Queenston Blvd 16, LLC v. Wendy Wang and Zemin Hu

Reversed and Rendered and Memorandum Opinion filed September 12, 2024.

In The

Fourteenth Court of Appeals

NO. 14-23-00016-CV

QUEENSTON BLVD 16, LLC, Appellant

V.

WENDY WANG AND ZEMIN HU, Appellees

On Appeal from the County Civil Court at Law No. 3
Harris County, Texas
Trial Court Cause No. 1123005

MEMORANDUM OPINION

Following a jury trial, the trial court rendered a final judgment in favor
appellees Wendy Wang and Zemin Hu for damages and attorney’s fees based on
the jury’s finding that appellant Queenston Blvd 16, LLC (the builder) breached its
contract with Wang and Hu by failing to return earnest money and costs for
upgrades after Hurricane Harvey flooded the commercial office properties
appellees contracted to purchase. Raising six points of error, the builder argues:
(1) a take-nothing judgment on Wang and Hu’s claims should have been rendered
by the trial court because there was insufficient or no evidence to support the jury’s
verdict; 1 (2) the trial court erred in granting a motion for judgment notwithstanding
the verdict (JNOV) on the issue of attorney’s fees and awarding attorney’s fees to
appellees in excess of the jury’s award; and (3) the trial court erred in awarding
Wang and Hu monies on deposit with the title company.

Concluding there was no evidence to support the jury’s finding that the
builder failed to comply with its agreements with Wang and Hu on which the
judgment was predicated, we reverse the judgment of the trial court and render a
take-nothing judgment on Wang and Hu’s claims against the builder.

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The builder’s first four points of error are duplicative:
First Point Of Error
The trial court erred in denying appellant’s motion to for JNOV, to modify judgment and
alternatively for a new trial [] because the contract (Pl. Ex. 3) did not permit Zemin Hu to
unilaterally terminate the contract after the feasibliity [sic] period (Pl. Ex. 3 p.4 ¶ 7b), or receive
upgrade refund [(]Pl. Ex. 3 p. 8 ¶ 12) and there was no evidence or insufficient evidence that
defendant failed to comply with the contract with Zemin Hu (Pl. Ex. 3).
....
Second Point Of Error
The trial court erred in denying appellant’s motion to for JNOV, to modify judgment and
alternatively for a new trial [] because the contract (Pl. Ex. 5) does not permit Wendy Wang to
uniterlaterally [sic] terminate the contract after the feasibliity [sic] period (Pl. Ex. 5 p.4 ¶ 7b), or
receive upgrade refund [(]Pl. Ex. 5 p. 8 ¶ 12) and there was no evidence or insufficient evidence
that defendant failed to comply with the contract with Wendy Wang (Pl. Ex. 5).
....
Third Point Of Error
There was no evidence or alternatively insufficient evidence of a modification of
plaintiff’s [Exhibit] 3 which would entitle Zemin Hu [to] a refund of his earnest money or
receive an upgrade refund[.]
Fourth Point Of Error
There was no evidence or alternatively insufficient evidence of a modification of
plaintiff’s [Exhibit] 5 which would entitle Wendy Wang [to] a refund of her earnest money or
receive an upgrade refund[.]

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I. BACKGROUND

Wang and Hu (“the buyers”) signed separate real estate contracts for the
purchase of commercial office condominium units (“commercial contracts”) in
2017 within the same commercial office development in Harris County. The
buyers were both represented by Wang’s mother, Jane Zhang, as their agent. Both
commercial contracts are on the Texas Association of Realtors’ commercial
contract form for unimproved property.

Pursuant to the commercial contracts, each of the buyers paid $5,000 in
earnest money deposited with the title company, as well as an additional $7,990.00
paid directly to the seller. Both commercial contracts provided for a 45-day
feasibility period, during which period the buyers were allowed the unrestricted
right to cancel with a full refund, less $500. The commercial contracts do not
provide any further right to terminate.

The buyers both paid additional monies for upgrades to be installed in their
respective office suites. Wang paid $8,910 for upgrades and Hu paid $2,100. The
commercial contracts state that upgrades are “due up-front and [] considered non-
refundable.” The buyers each later signed a document, that itemized the costs for
the upgrades to their respective suites. After Wang paid for the cost of her
upgrades, changes were made reducing the cost of the upgrades. The builder’s
broker agreed to remove those items and credit Wang’s overpayment against her
purchase cost through an amendment to the commercial contract. Wang and the
builder signed an amendment to the commercial contract that provides the
following: “Seller to contribute the amount of $3,180 to buyer at closing.”

After the office units were flooded following Hurricane Harvey, the buyers
sought to cancel their commercial contracts. They requested the return of their
earnest money and upgrade costs. No agreement was reached and ultimately the
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buyers filed suit to recover the money they paid.

After a jury trial, the jury found the builder failed to comply with its
agreement with Hu and awarded Hu damages of (1) $2,500 for money deposited
with the title company, (2) $7,499 for money deposited with the builder and
(3) $2,100 for the upgrade costs. Similarly, the jury found that the builder failed to
comply with its agreement with Wang and awarded Wang damages of (1) $2,500
for money deposited with the title company, (2) $7,490 for money deposited with
the builder and (3) $8,910 for the upgrade costs. The buyers were also awarded
attorney’s fees.

After trial, the buyers filed a motion for entry of judgment. The builder
responded and filed a motion for JNOV asserting that a take-nothing judgment
should be entered on the buyers’ claims. After the trial court rendered a final
judgment on the jury verdict, the builder reasserted its legal arguments filing a
postjudgment motion for new trial, motion to modify, and motion for JNOV, which
were overruled by operation of law.

II. ANALYSIS

In its first and second points of error, the builder argues that the finding that
the builder failed to comply with its contracts was not supported by legally-
sufficient evidence. 2 As drafted, the builder asserts the agreement did not allow the
buyers to terminate the agreement after the 45-day feasibility period or receive a
refund of their upgrade costs. Further, the builder maintains buyers did not
establish that any amendment to the agreement allowed them to terminate outside
the feasibility period.

The builder additionally argues the jury charge did not include any questions
2
The first point of error addresses the commercial contract with Hu and the second point
of error addresses the commercial contract with Wang.

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about contract formation. Restated, the jury was not asked if the contract included
a provision that allowed the buyers to cancel the contract outside of the feasibility
period or if the commercial contracts were modified. Instead, the jury was asked:
“Did [the builder] fail to comply with the agreement, if any, with Zemin Hu?” The
question relating to the contract between the builder and Wang is identical.
Therefore, we first review the commercial contracts and consider their provisions,
and then turn to the question of whether the commercial contracts were modified or
amended.

A. Standard of review

When a party challenges the legal sufficiency of the evidence supporting an
adverse finding on which the party did not have the burden of proof at trial, the
party must demonstrate no evidence exists to support the adverse finding. See City
of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005); Croucher v. Croucher, 660
S.W.2d 55, 58 (Tex. 1983). Under a legal-sufficiency review, we consider all of
the evidence in the light most favorable to the prevailing party, make every
reasonable inference in that party’s favor, and disregard contrary evidence unless a
reasonable fact-finder could not. City of Keller, 168 S.W.3d at 807, 822, 827. We
cannot substitute our judgment for that of the fact-finder if the evidence falls
within this zone of reasonable disagreement. Id. at 822.

B. The commercial contracts

Both commercial contracts have the identical operative language. Each
commercial contract required the deposit of $12,990 in earnest money; however, of
that total, $5,000 was deposited with the title company and the remainder was paid
directly to the builder.

Section 7 of the commercial contracts addresses the property condition and

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the feasibility period:

A. Present Condition: Buyer accepts the Property in its present
condition except that Seller, at Seller’s expense, will complete the
following before closing –
B. Feasibility Period: Buyer may terminate this contract for any
reason within 45 days after the effective date (feasibility period) by
providing Seller written notice of termination. (Check only one box.)
[X] (1) If Buyer terminates under this Paragraph 7B, the earnest
money will be refunded to Buyer less $ 500.00 that Seller will retain
as independent consideration for Buyer’s unrestricted right to
terminate. Buyer has tendered the Independent consideration to Seller
upon payment of the amount specified in Paragraph 5A to the title
company. The independent consideration is to be credited to the sales
price only upon closing of the sale. If no dollar amount is stated in this
Paragraph 7B(1) or if Buyer falls to deposit the earnest money, Buyer
will not have the right to terminate under this Paragraph 7B.
The commercial contracts contain no other unrestricted right to terminate or
receive a substantial return of the earnest money on termination or default. The
commercial contracts contain default provisions as follows:

If Buyer fails to comply with this contract, Buyer is in default and
Seller, as Seller’s sole remedy(ies), may terminate this contract and
receive the earnest money, as liquidated damages for Buyer’s failure
except for any damages resulting from Buyer’s inspections, studies or
assessments in accordance with Paragraph 7C(3) which Seller may
pursue[.]
....
[I]f Seller fails to comply with this contract, Seller is in default and
Buyer may (1) terminate this contract and receive the earnest money,
less any independent consideration under Paragraph 7B(1), as
liquidated damages and as Buyer’s sole remedy . . . .
The commercial contracts also state “This contract contains the entire
agreement of the parties and may not be changed except in writing.”

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C. Modification

The buyers do not dispute the validity or enforceability of the commercial
contracts. They also do not dispute the commercial contracts contain no provision
for the return of earnest money outside the feasibility period or the upgrade costs.
Instead, the buyers argued at trial (and here) that the builder, through its broker,
agreed to return those costs and, therefore, either created a new contract or
modified the commercial contracts.

The buyers’ agent, Zhang, emailed the broker for the builder in October
2017, stating that the buyers “decided to back out from our purchasing contract and
are seeking full refund of earnest money and prepaid upgrade money.” The broker
who represented the builder in the transaction responded to the buyers request to
terminate as follows:

Jane,
Yesi will email you the termination documents tomorrow morning.
They will include the deduction of the 500 dollars for each contract
and also the developer did not allow any of the upgrade money to be
returned. I was hoping you would reconsider moving forward with the
purchase of the office after you visited with Mike Evenson. I’m sorry
that the upgrades money is not refundable. Yesi will email you all the
documents for review tomorrow.

Responding to the broker’s email, Zhang reiterated via email that the buyers were
backing out and sought a “full refund of upgrade money.”

D. Applicable law

To recover on their breach-of-contract claims, the buyers had to prove:
(1) the existence of a valid contract; (2) the buyers performed or tendered
performance as the contract required; (3) the builder breached the contract by
failing to perform or tender performance as the contract required; and (4) the

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buyers sustained damages as a result of the breach. USAA Tex. Lloyds Co. v.
Menchaca, 545 S.W.3d 479, 502 n.21 (Tex. 2018).

The following elements are required for the formation of a binding contract:
(1) an offer; (2) acceptance in strict compliance with the terms of the offer; (3) a
meeting of the minds; (4) each party’s consent to the terms; and (5) execution and
delivery of the contract with the intent that it be mutual and binding. Wal-Mart
Stores, Inc. v. Lopez, 93 S.W.3d 548, 555–56 (Tex. App.—Houston [14th Dist.]
2002, no pet.). A “meeting of the minds” is “merely a mutuality subpart of the
offer and acceptance elements.” WTG Gas Processing, L.P. v. ConocoPhillips Co.,
309 S.W.3d 635, 643 (Tex. App.—Houston [14th Dist.] 2010, pet. denied)
(internal quotation omitted). “Questions of contract formation must be resolved on
objective standards, based upon the meaning reasonably conveyed by the parties’
actions and words rather than their uncommunicated subjective intentions.” Parker
Drilling Co. v. Romfor Supply Co., 316 S.W.3d 68, 73 (Tex. App.—Houston [14th
Dist.] 2010, pet. denied).

“To be enforceable, a contract must address all of its essential and material
terms with ‘a reasonable degree of certainty and definiteness.’” Fischer v. CTMI,
L.L.C., 479 S.W.3d 231, 237 (Tex. 2016) (quoting Pace Corp. v. Jackson, 284
S.W.2d 340, 345 (1955)). “The material terms of the contract must be agreed upon
before a court can enforce the contract.” T.O. Stanley Boot Co., Inc. v. Bank of El
Paso, 847 S.W.2d 218, 221 (Tex. 1992). “[A] contract must at least be sufficiently
definite to confirm that both parties actually intended to be contractually bound.”
Fischer, 479 S.W.3d 231, 237 (citing Fort Worth Indep. Sch. Dist. v. City of Fort
Worth, 22 S.W.3d 831, 846 (Tex. 2000)). Where an essential term is open for
future negotiation, there is no binding contract. T.O. Stanley Boot Co., 847 S.W.2d
at 221. Whether an agreement is legally enforceable is a question of law.

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Yazdani-Beioky v. Sharifan, 550 S.W.3d 808, 823 (Tex. App.—Houston [14th
Dist.] 2018, pet. denied).

A contract modification must satisfy all the essential elements of a contract.
Hathaway v. Gen. Mills, Inc., 711 S.W.2d 227, 228 (Tex. 1986). There must be
both a meeting of the minds and new consideration to support the modification. Id.

There is no dispute that the commercial contracts are enforceable contracts.
However, the buyers asserted either a new agreement or a modification to the
commercial contracts. 3

E. There was no new agreement or modification

Here, there was a series of emails between Zhang and the builder’s broker.
Zhang’s email proposed a new agreement and terms that the entire contract be
cancelled and all earnest and upgrade money be returned to the buyers. The
broker’s email did not accept those terms. Instead, the broker proposed new terms
on behalf of the builder: that the upgrade monies would not be refunded, but
otherwise implied that the builder would agree to return the earnest monies. Zhang
rejected this proposal and again reiterated her demand that the buyers get a full
refund of all monies paid (less the $500 fee referenced in the commercial
contracts).

Standing alone, none of the referenced emails between the broker and Zhang
present evidence of any mutual agreement to terms sufficiently definite to be
enforceable. Because multiple documents can together constitute an agreement, we
also consider the email correspondence between Zhang and the broker as a whole.
Fort Worth Indep. Sch. Dist., 22 S.W.3d at 840 (multiple writings may comprise
contract “even if the parties executed the instruments at different times and the
3
We do not address statute of frauds because the builder did not plead the affirmative
defense in the trial court. See Tex. R. Civ. P. 94.

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instruments do not expressly refer to each other.”). However, the email
correspondence as a whole reflects no agreement or meeting of the minds to which
the parties agreed. At best, the email correspondence reflects proposed terms from
both parties that were never mutually agreed on. See Copano Energy, LLC v.
Bujnoch, 593 S.W.3d 721, 730 (Tex. 2020) (“the December 7 e-mails themselves
reflect no such intent to be bound by their terms . . . nor does any other writing
proffered by the Landowners”).

Emails from both Zhang and the broker further refer to the creation and
distribution of “termination paperwork” or “termination documents” and use the
future tense 4 reflecting that neither agent intended for their communications to
constitute the agreement. E.g., Hartford Fire Ins. Co. v. C. Springs 300, Ltd., 287
S.W.3d 771, 778 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) (“Writings
that contain ‘futuristic’ language are insufficient to confirm that a contract or
promise is already in existence.”); Columbia/HCA of Houston, Inc. v. Tea Cake
French Bakery & Tea Room, 8 S.W.3d 18, 21 (Tex. App.—Houston [14th Dist.]
1999, pet. denied) (letter constituting “initial starting point for the negotiations”
could not “constitute a binding written agreement”).

In opposition, the buyers also rely on proposed amendments prepared by the
builder (or its broker) that would return the earnest money paid by the buyers.
These unsigned, proposed amendments do not reflect agreement as to the “material
terms of the contract.” T.O. Stanley Boot Co., 847 S.W.2d at 221. Rather, they
present potential modification terms.

In their appellate briefing, the buyers also refer to a document addressing an

4
As an example, the broker’s email to Zhang states in relevant part: “Yesi will email you
the termination documents tomorrow morning. They will include the deduction of the 500 dollars
for each contract and also the developer did not allow any of the upgrade money to be
returned. . . . Yesi will email you all the documents for review tomorrow.” (emphasis added).

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amendment to the commercial contract with Wang that proposed to provide a
credit of $3,180 against the sale price to Wang for upgrades that she canceled or
removed. The buyers suggest that the fact the builder allowed Wang to remove
some of her upgrades and applied the credit towards the closing purchase price was
evidence that the upgrade costs could be canceled and refunded. The buyers do not
address how the language in the commercial contracts stating upgrade costs were
“considered nonrefundable,” to which the buyers agreed, was modified or
eliminated. Instead, the buyers argue the term “nonrefundable” is ambiguous
because it does not state when the upgrade costs became nonrefundable. 5 We
disagree. The term “nonrefundable” is not ambiguous. Black’s Law Dictionary
defines the term as “[i]ncapable of being paid back; not returnable for any reason.”
Nonrefundable, Black’s Law Dictionary (12th ed. 2024). Nothing in the
commercial contracts reflects that the term “nonrefundable” was intended to be
modified or limited by any date or time period. Therefore, without ambiguity, there
is no need to turn to parol evidence and consider the conduct or subjective intent of
the parties. See David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450 (Tex. 2008)
(“An unambiguous contract will be enforced as written, and parol evidence will not
be received for the purpose of creating an ambiguity or to give the contract a
meaning different from that which its language imports.”). That the buyers
received no value for the upgrade costs or whether the upgrades were “custom” or
not is an equitable argument, but is not evidence of contract modification.

We conclude the email correspondence between Zhang and the broker did
not constitute an enforceable agreement or contract modification obligating the
builder to return the earnest money and upgrade costs paid by the buyers. Although

5
Buyers maintain that the conduct of the parties reflects that the term “nonrefundable” in
the commercial contracts was interpreted by the parties to mean that “the funds for upgrades
became nonrefundable upon installation of the upgrades by the builder.”

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there were undisputed amendments to the commercial contracts that do not speak
to the issues in this appeal, the buyers produced no evidence of an enforceable
agreement that provided the buyers with an unrestricted right to terminate the
contract, or obligated the builder to return the earnest money paid by the buyers, or
refund the upgrade costs “considered nonrefundable.”

We sustain points of error one, two, three and four. Because of our
disposition of these issues, we need not address the builder’s remaining issues.
Tex. R. App. P. 47.1.

III. CONCLUSION

Having sustained points of error one, two, three and four, we reverse the
judgment of the trial court and render judgment that the buyers take nothing by
their claims against the builder.

/s/ Charles A. Spain
Justice

Panel consists of Chief Justice Christopher and Justices Spain and Poissant.

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