Carmichael, Euris v. the City of Houston, Texas, and the State of Texas Acting Through the Texas Natural Resource Conservation Commission ( 2002 )

Opinion issued April 11, 2002

In The

Court of Appeals

For The

First District of Texas  

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NO. 01-00-00579-CV

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EURIS CARMICHAEL, Appellant

V.

THE CITY OF HOUSTON AND THE STATE OF TEXAS ACTING THROUGH THE TEXAS NATURAL RESOURCE CONSERVATION COMMISSION, Appellees

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On Appeal from the 189th District Court Harris County, Texas Trial Court Cause No. 9845542

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O P I N I O N  

A jury awarded the City of Houston and the Texas Natural Resource Conservation Commission (TNRCC) more than $80,000,000 and a permanent injunction against San Jacinto Paint Manufacturing Company, Gulf States Paint Company, Tricon Industries, and Euris Carmichael. ⁽¹⁾ In seven points of error, Euris Carmichael argues the evidence was legally and factually insufficient and the trial court erred when it granted directed verdicts relating to Fire Code violations and the duration on the violations. We affirm.

Background

On May 11, 1994, Carmichael wrote a letter to the TNRCC notifying it that he was the new owner and chief executive officer of Gulf States Paint. In the letter, he acknowledged responsibility for complying with an agreed order between the Texas Water Commission and Gulf States Paint dated September 15, 1993. The agreed order found that Gulf States had improperly stored hazardous waste at the facility without a permit and it had allowed release of hazardous waste. The agreed order required Gulf States to do the following:

(1) immediately cease all discharges of industrial solid waste;

(2) manage all waste materials in such a manner so as to comply with various state laws and regulations;

(3) inventory all wastes and products stored on-site;

(4) submit documentation for all containers which have been shipped off-site for storage or disposal; and

(5) submit, for approval, a plan to monitor the ground wells and soil to determine whether there has been contamination from the hazardous waste, and if so, to present a plan to clean up the site.

Gulf States Paint filed for Chapter 7 bankruptcy. Carmichael, as president of San Jacinto Paint, entered into an agreement with the bankruptcy trustee in which San Jacinto Paint agreed:

to accept full responsibility for proper disposal of all inventory of [Gulf States Paint], and [] fully comply with all applicable laws, rules and regulations promulgated by all federal and state authorities regarding disposal of hazardous waste, and [] fully comply with any and all prior orders of the TNRCC with regard to disposition and disposal of [Gulf States's] inventory.

Carmichael, who was representing himself, San Jacinto Paint, Gulf States Paint, and Tricon Industries pro se at trial, testified that some of the hazardous waste present at the site had been there since he purchased the company and the property in 1994. He also testified he did not have permission from the TNRCC to store hazardous waste at the site. Carmichael called no other witnesses. The trial court directed verdict on numerous issues including the duration of the alleged violations - 804 days of Houston Fire Code violations and 1919 days of Texas Water Code violations. Additionally, the trial court granted a directed verdict that one of the buildings at the San Jacinto Facility had inadequate ventilation.

The jury found (1) the conditions in the three buildings and the trailer all presented physical and health hazards; (2) the facility had released contaminates into the environment and combustible waste was located at the site; (3) no complete Hazardous Materials Inventory Statement for the facility had been provided, and it awarded a civil fine of $300 a day for the violation. The jury also found no Hazardous Materials Management Plan had been provided to the Houston Fire Department, and it awarded a civil fine of $300 a day for the violation. In addition, the jury awarded (1) a $750 a day fine for storing hazardous materials above the exempt amount; (2) a $200 a day fine for operating without adequate ventilation in Building One; (3) a $500 a day fine for operating without a sprinkler system; (4) a $1000 a day fine for operating without properly marking containers by identifying the material inside; (5) a $1000 a day fine for failing to provide spill control; (6) a $950 a day fine for failing to provide secondary containment; (7) a $20,000 a day fine for permitting the storage of industrial solid wastes without a permit from the TNRCC prior to September 1, 1997; and (8) a $20,000 a day fine for permitting the storage of industrial solid wastes without a permit from the TNRCC on or after September 1, 1997. The jury further found San Jacinto Paint caused, suffered, allowed or permitted the collection, handling, storage, processing, or disposal of industrial solid waste in such a manner as to cause the discharge or imminent threat of discharge of industrial solid waste into or adjacent to waters in the state, the creation and maintenance of a nuisance, or the endangerment of the public health and welfare, and it awarded fines of $20,000 a day before September 1, 1997 and $20,000 a day on or after September 1, 1997. All told, the civil penalty exceeded $80,000,000, and the trial court issued a permanent injunction enjoining the defendants from conducting any business at the San Jacinto Paint facility.

Sufficiency of the Evidence

In issues one, three, five, and six, Carmichael complains the evidence is legally and factually insufficient to support the various directed verdicts and specific jury issues.

There are five ways to preserve a challenge to the legal sufficiency of evidence: (1) a motion for instructed verdict; (2) an objection to the submission of a jury question; (3) a motion for judgment notwithstanding the verdict; (4) motion to disregard jury's answer to vital fact issue; or (5) a motion for new trial. T. O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 220 (Tex. 1992).

Carmichael was pro se at trial, but a lawyer filed a motion for new trial on his behalf. He did not avail himself of any of the first four alternatives for preserving error. In his motion for new trial, Carmichael complained that (1) plaintiffs' exhibits were inconclusive in establishing the allegations against him, (2) the accuracy of the tests performed to establish his wrongdoing was questionable, (3) substances identified as contaminants were not remotely linked to his activities, (4) substances identified as contaminants predated his activities on the site, and (5) his rights to equal protection and due process were violated by filing of complaints against him in the "twelfth hour." In a case in which a motion for new trial is required, a ground of error not distinctly raised in a motion for new trial is waived. Gulf Coast State Bank v. Emenhiser, 562 S.W.2d 449, 452 (Tex. 1978).

On appeal, Carmichael contends:

issue one -- the trial court erred in awarding attorneys' fees;

issue three -- there is no evidence or insufficient evidence he failed to submit a hazardous material management plan and hazardous material inventory statement;

issue five -- there is no evidence or insufficient evidence establishing a causal connection to the San Jacinto Paint Facility versus emissions that have been previously fined; ⁽²⁾ and

issue six -- there is no evidence or insufficient evidence to support the position that San Jacinto Paint caused the discharge or imminent threat of discharge or imminent threat of discharge [sic] of industrial solid waste into or adjacent to waters of the state; the creation and maintenance of a nuisance or the endangerment of the public health and welfare.

The points raised in the motion for new trial do not conform with the points raised on appeal. Carmichael has not preserved his legal sufficiency challenges.

In order to present a challenge to the factual sufficiency of the evidence on appeal, it must be preserved in the trial court by pursuing a motion for new trial. Tex. R. Civ. P. 324(b)(2), (3); Cecil v. Smith, 804 S.W.2d 509, 510 (Tex. 1991). Carmichael's motion did not raise sufficiency arguments conforming to those raised on appeal. Therefore, issues one, three, five, and six are waived because nothing is preserved for review.

We overrule Carmichael's issues one, three, five, and six.

Excessive Damages

In issue seven, Carmichael argues the damages rendered were "wholly disproportionate" to the severity of the alleged offense.

In ordering a remittitur of excessive damages, we must examine all of the evidence in the record to determine whether sufficient evidence supports the damage award, remitting only if some portion is so factually insufficient or so against the great weight and preponderance of the evidence as to be manifestly unjust. Pope v. Moore, 711 S.W.2d 622, 624 (Tex. 1986).

By failing to raise the issue in a motion for new trial, Carmichael has waived this sufficiency challenge. See Tex. R. Civ. P. 324(b)(4); Cecil, 804 S.W.2d at 510. We overrule issue seven.

Directed Verdict

In issue two, Carmichael argues the trial court erred when it granted a directed verdict and failed to allow the jury to determine the number of days of any of the violations. In issue four, Carmichael contends the trial court erred when it granted a directed verdict on the ventilation issue because the jury should have been allowed to make any such determination.

A directed verdict is proper when (1) a defect in the opponent's pleadings makes them insufficient to support a judgment, (2) the evidence conclusively proves a fact that establishes a party's right to judgment as a matter of law, or (3) the evidence is legally insufficient to raise an issue of fact. CDB Software, Inc. v. Kroll, 992 S.W.2d 31, 39 (Tex. App.--Houston [1st Dist.] 1998, pet. denied).

In reviewing the granting of a directed verdict, we must determine whether there is any evidence of probative force to raise a fact issue on the material questions presented. Szczepanik v. First S. Trust Co., 883 S.W.2d 648, 649 (Tex. 1994); Metzger v. Sebek, 892 S.W.2d 20, 41 (Tex. App.--Houston [1st Dist.] 1994, writ denied). We consider all the evidence in a light most favorable to the party against whom the verdict was directed and disregard all contrary evidence and inferences. Szczepanik, 883 S.W.2d at 649; Metzger, 892 S.W.2d at 40. The trial court should not weigh the credibility of the witnesses in determining whether to grant a directed verdict. Prather v. Brandt, 981 S.W.2d 801, 805 (Tex. App.--Houston [1st Dist.] 1998, pet. denied).

Calculation of Days

The trial court directed a verdict that San Jacinto Paint was not in compliance with the Houston Fire Code from May 31, 1997 through August 12, 1999 (the date of the start of the trial) for a total of 804 days. The trial court also granted a directed verdict that San Jacinto Paint violated the permitting requirements of the TNRCC and the Texas Water Code from May 11, 1994 to the day the trial began, resulting in 1919 days of violation.

Carmichael contends the jury should have been given the opportunity to determine the number of days of noncompliance.

Fire Code Violations (May 31, 1997 to trial date)

Brian Mangham, an inspector in the Fire Marshall's office of the Houston Fire Department, testified that, on January 29, 1997, he issued San Jacinto Paint notice of violations of the Houston Fire Code. He testified Carmichael was given until May 30, 1997 to comply with the Fire Code. Mangham returned to the site on five different occasions from January 1997 to the time of trial, and he testified the property remained in violation of the same Fire Code provisions.

Carmichael's cross-examination of Mangham did not attempt to dispute the fact that San Jacinto Paint was noncompliant. Quite the contrary. During Mangham's cross-examination, Carmichael introduced several letters he had written to the Houston Fire Department in which he confirmed San Jacinto Paint's noncompliance during this period by outlining the efforts it was making to come into compliance. There is no time during Carmichael's testimony that he attempted to refute that San Jacinto Paint was noncompliant during the time period in question.

Water Code Violations (May 11, 1994 to trial date)

On May 11, 1994, Carmichael wrote a letter to the TNRCC notifying it that he was the new owner and chief executive officer of Gulf States Paint. In the letter, he acknowledged responsibility for complying with an agreed order between the Texas Water Commission and Gulf States Paint dated September 15, 1993. It is undisputed the order required compliance with state law on the site. Carmichael did not deny he took possession of and responsibility for the hazardous waste at the facility on May 14, 1994 - the day he wrote to the TNRCC. Additionally, he presented no evidence refuting the fact that San Jacinto Paint was still storing hazardous waste up until the day of trial.

We find no evidence, and Carmichael directs us to no evidence, indicating the dates in question should be anything other than those found by the trial court in its directed verdict. The evidence presented by Carmichael was legally insufficient to raise an issue of fact. See Kroll, 992 S.W.2d at 39. As such, the trial court did not err when it granted a directed verdict on the calculation of days Carmichael was in violation of the Fire Code and the Texas Water Code.

We overrule issue two.

Ventilation

Section 8003.1.8.2 of the 1994 Uniform Fire Code requires ventilation no more than 12 inches off the ground. During the charge conference, the appellees sought a directed verdict that the ventilation at San Jacinto Paint did not meet the statutory requirements. When it granted the directed verdict, the trial court explained to Carmichael that he

did not provide any controverting evidence that [he] did have an improved ventilation system on one of the three buildings, so that's an issue the Court can decide as a matter of law, that there was not approved ventilation system in one of these buildings.

To have directed verdict on this issue, the trial court had to have found two things: (1) the ventilation system at the San Jacinto facility was in violation of the Houston Fire Code, and (2) the ventilation system in Building One was not approved by the Houston Fire Marshall's office.

Carmichael testified that the ventilation system in Building One consisted of a large fan located more than 12 inches off the floor. He testified the City of Houston Fire Marshal's office had not approved the mechanical ventilation system.

Carmichael contends, however, that a letter from Mr. John Tenini of Resochem ⁽³⁾ Corporation raises a fact question which should have required the ventilation issue be submitted to the jury. Mr. Tenini's letter states that "the ventilation provided by exhaust fans is sufficient to remove solvent vapors meeting both environmental and safety requirements." Tenini's letter does not address whether the fan met the requirements for an approved ventilation system as set forth in the Fire Code, and it does not offer any evidence that the Houston Fire Marshal's office approved the ventilation system.

The evidence presented by Carmichael was legally insufficient to raise an issue of fact. See Kroll, 992 S.W.2d at 39. As such, the trial court did not err when it granted a directed verdict on the ventilation issue.

We overrule issue four.

The judgment of the trial court is affirmed.

Jackson B. Smith, Jr.

Justice

Panel consists of Justices Cohen, Nuchia, and Smith. ⁽⁴⁾  

Do not publish. Tex. R. App. P. 47.

1.

The trial court entered a directed verdict that Carmichael was the owner of San Jacinto Paint, Gulf States, and Tricon and the operator of the San Jacinto Facility. San Jacinto Paint, Gulf States, and Tricon's corporate charters were forfeited; therefore, Carmichael was jointly and severally liable for them for all civil penalties, costs, and attorneys' fees assessed against them.

2.

His briefing is actually objecting to the phrasing of the jury question and that the evidence was insufficient to establish a time frame.

3.

The record is silent at to what Resochem does or who Tenini is.

4.

The Honorable Jackson B. Smith, Jr., retired Justice, Court of Appeals, First District of Texas at Houston, participating by assignment.