Bayer Corp. v. DX Terminals, Ltd.

OPINION

Bayer Corporation, now known as Bayer MaterialScienee L.L.C., appeals from a judgment awarding damages to DX Termi *592 nals, Ltd. DX sued Bayer for breach of contract, alleging Bayer failed to comply with an agreement for the sale of caustic soda from Bayer to DX. DX also claimed that Bayer intentionally interfered with DX’s contractual relationship with one of its customers. In turn, Bayer counterclaimed against DX, also alleging breach of contract. A jury found that each side failed to comply with the agreement, that DX suffered $7.5 million in damages as a result of Bayer’s breach, and that Bayer suffered $40,000 as a result of DX’s breach. The jury further found that Bayer did not intentionally interfere with DX’s contractual relationship. The trial court offset the award to Bayer against DX’s recovery and awarded DX $7,460,000 as actual damages, as well as prejudgment interest of $512,273 and post-judgment interest at 6 percent. The court additionally ordered each side to pay its own costs.

On appeal, Bayer contends that the trial court erred in (1) refusing to grant Bayer’s motion for a directed verdict when the evidence conclusively established that DX’s material breach of the contract substantially impaired the value of the whole contract to Bayer; (2) refusing to disregard as immaterial the jury’s finding that Bayer failed to comply with the contract; (3) refusing to grant Bayer’s motion to disregard jury findings where the evidence was legally and factually insufficient to support the finding that Bayer failed to comply with the contract; (4) refusing to provide the jury with additional instructions regarding Bayer’s right to cancel the contract when the jury sent out a note requesting such instruction; (5) admitting the testimony of DX’s damages expert, which was based on improper methodology and improper foundation; (6) awarding DX damages for lost profits when such were precluded by the contract and applicable law; and (7) awarding DX damages and failing to suggest a remittitur when the evidence was legally and factually insufficient to support the jury’s damages award. In a cross-appeal, DX contends that the trial court erred in calculating prejudgment interest and in ordering each side to pay its own costs. We affirm.

I. Background 1

In 1998, Bayer and DX entered into a monthly installment contract for the sale of caustic soda from Bayer to DX. Caustic soda is a by-product of chlorine production, and Bayer had begun construction of a “Chlor-Alkali” unit at its Baytown, Texas facility. Bayer needed a buyer for the caustic soda. DX planned to resell the soda to affiliated companies (which used the caustic soda in producing bleach) as well as to outside customers, including principally Davison Petroleum. Under the contract, Bayer agreed to sell and DX agreed to buy between 135,000 and 150,000 dry short tons of caustic soda per year (or 11,250 to 12,500 tons per month) for a five-year period beginning in February 1999. Although the contract called for distribution of the annual amounts in equal monthly volumes, there was evidence at trial that this equality of monthly volumes was “artificial,” and that the parties understood that exactly equal amounts would be impossible. The contract also specified that certain volumes would be shipped each month by rail car, by tanker truck, and by barge. Pricing under the contract was to be calculated based on the lowest of three possible measures of price minus $27.50 per ton. The three possible measures were (1) the “contract price” for caustic *593 soda published by Chemical Market Associates, Inc., (2) the “spot price” published by CMAI, and (3) DX’s average purchase price for non-Bayer caustic soda for the current month. Thus, DX’s price was $27.50 less per ton than the lowest of three market measures. 2

Disputes between the parties arose early in the contract period. For example, the parties bickered over who was to set the annual volumes and who was at fault for apparent logistical problems. DX contends that because Bayer’s Chlor-Alkali unit was unprofitable and Bayer became convinced that the contract was too advantageous for DX, Bayer engaged in a scheme to restrict the volumes of caustic soda sold to DX. DX supported this assertion at trial with various internal Bayer documents. DX further contended that the restriction of volumes to below the required contract minimums breached the contract.

In 2000, Bayer began selling caustic soda directly to Davison, who was DX’s largest external customer. In December 2000, DX notified Davison that it was can-celling their contract effective December 31, 2001. Although the precise reasons for this cancellation are unclear, Davison was apparently to some degree dissatisfied with DX’s service under the contract, and DX may have believed that it could make more money selling caustic soda to other customers. Davison stopped ordering caustic soda from DX in May 2001, well before the cancellation date. From May through August 2001, DX removed substantially less caustic soda from Bayer’s facility than the contract required. Bayer contended at trial that the buildup of caustic soda inventories occasioned by DX’s failure to remove contract minimums threatened an inventory emergency that could have caused Bayer to shut down its entire Baytown facility, resulting in millions of dollars in lost profits. On September 11, 2001, Bayer terminated the contract, stating as its reason, “DX’s continuing failure to take and pay for at least 135,000 dry short tons per year, in equal monthly volumes.”

DX sued Bayer for breach of contract and tortious interference with DX’s contractual relationship with Davison. Bayer counterclaimed for breach of contract based on DX’s failure to remove the required amounts of caustic soda. At trial, the parties offered competing evidence regarding who was at fault for contract shortfalls and difficulties in processing orders, whether DX’s failure to take contract minimums during certain months substantially impaired the value of the whole contract to Bayer, and whether Bayer’s alleged impending inventory crisis was real or merely a justification for cancelling the contract. DX’s expert witness on damages, Ron Vollmar, calculated that DX suffered pre-cancellation damages of $1.6 million and post-cancellation damages of $13.1 million. Bayer presented evidence that it suffered $40,000 in demurrage charges for caustic soda that was loaded on barges in March 2001 but which DX did not take.

During deliberations, the jury sent out a note asking: “Provided that there is no cancellation clause in the contract, will cancellation in itself constitute a breach of contract?” Although Bayer’s counsel argued that the correct answer to the jury’s query was “no,” and that barring that answer, the court should read several UCC sections to the jury, he further stated that the court had already given the *594 jury a correct charge. The trial judge responded to the jury’s query by instructing: “Please answer the question in accordance with the instructions given and the Charge.” The next day, Bayer’s counsel tendered a proposed written instruction regarding cancellation, which the court denied.

The jury found that both parties breached the agreement but that Bayer did not tortiously interfere with DX’s contractual relationship with Davison. The jury awarded DX $7.5 million for Bayer’s breach, and it awarded Bayer $40,000 for DX’s breach. The trial court entered judgment in accordance with the jury verdict, calculating pre-judgment interest from December 31, 2003, the last day that the contract would have been enforced, and ordered each party to pay its own costs.

II. Substantial Impairment

In its first issue, Bayer contends that the trial court erred in refusing to grant its motion for a directed verdict. It reasons that because the evidence conclusively established that DX’s material breach substantially impaired the value of the whole contract, Bayer was justified in can-celling and cannot be held hable for damages. We review this matter-of-law issue under the well-established standards. See City of Keller v. Wilson, 168 S.W.3d 802, 814-816, 823 (Tex.2005).

In the contract, the parties agreed that Pennsylvania law would govern any disputes. 3 On appeal, the parties specifically agree that the contract at issue is an installment contract for the sale of goods governed by the Pennsylvania version of the Uniform Commercial Code. 4 Under the UCC, when one party to an installment contract defaults with respect to one or more installments and thereby substantially impairs the value of the whole contract to the other party, such default constitutes a breach of the whole contract. Pa. Cons.Stat. § 2612. When such a breach occurs and the nonbreaching party is the seller (as Bayer was here), the seller has the right, among other options, to cancel the contract. Id. § 2703. Bayer contends that the evidence established, as a matter of law, substantial impairment of the value of the whole contract as a result of DX’s breach. Therefore, Bayer argues, it was justified in canceling the contract and is not liable for any damages for post-cancellation nonperformance.

It is possible to conclusively establish substantial impairment of the value of a whole contract. See, e.g., L & M Enters. v. BEI Sensors & Sys. Co., 231 F.3d 1284, 1288 (10th Cir.2000); Design Plus Store Fixtures, Inc. v. Citro Corp., 131 N.C.App. 581, 508 S.E.2d 825, 830 (1998). However, given the subjective nature of this issue, it is typically regarded as an issue of fact for the jury. See, e.g., Cassidy Podell Lynch, Inc. v. Snydergeneral Corp., 944 F.2d 1131, 1148 (3d Cir.1991); Extrusion Painting, Inc. v. Awnings Unlimited, Inc., 37 *595 F.Supp.2d 985, 997 (E.D.Mich.1999); Emanuel Law Outlines, Inc. v. Multi-State Legal Studies, Inc., 899 F.Supp. 1081, 1087 (S.D.N.Y.1995); Valley Timber Sales, Inc. v. Midway Forest Prods., Inc., 563 So.2d 612, 613-14 (Ala.Civ.App.1990). In the present case, neither the evidence nor the case law supports Bayer’s contention that it proved substantial impairment as a matter of law.

At trial, Bayer presented evidence that DX failed to take required contract mínimums of caustic soda for four consecutive months: May through August 2001. 5 Bayer also presented evidence of the benefit derived from the contract: having a consistent buyer for the caustic soda generated as by-product from chlorine production. Bayer witnesses testified that the company had no experience in caustic soda sales or distribution. It was therefore willing to give a discount to DX because DX was to handle the logistics concerned with receiving the caustic soda from Bayer. Bayer witnesses also testified that the company had limited storage space for caustic soda and that when DX did not take contract mínimums, inventory levels began to climb to heights threatening to halt chlorine production. Witnesses further asserted that if chlorine production halted, the resulting domino effect could have closed production at Bayer’s entire Baytown facility. There was also testimony from some of DX’s expert witnesses that this impending inventory crises was a real possibility. 6 In summary, Bayer’s evidence established a prima facie case that *596 DX’s failure to take contract mínimums over a four-month period materially breached the contract and substantially impaired the value of the whole contract to Bayer. However, in determining whether Bayer conclusively proved this proposition at trial, we do not simply look at Bayer’s evidence but must examine DX’s as well. See City of Keller, 168 S.W.3d at 814-816, 823.

We first consider the actual totals taken by DX during the four-month period of the alleged breach. DX agreed to “take or pay” a minimum of 135,000 dry short tons of caustic soda per year. The contract states that sales were to be “in equal monthly volumes”: 135,000 tons per year equates to a minimum of 11,250 tons per month. Aleta Richards, the head of Bayer’s Inorganic Basic Chemicals Marketing Group (which oversees caustic soda sales), testified that this equality of monthly volumes was “artificial” and the parties understood that exactly equal amounts would be impossible. In May, DX removed 6,504 tons from Bayer (or 58 percent of the target monthly mínimums); in June, DX removed 7,074 tons (or 63 percent), in July, DX removed 6,305 tons (or 56 percent); in August, DX removed 8,186 tons (or 73 percent). In total, DX removed 16,931 fewer tons than the target monthly mínimums for these four months. Stated in percentage terms, the removal represented 38 percent less than the target monthly mínimums for those four months, 12.5 percent less than the minimum DX was supposed to remove annually, and less than 3 percent of the minimum over the life of the contract (59 months). While these calculation do not by themselves necessarily prove that DX’s failure to comply did or did not substantially impair the value of the whole contract, it places the failure to comply for those four months in perspective of the monthly, annual, and contract totals.

Additionally, DX presented evidence that neither these nor previous shortfalls in removing monthly mínimums were not deemed a problem by Bayer at the time they occurred, and in fact, were possibly caused by Bayer. There was substantial evidence that Bayer developed a policy to sell DX only the minimum required under the contract; Bayer then rejected numerous DX orders and failed to deliver required amounts on several occasions. 7 Indeed, internal Bayer correspondence offered by DX demonstrated that Bayer had incentives to reduce the amount of shipments to DX: Bayer believed that the contract was too favorable to DX, and Bayer wanted to sell caustic soda directly to Davison and others for greater profit. 8

DX also presented evidence suggesting that Bayer’s assertion of an imminent in *597 ventory crisis in the summary of 2001 was fictitious. Both Bayer and DX employees testified that Bayer did not complain to DX about the shortfalls in the summer of 2001. Indeed, there was evidence that inventory levels during this period of time did not rise appreciably higher than they had been during earlier contractual periods. Further, Bayer had an outlet for excess caustic soda through its direct sales to Davison. Bayer has offered no explanation as to how cancellation of the contract with DX would reheve its alleged inventory problem. 9

In summary, although Bayer presented some evidence that DX’s failure to take contract mínimums for four consecutive months substantially impaired the value of the whole contract to Bayer, evidence submitted by DX supported the opposite conclusion: that the shortfalls did not substantially impair the value of the whole contract to Bayer and that Bayer used the shortfalls as a pretext for cancellation.

The cases cited by Bayer in support of the proposition that substantial impairment can be proven as a matter of law are clearly distinguishable on their facts. For example, in L & M Enterprises, the court held that the seller established substantial impairment as a matter of law where there was an undisputed and complete failure by the buyer to pay for installment shipments. 231 F.3d at 1288. Similarly, in Design Plus Store Fixtures, the court held that the buyer proved substantial impairment as a matter of law where the goods delivered in the first two of three scheduled installments were not useable as delivered. 508 S.E.2d at 830. In contrast, it cannot be said that DX wholly failed to perform for four months. DX performed, at least partially, by taking approximately 62 percent of the monthly targets for those four months. Whether this partial performance substantially impaired the value of the whole contract to Bayer was a question of fact, particularly in light of the evidence propounded by DX. 10

Bayer failed to prove as a matter of law that DX’s conduct substantially impaired the value of the whole contract to Bayer. Accordingly, Bayer’s first issue is overruled.

III. Materiality of Jury Findings

In its second issue, Bayer assigns as error the trial court’s refusal to *598 disregard as immaterial the jury’s finding that Bayer failed to comply with the contract. A trial court may disregard a jury finding if it is immaterial or unsupported by evidence. Spencer v. Eagle Star Ins. Co. of Am., 876 S.W.2d 154, 157 (Tex.1994). A finding is considered immaterial when the issue should not have been submitted to the jury, or when it was properly submitted but has been rendered immaterial by other findings. Id. Here, Bayer specifically contends that in finding a failure by DX to comply with the agreement, the jury necessarily found that DX substantially failed to perform; thus, Bayer was excused from further performance. We find that Bayer’s argument is not supported by the language in the charge.

Question No. 1 reads as follows:

QUESTION NO. 1

Did Bayer Corporation or DX Terminals, Ltd. fail to comply with the Sales Contract?

In answering this question, you are instructed that:

Failure of a party to a contract to perform in accordance with its terms gives the other party a cause of action for breach. A breach of contract occurs when a party to the contract fails to perform any contractual duty of immediate performance, or violates an obligation, engagement or duty.

Not every nonperformance, however, is to be considered a breach of contract. If you find that the nonperformance was trivial, and thus that the contract was substantially performed, you must also find that the breach of the contract has not occurred.

Whenever non-conformity or default with respect to one or more installments of a contract substantially impairs the value of the whole contract, there is a breach of the whole.

In interpreting the contract, the intent of the parties should be determined solely from the express language of their agreement if the words of the contract are clear and unambiguous. However, if you find from the evidence that a particular custom or trade usage actually existed when the contract was made and the custom or trade usage evidence does not contradict the express terms of the contract, you may also consider evidence of custom or trade usage in determining the parties’ contractual intent.

In addition to the language of the agreement, the law imposes on the parties to a contract the duty to perform the contract with honesty in fact and to observe the reasonable commercial standards of fair dealing in the trade.

Answer ‘Tes” or “No” for each of the following:

a. Bayer Corporation Yes

b. DX terminals, Ltd. Yes

In answering “yes,” the jury found that DX failed to substantially perform. 11 The charge, however, does not define “substantially perform” other than by reference to whether a given breach was trivial or not. The charge equates a finding of substantial performance of the contract with a finding that any nonperformance was merely trivial in nature. Further, if any nonperformance is merely trivial (and thus the contract was substantially performed), the nonperforming party is not liable for a breach of contract. And, stated conversely, if a nonperformance is not trivial in *599 nature (and thus the contract was not substantially performed) then the nonperforming party is hable for breach of contract.

Bayer takes this a step further and argues that DX’s breach completely excused Bayer’s performance and justified its cancellation of the contract. This argument, however, ignores the context in which DX’s alleged breach occurred. In the installment contract context, one party can materially (or nontrivially) breach in regard to one or more installments (thus entitling the nonbreaching party to damages) without substantially impairing the value of the whole contract to the non-breaching party and, hence, without excusing the nonbreaching party’s further performance. See, e.g., Pa. Cons.Stat. § 2612(c) & cmt. 6 (providing for actions seeking damages only for default on an installment); Arkla Energy Res., A Div. of Arkla, Inc. v. Roye Realty & Developing, Inc., 9 F.3d 855, 863 (10th Cir.1993) (holding that even though delay in delivery did not substantially impair the value of the whole contract, nonbreaching party could still recover damages due to uncured breach of installment); Gregory M. Trava-lio, The UCC’s Three R’s: Rejection, Revocation and (the Seller’s) Right to Cure, 53 U. Cin. L.Rev. 931, 1002 (1984) (stating that if a party defaults in regard to one installment, the nonbreaching party’s remedy lies in damages, and “only very serious breaches” were meant to enable a non-breaching party to cancel the contract); see also Midwest Mobile Diagnostic Imaging, L.L.C. v. Dynamics Corp. of Am., 965 F.Supp. 1003, 1015-16 (W.D.Mich.1997) (analyzing default on one installment separately from substantial impairment of the whole contract). 12 Indeed, in support of its argument that the finding of DX’s breach rendered the finding of Bayer’s breach immaterial, Bayer cites only two cases, neither involving installment contracts. See Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195 (Tex.2004); Hooker v. Nguyen, No. 14-04-00238-CV, 2005 WL 2675018 (Tex.App.-Houston [14th Dist.] Oct. 20, 2005, pet. denied).

We believe that in finding DX’s failure to comply, the jury did not consequently find that DX substantially impaired the value of the whole contract to Bayer. While Question No. 1 includes a sentence explaining that when default on one or more installments substantially impairs the value of the whole contract, there is a breach of the whole contract, this sentence does not state the contrary: that a default on one or more installments not substantially impairing the value of the whole cannot be a breach of contract. Thus, the jury’s finding of DX’s failure to comply with the contract is not axiomatically converted into a finding that DX’s breach substantially impaired the value of the whole contract to Bayer. 13 In other words, *600 the charge leaves open the possibility that the jury could have found that DX defaulted on one or more installments (thus entitling Bayer to damages) but did not substantially impair the value of the whole contract to Bayer. Because the finding of DX’s breach is not tantamount to a finding of substantial impairment, the finding on Bayer’s breach was not immaterial. 14 Because there is no finding, implied or explicit, that DX’s breach substantially impaired the value of the whole contract to Bayer, we overrule Bayer’s second issue.

IV. Sufficiency of Evidence Re: Breach

In its third issue, Bayer contends that the evidence was legally and factually insufficient to support the jury’s finding of its failure to comply with the contract. See City of Keller, 168 S.W.3d at 822 (providing standards for legal sufficiency review); Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex.1986) (providing standards for factual sufficiency review). Although Bayer acknowledges that it cancelled the contract on September 11, 2001, and failed to comply with the contract terms after that date, it argues that there is no evidence of its failure to comply prior to DX’s breach. Bayer also contended above that it was justified in cancelling the contract because DX’s prior breach substantially impaired the value of the whole contract. Thus, Bayer has argued that (1) the evidence was legally and factually insufficient to support a finding that it breached prior to DX’s breach, and (2) Bayer’s cancellation of the contract was justified due to DX’s breach. Bayer therefore concludes that DX was not entitled to damages incurred either before or after DX breached.

Jury Question No. 1, however, is not bifurcated in this manner; it does not segregate Bayer’s alleged breaches into categories of before and after DX’s breach. Moreover, we considered and rejected the justification argument above, and Bayer acknowledges its cancellation of the contract. Accordingly, we find that the evidence is sufficient to support the jury finding that Bayer breached the contract. Bayer’s arguments regarding what damages are available (based in part on when alleged breaches occurred) are better addressed below in the discussion of the issues relating to damages calculations. Bayer’s third issue is overruled.

V. Additional Instructions

In its fourth issue, Bayer contends that the trial court erred in refusing to supple-mentally instruct the jury when the latter sent out a note asking whether cancellation of the contract could constitute breach of the contract. See Tex.R. Civ. P. 286 (permitting trial court to additionally instruct jury after they have retired for deliberations). DX contends that Bayer failed to preserve any alleged error by omitting to make a timely and sufficiently specific objection in the trial court. See Tex.R.App. P. 33.1(a); Tex.R. Civ. P. 272, 274, 278. We agree with DX.

A. Sequence of Events

At the conclusion of its case, Bayer’s counsel asked the trial judge to judicially *601 notice several sections from the Pennsylvania UCC, including sections 2106 (concerning cancellation), 2610 (concerning anticipatory breach), 2612 (concerning breach of an installment contract), and 2708 (concerning a seller’s general remedies for breach). Pa. Cons.Stat. §§ 2106, 2610, 2612, 2703. Counsel further requested that the judge permit him to read the sections into evidence. The trial judge agreed to take judicial notice of the sections but refused to allow them to be read into the record. Specifically, the judge stated: “We can discuss that on [sic] the context of the Charge.”

At some point, Bayer submitted its “discussion draft” of the jury charge. The instructions accompanying proposed Question No. 1, regarding whether Bayer failed to comply with the agreement, explained that in the installment contract context, a breach of one installment is not necessarily a breach of the entire contract and necessarily entitles the non-breaching party only to damages pertaining to that installment. The draft also included a question asking whether Bayer’s failure to comply was excused due to DX’s prior material breach. The instructions accompanying this question explained that in the installment context, a breach of one installment does not precipitate breach of the entire agreement unless it substantially impairs the value of the whole contract. The record does not reflect whether the trial court specifically ruled on these proposed instructions.

On February 23, 2005, the trial court held a jury charge conference. During the conference, Bayer neither made any objection to Question No. 1, regarding whether Bayer breached, nor offered any instructions concerning cancellation, excuse, or justification. The final charge does not identically match either Bayer’s or DX’s proposed charges. 15

Later on February 23, after the jury retired for deliberations, it sent out three questions, which the trial court answered tersely. On the same day, the jury sent out what the trial judge called a “clarification request.” It stated: “Provided that there is no cancellation clause in the contract, will cancellation in itself constitute a breach of contract?” Bayer’s counsel insisted that the proper answer to the question was “no” and then requested that “the court read to the jury the sections of which the Court took judicial notice.” In response, DX’s counsel asserted that the answer was not as simple as merely saying “no,” because a cancellation would constitute a breach unless the cancellation was justified. DX’s counsel then questioned how the court could supply “a whole new set of instructions on what justifies cancellation.” To which Bayer’s counsel responded: “The Court’s already given them the correct instruction.” And the judge stated: “Right. Which is exactly why I am not going to answer this question.” Bayer’s counsel then stated: “If you are not going to say directly ‘no,’ your honor, which I think you should, it ought to be not necessarily ‘read the Charge.’ ” The judge then sent the question back into the jury with the response: “Please answer the question in accordance with the instructions given and the Charge.”

Before the jury left for the day, it apparently sent out two additional notes: one *602 requesting to see certain exhibits and another requesting a highlighter pen. The next day, February 24, when the issue of the additional requests was raised, Bayer’s counsel took the opportunity to readdress the jury’s cancellation query from the day before. 16 Specifically, counsel mentioned Rule 286 of the Texas Rules of Civil Procedure and tendered proposed supplemental instructions. Although the proposed instructions were apparently in writing, Bayer does not cite to them in the record. However, Bayer’s counsel represented to the trial court that the proposed supplemental instructions were identical to ones “previously submitted,” presumably meaning in the “discussion draft” mentioned above. The proposed instructions apparently contained several parts, including one specifically mentioned by counsel that “a party to the contract may cancel the contract if the other party to the contract is in breach and such breach substantially impairs the whole of the contract.” The court responded by saying that this proposed instruction “looks to me like ... one of the instructions that was submitted originally in the proposed charge, and we chose to go a different way with this.” DX’s counsel asserted that “just sending an unsolicited instruction in is like a lightning bolt.” Ultimately, the judge denied Bayer’s request.

B. Standards for Preservation

Objections to supplemental jury instructions must be made in conformity with the rules governing submission of the charge. Scott Fetzer Co. v. Read, 945 S.W.2d 854, 871 (Tex.App.-Austin 1997), aff'd, 990 S.W.2d 732 (Tex.1998); see also Willis v. Donnelly, 118 S.W.3d 10, 29 (Tex.App.-Houston [14th Dist.] 2003) (applying general rules of charge submission in supplemental charge context), aff'd in part, rev’d in part, 199 S.W.3d 262 (Tex.2006); Texaco, Inc. v. Pennzoil, Co., 729 S.W.2d 768, 833-34 (Tex.App.-Houston [1st Dist.] 1987, writ ref'd n.r.e.) (same). Generally, to preserve for appellate review a complaint premised on a defective jury charge question, a party must bring the objectionable matter to the trial court’s attention and state the basis for the objection. Tex.R. Civ. P. 274; ASEP USA Inc. v. Cole, 199 S.W.3d 369, 377 (Tex.App.Houston [1st Dist.] 2006, no pet.); Flo Trend Sys., Inc. v. Allwaste, Inc., 948 S.W.2d 4, 10 (Tex.App.-Houston [14th Dist.] 1997, no writ). The test for preservation of a jury charge complaint is whether the party made the trial court aware of the complaint, timely and plainly, and obtained a ruling. State Dep’t of Highways & Pub. Transp. v. Payne, 838 S.W.2d 235, 241 (Tex.1992). However, where an appellant contends that the trial court improperly omitted a question or instruction on an issue in the charge, the appellant must do more than just object to preserve the issue on appeal. The failure to submit a question or instruction shall not be deemed a ground for reversal of the judgment unless a substantially correct definition or instruction has been requested in writing and tendered by the party complaining of the judgment. Tex.R. Civ. P. 278; Union *603 Pac. R.R. Co. v. Williams, 85 S.W.3d 162, 166 (Tex.2002). Thus, an appellant does not preserve the issue of an omitted instruction or question for appellate review unless the appellant: (1) tenders a written request to the trial court for submission of the question, (2) which is “in substantially correct wording.” See Tex.R. Civ. P. 278; Tex. Dep’t of Human Servs. v. Hinds, 904 S.W.2d 629, 637-38 (Tex.1995); ASEP USA, 199 S.W.3d at 376-77.

C. Failure to Preserve

Bayer contends that it made a timely and proper submission to the trial court regarding cancellation when it requested a jury instruction as follows: “[a] party to the contract may cancel the contract if the other party to the contract is in breach and such breach substantially impairs the whole contract.” This request was not made, however, until the day after the jury sent its cancellation query. On February 23, the day the jury sent its query, Bayer’s counsel argued only that the correct answer was “no,” and that barring that answer the court should read four sections of the UCC to the jury. On appeal, Bayer does not assert that either suggestion would have been proper. See Wohlfahrt v. Holloway, 172 S.W.3d 630, 639-40 (Tex.App.-Houston [14th Dist.] 2005, pet. denied) (holding that to have preserved error, a party’s argument on appeal must comport with its argument in the trial court). Indeed, Bayer’s own subsequent submission suggests that a simple “no” answer to the jury’s query would have been incorrect, indicating that cancellation could constitute a breach if it were unjustified. 17 Further, Bayer does not contend on appeal that reading the UCC sections to the jury would have either been proper or would have answered the jury’s question. These were the only two requests that Bayer made on the day the jury sent out its note. Furthermore, Bayer’s counsel inconsistently stated on this first day that “[t]he Court’s already given them the correct instruction.” Moreover, because on appeal Bayer contends that the trial court erred in omitting an instruction regarding cancellation, it was required to submit the requested instruction in writing. Tex.R. Civ. P. 278; Hinds, 904 S.W.2d at 637-38. Consequently, the oral statements made on February 23 failed to preserve error. Tex.R.App. P. 33.1(a); Tex.R. Civ. P. 272, 274, 278; see also Willis, 118 S.W.3d at 29 (holding oral request for supplemental instruction was not sufficient to preserve error after jury sent out note).

After the court responded to the question, the jury apparently sent out two additional and unrelated requests and concluded deliberations for the day. At some point during the following day, Bayer’s counsel submitted proposed supplemental instructions in writing to the court. Regardless of the merits of these proposed instructions, they were clearly untimely. See Read, 945 S.W.2d at 871 (holding that in order to preserve error for appellate review on a complaint about a supplemental charge, a party must make any objections or requests to such charge before it is given to the jury); Texaco, Inc., 729 S.W.2d at 834 (holding that party failed to preserve error when it did not object to supplemental instruction until the following day). The trial judge himself indicated that the request was untimely when he stated: “You made the request for Additional Instruction 286, right, based on the *604 jury questions submitted by the jury in writing on a point of law that was answered by the Court yesterday. And I have declined to reraise the issue.” Because Bayer failed to make a proper request regarding supplementation of the charge until the day after the jury’s note was received and answered, it has failed to preserve its complaint for appellate review. Bayer’s fourth issue is overruled.

VI. Damages

Bayer’s fifth, sixth, and seventh issues concern the calculation and awarding of damages. In its fifth issue, Bayer contends that the trial court erred in admitting the testimony of DX’s damages expert because his testimony was based on improper methodology and improper foundation. In its sixth issue, Bayer contends that any award of lost profits was precluded by the contract and applicable law. In its seventh issue, Bayer contends that the evidence was legally and factually insufficient to support the jury’s damages award. We begin by considering issue seven, challenging the legal and factual sufficiency of the evidence regarding damages.

A. Sufficiency

Question No. 4, concerning damages caused by Bayer’s failure to comply with the contract, asked the jury as follows:

QUESTION NO. 4

What sum of money, if any, if paid now in cash, would fairly and reasonably compensate DX Terminals, Ltd. for its damages, if any, resulting from Bayer Corporation’s failure to comply with the contract between DX Terminals, Ltd. and Bayer Corporation?

“Market price” is the price for which DX Terminals, Ltd. could have obtained caustic soda at the place of tender at the time DX Terminals, Ltd. learned of the breach.

Consider the following elements of damages, if any, and none other:

The difference, if any, between the cost to purchase caustic soda as substitute for caustic soda that Bayer Corporation failed to deliver and the price for caustic soda under the contract between DX Terminals, Ltd. and Bayer Corporation, less any expenses saved because of Bayer Corporation’s failure to comply with the contract;

The difference, if any, between the market price for caustic soda at the time Bayer Corporation failed to comply with the contract and the price for caustic soda under the contract between DX Terminals, Ltd. and Bayer Corporation, less any expenses saved because of Bayer Corporation’s failure to comply with the contract; and

The difference between what DX Terminals, Ltd. actually earned and what it would have earned if Bayer Corporation had complied with the contract.

Do not add any amount for interest on damages, if any.

Do not include in your answer any amount that you find DX could have avoided by the exercise of reasonable care.

Answer in dollars and cents, if any.

Answer: $7,500,00.00

Because Bayer did not object to the definitions and instructions contained in this submission, we must examine the sufficiency of the evidence in light of the charge as given. See, e.g., Bencon Mgmt. & Gen. Contracting, Inc. v. Boyer, Inc., 178 S.W.3d 198, 206 (Tex.App.-Houston [14th Dist.] 2005, no pet.). Furthermore, unless the record clearly demonstrates otherwise, *605 we presume that the jury followed the court’s instructions on damages. Golden Eagle Archer, Inc. v. Jackson,