Jerry Hofrock v. Judy Hornsby ( 2016 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-14-00505-CV
Jerry Hofrock, Appellant
v.
Judy Hornsby, Appellee
FROM THE DISTRICT COURT OF BELL COUNTY, 169TH JUDICIAL DISTRICT
NO. 253,616-C, HONORABLE GORDON G. ADAMS, JUDGE PRESIDING
MEMORANDUM OPINION
Jerry Hofrock appeals from a judgment that rescinded the conveyance of real
property to him from Judy Hornsby and awarded her attorney’s fees. Representing himself on
appeal, Hofrock contends that his trial counsel was ineffective, that the trial court erred by ignoring
his difficulty hearing, and that the trial court erred by awarding Hornsby attorney’s fees. We will
affirm the judgment.
BACKGROUND
Hornsby owned two adjacent lots of approximately five acres each in Temple. One
lot had a house and was encumbered by a mortgage. The unimproved lot she owned outright.
Having difficulty making mortgage payments, she contacted Hofrock for help. What they agreed
he would do and how they formalized that arrangement was the crux of the dispute in the trial.
Hornsby testified that Hofrock told her he would auction the improved land and
that his commission would be whatever exceeded the balance of the mortgage. She said he was to
sell the unimproved five acres for $75,000 if the buyer of the improved lot wanted it. She testified
that she signed five different signature pages, but did not see the full documents. She testified that
Hofrock told her that the signatures were for documents necessary to expedite the sale to the auction
buyer, and that signing them in advance would relieve her from having to return from her home
in Kentucky to sign them when the sale occurred. She said that she understood references in the
documents to the “buyer” to refer to the auction purchaser, not Hofrock. Hornsby testified that
Hofrock told her not to make mortgage payments because the sale would take care of that debt. She
testified that when she mentioned hiring an attorney to examine the documents, Hofrock told her
that would end their agreement. She said that she trusted him and relied on his explanations. She
testified that Hofrock did not tell her that the documents to which the signature pages were attached
transferred the property to Hofrock, though both special warranty deeds list Hornsby as the grantor
and Hofrock, as trustee of a trust named after the property’s address, as grantee. These deeds state
that Hofrock gave Hornsby a $348,750 promissory note in exchange for the ten-plus acre property,
but no such note existed. A separate deed of trust lists Hofrock as the grantor and Hornsby as the
grantee. A deed addendum lists Hofrock both as grantor and, as trustee of a trust, grantee. Hornsby
testified that Hofrock told her he tried to auction the property in December 2009 but that bad weather
dampened turnout and that nobody bid on it. In March 2010, Hornsby returned to the property and
began living there despite Hofrock’s assertion that he owned the property.
Hofrock testified that he always intended to conduct a short sale and that he
explained to Hornsby that her deeding the property to him was part of that process. He denied that
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he discussed holding an auction or the nature of his compensation because those things would
not concern her after she deeded the property to him. Hofrock denied showing Hornsby only the
signature page of the documents. He denied that he told her not to contact an attorney and testified
that he let her read the full documents by herself and returned to help explain them. He admitted
not giving a promissory note as described in the deed, but explained that one never does that during
a short sale. He asserted that he was the owner of the property and that he was cheated out of the
money he spent to repair the property1 and of the profit from selling it. He testified that he was not
trying to defraud anyone with mistakes he made in typing in party names on the documents—he had
been tired when composing the documents—and that, instead, he had been defrauded.
The mortgage company foreclosed on the mortgage and sold the house and five-acre
lot on which it sits.
Hornsby sued Hofrock for fraud, breach of fiduciary duty, unjust enrichment, and
trespass to try title. The trial court rendered judgment for her, rescinding all documents purporting
to convey any interest in the property from Hornsby to Hofrock. The court awarded Hornsby
$13,701.09 in attorney’s fees. See Tex. Bus. & Com. Code § 27.01.
DISCUSSION
Hofrock contends that he received ineffective assistance of counsel, that the trial court
erred by ignoring his hearing difficulty, and that the trial court erred by awarding attorney’s fees.
1
Hofrock testified that he removed five dumpsters full of trash, repaired the pool, and
renovated the deck among other repairs.
3
Hofrock has not shown that his counsel’s performance entitles him to reversal of the
judgment. The Sixth Amendment guarantees the “accused” “[i]n all criminal actions” the right
“to have the assistance of counsel for his defence.” See U.S. Const. amend. VI; see also Strickland
v. Washington, 466 U.S. 668, 686 (1984). Indigent parents represented by appointed counsel in
parental-rights termination cases have a similar right to effective counsel defined by statute. See
In re B.G., 317 S.W.3d 250, 253 (Tex. 2010). No such right or protection has been articulated in
the constitution, statutes, or case law with respect to persons represented by retained counsel in
a real-estate fraud action. Even if Hofrock—who represents himself on appeal—showed that his
trial counsel was utterly ineffective, he would not be entitled to reversal of the judgment on that
basis. We overrule issue one.
Hofrock has not shown that the court ignored his hearing difficulty. Generally, a
party must bring an error to the trial court’s attention and receive an adverse ruling before he can
present that complaint to an appellate court. See Tex. R. App. P. 33.1(a). Hofrock asserts that “[i]t
is obvious from the transcript that Appellant has a hearing impairment” and that the trial court
violated the Texas Constitution and the Americans With Disabilities Act by “try[ing] him with
no listening device” and by “not supplying Appellant with an assistive listening [device].” He
asserts that the courtroom is equipped with “assisted hearing devices” but none was offered to him
and that the trial court only offered to turn up the volume on speakers. Even in a criminal case in
which a trial court is statutorily required to provide a means for a hearing-impaired defendant to
understand the proceedings against him,2 a trial court does not commit error by not providing
2
See Tex. Code Crim. Proc. art. 38.31.
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accommodations if the defendant does not request an interpreter, object to the absence of an
interpreter, or make the court aware that he is not able to understand the trial. See Lincoln v. State,
999 S.W.2d 806, 809 (Tex. App.—Austin 1999, no pet.); see also Salazar v. State, 93 S.W.3d 339,
341 (Tex. App.—Texarkana 2002, pet. ref’d). Hofrock has not shown in the record that he requested
and was denied a listening device or other accommodation. The record in this case is similar to that
described in the Lincoln opinion:
On a few occasions during the course of his trial, appellant or his counsel indicated
to the court that he was having difficulty hearing. On each occasion, appellant was
allowed to move or the speakers repeated themselves to permit appellant to hear.
Appellant did not indicate at the time that these arrangements were unsatisfactory.
More than once, appellant was addressed by the court and responded appropriately,
indicating that he heard and understood what was said. Similarly, appellant twice
took the stand and testified without difficulty.
....
While the failure of appellant or his attorney to tell the court earlier that appellant
could not hear the proceedings is not a bar to raising the issue on appeal, it is relevant
to the question whether the district court knew or should have known that additional
remedies were needed. Considering what the district court was told and observed
during the trial, we are not persuaded that the court failed to take constitutionally
adequate steps to assure that appellant heard and understood the proceedings.
999 S.W.2d at 809-10. A few times, Hofrock asked counsel to repeat a question, and counsel
complied. Hofrock does not point to an instance in which the attorney failed to repeat a question or
a witness failed to repeat an answer, much less a time when the trial court directed a speaker not to
repeat a statement for Hofrock’s benefit. The record contains passages in which Hofrock interacted
in ways that indicated that he understood other speakers without clarification. Hofrock asserts in his
appellate brief that “there were many discrepancies in the testimony of Hornsby and her attorney,
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but he did not clearly hear any of the proceedings in the courtroom and therefore could not alert his
attorney to the misrepresentations.” But he points to no instance in which he notified the trial court
of his difficulties and was denied relief, nor does the record demonstrate that the trial court should
have been aware that he did not understand the proceedings, nor does Hofrock list discrepancies
that went unaddressed that affected the outcome of the case. The trial court cannot be held to have
committed error when Hofrock did not alert the trial court to the problem. We overrule issue two.
Hofrock asserts that the trial court erred by awarding attorney’s fees. He argues that
Hornsby cannot collect attorney’s fees under Texas Business and Commerce Code section 27.01
because she did not plead a claim under that statute. He contends that, because there was no
contract for the sale of land between the parties involved in this case, section 27.01 does not apply.
He contends that Hornsby did not sell her property to him, but simply conveyed it to him as security
for his performance of a contract between the two of them for a short sale. He also argues that
she did not plead any injury from any misrepresentation. He argues that the property was set for
foreclosure before she met him and it was ultimately foreclosed upon, so she was not harmed.
Texas Business and Commerce Code section 27.01(a) defines fraud as follows:
Fraud in a transaction involving real estate or stock in a corporation or joint stock company
consists of a
(1) false representation of a past or existing material fact, when the false
representation is
(A) made to a person for the purpose of inducing that person to enter into a
contract; and
(B) relied on by that person in entering into that contract; or
(2) false promise to do an act, when the false promise is
(A) material;
(B) made with the intention of not fulfilling it;
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(C) made to a person for the purpose of inducing that person to enter into a
contract; and
(D) relied on by that person in entering into that contract.
The statute provides that “[a]ny person who violates the provisions of this section shall be liable to
the person defrauded for reasonable and necessary attorney’s fees, expert witness fees, costs for
copies of depositions, and costs of court.” Id. § 27.01(e).
Although Hornsby did not plead for attorney’s fees specifically under section 27.01,
the issue was raised sufficiently at trial. In her First Amended Petition, Hornsby claimed fraud
with respect to a real-estate transaction and sought attorney’s fees in her general prayer for relief.
Hornsby argues that, because the award of attorney’s fees is mandatory under the statute, she
was not required to plead for it. See id.; see also Robinson v. Brannon, 313 S.W.3d 860, 868-69
(Tex. App.—Houston [14th Dist.] 2010, no pet.) (no need to plead for mandatory attorney’s fees
under Tex. Educ. Code § 22.0517). More critically, the issue was tried by consent. See Tex. R. Civ.
P. 67. Trial by consent exists in exceptional cases where the record clearly shows that the parties
tried the unpleaded issue. Austin Area Teachers Fed. Credit Union v. First City Bank–Nw. Hills,
N.A., 825 S.W.2d 795, 800 (Tex. App.—Austin 1992, writ denied). We review whether an issue was
tried by consent for an abuse of discretion. RR Maloan Invs., Inc. v. New HGE, Inc., 428 S.W.3d
355, 363 (Tex. App.—Houston [14th Dist.] 2014, no pet.). A party who allows an issue to be tried
by consent and who fails to raise the lack of a pleading before submission of the case cannot raise
the pleading deficiency for the first time on appeal. Id. At trial, Hornsby’s attorney expressly stated
his belief that she was entitled to attorney’s fees “under Business and Commerce Code Section—I
think it’s 2701.” He then elicited evidence supporting the claim for attorney’s fees. After the close
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of evidence, the court stated its belief that Hornsby was not entitled to attorney’s fees, and requested
explanation in her post-trial submission why she was entitled to them. Hofrock was advised of the
basis of the claim at trial before the evidence was adduced but did not object to the lack of pleading
at trial. The issue of entitlement to attorney’s fees under Texas Business and Commerce Code
section 27.01 was tried by consent, and the absence of pleadings cannot be raised here now.
Hofrock’s remaining complaints do not merit reversal of the judgment. He complains
that Hornsby pleaded no injury, but under the fraud cause-of-action heading, she pleaded that she
“suffered damages within the jurisdictional limits of this court by losing a buyer for the Improved
Property before the foreclosure, because of the cloud on her title.” Hornsby pleaded that her
title issues arose because Hofrock knowingly made material and false representations that were
intended to and did induce her participation in certain transactions. The facts that Hornsby feared
that the property was headed toward foreclosure before she met Hofrock and that it ultimately was
foreclosed upon does not mean that Hornsby did not suffer damages due to the misrepresentations
she pleaded and testified that Hofrock made. Hofrock’s claim that there was no contract between
them is contradicted by documents showing that Hornsby transferred the property to him and by
testimony from both sides that his representations induced her to retain his services concerning
a transaction involving real estate in return for compensation. The parties told different versions of
what that contract entailed—whether it was a short sale, an auction, a brokered sale, or a simple
conveyance of the property—but both parties testified that they agreed that Hofrock would perform
services that would result in a transfer of ownership of Hornsby’s real estate. That is a quintessential
“transaction involving real estate” and falls under Texas Business and Commerce Code
section 27.01. Hornsby pleaded and provided some proof that Hofrock induced her to hire him and
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engage in the real-estate transactions through false representations intended to induce her to enter
the contract and on which she relied in entering the contract. The trial court could have resolved
conflicts in the evidence differently, but the record supports its conclusion that Hornsby proved her
claim.3 We overrule Hofrock’s third issue.
CONCLUSION
We affirm the judgment.
Jeff Rose, Chief Justice
Before Chief Justice Rose, Justices Pemberton and Field
Affirmed
Filed: June 3, 2016
3
Although he does not couch it in these terms, aspects of Hofrock’s third issue resemble
a challenge to the factual sufficiency of the evidence supporting the judgment. When a party
brings a factual-sufficiency challenge to a jury finding for which the party did not have the burden
of proof, we consider and weigh all of the evidence and set aside the verdict only if the evidence
that supports the finding is so weak as to make the verdict clearly wrong and manifestly unjust. Cain
v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); see also Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996)
(applying same standards to court’s factual findings as those used to assess jury verdict).
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