V247 POWER CORPORATION v. ITALIAN JEWEL CORPORATION (2026)

OPINION

In this breach-of-contract case, defendant V247 Power Corporation challenges the judgment rendered after a non-jury trial on the grounds that it conclusively established its affirmative defense of impossibility of performance and that plaintiff Italian Jewel Corporation's evidence of damages from V247's breach of contract is legally insufficient. We disagree that V247 conclusively proved impossibility of performance, but we agree that Italian Jewel's evidence is legally insufficient to support all of the damages awarded. Because we are unable to suggest remittitur on this record, we reverse the judgment and remand the case for a new trial.

I. BACKGROUND

V247, a retail electric provider, contracted to provide electricity to Italian Jewel Corporation d/b/a Best Western Plus Lake Jackson Inn & Suites, charging Italian Jewel a fixed base-rate of $0.05856/kWh, plus certain other charges not controlled by V247. The contract was effective for eighteen months from July 14, 2021.

By letter dated May 3, 2022, V247 wrote to its customers that it had “made a very difficult decision to leave the Texas market as of 5/3/2022.” To ensure continuous electric service to V247's customers, the Public Utility Commission of Texas transferred their accounts to TXU Energy, identified as a “Provider of Last Resort,” and informed V247's customers that they could select another retail electric provider. Italian Jewel initially received electricity from TXU Energy, then switched to Hudson Energy Services, LLC.

A few months after its contract with V247 would have expired by its terms, Italian Jewel sued for breach of contract and violations of the Deceptive Trade Practices–Consumer Protection Act. The case was tried without a jury, and the trial court ruled against V247 only on the contract claim, awarding Italian Jewel actual damages of $20,839 and attorneys' fees of $9,521.

Although V247 presents four issues for review, we need address only its two legal-sufficiency challenges. In its first such issue, V247 argues that it conclusively established impossibility of performance due to illegality. In its second issue, V247 contends that the damage testimony is speculative and the damage evidence is legally insufficient to support the judgment.

II. STANDARD OF REVIEW

Where, as here, findings of fact and conclusions of law were neither issued nor properly and timely requested after a nonjury trial, we presume the trial court made all of the factual findings necessary to support the judgment. See Shields Ltd. P'ship v. Bradberry, 526 S.W.3d 471, 480 (Tex. 2017). A party may rebut the presumption by demonstrating that the record evidence does not support the presumed finding. Ad Villarai, LLC v. Chan Il Pak, 519 S.W.3d 132, 135 (Tex. 2017) (per curiam).

A trial court's presumed findings are challenged for legal sufficiency under the same standards that apply to a jury's verdict. See Shields Ltd. P'ship, 526 S.W.3d at 480. We review the evidence in the light most favorable to the finding and indulge every reasonable inference that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). We credit favorable evidence if a reasonable factfinder could, and disregard contrary evidence unless a reasonable factfinder could not. Id. at 827. The evidence is legally sufficient if it would enable reasonable and fair-minded people to reach the finding under review. See id.

III. IMPOSSIBILITY OF PERFORMANCE

Impossibility of performance due to illegality is a defense to a breach-of-contract claim. Centex Corp. v. Dalton, 840 S.W.2d 952, 954 (Tex. 1992). Under this doctrine, “the performance of a contract is excused by a supervening impossibility caused by the operation of a change in the law.” Id. (quoting Houston Ice & Brewing Co. v. Keenan, 99 Tex. 79, 88 S.W. 197, 199 (1905)).

Although V247 contends that it conclusively established this defense, V247 neither identifies the statute, ordinance, or regulation it contends was changed nor explains why the unidentified change rendered performance impossible. V247 states that “ERCOT revoked [V247's] right as a Load Servi[ng] Entity” on or about May 3, 2022, but the evidence V247 cites is an order from the Public Utility Commission revoking V247's “REP certificate.”¹ That order, however, was signed on April 6, 2023—a date that is after V247's contract with Italian Jewel would have expired by its terms.

The Order itself sheds some light on V247's references to events in May 2022, for it states,

On April 26, 2022, V247's qualified scheduling entity gave notice of its intent to terminate its relationship with V247. ERCOT required V247 to, by noon on May 2, 2022, either designate a new qualified scheduling entity with such relationship to take effect on the date its relationship with its current qualified scheduling entity was terminated or to satisfy all necessary creditworthiness requirements for qualified scheduling entities and become an emergency qualified scheduling entity.

When the deadline passed, ERCOT gave V247 until noon on May 3, 2022, to comply, but V27 failed to do so. ERCOT therefore “terminated V247's market participant agreement,” “revoked V247's rights to conduct activity as a load serving entity,” and “executed a mass transition of V247's customers to providers of last resort.”

But these references do not fill in the gaps in V247's argument. According to the Order, ERCOT took these actions due to V247's failure to “designate a new qualified scheduling entity” or to “satisfy all necessary creditworthiness requirements,” but V247 does not contend that it would have been illegal for it to take either action. V247 also does not contend that, absent a change in the law while the contract was in effect, it would have been lawful for V247 to perform the contract without a “relationship” with a “qualified scheduling entity” or without V247 itself becoming “an emergency qualified scheduling entity.”²

We overrule this issue.

IV. LEGAL SUFFICIENCY OF THE DAMAGE EVIDENCE

At trial, Italian Jewel's co-owner Bruno Cencini was asked to state the amount of Italian Jewel's damages, and he replied, “Rough calculation of about $20,000.” When asked how he arrived at that figure, Cencini stated, “Essentially 20,000 is approximately the difference between the 5.8 cents that I was entitled to receive versus the 10, 11, 12 cents that I had to get somewhere else because V247 was no longer there.” He explained,

I took what it cost me to receive electricity in the period while V247 was performing. And I compared that in the amount of time that I had to pay a much, much higher rate. So it's an approximate calculation, but it's basically the difference between 5.8 cents and 10 or 11 cents over that amount of time.

But the parties' contract contains the following provision about early termination of their eighteen-month contract:

If the termination is due to V247 Power's uncured default, Customer would be entitled to the estimated remaining usage of the terminated Service Address(es) for the remainder of the Term multiplied by the positive difference, if any, by subtracting the Rate set forth in this Enrollment Authorization from the market based rate (which will be establish [sic] in a commercially reasonable manner).

In other words, the contract specifies that Italian Jewel's damages for V247's early termination of the contract are calculated using the formula:

Estimated remaining usage x (Market rate – V247's rate).

V247 objected at trial that Cencini's damage testimony was speculative, and on appeal, V247 argues both that the damage evidence is speculative and legally insufficient to support the judgment. We conclude that there is legally sufficient evidence of a market rate and of V247's contract rate, but the evidence is legally insufficient to support an implied finding of an “estimated remaining usage” large enough to support the full amount of the damages awarded.

A. Market Rate – V247's Rate

For this part of the equation, it is undisputed that V247's rate was $0.05856/kWh; the legal-sufficiency question about this part of the equation concerns only the market rate.

No one testified to what “market rate” means or how it should be calculated. According to Cencini, “The electricity market changed substantially. Like it went from 5 or 6 cents a kilowatt and nearly doubled.” He stated that “the market went to 10, 11, 12 cents during the time,” and “[t]he commercially reasonable manner reached 10, 11, 12 cents.” Elsewhere, he testified that the market rate was “probably 11 cents” and “the ongoing market” was “around 11.”

There was no explanation for these generalized figures, but Cencini testified that after V247's breach he switched to “the cheapest [provider] I could find,” and introduced Italian Jewel's invoices, some of which were redacted, into evidence. The invoices show that Hudson Energy Services, LLC, charged Italian Jewel a fixed rate of $0.10833/kWh. The trial court reasonably could have inferred that, because V247's contract is itself a fixed-rate contract, it would be commercially reasonable to calculate the “market rate” with reference to other fixed-rate contracts then available. It would be commercially reasonable to use the lowest fixed rate available, and we presume that the trial court credited Cencini's testimony that Hudson Energy's offering of $0.10833/kWh was the lowest fixed rate he could obtain. Italian Jewel confirms in its appellate brief that Cencini calculated Italian Jewel's damages “as the difference between the rate he had to pay for electricity, minus the $0.05856 per kWh he should have paid under the Energy Service Contract, for the term of the contract after V247 Power Corporation breached the contract on or about May 3, 2022.”

Construing the evidence in the light most favorable to the trial court's implied findings and drawing all reasonable inferences in support of such findings, we conclude there is legally sufficient evidence to support an implied finding that the fixed rate Italian Jewel paid Hudson Energy was the market rate. Those invoices show that Italian Jewel paid Hudson Energy a fixed rate of $0.10833/kWh.

The difference between the $0.10833/kWh market rate Italian Jewel paid and V247's fixed rate of $0.05856/kWh is $.04977/kWh.³ To complete the damage calculation, one need only multiply Italian Jewel's “estimated remaining usage” in kilowatt-hours.

B. Estimated Remaining Usage

This is where the problem lies: at the rate of $.04977/kWh, there is legally sufficient evidence to support the trial court's damage award of $20,839 only if there is evidence that, for the eight months and ten days of the contract term that remained after V247's breach, Italian Jewel's estimated usage was 418,706 kWh. That would be an average of more than 50,000 kWh per month, but no construction of the evidence comes close to that amount.

Although no one testified to the “estimated remaining usage” under the contract, or how it should be calculated, Cencini testified that Italian Jewel's total damages would be “[e]ssentially 20,000,” or a “[r]ough calculation of about 20,000.” Given that Cencini relied on no usage data in arriving at this figure and did not actually calculate this amount, this testimony is mere guesswork. Italian Jewel correctly characterizes this testimony as speculative, and “[t]here can be no recovery for damages that are speculative or conjectural.” U.S. Bank Nat. Ass'n v. Stanley, 297 S.W.3d 815, 822 (Tex. App.—Houston [14th Dist.] 2009, no pet.).

There is, however, evidence of Italian Jewel's electricity usage from which the factfinder could have performed its own damage calculation. Italian Jewel's evidence includes two sets of actual invoices. The first set covers the period from April 14, 2021, through January 14, 2022, and offers some evidence of the kilowatt hours used before the breach.⁴ The second set of invoices covers the period from May 5, 2022, through January 17, 2023, which offers some evidence of the kilowatt hours used after the breach.⁵

Both sets of invoices were for periods longer than eight months and ten days, but even so, the earlier set of invoices shows a total usage of 253,040 kWh, and the later set—which includes Italian Jewel's actual post-breach usage—shows a total of usage of only 199,800 kWh. Given that the difference between the market rate and V247's rate is $.04977/kWh, damages calculated with the larger usage number would be some figure under $12,593.80, and damages calculated with the smaller usage number would be less than $9,944.05. The damages would be lower than these amounts because each set of invoices covers a longer period than the eight months and ten days remaining under the contract after V247's breach; however, we cannot suggest remittitur because there is more than one way in which the factfinder could calculate the estimated remaining usage.

We sustain this legal-sufficiency challenge in part.

V. CONCLUSION

Because the evidence is legally insufficient evidence to support the damages awarded, but is sufficient to support a finding of some lesser amount, the proper remedy is to reverse the judgment and remand for a new trial. Formosa Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41, 51 (Tex. 1998) (sub. op on denial of reh'g); see also TEX. R. APP. P. 44.1(b) (“The court may not order a separate trial solely on unliquidated damages if liability is contested.”). Because we cannot be reasonably certain that the factfinder was not significantly influenced by the erroneous amount of damages it considered, attorneys' fees must also be retried. Young v. Qualls, 223 S.W.3d 312, 314 (Tex. 2007) (per curiam).

V247's two remaining issues concern evidentiary rulings. Because the resolution of these issues could result in no greater relief than a remand for new trial, we need not and do not address them.

FOOTNOTES

1.   “ERCOT” is the acronym for the Electric Reliability Council of Texas. Hartman Income REIT Mgmt. v. Summer Energy, LLC, 693 S.W.3d 622, 627 n.1 (Tex. App.—Houston [14th Dist.] 2023, no pet.). It operates the Texas wholesale electric market. CPS Energy v. Elec. Reliability Council of Tex., 671 S.W.3d 605, 612 (Tex. 2023). “REP” is the acronym for “retail electric provider.” Hartman, 693 S.W.3d at 626. From the context in which the terms are used, a retail electric provider appears to be a type of “load serving entity.”

2.   ERCOT had informed V247 that V247 would have to pay ERCOT $497,829 to become “an emergency qualified scheduling entity,” and V247's position in the trial court was that it could not afford this amount. But neither in the trial court nor on appeal has V247 addressed the alternative: rather than becoming an emergency qualified scheduling entity itself, V247 could designate a different qualified scheduling entity.

3.   This is consistent with Cencini's testimony that the market rate minus V247's contract rate was the difference between a market rate of approximately 11 cents/kWh and the contract rate of approximately 6 cents/kWh.

4.   Italian Jewel redacted all data other than the dates of service from the V247 invoice covering the period from July 14, 2021, through August 12, 2021.

5.   Italian Jewel redacted all data but the dates of service from the Hudson Energy invoice covering July 14, 2022, through August 12, 2022, and all data but the dates of service and the total “new charges” from the Hudson Energy invoice for June 14, 2022 through July 14, 2022. The usage data cannot be calculated simply by dividing the “new charges” by the fixed rate of $0.10833/kWh, because in addition to that charge, the total “new charges” include charges in unstated amounts for “Market Securitization Debt Fin. (Default),” “Market Securitization Debt Fin. (Uplift),” “Hub to Load Zone Basis,” “TDU Delivery Charges,” city tax, county tax, sales tax, “Gross Receipts Reimb,” and “PUC Assessment.”

Tracy Christopher Chief Justice