## Facts

- Ralph W. Spoljaric worked for Percival Tours, Inc. as vice president of finance and accountancy under a written two-year contract beginning in 1978.
- As the contract neared expiration, Spoljaric negotiated continued employment with Jessie L. Upchurch, Percival’s president; they agreed to $70,000 per year without a new written employment contract and with increased responsibilities.
- Upchurch discussed a bonus plan under which Spoljaric and another executive would receive a 5% bonus based on improvement over the company’s net operating loss, payable when the company became profitable, and instructed Spoljaric to reduce the plan to writing.
- Spoljaric drafted the plan and submitted it; Upchurch objected to parts and had an alternate termination provision prepared and approved.
- For months, Spoljaric repeatedly asked about execution of the plan; Upchurch responded that attorneys were reviewing it.
- After corporate changes and management restructuring, Upchurch ultimately stated he would not sign any bonus plan.
- Spoljaric sued for fraudulent misrepresentation, alleging the bonus promise was made to keep him employed while the employer never intended to implement it; a jury found fraudulent intent and awarded actual and exemplary damages.
- The court of appeals reversed and rendered for the employer, concluding there was no evidence of lack of intent to perform when the promise was made.

## Issues

1. Whether there was some evidence that the employer, when promising to implement a bonus plan, had no present intent to perform, supporting liability for fraud based on a promise of future performance.
2. Whether the evidence supporting fraudulent intent was sufficient to sustain the jury’s award of exemplary (punitive) damages.

## Decision

- The Texas Supreme Court reversed the court of appeals and held there was some evidence from which the jury could infer the employer lacked intent to implement the bonus plan at the time of the promise.
- The Court held that the same evidence supporting fraudulent intent also supported exemplary damages.
- The case was remanded to the court of appeals to address remaining issues not previously reached.

## Legal Principles

- A promise of future performance is actionable as fraud if made with intent to deceive and with no intent to perform at the time the promise is made.
- Lack of intent to perform may be inferred from later conduct; intent is ordinarily a fact question for the trier of fact.
- Nonperformance alone is not evidence of fraud, but nonperformance combined with other circumstances may support an inference of fraudulent intent.
- In circumstances imposing a duty to speak, deliberate silence may constitute a false representation.

## Conclusion

The court held that a jury may infer promissory fraud from a combination of prolonged delay, misleading explanations, and eventual refusal to perform, and that such evidence can also sustain an exemplary-damages award where fraudulent intent is found.


Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432 (Tex. 1986)