Before Birdwell, Wallach, and Walker, JJ. Opinion by Justice Walker OPINION Appellants Roy Upshaw and his limited-liability company, R&S Upshaw Franchising, LLC, appeal from a jury verdict, finding that Upshaw had breached three franchise agreements he had entered into with appellees Lacado, LLC and Andrew K. Wilson and had committed fraud. Upshaw and R&S argue that the evidence did not support the jury’s adverse findings against Upshaw. They also attack the trial court’s attorney’s-fee award. Because we conclude that the evidence supported the jury’s breach-of-contract findings and because there was no reversible charge error, we affirm the trial court’s actual-damages award. But because the trial court erred by rendering an attorney’s-fee award after the jury found Lacado was entitled to no attorney’s fees, we reverse that award and remand for a new trial on the issue. BACKGROUND FACTS Upshaw Founds Restaurant Chain In 1972, Upshaw opened a fast-food restaurant after giving up a Taco Bell franchise. Upshaw used the same recipes as Taco Bell for his new restaurant, Taco Hut. Over time, Upshaw opened additional restaurants and renamed them Taco Casa. In 1984, Upshaw began franchising Taco Casa restaurants. In the mid-1980s, Upshaw tried to obtain the federally registered trademark for Taco Casa but was unsuccessful because someone else owned the mark. The Franchise Agreements In 2010, Wilson, the owner of Lacado, became interested in buying a Taco Casa franchise and met with Upshaw. Upshaw assured Wilson that he owned the Taco Casa trademark and that he did not receive rebates from Taco Casa vendors.[1] Upshaw’s contract with one of those vendors—Coca-Cola—required him to give “written notification” to his franchisees that he was receiving rebates from Coca-Cola and the purpose for which those funds were to be used. The purpose of the rebates were, by contract, to be used for the “benefit” of the franchisees, which Upshaw understood to mean that he was to use the rebates “for advertising for the franchisees.” Upshaw offered Wilson a franchise in Mansfield and gave Wilson the required Federal Disclosure Document (FDD) on April 29, 2011. See 16 C.F.R. § 436.2. Wilson signed it, acknowledging that he had received a copy of the FDD and that he understood he had a responsibility to review the FDD before signing a franchise agreement. On December 27, 2011, Wilson (on behalf of Lacado) and Upshaw (as Taco Casa’s president) signed a 20-year franchise agreement for the Mansfield location. Lacado was listed as the “owner” of the franchise. In exchange for a $35,000 franchise fee and a 6% gross-sales royalty, the franchise agreement granted Lacado a “limited license to use the [Taco Casa] trademarks.” Lacado acknowledged that Taco Casa had “the sole and exclusive right” to use the trademark and agreed that it would not contest Taco Casa’s ownership or use of the trademark. Taco Casa contractually required its franchisees to complete a 90-hour training program covering “construction requirements, equipment, site selection, advertising, promotions, accounting and bookkeeping procedures, communications, operations management, personnel management and problem solving.” Taco Casa was also obligated to “develop and administer advertising and sales promotion programs designed to promote and enhance the collective success of all Taco Casa restaurants.” The franchise agreement contained a disclaimer-of-reliance paragraph: This agreement and the documents referred to herein constitute the entire agreement between the parties and supersedes and cancels any and all prior and contemporaneous agreements, understandings, representations, inducements and statements, oral or written, of the parties . . . . The franchisee expressly acknowledges that it has entered into this franchise agreement as a result of its own independent investigation . . . and not as a result of any representations of [Taco Casa] . . . . Lacado and Wilson entered into a second 20-year franchise agreement with Taco Casa on October 15, 2013, for a location on Little Road in Arlington. Lacado and Wilson were listed as the owners of the franchise, and Wilson signed as the owner and franchisee. Upshaw signed the agreement as Taco Casa’s president. The operative terms of the second franchise agreement were the same as the first. On October 22, 2014, Lacado entered into a third franchise agreement with Taco Casa for a location on Collins Street in Arlington.[2] As before, Wilson signed the agreement as the franchisee, and Upshaw signed as Taco Casa’s president. The relevant terms of the third franchise agreement were the same as in the first and second franchise agreements. Lacado’s franchises were successful. Between 2012 and 2019, Lacado paid Upshaw $1,855,430.78 in royalties. During that same time period, Lacado’s combined gross sales were $33 million. Wilson’s Discovery In February 2016, Wilson discovered that another Taco Casa franchisee in Texas had filed a fraud suit against Upshaw, alleging that Upshaw did not own the Taco Casa trademark.[3] That suit also alerted Wilson to the fact that Upshaw was receiving undisclosed rebates from Taco Casa’s approved vendors. Wilson and his son, appellee Cade Wilson, investigated and found that a woman in Topeka, Kansas, owned the Taco Casa mark. Taco Casa’s FDD to Lacado had disclosed neither that Upshaw did not own the Taco Casa mark nor that Upshaw received rebates from vendors, both of which are required to be disclosed in an FDD. See 16 C.F.R. § 436.5(h)(8), (m). In fact, when Upshaw was asked what trademarks he owned when he had provided the FDD to Wilson, Upshaw responded, “I didn’t own any.” Similarly, Upshaw admitted that he did not have the Taco Casa trademark to license when he entered into the franchise agreements with Wilson and Lacado. Upshaw also admitted that at the time he provided the FDD to Lacado, he had been receiving rebates from vendors when his franchisees would buy the vendors’ products. Wilson later stated that had he known that Upshaw was being “dishonest” and “was receiving these rebates,” he would have never entered into the franchise agreements. In June 2016, R&S, as the franchisor, began disclosing in its FDD to prospective franchisees that it did not own the Taco Casa registered trademark[4] and that it received rebates from Taco Casa’s approved vendors. Upshaw then attempted to buy the mark from its owner’s bankruptcy estate in Kansas and initially bid $5,500. Cade also attempted to buy the mark for $25,000, which caused Upshaw to increase his bid to $27,000. Upshaw eventually bought the Taco Casa mark and other bankruptcy-estate assets in 2017 for $375,000. PROCEDURE Lacado Files Suit On July 9, 2017, Lacado filed suit against Upshaw, his wife Shelda Upshaw,[5] and R&S, raising a claim for breach of the franchise agreements based on his failure to own the Taco Casa trademark, to provide training to Lacado’s employees, and to develop and administer advertising and sales-promotion programs.[6] Lacado also alleged fraud based on Upshaw’s failure to disclose the vendor rebates and based on Upshaw’s false assertions that he owned the trademark and that he would provide Lacado with recipes, operations manuals, and suppliers’ and vendors’ names. Lacado asserted that Upshaw’s concealment of the fact that he did not own the trademark and that he was receiving rebates justified the application of the discovery rule, tolling the applicable statute of limitations. Finally, Lacado pleaded for the recovery of its attorney’s fees. See Tex. Civ. Prac. & Rem. Code Ann. § 38.001. Upshaw and R&S answered Lacado’s claims and raised several affirmative defenses, including limitations and waiver. See Tex. R. Civ. P. 94. Upshaw Counterclaims and Files a Third-Party Petition Upshaw counterclaimed for Lacado’s alleged breaches of the franchise agreements. See Tex. R. Civ. P. 97. He alleged that Lacado had interfered with his attempts to buy the mark from the bankruptcy estate, raising the price he eventually had to pay. Upshaw also alleged that Lacado “failed to perform duties under the franchise agreements, including but not limited to menu offerings, marketing plans, and protection of trade secrets.” Finally, Upshaw counterclaimed for Lacado’s alleged fraud based on Lacado’s warranting in the franchise agreements that it had obtained counsel to review them. Lacado answered the counterclaims and raised several affirmative defenses, including justification and fraudulent inducement. Upshaw also raised third-party claims against Wilson, Cade, and Cade’s limited- liability company, appellee Carrd, LLC. See Tex. R. Civ. P. 38(a). Upshaw’s first claim alleged that Wilson, Cade, and Carrd tortiously interfered with Upshaw’s franchise agreements with Lacado by “attempting to make a straw purchase for Lacado of the Taco Casa trademark” from the bankruptcy estate. The second claim alleged that Lacado, Wilson, Cade, and Carrd engaged in a conspiracy to interfere with Upshaw’s purchase of the Taco Casa trademark. Wilson, Cade, and Carrd answered the third- party claim and raised affirmative defenses, including justification.[7] Upshaw pleaded for the recovery of his attorney’s fees.[8] After a flurry of summary-judgment cross-motions and responses touching on all claims and some affirmative defenses, the trial court granted summary judgment in favor of Lacado regarding Upshaw’s fraud counterclaim.[9] The other claims proceeded to a jury trial, based on Lacado’s request for a jury and payment of the jury fee. See Tex. R. Civ. P. 216. Trial and Post-Trial After a two-week jury trial, the jury made the following findings regarding Lacado’s breach-of-contract claim: Upshaw had breached the franchise agreements. Lacado should have discovered the breach of the first franchise agreement by October 15, 2013. Lacado did not waive its claim. Lacado’s damages attributable to Upshaw’s breach of the franchise agreements were, collectively, $927,716. Lacado was entitled to no fees for the necessary services of its attorneys. The jury also found that Upshaw committed fraud against Lacado, causing it $139,650 in damages. Regarding Upshaw’s breach-of-contract counterclaim, the jury found that although Lacado had failed to comply with the franchise agreements, Lacado had been fraudulently induced to enter into them. As to Upshaw’s third-party, tortious- interference claim, the jury found that although Cade and Carrd had intentionally interfered with the franchise agreements, both had had a good-faith belief that they had the legal right to make an offer to buy the Taco Casa trademark. And regarding Upshaw’s conspiracy claim, the jury found that Lacado, Wilson, Cade, and Carrd had been part of a conspiracy that damaged Upshaw but that Cade and Carrd had not acted with malice.[10] As it had for Lacado, the jury determined that Upshaw was entitled to no attorney’s fees. Lacado, Wilson, Cade, and Carrd moved for entry of final judgment on the jury’s verdict and elected to recover for Upshaw’s breaches of contract. However, Lacado asked the trial court to disregard the jury’s finding that it was not entitled to attorney’s fees based on Lacado’s evidence, which Lacado asserted conclusively established the amount and the reasonableness of its necessary attorney’s fees. See Tex. R. Civ. P. 301. Upshaw and R&S filed a motion for entry of judgment on the jury’s findings that Lacado had breached the franchise agreements, asked the trial court to disregard the findings in favor of Lacado, and asked the trial court to disregard the jury zero finding regarding Upshaw’s attorney’s fees. The trial court entered judgment against Upshaw and in favor of Lacado for Upshaw’s breaches of the franchise agreements and awarded Lacado a total of $927,716 in actual damages as found by the jury. The trial court disregarded the jury’s zero award for attorney’s fees and awarded Lacado $448,446.56 in reasonable and necessary attorney’s fees relating to Upshaw’s breaches and included additional amounts for appellate attorney’s fees. The trial court charged prejudgment and postjudgment interest against Upshaw and charged costs against him.[11] Finally the trial court noted that Upshaw’s breach-of-contract and tortious-interference claims failed because Lacado, Cade, and Carrd had prevailed on their affirmative defenses to those claims. The trial court included finality language in the judgment: “All other relief not expressly granted herein is denied. This judgment finally disposes of all parties and all claims and is appealable as a final judgment.” Upshaw and R&S filed a motion to modify, reform, or correct the final judgment and an alternative motion for new trial, raising the same arguments asserted in their prejudgment motion for entry of judgment. The trial court denied the motion. Upshaw and R&S appealed from the trial court’s judgment and now argue that the breach-of-contract recovery in Lacado’s favor must be reversed because Lacado waived its right to a jury trial in the FDD, Lacado waived its claims by continuing to operate under the franchise agreements, Lacado’s claim is time-barred, Lacado cannot enforce the agreements while also asserting they were fraudulently induced, Upshaw did not breach the agreements as a matter of law, Lacado suffered no damages as a matter of law, the judgment amount exceeded a damages-cap provision in the FDD, and the contractual-liability questions were improperly submitted in the charge. Upshaw and R&S also attack the trial court’s award of attorney’s fees in Lacado’s favor. Finally, Upshaw and R&S attack the jury’s fraud findings.[12] Because the trial court entered judgment solely against Upshaw, imposing no liability against R&S, we will only address these complaints as having been raised solely by Upshaw.
