Rudis Robles and Claudia Flores Robles v. Christopher Mann, Gwenda Mann, and Mann's MacHine, Inc. ( 2014 )

ACCEPTED
FILED 13-14-00211
IN THE 13TH COURT OF APPEALS THIRTEENTH COURT OF APPEALS
CORPUS CHRISTI, TEXAS
CORPUS CHRISTI
12/29/2014 5:40:19 PM
DORIAN RAMIREZ
12/29/14 CLERK
DORIAN E. RAMIREZ, CLERK
BY DTello NO. 13-14-00211-CV
IN THE THIRTEENTH COURT OF APPEALS RECEIVED IN
13th COURT OF APPEALS
CORPUS CHRISTI, TEXAS
CORPUS CHRISTI/EDINBURG, TEXAS
12/29/2014 5:40:19 PM
DORIAN E. RAMIREZ
RUDIS ROBLES AND CLAUDIA E. Clerk
FLORES ROBLES,
Appellants
VS.
CHRISTOPHER MANN, GWENDA MANN, AND
MANN'S MACHINE, INC.,
Appellees
On Appeal from the 284th District Court of Montgomery County, Texas
Trial Court Cause Number 10-12-13737-CV
REPLY BRIEF FOR CROSS-APPELLANTS,
CHRISTOPHER MANN, GWENDA MANN,
AND MANN’S MACHINE, INC.
Tom Shipp Kenna M. Seiler
State Bar No. 18271000 State Bar No. 13944250
10200 Grogan’s Mill Road, Suite 320 The Seiler Law Firm, PLLC
The Woodlands, Texas 77380 8505 Technology Forest Place
(281) 364-7228 Suite 1102
(281) 364-7230 – Telecopier The Woodlands, Texas 77381
tomshippassoc@aol.com (281) 419-7770
(281) 419-7791 – Telecopier
kenna.seiler@theseilerlawfirm.com
ATTORNEYS FOR APPELLEES
ORAL ARGUMENT REQUESTED
TABLE OF CONTENTS
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
Index of Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iii
Argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Issue Number One
The trial court’s finding of no damages for Christopher Mann,
Gwenda Mann, and Mann’s Machine, Inc. is against the great
weight and preponderance of the evidence. (C.R. 228-230;
R.R. Vol. 4, p. 10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Issue Number Two
The trial court’s award of only attorney fees through trial in the
amount of $4,069.98 is against the great weight and
preponderance of the evidence. (C.R. 228-230; R.R. Vol. 4, pp.
10-11). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Prayer for Relief. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Certificate of Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Certificate of Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . .9
ii
INDEX OF AUTHORITIES
CASES
Brookshire Katy Drainage Dist. v. Lily Gardens, LLC,
333 S.W.3d 301 (Tex. Civ. App.—Houston [1st Dist.] 2010, pet. denied) . . .3
Smith v. Patrick W.Y. Tam Trust,
296 S.W.3d 545 (Tex. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4-5
Tony Gullo Motors I, L.P. v. Chapa,
212 S.W.3d 299 (Tex. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
RULES
Tex. Civ. Prac. & Rem. Code Section 37.009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
iii
NO. 13-14-00211-CV
IN THE THIRTEENTH COURT OF APPEALS
CORPUS CHRISTI, TEXAS
RUDIS ROBLES AND CLAUDIA E. FLORES ROBLES,
Appellants
VS.
CHRISTOPHER MANN, GWENDA MANN, AND
MANN'S MACHINE, INC.,
Appellees
On Appeal from the 284th District Court of Montgomery County, Texas
Trial Court Cause Number 10-12-13737-CV
BRIEF FOR APPELLEES,
CHRISTOPHER MANN, GWENDA MANN,
AND MANN’S MACHINE, INC.
__________________________________________________________________
SUMMARY OF THE ARGUMENT
The evidence is undisputed that Robles interfered with the Manns’ easement
rights. As a result of that interference, the Manns sustained damages, damages
which were not controverted.
ARGUMENT
Issue Number One: The trial court’s finding of no damages for
Christopher Mann, Gwenda Mann, and Mann’s Machine, Inc. is
against the great weight and preponderance of the evidence. (C.R.
228-230; R.R. Vol. 4, p. 10) (Restated)
1
The evidence is undisputed that Robles interfered with the Manns’ easement
rights. Because of that interference, the Manns sustained damages, damages which
were not controverted. The Robleses claim that the Manns did not prevail on any
claim for which they would be entitled to damages and there was insufficient
evidence of those damages. But both contentions are incorrect.
There is both legally and factually sufficient evidence that the Robleses
interfered with the Manns’ property rights. Robles focuses on the timing of the
installation of the gate, the prior temporary injunction, and the Manns’ actions
regarding the gate. But the focus should be on the Robleses’ actions, as these
support the claim for interfering with the Manns’ property rights. And the
Robleses’ actions were many: Rudis Robles denied there was an easement, he placed
a gate on the easement that was latched 24 hours a day, and he placed poles on the
easement. (R.R. Vol. 2, pp. 29, 30-31, 35, 47-48, 52-53) And this was testimony
directly from Mr. Robles. The Manns also testified about debris on the easement,
with utility poles, trees, and pipes. (R.R. Vol. 2, pp. 63-64, 106, 107-108) Mr.
Robles disagreed with the easement and did everything he could to interfere with the
Manns’ use of that easement.
As a result of this interference, the Manns and their business suffered
damages. Mr. Mann testified that they sustained losses of $120,000.00 to
2
$130,000.00. (R.R. Vol. 2, p. 68) Customers and vendors could not get to the
business. (R.R. Vol. 2, p. 69, 100)
The Robleses claim that because an easement does not convey title to the
property, there is no claim for damages to real property. But this argument misses
the mark. The Manns sued for interference with easement rights. To prevail on
such a claim, they had to prove that the Robleses engaged in activities that interfered
with their reasonable use and enjoyment of the easement. Brookshire Katy
Drainage Dist. v. Lily Gardens, LLC, 333 S.W.3d 301, 310 (Tex. Civ. App.—
Houston [1st Dist.] 2010, pet. denied). They provided this proof. And they
provided proof of those damages, even under the standards set forth by the Robleses.
The statement by the Robleses that the only evidence presented was Gwenda Mann’s
statement they lost business is incorrect. Both Mr. and Mrs. Mann testified to dollar
amounts lost because of the Robleses’ interference with their rights. (R.R. Vol. 2,
p. 68; R.R. Vol. 2, p. 114)
This interference caused the Manns mental anguish damages—so much so
they had to seek medical attention and were prescribed medication. (R.R. Vol. 2,
p. 77; R.R. Vol. 2, pp. 113-114)
Because the evidence as to the interference and the damages sustained was so
contrary to the overwhelming weight of all the evidence, this portion of the trial
court’s judgment should be set aside and a new trial ordered as to the Manns’
3
damages.
Issue Number Two: The trial court’s award of only attorney fees
through trial in the amount of $4,069.98 is against the great weight
and preponderance of the evidence. (C.R. 228-230; R.R. Vol. 4,
pp. 10-11) (Restated)
The Manns incurred substantial attorney fees in obtaining the declaratory
judgment signed by the trial court to enforce their easement rights. The trial court
erred by limiting the recovery of attorney fees to all of the fees charged in one month
to the Manns by their prior attorney.
Specifically, the trial Court stated:
I am awarding attorneys fees to Christopher Mann and Gwenda
Mann, the attorneys fees being in an amount testified to by Ms. Tillman
as being expended on this case during one month. That amount is
$4,069.98.
(R.R. Vol. 4, pp. 10-11) But the Manns prevailed on their claim for a declaratory
judgment, a claim that has been part of the relief sought by the Manns in their
original pleading. (C.R. 10-74) Section 37.009 of the Tex. Civ. Prac. & Rem.
Code allows the Court to award costs and reasonable attorney fees. Tom Shipp
testified as to his reasonable hourly rate of $390.00 per hour. (R.R. Vol. 3 p. 60)
He testified as to the number of hours worked. (R.R. Vol. 3 p. 64)
Attorney fees are conclusively proved when the supporting evidence is clear,
direct, positive, and without contradiction from another witness or attendant
circumstances, and such evidence could have easily been controverted. Smith v.
4
Patrick W.Y. Tam Trust, 296 S.W.3d 545, 547-548 (Tex. 2009). Robles’ primary
dispute with the Manns’ attorney fees is that Tom Shipp did not segregate the fees.
The general rule requires the segregation of attorney fees. But as the Texas
Supreme Court directed in Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299,
313-314 (Tex. 2006), when discrete legal services advance both a recoverable and
unrecoverable claim they are so intertwined that they need not be segregated. And
Steven Lawrence testified about the attorney fees. (R.R. Vol. 3, p. 69) He testified
that because of the common nucleus of acts, each of the causes of action are
interrelated. (R.R. Vol. 3, p. 72) He testified that the fees sought by Christopher
Mann, Gwenda Mann, and Mann’s Machine, Inc. were reasonable and customary.
(R.R. Vol. 3, pp. 72-73) The trial court erred in disregarding this uncontradicted
testimony.
Cross-Appellants request that this Court sustain their Issue Number Two,
reverse the Judgment of the trial court awarding attorney fees of $4,069.98, and
remand to the trial court for a new trial as to the amount of the Cross-Appellants’
attorney fees.
CONCLUSION
The trial court’s failure to award damages to the Manns and the trial court’s
award of attorney fees limited to $4,069.98 are not supported by sufficient evidence.
The Robleses took affirmative and undisputed steps to interfere with the Manns’
5
easement. And because of those steps, the Manns sustained damages. The trial
court’s failure to award damages is not supported by sufficient evidence.
And the Manns attorney worked in excess of 200 hours, including the trial on
the merits of this case. Yet the trial court awarded damages only for one month of
fees charged by a prior attorney—and awarded no fees for the actual trial. The
Robleses’ only argument as to the Manns’ fees is that Tom Shipp did not segregate
his fees. But segregation is not required when the claims are so intertwined that
they need not be segregated. Although Tom Shipp did not testify as to the
intertwined nature of the claims, Steven Lawrence did. With this evidence, the trial
court’s award of attorney’s fees for one month’s work for the prior attorney is not
support by sufficient evidence.
PRAYER FOR RELIEF
Cross-Appellants request that this Court reverse the Judgment of the trial court
on the issue of the Cross-Appellants’ damages and attorney fees and remand this
case to the trial court for a new trial on these issues.
6
Respectfully submitted,
THE SEILER LAW FIRM, PLLC
/s/ Kenna M. Seiler
Kenna M. Seiler
State Bar No. 13944250
8505 Technology Forest Place, Suite 1102
The Woodlands, Texas 77381
kenna.seiler@theseilerlawfirm.com
(281) 419-7770
(281) 419-7791 – Telecopier
Tom Shipp
State Bar No. 18271000
10200 Grogan’s Mill Road, Suite 320
The Woodlands, Texas 77380
(281) 364-7228
(281) 364-7230 – Telecopier
ATTORNEYS FOR CROSS-
APPELLANTS
7
CERTIFICATE OF SERVICE
Pursuant to Rule 9.5 of the Texas Rules of Appellate Procedure, I certify that
the Cross-Appellants’ Brief has been electronically filed with the Clerk of the
Thirteenth Court of Appeals, and true and correct copies of same have been
electronically served, on this 29th day of December 2014, correctly addressed as
follows:
George D. Gordon
Richard S. Browne
Baggett, Gordon & Deison
307 N. San Jacinto
Conroe, Texas 77301
/s/ Kenna M. Seiler
Kenna M. Seiler
8
CERTIFICATE OF COMPLIANCE
Pursuant to Rules 9.4(i)(2)(C) and 9.4(i)(2)(3) of the Texas Rules of Appellate
Procedure, I certify that this Appellees’ Brief contains 1,205 words (excluding the
Caption, Statement regarding Oral Argument, Table of Contents, Index of
Authorities, Signature, Proof of Service, Certification, and Certificate of Service).
This is a computer-generated document created in Microsoft Word, using 14-point
typeface for all text, except for footnotes, which are in 12-point typeface. In making
this Certificate of Compliance, I am relying on the word count provided by the
software used to prepare the document.
/s/ Kenna M. Seiler
Kenna M. Seiler
9
Page 1
BROOKSHIRE KATY DRAINAGE DISTRICT, Appellant v. THE LILY
GARDENS, LLC, RICHARD E. FLUECKIGER AND KENNETH B. LUEDECKE,
Appellees
NO. 01-07-00431-CV
COURT OF APPEALS OF TEXAS, FIRST DISTRICT, HOUSTON
333 S.W.3d 301; 2010 Tex. App. LEXIS 7532
September 10, 2010, Opinion Issued
SUBSEQUENT HISTORY: Released for Publication OPINION
May 25, 2011.
Reconsideration denied by, En banc Brookshire Katy
Drainage Dist. v. Lily Gardens, LLC, 2011 Tex. App. [*304] OPINION ON REHEARING
LEXIS 1619 (Tex. App. Houston 1st Dist., Feb. 25, 2011)
Appellees, Lily Gardens, LLC, and its owners,
Petition for review denied by Brookshire Katy Drainage
Richard E. Flueckiger and Kenneth B. Leudecke
Dist. v. Lily Gardens, LLC, 2012 Tex. LEXIS 84 (Tex.,
(collectively, the "Defendants"), have filed a motion for
Jan. 27, 2012)
rehearing. Appellant, Brookshire Katy Drainage District
PRIOR HISTORY: [**1] (the "District"), filed a response to the motion. We grant
On Appeal from the 9th District Court, Waller County, rehearing and withdraw our opinion and judgment of
Texas. Trial Court Case No. 06-08-18415. December 22, 2009 and substitute this opinion and
Brookshire Katy Drainage Dist. v. Lily Gardens, LLC, judgment in their place.
2009 Tex. App. LEXIS 9716 (Tex. App. Houston 1st Dist.,
The District filed suit against the Defendants and
Dec. 22, 2009)
sought declaratory and injunctive relief, alleging, among
other things, that the Defendants (record owners of the
tract of real property at issue) violated the District's rights
COUNSEL: For APPELLANT: David Frishman, Katy,
pursuant to an express easement and trespassed on the
TX; Kevin D. Jewell, William S. Helfand, Chamberlain,
District's property. Specifically, the District alleged
Hrdlicka, White, Williams & Martin, Houston, TX.
[**2] that the Defendants were "encroaching and
For APPELLEE: Dale Jefferson, Levon G. Hovnatanian, infringing into the [District's] easement and culverts
Raul H. Suazo, Martin, Disiere, Jefferson & Wisdom, without permission."
L.L.P., Houston, TX.
The Defendants filed traditional and no-evidence
summary judgment motions relating to all of the District's
JUDGES: Panel consists of Justices Alcala, Hanks, and
claims. The trial court granted summary judgment
Wilson. Justice Wilson, dissenting.
disposing of all of the District's claims and awarded
attorney's fees to the Defendants. 1
OPINION BY: George C. Hanks
Page 2
333 S.W.3d 301, *304; 2010 Tex. App. LEXIS 7532, **2
1 Prior to the trial court dismissing the case, the damage to roads, passageways and fences
Defendants nonsuited their counterclaims against resulting from the DISTRICT'S use in
the District, and accordingly, those claims are not going to and from said easement and right
at issue in this appeal. of way, and to restore the same to the
previously existing condition as near as
In its first two issues, the District contends that the possible.
trial court erred by granting the Defendants' motion for
summary [*305] judgment on the District's claims for GRANTOR reserves the right to use
declaratory and injunctive relief for violation of the the facilities offered by the drainage canal
easement and trespass. In its third issue, the District for the disposal of surface waters, rain, or
argues the trial court erred in awarding attorney's fees to any excess waters collecting upon his
the Defendants under the Declaratory Judgments Act. land, and in such connection GRANTOR
has the right in the manner provided by
We find no reversible error and affirm. law and at his own expense to construct
and provide ditches, drains and laterals
Background connecting his said land or portions
thereof with the drainage canal.
The District is a political subdivision of the State of
Texas, created by the Texas Legislature, and charged
with controlling drainage in an area of Waller County. Pursuant to the easement, the District constructed a
Pursuant to this directive, in 1962 the District entered ten-foot deep drainage ditch traversing both of the tracts
into two [**3] express easements with Mrs. Frank E. and severing the front portions of the tracts from the
Smith and Johnnie Harris. Identical in language, the larger back parcels. After the drainage ditch was
easements granted the District "a right of way and completed, the District installed a concrete bridge across
easement for the purpose of constructing, maintaining, the ditch to connect the front and back portions of the
operating, repairing and re-constructing a drainage canal" tracts. Underneath the bridge and in the drainage ditch,
across two tracts of land. The easement conveyances, the District installed two metal pipes (or "culverts") that
which were submitted by both parties as summary ran along with the route of drainage.
judgment evidence, go into greater detail regarding the
respective rights of the parties, and state, In 2004, Richard Flueckiger and Kenneth Luedecke
created Lily Gardens, LLC ("Lily Gardens"), which
The DISTRICT shall have all rights and acquired three [**5] consecutive tracts of land, including
benefits necessary or convenient for the the two tracts subject to the drainage ditch easements
full enjoyment or use of the rights herein with the District. After acquiring the property, Lily
granted, with the right of ingress and Gardens undertook various projects to make the property
egress to and from said drainage canal suitable for visitors as an outdoor event venue, including
right of way, provided however, that after adding a picturesque covering to the existing cement
construction of said drainage canal, said bridge spanning the drainage ditch. Lily Gardens
right of ingress and egress of the intended to use the existing bridge to transport visitors
DISTRICT shall be limited to the said from a reception facility on the front part of the property
right of way and to existing roads and to a gazebo on the back portion of the property.
passageways. The DISTRICT is given the
right from time to time to cut and remove [*306] Lily Gardens left all existing structures in
all trees, undergrowth, and abate other place and merely affixed the bridge covering to the
obstruction, upon said canal right of way, existing cement bridge at ground level; the bridge
that may injure, endanger, or interfere with covering did not extend down to the actual drainage ditch
the construction, operation, maintenance nor did it touch the pipes (or "culverts") underneath the
and repair of said drainage canal. bridge. In 2006, the District sent Lily Gardens a cease
and desist letter stating that the construction of the bridge
The DISTRICT agrees during the life covering constituted an encroachment on the District's
of this easement to repair [**4] all right-of-way and otherwise violated the easement
Page 3
333 S.W.3d 301, *306; 2010 Tex. App. LEXIS 7532, **5
restrictions. Specifically, the District alleged that the court based its ruling.
structure was attached to the District's "culverts," which
"interfere[d] with the District's drainage plans and After conducting a hearing on attorney's fees, the
system, . . . violate[d] [**6] the easement restrictions, court signed an amended final judgment. In the judgment,
and impermissibly encroache[d] on the District's the court reiterated that it granted the Defendants' motion
right-of-way." for summary judgment, awarded attorney's fees, and
disposed of all remaining claims [**8] by
After the Defendants refused to remove the bridge acknowledging that the Defendants non-suited their
covering, the District filed suit. The District alleged remaining claims without prejudice.
causes of action for temporary and injunctive relief
relating to (1) violation, encroachment, and infringement Summary Judgment
on the District's rights under the easement; (2) trespass;
In its first and second issues, the District contends
and (3) nuisance. Each claim involved the common
the trial court erroneously granted summary judgment
allegation that Lily Gardens wrongfully constructed the
because the Defendants failed to establish entitlement to
bridge covering.
judgment as a matter of law and, alternatively, the
The Defendants filed traditional and no-evidence District raised genuine issues of material fact precluding
motions for summary judgment as to all of the District's summary judgment. Although the trial court granted
causes of action. The trial court signed an order granting summary judgment in the Defendants' favor on all of the
the "Defendants' Traditional and No-Evidence Motion for District's causes of action, the District only challenges the
Summary Judgment," without specifying whether it was trial court's summary judgment as to two of its claims;
granting summary judgment on the traditional or specifically, the claims relating to violation of easement
no-evidence motions. In the order, the trial court and trespass. Accordingly, [*307] we limit our review to
specifically stated that "the bridge covering at issue . . . whether summary judgment was proper on those claims.
[did] not encroach on the Brookshire Katy Drainage
A. Standard of Review
District's easement rights" and that the Defendants were
"not required to remove the bridge covering and "We review a grant of summary judgment de novo."
defendants [were] expressly allowed to complete the Ferguson v. Bldg. Materials Corp. of Am., 295 S.W.3d
bridge covering." 2 The court withheld ruling on the issue 642, 644 (Tex. 2009) (citing Tex. Mun. Power Agency v.
of attorney's [**7] fees so that it could hold a hearing. PUC of Tex., 253 S.W.3d 184, 192 (Tex. 2007)). In both
traditional and no-evidence summary judgment motions,
2 In its brief, the District points to this language
we review the entire record in the light most favorable to
in the order and argues that the trial court
the non-movant, indulging every reasonable inference
"specifically state[d] the grounds on which [the
and resolving any doubts [**9] against the motion.
summary judgment was] based[.]" Citing
Sudan v. Sudan, 199 S.W.3d 291, 292 (Tex. 2006);
Vannerson v. Klevenhagen, 908 S.W.2d 37, 41
KPMG Peat Marwick v. Harrison County Hous. Fin.
(Tex. App.--Houston [1st Dist.] 1995, writ
Corp., 988 S.W.2d 746, 748 (Tex. 1999).
denied), the District argues that "Lily Gardens is
limited to the rationale enumerated by the trial "[I]ssues a non-movant contends avoid the movant's
court and cannot seek affirmance on other entitlement to summary judgment must be expressly
arguments." The authority cited by the District is presented by written answer to the motion or by other
misplaced. The Texas Supreme Court has more written response to the motion and are not expressly
recently held that the Court of Appeals is not presented by mere reference to summary judgment
limited to the grounds enumerated in a trial court's evidence." 3 McConnell v. Southside Indep. Sch. Dist.,
order and may consider any grounds presented to 858 S.W.2d 337, 341 (Tex. 1993). We must affirm the
the trial court that are preserved for appellate summary judgment if any of the movant's theories
review. Cincinnati Life Ins. Co. v. Cates, 927 presented to the trial court and preserved for appellate
S.W.2d 623, 626 (Tex. 1996). Accordingly, we review are meritorious. Provident Life & Accident Ins.
need not opine on whether the statements in the Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003).
order constitute the grounds on which the trial
Page 4
333 S.W.3d 301, *307; 2010 Tex. App. LEXIS 7532, **9
3 On appeal, the District argues that the trial must grant the motion unless [*308] the respondent
court erred in denying its motion for produces summary judgment evidence raising a genuine
reconsideration that it filed after the trial court issue of material fact." TEX. R. CIV. P. 166a(i). If the
granted summary judgment. However, after non-movant brings forward more than a scintilla of
granting summary judgment, the trial court evidence that raises a genuine issue of material fact, then
generally has no obligation to consider further summary judgment is not proper. Flameout Design &
motions on issues adjudicated by the summary Fabrication, Inc. v. Pennzoil Caspian Corp., 994 S.W.2d
judgment. Macy v. Waste Mgmt., Inc., 294 S.W.3d 830, 834 (Tex. App.--Houston [1st Dist.] 1999, no pet.).
638, 650-51 (Tex. App.--Houston [1st Dist.] 2009,
pet. filed). New arguments to defeat summary Our review of a trial court's summary judgment
judgment presented [**10] after the trial court extends to the evidence that was before the court at the
has granted summary judgment do not warrant time of the ruling. Plotkin v. Joekel, 304 S.W.3d 455, 486
reversal. See id.; see also TEX. R. CIV. P. (Tex. App.--Houston [1st Dist.] 2009, pet. denied);
166a(c). Accordingly, we limit our review to [**12] see also TEX. R. CIV. P. 166a(c); TEX. R. APP. P.
those arguments set out in the District's summary 33.1. However, "[i]n determining whether a respondent to
judgment response, not those arguments presented a no-evidence motion for summary judgment has
for the first time in the District's motion for sufficient evidence to raise a genuine issue of material
reconsideration or in its appellate briefs. fact, courts are not required to search the record without
guidance." Aleman v. Ben E. Keith Co., 227 S.W.3d 304,
When a party seeks both a traditional and a 309 (Tex. App.--Houston [1st Dist.] 2007, no pet.). A
no-evidence summary judgment on the non-movant's general reference to a voluminous record that does not
claim, we first review the trial court's summary judgment direct the trial court and parties to the evidence relied
under the no-evidence standards of Texas Rule of Civil upon is insufficient. See Rogers v. Ricane Enterprises,
Procedure 166a(i). Ford Motor Co. v. Ridgway, 135 Inc., 772 S.W.2d 76, 81 (Tex. 1989).
S.W.3d 598, 600 (Tex. 2004). If a non-movant failed to
produce evidence to defeat the summary judgment We will affirm a no-evidence summary judgment
motion, then we need not analyze whether the movant's when (1) there is a complete absence of evidence of a
summary judgment proof satisfied the less stringent vital fact, (2) the court is barred by rules of law or of
"traditional" burden. Id. In other words, if no-evidence evidence from giving weight to the only evidence offered
summary judgment was properly granted, we do not to prove a vital fact, (3) the evidence offered to prove a
reach arguments under the traditional motion for vital fact is no more than a scintilla, or (4) the evidence
summary judgment. See id. conclusively establishes the opposite of a vital fact. City
of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005).
Here, the Defendants included both traditional and
no-evidence grounds in their motion for summary 2. District's Summary Judgment Response
judgment. The trial court did not specify whether it was
In its response to the Defendants' no-evidence
granting the motion on traditional or no-evidence
motion, the District specifically asserted that the
grounds. [**11] Accordingly, we review the no-evidence
construction of the bridge covering [**13] violated the
grounds first.
terms of the easement. To support this argument, the
1. No-Evidence Summary Judgment District attached summary judgment evidence to its
response, including the easement in question and pictures
Under the no-evidence standard, the party without of the bridge covering. The District also attached the
the burden of proof may move for a no-evidence affidavit of Raymond Dollins, President of the District.
summary judgment on the basis that there is no evidence
to support an essential element of the non-moving party's In the affidavit, Dollins states that the Defendants did
claim. TEX. R. CIV. P. 166a(i). Once the motion is filed, not obtain a permit from the District prior to beginning
the burden shifts to the non-moving party to present construction on the bridge covering. The remainder of
evidence raising a genuine issue of material fact as to the Dollins's affidavit is either (1) not relevant to a material
elements specified in the motion. Mack Trucks, Inc. v. fact regarding the easement or alleged trespass or (2)
Tamez, 206 S.W.3d 572, 582 (Tex. 2006). "The court verbatim allegations and conclusions from the District's
Page 5
333 S.W.3d 301, *308; 2010 Tex. App. LEXIS 7532, **13
response without supporting "statements of fact." See of plaintiff's claims" that "could not support summary
TEX. R. CIV. P. 166a(f); TEX. GOV'T CODE ANN. § judgment"; further stating that an affiant "cannot simply
312.011(1) (Vernon 2005) (defining "affidavit" as a say, Take my word for it; I know[.]"). In short, Dollins's
"statement in writing of a fact or facts"). affidavit contains no probative evidence favorable to the
District's claims, as it is entirely his unsupported
Such conclusory statements in an affidavit are conclusions and interpretations of law.
insufficient to raise an issue of fact in response to a
motion for summary judgment. See, e.g., Ryland Group, The District's claim that the bridge covering
Inc. v. Hood, 924 S.W.2d 120, 122 (Tex. 1996); Brownlee infringes upon the scope of its easement across
v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984). "A Defendants' land seems to be based, in part, upon an
conclusory statement is one that does not provide the allegation that the covering either impedes the flow of
underlying facts to support the conclusion." Winchek v. water through the canal or that it might, in the future,
Am. Exp. Travel Servs. Co., 232 S.W.3d 197, 206 (Tex. impact the District's ability to repair or maintain the
App.--Houston [1st Dist.] 2007, no pet.). [**14] canal. However, the District failed to provide any
Similarly, an affidavit that is nothing more than a sworn summary judgment evidence to show this.
repetition of allegations in the pleadings has no probative
force, as the statements are no more than conclusions or a Thus, our analysis turns [**16] to the remaining
mere surmise or suspicion. Selz v. Friendly Chevrolet, summary judgment evidence: the express easement
Inc., 152 S.W.3d 833, 837 (Tex. App.--Dallas 2005, no language and the photos of the construction in question.
pet.). We must determine whether the mere act of constructing
the bridge covering, even if that covering does not extend
Further, Dollins's conclusory statements that the into the canal or impede the flow of water through the
District's legislative authority allows it do certain things canal beneath it, violates the terms of the easement.
(Dollins's interpretations of the law) are not competent
[*309] summary judgment evidence. Haden v. David J. B. Violation of Easement
Sacks, P.C., No. 01-01-00200-CV, 332 S.W.3d 503, 2009
On appeal, the District argues that the trial court
Tex. App. LEXIS 3199, 2009 WL 1270372, *5 (Tex.
erred in granting summary judgment on its claim for
App.--Houston [1st Dist.] 2009, pet. denied) ("Statements
declaratory and injunctive relief relating to the
that are nothing more than legal conclusions are not
Defendants' alleged violation of the easement.
sufficient to support a summary judgment as a matter of
law . . . ."). 4 1. Applicable Law
4 The absence of factual statements and the "An easement does not convey title to property."
presence of conclusory statements are both Stephen F. Austin State Univ. v. Flynn, 228 S.W.3d 653,
defects of substance. See Rizkallah v. Conner, 952 658 (Tex. 2007) (citing Marcus Cable Assocs. v. Krohn,
S.W.2d 580, 587 (Tex. App.--Houston [1st Dist.] 90 S.W.3d 697, 700 (Tex. 2002)). Instead, an easement is
1997, no writ). a nonpossessory interest in another's property that
authorizes its holder to use that property for a particular
In its reply brief, the District asserts (without
purpose. Marcus Cable, 90 S.W.3d at 700. The
supporting authority) that "every word in Mr. Dollins's
contracting parties' intentions as expressed in the grant
affidavit in support of the District must be taken as true."
determine the scope of the interest conveyed. Id. at
That, however, is not the case when the affidavit is
700-01. We read the terms of an easement as a whole to
wholly lacking factual support. [**15] In the reply brief,
reach an adequate interpretation of the parties' intentions
the District argues that, in his affidavit, Dollins "clearly
and to carry out [**17] the purpose for which the
and unequivocally denied Lily Gardens' description of
easement was created. Id. at 701. Unless the language is
events." However, a sworn general denial of another
ambiguous, we rely solely on the written instrument.
party's factual accounts does not meet the burden under
Koelsch v. Indus. Gas Supply Corp., 132 S.W.3d 494, 498
the no-evidence summary judgment grounds of
(Tex. App.--Houston [1st Dist.] 2004, pet. denied).
producing evidence to create a material fact issue. See
Burrow v. Arce, 997 S.W.2d 229, 235-36 (Tex. 1999) [*310] "In determining the scope of an easement,
(rejecting affidavit as "nothing more than a sworn denial
Page 6
333 S.W.3d 301, *310; 2010 Tex. App. LEXIS 7532, **17
'we may only imply those rights reasonably necessary to District has asserts that the covering was affixed to the
the fair enjoyment of the easement with as little burden as "culvert." By "culvert," the District is referring to two
possible to the servient owner.'" Whaley v. Cent. Church pipes that are located in the drainage canal, underneath
of Christ of Pearland, 227 S.W.3d 228, 231 (Tex. the cement bridge. 5 The term "culvert" is not used in the
App.--Houston [1st Dist.] 2007, no pet.) (quoting easement grant, as are "canal" and "roadway." The
Lakeside Launches, Inc. v. Austin Yacht Club, Inc., 750 easement delineates, in clear terms, the District's rights
S.W.2d 868, 871 (Tex. App.--Austin 1988, writ denied)); with respect (a) the roadways to access the drainage canal
see also Marcus Cable, 90 S.W.3d at 701. "If a particular and (b) the canal. We also address (c) the District's public
purpose is not provided for in the grant, a use pursuing interest arguments.
that purpose is not allowed." Marcus Cable, 90 S.W.3d at
701. 5 See Fort Bend County Drainage Dist. v.
Sbrusch, 818 S.W.2d 392, 395 (Tex. 1991)
To prevail on a claim for interference with easement (drawing distinction between responsibilities with
rights, the District must prove that the Defendants regard to easement and bridge crossing over
engaged in activities that interfered with the District's easement in tort case).
reasonable use and enjoyment of the easement. See Still
v. Eastman Chem. Co., 170 S.W.3d 851, 854 (Tex. a. Rights with respect to the roadway
App.--Texarkana 2005, no pet.) (citing County of Harris
The granting instrument provides the District with
v. Southern Pacific Trans. Co., 457 S.W.2d 336, 340
certain rights incident to the purpose or use of the
(Tex. Civ. App.-Houston [1st Dist.] 1970, no writ.)).
easement, including the "right of ingress and egress to
2. [**18] Analysis and from said drainage canal right of way[.]" In other
words, the District has the right to use the Defendants'
In their summary judgment motion, the Defendants roadway to travel from the public street to the drainage
specifically alleged that there was no evidence that they canal location and back; the easement does not provide
engaged in activities that interfered with the District's unlimited or exclusive use of the roadways [**20] or the
reasonable use and enjoyment of the easement. Defendants' property. [*311] The instrument also
Accordingly, the burden shifted to the District to present provides, "after construction of said drainage canal, said
summary judgment evidence raising a genuine issue of right of ingress and egress of the DISTRICT shall be
material fact that they did. See Mack Trucks, Inc., 206 limited to the said right of way and to existing roads and
S.W.3d at 582. passageways." (Emphasis added.) Thus, the District is
prohibited from relocating the roadways. As further
Here, the easement's stated purposes was for evidence of the District's limited right to use the
"constructing, maintaining, operating, repairing, and roadways on the property, the easement also expressly
re-constructing a drainage canal, including drains, states that, during the life of the easement, the District is
ditches, laterals and levees[.]" The District alleged that required "to repair all damage to roads, passageways and
the Defendants' construction of the covering over the fences resulting from the DISTRICT'S use[.]"
existing bridge interfered with its easement rights.
The intention of the parties was clearly expressed in
The bridge covering added by the Defendants is the easement instrument. The District has no right, under
affixed to the preexisting cement bridge above the the terms of the easement, to control or prohibit
drainage canal, as distinguishable from construction in or construction on the roadway. The District's only right
obstructing the canal. with respect to the roadways is ingress and egress to and
from the drainage canal, and the District has not produced
It is undisputed that the cement bridge was built any evidence showing that the construction of the bridge
around the time the District built the drainage canal. The covering prevented its ingress and egress to and from the
pictures attached as summary judgment evidence by the drainage canal.
District show that the bridge covering was attached to
this preexisting bridge. The District does not provide any b. District's Ability to Maintain the Drainage
evidence showing that the structure [**19] was actually Canal
built onto or extended into the drainage canal. The
Page 7
333 S.W.3d 301, *311; 2010 Tex. App. LEXIS 7532, **20
The District argues that the construction of the writ denied) (observing that when summary judgment
covering may interfere with its ability [**21] to maintain evidence raises only mere suspicion or surmise of fact in
the canal. Specifically, the District argues that it may issue, no genuine issue of material fact exists).
need to remove and replace its "culverts." The District
points to language in the easement providing the District [*312] c. Benefit of the Public
"the right from time to time to cut and remove all trees,
The District also makes an appeal to the interest of
undergrowth, and abate other obstruction, upon said
[**23] the public, despite its failure to put forth any
canal right of way, that may injure, endanger, or interfere
evidence showing that the bridge covering affects
with the construction, operation, maintenance and repair
drainage, water flow, or flooding. In its summary
of said drainage canal." (Emphasis added). The District
judgment response, and without supporting allegations or
has not produced any evidence to show how the bridge
facts, the District urged that "there will be injury to the
covering would interfere with "the construction,
area landowners and the general public at large."
operation, maintenance and repair" of the drainage canal
as required by the terms of the easement. In fact, the On appeal, the District makes a similar public
photographs, provided by the District as summary interest argument, citing authority relating to "public
judgment evidence, conclusively establish that there is easements." However, unlike the authority cited, this case
space between the preexisting cement bridge (to which does not involve a public dedication or an easement
the bridge covering was attached) and the piping in the authorizing use by the public. See Marcus Cable, 90
drainage ditch below. In other words, the photos show S.W.3d at 707 (public easements are those easements
that the cement bridge is not attached to the piping in the dedicated to public's use); Grimes v. Corpus Christi
drainage ditch. Transmission, 829 S.W.2d 335, 337 (Tex. App.--Corpus
Christi 1992, writ denied) (easement granting State
The District also suggests that the structure might
right-of-way for "highway purposes"). Furthermore, the
interfere with the future operation of the drainage system
Texas Supreme Court has held that the interests of the
because the District might opt to change the location of
public, no matter how laudable they may be, do not
the culvert. [**22] But the District has not shown how
warrant disregarding express easement terms to enlarge
the bridge covering might affect its ability to move the
its purpose beyond those intended by the contracting
culvert located beneath the bridge that was erected by the
parties. Marcus Cable, 90 S.W.3d at 706.
District.
The District has failed to show that the Defendants'
The District concedes that the bridge covering has
construction of the bridge covering violated the [**24]
not affected drainage, but it asserts that it may pose a
District's rights as expressly provided in the easement or
drainage problem in the future. To this extent, Dollins's
those rights reasonably necessary to accomplish the
affidavit states:
purpose of the easement, namely, "constructing,
maintaining, operating, repairing, and reconstructing a
I do not know every possible future
drainage canal[.]" The District has not provided any
problem that might result from the covered
evidence to create a fact issue as to whether the
bridge; but for example, it might be a
construction of the bridge covering infringed on its rights
drainage problem, it might be a wedding
pursuant to the easement. Accordingly, the record in this
that was planned and the District removed
case warrants summary judgment in the Defendants'
its culverts before the wedding, it might be
favor on the District's claims that its easement was
that someone was injured on the covered
violated. Because we conclude that the trial court could
bridge; the District would not want those
have properly granted the Defendants' no-evidence
parties to claim that somehow the District
summary judgment motion, we need not reach
was responsible for their problems.
Defendants' traditional summary judgment grounds
motion.
The statement quoted above has no evidentiary value
because it is not a "statement of fact," but instead, is We overrule the District's first issue.
Dollins's speculation. See Wiggins v. Overstreet, 962
S.W.2d 198, 200 (Tex. App.--Houston [14th Dist.] 1998, C. Trespass
Page 8
333 S.W.3d 301, *312; 2010 Tex. App. LEXIS 7532, **24
In its second issue, the District argues that the trial ability to regulate and improve drainage and flood
court erred in granting summary judgment in favor of the prevention within the district. See Tex. H.B. 2959, 77th
Defendants on the "District's trespass claim." Leg., R.S. (2001) (enrolled). The Legislature cannot,
however, change a nonpossessory easement interest into a
The Defendants addressed trespass in both its possessory interest or title ownership, as would be
traditional and no-evidence summary judgment points. required to maintain a trespass action against the
Under the no-evidence grounds, the Defendants argued Defendants, without compensating a private landowner.
that, to recover on a trespass claim, the District would [**27] See, e.g., Nollan v. Ca. Coastal Com'm, 483 U.S.
have to show that the Defendants made [**25] an 825, 107 S. Ct. 3141, 97 L. Ed. 2d 677 (1987).
unauthorized entry onto property owned by the District.
The Defendants contended that the District had no Accordingly, the trial court did not err by granting
evidence that it owned the property at issue or that the summary judgment in the Defendants' favor on the
Defendants made an unauthorized entry. Also, to the District's trespass claim.
extent that the District relied on its regulations to support
the trespass allegation, the Defendants argued in their We overrule the District's second issue.
no-evidence points that the District had no evidence that
Attorney's Fees
its regulations were lawfully adopted.
In its third issue, the District argues that the trial
In its brief, in support of its trespass claim, the
court erred in awarding the Defendants attorney's fees for
District asserts that "Lily Gardens does not own the
two reasons: (1) the Defendants were not entitled to fees
culvert in fee simple and the covering constitutes a
because they were not entitled to judgment under the
physical trespass without the District's consent." The
Declaratory Judgments Act; and (2) the Defendants did
District points out that the summary judgment record
not timely supplement their responses to the District's
"conclusively establishes the existence of a physical
request for production of documents regarding fees.
structure built by Lily Gardens upon the District's
easement," and the District summarily argues, "The A. Attorney's Fees Under Declaratory Judgment Act
presence of [the bridge covering] structure constitutes a
trespass as a matter of law." The District argues that, "because Lily Gardens is
not entitled to judgment under the Declaratory Judgments
To prevail on a trespass claim, the plaintiff has the Act, it may not recover fees under the statute." The
burden to prove (1) his right of ownership of the property District seems to be arguing that only a party who
or a [*313] lawful right of possession, and (2) an entry prevails on his own declaratory judgment cause of action
by the defendant. Cain v. Rust Indus. Cleaning Servs., may recover attorney's fees. To the contrary, it is well
Inc., 969 S.W.2d 464, 470 (Tex. App.--Texarkana 1998, established that the trial court may award attorney's fees
pet denied). [**26] "Unlike a possessory interest in land, to any party under the Declaratory Judgment Act.
an easement is a nonpossessory interest that authorizes its
holder to use the property for only particular purposes." Section 37.009 of the Texas Civil Practice and
Marcus Cable, 90 S.W.3d at 700 (emphasis added). "An Remedies Code, addressing [**28] costs and fees under
easement does not convey title to property." Flynn, 228 the Declaratory Judgment Act, provides, "In any
S.W.3d at 658. In other words, an easement does not proceeding under this chapter, the court may award costs
convey to the easement holder an ownership or and reasonable and necessary attorney's fees as are
possessory interest. See id. Because, as a matter of law, equitable and just." TEX. CIV. PRAC. & REM. CODE
the District cannot establish the first element of trespass ANN. § 37.009 (Vernon 2008). The grant or denial of
(ownership or right of possession), its claim necessarily attorney's fees in a declaratory judgment action lies
fails. within the discretion of the trial court, and its judgment
will not be reversed on appeal absent a clear showing that
Lastly, the District attempts to support its trespass
it abused that discretion. Oake v. Collin County, 692
claim with its own rules and regulations. The District S.W.2d 454, 455 (Tex. 1985). In the exercise of its
asserted that the legislature authorized it to enact rules discretion to award attorney's fees in declaratory
and a permitting system and that House Bill 2959 of the judgment action, the trial court may award attorney's fees
77th Texas Legislative Session expanded the District's
Page 9
333 S.W.3d 301, *313; 2010 Tex. App. LEXIS 7532, **28
to the prevailing party, may decline to award attorney's prejudice. See TEX. R. CIV. P. 193.6.
fees to either party, or may award attorney's fees to the
nonprevailing party, regardless of which party sought In its brief, the District fails to specify what
declaratory judgment. Ochoa v. Craig, 262 S.W.3d 29, 33 testimony, documents, or other evidence the trial court
(Tex. [*314] App.--Dallas 2008, pet. denied). Thus, improperly admitted and has thus waived this issue for
contrary to the District's assertion, it is well established improper briefing. See TEX. R. APP. P. 38.1(h); Garza v.
that attorney's fees under section 37.009 are not Tex. Alcoholic Beverage Comm'n, 138 S.W.3d 609, 618
conditioned upon a party's prevailing on its own (Tex. App.--Houston [14th Dist.] 2004, no pet.) (holding
declaratory claim. appellant waived complaint that court improperly
admitted testimony and documents untimely [**31]
The authority cited by the District does not support produced or disclosed during discovery because he cited
its position. 6 Because the District [**29] has not clearly only one example of improperly admitted evidence and
established an abuse of discretion, we may not disturb the otherwise failed to specify which evidence was
trial court's award. improperly admitted).
6 The District cites Cytogenix, Inc. v. Waldroff The District does not allege that the Defendants
and McDowell v. McDowell for the proposition failed to properly designate their counsel as an expert
that, because the Defendants were not entitled to witness on attorney's fees. Rather, the District
judgment under the Declaratory Judgment Act, it acknowledges that the Defendants requested attorney's
may not recover under Section 37.009. Cytogenix fees and provided summary judgment evidence in support
involved a traditional breach of contract claim in of the figures claimed at that point of time. Specifically,
which the party was not awarded actual damages. the Defendants provided the affidavit of their counsel
See Cytogenix, 213 S.W.3d 479, 489-90 (Tex. created on November 6, 2006. The affidavit included the
App.--Houston [1st Dist.] 2006, pet. denied). hourly billing rate sought, the summary of the work
Cytogenix suggested the Declaratory Judgment performed up to that time, an opinion regarding the
Act as an alternative basis for attorney's fees, and reasonable and necessary cost of the services provided
the Court held that, "A party may not . . . couple a and the services that would be required in the event of an
declaratory plea with a damages action just to appeal, and the total fees as of that time. The trial court
recover attorney's fees." Id. at 490. In McDowell, granted the Defendants' summary judgment but left open
the San Antonio Court of Appeals reversed an the issue of attorney's fees so that a hearing could be
award of attorney's fees where declaratory held. Between the time of the Defendants motion for
judgment was not pled as a cause of action. See summary judgment on November 6, 2006 and the hearing
McDowell, 143 S.W.3d 124, 131 (Tex. App.--San on attorney's fees on April 17, 2007, the Defendants
Antonio 2004, pet. denied). [**30] Both cases are incurred additional fees in corresponding [**32] with
distinguishable from the present case because, and addressing the issues raised by the District. Thus, the
here, declaratory relief was pled and pursued as change to the requested attorney's fees [*315] was
an actual theory of relief. Thus, neither authority merely due to their continuation of their work on the case
supports reversal of attorney's fees in the present to address issues raised and to prepare for the hearing on
case. attorney's fees. We cannot conclude the trial court abused
its discretion by determining that the District was not
B. Failure to Supplement Discovery Record unfairly surprised. See TEX. R. CIV. P. 193.6(a)(2).
The District argues that the trial court's award of We overrule the District's third issue.
attorney's fees to the Defendants was improper because
the Defendants "did not timely supplement [their] Conclusion
responses to the District's request for production of
documents[.]" Specifically, the District alleges that the We affirm the trial court's summary judgment.
trial court should have excluded the evidence of
George C. Hanks
attorney's fees under Texas Rule of Civil Procedure 193.6
because evidence was not timely produced and there was Justice
no showing of good cause or a lack of unfair surprise or
Page 10
333 S.W.3d 301, *315; 2010 Tex. App. LEXIS 7532, **32
Panel consists of Justices Alcala, Hanks, and Wilson. 7 with the . . . maintenance and repair of said drainage
canal" as in the language of the easement.
7 The Honorable Davie L. Wilson, retired
Justice, First Court of Appeals, participating by It is within the common knowledge of all that to
assignment. work on the large pipes seen in the pictures might require
the use of equipment that may need to be placed on the
Justice Wilson, dissenting. top of the bridge/ culvert. To insist the District come
forth with exacting evidence to make the future certain
DISSENT BY: Davie L. Wilson asks for more than the burden required by law.
DISSENT Further, to reach its conclusions, it appears the
majority must necessarily believe that the top of the
bridge/ culvert is not in the easement. This result flows
DISSENT FROM OPINION ON REHEARING from a narrow interpretation of the easement language
which I do not believe is supported by the law as outlined
Because I believe the District has produced more
in the original opinion. Because I would stand on the
than a scintilla of evidence that raises a genuine issue of
original opinion of the court, return the case below for
material fact, I respectfully dissent.
further consideration of the merits [**34] of the issues
The word "may" as used in the easement language presented, I respectfully dissent.
contemplates future events which by their nature are
Davie L. Wilson
speculative. The pictures of the bridge covering are in
and of themselves sufficient to raise a fact issue (i.e., Justice, Retired
showing that the bridge covering includes walls on the
side of the bridge that prevent people and [**33] Panel consists of Justices Alcala, Hanks, and Wilson.
machinery from reaching down off of the bridge into the 1
waterway below). In my judgment, expert testimony is
not necessary to reach the conclusion that some future 1 The Honorable Davie L. Wilson, retired
event "may" require access to the top of the Justice, First Court of Appeals, participating by
bridge/culvert by the District to make repairs and/or assignment.
improvements to the canal directly below due to
circumstances that "may injure, endanger, or interfere
Page 1
LAURI SMITH AND HOWARD SMITH, PETITIONERS, v. PATRICK W. Y.
TAM TRUST, RESPONDENT
NO. 07-0970
SUPREME COURT OF TEXAS
296 S.W.3d 545; 2009 Tex. LEXIS 822; 53 Tex. Sup. J. 54
August 29, 2008, Argued
October 23, 2009, Opinion Delivered
PRIOR HISTORY: [**1] (quoting Cochran v. Wool Growers Cent. Storage Co.,
ON PETITION FOR REVIEW FROM THE COURT 140 Tex. 184, 166 S.W.2d 904, 908 (Tex. 1942)). We
OF APPEALS FOR THE FIFTH DISTRICT OF must decide whether Ragsdale authorizes a court to
TEXAS. award fees as a matter of law when a jury awards roughly
Smith v. Patrick W.Y. Tam Trust, 235 S.W.3d 819, 2007 one-third of the damages sought and no attorney's fees.
Tex. App. LEXIS 6022 (Tex. App. Dallas, 2007) Because, under such circumstances, a court's award of the
full amount of fees sought is unreasonable, we reverse in
part the court of appeals' judgment and remand to the trial
COUNSEL: For Smith, Lauri, PETITIONER: Mr. court for a new trial on attorney's fees.
Robert D. Ranen, Ranen & Netzer, LLP, Plano TX.
I
For Patrick W.Y. Tam Trust, RESPONDENT: Mr. Scott
E. Hayes, Mr. Michael Wayne Massiatte, Vincent | Factual and Procedural Background
Moye, P.C., Dallas TX.
The Patrick W. Y. Tam Trust owns a shopping center
JUDGES: CHIEF JUSTICE JEFFERSON delivered the in [**2] Collin County. The Trust leased space to
opinion of the Court. Independent Quality Wholesale, Inc. d/b/a Plano Pets &
Grooming, with Lauri and Howard Smith as guarantors.
OPINION BY: Wallace B. Jefferson When Plano Pets stopped making payments, the Trust
sued Plano Pets 1 and the Smiths, seeking $ 215,391.50 in
OPINION damages and $ 47,438.75 in attorney's fees.
[*546] The reasonableness of attorney's fees is 1 The Trust nonsuited Plano Pets after the
generally an issue for the trier of fact. In Ragsdale v. company filed bankruptcy.
Progressive Voters League, however, we held that a court
At trial, Scott Hayes, the Trust's attorney, testified
may award attorney's fees as a matter of law when the
that a reasonable fee for the preparation and trial of the
testimony on fees "'is not contradicted by any other
case would be $ 47,438.75, plus $ 15,000 for appeals, for
witness, or attendant circumstances, and the same is
a total of $ 62,438.75. To support his testimony, Hayes
clear, direct and positive, and free from contradiction,
offered the legal bills of several other attorneys in his
inaccuracies, and circumstances tending to cast suspicion
firm. The Smiths unsuccessfully objected that the bills
thereon.'" Ragsdale, 801 S.W.2d 880, 882 (Tex. 1990)
Page 2
296 S.W.3d 545, *546; 2009 Tex. LEXIS 822, **2;
53 Tex. Sup. J. 54
were hearsay but did not otherwise challenge the Trust's provided by counsel; the time required for trial; the
evidence. amount of money involved; the client's interest that is at
stake; the responsibility imposed upon counsel; and the
The jury found the Smiths liable and awarded the skill and expertise required." Ragsdale, 801 S.W.2d at
Trust $ 65,000 in damages but no attorney's fees. The 881. We noted that generally, "'the testimony of an
Trust moved to enter judgment on the jury's liability and interested witness, such as a party to the suit, though not
damages answers and to disregard the jury's refusal to contradicted, does no more than raise a fact issue to be
award attorney's fees. The trial court rendered judgment determined by the jury.'" Id. at 882 (quoting Cochran,
that the Trust receive the $ 65,000 the jury awarded, and 166 S.W.2d at 908). But we recognized that there was
rendered judgment notwithstanding [*547] the verdict on "'an exception to this rule, which is that where the
attorney's fees: $ 7,500 for fees incurred through [**3] testimony of an interested witness is not contradicted by
trial and up to $ 15,000 in attorney's fees for success at any other witness, or attendant [**5] circumstances, and
various stages of appeal. Both sides appealed. the same is clear, direct and positive, and free from
contradiction, inaccuracies, and circumstances tending to
The court of appeals vacated the $ 7,500 attorney's cast suspicion thereon, it is taken as true, as a matter of
fee award and rendered judgment for $ 47,438.75 instead, law.'" Id. (quoting Cochran, 166 S.W.2d at 908). "The
holding that "[b]ecause the Trust presented competent, court, as a trier of fact, may award attorneys' fees as a
uncontroverted evidence of its right to attorney's fees and matter of law in such circumstances, especially when the
because the Smiths did not challenge the amount, nature, opposing party has the means and opportunity of
or necessity of these fees . . . the trial judge abused his disproving the testimony or evidence and fails to do so."
discretion in awarding $ 7,500." 235 S.W.3d 819, 828 Id. Because the attorney's fees evidence met those
(citing Ragsdale, 801 S.W.2d at 881). The court of requirements, we rendered judgment for $ 22,500 in
appeals affirmed the remainder of the judgment. Id. at attorney's fees and affirmed the $ 40,000 damages award.
829. We granted the Smiths' petition for review. 51 Tex. Id.
Sup. Ct. J. 980, 987 (June 9, 2008).
Relying on Ragsdale, the court of appeals in this
II case rendered judgment as a matter of law, holding that
the Trust's attorney's fee evidence was competent,
Discussion
uncontroverted, and unchallenged. 235 S.W.3d at 828-29.
"A person may recover reasonable attorney's fees . . . But Ragsdale recognized that its rule would not apply
in addition to the amount of a valid claim and costs, if the whenever attorney's fees testimony is undisputed:
claim is for . . . an oral or written contract." TEX. CIV.
PRAC. & REM. CODE § 38.001(8). If attorney's fees are [W]e do not mean to imply that in every
proper under section 38.001(8), the trial court has no case when uncontradicted testimony is
discretion to deny them. See Bocquet v. Herring, 972 offered it mandates an award of the
S.W.2d 19, 20 (Tex. 1998) (holding that statutes amount claimed. For example, even
providing that a party "may recover" attorney's fees are though the evidence might be
not discretionary). Generally, the party seeking [**4] to uncontradicted, if it is unreasonable,
recover attorney's fees carries the burden of proof. incredible, [*548] or its belief is
Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 10 questionable, [**6] then such evidence
(Tex. 1991). would only raise a fact issue to be
determined by the trier of fact.
The reasonableness of attorney's fees is ordinarily
left to the factfinder, and a reviewing court may not Ragsdale, 801 S.W.2d at 882. We also cautioned that the
substitute its judgment for the jury's. Barker v. Eckman, factfinder had to consider "the amount of money
213 S.W.3d 306, 314 (Tex. 2006); Ragsdale, 801 S.W.2d involved." Id. at 881; see also Wayland v. City of
at 881. In Ragsdale, we held that "[i]n awarding Arlington, 711 S.W.2d 232, 233 (Tex. 1986) ("One of the
attorney's fees the trial court, as the trier of fact, must factors in determining the reasonableness of attorney's
take into account various factors such as: the nature and fees is the amount of damages awarded."). Seven years
complexity of the case; the nature of the services later, we added a corollary: the factfinder should consider
Page 3
296 S.W.3d 545, *548; 2009 Tex. LEXIS 822, **6;
53 Tex. Sup. J. 54
"the amount involved and the results obtained," among to fee awards made by trial courts, not just juries. Young
other things. Arthur Andersen & Co. v. Perry Equip. v. Qualls, 223 S.W.3d 312, 314 (Tex. 2007). We see no
Corp., 945 S.W.2d 812, 818 (Tex. 1997). reason why [**8] they would not apply--as the Ragsdale
factors do--to an appellate court's assessment of whether
Here, the Trust sought over $ 200,000 in damages, fees were established as a matter of law. Because the fee
but the jury awarded only $ 65,000. The Trust asked for a is unreasonable in light of the amount involved and the
maximum of $ 62,438.75 in attorney's fees; the jury results obtained, the evidence did no more than raise a
awarded nothing. The court of appeals held that fees were fact issue to be decided by the jury. See Ragsdale, 801
established as a matter of law. See Ragsdale, 801 S.W.2d S.W.2d at 882.
at 882. But the fee, though supported by uncontradicted
testimony, was unreasonable in light of the amount The jury, however, awarded nothing. Although it
involved and the results obtained, and in the absence of could have rationally concluded that, in light of the
evidence that such fees were warranted due amount involved and the results obtained, a reasonable
circumstances unique to this case. Cf. Farrar v. Hobby, fee award was less than the full amount sought, no
506 U.S. 103, 114, 113 S. Ct. 566, 121 L. Ed. 2d 494 evidence supported the jury's refusal to award any
(1992) (holding that "'the degree [**7] of the plaintiff's attorney's fees (as the court of appeals correctly noted).
overall success goes to the reasonableness' of a fee 235 S.W.3d at 829. The trial court could have directed the
award" and "'the most critical factor' in determining the jury to reform its verdict, see TEX. R. CIV. P. 295, but the
reasonableness of a fee award 'is the degree of success court was not free to set a reasonable fee on its own.
obtained.'") (quoting Tex. State Teachers Ass'n v. Accordingly, the Smiths are entitled to a new trial on
Garland Indep. Sch. Dist., 489 U.S. 782, 793, 109 S. Ct. attorney's fees.
1486, 103 L. Ed. 2d 866 (1989); Hensley v. Eckerhart,
461 U.S. 424, 436, 103 S. Ct. 1933, 76 L. Ed. 2d 40 On retrial, the evidence may support a similar fee
(1983)). Although the Trust sought some $ 215,000 in award, but that is a matter within the jury's purview. See
damages, the jury found that "the amount involved" was Young, 223 S.W.3d at 315 ("It may be that, upon
much lower--$ 65,000. The jury then decided that the consideration of the correct results obtained, this
Trust was entitled to no fees (which must be reversed for evidence would be factually sufficient to support a like
reasons explained below). fee award."). On this record, the [**9] Trust is not
entitled to its fees [*549] as a matter of law. Because the
The Trust complains that the Smiths' failure to court of appeals concluded otherwise, we reverse its
request a jury instruction on the Arthur Andersen factors judgment as to attorney's fees and remand that part of the
waives their right to complain about the fee award. But case to the trial court for a new trial. TEX. R. APP. P.
the jury's fee award is not at issue here. The court of 60.2(d).
appeals awarded the full amount requested, despite the
jury's rejection of a substantial portion of the damages Wallace B. Jefferson
sought. Those fees, even though supported by
Chief Justice
uncontradicted testimony, may not be awarded by a court
as a matter of law. Opinion Delivered: October 23, 2009
We have held that the Arthur Andersen factors apply
Page 1
TONY GULLO MOTORS I, L.P. AND BRIEN GARCIA, PETITIONERS, v. NURY
CHAPA, RESPONDENT
NO. 04-0961
SUPREME COURT OF TEXAS
212 S.W.3d 299; 2006 Tex. LEXIS 1301; 50 Tex. Sup. J. 278
October 19, 2005, Argued
December 22, 2006, Opinion Delivered
SUBSEQUENT HISTORY: [**1] Released for JUSTICE HECHT, JUSTICE WAINWRIGHT, JUSTICE
Publication February 23, 2007. GREEN, and JUSTICE WILLETT joined. JUSTICE
Rehearing denied by Tony Gullo Motors I, L.P. v. Chapa, JOHNSON filed a concurring opinion. JUSTICE
2007 Tex. LEXIS 165 (Tex., Feb. 23, 2007) O'NEILL filed a dissenting opinion. JUSTICE MEDINA
On remand at, Remanded by Chapa v. Tony Gullo did not participate in the decision.
Motors I, L.P., 2007 Tex. App. LEXIS 5870 (Tex. App.
Beaumont, July 26, 2007) OPINION BY: Scott Brister
On remand at, Remanded by Chapa v. Tony Gullo
Motors I, L.P., 2007 Tex. App. LEXIS 9543 (Tex. App. OPINION
Beaumont, Dec. 6, 2007)
[*303] Nury Chapa bought a Toyota Highlander
PRIOR HISTORY: ON PETITION FOR REVIEW from Tony Gullo Motors for $ 30,207.38; they disagree
FROM THE COURT OF APPEALS FOR THE NINTH what model of the car was involved. After a two-day trial,
DISTRICT OF TEXAS. the six jurors answered 15 questions concerning breach of
Chapa v. Tony Gullo Motors I, L.P., 2004 Tex. App. contract, fraud, and the DTPA 1 in Chapa's favor. They
LEXIS 7751 (Tex. App. Beaumont, Aug. 26, 2004) also found a difference in value of the two models of $
7,213, mental anguish damages of $ 21,639, exemplary
damages of $ 250,000, and attorney's fees of $ 20,000.
COUNSEL: For PETITIONER: The Honorable Craig T.
Enoch, Ms. Melissa Anne Prentice, Mr. Alejandro Sin 1 See Texas Deceptive Trade
Valdes, Ms. Roxanne T. L. Wilson, WINSTEAD Practices-Consumer Protection Act, TEX. BUS. &
SECHREST & MINICK, P.C., Austin, TX; Mr. Joe COM. CODE §§ 17.41-.63 ("DTPA").
Michels, Jr., WINSTEAD SECHREST & MINICK, P.C.,
[**2] The trial court disregarded the mental anguish
The Woodlands, TX; Mr. William T. Green, III, Houston,
and exemplary awards on the ground that Chapa's only
TX.
claim was for breach of contract, and the fee award
For RESPONDENT: Ms. Kristin Bays, Mr. J. Randal because Chapa had not segregated fees attributable to that
Bays, BAYS & BAYS, Conroe, TX. claim alone. In a per curiam memorandum opinion, the
Ninth Court of Appeals disagreed with both conclusions,
JUDGES: JUSTICE BRISTER delivered the opinion of reinstating all the awards but reducing exemplary
the Court, in which CHIEF JUSTICE JEFFERSON, damages to $ 125,000.
Page 2
212 S.W.3d 299, *303; 2006 Tex. LEXIS 1301, **2;
50 Tex. Sup. J. 278
We agree that Chapa could assert her claim in 4 See Stewart Title Guar. Co. v. Aiello, 941
several forms, but disagree that she could recover in all of S.W.2d 68, 72, 40 Tex. Sup. Ct. J. 290 (Tex. 1997)
them. Further, the court of appeals' judgment included (holding mental anguish and exemplary damages
exemplary damages exceeding the bounds of unavailable for breach of contract).
constitutional law and attorney's fees exceeding the 5 See New Amsterdam Cas. Co. v. Texas Indus.,
bounds of Texas law. Accordingly, we reverse and 414 S.W.2d 914, 915, 10 Tex. Sup. Ct. J. 357 (Tex.
remand for further proceedings. 1967) (stating that "attorney's fees are not
recoverable either in an action in tort or a suit
I. Election of Remedies upon a contract unless provided by statute or by
contract between the parties"); see also Neeley v.
In entering judgment for Chapa on all her contract, Bankers Trust Co. of Texas, 757 F.2d 621, 633
fraud, and DTPA claims, the court of appeals violated the (5th Cir. 1985).
one-satisfaction rule. "There can be but one recovery for 6 See TEX. BUS. & COM. CODE § 17.50(b)(1).
one injury, and the fact that . . . there may be more than For acts committed intentionally, a consumer may
one theory of liability[] does not modify this rule." 2 recover additional damages up to three times the
amount of economic and mental anguish damages
2 Stewart Title Guar. Co. v. Sterling, 822 S.W.2d
combined, see id.; with regard to the DTPA,
1, 8, 35 Tex. Sup. Ct. J. 206 (Tex. 1991).
Chapa only requested and obtained a jury finding
[**3] Chapa alleged only one injury -- delivery of a that Gullo Motor's violations were committed
base-model Highlander rather than a Highlander Limited. knowingly.
While she could certainly plead more than one theory of
[**5] But as Chapa was the prevailing party, she is
liability, she could not recover on more than one. 3
still entitled to judgment on the most favorable theory
3 See Boyce Iron Works, Inc. v. Sw. Bell Tel. supported by the pleadings, evidence, and verdict. 7 Gullo
Co.,747 S.W.2d 785, 787, 31 Tex. Sup. Ct. J. 310 Motors does not challenge the jury's breach of contract or
(Tex. 1988) ("When a party tries a case on economic damages findings in this Court. Accordingly,
alternative theories of recovery and a jury returns the only question before us is whether Chapa is entitled to
favorable findings on two or more theories, the anything more.
party has a right to a judgment on the theory
7 See Gulf States Utils. Co. v. Low, 79 S.W.3d
entitling him to the greatest or most favorable
561, 566, 45 Tex. Sup. Ct. J. 724, 45 Tex. Sup. Ct.
relief."); see also TEX. BUS. & COM. CODE §
J. 793 (Tex. 2002); Boyce Iron Works, 747 S.W.2d
17.43 (providing that "no recovery shall be
at 787 (Tex. 1988).
permitted under both this subchapter and another
law of both damages and penalties for the same II. Mere Breach of Contract
act or practice"); Gunn Infiniti, Inc. v. O'Byrne,
996 S.W.2d 854, 862 (Tex. 1999)(holding plaintiff Gullo Motors argues that Chapa's only claim is in
must elect recovery under either DTPA or fraud contract, as the parties' only dispute is whether she
after remand). contracted for a base-model Highlander or Highlander
Limited. "An allegation of a mere breach of contract,
[*304] For breach of contract, Chapa could recover without more, does not constitute a 'false, misleading or
economic damages and attorney's fees, but [**4] not deceptive act' in violation of the DTPA." 8 Similarly, "the
mental anguish or exemplary damages. 4 For fraud, she usual view is that mere breach of contract is not fraud and
could recover economic damages, mental anguish, and that it may not be evidence of fraud." 9
exemplary damages, but not attorney's fees. 5 For a
DTPA violation, she could recover economic damages, 8 Ashford Dev., Inc. v. US Life Real Estate Serv.
mental anguish, and attorney's fees, but not additional Corp., 661 S.W.2d 933, 935, 27 Tex. Sup. Ct. J.
damages beyond $ 21,639 (three times her economic 118 (Tex. 1983)(citations omitted).
damages). 6 The court of appeals erred by simply [**6]
awarding them all. 9 Thigpen v. Locke, 363 S.W.2d 247, 252, 6 Tex.
Sup. Ct. J. 157 (Tex. 1962).
Page 3
212 S.W.3d 299, *304; 2006 Tex. LEXIS 1301, **6;
50 Tex. Sup. J. 278
But Chapa alleged more than a mere breach of "failing to disclose information concerning goods
contract; her complaint was not just that Gullo Motors or services which was known at the time of the
failed to deliver a Highlander Limited, but that it never transaction if such failure to disclose such
intended to do so. A contractual promise made with no information was intended to induce the consumer
intention of performing may give rise to an action for into a transaction into which the consumer would
fraudulent inducement. 10 The duty not to fraudulently not have entered had the information been
procure a contract arises from the general obligations of disclosed").
law rather than the contract itself, and may be asserted in
tort even if the only damages are economic. 11 [**8] Of course, Chapa was required not just to
plead but to prove her claims. Proving that a party had no
10 See Formosa Plastics Corp. USA v. Presidio intention of performing at the time a contract was made is
Eng'rs and Contractors, Inc., 960 S.W.2d 41, 46, not easy, as intent to defraud is not usually susceptible to
41 Tex. Sup. Ct. J. 289 (Tex. 1998)(quoting Crim direct proof. 16 Breach alone is no evidence that breach
Truck & Tractor Co. v. Navistar Int'l Transp. was intended when the contract was originally made. 17
Corp., 823 S.W.2d 591, 597, 35 Tex. Sup. Ct. J. Similarly, denying that an alleged promise was ever made
342 (Tex. 1992)). is not legally sufficient evidence of fraudulent
11 inducement. 18 Usually, successful claims of fraudulent
inducement have involved confessions by the defendant
See id. at 46-47. or its agents of the requisite intent. 19
Gullo Motors argues that Chapa cannot bring a 16 See Spoljaric, 708 S.W.2d at 435.
fraudulent inducement claim because she was not [**7] 17 See id. ("Failure to perform, standing alone, is
promised a car she did not want, but one that she did. But no evidence of the promisor's intent not to
a party may bring a fraudulent inducement [*305] claim perform when the promise was made."); Formosa
even if the terms of the promise are later subsumed into a Plastics, 960 S.W.2d at 48; Schindler v. Austwell
contract. 12 In all such cases, the liability of the defendant Farmers Co-op., 841 S.W.2d 853, 854, 36 Tex.
on the contract does not absolve it from liability in tort Sup. Ct. J. 84 (Tex. 1992) (per curiam) (finding
damages too. 13 failure to pay amount due was not fraud); Crim
Truck, 823 S.W.2d at 597.
12 See id. at 47 (citing Graham v. Roder, 5 Tex. 18 See Miga v. Jensen, 96 S.W.3d 207, 210-11,
141, 149 (1849)). 46 Tex. Sup. Ct. J. 89 (Tex. 2002); T.O. Stanley
13 Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d
218, 222, 36 Tex. Sup. Ct. J. 259 (Tex. 1992)
See id.; Spoljaric v. Percival Tours, Inc., 708
(stating that denial of making promise was "a
S.W.2d 432, 436, 29 Tex. Sup. Ct. J. 280 (Tex.
factor" but "does not constitute evidence that the
1986).
Bank never intended to perform its promise");
Similarly, while the failure to deliver a Highlander Spoljaric, 708 S.W.2d at 435 ("Failure to perform
Limited would not alone violate the DTPA, 14 Chapa's . . . is a circumstance to be considered with other
claim was that Gullo Motors represented she would get facts to establish intent."). But see Thigpen v.
one model when in fact she was going to get another. Locke, 363 S.W.2d 247, 252, 6 Tex. Sup. Ct. J.
While failure to comply would violate only the contract, 157 (Tex. 1962) ("[S]ubsequent breach is not
the initial misrepresentation violates the DTPA. 15 evidence that may be considered in determining
whether or not there was fraud in the original
14 See Crawford v. Ace Sign, Inc., 917 S.W.2d transaction.").
12, 14, 39 Tex. Sup. Ct. J. 296 (Tex. 1996). [**9]
15 See TEX. BUS. & COM. CODE §§ 19 See, e.g., Formosa Plastics, 960 S.W.2d at 48
17.46(b)(7) (defining deceptive acts to include (noting that defendant's civil department director
"representing that . . . goods are of a particular admitted that defendant had acted deceptively and
style or model, if they are of another"), had no intention of performing a key contractual
17.46(b)(24)(defining deceptive acts to include promise at the time it was made); Spoljaric, 708
Page 4
212 S.W.3d 299, *305; 2006 Tex. LEXIS 1301, **9;
50 Tex. Sup. J. 278
S.W.2d at 434-35 (noting that defendant denied he 23 Chapa also argues that Gullo Motors'
ever approved a bonus contract, but corporate agreement after the dispute arose to install certain
secretary testified that he did). features of a Highlander Limited in her
base-model is some evidence of its earlier
But while breach alone is no evidence of fraudulent fraudulent intent. We disagree; if efforts to satisfy
intent, breach combined with "slight circumstantial a consumer after a dispute arises are some
evidence" of fraud is enough to support a verdict for evidence of fraud, sellers will be loathe to make
fraudulent inducement. 20 We believe Chapa met that any. Cf. PPG Indus., Inc. v. JMB/Houston Ctrs.
standard here. Partners Ltd. P'ship, 146 S.W.3d 79, 95, 47 Tex.
Sup. Ct. J. 822 (Tex. 2004)("We should encourage
20 Spoljaric, 708 S.W.2d at 435. sellers to attempt repairs; tolling limitations every
time they do might discourage them from doing
At trial, Chapa testified that she signed a contract
so at all.").
listing a Highlander Limited, but that Gullo Motors
personnel "snatched" the contract from her after she [**12] We recognize the need to keep tort law from
signed it, and must have destroyed it later. She also overwhelming contract law, so that private agreements
testified that the signatures [**10] on at least four are not subject to readjustment by judges and juries. 24
documents were forged, and that [*306] some were But we long ago abandoned the position that procuring a
forgeries of her deceased husband's signature rather than contract by fraud was simply another contract dispute. 25
her own. In light of the favorable verdict, we must Because Chapa proved more than mere breach of contract
assume the jury credited this testimony. 21 here, we hold she was entitled to assert fraud and DTPA
claims as well.
21 See City of Keller v. Wilson, 168 S.W.3d 802,
819-20, 48 Tex. Sup. Ct. J. 848 (Tex. 2005). 24 See, e.g., William Powers, Jr., The
Availability of Tort Remedies for Breach of
Spoliation of evidence normally supports an
Contract: Border Wars, 72 TEX. L. REV. 1209
inference only that the evidence was unfavorable, 22 not
(1994).
that it was created ab initio with fraudulent intent. But as
25 See Formosa Plastics, 960 S.W.2d at 46-47.
the evidence here was part of the original contracting
process, it provides some circumstantial evidence of III. Exemplary Damages
fraud in that process.
The jury found Gullo Motors had committed
22 See Trevino v. Ortega, 969 S.W.2d 950, 953, deceptive acts knowingly and found clear and convincing
41 Tex. Sup. Ct. J. 907 (Tex. 1998)(holding evidence that it had committed fraud. Beyond arguing
spoliation best addressed not by independent that Chapa can only sue in contract, Gullo Motors does
cause of action but by inference that evidence was not challenge either finding. As we have rejected that
unfavorable). argument, Chapa is entitled under the verdict to
exemplary damages for either fraud or violation of the
Further, the only contract introduced at trial listed
[**13] DTPA. 26
[**11] the car sold as a "2002 Toyota"; although Gullo
Motors prepared the contract, it offered no explanation 26 See TEX. CIV. PRAC. & REM. CODE §
why the box for indicating the model was left blank. 41.003(a) (providing for recovery of exemplary
Although the contract listed a vehicle identification damages if claimant proves by clear and
number that matched the base-model Chapa ultimately convincing evidence that harm resulted from
received, there was evidence that Gullo Motors did not fraud); TEX. BUS. & COM. CODE §
contract for that car until several days after Chapa signed 17.50(b)(1)(providing for recovery of up to three
the contract, and thus must have added it later. 23 And times economic damages if conduct violating
when Chapa's first attorney offered to return the car for a DTPA was committed knowingly).
refund, Gullo Motors refused on the ground that it had
already been titled, although evidence at trial suggested But both parties challenge the court of appeals'
that did not occur until several days later. judgment reinstating exemplary damages but reducing
Page 5
212 S.W.3d 299, *306; 2006 Tex. LEXIS 1301, **13;
50 Tex. Sup. J. 278
them to $ 125,000 -- Gullo Motors because the 436-37, 121 S. Ct. 1678, 149 L. Ed. 2d 674
reinstatement went too far, and Chapa because it did not (2001)(requiring de novo appellate review of
go far enough. Although the jury assessed exemplary exemplary damages because "the level of punitive
damages for both fraud [*307] and deceptive acts at $ damages is not really a 'fact' 'tried ' by the
250,000, the DTPA caps those damages at $ 21,639 jury")(citation omitted).
(three times Chapa's economic loss of $ 7,213), 27 while 31 See Bentley v. Bunton, 94 S.W.3d 561, 607,
the fraud award is capped at $ 200,000. 28 Accordingly, 45 Tex. Sup. Ct. J. 1172 (Tex. 2002) (finding
the court of appeals' opinion and the parties' briefs exemplary damages were not constitutionally
address only whether the exemplary damages were excessive, but remanding for reassessment in light
properly awarded based on fraud. of reduced mental anguish award); Malone, 972
S.W.2d at 45-48 (finding exemplary damages
27 TEX. BUS. & COM. CODE § 17.50(b)(1). were not constitutionally excessive).
The same statutory provision limits additional 32 Honda Motor Co., Ltd. v. Oberg , 512 U.S.
damages to three times economic and mental 415, 418, 426-27, 114 S. Ct. 2331, 129 L. Ed. 2d
anguish damages if conduct is committed 336 (1994) ("An amendment to the Oregon
intentionally, id., but Chapa only requested a jury Constitution prohibits judicial review of the
finding whether Gullo Motors' committed amount of punitive damages awarded by a jury
deceptive acts knowingly. 'unless the court can affirmatively say there is no
[**14] evidence to support the verdict.' The question
28 TEX. CIV. PRAC. & REM. CODE § presented is whether that prohibition is consistent
41.008(b)(capping exemplary damages at the with the Due Process Clause of the Fourteenth
greater of (1) noneconomic damages plus two Amendment. We hold that it is not.").
times economic damages, or (2) $ 200,000).
[**16] Second, Chapa claims that by authorizing up
A to $ 200,000 in exemplary damages, the Legislature
necessarily rendered that amount constitutionally
As an initial matter, Chapa asserts that three grounds permissible. But while "state law governs the amount
preclude our constitutional review of the exemplary properly awarded as punitive damages," that amount is
damages award. First, she argues this Court lacks still "subject to an ultimate federal constitutional check
jurisdiction to consider whether exemplary damages are for exorbitancy." 33
constitutionally excessive. While the excessiveness of
damages as a factual matter is final in the Texas courts of 33 Gasperini v. Ctr. for Humanities, Inc., 518
appeals, 29 the constitutionality of exemplary damages is U.S. 415, 431 n.12, 116 S. Ct. 2211, 135 L. Ed. 2d
a legal question for the court. 30 We have conducted such 659 (1996); Malone, 972 S.W.2d at 45 ("[E]ven if
analyses before. 31 Moreover, the Supreme Court of the an assessment of punitive damages is not deemed
United States has found unconstitutional a state excessive under governing state law, it may
constitutional provision limiting appellate scrutiny of violate a party's substantive due process right to
exemplary damages to no-evidence review. 32 Only by protection from 'grossly excessive' punitive
adhering to our practice of reviewing exemplary damages damages awards.").
for constitutional (rather than factual) excessiveness can
we avoid a similar constitutional conflict. Third, Chapa argues that she is entitled to the jury's
entire exemplary damage award because the trial court
29 See Alamo Nat'l. Bank v. Kraus, 616 S.W.2d complied with the procedural protections required by the
908, 910, 24 Tex. Sup. Ct. J. 343 (Tex. 1981). Due Process Clause. But the constitutional limitations on
[**15] such awards are substantive as well as procedural. 34
30 [*308] Even if the procedural processes [**17] were
perfect, "[t]o the extent an award is grossly excessive, it
See Owens-Corning Fiberglas Corp. v. furthers no legitimate purpose and constitutes an arbitrary
Malone, 972 S.W.2d 35, 43, 45, 41 Tex. Sup. Ct. deprivation of property." 35
Johns. 877 (Tex. 1998); see also Cooper Indus., Inc. v.
Leatherman Tool Group, Inc., 532 U.S. 424, 34 State Farm Mut. Auto. Ins. Co. v. Campbell,
Page 6
212 S.W.3d 299, *308; 2006 Tex. LEXIS 1301, **17;
50 Tex. Sup. J. 278
538 U.S. 408, 418, 123 S. Ct. 1513, 155 L. Ed. 2d financial ruin.").
585 (2003); Cooper Indus.,532 U.S. at 433; 40 Campbell, 538 U.S. at 419.
Oberg, 512 U.S. at 420 ("Our recent cases have
recognized that the Constitution imposes a Touching the second guidepost, the Supreme Court
substantive limit on the size of punitive damages has declined to adopt a bright-line ratio between actual
awards."); TXO Prod. Corp. v. Alliance Res. and exemplary damages, but has stated that "few awards
Corp., 509 U.S. 443, 453-54, 113 S. Ct. 2711, 125 exceeding a single-digit ratio . . . will satisfy due
L. Ed. 2d 366 (1993). process." 41 Further, the Court has pointed to early
35 Campbell, 538 U.S. at 417. statutes authorizing awards of double, treble, or
quadruple damages as support for the conclusion that
B "four times the amount of compensatory damages might
be close to the line of constitutional impropriety." 42
We review not whether the exemplary damage award Here, the court of appeals' award exceeds four times
is exorbitant (as the dissent says), but whether it is Chapa's total compensatory award, and is more than 17
constitutional. In reviewing the amount of an exemplary times her economic damages. Further, the [**20] jury's
damage award for constitutionality, we have been award of precisely $ 21,639 for mental anguish -- exactly
directed to consider three "guideposts": (1) the nature of three times her economic damages of $ 7,213 -- supports
the defendant's conduct, (2) the ratio between exemplary the Supreme Court's observation that emotional damages
and compensatory damages, and (3) the size [**18] of themselves often include a punitive element. 43 The court
civil penalties in comparable cases. 36 of appeals' judgment [*309] at least pushes against, if
not exceeds, the constitutional limits.
36 Id. at 418 (citing BMW of N. Am. v. Gore,
517 U.S. 559, 575, 116 S. Ct. 1589, 134 L. Ed. 2d 41 Id. at 425; Gore, 517 U.S. at 581-82.
809 (1996)). 42 Campbell, 538 U.S. at 425.
43 See id. at 426; see also RESTATEMENT
The reprehensibility of Gullo Motors' conduct (the (SECOND) OF TORTS § 908, cmt. c, at 466
most important of the guideposts) 37 depends in turn on (1977)("In many cases in which compensatory
five more factors, all but one of which weigh against damages include an amount for emotional
exemplary damages here. 38 Gullo Motors' actions did distress, such as humiliation or indignation
not cause physical rather than economic harm, did not aroused by the defendant's act, there is no clear
threaten the health or safety of others, and did not involve line of demarcation between punishment and
repeated acts rather than an isolated incident. Chapa compensation and a verdict for a specified amount
claims she was financially vulnerable, but the only harm frequently includes elements of both.").
she alleged (that her SUV did not have Michelin tires and
lumbar-support seats) did not threaten financial ruin. 39 Finally, we must compare the exemplary damages
Only the last factor, that the conduct at issue was awarded here to civil penalties authorized in comparable
deceitful rather than accidental, points in Chapa's favor. cases. The [**21] Texas Occupations Code provides for
The existence of a single factor "may not be sufficient to a maximum civil penalty of $ 10,000 for statutory or
sustain a punitive damages award." 40 regulatory violations by motor vehicle dealers. 44
Similarly, the attorney general could collect not more
37 Id. at 419 (quoting Gore, 517 U.S. at 575). than $ 20,000 as a civil penalty under the DTPA in a case
[**19] like this. 45 These are precisely the kinds of penalties for
38 See id. comparable misconduct the Supreme Court has used --
39 Cf. Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, and says we must use -- in our constitutional analysis. 46
24, 37 Tex. Sup. Ct. J. 883 (Tex. 1994) ("[A]n
insurance carrier's refusal to pay a claim cannot 44 TEX. OCC. CODE § 2301.801.
justify punishment unless the insurer was actually 45 See TEX. BUS. & COM. CODE § 17.47(c).
aware that its action would probably result in 46 See Campbell, 538 U.S. at 428 (comparing
extraordinary harm not ordinarily associated with award in bad-faith insurance case to civil penalty
breach of contract or bad faith denial of a of $ 10,000 available under Utah law); Cooper
claim-such as death, grievous physical injury, or Indus., Inc. v. Leatherman Tool Group, Inc., 532
Page 7
212 S.W.3d 299, *309; 2006 Tex. LEXIS 1301, **21;
50 Tex. Sup. J. 278
U.S. 424, 442-43, 121 S. Ct. 1678, 149 L. Ed. 2d [**24]
674 (2001) (comparing award in misappropriation 50 Campbell, 538 U.S. at 426.
case to civil penalty of $ 25,000 available under 51 See S.W.3d at .
Oregon's Unlawful Trade Practices Act). 52 Campbell, 538 U.S. at 425.
53 S.W.3d at .
Chapa argues we should consider the possibility 54 Gore, 517 U.S. at 575 (emphasis added);
[**22] that Gullo Motors might be found criminally Campbell, 538 U.S. at 428; Cooper Indus., Inc. v.
liable or lose its license for what happened here. But she Leatherman Tool Group, Inc., 532 U.S. 424,
provides no proof that such a sanction has ever been 442-43, 121 S. Ct. 1678, 149 L. Ed. 2d 674
awarded in a case like this. "[T]he remote possibility of a (2001).
criminal sanction does not automatically sustain a 55 See S.W.3d at . The case cited by the
punitive damages award." 47 dissent does not support its analysis. See Gore,
517 U.S. at 583-84 (comparing award in fraud
47 Campbell, 538 U.S. at 428 ("Great care must case to maximum civil penalty of $ 2,000
be taken to avoid use of the civil process to assess available under Alabama's Deceptive Trade
criminal penalties that can be imposed only after Practices Act).
the heightened protections of a criminal trial have 56 Honda Motor Co., Ltd. v. Oberg, 512 U.S.
been observed, including, of course, its higher 415, 432, 114 S. Ct. 2331, 129 L. Ed. 2d 336
standards of proof. Punitive damages are not a (1994).
substitute for the criminal process. . .").
While finding the jury verdict of $ 250,000
The dissent reaches a different conclusion only by constitutionally excessive, the court of appeals gave no
changing the constitutional standards. The Supreme explanation for its award of half that amount. Exemplary
Court says "repeated conduct" refers to recidivism; 48 the damages are not susceptible to precise calculation, but
dissent says it means reiterating a single this is still five to ten times [**25] more than comparable
misrepresentation to a single consumer. 49 The Supreme civil penalties, or what Chapa could recover under the
Court says $ 1,000,000 in emotional anguish does not consumer-friendly DTPA. 57 Pushing exemplary
mean there are "physical injuries"; 50 the dissent [**23] damages to the absolute constitutional limit in a case like
says $ 21,000 in emotional anguish is enough to conclude this leaves no room for greater punishment in cases
otherwise. 51 The Supreme Court says multiplying involving death, grievous physical injury, financial ruin,
damages by a factor of 4 is "close to the line of or actions that endanger a large segment of the public. 58
constitutional impropriety"; 52 the dissent says using a On this record, Gullo Motors' conduct merited exemplary
factor of 4.33 is unworthy of our review. 53 The Supreme damages, but the amount assessed by the court of appeals
Court says we must look to the civil penalties "imposed exceeds constitutional limits.
in comparable cases"; 54 the dissent says we should look
to the general $ 200,000 cap applicable to all exemplary 57 Cf. PPG Indus., Inc. v. JMB/Houston Ctrs.
cases regardless of their nature. 55 The Supreme Court Partners Ltd. P'ship, 146 S.W.3d 79, 89, 47 Tex.
says exemplary damages "pose an acute danger of [*310] Sup. Ct. J. 822 (Tex. 2004) ("Frequently, the
arbitrary deprivation of property"; 56 the dissent DTPA is pleaded not because it is the only
perceives no danger in pushing against the constitutional remedy, but because it is the most favorable
limits in all fraud cases, as the only factor present here remedy.") (italics in original).
(deceitful conduct) is present in every one. 58 See Transp. Ins. Co. v. Moriel, 879 S.W.2d
10, 24, 37 Tex. Sup. Ct. J. 883 (Tex. 1994).
48 See, e.g., BMW of N. Am. v. Gore, 517 U.S.
559, 577, 116 S. Ct. 1589, 134 L. Ed. 2d 809 C
(1996) ("Our holdings that a recidivist may be
punished more severely than a first offender The Texas Rules of Appellate Procedure provide for
recognize that repeated misconduct is more remittitur orders by the courts of appeals, 59 but make no
reprehensible than an individual instance of similar provision for this Court. While this Court may
malfeasance."). [**26] review the constitutionality of an exemplary
49 See S.W.3d at . damages award, the amount of a suggested remittitur is in
Page 8
212 S.W.3d 299, *310; 2006 Tex. LEXIS 1301, **26;
50 Tex. Sup. J. 278
the first instance a matter for the courts of appeals. Appraisal Dist. v. Seven Inv. Co., 835 S.W.2d 75,
77, 35 Tex. Sup. Ct. J. 856 (Tex. 1992); New
59 TEX. R. APP. P. 46. Amsterdam Cas. Co. v. Texas Indus., Inc., 414
S.W.2d 914, 915, 10 Tex. Sup. Ct. J. 357 (Tex.
Thus, for example, when our constitutional review in 1967); Mundy v. Knutson Constr. Co., 156 Tex.
Bentley v. Bunton found evidentiary support for some 211, 294 S.W.2d 371, 373 (Tex. 1956).
amount of mental anguish damages but not for the $ 7 64 See, e.g., Buckhannon Bd. and Care Home,
million awarded, we remanded to the court of appeals to Inc. v. West Virginia Dept. of Health and Human
determine an appropriate remittitur. 60 When the case Res., 532 U.S. 598, 602, 121 S. Ct. 1835, 149 L.
returned to us after remittitur but without any Ed. 2d 855 (2001) ("In the United States, parties
reassessment of exemplary damages, we returned it again are ordinarily required to bear their own attorney's
to the court of appeals to conduct a constitutional analysis fees-the prevailing party is not entitled to collect
of those damages in the first instance. 61 from the loser. Under this 'American Rule,'" we
follow "a general practice of not awarding fees to
60 94 S.W.3d 561, 605-08, 45 Tex. Sup. Ct. J.
a prevailing party absent explicit statutory
1172 (Tex. 2002).
authority.") (internal citations omitted).
61 See Bunton v. Bentley, 153 S.W.3d 50, 53-54,
65 Travelers Indem. Co. of Connecticut v.
48 Tex. Sup. Ct. J. 197 (Tex. 2004) (per curiam).
Mayfield, 923 S.W.2d 590, 594, 39 Tex. Sup. Ct.
Accordingly, [**27] having found that the amount J. 678 (Tex. 1996).
awarded by the court of appeals exceeds the [**29]
constitutional limitations on exemplary damages, we 66 See Stewart Title Guar. Co. v. Aiello, 941
remand to that court for determining a constitutionally S.W.2d 68, 73, 40 Tex. Sup. Ct. J. 290 (Tex.
permissible remittitur. 1997); Stewart Title Guar. Co. v. Sterling, 822
S.W.2d 1, 10, 35 Tex. Sup. Ct. J. 206 (Tex. 1991);
IV. Attorney's Fees Matthews v. Candlewood Builders, Inc., 685
S.W.2d 649, 650, 28 Tex. Sup. Ct. J. 284 (Tex.
The jury found a reasonable and necessary attorney's 1985); Int'l Sec. Life Ins. Co. v. Finck, 496 S.W.2d
fee "in this case" was $ 20,000. 62 During and after trial, 544, 547, 16 Tex. Sup. Ct. J. 381 (Tex. 1973).
Gullo Motors objected that fees were not recoverable for
Chapa's fraud claim, and thus had to be excluded. We We recognized an exception to this historical
agree, and thus reverse and remand the fee issue for a practice in 1991 that has since threatened to swallow the
new trial. rule. In Stewart Title Guaranty Co. v. Sterling, we
affirmed the general rule: "the plaintiff is required to
62 The figure represented fees only through the show that [attorney's] fees were incurred while suing the
trial level; Chapa tendered no evidence or jury defendant sought to be charged with the fees on a claim
question on appellate fees. which allows recovery of such fees." 67 But we then
added:
For more than a century, Texas law has not allowed
recovery of attorney's fees unless authorized by statute or A recognized exception to this duty to
contract. 63 This rule is so venerable and [*311] segregate arises when the attorney's fees
ubiquitous in American courts it is known as "the rendered are in connection with claims
American Rule." 64 Absent a contract or statute, trial arising out of the same transaction and are
courts do not have inherent authority to require a losing so interrelated that their "prosecution or
party to pay the prevailing party's fees. 65 As a result, defense entails proof or denial of
[**28] fee claimants have always been required to essentially the same facts." Flint & Assoc.
segregate fees between claims for which they are v. Intercontinental Pipe & Steel, Inc., 739
recoverable and claims for which they are not. 66 S.W.2d 622, 624-25 (Tex. App.-Dallas
1987, writ denied) [**30] . Therefore,
63 See, e.g., Gulf States Utils. Co. v. Low, 79
when the causes of action involved in the
S.W.3d 561, 567, 45 Tex. Sup. Ct. J. 724, 45 Tex.
suit are dependent upon the same set of
Sup. Ct. J. 793 (Tex. 2002); Dallas Cent.
Page 9
212 S.W.3d 299, *311; 2006 Tex. LEXIS 1301, **30;
50 Tex. Sup. J. 278
facts or circumstances and thus are sought to invoke it. Moreover, as the details of an
"interwined to the point of being attorney's work are shrouded in the attorney-client
inseparable," the party suing for attorney's privilege, it may be hard for anyone else to tell whether
fees may recover the entire amount the work on [**32] several claims truly was inextricably
covering all claims. Gill Sav. Ass'n v. intertwined.
Chair King, Inc., 783 S.W.2d 674, 680
(Tex. App.-Houston [14th Dist.] 1989), 72 A Westlaw search shows more than one
modified, 797 S.W.2d 31, 34 Tex. Sup. Ct. hundred published and unpublished opinions
J. 42 (Tex. 1990)(remanded to the trial addressing the Sterling exception since 1991. See,
court for reexamination of attorney's fee e.g., Ski River Dev., Inc. v. McCalla, 167 S.W.3d
award). 68 121, 143 (Tex. App.-Waco 2005, pet. denied);
Marrs and Smith P'ship v. D.K. Boyd Oil and Gas
As the only two authorities cited in this passage suggest, Co., 2005 Tex. App. LEXIS 9691, 2005 WL
this exception had not been recognized by this Court 3073794, *15 (Tex. App.-El Paso 2005, pet.
before, but only by a few courts of appeals beginning denied); Shadow Dance Ranch P'ship, Ltd. v.
about ten years earlier. 69 In fact, we did not even apply Weiner, 2005 Tex. App. LEXIS 10131, 2005 WL
the exception in Sterling (as the fees there could be 3295664, *9 (Tex. App.-San Antonio 2005, no pet.
segregated), 70 and appear to have applied it only once h.); Royal Maccabees Life Ins. Co. v. James, 146
since. 71 S.W.3d 340, 353 (Tex. App.-Dallas 2004, pet.
denied); Aetna Cas. & Sur. v. Wild, 944 S.W.2d
67 822 S.W.2d at 10. 37, 40 (Tex. App.-Amarillo 1997, writ denied);
68 Id. at 11-12. Panizo v. Young Men's Christian Ass'n of the
69 See, e.g., Village Mobile Homes, Inc. v. Greater Houston Area, 938 S.W.2d 163, 170 (Tex.
Porter, 716 S.W.2d 543, 552 (Tex. App.-Austin App.-Houston [1st Dist.] 1996, no writ); Kenneth
1986, writ ref'd n.r.e.); de La Fuente v. Home Sav. H. Hughes Interests, Inc. v. Westrup, 879 S.W.2d
Ass'n, 669 S.W.2d 137, 146 (Tex. App.-Corpus 229, 233 (Tex. App.-Houston [1st Dist.] 1994,
Christi 1984, no writ); First Wichita Nat'l Bank v. writ denied).
Wood, 632 S.W.2d 210, 215 (Tex. App.-Fort
Worth 1982, no writ); Wilkins v. Bain, 615 S.W.2d [**33] The exception has also been hard to apply
314, 316 (Tex. Civ. App.-Dallas 1981, no writ). consistently. The courts of appeals have disagreed about
[**31] what makes two claims inextricably intertwined -- some
70 See Sterling, 822 S.W.2d at 12. focusing on the underlying facts, 73 others on the
71 See Aiello, 941 S.W.2d at 73. In Am. Nat'l elements that must be proved, 74 and others on some
Petroleum Co. v. Transcon. Gas Pipe Line Corp., combination of the two. 75 Some do not require testimony
this Court held that the court of appeals erred in that claims are intertwined, 76 while others do. 77 When
requiring segregation of fees between a valid faced with fraud and breach of contract claims like those
contract and an invalid tortious interference claim, here, some have held the claims inextricably intertwined,
holding instead that both claims were valid. 798 78 and others just the opposite. 79
S.W.2d 274, 280, 34 Tex. Sup. Ct. J. 20 (Tex.
73 See, e.g., Rio Grande Valley Gas Co. v. City
1990). We did not address the alternative basis for
of Edinburg, 59 S.W.3d 199, 224 (Tex.
the court of appeals' ruling -- that attorney's fees
App.-Corpus Christi 2000) aff'd in part, rev'd in
are not recoverable in a tort action. See
part sub nom. Southern Union Co. v. City of
Transcontinental Gas Pipe Line Corp., 763
Edinburg, 129 S.W.3d 74, 47 Tex. Sup. Ct. J. 60
S.W.2d 809, 823 (Tex. App.-Texarkana 1988).
(Tex. 2003); Great Am. Ins. Co. v. N. Austin Mun.
[*312] But the courts of appeals have been flooded Util. Dist. No. 1, 902 S.W.2d 488, 505 (Tex.
with claims that recoverable and unrecoverable fees are App.-Austin 1993) aff'd in part, rev'd in part, 908
inextricably intertwined. 72 As the exception can make all S.W.2d 415, 38 Tex. Sup. Ct. J. 817 (Tex. 1995).
fees recoverable (even if Texas law has long said they are 74 See, e.g., Z.A.O., Inc. v. Yarbrough Drive Ctr.
not), it is no surprise that more and more claimants have Joint Venture, 50 S.W.3d 531, 550-51 (Tex.
Page 10
212 S.W.3d 299, *312; 2006 Tex. LEXIS 1301, **33;
50 Tex. Sup. J. 278
App.-El Paso 2001, no pet.); AU Pharm., Inc. v. pet. denied); Pacesetter Pools, Inc. v. Pierce
Boston, 986 S.W.2d 331, 337 (Tex. Homes, Inc., 86 S.W.3d 827, 833 (Tex.
App.-Texarkana 1999, no pet.). App.-Austin 2002, no pet.); Aetna Cas. & Sur. v.
[**34] Wild, 944 S.W.2d 37, 41 (Tex. App.-Amarillo
75 See, e.g., Air Routing Int'l. Corp. (Canada) v. 1997, writ denied). But see AU Pharm., Inc. v.
Britannia Airways, Ltd., 150 S.W.3d 682, 693 Boston, 986 S.W.2d 331, 337 (Tex.
(Tex. App.-Houston [14th Dist.] 2004, no pet.). App.-Texarkana 1999, no pet.) (applying abuse of
76 See id. discretion review).
77 See Royal Maccabees, 146 S.W.3d at 353.
78 See, e.g., Nat'l Gas Clearinghouse v. Midgard [**36] This case illustrates several of these
Energy Co., 113 S.W.3d 400, 417 (Tex. difficulties. The court of appeals held that Chapa was not
App.-Amarillo 2003, pet. denied); W. Beach required to segregate fees (and thus could recover 100
Marina, Ltd. v. Erdeljac, 94 S.W.3d 248, 268 percent of them) because she "was required to prove
(Tex. App.-Austin 2002, no pet.); Pegasus Energy essentially the same facts in pursuing each of her three
Group, Inc. v. Cheyenne Petroleum Co., 3 S.W.3d causes of action." But when Chapa's attorneys were
112, 131 (Tex. App.-Corpus Christi 1999, pet. drafting her pleadings or the jury charge relating to fraud,
denied). there is no question those fees were not recoverable. Nor
79 See, e.g., Young v. Neatherlin, 102 S.W.3d does Texas law permit them to be compensated for
415, 421 (Tex. App.-Houston [14th Dist.] 2003, preparing and presenting evidence regarding the
no pet.); Panizo v. Young Men's Christian Ass'n, defendant's net worth.
938 S.W.2d 163, 171 (Tex. App.-Houston [1st
Further, the effort to recover 100 percent of their fees
Dist.] 1996, no writ); S. Concrete Co. v. Metrotec
has required Chapa's attorneys to take a position
Fin., 775 S.W.2d 446, 450-51 (Tex.App.-Dallas
inconsistent with her underlying claims. As noted above,
1989, no writ).
Chapa has insisted (and we have agreed) that her claims
As Sterling suggests the need to segregate fees is a were more than a mere breach of contract - they could be
question of law, 80 the courts of appeals have generally asserted in fraud. But when it came time to segregate
[**35] (though not always) applied a de novo standard of fees, her attorneys testified that their work on the fraud
review. 81 That standard, of course, gives no [*313] claim could not possibly be distinguished from that on
deference to the factual determinations of the trial judge the contract and DTPA claims. Having prevailed in her
or the jury. But the fees necessary to prove particular argument that the claims are distinct, it is hard to see how
claims often turn on such facts - how hard something was she can also claim they are inextricably intertwined.
to discover and prove, how strongly it supported
It is certainly true that Chapa's [**37] fraud,
particular inferences or conclusions, how much
contract, and DTPA claims were all "dependent upon the
difference it might make to the verdict, and a host of
same set of facts or circumstances," 82 but that does not
other details that include judgment and credibility
mean they all required the same research, discovery,
questions about who had to do what and what it was
proof, or legal expertise. Nor are unrecoverable fees
worth. Given all these details, it may often be impossible
rendered recoverable merely because they are nominal;
to state as a matter of law the extent to which certain
there is no such exception in any contract, statute, or "the
claims can or cannot be segregated; the issue is more a
American Rule." To the extent Sterling suggested that a
mixed question of law and fact for the jury.
common set of underlying facts necessarily made all
80 See Stewart Title Guar. Co. v. Sterling, 822 claims arising therefrom "inseparable" and all legal fees
S.W.2d 1, 12, 35 Tex. Sup. Ct. J. 206 (Tex. 1991) recoverable, it went too far.
("Following a review of the record, we conclude
82 Sterling, 822 S.W.2d at 11.
that the attorney's fees are capable of
segregation."). But Sterling was certainly correct that many if not
81 See, e.g., Air Routing Int'l. Corp., 150 S.W.3d most legal fees in such cases cannot and need not be
at 688; Flagship Hotel, Ltd. v. City of Galveston, precisely allocated to one claim or the other. Many of the
117 S.W.3d 552, 565 (Tex. App.-Texarkana 2003, services involved in preparing a contract or DTPA claim
Page 11
212 S.W.3d 299, *313; 2006 Tex. LEXIS 1301, **37;
50 Tex. Sup. J. 278
for trial must still be incurred if tort claims are appended a rough percent of the amount attributable to the
to it; adding the latter claims does not render the former breach of contract claim. Schenck v. Ebby
services unrecoverable. Requests for standard Halliday Real Estate, Inc., 803 S.W.2d 361, 369
disclosures, proof of background facts, depositions (Tex. App.-Fort Worth 1990, no writ); accord,
[**38] of the primary actors, discovery motions and Bradbury v. Scott, 788 S.W.2d 31, 40 (Tex.
hearings, voir dire of the jury, and a host of other services App.-Houston [1st Dist.] 1989, writ denied).").
may be necessary whether a claim is filed alone or with
others. To the extent such services would have been [**40] There may, of course, be some disputes
incurred on a recoverable claim alone, they are not about fees that a trial or appellate court should decide as a
disallowed simply because they do double service. matter of law. For example, to prevail on a contract claim
a party must overcome any and all affirmative defenses
Accordingly, we reaffirm the rule that if any (such as limitations, res judicata, or prior material
attorney's fees relate solely to a claim for which such fees breach), and the opposing party who raises them should
are unrecoverable, a claimant must segregate recoverable not be allowed to suggest to the jury that overcoming
from unrecoverable fees. Intertwined facts do not make those defenses was unnecessary. But when, as here, it
tort fees recoverable; it is only when discrete legal cannot be denied that at least some of the attorney's fees
services advance both a recoverable and unrecoverable are attributable only to claims for which fees are not
[*314] claim that they are so intertwined that they need recoverable, segregation of fees ought to be required and
not be segregated. We modify Sterling to that extent. the jury ought to decide the rest.
This standard does not require more precise proof for Chapa's failure to segregate her attorney's fees does
attorney's fees than for any other claims or expenses. not mean she cannot recovery any. Unsegregated
Here, Chapa's attorneys did not have to keep separate attorney's fees for the entire case are some evidence of
time records when they drafted the fraud, contract, or what the segregated amount should be. 84 We have
DTPA paragraphs of her petition; an opinion would have applied this same rule for lost profits, medical expenses,
sufficed stating that, for example, 95 percent of their and attorney's fees -- an unsegregated damages award
drafting time would have been necessary even if there requires a remand. 85 Accordingly, remand is required.
had been no fraud claim. 83 The court of appeals could
then [**39] have applied standard factual and legal 84 See Sterling, 822 S.W.2d at 12.
sufficiency review to the jury's verdict based on that 85 See Minnesota Mining and Mfg. Co. v.
evidence. Nishika Ltd., 953 S.W.2d 733, 739, 41 Tex. Sup.
Ct. J. 14 (Tex. 1997) (lost profits); Texarkana
83 See, e.g., Stewart Title Guar. Co. v. Aiello, Mem'l Hosp., Inc. v. Murdock, 946 S.W.2d 836,
941 S.W.2d 68, 73, 40 Tex. Sup. Ct. J. 290 (Tex. 840-41, 40 Tex. Sup. Ct. J. 513 (Tex. 1997)
1997) (noting that claimant's attorney "testified (medical expenses); Sterling, 822 S.W.2d at 11-12
that approximately twenty-percent of his time and (attorney's fees).
fifteen-percent of his paralegal's time concerned
issues predating the agreed judgment"); Med. [**41] V. Conclusion
Specialist Group, P.A. v. Radiology Assocs.,
Because the jury found in Chapa's favor on all her
L.L.P., 171 S.W.3d 727, 738 (Tex. App.-Corpus
claims, she is entitled to recover on the most favorable
Christi 2005, pet. denied) ("In his affidavit,
theory the verdict would support. But she is not required
Radiology Associates' counsel. . . testified that his
to make that election until she knows her choices. 86
fees for the defense of the case totaled $
460,087.00, and approximately forty percent of 86 The dissent suggests Chapa must elect
these fees were directly related to Saratoga's between her fraud, contract, and DTPA claims
antitrust claims."); Flagship Hotel, 117 S.W.3d at before knowing what amount of attorney's fees
566 n.7 ("Flagship argues that the segregation she might recover. This would defeat the principle
standard is difficult to meet. We disagree and note that she is entitled to recover on the most
that segregated attorney's fees can be established favorable theory the verdict supports. See n.7,
with evidence of unsegregated attorney's fees and supra.
Page 12
212 S.W.3d 299, *314; 2006 Tex. LEXIS 1301, **41;
50 Tex. Sup. J. 278
Under either fraud or the DTPA, Chapa is entitled to
$ 7,213 in economic damages and $ 21,639, in mental We decline again to impose a bright-line
anguish. The court of appeals must reassess her ratio which a punitive damages award
exemplary damages, and a jury must reassess her cannot exceed. Our jurisprudence and the
attorney's fees. There is no rule establishing [*315] principles it has now established
which should go first, but for practical reasons we demonstrate, however, that, in practice,
remand first to the court of appeals. At the trial level, the few awards exceeding a single-digit ratio
most Chapa could recover under the DTPA would be between punitive and compensatory
additional damages of $ 21,639 (three times her damages, to a significant degree, will
economic damages) plus attorney's [**42] fees of satisfy due process. In Haslip, in
something less than $ 20,000 (depending on the new upholding a punitive damages award, we
verdict). If the court of appeals' reassessment of concluded that an award of more than four
exemplary damages for fraud exceeds this amount, Chapa times the amount of compensatory
would obviously be better off electing that recovery; if damages might be close to the line of
not, then the court of appeals should thereafter remand to constitutional impropriety. 499 U.S. , at
the trial court for a new trial on attorney's fees. 23-24. We cited that 4-to-1 ratio again in
Accordingly, we remand to the court of appeals for Gore. 517 U.S., at 581. The Court further
further proceedings consistent with this opinion. referenced a long legislative history,
dating back over 700 years and going
Scott Brister forward to today, providing for sanctions
of double, treble, or quadruple damages to
Justice deter and [**44] punish. Id., at 581, and
n. 33. While these ratios are not binding,
CONCUR BY: Phil Johnson
they are instructive. They demonstrate
what should be obvious: Single-digit
CONCUR
multipliers are more likely to comport
JUSTICE JOHNSON, concurring. with due process, while still achieving the
State's goals of deterrence and retribution,
I concur in the Court's judgment, and, except for part than awards with ratios in range of 500 to
III.B. as to Exemplary Damages, I join its opinion. 1, id., at 582, or, in this case, of 145 to 1.
The court of appeals properly identified State Farm Nonetheless, because there are no rigid
Mutual Automobile Insurance Co. v. Campbell, 538 U.S. benchmarks that a punitive damages
408, 123 S. Ct. 1513, 155 L. Ed. 2d 585 (2003) and BMW award may not surpass, ratios greater than
of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. those we have previously upheld may
1589, 134 L. Ed. 2d 809 (1996) as guiding authorities for comport with due process [under certain
its review of the $ 250,000 exemplary damages jury circumstances].
award. It then concluded that $ 125,000 exemplary
damages is constitutionally permissible under this record. Campbell, 538 U.S. at 425 (emphasis added).
That amount is between 4.33 and 4.34 times the actual
damages of $ 28,852 found by the jury. The court of [*316] The Court says that "The court of appeals'
appeals' analysis as to the exemplary [**43] damages judgment at least pushes against, if not exceeds the
issue is not as detailed as that in this Court's opinion. But, constitutional limits." S.W.3d . A ratio of 4.33 to 1 is
because the court of appeals did not give a detailed clearly close to the ratio of 4 to 1 which "might be close
explanation for its conclusion does not mean that its to the line of constitutional impropriety." Campbell, 538
conclusion is wrong. U.S. at 425. But, there are no rigid constitutional
benchmarks that an exemplary damages award may not
The United States Supreme Court has not set a bright surpass. Id. Unless we determine that the court of appeals
line constitutional limit for exemplary damages. Some of misapplied the standards [**45] enunciated by the
its specific language bears reviewing: Supreme Court, however, I consider a 4.33 ratio of
Page 13
212 S.W.3d 299, *316; 2006 Tex. LEXIS 1301, **45;
50 Tex. Sup. J. 278
exemplary damages to actual damages under this record Chapa agreed, but when she returned to sign the contract
to be within the discretion lodged in the court of appeals it only indicated she was buying a "2002 Toyota." Chapa
to determine the amount of remittitur to suggest. I would wrote "Limited," "Michelin tires," "TV" and "VCR" on
remand to the court of appeals for reconsideration of the the contract and then signed it. She was told more
exemplary damages issue and more complete explanation signatures were needed and a copy would be mailed to
of its analysis as to the remittitur. I would not instruct the [**47] her. Chapa never received the contract.
court of appeals, at this juncture, that it should determine
a different, more appropriate, remittitur. After sending in her $ 30,207.38 payment, Chapa
received a call informing her that the vehicle had arrived.
Phil Johnson Chapa went to pick it up, but Garcia presented her with a
Highlander, not a Highlander Limited. When Chapa
Justice refused to take it, Garcia acknowledged that she had
purchased a Highlander Limited and assured her she
DISSENT BY: Harriet O'Neill would get one.
DISSENT Again, a sales representative called Chapa to say her
car was ready, and again a Highlander, not a Highlander
JUSTICE O'NEILL, dissenting. Limited, was presented to her. Chapa complained, but
Gullo told her the Highlander she was taking had a V-6
Nury Chapa's allegations describe what amounts to a
engine just like the Limited; in addition, Gullo promised
bait-and-switch by Gullo Motors, a claim the jury and
to add the other features from the Limited, plus the
this Court agree there is evidence to support. The
Michelin tires, and assured her the modifications would
evidence shows that, in furtherance of that scheme,
be complete in two [*317] days. Chapa agreed to take
Chapa was threatened, lied to, and her signature and that
delivery of the Highlander, but insisted Gullo Motors
of her deceased husband were forged. The defendant's
write these promises on her new delivery check sheet,
conduct in this case was at best reprehensible, and
which she then signed. Garcia wrote her a "We Owe"
bordered on criminal, prompting the jury to award $
form, which stated Gullo owed her Michelin tires and
250,000 in exemplary damages. Texas law capped that
lumbar seats. He did not include the other items, so
award at $ 200,000, and the court of appeals further
Chapa listed them on the delivery check sheet; she
reduced it by remittitur to $ 125,000. Even though the
testified Garcia told her that was enough.
remitted award is [**46] well below the statutory ceiling
that the Legislature set, the Court today decides the When Gullo Motors failed to install [**48] the
appeals court award is exorbitant and cannot stand. I do promised items, Chapa went to the dealership to speak
not agree that the court of appeals violated constitutional with Brian Debiski, the sales manager. Debiski told
exorbitancy standards by suggesting the remittitur that it Chapa she was "crazy, that [she] didn't buy that
did, nor do I agree with the Court's advisory [Limited]." Chapa explained that she had a "We Owe"
determination of the attorney's fee issue. Accordingly, I form, but Debiski responded, "[Y]ou have nothing. You
respectfully dissent. are a nobody. It's your word against me." When Chapa
told him she would inform the media, Debiski responded
I. Background
that "nobody will dare to go against me, against us," and
The evidence supporting the verdict in this case informed Chapa that he would show her by having her
demonstrates that Chapa purchased a Toyota Highlander car towed away at her expense.
Limited from Gullo Motors, but Gullo Motors tried to
Later, when Chapa's attorney informed the
make her accept instead a less expensive Toyota
dealership that Chapa would like to return the car for a
Highlander. According to Chapa, she offered her
refund, Gullo refused, claiming the Highlander had
salesman, Brien Garcia, $ 30,000 for the Highlander
already been titled to Chapa (even though it had not) and
Limited on the showroom floor, with the added options
explaining that it would thus have to sell the car as used.
of a TV/VCR and Michelin tires. After consulting with
Gullo produced a New Vehicle Delivery Check Sheet
management, Garcia responded that the showroom car
showing Chapa had accepted delivery of the Highlander
had been sold but he could get her one for $ 207.38 more.
without complaint. However, Chapa testified that Gullo
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50 Tex. Sup. J. 278
forged her deceased husband's signature on the delivery concerning appropriate sanctions. BMW of N. Am. v.
check sheet by using documents her late husband, Gore, 517 U.S. 559, 583, [*318] 116 S. Ct. 1589, 134 L.
Ernesto Chapa, had signed when they had previously Ed. 2d 809 (1996). "[A] punitive damages award that
bought a car from Gullo. Chapa also claimed that Gullo comports with a statutory cap provides strong evidence
forged her deceased husband's signature on [**49] the that a defendant's due process rights have not been
"We Owe" form. Chapa testified that numerous other violated." Rodriguez-Torres v. Caribbean Forms Mfr.,
documents were forged, and there was evidence that Inc., 399 F.3d 52, 65 (1st Cir. 2005) (citing Romano v.
Garcia admitted to Gullo he had promised Chapa the U-Haul Int'l, 233 F.3d 655, 673 (1st Cir. 2000)). The
features listed on the "We Owe" form. award the Court finds excessive today is well below the
statutory cap that the Legislature determined appropriate
The jury found Chapa's evidence credible and when a defendant engages in conduct [**51] that would
awarded her $ 7,213 for breach of contract (the difference support an exemplary damages award. Neither does the
in value between the vehicle promised and the one award violate the three-part test for constitutional
delivered), $ 7,213 for fraud, $ 21,639 for mental exorbitancy that the United States Supreme Court has
anguish, $ 250,000 for exemplary damages, $ 7,213 for articulated. See State Farm Mut. Auto. Ins. Co. v.
damages under the Texas Deceptive Trade Practices Act, Campbell, 538 U.S. 408, 418-19, 123 S. Ct. 1513, 155 L.
and $ 20,000 for attorney's fees. The trial court rendered Ed. 2d 585 (2003).
judgment only on the breach of contract claim, but the
court of appeals reversed and reinstated all the awards Courts must consider three guideposts when
except for exemplary damages, which the court remitted reviewing an exemplary damage award: (1) the degree of
to $ 125,000, one-half of what the jury awarded. reprehensibility of the misconduct; (2) the disparity
between the actual or potential harm suffered by the
I agree with the Court that Chapa must elect only one plaintiff and the punitive damages award; and (3) the
liability theory upon which to recover, and the court of difference between the punitive damages awarded by the
appeals erred to the extent it concluded otherwise. But I jury and the civil or criminal penalties that could be
disagree that the court of appeals' remittitur is imposed for comparable misconduct. Id.; Gore, 517 U.S.
constitutionally infirm or that Chapa's attorney's fees are at 575. According to the Supreme Court, it is "the degree
capable of segregation. of reprehensibility of the defendant's conduct" that is
"[t]he most important indicium of the reasonableness of a
II. Exemplary Damages punitive damages award," and five factors guide that
assessment: (1) whether the harm caused was physical
In Texas, the amount of exemplary damages for
rather than economic, (2) whether the conduct evinced an
which a defendant may be liable is capped [**50] at
indifference to others' health or safety, (3) whether the
harm involved repeated acts or isolated incidents, (4)
an amount equal to the greater of:
whether the [**52] target of the conduct was financially
(1) (A) two times the amount of vulnerable, and (5) whether the harm resulted from mere
economic damages; plus accident or from "intentional malice, trickery, or deceit . .
. ." Campbell, 538 U.S. at 419.
(B) an amount equal to any
noneconomic damages found by the jury, The Court summarily concludes that only the last of
not to exceed $ 750,000; or these factors, deceitful conduct, favors Chapa. And the
Court gives that conduct very cursory attention, even
(2) $ 200,000. though the Supreme Court has said that the "infliction of
economic injury, especially when done intentionally
TEX. CIV. PRAC. & REM. CODE § 41.008(b) (emphasis through affirmative acts of misconduct . . . can warrant a
added). I agree with the Court that the mere existence of a substantial penalty." Gore, 517 U.S. at 576 (citing TXO
statutory cap does not foreclose a federal constitutional Prod. Corp. v. Alliance Res. Corp. 509 U.S. 443, 453,
check for exorbitancy. But the United States Supreme 113 S. Ct. 2711, 125 L. Ed. 2d 366 (1993)). Assuming
Court has instructed that reviewing courts should accord Chapa elected to recover on the jury's fraud finding, she
"substantial deference" to legislative judgments would be entitled to $ 28,852 in compensatory damages.
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50 Tex. Sup. J. 278
Thus, the penalty the court of appeals determined to be The third guidepost considers civil or criminal
appropriate reflects a ratio between compensatory and penalties that could be imposed for comparable
exemplary damages of a little more than 4 to 1, a misconduct. Campbell, 538 U.S. at 418; Gore, 517 U.S.
differential the petitioners have not demonstrated is at 575. The Court considers two potential civil penalties
constitutionally disproportionate to the defendant's of $ 10,000 and $ 20,000 that Gullo Motors' conduct
conduct here. See TXO Prod. Corp., 509 U.S. at 462 [**55] might subject it to, yet declines to consider
(holding a 10 to 1 ratio permissible); [**53] Pac. Mut. potentially applicable criminal penalties that, according
Life Ins. Co. v. Haslip, 499 U.S. 1, 19, 111 S. Ct. 1032, to Chapa, would result in jail time and $ 80,000 in felony
113 L. Ed. 2d 1 (1991) (affirming award of four times fines for forgery, document destruction, and fraudulently
compensatory damages and two hundred times economic inducing signatures. Certainly I agree that "the remote
damages); Glasscock v. Armstrong Cork Co., 946 F.2d possibility of a criminal sanction does not automatically
1085, 1095-96 (5th Cir. 1991) (upholding a 20 to 1 ratio). sustain a punitive damages award," as the Court recites,
but that doesn't mean comparable potential criminal
As for the other reprehensibility factors, the Court sanctions should be altogether ignored. Campbell, 538
either misapplies them or gives them short shrift. For U.S. at 428.
example, the Court's conclusion that Gullo's actions
caused Chapa only economic harm ignores the jury's In my view the more important issue is not the actual
award of mental anguish damages, a damage element we dollar amount that Chapa will ultimately recover, but the
have long considered non-economic that compensates for low threshold this Court steps over to declare a jury
harm with physical elements. See Golden Eagle Archery, award constitutionally exorbitant. Had I been on the jury
Inc. v. Jackson, 116 S.W.3d 757, 763, 46 Tex. Sup. Ct. J. in this case, I may well have disagreed with the amount
1133 (Tex. 2003). The Court also concludes Gullo of exemplary damages the jury actually awarded or even
Motors' misconduct was an isolated incident that did not the amount the appellate court suggested in its remittitur.
involve repeated acts, even though the evidence indicates Although exemplary damage awards can serve
otherwise. Gullo Motors committed [*319] multiple acts worthwhile purposes, they can also have debilitating
of misconduct, including switching contracts, altering economic impact and should be carefully policed by the
documents, engaging in deceptive and threatening courts. See Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 31,
behavior, and even forging the signatures of Chapa and 37 Tex. Sup. Ct. J. 883 (Tex.1994). Our courts of appeals
her deceased husband. In sum, the factors that the Court in Texas have long [**56] been empowered to suggest a
purports to follow in determining the reprehensibility remittitur of excessive awards when the evidence is
[**54] of Gullo Motors' conduct weigh in favor of the factually insufficient to support them. Id.; TEX. R. APP.
court of appeals' remitted award, not against it. P. 46.3. The court of appeals assiduously exercised that
power in this case. It is, of course, appropriate for this
The second guidepost used to review an exemplary Court to intervene if the appeals court allows a
damage award examines the ratio between exemplary and constitutionally offensive award to stand. But when the
compensatory damages. The Supreme Court has refused Court chooses a marginal case like this in which to
to adopt a bright-line constitutionally prohibited ratio. intervene, it risks intruding upon an area that has
Instead, it has suggested a range beyond which traditionally been the well-patrolled province of our
exemplary damage awards will likely become courts of appeals. And when, as here, the Legislature has
constitutionally exorbitant, stating "few awards chosen to set its own parameters for such awards, the
exceeding a single-digit ratio between punitive and Court's intrusion is even more disturbing.
compensatory damages, to a significant degree, will
satisfy due process." Campbell, 538 U.S. at 419. The III. Attorney's Fees
Court's opinion in this case highlights a 17 to 1 ratio that
reflects a comparison between the remitted award and I also question the Court's decision to address the
economic damages. The constitutionally relevant attorney's fee issue in this case. If the court of appeals
comparison, though, focuses on compensatory rather than renders judgment on remand based on the jury's fraud
economic damages, which yields a much lower 4.33 to 1 finding, the attorney's fee issue will be moot. Thus, the
ratio. Court's analysis of the issue is purely advisory. TEX.
CONST. art. II, § 1; Brooks v. Northglen Ass'n, [*320]
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50 Tex. Sup. J. 278
141 S.W.3d 158, 164, 47 Tex. Sup. Ct. J. 719 (Tex. 2004). to disclose information concerning goods which was
But even assuming the Court properly reaches the issue, I known at the time of the transaction if such failure to
disagree with the Court's application [**57] of the rule it disclose was intended to induce the consumer into a
announces. According to the Court, when the legal transaction the consumer would not have entered had the
services themselves advance both a recoverable and information been disclosed. As for the common-law fraud
unrecoverable claim, segregation is not required. The claim, the jury was instructed that Gullo Motors
Court concludes that at least some of Chapa's attorney's committed fraud if (a) it made a material
fees are attributable only to claims for which fees are not misrepresentation, (b) the representation was made with
recoverable, requiring a new trial. It is true that some of knowledge of its falsity or made recklessly without any
Chapa's attorney's fees are attributable to her knowledge of the truth and as a positive assertion, (c) the
common-law fraud claim for which fees are not representation was made with the intention that Chapa
recoverable. Attorneys fees are recoverable, though, would act upon it, and (d) Chapa relied on the
under the DTPA for deceptive acts or practices. It is misrepresentation and thereby suffered injury. The
unclear to me, and the Court does not explain, how the evidence that Chapa presented to support her fraud claim
legal services used to advance Chapa's DTPA claim did also supported her DTPA claim, and vice versa. Because
not also advance her common-law fraud claim. The the legal services provided to advance the DTPA claim
court's charge that was read to the jury instructed that also advanced the fraud claim, the fees incurred cannot be
Gullo Motors violated the DTPA if it (1) breached an segregated even under the Court's own analysis.
express warranty, defined as any affirmation of fact that
related to the 2002 Highlander Limited and became part ***
of the basis of its bargain with Chapa, or (2) engaged in
For the reasons expressed, I respectfully dissent.
any false, misleading, or deceptive act or practice upon
which Chapa relied to her detriment. A false, misleading, Harriet O'Neill
or deceptive act or practice includes representing that
goods or services are of a particular standard, [**58] Justice
quality, grade, or of a particular style or model, or, failing