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March 5, 2026 Get Citation Alerts Download PDF Add Note

Cheyenne Partners, LLC and Jason Alan Kitts v. Rainbow International, LLC and the Grounds Guys, LLC

Texas Court of Appeals, 10th District (Waco)

• Citations: None known
• Docket Number: 10-24-00282-CV
• Nature of Suit: Miscellaneous/other civil

• Disposition: Affirmed

• Opinion

• Authorities (19)

• Cited By (0)

• Summaries (0)

• Similar Cases (21.9K)

• PDF

Disposition

Affirmed

Lead Opinion

Court of Appeals
Tenth Appellate District of Texas

10-24-00282-CV

Cheyenne Partners, LLC and Jason Alan Kitts,
Appellants

v.

Rainbow International, LLC and The Grounds Guys, LLC,
Appellees

On appeal from the
170th District Court of McLennan County, Texas
Judge Jim Meyer, presiding
Trial Court Cause No. 2017-2979-4

JUSTICE SMITH delivered the opinion of the Court.

MEMORANDUM OPINION

Cheyenne Partners, LLC and Jason Alan Kitts appeal from the trial

court’s judgment rendered in favor of Rainbow International, LLC and The

Grounds Guys, LLC’s suit involving a Michigan franchise agreement. In four

issues, Appellants contend Michigan law applies to this dispute, the evidence

is insufficient to support the finding of breach of contract, Appellants
established defenses precluding judgment, and Appellants established their

counterclaims. We affirm.

BACKGROUND

Jason Kitts acquired a Rainbow franchise in Monroe, Michigan in 2009

and a second franchise in Oakland, Michigan in 2014. In late 2014, he acquired

a Grounds Guys franchise. Kitts assigned the franchises to his company,

Cheyenne Partners, but Kitts is the personal guarantor. While Appellants’

franchises were financially successful, Kitts had a contentious relationship

with Rainbow. On September 5, 2017, following months of unproductive

communications between Kitts and Rainbow, Appellees filed their original

petition in the 170th District Court in Waco. Rainbow sent a “Notice of Default

and Intent to Terminate Franchise Agreements,” dated September 8, 2017,

specifying defaults and giving Appellants thirty days to remedy the defaults.

Thereafter, Rainbow sent a “Notice of Final Termination of Franchise

Agreement” to Appellants dated November 16, 2017.

In April 2018, Appellants filed a “Notice of Removal” in the United States

District Court for the Western District of Texas, Waco Division. In December

2018, that court remanded the case back to the 170th District Court. A trial

before the court was eventually held in June 2024. The trial court found that

Cheyenne Partners, LLC v. Rainbow Int’l, LLC Page 2
Appellants breached their contract with Rainbow and abandoned their

Grounds Guys franchise and awarded damages to Appellees.

CHOICE OF LAW

In their first issue, Appellants contend that the trial court erred in failing

to apply Michigan law, which provides protections to the franchise

relationship. Without specifying which defenses and issues, they assert that

Michigan’s franchise protections should apply to specific defenses and issues

arising under its statutory scheme.

Under Rule of Evidence 202, a party may compel a trial court to take

judicial notice of another state’s law by filing a motion, giving notice to other

parties, and furnishing the court with sufficient information to enable it to

properly comply with the request. TEX. R. EVID. 202; Daugherty v. S. Pac.

Transp. Co., 772 S.W.2d 81, 83 (Tex. 1989). To have foreign law applied to a

case, a party must file a preliminary motion requesting application of foreign

law in addition to the request to take judicial notice. Pittsburgh Corning Corp.

v. Walters, 1 S.W.3d 759, 769 (Tex. App.—Corpus Christi-Edinburg 1999, pet.

denied). Choice of law issues can be waived if not properly invoked. Kubbernus

v. ECAL Partners, Ltd., 574 S.W.3d 444, 473 (Tex. App.—Houston [14th Dist.]

2018, pet. denied). Further, to preserve an issue for appellate review, a party

must make its complaint known to the trial court by a timely request or

Cheyenne Partners, LLC v. Rainbow Int’l, LLC Page 3
objection that is specific enough for the trial court to be aware of the complaint

and then receive a ruling from the trial court. TEX. R. APP. P. 33.1.

Appellants assert that they adequately apprised the court of a choice of

law dispute by raising the issue and providing the court sufficient information

to conduct a choice of law analysis. They cited to several documents in the

record arguing that in those documents they asserted that Michigan law

applies, asked the court to apply it, provided the court with specific statutes on

which they relied, and pointed out the differing standards under each state’s

laws.

The documents Appellants cited are: Defendant’s Original Answer and

Counterclaims filed in the United States District Court for the Western

District of Texas, Waco Division; Defendant’s Supplemental Response to

Plaintiffs’ Opposed Motion to Remand filed in the United States District Court

for the Western District of Texas, Waco Division; Defendant’s Response to

Plaintiffs’ No-Evidence Motion for Summary Judgment; Defendants’

Objections to Plaintiffs’ Motion for Entry of Judgment and Proposed Judgment;

and Defendants’ Motion for New Trial.

Two of the documents Appellants rely on were filed in federal court and

therefore did not provide information to the 170th District Court. Of the

documents filed in the 170th District Court, one was filed after the trial and

Cheyenne Partners, LLC v. Rainbow Int’l, LLC Page 4
one was filed after the trial court rendered judgment, therefore both were

untimely for purposes of raising a choice of law issue. See DaimlerChrysler

Motors Co., LLC v. Manuel, 362 S.W.3d 160, 196-97 (Tex. App.—Fort Worth

2012, no pet.); Colvin v. Colvin, 291 S.W.3d 508, 514 (Tex. App.—Tyler 2009,

no pet.) (motion to apply Louisiana law filed after jury was seated and with a

trial set to begin within the hour was untimely); Walters, 1 S.W.3d at 769-70

(motions to apply Virginia law filed on eve of trial were untimely). The final

document Appellants rely on is their response to Appellees’ No-Evidence

Motion for Summary Judgment. In their response, Appellants asserted Texas

law, with one exception. While they cited to Section 445.1527 of the Michigan

Franchise Investment Law, asserting they have sufficient evidence of

violations of that law, they did not raise the issue of choice of laws or address

differences between Michigan and Texas law.

It is undisputed that Appellants did not file a Rule 202 motion requesting

the court take judicial notice of Michigan law. Although Michigan franchise

law was mentioned at trial, that is insufficient to constitute a request to take

judicial notice or to raise a choice of law issue. Furthermore, while cross

examining a witness, Appellants’ counsel asked a question referencing a

Michigan law that voids any provision in a franchise agreement requiring

arbitration or litigation to be conducted outside Michigan. Appellees’ counsel

Cheyenne Partners, LLC v. Rainbow Int’l, LLC Page 5
objected, telling the court that Appellants did not follow the process of

informing the court of Michigan law. Appellants’ counsel did not correct him.

We conclude that nothing in the record shows that Appellants asked the court

to apply Michigan law. Accordingly, Appellants’ contention that Michigan law

applies has been waived. See Kubbernus, 574 S.W.3d at 473. We overrule

Appellants’ first issue.

BREACH OF CONTRACT

In part A of their second issue, Appellants argue that “many of the

alleged breaches, resulting in termination and damages, are legally invalid as

no notice or opportunity to cure were given.” Noting that the trial court did

not specify which contractual term was breached, or “articulate which theory

the judgment rested [on]—including legally invalid ones for which no notice or

opportunity to cure were provided,” Appellants argue that “the judgment co-

mingles and rests on legally invalid theories of recovery,” requiring reversal

and remand of the case for a new trial.

Apparently, Appellants’ argument that some theories presented to the

trial court are legally invalid rests on the application of Michigan law. As

explained above, Appellants never asked the trial court to apply Michigan law.

Even assuming Appellants’ characterization of some theories as constituting

Cheyenne Partners, LLC v. Rainbow Int’l, LLC Page 6
legally invalid theories is accurate, the theories based on Michigan law were

never presented to the trial court.

Appellants label their complaint in this issue a Casteel problem. See

Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 387-89 (Tex. 2000) (op. on reh’g)

(held that a jury charge is erroneous when a jury answers a single broad-form

liability question affirmatively, the single liability question incorporates

multiple legal theories, and at least one of those legal theories does not support

liability as a matter of law and therefore is invalid). Appellants argue that co-

mingling of legally invalid theories of recovery makes it impossible for

Appellants or a reviewing court to discern whether the findings and judgment

are predicated on a legally valid theory.

The parties’ franchise agreement required notice and an opportunity to

cure some of the alleged breaches but not all of the alleged breaches. Also,

Appellants were given the opportunity to cure some alleged breaches.

Appellants do not explain how those theories of breach requiring notice and an

opportunity to cure fail to support liability as a matter of law as opposed to

merely failing to support liability because they lack evidentiary support. The

Texas Supreme Court has clarified that whether the Casteel presumption of

harm applies, because a broad-form charge commingled legally valid theories

or allegations with legally invalid theories or allegations, or does not apply,

Cheyenne Partners, LLC v. Rainbow Int’l, LLC Page 7
because the charge commingled valid theories or allegations with theories or

allegations that were invalid only because the evidence did not support them,

the question on review is whether the charge probably caused an improper

judgment or probably prevents the appellant from properly presenting the case

on appeal. Horton v. Kansas City S. Ry. Co., 692 S.W.3d 112, 145-46 (Tex.

2024). This was a nonjury trial. For purposes of our discussion, we assume

the same reasoning applies in a trial before the court. See Zaidi v. Shah, 502

S.W.3d 434, 440 (Tex. App.—Houston [14th Dist.] 2016, pet. denied).

Here, as explained below, there is sufficient evidentiary support for some

of the theories on which Appellees relied and presented to the trier of fact.

Therefore, even assuming the theories requiring notice and an opportunity to

cure can be labeled as invalid, comingling of those theories with other theories

not requiring notice and an opportunity to cure did not cause an improper

judgment or prevent Appellants from properly presenting their case on appeal.

See Horton, 692 S.W.3d at 145-46.

In part B of their second issue, mentioning only the four alleged defaults

named in Rainbow’s November 16, 2017 termination letter, Appellants assert

the evidence is legally and factually insufficient to support a finding of breach

of contract.1 They argue that “[t]he question is what evidence if any, supports

1 In its findings of fact, the trial court found that Appellants breached the terms of the agreements

with both Rainbow and Grounds Guys. However, Appellants never mention Grounds Guys in their

Cheyenne Partners, LLC v. Rainbow Int’l, LLC Page 8
the conclusion that Rainbow notified Kitts of defaults which he then failed to

cure.” Regarding the allegation of failure to make note payments, Appellants

assert that the testimony presented by Appellees was a guess, not based on

personal knowledge. Regarding the alleged lack of tax documents, and

considering testimony that Kitts did not submit the precise letters from his

accountant that Rainbow wanted, Appellants contend they were in substantial

compliance with the contractual requirements.

Standard of Review

In an appeal of a judgment rendered after a bench trial, the trial court’s

findings of fact have the same weight as a jury’s verdict, and we review the

legal and factual sufficiency of the evidence used to support them just as we

would review a jury’s findings. In re Doe, 19 S.W.3d 249, 253 (Tex. 2000). We

review the trial court’s conclusions of law de novo; that is, we review the trial

court’s legal conclusions drawn from the facts to determine their correctness.

See BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002).

A party who challenges the legal sufficiency of the evidence to support

an issue upon which it did not have the burden of proof at trial must

argument in support of their second issue. Therefore, we construe the complaint to be directed solely
at the breach of contract finding regarding the contract with Rainbow. However, to the extent
Appellants may be asserting the evidence is insufficient to support the breach of contract finding
regarding their contract with Grounds Guys, that complaint has no merit. Mary Thompson and Josh
Sevick, employees of the parent company, testified that Appellants abandoned their Grounds Guys
contract. Pursuant to Section 11.1.4 of the franchise agreement, the franchisor may terminate the
franchise without notice if the franchisee abandons the franchised business.

Cheyenne Partners, LLC v. Rainbow Int’l, LLC Page 9
demonstrate on appeal that there is no evidence to support the adverse finding.

Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 215 (Tex. 2011).

Evidence is legally sufficient if it would enable reasonable and fair-minded

people to reach the verdict under review. Id. We credit favorable evidence if

a reasonable finder of fact could, and disregard contrary evidence unless a

reasonable finder of fact could not. Id. If there is any evidence of probative

force to support the finding, i.e. more than a scintilla, we will overrule the

issue. Haggar Clothing Co. v. Hernandez, 164 S.W.3d 386, 388 (Tex. 2005) (per

curiam).

If a party is attacking the factual sufficiency of the evidence to support

an adverse finding on an issue on which the other party had the burden of

proof, the attacking party must demonstrate that there is insufficient evidence

to support the adverse finding. Capps v. Nexion Health at Southwood, Inc.,

349 S.W.3d 849, 855 (Tex. App.—Tyler 2011, no pet.). The verdict should be

set aside only if it is so contrary to the overwhelming weight of the evidence as

to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986)

(per curiam). In reviewing the factual sufficiency of the evidence, we must

examine the entire record, considering both the evidence in favor of, and

contrary to, the challenged findings. See Mar. Overseas Corp. v. Ellis, 971

S.W.2d 402, 406-07 (Tex. 1998); Cain, 709 S.W.2d at 176. The reviewing court

Cheyenne Partners, LLC v. Rainbow Int’l, LLC Page 10
may not substitute its opinion for that of the trier of fact, as it is the factfinder’s

role to judge the credibility of witnesses, to assign the weight afforded their

testimony, and to resolve inconsistencies within or conflicts among the

witnesses’ testimony. Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757,

761 (Tex. 2003); Ford v. Panhandle & Santa Fe Ry. Co., 252 S.W.2d 561, 563

(Tex. 1952).

Applicable Law

The essential elements of a breach of contract claim are: (1) the existence

of a valid contract; (2) performance or tendered performance by the plaintiff;

(3) breach of the contract by the defendant; and (4) damages sustained as a

result of the breach. Caprock Inv. Corp. v. Montgomery, 321 S.W.3d 91, 99

(Tex. App.—Eastland 2010, pet. denied). The last element encompasses a

causation requirement. Velvet Snout, LLC v. Sharp, 441 S.W.3d 448, 451 (Tex.

App.—El Paso 2014, no pet.).

Discussion

In arguing the evidence is insufficient to support the breach of contract

finding, Appellants mention the four alleged defaults named in the November

16, 2017 letter: failure to make note payments, submit royalty reports, provide

tax returns, and maintain insurance. The failure to make note payments and

maintain insurance were not alleged as grounds for breach of contract in

Cheyenne Partners, LLC v. Rainbow Int’l, LLC Page 11
Appellees’ petition. Therefore, it was not necessary to present evidence of those

two failures.

Reports

Pursuant to Sections 3.6 and 5.7.1 of the franchise agreement, sales

reports and license fee payments were required to be made weekly. Mary

Thompson, Chief Operating Officer of Rainbow’s parent company at the time,

testified that between May 2016 and December 2016, Kitts did not submit

reports. In 2017, there were twenty-three times he did not submit reports on

time. He stopped reporting in March 2017. As of the date of termination, he

owed eighteen reports for 2017 for his Monroe territory and thirty-five weeks

of reports for his Oakland territory. When Kitts failed to send in reports, he

also failed to send in required license fees. In July 2017, Rainbow sent email

notifications to Kitts identifying missing reports. Pursuant to Sections 11.1

and 11.1.11 of the franchise agreement, the franchisor may terminate the

agreement without providing the franchisee with notice and the opportunity to

cure when he fails to comply with reporting requirements. Section 11.2.1

requires the franchisor to provide notice and an opportunity to cure for failure

to promptly pay any monies owing to the franchisor. The September 8, 2017

notice of default and intent to terminate named the failure to make payments

due in breach of Section 3 of the franchise agreement as a basis for default.

Cheyenne Partners, LLC v. Rainbow Int’l, LLC Page 12
Financial Statements

Section 5.7.3 of the franchise agreement requires the franchisee to timely

submit an income and expense statement and a balance sheet, and upon

demand by the franchisor, financial statements audited by an independent

certified public accountant. Thompson testified that Kitts failed to provide the

audited financial statements. Pursuant to Section 11.1.10 of the franchise

agreement, the franchisor may terminate the agreement without providing the

franchisee with notice and the opportunity to cure when he fails to provide the

required audited financial statements.

Goodwill

Liberty Mutual Insurance Company had an agreement with Rainbow

whereby Rainbow franchisees would provide services for Liberty Mutual

insureds. Participation by franchisees is optional but if they opt in, they must

comply with the insurance company’s requirements. Appellants participated

in the program but failed to comply with Liberty Mutual’s requirements.

Therefore, Liberty Mutual suspended Kitts and Rainbow. Thompson testified

that the suspension caused Rainbow to lose a substantial amount of business

and damaged Rainbow’s goodwill. Sections 11.1 and 11.1.8 of the franchise

agreement provide that the franchisor need not provide the franchisee with

Cheyenne Partners, LLC v. Rainbow Int’l, LLC Page 13
notice and the opportunity to cure if the franchisee materially impairs

Rainbow’s goodwill.

Appellants’ Evidence

Kitts was asked by Appellees’ counsel why he did not timely submit the

weekly sales analysis reports. He responded with, “I don’t recall exactly why

each event. There was probably different reasons for each time.” Kitts testified

that, although the reports were delayed, he turned in the missing reports along

with checks for money due. He also provided tax returns. He testified that

after he received the notice of default, he cured everything.

Conclusion

There is more than a scintilla of evidence to show that Appellants

breached the franchise agreement by failing to submit reports timely, failing

to pay all fees due, failing to provide audited financial statements, and by

impairing Rainbow’s goodwill. See Hernandez, 164 S.W.3d at 388. Although

Kitts presented some evidence that he attempted to cure the alleged defaults,

he fails to acknowledge that the franchise agreement allows termination

without notice and the opportunity to cure when the franchisee has failed to

timely submit reports or audited financial statements, or if the franchisee

materially impairs Rainbow’s goodwill. Even considering Kitts’ attempts to

cure, the verdict is not so contrary to the overwhelming weight of the evidence

Cheyenne Partners, LLC v. Rainbow Int’l, LLC Page 14
as to be clearly wrong and unjust. See Cain, 709 S.W.3d at 176. We overrule

Appellants’ second issue.

AFFIRMATIVE DEFENSES AND COUNTERCLAIMS

In their third issue, Appellants assert that the evidence

established their affirmative defenses of fraud, including fraudulent non-

disclosure, violation of Michigan law, and prior material breach. In their

fourth issue, Appellants contend they established their counterclaims for

fraud, breach of contract, violations of the Texas Deceptive Trade Practices Act,

and violations of Michigan’s Franchise Investment Law.

As mentioned above, Appellants filed their “Defendants’ Original

Answer and Counterclaims,” which also included their affirmative defenses, in

the federal court. That is the document Appellants cite to in their brief.

Appellants’ letter to the district court requesting items to be included in the

clerk’s record and filed with this Court does not include a request for

“Defendants’ Original Answer and Counterclaims.” The clerk’s record filed in

this Court does not include a document entitled “Defendants’ Original Answer

and Counterclaims” filed in the McLennan County District Court.

Texas Rule of Appellate Procedure 34.5 dictates that, with one exception

involving agreement by the parties which is not applicable here, the clerk’s

record must include copies of all pleadings on which the trial was held. TEX.

Cheyenne Partners, LLC v. Rainbow Int’l, LLC Page 15
R. APP. P. 34.5(a). The burden is on the party seeking review to ensure that

the proper record is before the Court of Appeals to show error requiring

reversal. See Walker v. Horine, 695 S.W.2d 572, 579 (Tex. App.—Corpus

Christi-Edinburg 1985, no writ) (per curiam) (op. on reh’g). Without the

pleading filed in the district court setting forth the affirmative defenses and

counterclaims, we cannot properly review the issues relating to those

affirmative defenses and counterclaims. Appellants have waived their

complaints regarding the denial of their affirmative defenses and

counterclaims. We overrule Appellants’ third and fourth issues.

CONCLUSION

Having overruled each of Appellants’ issues, we affirm the trial court’s

judgment.

STEVE SMITH
Justice

OPINION DELIVERED and FILED: March 5, 2026
Before Chief Justice Johnson,
Justice Smith, and
Justice Harris
Affirmed
CV06

Cheyenne Partners, LLC v. Rainbow Int’l, LLC Page 16