Askari v. Endevco, Inc. (Tex.App.- Houston [14th Dist.] Jul. 2, 2009)(breach of contract for
consulting services claim, payment in stock, court sustained both parties' objections to parol evidence,
applicability of parol evidence rule, ambiguous and unambiguous contract provisions, preservation of error
regarding evidentiary objections).
AFFIRMED: Opinion by Justice Seymore
Before Justice Seymore
14-08-00278-CV Farzad Askari v. Endevco, Inc.
Appeal from 11th District Court of Harris County
Trial Court Judge: Mark Davidson
Trial Court Case #: 06-34662
Affirmed and Memorandum Opinion filed July 2, 2009.
Fourteenth Court of Appeals
FARZAD ASKARI, Appellant
ENDEVCO, INC., Appellee
On Appeal from the 11th District Court
Harris County, Texas
Trial Court Cause No. 06-34662
M E M O R A N D U M O P I N I O N
In this breach of contract case, appellant, Farzad Askari, appeals a take-nothing judgment in favor of
appellee, EnDevCo, Inc. In three issues, Askari argues the trial court erred in (1) ruling the contract was
unambiguous, (2) disallowing Askari's parol evidence to explain the contract, and (3) allowing EnDevCo to
introduce parol evidence. Because all dispositive issues of law are settled, we issue this memorandum
opinion and affirm. See Tex. R. App. P. 47.4.
I. Factual and Procedural Background
On July 11, 2002, Askari executed a consulting agreement with John Adair, then Chief Executive Officer of
EnDevCo's predecessor, Adair International Oil and Gas. As of July 11, 2002, Askari had been working for
Adair International for almost a year, but had not been paid. The agreement contained the following
provisions, among others:
THIS CONSULTING AGREEMENT (the "Plan") is made the 1st day of August 2001 among Adair International
Oil and Gas, Inc., a Texas Corporation (the “Company”) and Mr. Farzad Askari, who will execute and deliver
this Plan on the date of engagement by the execution and delivery of the Counterpart Signature Pages which
are in the form as set forth on Exhibit "B" (the "Consultants").
WHEREAS, the Board of Directors of the Company has adopted a Consulting Agreement for compensation to
consultants who are natural persons; and
WHEREAS the Board of Directors desires that the total compensation of this Plan be up to 903,889 shares of
common stock, no par value per share, of the Company; and
WHEREAS, the Company will engage the Consultants to provide services solely at the request of and subject
to the satisfaction of its President, and will avail itself to the services of Consultants; and
WHEREAS, a general description of the nature of the services to be performed by the Consultants and the
maximum value of such services under this Plan will be listed in the Counterpart Signature Pages; and
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, it is agreed:
1.1 Engagement. The Company hereby engages the Consultants and the Consultants hereby accept
such engagement, subject to the written request of the Company's President, and agree to perform the
services requested solely by the President of the Company to his satisfaction. The services to be performed
by the Consultants hereunder shall be personally rendered by the Consultants, and no one acting for or on
behalf of the Consultants, except those persons normally employed by the Consultants in rendering services
* * *
1.3 Term. All services to be performed at the request of the Company by the Consultant shall be
performed no later than one year from the date hereof, subject to the receipt of the President's written
request to perform such services, at which time this Plan shall terminate, unless otherwise provided herein.
* * *
1.5 Invoices for Services. Each of the Consultants agree to provide the Company, in consideration of the
Compensation Shares, with a written invoice detailing the services duly performed and to be performed. Such
invoice shall be paid by the Company in accordance with Section 1.4 above. The submission of an invoice
for the services performed by each of the Consultants shall be deemed to be a subscription by the respective
Consultants to purchase Compensation shares at the price outlined in Section 1.4 above . . . .
* * *
1.7. Delivery of Compensation Shares. On submission of an invoice for services performed by the
respective Consultants, and duly verified to the satisfaction of the Company, one or more stock certificates
representing such Compensation Shares shall be delivered to the respective Consultants . . . .
Exhibit B to the agreement contained a table of the “Value of Certain Services Performed" from August 2001
through June 2002. For each of the eleven months, the table listed a salary, a price per share, and a
number of shares. Notes following the table indicated a salary of $5,000 per month from August 2001 until
January 2002, and a salary of $6,000 per month from February 1, 2002, until ninety days after a July 26,
2002 shareholders' meeting, with forty percent of the salary taken in stock and sixty percent in cash for each
period. The notes also indicated the agreement was to terminate ninety days after the July 26, 2002
shareholders' meeting if the company did not have adequate cash flow.
Within weeks after Askari signed the agreement, a proxy battle occurred, the company's name was changed
to EnDevCo, Inc., and Chris Dittmar eventually replaced Adair as Chief Executive Officer. During the year
preceding the proxy battle, Adair and another company officer were issuing stock certificates to brokers in
Canada, where the stock was sold and proceeds then deposited in Houston accounts, including a joint
account held by Adair and his secretary. The new management team fired all employees who had worked
with the Adair team, including Askari. Askari subsequently sent EnDevCo's chief operating officer a letter
demanding payment. A copy of the consulting agreement was attached to the letter. Dittmar ultimately
decided there was no basis for Askari's claim.
Askari sued EnDevCo for breach of the consulting agreement. He alleged EnDevCo (1) failed to pay
revenue-generated bonuses, (2) failed to allow him to continue to serve as a consultant, (3) failed to allow
him to have promised job duties and responsibilities, (4) failed to deliver the promised stock ownership, and
(5) failed to pay his earnings.
Trial was to a jury. During trial, the court sustained both parties' objections to parol evidence. Without
objection on cross-examination, EnDevCo elicited Adair's admission that, between August 2001 and July
2002, Adair authorized a corporate policy under which stock was issued, certificates sent to Canadian
stockbrokers, the stocks sold, and money deposited into various Houston bank accounts, one of which was a
joint account between Adair and his secretary. When Askari objected to a question about whether the
shareholders' meeting was the start of Adair's problems relative to the other shareholders, the trial court
sustained the objection.
Without objection in closing argument, EnDevCo argued Adair was interested in the litigation and not a
credible witness. Also without objection, EnDevCo referred to Adair's paying huge sums while saying there
was no money to pay Askari and also to Adair's coming to a deposition at his own expense and waiting in the
hall during trial.
In response to Question 1, the single breach-of-contract question, the jury found both Askari and EnDevCo
“fail[ed] to comply with the Consulting Agreement of July 11, 2002." Having thus answered “yes," to Question
1, the jury was instructed to answer Question 2, in which it was asked what sum of money would fairly and
reasonably compensate Askari for his damages, if any, resulting from EnDevCo's failure to comply with the
agreement. The jury answered $49,500 as the fair market value of stock Askari was entitled to receive.
“On the basis of the jury's answers to special issues," the trial court concluded EnDevCo had “no liability for
the claims made the basis of [the] suit" and rendered judgment Askari take nothing. Askari filed a Motion for
New Trial. He asserted, contrary to the trial court's ruling, that the contract was ambiguous and parol
evidence should have been admitted to show the conditions prescribed in the agreement did not apply to the
work already performed as denoted in Exhibit “B" of the agreement. Alternatively, Askari argued the
evidence conclusively established that he did not breach the contract and that EnDevCo's counsel engaged
in improper jury argument. Following a hearing, the trial court denied Askari's motion.
A. Issues One and Two: Whether the Consulting Agreement was Ambiguous, thus Warranting
Admission of Parol Evidence
In issue one, Askari argues the consulting agreement was ambiguous as a matter of law. In issue two, Askari
argues the trial court's disallowance of parol evidence was therefore reversible error.
Courts will enforce an unambiguous contract as written and will not receive parol evidence for the purpose of
creating an ambiguity to give the contract meaning different from that which its language imports. Sacks v.
Haden, 266 S.W.3d 447, 450 (Tex. 2008) (per curiam). A court may consider the parties' interpretation and
“'admit extraneous evidence to determine the true meaning of the instrument'" only when a contract is
ambiguous. Id. (quoting Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995) (per
curiam)). “'Whether a contract is ambiguous is a question of law that must be decided by examining the
contract as a whole in light of the circumstances present when the contract was entered.'" Id. at 451 (quoting
Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996)).
A contract is not ambiguous if a court can give the contract a definite or certain meaning as a matter of law.
Columbia Gas, 940 S.W.2d at 589. Nevertheless, if after application of the pertinent rules of construction,
the contract is subject to two or more reasonable interpretations, the contract is ambiguous, and a fact issue
exists regarding the parties' intent. Id. An ambiguity does not arise, however, simply because the contract
lacks clarity or the parties advance conflicting interpretations of the contract. Universal Health Servs., Inc. v.
Renaissance Women's Group, P.A., 121 S.W.3d 742, 746 (Tex. 2003). For an ambiguity to exist, both
interpretations must be reasonable. Columbia Gas, 940 S.W.2d at 589. It is for the court to decide whether
there is more than one reasonable interpretation of a contract, thereby creating a fact issue concerning the
parties' intent. Id.
Finally, an ambiguity in a contract may be patent or latent. Nat'l Union, 907 S.W.2d at 520. A patent
ambiguity is evident on the face of the contract. Id. In contrast, a latent ambiguity arises when a contract that
is unambiguous on its face is applied to the subject matter with which it deals and an ambiguity appears by
reason of some collateral matter. Id. If a latent ambiguity arises from this application, parol evidence is
admissible for the purpose of ascertaining the true intention of the parties as expressed in the agreement. Id.
Askari argues a latent ambiguity exists when one compares the conditions in Section 1 of the agreement with
the contents of the attached Exhibit B. He contends “this case is about money and stock already owed," and
argues the agreement merely memorializes his compensation for work already done as reflected by the
August 1, 2001 date the agreement was “made" (set forth in the introductory paragraph of the agreement)
and the “Value of Certain Services Performed" from August 2001 through June 2002 (set forth in Exhibit B).
Additionally, Askari argues it is unreasonable to interpret the agreement as requiring him retroactively to
satisfy the conditions precedent, i.e., receipt of approval and provision of invoices, for work already
The agreement, however, refers to consultants' providing “a written invoice detailing the services duly
performed and to be performed" (emphasis added). Thus, the agreement requires invoices not only for
future, but also past, services - services for which Exhibit B simply provides a value. There is nothing
unreasonable in reading the agreement and Exhibit B together as requiring Askari to provide, if he had not
already done so, invoices for work done from August 2001 through June 2002. There is also nothing
unreasonable about reading the agreement and Exhibit B together to require retroactive approval for work
already performed before the company would compensate Askari in the amounts listed in Exhibit B.
Accordingly, we conclude the agreement is not ambiguous. Askari's first issue is overruled.
Having concluded the agreement is not ambiguous, we therefore conclude the trial court did not err in
excluding parol evidence. Askari's second issue is overruled.
B. Issue Three: EnDevCo's “Parol" Evidence and Closing Argument
In issue three, Askari contends the trial court “committed reversible error" when it allowed EnDevCo to
introduce “parol evidence." Specifically, Askari complains that “the Court let the jury hear numerous
accusations of fraud by former CEO John Adair and arguments regarding the proxy battle that occurred
before and during the execution of the contract." He complains the arguments unfairly discredited Adair as a
Askari cites this court to only three places in the record where the purportedly improper evidence was
received or arguments occurred. Askari first cites EnDevCo's cross-examination of Adair about whether he
was creating stock in the company, sending certificates to Canadian stockbrokers who sold the stock, and
arranging for the sales proceeds to be deposited in his accounts. Askari did not object to a question that
elicited Adair's admission he had engaged in such action. The trial court sustained two of Askari's objections
and instructed the jury to disregard the answer to the question that was the subject of the second objection.
Askari did not request further relief. The court overruled only one of Askari's objections during this line of
questioning, and Askari did not provide a ground for that objection.
Askari next cites questions about the timing of Adair's proxy problems with the company. Askari objected
once on the ground the question violated the motion in limine and related to parol evidence. The trial court
sustained the objection. Again, Askari did not request further relief.
Finally, Askari cites EnDevCo's argument regarding Adair's alleged interest in the outcome of the litigation.
Askari did not object to the argument.
By failing to object, and by objecting but providing no ground for the objection, or by not requesting further
relief when the court sustained his objections, Askari has not preserved the errors of which he complains in
issue three. See Tex. R. Evid. 103(a)(1) (“Error may not be predicated upon a ruling which admits . . .
evidence unless . . . a timely objection or motion to strike appears of record, stating the specific ground of
objection, if the specific ground was not apparent from the context."); Tex. R. App. P. 33.1 (stating, as
prerequisite to presenting complaint for appellate review, record must show complaint was made to trial court
by timely request, objection, or motion that stated grounds for ruling that complaining party sought from trial
court with sufficient specificity to make trial court aware of complaint, unless the specific grounds were
apparent from context); One Call Sys., Inc. v. Houston Lighting & Power, 936 S.W.2d 673, 677 (Tex. App.-
Houston [14th Dist] 1996, writ denied) (holding plaintiff waived its objection to inadmissible testimony by failing
to request further relief after trial court sustained its objection).
Nevertheless, even if Askari can be said to have preserved the issue he presents on appeal, the issue is
without merit. To the extent Askari is contending the cited evidence and argument were improper under the
parol evidence rule, he misapprehends the application of that rule.
When parties have made an unambiguous written agreement with respect to a particular subject matter, the
parol evidence rule prohibits the presentation of extrinsic evidence to vary or contradict the terms of a written
instrument. Silsbee Hosp., Inc. v. George, 163 S.W.3d 284, 293 (Tex. App.- Beaumont 2005, pet. denied)
(citing Friendswood Dev. Co. v. McDade + Co., 926 S.W.2d 280, 283 (Tex. 1996)). EnDevCo's evidence and
argument of which Askari complains, however, were not directed at the meaning of the agreement. Instead,
they were directed at impeaching Adair's character and showing his bias as a witness. Askari concedes as
much, alleging, “These improper arguments unfairly discredited John Adair as a witness." Thus, Askari's third
issue also fails on the merits.
Accordingly, we overrule Askari's third issue.
Having overruled Askari's three issues, we affirm the judgment of the trial court.
/s/ Charles W. Seymore
Panel consists of Justices Seymore, Brown, and Sullivan.
 Additionally, Askari claimed EnDevCo breached the consulting agreement by terminating him on or about
August 30, 2002, and also sued for specific performance and quantum meruit. He did not pursue these
claims at trial.
 The trial court's determination the consulting agreement was unambiguous is not part of the record.
Nevertheless, the trial court repeatedly upheld both parties' objections on parol evidence grounds. In an
unreported conference prior to jury selection, the trial court heard motions in limine. At one point when
Askari's counsel objected to parol evidence, he stated, AThis violates our Motion in Limine. It also goes to
parol evidence." It is possible, therefore, the court announced its decision on parol evidence in the
unreported conference on the motions in limine. In its brief, EnDevCo states,
In a supplemental pleading, Mr. Askari also requested the court to analyze “the four corners of the contract"
to determine whether there was a “patent or latent ambiguity with regard to the conditions precedent set forth
in the contract." Mr. Askari alleged that “[a] reasonable interpretation of the [c]ontract would not apply
conditions precedent to work [he] has already performed prior to the execution of the contract and
acknowledged [therein]." (citations omitted). EnDevCo cites to a second supplemental clerk's record, which is
not part of the record on appeal.
 Askari had unsuccessfully objected to a question about whether Adair was issuing stock to himself on an
ongoing and regular basis, but Adair's answer was not completely responsive to the question. During this
line of questioning, there were two unreported bench conferences.
 We also note the appellate record does not indicate that Askari presented an offer of proof or bill of
exceptions relative to the excluded evidence. See Tex. R. Evid. 103(a)(2) (regarding preservation of error
related to ruling excluding evidence).
 Askari filed a motion for mistrial approximately one month after the trial ended.