Sterling Interests Investments, Inc. D/B/A Elite Collision Center v. CC Auto Brokers, Inc. ( 2016 )

Affirmed and Memorandum Opinion filed August 11, 2016.
In the
Fourteenth Court of Appeals
NO. 14-15-00078-CV
STERLING INTERESTS INVESTMENTS, INC. D/B/A ELITE COLLISION
CENTER, Appellant
V.
C.C. AUTO BROKERS, INC., Appellee
On Appeal from the County Civil Court at Law No. 4
Harris County, Texas
Trial Court Cause No. 978206
MEMORANDUM OPINION
Sterling Interests Investments, Inc. d/b/a Elite Collision Center (Elite)
appeals from a final judgment in favor of C.C. Auto Brokers, Inc. (C.C. Auto), on
its Deceptive Trade Practices and Consumer Protection Act (DTPA) claim in
connection with vehicle repairs. Elite brings three issues on appeal. First, Elite
argues the trial court erred by concluding that C.C. Auto was a consumer under the
DTPA. Second, Elite contends the evidence is legally insufficient to support the
jury findings that Elite knowingly committed a violation of the DTPA. Finally,
Elite requests, should this court reverse, that the case be remanded to decide the
issue of attorney’s fees Elite incurred in defending C.C. Auto’s frivolous suit. We
affirm and do not reach Elite’s conditional issue.
I. FACTUAL AND PROCEDURAL BACKGROUND
Danny Carlin, the owner of C.C. Auto, purchased a 1998 Toyota 4Runner at
auction and had it inspected and reconditioned for sale. The vehicle “drove great”
and had a clean Carfax report indicating no prior damage. Michelle Gay purchased
the 4Runner from C.C. Auto on January 22, 2008. Gay also financed the vehicle
through C.C. Auto. Gay reported no problems driving the vehicle.
On February 28, 2008, while driving the 4Runner, Gay was involved in an
accident. The main impact was on the driver’s side. The vehicle was taken by an
Elite tow truck to Elite’s facility. Gay, who was insured with United Automobile
Insurance Company, authorized Elite to perform repairs. Elite provided Gay with
a rental car.
In early April 2008, Gay informed Carlin that the 4Runner had been in an
accident and that she was not able to make payments on her note or afford the
repairs. Carlin suggested that Gay return the vehicle to C.C. Auto for resale. Gay
agreed and on April 9, 2008, executed an affidavit of repossessed motor vehicle for
the 4Runner. Carlin then attempted to contact Elite to ascertain the status of the
repairs.
Elite provided a list of charges dated April 24, 2008 to C.C. Auto. These
charges included storage fees, repairs, rental car, towing, and “gas & clean up.”
Carlin called Elite and was informed that the vehicle was properly repaired and
“ready to go.” Carlin obtained a cashier’s check from C.C. Auto’s bank in the
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amount of $4,477.37 to pay Elite and obtain the 4Runner. On April 30, 2008,
Carlin went to Elite to pick up C.C. Auto’s vehicle. Elite assured Carlin that the
vehicle was okay and “ready to go.” Before he was able to see the vehicle, Elite
had Carlin pay and sign a hold harmless agreement. The vehicle was “empty” so
Carlin asked about the closest gas station. Within 30 yards of driving off the lot,
however, the passenger front tire was rubbing the tire shroud and the vehicle was
pulling. Carlin returned to Elite because the vehicle was not safe to drive and
informed Elite about the issues. Carlin left the 4Runner with Elite.
Elite left Carlin a message stating that it would not perform additional
repairs. Carlin returned the call and told Elite that the vehicle needed to be
returned to its original state. Elite again told Carlin that it would not do any more
repairs.
After Elite had the 4Runner towed and impounded, Carlin retrieved it.
Carlin paid an additional $501.29 in towing and storage charges.1 Carlin hired an
independent insurance adjuster with over 40 years’ experience, James McWilliams,
to inspect the vehicle and provide an opinion about Elite’s repairs. Based on his
inspection of the 4Runner and his review of Elite’s estimate, McWilliams
concluded that Elite did not perform some of its repairs adequately. Some of the
inadequate repairs included: using a zip tie instead of a bolt to connect two metal
parts; installing an incorrect fender part; not properly lining up the gap between the
fender and the hood resulting in a hood dent; not replacing a charged-for core
support; improperly mounting a headlight because the core support panel was not
properly straightened; not installing charged-for molding; improperly mounting the
bumper; and not catching the problem of the misaligned front end causing the tire
1
United ultimately reimbursed C.C. Auto for a total of $2,555.79 in connection with the
insurance claim on the 4Runner.
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to rub. McWilliams estimated that an additional $2,135.40 in repairs was
necessary to correct Elite’s defective work and to make the 4Runner safe and ready
to sell.
C.C. Auto filed suit against Elite on its behalf and as assignee on Gay’s
behalf for negligence, conversion, and DTPA violations.2 Elite filed a pretrial
motion pursuant to Texas Rule of Civil Procedure 248 contesting C.C. Auto’s
standing as a consumer for purposes of the DTPA. The trial court denied Elite’s
motion. At the time of trial, only C.C. Auto’s DTPA claim remained. The jury
found: (1) Elite engaged in a false, misleading, or deceptive act or practice that
C.C. Auto relied on to its detriment and that was a producing cause of damages to
C.C. Auto; and (2) Elite engaged in such conduct knowingly. The jury awarded
C.C. Auto $3,830.89 as fair and reasonable compensation for its damages that
resulted from such conduct. The jury did not award any additional damages. The
jury also awarded $22,500 as a reasonable fee for the necessary services of C.C.
Auto’s attorney. The trial court entered a final judgment consistent with the
verdict. Elite filed a motion for new trial3 and a notice of appeal.
II. ANALYSIS
A. Consumer status of C.C. Auto
In its first issue, Elite argues that C.C. Auto did not qualify as a “consumer”
of the repairs transaction and therefore had no standing to pursue a DTPA claim.
A plaintiff must prove his status as a consumer to bring an action and
recover under the DTPA. See Tex. Bus. & Com. Code Ann. § 17.50 (West 2011);
Eckman v. Centennial Sav. Bank, 784 S.W.2d 672, 674 (Tex. 1990); Clark Equip.
2
The original petition also included Gay as a plaintiff. Gay later nonsuited her claims.
3
The record does not reflect that the trial court ruled on this motion.
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Co. v. Pitner, 923 S.W.2d 117, 127 (Tex. App.—Houston [14th Dist.] 1996, writ
denied) (citing Eckman, 784 S.W.2d at 674). To establish consumer status, a party
must have sought or acquired goods or services by purchase or lease, and the goods
or services purchased or leased must form the basis of the DTPA complaint.
Melody Home Mfg. Co. v. Barnes, 741 S.W.2d 349, 351–52 (Tex. 1987) (citing
Sherman Simon Enters., Inc. v. Lorac Serv. Corp., 724 S.W.2d 13, 15 (Tex. 1987),
and Cameron v. Terrell & Garrett, Inc., 618 S.W.2d 535, 539 (Tex. 1981));
Collums v. Ford Motor Co., 449 S.W.3d 189, 191 (Tex. App.—Houston [14th
Dist.] 2014, no pet.); see Tex. Bus. & Com. Code Ann. §§ 17.45(1) (defining
“goods” as “tangible chattels or real property purchased or leased for use”),
17.45(2) (defining “services” as “work, labor, or service purchased or leased for
use, including services furnished in connection with the sale or repair of goods”),
17.45(4) (defining “consumer” as “an individual, partnership, corporation, this
state, or a subdivision or agency of this state who seeks or acquires by purchase or
lease, any goods or services”) (West 2011). Standing does not depend on privity
of contract, but rather on the plaintiff’s relationship to the transaction. See
Kennedy v. Sale, 689 S.W.2d 890, 893 (Tex. 1985); Clark Equip., 923 S.W.2d at
127–28. Whether a party is a consumer under the DTPA is a question of law. See
Collums, 449 S.W.3d at 193.
Elite contends that C.C. Auto only prosecuted the case as Gay’s assignee. In
PPG Industries, Inc. v. JMB/Houston Centers Partners Ltd. Partnership, the
Supreme Court of Texas concluded that generally DTPA claims cannot be assigned
by an aggrieved consumer to someone else. 146 S.W.3d 79, 91–92 (Tex. 2004);
Wright v. Sydow, 173 S.W.3d 534, 551 n.15 (Tex. App.—Houston [14th Dist.]
2004, pet. denied) (citing PPG Indus., 146 S.W.3d at 91). The Court highlighted
the personal aspect of the DTPA and expressed concern that assignments could
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skew the litigation process. See PPG Indus., 146 S.W.3d at 91–92.
Although in its live petition C.C. Auto asserted a DTPA claim “as the
assignee of” Gay, C.C. Auto also asserted a DTPA claim “on its behalf.” At trial,
C.C. Auto presented evidence of a personal DTPA claim based on its own
acquisition of repair goods and services from, and direct interactions with, Elite.
Accordingly, the jury was charged and returned its verdict based on C.C. Auto’s
individual DTPA claim against Elite, not on any assigned DTPA claim of Gay.
Under these circumstances, we conclude that PPG Industries does not apply to
merit reversal here.
Elite further argues that at most C.C. Auto was an incidental beneficiary of
the repairs transaction and therefore cannot be considered a consumer. A plaintiff
who is merely an incidental beneficiary of a transaction does not have consumer
status under the DTPA. See, e.g., Guest v. Cochran, 993 S.W.2d 397, 408 (Tex.
App.—Houston [14th Dist.] 1999, no pet.) (will beneficiaries were not consumers
of legal services provided to testator); Vinson & Elkins v. Moran, 946 S.W.2d 381,
407–08 (Tex. App.—Houston [14th Dist.] 1997, writ dism’d by agr.) (estate
beneficiaries were not consumers of legal services provided to executors).
However, the trial evidence reflects that C.C. Auto’s relationship to the
repairs transaction with Elite was not “merely incidental.” The main purpose of
the repairs transaction with Elite was to obtain a properly repaired vehicle. During
the course of the repairs transaction with Elite, C.C. Auto forgave Gay’s debt on,
repossessed, and resumed its ownership of the 4Runner. Elite knew that, although
the repairs transaction was initiated by Gay, it would not be concluded by her, but
rather by C.C. Auto. C.C. Auto had direct dealings with Elite relating to the
repairs on the vehicle. C.C. Auto directly stood to benefit from the quality of
Elite’s repairs so that C.C. Auto could resell its vehicle in a safe, drivable state.
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And C.C. Auto personally paid for some of the charges associated with Elite’s
repairs.
Having reviewed the record, we conclude that C.C. Auto is a consumer for
purposes of the DTPA. We overrule Elite’s first issue.
B. Legal sufficiency of evidence supporting the jury’s DTPA findings
In its second issue, Elite argues there is no evidence or legally-insufficient
evidence supporting the jury’s findings that Elite knowingly engaged in a false,
misleading, or deceptive act or practice that C.C. Auto relied on to its detriment
and that was a producing cause of C.C. Auto’s damages.
Initially, we address whether Elite preserved these legal-sufficiency
complaints. A no-evidence or legal-sufficiency issue is preserved for appeal in one
of five ways: (1) a motion for directed verdict, (2) a motion for judgment
notwithstanding the verdict, (3) an objection to the submission of the issue to the
jury, (4) a motion to disregard the jury’s answer to a vital fact issue, or (5) a
motion for new trial. Solutioneers Consulting, Ltd. v. Gulf Greyhound Partners,
Ltd., 237 S.W.3d 379, 390 (Tex. App.—Houston [14th Dist.] 2007, no pet.); see
Cecil v. Smith, 804 S.W.2d 509, 510–11 (Tex. 1991).
Elite contends that it preserved its legal-sufficiency challenges when it
moved for directed verdict at the close of C.C. Auto’s case. However, the record
reflects that the sole basis for Elite’s motion for directed verdict was its argument
that C.C. Auto had not demonstrated its consumer status under the DTPA. The
motion for directed verdict was not based on any argument challenging the legal
sufficiency of the evidence to support any findings of a knowing DTPA violation.
Nor does our review of the record reveal that Elite preserved its legal-sufficiency
challenges in any other way. At the close of Elite’s case, Elite “reurged” and
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“reasserted” its motion for directed verdict “on the same basis.” Elite did not lodge
any objections to the jury charge. Elite did not file a motion for judgment
notwithstanding the verdict to attack the jury’s DTPA findings. And although Elite
filed a motion for new trial, again, its only ground was that “[t]he evidence does
not support that [C.C. Auto] meets the threshold requirements of being a consumer
eligible to bring a claim under the DTPA.” As such, we conclude that Elite failed
to preserve its legal-sufficiency challenges to the jury’s findings regarding Elite’s
knowingly engaging in a false, misleading, or deceptive act or practice that C.C.
Auto relied on to its detriment. See Solutioneers Consulting, 237 S.W.3d at 390.4
We therefore overrule Elite’s second issue.
Having determined reversal is not warranted, we do not reach Elite’s
conditional third issue. See Tex. R. App. P. 47.1.
III. CONCLUSION
Accordingly, we affirm the trial court’s final judgment.
/s/ Marc W. Brown
Justice
Panel consists of Justices Jamison, Donovan, and Brown.
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Elite’s briefing does not present any factual-sufficiency challenge. Elite expressly prays
that the court reverse and render in connection with its first two issues and only conditionally
requests remand for a determination of its attorney’s fees. In any event, Elite did not raise any
factual-sufficiency issue in connection with the jury’s DTPA findings in its motion for new trial
and therefore failed to preserve any such issue. See Tex. R. Civ. P. 324(b)(2); Tex. R. App. P.
33.1; Cecil, 804 S.W.2d at 510–11; Halim v. Ramchandani, 203 S.W.3d 482, 487 (Tex. App.—
Houston [14th Dist.] 2006, no pet.).
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