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Click here for the full text of this decision FACTS:Southern Vanity Magazine Inc. (SV) was formed in late 2002 by Perry Hollingsworth, Allison Hollingsworth and Lisa Applewhite to publish a magazine. At all relevant times, Perry owned 100 percent of the stock of SV. SV published its first issue in February 2003. Kelly Stafford began working for the magazine in April 2003 as an independent contractor selling advertisements in the magazine in return for a 20 percent commission. Shortly after Stafford began working for SV, Allison and Applewhite had a business dispute. Allison and Perry removed SV’s property from the magazine’s offices and considered shutting down the magazine. For a period of several weeks, the magazine was in limbo, and Stafford did no work for SV. Allison and Perry ultimately decided to continue with the magazine and asked Stafford to return to work. SV could not pay Stafford a salary, but on June 26, 2003, Allison e-mailed Stafford and Donana Galloway, another independent contractor selling advertisements for SV, stating: “Steve (SV att.) is working day and night on legal issues with Lisa Applewhite Brandt, so he will start working on the following documents next week. Of course I have put numerous amounts of time and money into the magazine and wound up with a disgruntled, out of control associate. I never want this to happen again! “I appreciate both of you and all of your hard work getting SV back on track. There is much more to do (sales, sales, sales)! I regret salaries and benefits are not an option as of yet, but will be in the future. Because of your help and continued support in building Southern Vanity Magazine, I would like to offer each of you stock and 20% of the company. Perry and I expect our investments back from the company as each of you expect to be reimbursed for your expenses as SV profits.” Following this e-mail, Stafford continued to work at SV, received the title of “Principal/Director of Marketing” and took on additional duties. SV did not transfer the stock to Stafford. In September 2003, Stafford left SV. Stafford sued SV, Perry and Allison (the appellees) based on SV’s failure to transfer the stock. At trial, Stafford contended that she was entitled to receive the stock as of June 26, 2003. The appellees argued that SV was not required to transfer the stock until it became profitable and Stafford contributed to its success. The jury determined that SV breached its agreement to convey the stock but found for the appellees on the fraud claim. Stafford moved for specific performance of the contract. SV filed an affidavit executed by Allison stating it was impossible for SV to convey any stock to Stafford, because all of SV’s stock had been issued to Perry. The trial court granted Stafford’s request for specific performance and ordered SV to convey the stock to Stafford. Stafford then filed a motion for new trial on her fraud cause of action, contending that the fact the stock had been issued to Perry was newly discovered evidence that entitled her to a new trial and that the jury’s adverse finding on the fraud claim was against the great weight of the evidence. The trial court granted Stafford’s request for specific performance. Stafford’s motion for new trial was overruled by operation of law. Both Stafford and SV appealed. HOLDING:Affirmed. The court began its analysis with SV’s cross-issue alleging the trial court erred in awarding specific performance. SV maintained that the court must reverse the trial court’s judgment, because Stafford did not: 1. plead for specific performance; 2. offer any evidence on the essential elements of specific performance; or 3. request jury questions on the elements of specific performance. The court disagreed, noting Texas’ “fair notice” standard of pleading. Construing the pleadings liberally in Stafford’s favor, the court concluded that they were sufficient to put SV on notice that Stafford was seeking the alternative remedy of specific performance for SV’s breach of contract. SV next contended that there was” no evidence that would support an award of specific performance.” A party who seeks specific performance of a contract for personal property, the court stated, must show it has complied with all terms of the contract by performing, or tendering performance, of all obligations under the contract. It was undisputed that Stafford returned to work at the magazine after receiving the stock offer, the court stated. Accordingly, legally sufficient evidence established Stafford performed under the contract. After finding that Stafford had” clean hands” and no adequate remedy at law, the court found that Stafford could seek specific performance requiring SV to transfer the stock of the closely held corporation to her. The court also rejected SV’s impossibility defense to an award of 20 percent of the stock to Stafford. Next, the court considered Stafford’s claim that the trial court erred in denying her motion for new trial on her fraud claim, because” Allison’s affidavit filed after trial asserting SV has no stock to transfer to appellant is newly discovered evidence that entitled appellant to a new trial and because the jury’s finding is against the great weight of the evidence.” The court stated, however, that it was undisputed Perry owned 100 percent of the stock of SV and that any stock transferred to Stafford would come from Perry. Stafford, the court stated, failed to show that the fact SV issued the stock to Perry was either newly discovered evidence or so material that it would produce a different result at trial. As for Stafford’s factual sufficiency claim, the court noted that both Perry and Allison testified they believed SV was not obligated to transfer stock to Stafford until SV became profitable. Thus, the jury’s finding that the appellees did not commit fraud in making the stock offer to Stafford was not against the great weight and preponderance of the evidence. OPINION:Wright, J.; Wright, Richter and Smith, JJ.

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