of the Walther tract, in yellow—
and the northerly and southerly Seller Retained Land, in pink:
The roadway running through the northerly Seller Retained Land is for the Williamson County
Southeast Loop. The road running through the southerly Seller Retained Land from left to right
in the graphic is FM-1660. Both the Property and the Seller Retained Land lie within the extraterri4
torial jurisdiction of the City of Hutto. As Meritage would develop the Property for residential
use, Walther contemplated that its Seller Retained Land could be developed with commercial uses,
and the Contract required Meritage to undertake efforts to include potential development of the
Seller Retained Land in various applications that Meritage was to make to the relevant governmental authorities. Yet for the Property and Seller Retained Land to be developed for the purposes
that the parties were contemplating, they needed new utility infrastructure.
The contemplated development requires, the parties generally agree, a series of approvals in a particular sequence. Development would require wastewater-utility connections provided by the City and water-utility connections depending on their location in relation to FM-1660.
The Property and the Seller Retained land north of FM-1660 would require water service by Jonah
Special Utility District, and the Seller Retained Land south of FM-1660 would require water service by the City. To obtain these approvals, Meritage would have to submit particular applications
to each entity. The entity would at some point give the requested approval and the conditions
under which it would provide service, like the size and location of infrastructure that Meritage
would construct but that the entity would later own and operate.
Aside from water and wastewater approvals, because Meritage intended to finance
the construction of utility infrastructure by creating a Municipal Utility District (MUD), it needed
the City’s consent, which would be obtained by entering into a Development Agreement with the
City, to which Walther also would be a party. Next in the approval sequence behind the water and
wastewater approvals and the concluding of a Development Agreement, was a Preliminary Plan.
A Preliminary Plan, according to the testimony of Meritage’s point person on this
development project, “is the step that you take before you create subdivision construction plans.”
It is a document agreed to by both the developer (here, Meritage) and any relevant regulating
5
entities to approve the developer’s engineering plans for how it will create the later, even-moredetailed Improvement Plans, which guide construction efforts in the development. The Preliminary Plan, again in the words of Meritage’s point person, maps “out where the lots are going, where
the drainage [goes], [and] where the roads are,” to include “details on road width, utility sizes,
[and] things like that.” He added that the City would not even view a draft Preliminary Plan until
the City had approved the prior application for wastewater service.
Because of the types of drawings and plans that go into a Preliminary Plan, regulatory design requirements apply to what a developer may put into its Plan. But here, the relevant
design requirements imposed by the City conflicted in many respects with the relevant design
requirements imposed by Williamson County, and the City and County disagreed about whose
requirements should apply to development on the Property.
Much of the parties’ dispute at trial was over what Meritage did or did not do, when
it did or did not do it, and what Walther did or did not do in response regarding the Concept Plan,
the utilities matters, the Development Agreement, and the Preliminary Plan. Undisputed, however,
is that the Contract describes the structure and timing for the governmental approvals:
[T]hrough December 17, 2021 (the “Governmental Approvals Period”), [Meritage]
shall have the right to seek, and [Meritage] shall diligently pursue, all necessary
approvals from applicable governmental authorities, quasi-governmental authorities, and/or utility providers and regulators (collectively, “Governmental Authorities”) for the development of the Property as a residential subdivision (collectively,
the “Approvals”), including, without limitation, all of the following in form acceptable to [Meritage] in its sole and absolute discretion (except as expressly provided otherwise in this Section 4.4.1): . . . the “Preliminary Plan”[]; . . . approval
by all applicable Governmental Authorities of all agreements, easements and arrangements necessary for the providing to the Property of all utility services necessary or desirable for [Meritage]’s intended residential development of the Property
and for development of the Seller Retained Land (the “Utility Arrangements”); . . . the “Improvement Plans”[;] and . . . the “Development Agreement.”
6
It also obligates Meritage to diligently pursue the Approvals at its own cost and expense and to
incorporate, at [Meritage]’s sole cost and expense, [Walther]’s intended use of the
Seller Retained Land into all of its various efforts to seek the Governmental Approvals from Government[al] Authorities, including, without limitation, incorporating into [Meritage]’s application or other submittal for the Preliminary Plan and
other Governmental Approvals . . . the roads of appropriate size to support intended
uses of Seller Retained Land . . . and . . . extension and installation of utilities, including, without limitation, water, wastewater, electricity, and any other Utility Arrangements to the Seller Retained Land in the locations, sizes, and configurations
mutually agreed upon by [Meritage] and [Walther], both acting reasonably and in
good faith, but in all cases ensuring that access to all utilities is provided to Seller
Retained Land both north and south of FM 1660.
And it requires Meritage to “submit a draft preliminary plan to the applicable Governmental
Authorities” by a deadline of September 27, 2021. (Emphasis added.)
Closing was set for December 27, 2021, but could have been earlier had “all Approvals . . . been obtained pursuant to Section 4.4.” They were not, and on December 27, 2021,
Meritage expressed that it intended to close the transaction. Meritage tendered the $21.5 million
for the purchase price to the escrow agent for the transaction. The same day, Walther told Meritage
that it refused to close, and both that day and three days later, it gave Meritage reasons for the
refusal, reasons whose meaning and effect the parties dispute. Also on that third day, Walther told
Meritage that it was terminating the Contract under its sections 12.2 and 12.4.
B
Meritage sued Walther for breach of the Contract, focusing on Walther’s failure to
close the transaction. It sought as relief specific performance to have the Property conveyed and
attorneys’ fees and expenses. Walther counterclaimed for breach of contract, seeking damages in
the form of the earnest money that Meritage had paid and attorneys’ fees as well. Trial proceeded
before a jury. Walther presented several theories of Meritage’s breach to the trial court and jury,
7
including that Meritage had failed to submit the draft Preliminary Plan by September 27, 2021,
and that Meritage had failed to diligently pursue the government approvals.
During the charge conference, both sides requested certain submissions and objected to the charge. For Meritage’s part, it sought these jury submissions—combinations of questions
and accompanying instructions, including predicating instructions—on waiver and election3:
If you answered “Yes” to [the question about whether Meritage failed to comply
with the Contract], then answer the following question. Otherwise, do not answer
the following question.
[Proposed] Question 4 (Waiver Defense)
Was Meritage’s failure to comply excused?
Failure to comply by Meritage is excused if compliance is waived by Walther.
Waiver is an intentional surrender of a known right or intentional conduct inconsistent with claiming that right.
Answer “Yes” or “No.”
If you answered “Meritage” to [the question about which party materially breached
the Contract first], then answer the following question. Otherwise, do not answer
the following question.
[Proposed] Question 6 (Election)
When Meritage failed to comply with the [Contract], did Walther elect to (1) continue performance under the [Contract] or (2) cease performance and terminate the
[Contract]?
Answer “1” or “2.”
3 Meritage did not request jury submissions on the issue of impossibility, or impracticability, of performance and has not argued that issue on appeal. See, e.g., Samson Expl., LLC v. T.S. Reed Props., Inc., 521 S.W.3d 766, 775 (Tex. 2017); FP Stores, Inc. v. Tramontina US, Inc., 513 S.W.3d 684, 693 (Tex. App.—Houston [1st Dist.] 2016, pet. denied).
8
The court refused the waiver and election submissions and instead submitted the case to the jury
on four questions. The first two involved failures to comply with the Contract. The charge instructed the jury that any failure to comply with the Contract must have been material. The
charge’s four questions, accompanying instructions, and the jury’s answers are:
This section contains four questions. Depending on your answers, you may not be
required to answer each question.
QUESTION 1
Did Walther . . . fail to comply with the Contract?
Answer “Yes” or “No.”
Answer: Yes
QUESTION 2
Did Meritage fail to comply with the Contract?
Answer “Yes” or “No.”
Answer: No
If you answered “Yes” to both Question 1 and Question 2, answer Question 3. Otherwise, do not answer Question 3 and move to Question 4.
QUESTION 3
Who failed to comply with the Contract first?
Answer “Meritage” or “Walther . . . .”
Answer: _____
If you answered “Yes” to Question 1 and “No” to Question 2, or if you answered
“Walther . . . ” to Question 3, then answer Question 4.
QUESTION 4
Was Meritage ready, willing, and able to perform its obligations under the Contract
on December 27, 2021?
Answer “Yes” or “No.”
Answer: No
The parties then conducted post-verdict motion practice.
9
Meritage moved the trial court to disregard the answer to Question 4, arguing that
the “No” to Question 2 constituted an affirmative finding that Meritage complied with the Contract, a finding that necessarily meant that Meritage was ready, willing, and able to perform on the
closing date because it was undisputed that Meritage had tendered the purchase price. Walther
argued, among other things, that if any jury answers should be disregarded, it should be those to
Questions 1 and 2. Walther expressly sought the relief that the trial court disregard those answers.
Ultimately, the trial court denied each side’s motions to disregard. It then rendered
its final judgment, ruling that Meritage take nothing on its request for specific performance, that
the earnest money be released to Walther, and that Walther be awarded attorneys’ fees and Meritage awarded none. Meritage now appeals, and Walther raises its cross-point.
II
Meritage raises six issues on appeal:
1. Was the evidence conclusive that [Meritage] was ready, willing, and able to
perform on the closing date when undisputed evidence showed that [Meritage]
actually performed on that date?
2. Should the trial court have granted [Meritage]’s motion to disregard the jury’s
negative finding on “ready, willing, and able” and rendered judgment granting
[Meritage] specific performance?
3. Alternatively, was the jury’s finding on “ready, willing, and able” against the
great weight of the evidence, necessitating a new trial?
4. Should the trial court have awarded damages to [Walther] when [it] lost on liability and did not fulfill the contractual prerequisites for damages?
5. Was the trial court’s award of attorney’s fees to [Walther] as the prevailing
party erroneous as a matter of law because:
a. the jury found against [Walther] on both liability questions, making [it] both
a non-prevailing plaintiff and a non-prevailing defendant;
10
b. the jury found that [Meritage] did not breach the contract, making [Meritage] a prevailing defendant on [Walther]’s counterclaim; and
c. if judgment is rendered granting specific performance, [Meritage] will be
the sole prevailing party on all claims?
6. Did the trial court err by rejecting [Meritage]’s proffered jury questions regarding waiver and election? (relevant only if the Court credits [Walther]’s potential
cross point challenging the legal sufficiency of the breach findings)
(Emphasis removed.) Walther’s appellate cross-point seeks an affirmance of the trial court’s judgment on these grounds:
With undisputed evidence that Meritage had not performed material contract obligations on or before the closing date, was there factually or legally sufficient evidence to support a finding that Walther . . . breached the contract by declining to
close? . . . The evidence was factually and legally insufficient to support the jury’s
answers to Questions 1 and 2 on breach, and those findings should be disregarded.
We begin with the parties’ competing positions about specific performance.
A
Meritage’s first, second, third, and sixth issues implicate its request for specific
performance, which is an equitable remedy that may be awarded for breach of contract. Pathfinder
Oil & Gas, Inc. v. Great W. Drilling, Ltd., 574 S.W.3d 882, 888 (Tex. 2019). When plaintiffs seek
specific performance for a claim for breach of contract, these are the relevant elements:
Breach of contract requires pleading and proof that (1) a valid contract exists;
(2) the plaintiff performed or tendered performance as contractually required;
(3) the defendant breached the contract by failing to perform or tender performance
as contractually required; and (4) the plaintiff sustained damages due to the breach.
A party seeking the equitable remedy of specific performance in lieu of money
damages may, in some circumstances, be excused from pleading and proving the
second element, but must additionally plead and prove that, at all relevant times, it
was ready, willing, and able to perform under the contract.
11
Id. at 890 (emphases added); accord DiGiuseppe v. Lawler, 269 S.W.3d 588, 594 (Tex. 2008) (“It
is also a general rule of equity jurisprudence in Texas that a party must show that he has complied
with his obligations under the contract to be entitled to specific performance.”).
For plaintiffs to be awarded final relief, whether legal or equitable, they must prevail on at least one of their affirmative claims for relief. See Etan Indus., Inc. v. Lehmann,
359 S.W.3d 620, 624–25 & n.2 (Tex. 2011) (per curiam); Valenzuela v. Aquino, 853 S.W.2d 512,
514 n.2 (Tex. 1993). And for plaintiffs to prevail on an affirmative claim for relief, they must for
each element of the claim either conclusively prove the element or obtain an express or implied
finding in their favor on the element. See Tex. R. Civ. P. 279; Energy Transfer Partners, L.P. v.
Enterprise Prods. Partners, L.P., 593 S.W.3d 732, 741 & n.36 (Tex. 2020); Hanson
Aggregates W., Inc. v. Ford, 338 S.W.3d 39, 42–43, 46–48 (Tex. App.—Austin 2011, pet. denied);
see also Horton v. Kansas City S. Ry. Co., 692 S.W.3d 112, 139 n.26 (Tex. 2024) (“[A]n erroneous
failure to instruct the jury that it must find specific elements will not be harmful if undisputed
evidence conclusively establishes those elements.”).
As relevant here then, for Meritage to have prevailed on its contract claim for specific performance, it must have achieved at least one of the following outcomes in the trial court
(if not more—which is to say, one from the first group and one from the second): (1)(a) Meritage
obtained either an express or an implied finding that it performed, or tendered performance of, its
obligations under the Contract; (1)(b) Meritage conclusively proved that it performed, or tendered
performance of, its obligations under the Contract; (2)(a) Meritage obtained either an express or
an implied finding that it was at all relevant times ready, willing, and able to perform its obligations
under the Contract; and (2)(b) Meritage conclusively proved that it was at all relevant times ready,
willing, and able to perform its obligations under the Contract. It achieved none of these.
12
B
1
Meritage has presented its appeal as if it obtained an express finding from the jury
that Meritage performed its obligations under the Contract. But as we have said, the jury’s “No”
answer to Question 2 is not the legal equivalent of an affirmative finding in Meritage’s favor that
it performed its obligations under the Contract. See Boerschig, 2026 WL 1468464, at *7–8 &
nn.14, 16; Commitment of Jones, 602 S.W.3d at 912 n.5; Grenwelge, 705 S.W.2d at 694; Arbor
Windsor Ct., 463 S.W.3d at 141; see also Texas Genco, LP v. Valence Operating Co., 187 S.W.3d
118, 123 & n.4 (Tex. App.—Waco 2006, pet. denied) (legal effect of jury’s answers is question of
law, reviewed de novo). Nothing else in the jury’s verdict amounts to an affirmative finding that
Meritage performed, or tendered performance of, its obligations under the Contract either.
Nor did Meritage obtain an implied finding in its favor on the matter. When implied
findings arise, they arise only ever in support of the relevant portions of the trial court’s judgment.
See Tex. R. Civ. P. 279; Gulf States Utils. Co. v. Low, 79 S.W.3d 561, 564 (Tex. 2002). Because
the trial court in its judgment ruled that Meritage take nothing on its request for specific performance for its contract claim and awarded Meritage no relief based on the Contract, if any implied
finding arose on Meritage’s performance of the Contract, the implied finding must run in favor of
the portion of the judgment ruling that Meritage take nothing on its request for specific performance for its contract claim. Meritage thus did not obtain either an express or implied finding about
its own contractual performance.
2
Meritage also did not conclusively prove that it had performed, or tendered performance of, its obligations under the Contract. After setting forth the applicable rules in this area,
13
we review one of Walther’s theories of Meritage’s breach of the Contract, including the Contract
provisions relevant to the theory, and the evidence relating to the theory that showed that Meritage
had breached. See Greene v. Farmers Ins. Exch., 446 S.W.3d 761, 765 (Tex. 2014) (“‘Breach’ of
a contract occurs when a party fails to perform an act that it has contractually promised to perform.”). We also address Meritage’s counterargument that the theory at issue concerned a Contract
obligation that was not material.
To conclusively establish a vital fact, the evidence must be such that reasonable
people could not disagree that the fact exists. Hanson Aggregates W., 338 S.W.3d at 47. By
contrast, when the evidence allows for reasonable people to disagree about whether a given fact
has been proved, then there is at least some evidence against the fact, and it thus has not been
conclusively proved. See City of Keller v. Wilson, 168 S.W.3d 802, 815–16 (Tex. 2005); Merrell
Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). Conclusive proof of a fact is in
other words proof “as a matter of law” of that fact. See Airway Ins. Co. v. Hank’s Flite Ctr., Inc.,
534 S.W.2d 878, 879 n.2 (Tex. 1976); Valdez v. Moerbe, No. 03-14-00731-CV, 2016 WL
1407800, at *5 (Tex. App.—Austin Apr. 6, 2016, pet. denied) (mem. op.); Bisland v. Financial
Indem. Co., No. 03-11-00228-CV, 2013 WL 3186192, at *3 (Tex. App.—Austin June 21, 2013,
pet. denied) (mem. op.).4
4 The evidence to support a finding that Meritage failed to perform its obligations under the Contract is a subject of Walther’s cross-point and of Meritage’s sixth issue, which responds to the cross-point. The cross-point, however, is postured as a legal-sufficiency attack on the jury’s “No” answer to Question 2, with Walther arguing that the evidence conclusively proved that Meritage had failed to perform. At this stage in our analysis, we need not review whether the evidence conclusively proved that Meritage had failed to perform; instead, we are reviewing only for whether there was some evidence that Meritage had failed to perform. If there was, then Meritage did not conclusively prove its performance or tender of performance.
14
Among Walther’s theories of Meritage’s breach was the latter’s Contract obligation
to timely submit a draft of the Preliminary Plan to the government. There was at least some evidence that Meritage did not submit that draft timely and thus at least some evidence that Meritage
had not performed its obligations under the Contract. We first set forth the provisions of the Contract relevant to this topic, provisions that concern (a) the Preliminary Plan itself and similar efforts, (b) timeliness under the Contract, and (c) Meritage’s rights.
The Contract identifies the Preliminary Plan as one of the necessary Approvals to
be submitted to the Governmental Authorities before development of the property as a residential
subdivision could start. Under the Contract, Meritage was obligated to “diligently pursue the Approvals and conduct all negotiations with the Governmental Authorities.” It was also to “be solely
responsible to pay all fees and costs incurred by [it] to prepare, process, and obtain the Approvals.”
The Approvals included not only the Preliminary Plan but also the water and wastewater arrangements, the Development Agreement, and the Improvement Plans.
But more particular to the Preliminary Plan from among all the Approvals was a
deadline for a draft of it to be submitted. Under the Contract, Meritage had to “submit a draft
preliminary plan to the applicable Governmental Authorities within ninety . . . days following the
Due Diligence Termination Date,” a 90-day deadline that the parties agree fell on September 27,
2021. The Preliminary Plan was important in that it was to govern development of the Property:
“[D]evelopment of the Property will materially comply with . . . the approved Preliminary Plan.”
The Contract sets forth many other time constraints. It subjects “all matters” to
timely performance: “Time shall be of the essence with respect to all matters contemplated by this”
Contract. It prohibits certain escrow instructions from changing the time limits otherwise set up
by the Contract: “[N]o provision in any printed form instructions shall excuse any performance by
15
either party at the times provided in this [Contract or] provide either party hereto with any grace
period not provided in this” Contract. And it requires Walther to “promptly furnish” certain items,
like environmental reports, surveys, and tax data about the Property.
The Contract provides for still other performance by each party to occur in structured, timed phases. In rough chronological order, the Contract establishes an Agreement Date,
Document Delivery Date, Escrow Date, Due Diligence Termination Date,5 Governmental Approvals Period, and Closing. Tied to the defined times were specific, counted-in-days deadlines for
Meritage and Walther to communicate with each other about Meritage’s objections to any title
documents and for the parties to communicate about any continued farming and harvesting that
Walther would conduct on the Property. Further, the escrow agent was to “promptly” notify the
parties of the contractual Escrow Date. Then Meritage had 60 days and 150 days from the Escrow
Date to obtain surveys of, respectively, the Property and the Seller Retained Land. Both parties
were—within 60 days of the Escrow Date—to cooperate to prepare the Concept Plan. Later, but
before the end of the due-diligence period on the Due Diligence Termination Date, Meritage was
to submit to Walther for its approval marketing names for the development and for any streets and
parks in it. The still-later Governmental Approvals Period was to end on December 17, 2021,
before which Meritage had to “diligently pursue” the Approvals.
Before Closing, Meritage had the right to cure many types of default by it, limited
to a 30-day window. The Contract lays out detailed and time-bound cure-or-default procedures in
its sections 12.1 through 12.4, applicable to Closing Defaults or to other kinds of defaults. By
Closing, “[a]ll . . . permits and agreements required from any third party . . . to provide . . . all wa5 This date was 90 days after the Escrow Date.
16
ter, sewer and other utility services that are required in connection with the Approvals . . . must
have been obtained in form and content satisfactory to [Meritage] and [Walther] in each’s reasonable discretion.” At Closing, Meritage was to provide Walther with “items, documents, and instruments as may be reasonably required by [Walther] . . . in order to effectuate the provisions of this
[Contract] and the Closing.” And if Meritage ended up committing a type of Closing Default, then
it had just three business days to cure.
Finally among the Contract’s deadlines was the Closing. “Closing” was defined to
“mean the settlement of the purchase and sale of the Property at which [Walther] conveys title to
the Property to [Meritage] by delivery of a Deed and [Meritage] delivers the Purchase Price.” The
Closing was to take place, the parties agree, on December 27, 2021.
As for some of Meritage’s rights under the Contract, Meritage was given an option
either to proceed with buying the Property or to terminate the Contract. The Contract provides for
“rights and options extended to [Meritage] under this [Contract], including, without limitation, the
right and option to terminate the [Contract] as provided therein,” and one such termination right
expired by the end of the Due Diligence Termination Date, before which Meritage could “terminate this [Contract] . . . if [Meritage] determines in its sole and absolute discretion that the Property
is not acceptable to [Meritage] for any reason.”
Bearing the Contract’s relevant terms in mind, we proceed to decide whether there
was any evidence that Meritage had not performed, or tendered performance of, its Contract obligations. Undisputedly in the evidence, Meritage submitted no draft Preliminary Plan to any of the
Governmental Authorities by September 27, 2021, or indeed ever. Testimony and exhibits both
showed that Meritage has never submitted a draft Preliminary Plan to the government.
17
Meritage responds that its failure to submit the Preliminary Plan by the deadline is
not a material breach.6 The materiality of a breach can be established as a matter of law. For
example, the Supreme Court of Texas in Mustang Pipeline, as it explained later in Bartush–
Schnitzius Foods, “held that a contractor’s failure to meet a deadline in contravention of an express
time-is-of-the-essence clause was a material breach as a matter of law.” Bartush–Schnitzius Foods
Co. v. Cimco Refrigeration, Inc., 518 S.W.3d 432, 437 (Tex. 2017) (per curiam) (citing Mustang
Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 199–200 (Tex. 2004)); see also id. at 436–
37 (noting that materiality may be decided as a matter of law and contrasting Mustang Pipeline’s
dispute with that in Bartush–Schnitzius Foods by describing Mustang Pipeline’s as one involving
“conclusive evidence of materiality”).
Mustang Pipeline is no anomaly. Texas courts in many other cases have concluded
that a breach’s materiality was established as a matter of law. See, e.g., EM Bldg. Contractors
Servs., LLC v. Byrd Bldg. Servs., LLC, No. 05-19-00153-CV, 2020 WL 4592791, at *1, *10, *17
(Tex. App.—Dallas Aug. 11, 2020, no pet.) (mem. op.); GDL Masonry Supply, Inc. v. Lopez,
No. 05-15-01200-CV, 2016 WL 6835719, at *2–3 (Tex. App.—Dallas Nov. 2, 2016, no pet.)
(mem. op.); Duncan v. Woodlawn Mfg., Ltd., 479 S.W.3d 886, 901 (Tex. App.—El Paso 2015, no
pet.); TrueStar Petrol. Corp. v. Eagle Oil & Gas Co., 323 S.W.3d 316, 319–20 (Tex. App.—Dallas
2010, no pet.); Deep Nines, Inc. v. McAfee, Inc., 246 S.W.3d 842, 846 (Tex. App.—Dallas 2008,
no pet.); Casarez v. Alltec Constr. Co., No. 14-07-00068-CV, 2007 WL 3287933, at *6 (Tex.
App.—Houston [14th Dist.] Nov. 6, 2007, no pet.) (mem. op.); see also Dallas City Limits Prop.
6 Meritage’s materiality arguments concern the timeliness of submission of the draft Preliminary Plan; Meritage at oral argument conceded that the eventual obtaining of an approved Preliminary Plan was material to future development of the Property.
18
Co. v. Austin Jockey Club, Ltd., 376 S.W.3d 792, 800–01 (Tex. App.—Dallas 2012, pet. denied)
(concluding that party’s breach “was unquestionably material” and saying that Mustang Pipeline
teaches that “a breach of timeliness would be material” when, as there, “[t]he contract . . . provided
a deadline for performance” and “also provided that time was of the essence”).
Courts properly reach such a conclusion by reference to the plain language of the
parties’ contract. See GDL Masonry Supply, 2016 WL 6835719, at *2–3; Dallas City Limits Prop.,
376 S.W.3d at 800–01; TrueStar Petrol., 323 S.W.3d at 319–20; Deep Nines, 246 S.W.3d at 846;
see also Chowning v. Boyer, No. 03-20-00387-CV, 2021 WL 3233859, at *7 n.12 (Tex. App.—
Austin July 30, 2021, no pet.) (mem. op.) (citing Deep Nines, 246 S.W.3d at 846, with approval
and recognizing importance of contract language that expresses that “time is of the essence”);
Kennedy Ship & Repair, L.P. v. Pham, 210 S.W.3d 11, 19 (Tex. App.—Houston [14th Dist.] 2006,
no pet.) (“[A] date stated for performance does not mean time is of the essence. Instead, the contract must expressly make time of the essence or there must be something in the nature or purpose
of the contract and the circumstances surrounding it making it apparent that the parties intended
that time be of the essence. Unless the contract expressly makes time of the essence, the issue is a
fact question for the jury.” (emphases added) (citations omitted)).
So much of this area of the law, and of Walther’s and Meritage’s arguments, concerns the effect of a contract’s “time is of the essence” provision. But lumping all such provisions
together can be misleading. Each such provision’s particular language matters, for the express
language of all of a contract’s provisions regarding timeliness, including the express language of
any “time is of the essence” provision, can turn the issue of a breach’s materiality. Thus, the
Mustang Pipeline contractor’s “failure to meet a deadline in contravention of an express time-isof-the-essence clause was a material breach as a matter of law,” see Bartush–Schnitzius Foods,
19
518 S.W.3d at 437 (explaining Mustang Pipeline, 134 S.W.3d at 199–200), because the contract’s
language provided that “all time limits stated in the Contract are of the essence to the Contract”;
called for “100 percent completion of the pipeline system no later than” a certain date; and “required that ‘sufficient forces and equipment . . . be furnished at all times to adequately perform
work with ample margin for emergencies and unexpected events, to carry on the work at a sufficient rate of progress to ensure completion within the time specified in the Contract,’” see Mustang
Pipeline, 134 S.W.3d at 199. Similarly in Deep Nines, where a party was to make payments under
a contract, timely payment was material because the contract “state[d] specific dates and times for
performance as well as provide[d] a cure period if payment is not received when due” and provided
that “if payment is not received within the cure period, [the party] will be considered in default.”
See 246 S.W.3d at 846. That language “clearly ma[de] time of the essence”—the party’s “failure
to pay in a timely manner was a material breach” even though the contract lacked a “time is of the
essence” provision. Id.
In some tension with these authorities, Meritage contends that materiality here cannot be determined based solely on a review of the Contract’s language. Instead, Meritage argues,
the Contract’s terms should be only one of among many considerations to undertake in reviewing
the evidence. As support for its argument, Meritage argues that the materiality determination here
must be made just as we determined it in MHI Partnership, Ltd. v. DH Real Estate Investment Co.,
No. 03-04-00485-CV, 2008 WL 3877717 (Tex. App.—Austin Aug. 20, 2008, pet. denied) (mem.
op.). There, a lengthy contract contained a boilerplate clause tucked away near the end of the
contract that provided simply: “Time of the Essence. Time is of the essence of this Contract.” See
id. at *1–2. We concluded that this stock phrase did not apply to a particular contractual deadline
partly because two of the appellant’s witnesses testified that time was not of the essence with
20
regard to every contractual deadline or to the deadline at issue. See id. at *4–5. We drew on a
decades-old rule providing that although a contract may express generally that time is of the essence, “it is not necessarily so unless the parties intended it to be.” See id. at *4 (citing, ultimately,
Williams v. Shamrock Oil & Gas Co., 95 S.W.2d 1292, 1295 (Tex. [Comm’n Op.] 1936)). We
therefore reasoned that the contract’s “time is of the essence” clause was “just one consideration”
in determining materiality and that we needed to consult witness testimony as well. Id. at *5. We
distinguished the language of the “time is of the essence” provision then before us from the language of the Mustang Pipeline provision: “In contrast to the specific language used in Mustang
Pipeline, in which the clause said that ‘all time limits stated in the Contract are of the essence to
the Contract,’ the clause in this case simply said that time was of the essence to the contract.” MHI
P’ship, 2008 WL 3877717, at *5 (citation omitted) (quoting with emphasis 134 S.W.3d at 199).
We therefore concluded that rather than deciding whether the particular contractual deadline was
essential based solely on the boilerplate language of the contract, we needed to review the evidence
of all the surrounding circumstances between the parties. See id.
But here, despite Meritage’s argument for a review of not only the Contract’s language but also witness testimony, the Contract establishes as a matter of law that Meritage’s failure
to timely submit the draft Preliminary Plan is material. It does so via its “time is of the essence”
provision plus other provisions. Beginning with the “time is of the essence” provision, we note
that the provision is of the kind identified in Mustang Pipeline and not at issue in MHI Partnership.
The Contract says, “Time shall be of the essence with respect to all matters contemplated by this”
Contract.7 (Emphasis added.) See Mustang Pipeline, 134 S.W.3d at 199 (“all time limits stated in
7 MHI Partnership drew ultimately on Williams, so Williams’s analysis is instructive. The court there quite naturally concluded that a “time is of the essence” provision that “manifest[ly]”
21
the Contract are of the essence to the Contract”); MHI P’ship, 2008 WL 3877717, at *5. Plus, like
what the Dallas City Limits Property court observed about the Mustang Pipeline contract, the
Contract here combines a relevant “time is of the essence” clause with a specific deadline for the
relevant performance of submission of the draft Preliminary Plan. See 376 S.W.3d at 800–01.
Even more still, the Contract is like the one in Deep Nines. Both pair a specific deadline for the
relevant performance with cure-or-default provisions, here, sections 12.1 through 12.4 of the Contract. See Deep Nines, 246 S.W.3d at 846.
In the face of the Contract’s language, Meritage relies on evidence from trial concerning approval backlogs at the City and the Special Utility District; a City official’s testimony,
echoed by that of a Walther engineering consultant, that any draft Preliminary Plan submitted
without those backlogs first resolved and earlier Approvals accepted would have been rejected out
of hand; the City and County’s jurisdictional disagreement; and Walther’s communications, or
applied to only one party’s obligations did not extend to the other’s. See Williams v. Shamrock Oil & Gas Co., 95 S.W.2d 1292, 1295 (Tex. [Comm’n Op.] 1936). The court summed up:
This express recital that “time is the essence of this agreement,” taken in its setting
and in connection with the facts and circumstances, clearly evidences that time was
of the essence of the covenants made by the defendant; but we find nothing in the
contract, or in the facts and circumstances surrounding its execution, which evidences an intention to make time of the essence of any agreement on the part of
plaintiffs. . . . There is no provision in this contract which fixes the time of performance by the plaintiffs. . . . [I]t contains no promise on the part of the plaintiffs
thereafter to perform any act upon which the principle that time is of the essence of
a contract could operate.
Id. It thus makes sense that a “time is of the essence” provision that expressly applies to all obligations under a contract is distinct from a mere stock provision. See MHI P’ship, Ltd. v. DH Real Est. Inv. Co., No. 03-04-00485-CV, 2008 WL 3877717, at *5 (Tex. App.—Austin Aug. 20, 2008, pet. denied) (mem. op.). The “time is of the essence” provision in the Meritage–Walther Contract expressly applies to all obligations.
22
lack thereof, about the Preliminary Plan after Meritage had failed to submit it. But as we identified
above, the parties’ contract can establish materiality as a matter of law. More than once in the
Contract’s language, Meritage acknowledged how sophisticated it is, stating that it “acknowledges
and represents that it is an experienced real estate company” and that Walther thus “is relying on
[Meritage] to conduct its own due diligence and title investigations into the Property,” and that
Meritage “is a sophisticated buyer who is familiar with this type of property” and “will rely solely
on its own due diligence and investigations in purchasing the Property.” (All-caps removed.)
“Texas courts regularly enforce unambiguous contract language agreed to by sophisticated parties
in arms-length transactions. To that end, we do not protect parties ‘from the consequences of their
own oversights and failures in nonobservance of obligations assumed.’” James Constr. Grp., LLC
v. Westlake Chem. Corp., 650 S.W.3d 392, 403–04 (Tex. 2022) (citation omitted) (quoting
Dorroh–Kelly Mercantile Co. v. Orient Ins. Co., 135 S.W. 1165, 1167 (Tex. 1911)). As our sister
courts have suggested, courts when considering materiality need not resort to reviewing testimony
when the contract is clear. See Capcor at KirbyMain, L.L.C. v. Moody Nat’l Kirby Houston S,
L.L.C., 509 S.W.3d 379, 390 (Tex. App.—Houston [1st Dist.] 2014, no pet.) (noting that parties’
contract may make time essential); Kennedy Ship & Repair, 210 S.W.3d at 19.
From the Contract’s language, Meritage argues that for the transaction to close,
none of the Approvals need have been finally blessed by the Governmental Authorities. True, but
this circumstance does not make the failure of a timely submission of the draft Preliminary Plan a
nonmaterial breach so much as it simply recognizes Walther’s right to continue with the Contract
even after a material breach by Meritage, a topic to which we return below. See, e.g., Eco Built,
Inc. v. Lulfs, No. 03-08-00427-CV, 2010 WL 3629821, at *6 (Tex. App.—Austin Sept. 17, 2010,
no pet.) (mem. op.) (“When a contracting party commits a material breach, the non-breaching party
23
must elect between . . . continuing performance under the contract or ceasing performance and
terminating the contract.”). The Contract is shot through with requirements of timely performance
by both Walther and Meritage, with deadlines and distinct phases in the life of the Contract. It
expressly makes time of the essence for all matters, and it requires submission of the draft Preliminary Plan by a date certain.
Because Meritage missed that deadline, and because missing that deadline was, as
a matter of law, a material breach of the Contract according to its terms, we conclude that Meritage
did not conclusively prove that it performed, or tendered performance of, its Contract obligations.
At every turn in its appellate briefing, Meritage has argued that it performed all its
Contract obligations because either (1) the jury found that it had performed or (2) for any obligations that it might not have performed, it would have prevailed on the defensive issues of waiver
and election had they been submitted to the jury, thereby excusing the failure to perform. See
Tenneco Inc. v. Enterprise Prods. Co., 925 S.W.2d 640, 643 (Tex. 1996) (contractual rights may
be waived); Eco Built, 2010 WL 3629821, at *6 (nonbreaching party’s election, after other party’s
material breach, between continued performance under contract and terminating contract). But as
we have said, the first of those two arguments is unavailing.
As for the requested jury submissions on waiver and election, those defensive submissions would not have changed the outcome here. See Tex. R. App. P. 44.1(a)(1) (providing
that errors are not reversible unless they caused certain harm); Horton, 692 S.W.3d at 137 (“[A]n
error in a jury charge does not require reversal unless the error was harmful.”). Recall that under
the jury’s verdict, neither the jury’s “No” answer to Question 2 nor any other portion of the verdict
amounts to an affirmative finding that Meritage performed or tendered performance under the
Contract. The waiver question that Meritage requested was expressly conditioned on the jury’s
24
having answered “Yes” to whether Meritage had failed to comply with the Contract, that is, to
Question 2. But the jury instead answered “No” and so would not have reached Meritage’s waiver
question—because of the very instructions that Meritage requested be submitted along with its
waiver question—meaning that its submission would not change the outcome about whether Meritage had conclusively proved its own performance, or tender of performance, under the Contract.
See Healey v. Healey, 529 S.W.3d 124, 143 (Tex. App.—Tyler 2017, pet. denied) (recognizing
principle that jury’s answer to one question may render harmless trial court’s error in refusing to
submit another question); cf. Environmental Procs., Inc. v. Guidry, 282 S.W.3d 602, 631–32 (Tex.
App.—Houston [14th Dist.] 2009, pet. denied) (concluding that when appealing plaintiff needed
certain answers to jury questions, jury did not answer those questions because of conditioning
instructions, and plaintiff did not contend on appeal that it had conclusively proved the matters at
issue, plaintiff waived error arising from jury’s failure to answer questions because plaintiff did
not object to conditioning instructions). Much the same goes for the requested election submission. The question was expressly conditioned—by the instructions that Meritage itself requested—
on the jury’s having answered the question on prior material breach,8 that is, Question 3, which
the jury did not reach here because it answered “No” to Question 2. Therefore, despite Meritage’s
arguments on appeal that the trial court should have submitted the waiver and election questions
and instructions that Meritage requested, those submissions would have had no effect on whether
Meritage conclusively proved that it performed, or tendered performance of, its obligations under
the Contract.
8 See Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004) (when one party to a contract commits a material breach of that contract, the other party is ordinarily discharged or excused from further performance).
25
With the improper assumption regarding the jury’s “No” answer to Question 2 disposed of, and because at least some evidence reasonably supported a failure to find for Meritage
on its element that it had performed or tendered performance, the evidence from trial shows that
Meritage did not conclusively prove that it had performed.
C
1
Meritage did not obtain either an express or implied finding in its favor that it was
at all relevant times ready, willing, and able to perform its Contract obligations. The jury answered
“No” to Question 4, failing to find for Meritage that it was “ready, willing, and able to perform its
obligations under the Contract on December 27, 2021,” the closing date. And nothing else in the
jury charge amounts to an affirmative finding for Meritage that it was at all relevant times ready,
willing, and able to perform its obligations. No implied finding in Meritage’s favor could arise
under this element because the trial court’s judgment ruled that Meritage take nothing by its request
for specific performance. See Tex. R. Civ. P. 279; Gulf States Utils., 79 S.W.3d at 564.
2
Nor did Meritage conclusively prove that it was at all relevant times ready, willing,
and able to perform its Contract obligations. See Pathfinder Oil & Gas, 574 S.W.3d at 892 (plaintiff is not entitled to specific performance when plaintiff has failed to obtain finding or conclusively
establish that it was at all relevant times ready, willing, and able to perform (citing DiGiuseppe,
269 S.W.3d at 598)). Its arguments on this topic assume that the date of closing is the only relevant
time for assessing whether it was ready, willing, and able to perform and thus that only its Contract
obligations that were first due on the closing date are the ones that should be assessed for evidence
26
of readiness, willingness, and ability to perform them. Yet “[t]he plaintiff’s burden of proving
readiness, willingness and ability is a continuing one that extends to all times relevant to the contract and thereafter.” DiGiuseppe, 269 S.W.3d at 594 (quoting 25 Richard A. Lord, Williston on
Contracts § 67:15 (4th ed. 2002)). The readiness, willingness, and ability to perform the obligations involves “when they came due” under the parties’ contract. See id. at 600. Thus, even when
specific-performance plaintiffs obtain an affirmative finding in their favor that they were ready,
willing, and able to perform on a certain date, if that date is not the sole relevant date under the
contract, then the finding is not legally enough by itself to discharge the plaintiffs’ burden on the
“ready, willing, and able” element.9 See Lyons v. Ortego, No. 01-17-00092-CV, 2018 WL
4014218, at *5–6 (Tex. App.—Houston [1st Dist.] Aug. 23, 2018, pet. denied) (mem. op.).
Under the Contract, Meritage was obligated to diligently pursue the governmental
approvals and its diligent pursuit was to take place during the Governmental Approvals Period, a
defined period that ended on December 17, 2021. Ten days later, December 27, is the date that
the parties agree was the closing date and is the date reflected in jury Question 4. Some evidence
showed both (a) that as late as December 16, the parties were still negotiating the terms of the draft
Development Agreement to submit to the government for approval and (b) that this version of the
draft Development Agreement was the first such draft to comply with the Contract’s requirement
that Meritage’s submittals of draft government approvals always incorporate Walther’s intended
9 By its arguments under its third issue, Meritage contends that the jury’s “No” answer to Question 4 was not supported by factually sufficient evidence, necessitating a remand for a new trial. But Meritage is arguing that it is entitled to a new trial so that a jury may properly answer whether Meritage was ready, willing, and able to perform on the closing date. As we explain, the closing date is not the sole relevant time under the Contract, so Meritage’s arguments that it is entitled to a new trial on readiness, willingness, and ability to perform on the closing date are unavailing.
27
uses of the Seller Retained Land. Because a reasonable factfinder could conclude from this evidence that Meritage did not diligently pursue the Development Agreement during the Governmental Approvals Period, Meritage did not conclusively prove its readiness, willingness, and ability to
perform during at least one of the relevant times under the Contract.10 See Houston Auto M.
Imps. N., Ltd. v. R & A Harris S., L.P., No. 01-11-00011-CV, 2012 WL 3628878, at *9–10 (Tex.
App.—Houston [1st Dist.] Aug. 23, 2012, no pet.) (mem. op.) (concluding that at least some evidence supported finding that contract party had not diligently pursued certain government approval, under following standard: “‘[D]iligence’ is relative and incapable of exact definition. Its meaning must be determined by the circumstances of each case. Reasonable diligence has been defined
as such diligence that an ordinarily prudent and diligent person would exercise under similar circumstances. It is usually a question of fact.” (citation omitted) (quoting Strickland v. Lake, 357
S.W.2d 383, 384 (Tex. 1962) (orig. proceeding))). And even though Meritage argues that evidence
of pre-closing failures to perform are irrelevant to the “ready, willing, and able” element, Meritage
makes this argument while still mistakenly relying on the jury’s “No” answer to Question 2 as
supplying an affirmative finding that Meritage had performed all its pre-closing obligations. In
other words, Meritage argues from the Question 2 “No” answer that Question 4 must be concerned
with nothing other than performance on the closing date because the Question 2 answer absolved
Meritage of any alleged failures to perform before closing. As we have explained, that “No” does
not suffice for this purpose.
10 Because there was thus at least some evidence against Meritage on its element that it was at all relevant times ready, willing, and able to perform under the Contract, we reject Meritage’s arguments under its second issue, by which it contends that the trial court erred by failing to disregard the jury’s “No” answer to Question 4.
28
To sum up regarding Meritage’s request for specific performance, Meritage
achieved none of the above-mentioned four outcomes at trial at least one of which (if not more) it
must have achieved to show its entitlement to relief. See Pathfinder Oil & Gas, 574 S.W.3d at
890. We therefore conclude that the trial court did not err by ruling that Meritage must take nothing
on its request for specific performance. We overrule its first, second, and third appellate issues.
A portion of its sixth issue remains for determination below.
III
In its fourth issue, Meritage contends that the trial court erred by ordering in its
judgment that the earnest money be released to Walther. Walther sought the earnest money as its
damages for its counterclaim of breach of contract. As we said above, the elements of a claim for
breach of contract are that (1) a valid contract exists, (2) the plaintiff performed or tendered performance as contractually required, (3) the defendant breached the contract by failing to perform
or tender performance as contractually required, and (4) the plaintiff sustained damages due to the
breach. Pathfinder Oil & Gas, 574 S.W.3d at 890. Walther’s cross-point on appeal concerns the
elements of its own performance and Meritage’s breach.11 See generally Tex. R. Civ. P. 324(c)
(cross-points); Tex. R. App. P. 38.2(b)(1) (same). That is, Walther argues that the trial court’s
11 As for the elements of the existence of a valid contract and Walther’s damages, it is undisputed that the Contract was an existing, valid contract, and it is undisputed that Walther’s damages in the event that Meritage breached the Contract should include the earnest money as stipulated liquidated damages, according to the final sentence of Section 12.2 of the Contract. Had Meritage sought to challenge the liquidated-damages provision as unenforceable, it would have borne the burden to plead and prove the affirmative defense of penalty. See Atrium Med. Ctr., LP v. Houston Red C LLC, 595 S.W.3d 188, 196–97 (Tex. 2020); Phillips v. Phillips, 820 S.W.2d 785, 789 (Tex. 1991); Bunker v. Strandhagen, No. 03-14-00510-CV, 2017 WL 876374, at *6–10 (Tex. App.—Austin Mar. 3, 2017, no pet.) (mem. op.). Meritage did not plead that affirmative defense, and Meritage assigns no error on appeal relating to that affirmative defense.
29
judgment should be affirmed because the court should have disregarded the jury’s answers to
Questions 1 and 2 because the evidence was legally insufficient to support those answers. See
Tex. R. Civ. P. 301 (“[U]pon motion and reasonable notice . . . the court may . . . disregard any
jury finding on a question that has no support in the evidence.”); Oram v. State Farm Lloyds, 977
S.W.2d 163, 166 (Tex. App.—Austin 1998, no pet.) (“A trial court may disregard a jury’s findings
and grant a motion for judgment notwithstanding the verdict only when there is no evidence upon
which the jury could have made its findings.” (citing Tex. R. Civ. P. 301)); Villegas v. Nationwide
Mut. Ins. Co., 10 S.W.3d 380, 383 (Tex. App.—Austin 1999, pet. denied) (“Rule 301 does not
require ‘no evidence at all but comprehends those situations in which the evidence is deemed legally insufficient to establish an asserted fact.’” (quoting Andrews v. Houston Lighting & Power,
820 S.W.2d 411, 413 (Tex. App.—Houston [14th Dist.] 1991, writ denied))).
Walther’s cross-point is premised on showing that the evidence conclusively
proved the contrary to the jury’s answers, that is, conclusively proved that Meritage failed to comply with the Contract and that Walther did not fail to comply with the Contract. See Pools Unltd.,
Inc. v. Houchens, No. 03-21-00046-CV, 2022 WL 16824340, at *7 (Tex. App.—Austin Nov. 9,
2022, no pet.) (mem. op.) (Rule 301 burden to show conclusive evidence contrary to jury’s answer). As we said above, conclusive proof of a proposition is in other words proof “as a matter of
law” of that proposition. See Airway Ins., 534 S.W.2d at 879 n.2; Valdez, 2016 WL 1407800, at
*5; Bisland, 2013 WL 3186192, at *3.
In reviewing this contention, our considerations include whether “a legal principle
precludes recovery” by the party who was relying on the jury finding under attack. See Bisland,
2013 WL 3186192, at *3; World Access Telecomms. Grp., Inc. v. Statewide Calling, Inc.,
No. 03-05-00173-CV, 2006 WL 2986227, at *5 (Tex. App.—Austin Oct. 17, 2006, no pet.) (mem.
30
op.). If a legal principle prevents a party from prevailing on a claim or defense, then a relevant
jury finding is properly disregarded. See Palacios v. Palacios, No. 03-23-00129-CV, 2024 WL
1642921, at *5 (Tex. App.—Austin Apr. 17, 2024, no pet.) (mem. op.); see also Pike v. Texas
EMC Mgmt., LLC, 610 S.W.3d 763, 783 (Tex. 2020) (evidence is legally insufficient when rules
of law bar factfinder from giving weight to the evidence offered to prove finding under attack).
Meritage’s sixth appellate issue responds to Walther’s cross-point. In its sixth issue, Meritage contends that if we credit the cross-point, we should remand the case for a new trial
because at least some evidence supported Meritage’s requested jury submissions on waiver and
election, the trial court thus erred by refusing to submit those issues, and the error was harmful.
For its cross-point, Walther’s theory of Meritage’s breach is the one that we discussed above, that Meritage failed to submit a draft of the Preliminary Plan to the government by
the date that it was supposed to. And as we concluded above, that failure was a material breach.
There is no contrary evidence—no evidence to show that Meritage did not fail to submit the draft
Preliminary Plan timely. Meritage’s only counterarguments on the topic are that any such breach
was not material, an argument that we have rejected above, and that the trial court’s refusal to
submit its requested submissions on waiver and election was harmful error.
But when an element has been conclusively proved, the element should not be
submitted to the jury. See City of Keller, 168 S.W.3d at 814–15 & nn.51–52; Wright v. Vernon
Compress Co., 296 S.W.2d 517, 523 (Tex. 1956). Meritage’s requested jury submissions would
not have rescued it from the conclusive proof that it had breached because the submissions were
expressly predicated on jury answers that Meritage did not in fact receive and that it should not
have received. No jury answers establishing an element need be obtained when the element has
been proved conclusively. The most relief that Meritage requests in connection with its refused
31
waiver and election submissions is a new trial in which those questions may be asked of the jury;
Meritage has not assigned any error on the basis that it had conclusively proved either that Walther
had waived the obligation relating to the draft Preliminary Plan or that Walther had elected to treat
the Contract as continuing, rather than terminating it, despite knowledge of this breach. Cf. Environmental Procs., 282 S.W.3d at 631–32. The instructions that Meritage requested to accompany
its requested submissions on waiver and election would have meant that the jury still would not
have answered those questions. In addition, the jury should not have been given the chance to
answer Question 2 in the first place because the evidence was conclusive that Meritage had failed
to comply with the Contract. Walther thus did not need a “Yes” answer to Question 2—it needed
no jury answer at all about whether Meritage had failed to comply with the Contract. See City of
Keller, 168 S.W.3d at 814–15 & nn.51–52; Wright, 296 S.W.2d at 523; see also Energy Transfer
Partners, 593 S.W.3d at 741 & n.36 (plaintiff may discharge burden to prove element of claim by
conclusively proving the element); Hanson Aggregates W., 338 S.W.3d at 42–43, 46–48 (same).
Because of all these circumstances, Meritage’s arguments about its waiver and election submissions do not alter our conclusion that the trial court should have disregarded the jury’s answer to
Question 2. We therefore conclude that the portion of Walther’s cross-point contending that the
trial court should have disregarded the jury’s answer to Question 2 is meritorious. See Tex. R.
Civ. P. 324(c) (cross-points may “vitiate the verdict”); Tex. R. App. P. 38.2(b)(1) (same).
As to Question 1, Walther’s own performance, Walther’s theory at trial was the
doctrine of prior material breach. See Mustang Pipeline, 134 S.W.3d at 196 (when one party to
contract commits material breach of that contract, the other party is ordinarily discharged or excused from further performance). That is, although Meritage pleaded and presented evidence that
Walther had breached by failing to close the transaction and convey the Property to Meritage on
32
the closing date, Walther pleaded and presented evidence that it was discharged from or excused
for any such breach because Meritage had materially breached the Contract before the closing date.
Because Walther conclusively proved a prior material breach by Meritage, Walther proved as a
matter of law that its failure to close the transaction and convey the Property to Meritage was not
a breach of the Contract. See id. We therefore conclude that the portion of Walther’s cross-point
contending that the trial court should have disregarded the jury’s “Yes” answer to Question 1 is
meritorious. See Tex. R. Civ. P. 324(c); Tex. R. App. P. 38.2(b)(1).
In all then, we sustain Walther’s cross-point, overrule Meritage’s fourth and sixth
appellate issues, and conclude that the trial court did not err in the portion of its judgment ordering
the release of the earnest money to Walther.
IV
In its fifth and remaining appellate issue, Meritage contends that the trial court erred
by awarding Walther attorneys’ fees and by failing to award Meritage attorneys’ fees and expenses
because under the Contract’s prevailing-party provision, Walther was not a prevailing party in
light of the jury’s verdict and trial court’s judgment. Section 14.14 of the Contract provides:
If either party hereto brings an action or proceeding against the other party to enforce or interpret any of the covenants, conditions, agreements, or provisions of this
[Contract], the prevailing party in such action or proceeding shall be entitled to
recover all costs and expenses of such action or proceeding, including, without limitation, attorneys’ fees, charges, disbursements, and the fees and costs of expert
witnesses. If any party secures a judgment in any such action or proceeding,
then . . . any costs and expenses (including, but not limited to, attorneys’ fees and
costs) incurred by the prevailing party in any appeal from such judgment in connection with such appeal shall be recoverable separately from and in addition to any
other amount included in such judgment.
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Meritage argues that Walther is not a prevailing party because the jury found against it on Questions 1 and 2, Walther at trial thus did not prevail on its contract counterclaim, and Meritage should
be awarded specific performance on its own contract claim.
But the circumstances obviously have changed, given our reasoning above. Because of the success of Walther’s appellate cross-point and the failure of Meritage’s first, second,
third, fourth, and sixth appellate issues, Walther is entitled to a judgment both awarding it the
contractual earnest money and ruling that Meritage take nothing on its request for specific performance. That is the judgment that it received from the trial court, so the trial court rendered the
judgment that it should have. See Tex. R. App. P. 43.3. Because Walther prevails on its contract
counterclaim and prevails, via the take-nothing portion of the judgment, on Meritage’s request for
specific performance, Walther is the prevailing party here and so is entitled to the award of attorneys’ fees that it received. See Sunchase IV Homeowners Ass’n, Inc. v. Atkinson, 643 S.W.3d 420,
424 (Tex. 2022) (defendants are prevailing parties when they receive take-nothing judgment on
“the main issue”); Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 485 (Tex.
2019) (plaintiffs are prevailing parties when they prove compensable injury and secure enforceable
judgment in form of damages or equitable relief.). We thus overrule Meritage’s remaining, fifth
appellate issue. See Humble Nat’l Bank v. DCV, Inc., 933 S.W.2d 224, 236 (Tex. App.—Houston
[14th Dist.] 1996, writ denied) (overruling relevant portion of appellate issue assigning error to
award of attorneys’ fees because appellee’s relevant cross-points had been sustained); Dorchester
Gas Prod’g Co. v. Harlow Corp., 743 S.W.2d 243, 260 (Tex. App.—Amarillo 1987, writ dism’d
by agr.) (affirming portion of judgment denying appellant’s request for attorneys’ fees when appellant’s appellate issues were overruled and appellee’s relevant cross-point was sustained).
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* * *
We affirm the trial court’s judgment.
Chari L. Kelly, Justice
Before Justices Triana, Kelly, and Theofanis
Affirmed
Filed: August 27, 2026
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