Doyle Jones v. Frank Kent Motor Company D/B/A Frank Kent Cadillac ( 2015 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-14-00216-CV
DOYLE JONES APPELLANT
V.
FRANK KENT MOTOR COMPANY APPELLEE
D/B/A FRANK KENT CADILLAC
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FROM THE 67TH DISTRICT COURT OF TARRANT COUNTY
TRIAL COURT NO. 067-247167-10
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MEMORANDUM OPINION 1
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Appellant Doyle Jones appeals the trial court’s take-nothing judgment in
this discrimination case. We affirm.
Background Facts
In 2010, Jones was working as a car salesman at appellee Frank Kent
Motor Company d/b/a Frank Kent Cadillac. In May 2010, he left his position with
1
See Tex. R. App. P. 47.4.
the dealership. He then sued Frank Kent, claiming that Frank Kent had
discriminated against him based on his age and disability and that he had been
constructively discharged in retaliation for signing an affidavit stating that he
believed Frank Kent had discriminated against another employee. Frank Kent
filed counterclaims against Jones, claiming that he had participated in a
fraudulent scheme to increase bonuses for himself and the dealership based on
customer satisfaction surveys.
Frank Kent then moved for partial summary judgment on all of Jones’s
claims against it. The trial court granted the motion. Frank Kent then nonsuited
its counterclaims, but when the trial court reinstated Jones’s retaliation claim,
Frank Kent reasserted its counterclaims. Jones also added a retaliation claim
based on Frank Kent’s counterclaims, arguing that they were frivolous. Frank
Kent specially excepted to Jones’s retaliation claim based on its counterclaims,
claiming that no such post-termination retaliation cause of action exists under
Texas law. After a hearing (of which no record was made), the trial court granted
Frank Kent’s special exception to Jones’s third amended petition, striking Jones’s
retaliation claim relating to Frank Kent’s counterclaim. Jones subsequently filed
a fifth amended petition 2 that pleaded the same retaliation claim.
After a bench trial, the trial court rendered judgment in favor of Frank Kent
on Jones’s claims against it and in favor of Jones on Frank Kent’s claims against
2
Jones had filed a fourth amended petition prior to the hearing on the
special exception to the third amended petition.
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him. It ordered that both parties take nothing. Jones filed a motion for new trial
to apply for an award of attorney’s fees and costs under the Texas Theft Liability
Act (the Theft Act). The trial court denied the motion, and this appeal followed.
Discussion
1. Post-termination retaliation
In his first issue, Jones argues that the trial court erred by concluding that
Texas law does not recognize post-termination retaliation as a cause of action.
In his third amended petition, Jones alleged that Frank Kent retaliated
against him by bringing a frivolous counterclaim against him. Frank Kent
specially excepted to that claim, arguing that no such cause of action exists
under Texas law. The trial court granted the special exception and struck
Jones’s counterclaim.
Jones filed a fourth amended petition and a fifth amended petition, both
including the same allegations regarding the counterclaim and adding,
The purpose of the filing of the counterclaim against Jones
was to bully and punish Jones for asserting his rights under the
statute. This action was materially adverse to Jones because such
action would dissuade any reasonable employee from making or
supporting a charge of discrimination. Moreover, the counterclaim
has had a tangible effect on the terms and conditions of the plaintiff’s
prospective employment.
Frank Kent specially excepted again to the claim, and again the trial court
granted the special exception.
On appeal, Jones argues that the trial court erred by granting the special
exception to his third amended petition. He does not challenge the grant of
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Frank Kent’s special exception to the live pleading at the time of trial, thereby
waiving this issue. See Ford v. Performance Aircraft Servs., Inc., 178 S.W.3d
330, 334 (Tex. App.—Fort Worth 2005, pet. denied). Even if Jones had not
waived this issue, we note that there is no cause of action in Texas for post-
employment retaliation by filing of a counterclaim. See Stewart v. Sanmina Tex.
L.P., 156 S.W.3d 198, 209 (Tex. App.—Dallas 2005, no pet.) (“An employer’s
filing of a counterclaim after the employee has already been discharged cannot
support a retaliation claim.”) (citing Hernandez v. Crawford Bldg. Material Co.,
321 F.3d 528, 532–33 (5th Cir. 2003) (distinguishing Fifth Circuit’s “more
skeptical view” of “ultimate employment decision” from other circuits’
interpretation), cert. denied, 540 U.S. 817 (2003)). 3 We overrule Jones’s first
issue.
2. Frank Kent’s counterclaims
In his second issue, Jones argues that the trial court erred by finding that
Frank Kent’s counterclaims were not frivolous. A “frivolous” suit is generally
understood to mean one that does not have a reasonable basis in law or fact.
See Gen. Elec. Credit Corp. v. Midland Cent. Appraisal Dist., 826 S.W.2d 124,
125 (Tex. 1991) (stating that suit is not frivolous so long as it has “reasonable
3
Jones argues that Hernandez has been abrogated by the Supreme
Court’s holding in Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53, 126 S.
Ct. 2405 (2006). However, the Fifth Circuit continues to cite Hernandez with
approval. See Ellis v. Principi, 246 Fed. Appx. 867, 872 (5th Cir. 2007); see also
Anderson v. Sikorsky Support Servs., Inc., 66 F. Supp. 3d 863, 869 (S.D. Tex.
2014); Lopez v. Kempthorne, 684 F. Supp. 2d 827, 885 (S.D. Tex. 2010).
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basis in law and constituted an informed, good-faith challenge”); see also Tex.
Civ. Prac. & Rem. Code Ann. § 9.001(3) (West 2002) (defining groundless as
having no basis in fact or not warranted by existing law or a good faith argument
for the extension, modification, or reversal of existing law).
Frank Kent sued Jones for civil theft, common law fraud, mail fraud, breach
of fiduciary duty, and money had and received. All of Frank Kent’s claims stem
from Jones’s participation in the survey scheme. General Motors had a program
in which dealerships received bonuses when their customers were highly
satisfied with their car-buying experience. Customers’ satisfaction was recorded
by surveys that were mailed to their home after they bought a car.
Jones testified that salespeople would receive bonuses at the end of every
month that their customer service index, as determined by the surveys, was
above a certain number. One of Frank Kent’s owners also testified that the
salespeople bonuses were paid by the dealership based on the salesperson’s
customer satisfaction score. Jones said he filled out surveys for customers and
gave them to his supervisors. He also admitted that eight or nine of the surveys
were routed to his home address. He testified that he knew that his supervisor
would take the completed surveys and mail them to General Motors. Frank Kent
introduced evidence showing that it paid Jones $8,800 in bonuses that were
based on his customer survey scores. There was ample basis for Frank Kent’s
allegations, and they were therefore not frivolous. We overrule Jones’s second
issue.
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3. Attorney’s fees
In his third issue, Jones argues that the trial court erred by refusing to
award him attorney’s fees. Jones claims that as the prevailing party on Frank
Kent’s counterclaim under the Theft Act, he was entitled to recover his attorney’s
fees. See Tex. Civ. Prac. & Rem. Code Ann. § 134.005(b) (West 2011) (“Each
person who prevails in a suit under this chapter shall be awarded court costs and
reasonable and necessary attorney’s fees.”). When a statute provides that a
party “shall be awarded” attorney’s fees, as it does in the Theft Act, the trial court
has no measure of discretion in determining whether to award attorney’s fees.
Bocquet v. Herring, 972 S.W.2d 19, 20 (Tex. 1998). But even a mandatory fee
award must be supported by the pleadings and the record. Garcia v. Gomez,
319 S.W.3d 638, 644 (Tex. 2010).
The trial court issued the following findings of fact relevant to the issue of
attorney’s fees:
1. The Plaintiff/Counter-Defendant did not plead for attorney
fees and costs as a prevailing party on Frank Kent’s counterclaim
under the Texas Theft Liability Act (the “Theft Act”), Tex. Civ. Prac. &
Rem. Code § 134.005(b), and it was not tried by consent.
2. The Plaintiff’s/Counter-Defendant’s pleadings did not
provide sufficient notice to Frank Kent that the Plaintiff/Counter-
Defendant was seeking to recover his attorney fees and costs as a
prevailing party on Frank Kent’s counterclaim under the Theft Act.
3. An attorney of reasonable competence would interpret the
Plaintiff’s/Counter-Defendant’s Fifth Amended Petition and Answer
to Counterclaim as seeking attorney fees for the retaliation claims
under the Texas Labor Code and for defending a frivolous filing only,
and not for a prevailing party under the Theft Act.
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4. The Plaintiff/Counter-Defendant was not a prevailing party
under the Theft Act because he did not assert any counterclaim
under the Theft Act or recover any damages under the Theft Act.
5. Even if the Plaintiff/Counter-Defendant did plead for
attorney fees and costs as a prevailing party under the Theft Act
(which he didn’t) and was in fact a prevailing party under the Theft
Act (which he wasn’t), the Plaintiff/Counter-Defendant still is not
entitled to recover any attorney fees and costs because he did not
segregate his attorney fees and costs in defending the Theft Act
claim from his attorney fees and costs in pursuing his other claims
for retaliation and defending the other counterclaims for common law
fraud, mail fraud, breach of fiduciary duty, and money had and
received.
6. Even if the Plaintiff/Counter-Defendant did plead for
attorney fees and costs as a prevailing party under the Theft Act
(which he didn’t), was in fact a prevailing party under the Theft Act
(which he wasn’t), and did properly segregate his attorney fees and
costs (which he didn’t), the Plaintiff’s/Counter-Defendant’s attorney
fees in the amount of $141,277.50 and costs in the amount of
$5,564.48 were not necessary or reasonable in defending the Theft
Act claim.
Although the trial court found that Jones was not a prevailing party
because he did not recover damages under the Theft Act, the law is clear that a
party who successfully defends against an action under the Theft Act is a
prevailing party under the statute. See, e.g., Arrow Marble, LLC v. Estate of
Killion, 441 S.W.3d 702, 706 (Tex. App.—Houston [1st Dist.] 2014, no pet.) (“A
party prevails if he ‘successfully prosecutes the action or successfully defends
against it.’”) (quoting Johns v. Ram–Forwarding, Inc., 29 S.W.3d 635, 637–38
(Tex. App.—Houston [1st Dist.] 2000, no pet.); see also In re Corral-Lerma,
451 S.W.3d 385, 386 (Tex. 2014) (“[T]he Texas Theft Liability Act provides for
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attorney’s fees even without an underlying damages recovery . . . .”). Jones
successfully defended against Frank Kent’s Theft Act claim and was therefore
the prevailing party. However, a party seeking recovery of attorney’s fees under
the Theft Act must sufficiently notify the court and opposing party of his intent to
recover his attorney’s fees under the Act. See Shaw v. Lemon, 427 S.W.3d 536,
540 (Tex. App.—Dallas 2014 pet. denied), cert. denied, 135 S. Ct. 1563 (2015)
(“[A] pleading that does not ask for an award of attorney’s fees under a
mandatory statute does not give notice to the opposing party of all the relief
sought.”); Prize Energy Res., L.P. v. Cliff Hoskins, Inc., 345 S.W.3d 537, 569
(Tex. App.—San Antonio 2011, no pet.). Jones did not specifically plead for
attorney’s fees under the Theft Act, but he argues that his pleadings were
sufficient to notify Frank Kent that he intended to seek attorney’s fees under the
Act. See Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 897 (Tex.
2000) (“A petition is sufficient if it gives fair and adequate notice of the facts upon
which the pleader bases his claim. The purpose of this rule is to give the
opposing party information sufficient to enable him to prepare a defense.”).
Although Jones’s prayer for relief contains a general request for attorney’s
fees, in his answer to Frank Kent’s counterclaims in a section labelled
“Affirmative Defenses,” Jones stated, “This counterclaim is a frivolous claim and
should be dismissed[,] and Counter-Defendant Doyle Jones should be awarded
his costs and attorneys’ fees incurred in defending it.” Jones pleaded for
recovery of attorney’s fees for defending against a frivolous claim, see Tex. Civ.
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Prac. & Rem. Code Ann. § 9.012(e)(3) (West 2002) (allowing a sanction for a
frivolous filing to include reasonable attorney’s fees), and he elsewhere pleaded
for recovery of attorney’s fees under the Texas Commission on Human Rights
Act for his retaliation claim, see Tex. Lab. Code Ann. § 21.259(a) (West 2015)
(allowing a trial court to award a reasonable attorney’s fees to the prevailing party
under the Act). Nowhere did he plead for the recovery of attorney’s fees under
the Theft Act. In such instances when a party pleads specific grounds for the
recovery of attorney’s fees, he cannot recover attorney’s fees on another,
unpleaded ground. 4 See Smith v. Deneve, 285 S.W.3d 904, 916 (Tex. App.—
Dallas 2009, no pet.); see also Nat’l City Mortg. Co. v. Adams, 310 S.W.3d 139,
143 n.4 (Tex. App.—Fort Worth 2010, no pet.) (following Smith).
The trial court found that Jones did not sufficiently put Frank Kent on notice
that he was seeking attorney’s fees under the Theft Act and that this issue was
4
That Frank Kent was the party that put into play the Theft Act cause of
action in the first place does nothing to put it on notice that Jones’s general
request for attorney’s fees was to now be understood to cover a request under
the Theft Act that it previously had not included, especially in light of the fact that
Jones amended his petition in response to Frank Kent’s counterclaim to
specifically request attorney’s fees for defending against a frivolous claim. See
Heritage Gulf Coast Props., Ltd. v. Sandalwood Apartments, Inc., 416 S.W.3d
642, 661–62 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (“An opposing party
would conclude Sandalwood would have expressly mentioned the ‘prevailing
party’ provision of the contract if it were seeking fees for successful defense
under that theory. This conclusion is further supported by the fact that (1)
Sandalwood expressly pleaded one theory for recovering fees for successful
defense of appellants’ claims; and (2) . . . Woodbridge pleaded a specific
contractual provision under which it was seeking attorney’s fees concerning the
Taft Circle Apartments.”).
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not tried by consent. 5 The trial court therefore did not abuse its discretion by
denying Jones’s request for attorney’s fees under the Theft Act. See Shaw,
427 S.W.3d at 540 (“Because Shaw pleaded specifically for an award of
attorney’s fees for his breach of contract claim, but not for an award of attorney’s
fees under the Theft Act, we conclude that the trial court did not err by denying
an award of attorney’s fees under the Theft Act on that basis.”); Cricket
Commc’ns, Inc. v. Trillium Indus., Inc., 235 S.W.3d 298, 310 (Tex. App.—Dallas
2007, no pet.) (holding that trial court did not err in denying request for attorney’s
fees because cross-appellees did not specifically plead for attorney’s fees under
the Theft Act); see also Kreighbaum v. Lester, No. 05-06-01333-CV, 2007 WL
1829729, at *3 (Tex. App.—Dallas June 27, 2007, no pet.) (mem. op.) (“Although
appellants’ prayer for relief contains a nonspecific request for attorney’s fees,
appellants’ counterclaim specifically sets forth the basis for the request for
attorney’s fees, section 17.50(c) of the business and commerce code. An
opposing attorney of reasonable competence reading appellants’ pleading would
conclude the request for attorney’s fees in the prayer was based on the
statement in the counterclaim that appellants are entitled to attorney’s fees
pursuant to section 17.50(c) of the business and commerce code.”). We overrule
Jones’s third issue.
5
Jones makes no argument on appeal that that issue was tried by consent.
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4. Discrimination claim
In his fourth issue, Jones argues that the trial court erred by granting
partial summary judgment and dismissing his claim for discrimination.
After Jones filed his first amended petition, Frank Kent moved for partial
summary judgment on Jones’s claims of age discrimination, disability
discrimination, and retaliation. The trial court granted the motion. It later
reinstated the retaliation claim. After those rulings, Jones amended his petition
four times. None of the later-amended petitions contained age discrimination or
disability discrimination causes of action, including the fifth amended petition,
which was the live pleading at the time of trial.
Generally, filing an amended petition that does not include a cause of
action effectively dismisses the omitted claim as of the time the amended
pleading is filed. FKM P’ship, Ltd. v. Bd. of Regents of Univ. of Houston Sys.,
255 S.W.3d 619, 632 (Tex. 2008). This is so even when the trial court has
denied the claim through partial summary judgment. See Dolenz v. All Saints
Episcopal Hosp., 638 S.W.2d 141, 142 (Tex. App.—Fort Worth 1982, writ ref’d
n.r.e.) (holding that plaintiff could not complain on appeal of summary judgment
denying his request for injunctive relief when his subsequently amended petitions
did not include injunction claims). Because Jones’s amended petitions did not
include claims for age discrimination or disability discrimination, he abandoned
those claims and waived any error by the trial court in rendering summary
judgment for Frank Kent on those claims. See Akin v. Santa Clara Land Co.,
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34 S.W.3d 334, 339 (Tex. App.—San Antonio 2000, pet. denied) (“Akin waived
any error by the trial court when she amended her pleadings after the partial
summary judgments were granted and abandoned her DTPA and negligence
claims.”). We overrule Jones’s fourth issue.
Conclusion
Having overruled Jones’s four issues, we affirm the trial court’s judgment.
/s/ Lee Gabriel
LEE GABRIEL
JUSTICE
PANEL: WALKER, GABRIEL, and SUDDERTH, JJ.
DELIVERED: August 20, 2015
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