Opinion issued October 16, 2026
In The
Court of Appeals
For The
First District of Texas
NO. 01-25-00128-CV
QIAN WU AND LENSHOME OPTIC, LLC, Appellants
V.
ZHUO CHEN, SL VISION, LLC, AND LC-TX INVESTMENT, LLC,
Appellees
On Appeal from the 270th District Court
Harris County, Texas
Trial Court Case No. 2018-75354
MEMORANDUM OPINION
This case involves one eye clinic, two eye doctors, and a trial over who owed
what to whom. Dr. Chen said Dr. Wu bought the clinic from her but paid only part
of what she owed, and a jury agreed. Dr. Wu disagrees and now appeals.
We reverse the portion of the trial court’s judgment in favor of Dr. Chen on
her breach of contract claim against Dr. Wu and remand that portion for further
proceedings. We affirm the remainder of the judgment.
Background
Dr. Zhuo “Lucy” Chen went to medical school in China. In 2010, she obtained
a license to practice optometry in Texas, and in 2012, she opened an eye clinic in the
northwest part of Harris County. A few years later, this clinic caught the attention of
Dr. Qian Wu, who had an interest in buying at least part of the business. A deal could
make sense for both sides because Dr. Chen wanted to relocate and ply her trade
elsewhere, while Dr. Wu saw an opportunity to purchase what she believed to be a
profitable concern.
The testimony conflicted about the fine points of the negotiations, in that Dr.
Wu testified that she was told that the business generated more income than turned
out to be the case, but all agree that the two doctors eventually signed their names to
a pair of written contracts, with some disagreement as to the capacity in which Dr.
Wu signed each. The first contract is called a Buy-Sell Agreement. The second is a
lease. We will summarize the terms of each contract because they form the basis of
the jury questions and the judgment.
2
The Buy-Sell Agreement has a Buyer and a Seller. It sets a purchase price of
$330,000, which was to be paid in three tranches. Dr. Wu paid the first tranche but
never paid the remaining $213,000.
The Buy-Sell Agreement contains more than 20 single-spaced sections. It
states that it is made among the Seller (SL Vision LLC and its owner Dr. Chen), the
Landlord (LC-TX Investment LLC), and the Buyer (LensHome Optic LLC). Dr.
Wu is not listed as a party. The recitals indicate the following:
• Seller operates an eye care clinic, Lakewood Eye Care,
• Landlord owns the premises, and
• Buyer wants to take over the clinic, buy the assets, and lease the
premises.
Section 7 of the contract contains a guarantee from Seller that all the assets are free
and clear of encumbrances and bank debt. If this guarantee proves untrue, Buyer
has the right to terminate the deal. Section 14 contains a second termination
provision: “When Buyer pays the full amount of Consideration, Seller shall transfer
the title of all equipment and the Clinic to Buyer. If Buyer wants to terminate the
transaction and cooperation, the parties agree to negotiate the issue. Seller shall not
terminate the transaction in advance for any reason.”
Under section 12, Seller will “provide ophthalmic medical services in the
Clinic,” while Buyer will “operate the eyeglass business in the Clinic.” Seller is
3
solely responsible for the former, while Buyer is solely responsible for the latter. But
the parties later stipulated that references to ophthalmic refer to optometry.
Under section 13, Seller will collect the income from “ophthalmic medical
services,” while Buyer will collect the “non-medical service income (including the
income from the fitting and sales of various frames of eyeglasses and contact
lenses).” Furthermore, Seller and Buyer will divide certain income every month,
with 95% of Seller’s “received net income after deducting ophthalmologists’ salary
and other costs” being paid to Buyer as a fee for use of the equipment and premises,
and with 5% of Buyer’s “received net income” after deducting labor costs being paid
to Dr. Chen as a consulting fee.
The lease has a term of five years (60 months) at a rent of $3000 per month.
It starts with definitions and contains two handwritten entries to indicate the identity
of the landlord and the tenant:
Nothing else in the definitional section casts any light on the relationship between
SL Vision and Dr. Chen, or between Shanghai Lanhe and Dr. Wu. The rest of the
4
lease terms appear fairly standard. Dr. Wu paid rent for seven months but stopped
and did not pay after that.
The relationship fell apart in 2018. Dr. Wu engaged an attorney, Neal Cannon,
who considered filing an action against the prior attorney who had advised Dr. Wu
during the negotiations. Ultimately, however, Dr. Wu opted not to sue her prior
lawyer and instead sued Dr. Chen. Among other claims, Dr. Wu alleged breach of
contract and fraud.
In response, Dr. Chen filed a general denial, raised some affirmative defenses,
and asserted her own breach of contract allegations as counterclaims. Because the
two contracts involve the two doctors as well as their business entities, the lawsuit
includes those business entities as litigants. Specifically, the plaintiffs are Dr. Wu
and her company LensHome Optic, LLC, while the defendants are Dr. Chen, her
company SL Vision LLC, and another company called LC-TX Investment, LLC.
In response to Dr. Chen’s counterclaim for breach of the Buy-Sell Agreement,
Dr. Wu and LensHome interposed the affirmative defense of illegality. They
contended that the contract violates the licensing provisions of the Texas Optometry
Act. See TEX. OCC. CODE §§ 351.251–.367. That Act contains a fairly strict scheme
relating to licensing and the practice of optometry. Dr. Chen challenged that defense
with a no-evidence motion for summary judgment, to which Dr. Wu and LensHome
responded by pointing to the statute’s ban on certain kinds of fee sharing. The trial
5
court granted the motion, so the case went to trial with Dr. Wu’s and LensHome’s
illegality defense off the table.
The trial was largely a swearing match, in that the two doctors were the only
witnesses of any note. (There was some lawyer testimony about attorneys’ fees, but
not about the contracts or the transactions.) Dr. Wu maintained that Dr. Chen had
promised her a profitable business but sold her a mere money pit, while Dr. Chen
disagreed and argued that Dr. Wu spent too much time in China on other endeavors
and not enough time in Texas trying to make the clinic succeed.
The jury rejected Dr. Wu’s breach of contract claim. The most significant jury
findings are the following:
• Dr. Wu failed to comply with the Buy-Sell Agreement.
• The damages to Dr. Chen and SL Vision were $213,000.
• Dr. Wu signed the lease in her individual capacity (as opposed to
signing as an agent for her company, Shanghai Lanhe Optometry).
• Dr. Wu failed to comply with the lease.
• The damages to Dr. Chen, SL Vision, and LC-TX were $159,000.
• The reasonable and necessary attorney’s fees for Dr. Chen, SL Vision,
and LC-TX’s attorneys “in pursuing the breach of agreement claim(s)”
was $120,000.
The trial court rendered judgment as follows. First, the court ordered Dr. Wu to pay
$213,000 to Dr. Chen and SL Vision. Second, the court ordered Dr. Wu to pay
6
$159,000 to LC-TX (although not to Dr. Chen or SL Vision). Finally, the court
awarded interest and attorneys’ fees.
On appeal, Dr. Wu advances five complaints:1
1. Summary judgment was improper on the illegality defense to the
counterclaim for breach of the Buy-Sell Agreement.
2. Dr. Wu did not sign the lease in her individual capacity.
3. The trial court erred in granting a directed verdict that Dr. Wu signed
the Buy-Sell Agreement in her individual capacity.
4. The trial court should have submitted a question or jury instruction
about termination of the Buy-Sell Agreement.
5. The trial court erred in excluding the DTPA notice letter that Dr. Wu’s
lawyer sent to Dr. Chen.
We will go through the issues one by one.
I. The Partial Summary Judgment Against Dr. Wu’s Illegality Defense.
Dr. Wu and LensHome sued Dr. Chen and SL Vision on various theories,
alleging, among other things, that the “sale was illegal.” They further sought to void
the Buy-Sell Agreement because “the contract was illegal.” Dr. Chen and SL Vision
filed a counterclaim for breach of the Buy-Sell Agreement. In response to the
counterclaim, Dr. Wu and LensHome raised the affirmative defense of illegality,
reiterating that the “sale was illegal.”
1
Dr. Wu does not challenge the jury’s No answer to the question whether Dr. Chen
and SL Vision failed to comply with the Buy-Sell Agreement or the take-nothing
judgment that the trial court entered against Dr. Wu and LensHome.
7
Dr. Chen and SL Vision attacked the illegality defense in a no-evidence
motion for summary judgment. Dr. Wu and LensHome filed a response. This
response addresses illegality by citing a statutory ban on fee-splitting, see TEX. OCC.
CODE § 351.457, in a single paragraph of text:
The Buy-Sell Agreement violates the Texas Optometry Act on its face.
The Act holds, in one part:
Sec. 351.457. PROFESSIONAL RESPONSIBILITY; FEES. (a) An
optometrist or therapeutic optometrist may not directly or indirectly
divide, share, split, or allocate a fee for optometric services or materials
with: (1) a layperson, firm, or corporation;
The Buy-Sell Agreement holds, in part, “[e]very month, 95% of Seller’s
received net income . . . shall be paid to the Buyer . . .” (paragraph
13(4)). This is impermissible fee sharing, but the fee sharing
arrangement goes to the heart of the financial impetus and consideration
for this transaction.
The response does not say anything further about illegality, although it does attach a
copy of the Buy-Sell Agreement.
The court granted the no-evidence motion and took the illegality defense out
of the case. The parties then went to trial, with Dr. Chen contending that Dr. Wu had
paid part of the total purchase price but had failed to pay the remaining $113,000
and $100,000 portions. The jury found a breach of contract by Dr. Wu and damages
of $213,000, and the court rendered judgment accordingly.
In Issue 1 on appeal, Dr. Wu and LensHome challenge the summary judgment
against their illegality defense. They regard the Buy-Sell Agreement as illegal in
two ways: (1) it involves an unlicensed optometrist in the practice of optometry, and
8
(2) it splits fees between an optometrist and “a layperson, firm, or corporation.” Id.
The former argument fails, partly because there is no summary judgment evidence
about anyone being unlicensed and partly because Dr. Wu and LensHome did not
raise the issue of licensing in their response, as required by Rule of Civil Procedure
166a. State v. $3,774.28 in U.S. Currency, 713 S.W.3d 381, 391 (Tex. 2025) (to
avoid no-evidence summary judgment, nonmovant must expressly point out fact
issues in written response); Bertucci v. Watkins, 709 S.W.3d 534, 545 (Tex. 2025)
(“A court of appeals, however, cannot reverse a summary judgment on grounds not
presented to the trial court.”).
The latter argument requires more attention. The Buy-Sell Agreement itself
calls for splitting certain kinds of income: “Every month, 95% of Seller’s received
net income after deducting ophthalmologists’ salary and other costs shall be paid to
the Buyer as equipment and premises use fee, and premises management fee; and
5% of Buyer’s received net income after deducting the employee’s salary and other
costs, shall be paid to Dr. Zhuo Chen as the consulting fee . . . .”
According to Dr. Wu and LensHome, this clause impermissibly splits fees
between an eyeglass business and an optometry business, in violation of section
351.457(a)(1). This argument is properly in play because Dr. Wu and LensHome
raised it in their response and attached the agreement as summary judgment
evidence.
9
A. Law of Illegal Contracts.
Courts handle the issue of contract illegality using familiar legal principles.
First, illegality provides an affirmative defense to a claim for breach of contract.
TEX. R. CIV. P. 94. Courts will not enforce illegal contracts. Miller v. Long-Bell
Lumber Co., 148 Tex. 160, 163, 222 S.W.2d 244, 246 (1949); Hunt’s Heirs v.
Robinson’s Heirs, 1 Tex. 748, 760 (1847); see Roehl v. Pleasants, 31 Tex. 45, 48
(1868) (contract was against public policy, illegal, and void and therefore was “not
enforceable in a court of justice”). A contract to do something that cannot be
performed without violating the law violates public policy and is void. Philadelphia
Indem. Ins. Co. v. White, 490 S.W.3d 468, 483 (Tex. 2016); BRCC Enters. LLC v.
Skie, 697 S.W.3d 417, 424 (Tex. App.—Houston [14th Dist.] 2024, no pet.) (“An
illegal contract is one in which the parties undertake to do an act forbidden by the
law of [the] place where it is to be done.”).
Second, courts “must interpret” contracts “to avoid a construction that renders
the contract unlawful.” Borgelt v. Austin Firefighters Ass’n, IAFF Loc. 975, 692
S.W.3d 288, 303 (Tex. 2024); see also RESTATEMENT (SECOND) OF CONTRACTS
§ 203(a) (AM. L. INST. 1981) (“[A]n interpretation which gives a reasonable, lawful,
and effective meaning to all the terms is preferred to an interpretation which leaves
a part unreasonable, unlawful, or of no effect.”).
10
Third, courts sometimes sever illegal provisions from the rest of the contract:
“An illegal or unconscionable provision of a contract may generally be severed so
long as it does not constitute the essential purpose of the agreement.” In re PolyAm., L.P., 262 S.W.3d 337, 360 (Tex. 2008). “Whether or not the invalidity of a
particular provision affects the rest of the contract depends upon whether the
remaining provisions are independent or mutually dependent promises, which courts
determine by looking to the language of the contract itself.” Id.
“The relevant inquiry is whether or not parties would have entered into the
agreement absent the unenforceable provisions.” Id. This inquiry becomes easier
when the parties use a severability clause, which indicates that they want to save as
much of the contract as possible. Such clauses “serve to preserve contracts so long
as the invalidated portions of the contract do not constitute the main or essential
purpose of the agreement.” City of Brownsville v. Golden Spread Elec. Coop., Inc.,
192 S.W.3d 876, 881 (Tex. App.—Dallas 2006, pet. denied).
Thus, the courts have a tradition of enforcing whatever parts of a contract can
properly be severed out. See Gulf, C. & S.F. Ry. Co. v. Hume, 87 Tex. 211, 218, 27
S.W. 110, 112 (1894) (“When one, for a legal and valuable consideration, agrees to
perform two acts, which are severable, one of which is lawful and the other unlawful,
the contract may be enforced as to that for which it was lawful to contract, and held
void as to the other.”). A contract’s severability is a question of law. City of
11
Beaumont v. Int’l Ass’n of Firefighters, Loc. Union No. 399, 241 S.W.3d 208, 216
(Tex. App.—Beaumont 2007, no pet.).
B. The Challenged Portion of the Buy-Sell Agreement is Severable
from the Remainder of the Contract, and therefore the Contract is
Not Illegal.
The Buy-Sell Agreement contains numerous promises. Perhaps the most
prominent one is the promise by Buyer to pay $330,000 as consideration to Seller.
The agreement defines Buyer as LensHome Optic LLC, and Seller as SL Vision LLC
and its owner Dr. Chen. Buyer paid some of that amount but failed to pay the
remaining $213,000. This deficiency forms the basis of the recovery for breach of
the contract.
Although the summary judgment response urged illegality, it did so solely
based on the fee-sharing ban in Occupations Code section 351.457(a), so we will
focus on that ban in inquiring whether the agreement runs afoul of the law.
McCreary v. Bay Area Bank & Tr., 68 S.W.3d 727, 733 (Tex. App.—Houston [14th
Dist.] 2001, pet. dism’d) (“Where a contract is made in violation of a statute, it is
illegal and void.”). Section 351.457(a) prohibits an optometrist from directly or
indirectly dividing, sharing, splitting, or allocating a fee for optometric services or
materials with a layperson, firm, or corporation. TEX. OCC. CODE § 351.457(a)(1).
Paragraph 13—“Operating income and payroll”—contains four subdivisions.
Subdivision (4) provides a percentage formula for sharing certain revenues. The
12
formula calls for Seller to pay Buyer 95% of received net income after deducting
ophthalmologists’ salary and other costs. The contract calls this a fee for “equipment
and premises use” and “premises management,” but Dr. Wu and LensHome see the
arrangement as illegal fee splitting, given that the Seller is contractually responsible
for the “medical” side of the business and will surely be receiving at least some
revenues covered by the statute. Cf. Cmty. Health Sys. Pro. Servs. Corp. v. Hansen,
525 S.W.3d 671, 689 n.10 (Tex. 2017) (contract spoke of “professional medical
services” and “practice losses,” but it must mean services by doctor and not by
hospital, because including hospital revenue would result in the corporate practice
of medicine, making contract void as matter of law).
We will assume for purposes of argument that the fee-sharing formula violates
the statute. That premise, however, would not vitiate the whole contract or taint the
judgment for $213,000. The promise to pay a fixed purchase price for the clinic is
sufficiently distinct from the fee-sharing scheme as to qualify as severable. Section
16 requires severability, and even if it did not, the sharing scheme would still appear
divisible from the purchase arrangement. See Wicks v. Comves, 110 Tex. 532, 536,
221 S.W. 938, 939 (1920) (“Though the first act was unlawful, the second was
lawful. No two acts could be more readily separated.”).
For example, in Dietz v. Van Nortwick, 188 S.W.2d 590 (Tex. Civ. App.—
Galveston 1945, writ ref’d w.o.m.), this Court encountered a contract calling for the
13
sale of beer (legal) and the sale of gambling devices called punch boards (not legal).
We severed the former part from the latter: “The unlawful part of the contract here
can easily be separated from the lawful. That is, the sale of the beer can be separated
from the sale of the punch boards. Therefore, the contract was enforceable in so far
as it related to the sale of beer.” Id. at 592. Similarly, the purchase of the eyeglass
business can be separated from the part requiring Dr. Chen to pay some of her
optometric fees.
Because we conclude that Paragraph 13(4) is severable from the remainder of
the Buy-Sell Agreement, we conclude that the agreement as a whole is not illegal,
and the trial court did not err by granting no-evidence summary judgment on Dr.
Wu’s and LensHome’s illegality defense.
II. Dr. Wu’s Personal Liability for Breach of the Lease.
In Issue 2, Dr. Wu contends that legally and factually insufficient evidence
supports the jury’s finding that she breached the lease in her individual capacity. In
assessing this complaint, we follow well-established standards of review. See City
of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005) (when determining legal
sufficiency, we ask whether trial evidence would enable reasonable and fair-minded
people to reach verdict under review, crediting favorable evidence if reasonable
jurors could and disregarding contrary evidence unless reasonable jurors could not);
Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curiam) (when determining
14
factual sufficiency, we consider and weigh all evidence and set aside verdict only if
it is so contrary to overwhelming weight of evidence as to be clearly wrong and
unjust).
A presumption of legal separateness exists between entities such as limited
liability companies and corporations and the members and shareholders. Julka v.
U.S. Bank Nat’l Ass’n, 516 S.W.3d 84, 88 (Tex. App.—Houston [1st Dist.] 2017, no
pet.). As a result, an LLC member is not liable for the company’s debts “absent a
separate agreement in the member’s individual capacity.” Id.; see Sherrard v.
SignAd, Ltd., 637 S.W.3d 192, 199 (Tex. App.—Houston [14th Dist.] 2021, no pet.)
(“An agent who contracts for a disclosed principal is generally not liable on the
contract.”). Agency is not presumed, but an agent will be personally liable on a
contract if she does not disclose her agency. Gordon v. Leasman, 365 S.W.3d 109,
114 (Tex. App.—Houston [1st Dist.] 2011, no pet.). In determining whether an
agent is personally liable on a contract the agent signed, we consider both the
signature and the body of the contract. Plan B Holdings, LLC v. RSLLP, 681 S.W.3d
443, 454 (Tex. App.—Austin 2023, no pet.).
Dr. Wu and Dr. Chen offered competing versions of the 22-page lease at trial.
Both versions identify two tenants: Shanghai Lanhe Optometry Co. Ltd. and Qian
Wu. The signature blocks begin on page 21 of the lease, with the block for the
landlord. Both versions of the lease indicate that Dr. Chen signed the lease for
15
landlord LC-TX Investment, LLC in a representative capacity. Dr. Wu’s version
states:
Likewise, Dr. Chen’s version states:
16
The signature blocks for the tenant, however, differ. The version of the lease
offered by Dr. Wu has two pages for page 22, the page with the signature block for
the tenant. The first page does not indicate a representative capacity, but the second
page does:
17
The version of the lease offered by Dr. Chen has only one page 22, and it does
not indicate that Dr. Wu signed in a representative capacity:
18
The parties addressed this discrepancy at trial. Dr. Chen’s counsel pointed
out the differences to Dr. Wu and stated, “Somebody added Shanghai Lanhe
Optometry Clinic.” Dr. Wu replied, “It was not added in later on. It was there then.”
When counsel asked if Dr. Wu “signed one without Shanghai Lanhe Optometry
Clinic” and signed “the other one [that] did have Shanghai Lanhe Optometry Clinic,”
she stated, “It was signed like this.” Dr. Chen, when asked about the differences,
produced “the original lease,” which she was allowed to show to the jury as a
demonstrative exhibit. She testified that “Shanghai Lanhe Optometry Clinic” was
not on the signature page of the original lease.
The jury thus had before it conflicting evidence concerning whether Dr. Wu
signed the lease in a representative capacity on behalf of Shanghai Lanhe or in her
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individual capacity.2 The jury also heard testimony that the handwritten “Shanghai
Lanhe Optometry Clinic” was not on the original lease at the time of signing but was
instead added later. As the factfinder, it was within the jury’s province to resolve
conflicts in the evidence. See City of Keller, 168 S.W.3d at 820 (“[C]ourts reviewing
all the evidence in a light favorable to the verdict must assume that jurors resolved
all conflicts in accordance with that verdict.”). Moreover, jurors “are the sole judges
of the credibility of the witnesses and the weight to give their testimony,” and they
“may choose to believe one witness and disbelieve another.” Id. at 819. We may
not substitute our judgment for that of the jury. Golden Eagle Archery, Inc. v.
Jackson, 116 S.W.3d 757, 761 (Tex. 2003); City of Keller, 168 S.W.3d at 819
(“Reviewing courts cannot impose their own opinions to the contrary.”).
We conclude that legally sufficient evidence supports the jury’s finding that
Dr. Wu signed the lease in her individual capacity. We further conclude that the
jury’s finding is not against the great weight and preponderance of the evidence, and
therefore factually sufficient evidence supports the finding.
III. Dr. Wu’s Personal Liability on the Buy-Sell Agreement.
In Issue 3, Dr. Wu complains about a directed verdict ruling. Although she
had wanted a jury question that asked whether she signed the Buy-Sell Agreement
2
Dr. Wu’s counsel acknowledged this during a discussion about Dr. Wu’s motions
for directed verdict, stating, “On the Lease, that is a fact issue because of the
different versions of the Lease. I totally understand.”
20
individually as opposed to signing on behalf of her company LensHome, the trial
court took that issue out of play by ruling as a matter of law that Dr. Wu signed
individually. Dr. Wu assails that ruling.
This issue arose after the last witness stepped down. With the evidence closed,
the court moved on to hear arguments on directed verdict motions. Dr. Wu moved
for a directed verdict to the effect that she should not be liable for breach of the BuySell Agreement: “Her name nowhere appears in the contract other than her signing
on the signature page on behalf of Lens Home. So, to that extent, it is clear that there
can be no counterclaims against Dr. Wu for any breach of the Buy-Sell because she
is not a party to the Buy-Sell.”
The trial court was unpersuaded, explaining that Dr. Wu had one view, and
Dr. Chen had another, so the jury should decide Wu’s liability on the counterclaim
for breach of the Buy-Sell Agreement: “You think she’s not, he thinks she is. They
will decide if she is or she isn’t, or what’s going on.” Shortly thereafter, the
defendants adjusted their proposed liability question so that it no longer asked about
a failure to comply by Dr. Wu’s company (LensHome), but only about a failure to
comply by Dr. Wu.
A long and free-flowing discussion ensued. The court eventually ruled as a
matter of law that Dr. Wu signed the Buy-Sell Agreement in her individual capacity.
The court then asked the jury in Question 4 whether Dr. Wu failed to comply with
21
the Buy-Sell Agreement. (Although the contract defines “Buyer” as LensHome, thus
seemingly making LensHome a party to the contract, the court did not submit a
question asking whether LensHome failed to comply.) The jury found that Dr. Wu
failed to comply with the contract.
On appeal, Dr. Wu argues that the directed verdict was erroneous. The
standard of review for a directed verdict is familiar. See Bell v. Bay Area RV Parks,
L.L.C., 722 S.W.3d 176, 210–11 (Tex. App.—Houston [1st Dist.] 2025, no pet.)
(courts review granting of directed verdict de novo, viewing evidence in light most
favorable to party suffering adverse judgment and determining whether any evidence
of probative value raises material fact issue on question presented).
The directed verdict cannot survive scrutiny. The written contract facially
defines the Buyer as someone other than Dr. Wu. It defines the Buyer as “LensHome
Optic LLC, a Texas limited liability company with an address of 12238 Queenston
Blvd, Suit[e] K, Houston, TX 77095.” It repeatedly sets out the obligations as
running between the Buyer and the Seller. With LensHome being an LLC, one
would expect a signature from a company manager, which is exactly what appears.
The signature page shows a signature by an LLC manager:
22
Nothing in the agreement mentions Dr. Wu or purports to impose any obligations on
her. The record falls far short of establishing as a matter of law that Dr. Wu is a party
to the contract or signed the agreement individually. See Cleveland Reg’l Med. Ctr.,
L.P. v. Celtic Props., L.C., 323 S.W.3d 322, 346 (Tex. App.—Beaumont 2010, pet.
denied) (directed verdict proper “only if the evidence conclusively establishes the
movant[’]s right to judgment, negates the opponent’s right to judgment, or is
insufficient to raise a fact issue on a vital fact” (quotation omitted)).
Dr. Chen contends that Dr. Wu judicially admitted having individual liability.
According to Dr. Chen, Dr. Wu’s live petition contains a breach of contract allegation
on behalf of the plaintiffs (plural), which the petition defined as both LensHome and
Dr. Wu. The petition vacillates a bit in stating who made the Buy-Sell Agreement:
• Singular (LensHome only). In paragraph 11, it alleges the making of the
Buy-Sell Agreement between “Plaintiff LensHome Optic LLC, and Defendant
Chen and her company SL Vision LLC.”
• Plural (LensHome and Dr. Wu). In paragraph 29, it says that “Plaintiffs reallege and by reference adopt all allegations contained in the preceding
23
paragraphs 1-24. However, should the contracts at issue be found to be legal
and enforceable, then in the alternative to paragraphs 25-26, Plaintiffs contend
that Defendants Zhou Chen and SL Vision, LLC breached the contract at
issue.”
None of this vacillation rises to the level of a judicial admission that Dr. Wu herself
became a party to the Buy-Sell Agreement.
“A clear, deliberate, and unequivocal factual allegation made in a live pleading
and not pleaded in the alternative constitutes a judicial admission that conclusively
establishes the fact and bars the pleader from disputing it.” Lake Jackson Med. Spa,
Ltd. v. Gaytan, 640 S.W.3d 830, 839 (Tex. 2022). Paragraph 29 of the petition does
not state that Dr. Wu made or signed the Buy-Sell Agreement; at most, it accuses Dr.
Chen and SL Vision of breaching it. Furthermore, given the earlier allegation that
LensHome made the contract, we see no clear and unequivocal assertion that Dr. Wu
personally signed the contract or was a party to it.
Dr. Chen also argues that Dr. Wu signed for a nonexistent entity, so she has
individual liability. We acknowledge the general rule that a promoter who signs for
a nonexistent entity has personal liability unless the counterparty agrees otherwise.
See Bibbee v. Root Glass Co., 128 Tex. 220, 222, 96 S.W.2d 975, 976 (Tex. [Comm’n
Op.] 1936) (“[O]rdinarily promoters of a corporation are personally liable on
contracts made in the name of and for the proposed corporation.”). The theory is
24
that one cannot act as the agent of a nonexistent principal.3 This general rule is all
very well, but it has no application here. LensHome existed.4 The nonexistent entity
that Dr. Chen refers to is not LensHome, but Shanghai Lanhe, a completely different
company.
Dr. Chen also says that Dr. Wu’s liability raises an issue of capacity, which
needed to appear in a verified denial but did not. Under Rule 93, a defendant who
wants to contest the capacity in which he or she is sued must do so by verified denial,
“unless the truth of such matters appear of record.” TEX. R. CIV. P. 93(2).
3
See Weatherford, M.W. & N.W. Ry. Co. v. Granger, 86 Tex. 350, 353–54, 24 S.W.
795, 796 (1894) (“[W]here there is nothing more than a contract by a promoter, in
which he undertakes to bind the future corporation, it is generally conceded that it
cannot be enforced. The promoters themselves are liable upon the contract, unless
the person with whom they engage agrees to look to some other fund for payment.”
(citation omitted)); see also Fish v. Tandy Corp., 948 S.W.2d 886, 897–98 (Tex.
App.—Fort Worth 1997, writ denied) (quoting Granger and then stating,
“[o]therwise, a promoter is relieved of personal liability only when the corporation
subsequently adopts the contract either expressly or by accepting its benefits”);
Bradshaw v. Jones, 152 S.W. 695, 697 (Tex. Civ. App.—Texarkana 1912, writ
ref’d) (similar); RESTATEMENT (THIRD) OF AGENCY § 6.04 (AM. L. INST. 2006)
(“Unless the third party agrees otherwise, a person who makes a contract with a
third party purportedly as an agent on behalf of a principal becomes a party to the
contract if the purported agent knows or has reason to know that the purported
principal does not exist or lacks capacity to be a party to a contract.”). 4
Dr. Wu testified that at the time the lease was signed on March 18, 2018, LensHome
“was not formed yet,” so Wu signed the lease on behalf of Shanghai Lanhe,
LensHome’s parent company. There is no evidence in the record of when
LensHome was formed. Thus, there is no evidence that LensHome did not exist
when the Buy-Sell Agreement was signed the following week on March 25, 2018.
25
Dr. Chen’s capacity argument lacks merit. First, the truth of the matter appears
of record. See Beesley v. Hydrocarbon Separation, Inc., 358 S.W.3d 415, 422 n.6
(Tex. App.—Dallas 2012, no pet.); see also InvestIN.com Corp. v. Europa Int’l, Ltd.,
293 S.W.3d 819, 825 (Tex. App.—Dallas 2009, pet. denied) (where evidence showed
that company and not individual was contracting party, issue of capacity appeared
of record and needed no verified denial). Second, Dr. Wu has a right to defend the
merits of the claim by showing that she made no promise and broke no promise
because she is not a party to the contract. See Light v. Wilson, 663 S.W.2d 813, 814
(Tex. 1983) (Rule 93 addresses party’s “standing to assert or defend the action before
the Court” but “does not relate to the merits of the cause of action or the merits of
the defenses thereto”); Beesley, 358 S.W.3d at 421–22. A general denial allows such
a defense. Light, 663 S.W.2d at 814; Beesley, 358 S.W.3d at 421–22.
For these reasons, the trial court erred in granting a directed verdict that Dr.
Wu signed the Buy-Sell Agreement in her individual capacity.
IV. Whether the Jury Charge Needed to Address Termination.
In Issue 4, Dr. Wu contests her liability for breach of the Buy-Sell Agreement,
based on her contention that the jury charge needed either an extra question or at
least an instruction on her right to terminate the deal. Although we remand this claim
for further proceedings, we nevertheless address this issue now because it is likely
to recur on remand.
26
Questions 4 and 5 of the charge asked about breach and excuse, but they did
not contain any stand-alone language about the right to terminate the Buy-Sell
Agreement. They read as follows:
QUESTION 4
Did Dr. Qian Wu fail to comply with the Buy-Sell Agreement?
Answer “Yes” or “No.”
Answer: Yes
QUESTION 5
Was Dr. Qian Wu’s failure to comply, if any, excused?
Failure to comply by Dr. Qian Wu is excused if you find that Dr. Qian Wu
substantially relied to her detriment on a promise by SL Vision, LLC or Dr.
Zhuo (“Lucy”) Chen, if any, and her reliance was foreseeable.
Answer “Yes” or “No.”
Answer: No
Dr. Wu asserts: “The trial court committed harmful error by refusing to submit either
a question or instruction on the termination issue.” She wanted “a separate question
for the jury to answer as to whether Dr. Wu terminated the Buy-Sell Agreement,” or,
failing that, at least “an instruction on termination along with the question of whether
Dr. Wu breached the Buy-Sell Agreement.”
The applicable legal principles appear in Hyundai Motor Co. v. Rodriguez ex
rel. Rodriguez, 995 S.W.2d 661 (Tex. 1999). “The goal of the charge is to submit to
27
the jury the issues for decision logically, simply, clearly, fairly, correctly, and
completely. Toward that end, the trial judge is accorded broad discretion so long as
the charge is legally correct.” Id. at 664.
As Hyundai explains, a single question may relate to multiple legal theories.
Id. Hence, it may be unnecessary or even unwise to ask the same basic question in
multiple ways:
Because the controlling issues regarding the existence of a defect for
strict liability and breach of implied warranty were functionally
identical in this case, we hold that the district court was not required to
submit Rodriguez’s requested question and instruction. Rather, to
avoid confusing the jury and the possibility of inconsistent findings, the
district court properly refused the requested question and instruction.
This is true even though the language of the refused question and
instruction was different than that of the question and instruction
submitted. While trial courts should obtain fact findings on all theories
pleaded and supported by evidence, a trial court is not required to, and
should not, confuse the jury by submitting differently worded questions
that call for the same factual finding.
Id. at 665–66.
Dr. Chen counters that Dr. Wu’s termination theory amounts to an affirmative
defense that needed to be pleaded but was not. To avoid a fight about the adequacy
of her pleadings, Dr. Wu replies that her general denial empowered her to contest the
claim for breach of the contract: “Here, Plaintiffs’ actions in terminating the BuySell Agreement are the very same actions that Defendants claimed constituted a
breach of the contract. They are not an independent basis for avoiding contractual
obligations.”
28
As in Hyundai, the trial court submitted the controlling question—whether Dr.
Wu failed to comply with the Buy-Sell Agreement—and did not need to go over the
same ground a second time by asking or instructing about termination of the BuySell Agreement. See Berg v. Wilson, 353 S.W.3d 166, 179 (Tex. App.—Texarkana
2011, pet. denied) (“The issues of excuse and/or repudiation were subsumed by the
trial court’s submission of disjunctive questions for competing claims of material
breach, together with an instruction directing the jury to determine who committed
the first material breach.”); VingCard A.S. v. Merrimac Hosp. Sys., Inc., 59 S.W.3d
847, 866 (Tex. App.—Fort Worth 2001, pet. denied) (op. on reh’g) (“[T]he trial
court’s decision to submit a broad form issue regarding Merrimac’s breach of the
agreement subsumed both VingCard’s affirmative defense of excuse and its
counterclaim for breach of contract. By finding Merrimac had not violated any
material obligation of the VingCard contract, the jury necessarily found that
VingCard’s termination of the agreement was not excused.”).
We conclude the trial court did not abuse its discretion by refusing to submit
Dr. Wu’s requested question or instruction about terminating the Buy-Sell
Agreement.5
5
Dr. Wu raises an additional appellate issue relating to the Buy-Sell Agreement. In
her fifth issue, she argues that the court erred by excluding a DTPA demand letter
that her counsel sent to Dr. Chen because this exhibit was crucial in demonstrating
that she properly terminated the Buy-Sell Agreement. Because we conclude that
the trial court erred by directing a verdict that Dr. Wu signed the Buy-Sell
29
Conclusion
We reverse the portion of the trial court’s judgment awarding Dr. Chen and
SL Vision $213,000 as compensatory damages for breach of the Buy-Sell
Agreement. We remand this claim to the trial court for further proceedings
consistent with this opinion. Because the jury was asked to award attorney’s fees
for the attorneys for Dr. Chen, SL Vision, and LC-TX “in pursuing the breach of
agreement claim(s)” and we are reversing and remanding the claim for breach of the
Buy-Sell Agreement, we also vacate the award of attorney’s fees and remand that
claim for further proceedings. See Barker v. Eckman, 213 S.W.3d 306, 313–15 (Tex.
2006) (remanding for new trial on attorney’s fees when jury was instructed to
consider “results obtained” in determining fee award and appellate court
significantly reduced award of compensatory damages on appeal). We affirm the
remainder of the trial court’s judgment.
David Gunn
Justice
Panel consists of Justices Rivas-Molloy, Guerra, and Gunn.
Agreement in her individual capacity and remand this claim for further proceedings,
we need not address Dr. Wu’s fifth issue because resolution of this issue will not
afford her greater relief.
30