# Chamberlain v. ESL Ventures, LLC Supreme Court of Texas, No. 24-0825 **Chamberlain v. ESL Ventures, LLC, No. 24-0825, is before the Supreme Court of Texas. Key issue: What is the scope of a directed verdict on liability in a breach-of-contract case when the trial court does not say which of two termination-fee provisions was breached: only the ground stated in the motion under Rule 268, or the whole record?** Practice areas: breach of contract, civil procedure ## Key issues - What is the scope of a directed verdict on liability in a breach-of-contract case when the trial court does not say which of two termination-fee provisions was breached: only the ground stated in the motion under Rule 268, or the whole record? - Does the timing of the client's termination, which decides whether a $40,000-capped fee or a percentage-of-savings fee applies, go to liability or only to the amount of damages? ## Factual History Chamberlain, Hrdlicka, a law firm, engaged ESL Ventures (assignee of the cost-reduction consultancy Expense Reduction Analysts) to find savings on operating costs under a contract that let the firm terminate at any time but set an early termination fee that depended on timing (Petition for Review (Petitioner), PDF p. 12). Under the "Low Fee" provision, a termination after the Baseline Report but before the Recommendation Report required a fee of up to $40,000; under the "High Fee" provision, a termination after a successful Recommendation Report required a fee equal to 50% of projected savings for each project (Brief on the Merits (Petitioner), PDF p. 18). ESL presented its Baseline Report and began the Recommendation Report; the firm suspended the work, and the parties dispute whether an unsolicited copy of the Recommendation Report brought to a later meeting was "presented" under the contract (Brief on the Merits (Petitioner), PDF pp. 18-19). After a new CIO decided the firm did not need ESL, the firm terminated, believing it owed only the Low Fee, offered the full $40,000, and ESL refused it (Brief on the Merits (Petitioner), PDF pp. 19-20). ESL says the agreement had a variable termination fee with three measures of damages and that the firm admitted paying nothing (Brief on the Merits (Respondent), PDF p. 20). ## Procedural History ESL's live pleading alleged only that Chamberlain incurred and failed to pay the High Fee, and its summary-judgment motion on liability was denied because the firm disputed that the Recommendation Report was presented (Brief on the Merits (Petitioner), PDF pp. 20-21). At trial ESL moved orally for a directed verdict on the Low Fee theory only, and the trial court granted it (Brief on the Merits (Petitioner), PDF pp. 21-23). The court then instructed the jury that Chamberlain had failed to comply with the agreement as a matter of law and that damages should be measured by the contract's early termination fee, and the jury awarded $700,000 (Brief on the Merits (Petitioner), PDF pp. 23-24). The First Court of Appeals (Houston), in an opinion by Justice Goodman, affirmed, holding the directed verdict ambiguous and read as a verdict on "liability in general" that left the jury to decide which fee applied (Brief on the Merits (Petitioner), PDF pp. 9, 25). The Court ordered merits briefing and granted review on June 12, 2026. ## Issues Presented - Chamberlain (Brief on the Merits (Petitioner), PDF p. 11): whether ESL, having moved for a directed verdict on an unpleaded Low Fee theory subject to a $40,000 cap and having disclaimed a verdict on its pleaded High Fee theory, could recover damages nearly twenty times that cap when the jury was told liability had been decided. - ESL (Response to Petition (Respondent), PDF p. 6): whether the lack of specificity in a directed-verdict motion is reversible error, or was waived by Chamberlain's failure to object, and whether the trial court granted a directed verdict on liability for breach after Chamberlain confessed it did not pay. ## Standard(s) of Review The dispute is about the scope of an oral directed verdict and how a reviewing court should construe it, which Chamberlain says is governed by Rule 268 and this Court's precedent on construing ambiguous orders, and which ESL says is not an evidentiary-sufficiency case (Brief on the Merits (Petitioner), PDF pp. 14, 34; Brief on the Merits (Respondent), PDF p. 21). ## Legal Arguments **What the directed verdict decided.** **Chamberlain (Petitioner):** A directed-verdict motion is the best guide to the scope of the order granting it; Rule 268 requires the motion to state its grounds, and ESL's motion sought a verdict only on the Low Fee theory, so the only liability finding was for the capped fee (Brief on the Merits (Petitioner), PDF pp. 14, 29-33; Brief on the Merits (Petitioner's Reply Brief), PDF p. 2). Even if the order were ambiguous, the court of appeals had to adopt the construction that applied Rule 268, and ESL's defenses would rewrite the contract and confuse liability with damages (Brief on the Merits (Petitioner), PDF pp. 34-35, 50-52). **ESL (Respondent):** The court of appeals correctly held the directed verdict was granted on liability for breach, leaving damages to the jury, because Chamberlain confessed it breached and owed some amount, and the real dispute was the amount (Brief on the Merits (Respondent), PDF pp. 20, 23). Rule 268 does not stop a court of appeals from examining the whole record, the failure to state the ground is not error, and Chamberlain waived it by not objecting (Brief on the Merits (Respondent), PDF pp. 21, 29-32). **The remedy.** **Chamberlain (Petitioner):** The Court should render judgment that ESL recover the $40,000 Low Fee maximum, and alternatively hold ESL waived its High Fee claim by failing to secure a finding on the condition precedent, the presentation of the Recommendation Report (Brief on the Merits (Petitioner), PDF pp. 5, 48-50). In reply it says it would not oppose rendering judgment for $80,000 to avoid a remand (Brief on the Merits (Petitioner's Reply Brief), PDF p. 25). **ESL (Respondent):** The variable termination fee did not contain a condition precedent, and Chamberlain is re-litigating issues resolved below (Brief on the Merits (Respondent), PDF pp. 33-34). ## Stated Reasons the Court Should Take the Case Chamberlain argued the essential question is the scope of the directed verdict, which determines as a matter of law whether ESL could recover more than $40,000, and that the court of appeals ignored Rule 268 and misapplied this Court's precedent (Brief on the Merits (Petitioner), PDF p. 14). ESL argued the court of appeals correctly held the directed verdict was on liability for breach and that Chamberlain waived its Rule 268 complaint (Response to Petition (Respondent), PDF p. 21). ## Practice Area Tags breach-of-contract, civil-procedure ## Procedural Posture/Vehicle Petition for review from the First Court of Appeals (Houston); granted June 12, 2026. Oral argument: November 3, 2026. ## Amicus Involvement None noted --- Source: The SCOTX Report, https://scotxreport.com/cases/24-0825. AI-generated summary of the Court's opinion, orders and the parties' briefs, with pin cites to the page of each document; verify against the Court's own documents at search.txcourts.gov.