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Click here for the full text of this decision FACTS:Case Corp. sold its construction and agricultural equipment through authorized independently owned dealerships. Hi-Class Business Systems of America (HBS) made a computer software program called EPIC that allowed dealers to manage parts catalogs and service information. In 1994 Case and HBS entered into a license agreement for Case to use EPIC. As part of the deal, Case agreed that HBS would be a “certified, full service vendor” of business systems for its dealers in North America after HBS successfully tested its communications interfaces with Case (Paragraph 3.3). The agreement also included a provision that Case would notify its dealers of HBS’ status (Paragraph 5.6). After the both conditions were met, HBS became one of nine approved business-system vendors for case. Two years into the five-year HBS contract, Case decided it wanted to decrease the number of business-system vendors is used. It sent a request for proposal to its approved vendors, including HBS, and from the responses, Case chose two DIS and NDS as Case’s “preferred vendors.” Case then arranged for DIS and NDS to develop Case-specific software that its dealers could use at no charge. Case informed its dealers of the new preferred-vendor policy in September 1996, including the plans for the new software system. HBS sued Case for breach of contract and fraud. On the fraud claims, HBS said Case induced HBS to enter into the license agreement, gaining access to EPIC, by making several representations: 1. That as a certified vender, HBS would have access, for at least an assured period of five years, to the lucrative Case dealer market for business-systems software; 2. that Case was in the process of reducing the number of certified vendors to only two or three, and HBS would be included in the newly limited group of certified vendors (the “Hatch representations”); and 3. that Case would support HBS in its efforts to sell business systems software to Case dealers during the parties’ entire relationship. Without specifying its reasons, the trial court granted Case’s summary judgment motion on the fraud claims. Case’s arguments on summary judgment were that the alleged representations were too indefinite to support a fraud claim. Second, Case asserted the alleged representations could not have been performed within one year, so the Statute of Frauds barred enforcement of the Hatch representations, as well as any fraud claim based on them that sought to recover the benefit of those representations. On the breach-of-contract claims, HBS said Case breached Paragraph 3.3 by excluding HBS from the preferred-vendor group. HBS claimed Case spread negative information about HBS to its dealers, causing them to cancel orders. HBS continued by arguing that Case breached the duty of good faith and fair dealing under Uniform Commercial Code �1.203, as well as the implied duty of cooperation with respect to HBS’ sales. HBS included a new fraudulent-inducement claim that was based on the facts originally alleged in the fraud claims. The case was submitted to the jury, which found that Case breached the license agreement, causing HBS $2.5 million in damages. The jury found for Case, however, on the fraudulent inducement claim. The trial court overruled Case’s motion for judgment notwithstanding the verdict on the breach-of-contract claim, and its motion for new trial. Both parties appeal. HOLDING:Affirmed in part; reversed and rendered in part. The court first examines the jury’s answer to the jury’s answer to the question of whether Case breached the contract. First, HBS claims Case breached the contract by forcing the dealers to migrate the business systems from HBS to the new, preferred vendors. The court points out that HBS did not plead this act as a breach of contract, so it looks to whether the issue was tried by consent. The court finds that evidence relevant to the question was indeed entertained before the court, but notes that it was not considered “under circumstances indicating both parties understood that the issue . . . . was in the case.” The court thus concludes that the issue was not tried by consent, and since it wasn’t, the jury’s finding that case breached the license agreement by this particular action is not supported. The court next considers HBS’ argument that Case breached the contract by forcing migration, interfering in HBS’ relationships with the dealers, and disparaging HBS to the dealers. There is no evidence, however, that any of those actions correspond to any contractual provision that was breached. The court rejects HBS’ “broad argument” that the license agreement expressly granted it access to Case’s dealer network that would be free from interference. The court then finds the evidence does not support HBS’ additional argument that the contract was breached when Case began working with the other preferred vendors to develop new software. Again, nothing in the HBS/Case contract required any such action. Having concluded that there was no violation of any express terms in the contract, the court then turns to see if Case breached any implied covenants in the contract. Under one theory, HBS argues that Case’s forced migration to the preferred dealers denied HBS access to the dealers and “emasculated” its ability to sell business systems. The court agrees with Case, though, that HBS confuses its performance of the agreement with the benefits arising out of the agreement. HBS’ position amounts to an argument that Case violated an implied covenant of good faith and fair dealing, which the Texas Supreme Court expressly disapproved of. Finally, there is no evidence Case required HBS to support the new software before it provided HBS with the information necessary for HBS to comply with the contract term to certify that its software worked with Case’s basic computer infrastructure. Having concluded that no evidence supported the jury’s finding that Case breached the contract, the court finds it unnecessary to review the jury’s determination on damages or any other breach-of-contract issues. The court then turns to HBS’ arguments on appeal, the first of which is that the trial court erred by granting summary judgment on the fraud claim that was based on the Hatch representations. Noting that the full term of the agreement was four years, and that it was extended by one year after that, it is clear that the alleged oral agreement (the Hatch representation) could not be completed within one year, which means the Statute of Fraud applies. Because the Statute of Frauds barred enforcement of the Hatch representations, it also bars fraud claims seeking to recover as damages the benefits of those representations. Applicability of the Statute of Frauds does not bar recovery of out-of-pocket expenses, though, so the court examines the evidence of these. “HBS’s description of its claimed damages makes clear HBS was not seeking to recoup its expenditures made in reliance on the Hatch [\representations]. Instead, HBS was seeking to collect any prospective additional revenues it relinquished when it contracted: (a) to produce the Case catalogs at a discount from what it normally charged for such production; and (b) to reductions in license and maintenance fees. This measure of damages is unavailable on a fraud claim based on the unenforceable Hatch [Representations].” Finally, the court rejects HBS’ attack on the wording of the jury charge on the fraudulent inducement claim, and it finds the trial court did not abuse its discretion when it refused to allow HBS to enter some documentary evidence under the business-purpose exception to hearsay. OPINION:Moseley, J.; Morris, Moseley and O’Neill, JJ.

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