George Gregory v. Connecticut Shotgun Manufacturing Company ( 2017 )

NO. 12-15-00304-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS
GEORGE GREGORY, § APPEAL FROM THE 241ST
APPELLANT
V. § JUDICIAL DISTRICT COURT
CONNECTICUT SHOTGUN
MANUFACTURING COMPANY,
APPELLEE § SMITH COUNTY, TEXAS
MEMORANDUM OPINION
George Gregory appeals from a judgment rendered against him and in favor of
Connecticut Shotgun Manufacturing Company, Inc. (CSM). He presents four issues on appeal.
We affirm.
BACKGROUND
Gregory is a competitive shotgun shooter. When the top and bottom ribs of his
Winchester Model 21 became loose, he sent it to CSM for repairs. While CSM was working on
the Model 21, Gregory contacted Lou Frutuoso, one of CSM’s salesmen, about purchasing a set
of Grand American shotguns—a 12-gauge and a 28-gauge—that he wanted to match the
specifications of his Model 21. In February 2012, Gregory received an “order conformation”
and “terms and conditions” for each gun (the agreement). Each “order conformation” stated an
anticipated ship date of September 2012, and listed the configuration for each gun. Gregory
reviewed the documents and made revisions, including writing “same as the 21 that you are
working on” next to the specifications for the 12-gauge.
Gregory did not receive the guns until January 2013. According to Gregory, the guns
were beautiful, but were not the correct weight or dimensions and were not engraved. Gregory
also claims the guns did not fit correctly, were painful to shoot, and did not aim correctly.
Gregory sued CSM for breach of contract, fraud, breach of warranty, and violations of
the Deceptive Trade Practices Act (DTPA). At trial, CSM moved for a directed verdict. The
trial court granted the directed verdict on Gregory’s fraud, breach of warranty, and DTPA causes
of action. The jury found that CSM did not breach the contract. This appeal followed.
EXCLUSION OF EVIDENCE
In his first and fourth issues, Gregory challenges the trial court’s exclusion of alleged
misrepresentations and a previous transaction made by CSM.
Standard of Review
The decision to admit or exclude evidence lies within the trial court’s sound discretion.
Bay Area Healthcare Grp., Ltd. v. McShane, 239 S.W.3d 231, 234 (Tex. 2007). A trial court
abuses its discretion if it acts in an arbitrary or unreasonable manner or without reference to
guiding rules or principles. See Bowie Mem’l Hosp. v. Wright, 79 S.W.3d 48, 52 (Tex. 2002).
An appellate court must sustain the trial court’s ruling if there is any legitimate basis for the
ruling. Owens–Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998).
To obtain reversal of a judgment based on the trial court’s error in excluding or admitting
evidence, the complaining party must show that the error probably resulted in an improper
judgment. Interstate Northborough P’ship v. State, 66 S.W.3d 213, 220 (Tex. 2001); TEX. R.
APP. P. 44.1(a)(1). An appellate court must review the entire record to determine whether the
excluded evidence resulted in the rendition of an improper judgment. Interstate Northborough
P’ship, 66 S.W.3d at 220. The trial court’s error in the exclusion of evidence generally will not
be reversible unless the excluded proof is “controlling on a material issue.” Gee v. Liberty Mut.
Fire Ins. Co., 765 S.W.2d 394, 396 (Tex. 1989).
Governing Law
“All relevant evidence is admissible, except as otherwise provided by Constitution, by
statute, by these rules, or by other rules prescribed pursuant to statutory authority.” TEX. R. EVID.
402. “Relevant evidence” means evidence having any tendency to make the existence of any fact
that is of consequence to the determination of the action more probable or less probable than it
would be without the evidence. TEX. R. EVID. 401. Relevant evidence may be excluded “if its
probative value is substantially outweighed by the danger of unfair prejudice, confusion of the
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issues, or misleading the jury, or by considerations of undue delay, or needless presentation of
cumulative evidence.” TEX. R. EVID. 403.
Evidence of other wrongs or acts is not admissible to prove character in order to show
action in conformity therewith. TEX. R. EVID. 404. But it is admissible to show a party’s intent, if
material, provided the prior acts are so connected with the transaction at issue that they may all
be parts of a system, scheme or plan. Serv. Corp. Intern. v. Guerra, 348 S.W.3d 221, 235 (Tex.
2011); see TEX. R. EVID. 404. This can be shown through evidence of similar acts temporally
relevant and of the same substantive basis. Guerra, 348 S.W.3d at 235.
The parol evidence rule is not, strictly speaking, a rule of evidence. See Hubacek v.
Ennis State Bank, 317 S.W.2d 30, 31 (Tex. 1958). It is a substantive rule of law which
precludes the enforcement of inconsistent prior or contemporaneous agreements upon the
execution of a valid integrated agreement with respect to a particular matter. Carr v. Weiss, 984
S.W.2d 753, 765 (Tex. App.—Amarillo 1999, pet. denied). Only after a contract is found to be
ambiguous may parol evidence be considered for determining the true intent of the parties.
Friendswood Dev. Co. v. McDade & Co., 926 S.W.2d 280, 283 (Tex.1996). Under the Texas
Uniform Commercial Code (U.C.C.), parol evidence may not be offered to contradict a written
provision of a contract but parol evidence of “consistent additional terms” is allowed unless the
writing was intended as a complete and exclusive statement of the terms of the agreement. TEX.
BUS. & COM. CODE ANN. § 2.202 (West 2009).
Parol Evidence
In his first issue, Gregory contends the trial court erred by excluding parol evidence of
promises and misrepresentations that CSM made to induce him into purchasing the guns.
Specifically, Gregory sought to introduce evidence that: (1) the dimensions of the guns would
match his Model 21; (2) the guns would be delivered in September 2012; and (3) he was entitled
to a full refund if dissatisfied with the guns. The trial court excluded this evidence on grounds
that it violated the parol evidence rule. On appeal, Gregory contends that the excluded evidence
does not violate the parol evidence rule because (1) there was no fully integrated agreement, as
the written documents did not contain a warranty or a refund provision and were not intended to
be a complete expression of terms, (2) the anticipated ship date is consistent with Frutuoso’s
representation regarding September delivery, (3) the written documents do not preclude a refund,
and (4) the dimensions identified in the documents were taken from the Model 21. He further
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argues that the evidence was admissible for purposes of fraud and DTPA violations, and is not
barred by the parol evidence rule.
We first note that the parties’ agreement consisted of the “order conformation” and
“terms and conditions” for each gun. These documents contained all of the essential terms of the
agreement between the parties, i.e., the specifications for the guns, anticipated shipping date,
purchase price, and other details. See Crisp Analytical Lab, L.L.C. v. Jakalam Properties, Ltd.,
422 S.W.3d 85, 89 (Tex. App.—Dallas 2014, no pet.) (stating essential terms of contract include
time of performance, price, work to be done, services to be rendered, or property to be
transferred). Therefore, the agreement does not appear on its face to be ambiguous or
incomplete, and parol evidence was not admissible for purposes of removing any ambiguity or
making the contract complete. See Friendswood Dev. Co., 926 S.W.2d at 283; see also
Magnolia Warehouse & Storage Co. v. Davis & Blackwell, 195 S.W. 184, 185 (Tex. 1917)
(stating that one exception to parol evidence rule is that “if the written instrument itself shows to
be either ambiguous or incomplete, parol testimony is admissible to show what the real contract
was to the extent necessary to remove the ambiguity, and to make the contract complete in its
terms which show to be incomplete[]”).
Moreover, parol evidence cannot be used to vary or contradict the agreement’s terms. See
David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 451 (Tex. 2008). The “order conformation” for
each gun states that the anticipated shipping date is September 2012, and the “Ship Date” is left
blank. Accordingly, evidence that CSM guaranteed a September ship date is inconsistent with
the express terms of the agreement. Each “order conformation” also lists the specifications for
the particular gun. Although Gregory made a notation on the “order conformation” that the 12-
gauge should be of the same dimensions as the Model 21, he did not make the same notation for
the 28-gauge. Additionally, the “terms and conditions” for each gun expressly stated, “I agree
with the configuration of the CSMC 21 shotgun to be built for me specifically identified in Order
Number 806 [and 807].” Evidence that the guns were to have the same dimensions as Gregory’s
Model 21, as opposed to the specifications listed on each “order conformation,” contradicts the
agreement’s express terms. Because this evidence would vary or contradict the parties’ written
agreement, it was not admissible as an exception to the parol evidence rule. See id.; see also
Johnson v. Driver, 198 S.W.3d 359, 364 (Tex. App.—Tyler 2006, no pet.) (stating evidence that
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violates parol evidence rule is incompetent, is without probative force, and cannot properly be
given legal effect).
Regarding the excluded evidence of Gregory’s entitlement to a refund, Gregory contends
that Frutuoso, as well as CSM’s catalog and website, stated that he could return the guns for a
full refund if he was dissatisfied. He argues that this evidence is consistent with the agreement
because the “terms and conditions” stated that his deposit would not be refunded once
construction of the guns began. During his offer of proof, Gregory testified that he saw CSM’s
catalog and website, and he believed he was entitled to a refund if dissatisfied with the guns.
However, the catalog that Gregory attempted to introduce at trial was CSM’s 2013 catalog; thus,
the agreement predates this catalog. Moreover, the evidence showed that Gregory did not make
a deposit on the guns, but paid the full purchase price in advance. He could not say with certainty
when he saw any guarantee from CSM, and he admitted that the agreement said nothing about a
refund guarantee. The “terms and conditions” for each gun also contains the following clause: “If
the information in this letter is consistent with your order and our understanding, please sign this
letter and return it to us.” Gregory signed the letters, and the record does not indicate that any
changes were made with regard to a refund guarantee. Evidence to the contrary would be
inconsistent with the agreement, and was not admissible. See Haden, 266 S.W.3d at 451; see
also Johnson, 198 S.W.3d at 364.
Gregory further argues that the oral representations are admissible because the parol
evidence rule does not apply to fraud and DTPA claims. However, each of the oral
representations alleged by Gregory expressly conflict with the terms of the agreement. Reliance
upon an oral representation that is directly contradicted by the express, unambiguous terms of a
written agreement between the parties is not justified as a matter of law. DRC Parts &
Accessories, L.L.C. v. VM Motori, S.P.A., 112 S.W.3d 854, 858 (Tex. App.—Houston [14th
Dist.] 2003, pet. denied). Thus, while a plaintiff may be able to introduce parol evidence of a
defendant’s misrepresentations in order to prove a claim of fraudulent inducement, where that
parol evidence is directly contradicted by the express terms of the written agreement the plaintiff
will fail to prove the element of justifiable reliance. See Schlumberger Tech. Corp. v. Swanson,
959 S.W.2d 171, 179 (Tex. 1997) (“fraud must be something more than merely oral
representations that conflict with the terms of the written contract”) (citing Distribs. Inv. Co. v.
Patton, 110 S.W.2d 47, 48 (Tex. 1937)). And, as explained below, Gregory’s alleged DTPA
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claims amount to no more than a breach of contract claim. See Crawford v. Ace Sign, Inc., 917
S.W.2d 12, 14 (Tex. 1996). As a result, even if the evidence was admissible, Gregory has not
shown that its exclusion probably caused the rendition of an improper judgment. See Interstate
Northborough P’ship, 66 S.W.3d at 220 (Tex.2001); TEX. R. APP. P. 44.1(a)(1).
For these reasons, the trial court did not err by excluding the proffered evidence under the
parol evidence rule. See McShane, 239 S.W.3d at 234; see also Wright, 79 S.W.3d at 52. We
overrule Gregory’s first issue.
The Extraneous Transaction
In his fourth issue, Gregory alleges that the trial court should have admitted evidence of
one of CSM’s prior transactions because it shows CSM was engaged in a pattern of deceit.
Specifically, Gregory sought to introduce evidence of a transaction between CSM and
another customer, Elam Swann, in which CSM allegedly misrepresented the quality of a used
Model 21. Gregory introduced the evidence via an offer of proof, during which Swann testified
that he purchased a used Model 21 from CSM in March 2008. He testified that CSM advertised
the gun as “new in the box” and that Frutuoso told him that the gun appeared to be unused.
Swann stated that he relied on these representations and purchased the Model 21. He further
stated that he only used the gun once per year to hunt. In 2012, he took the Model 21 to a
gunsmith for some work on the stock and was told that the gun had been highly used, showed
extensive wear, and was unsafe to fire. The evidence also showed that the Model 21 had been
damaged in a fire and was repaired before Swann purchased the gun. Swann eventually returned
the gun to CSM. The trial court declined to admit evidence of this transaction.
On appeal, Gregory contends the excluded evidence shows that CSM was involved in a
pattern of deceiving its customers. We disagree. While Gregory’s and Swann’s transactions
both involved Frutuoso and the purchase of firearms, the similarities end there. Unlike Gregory,
Swann purchased a used firearm, not a custom gun. Furthermore, the evidence is of a single
transaction that occurred four years prior to Gregory’s purchase. Accordingly, Swann’s
transaction is not temporally relevant or of the same substantive basis. See Guerra, 348 S.W.3d
at 236 (determining events more than one year apart not part of system, plan, or scheme). Thus,
the trial court did not abuse its discretion by excluding evidence of the extraneous transaction.
See McShane, 239 S.W.3d at 234; see also Wright, 79 S.W.3d at 52. We overrule Gregory’s
fourth issue.
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MOTION FOR DIRECTED VERDICT
In his second issue, Gregory contends the trial court erred when it granted CSM’s motion
for directed verdict on his fraud, DTPA, and breach of warranty causes of action.
Standard of Review
In reviewing the grant of a directed verdict, an appellate court follows the standards for
assessing the legal sufficiency of the evidence. City of Keller v. Wilson, 168 S.W.3d 802, 809–
28 (Tex. 2005); see also Exxon Mobil Corp. v. Kinder Morgan Operating L.P. “A,” 192
S.W.3d 120, 126 (Tex. App.—Houston [14th Dist.] 2006, no pet.). An appellate court must
credit favorable evidence if reasonable jurors could and disregard contrary evidence unless
reasonable jurors could not. City of Keller, 168 S.W.3d at 827; see also Cotten v. Weatherford
Bancshares, Inc., 187 S.W.3d 687, 696 (Tex. App.—Fort Worth 2006, pet. denied). An
appellate court must determine whether there is any evidence of probative force to raise a fact
issue on the question presented. See, e.g., Bostrom Seating, Inc. v. Crane Carrier Co., 140
S.W.3d 681, 684 (Tex. 2004); Szczepanik v. First S. Trust Co., 883 S.W.2d 648, 649 (Tex.
1994); Sibai v. Wal–Mart Stores, Inc., 986 S.W.2d 702, 705 (Tex. App.—Dallas 1999, no pet.);
Edlund v. Bounds, 842 S.W.2d 719, 723 (Tex. App.—Dallas 1992, writ denied).
A directed verdict is warranted when the evidence is such that no other verdict can be
rendered and the moving party is entitled, as a matter of law, to a judgment. See Edlund, 842
S.W.2d at 724. A trial court may order a directed verdict in favor of a defendant when (1) a
plaintiff fails to present evidence raising a fact issue essential to the plaintiff’s right of recovery
or (2) the plaintiff admits or the evidence conclusively establishes a defense to the plaintiff’s
cause of action. See Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77
(Tex. 2000). A trial court may properly direct a verdict if no evidence of probative force raises a
fact issue on the material questions in the lawsuit. See id.; Sibai, 986 S.W.2d at 705. Moreover,
the reviewing court may affirm a directed verdict even if the trial court’s rationale for granting
the directed verdict is erroneous, provided the directed verdict can be supported on another basis.
See Exxon Corp. v. Breezevale Ltd., 82 S.W.3d 429, 443 (Tex. App.—Dallas 2002, pet. denied).
It is error for a trial court to direct a verdict when a material issue is raised by the
evidence. See Edlund, 842 S.W.2d at 724. If there is any conflicting evidence of probative value
on any theory of recovery, a directed verdict is improper and the case must be remanded for the
jury to determine that issue. See Szczepanik, 883 S.W.2d at 649; Sibai, 986 S.W.2d at 705;
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Monroe v. Grider, 884 S.W.2d 811, 815–16 (Tex. App.—Dallas 1994, writ denied). If
reasonable minds could differ as to the controlling facts, a trial court errs if it grants a directed
verdict and refuses to submit the issues to the jury. See Latham v. Castillo, 972 S.W.2d 66, 68
(Tex. 1998); Edlund, 842 S.W.2d at 724.
Governing Law
To prove a cause of action for fraud, a party must show: (1) a material representation was
made; (2) the representation was false; (3) the speaker knew the representation was false when
made or, alternatively, made the statement recklessly without any knowledge of its truth and as a
positive assertion; (4) the speaker made the representation intending that the other party act on it;
(5) the party acted in reliance upon the representation; and (6) the party was injured. Italian
Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 337 (Tex. 2011). Texas
recognizes two measures of direct damages for common-law fraud: the out-of-pocket measure
and the benefit-of-the-bargain measure. Formosa Plastics Corp. USA v. Presidio Eng’rs &
Contractors, Inc., 960 S.W.2d 41, 49 (Tex. 1998). The out-of-pocket measure computes the
difference between the value paid and the value received, while the benefit-of-the-bargain
measure computes the difference between the value as represented and the value received. Id.
The DTPA grants consumers a cause of action for false, misleading, or deceptive acts or
practices. TEX. BUS. & COM. CODE ANN. § 17.50(a)(1) (West 2011); Riverside Nat’l Bank v.
Lewis, 603 S.W.2d 169, 173 (Tex. 1980). The DTPA defines a “consumer” as “an individual ...
who seeks or acquires by purchase or lease, any goods or services.” TEX. BUS. & COM. CODE
ANN. § 17.45(4) (West 2011). A consumer must, in order to prevail on a DTPA claim, also
establish that the defendant violated a specific provision of the Act, and that the violation was a
producing cause of the claimant’s injury. Id. § 17.50(a); Doe v. Boys Clubs of Greater Dallas,
Inc., 907 S.W.2d 472, 478 (Tex. 1995). A breach of warranty under the U.C.C. can be brought
under the DTPA. The DTPA itself does not create any warranties; it only prohibits the breach of
express or implied warranties that are recognized by statute or the common law. See Parkway
Co. v. Woodruff, 901 S.W.2d 434, 438 (Tex. 1995).
Analysis
CSM moved for a directed verdict on Gregory’s DTPA, breach of warranty, and fraud
claims on grounds that those claims, if true, amounted to no more than a breach of contract.
Regarding Gregory’s claims for DTPA violations and breaches of express and implied
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warranties, he argues that CSM misrepresented and warranted that the guns would be and could
be made to the same dimensions and quality as his Model 21, it would deliver the guns by
September 2012, and it would refund the purchase price if Gregory was unsatisfied. He also
contends that CSM took advantage of his lack of knowledge regarding technical terms and
measurements.
Mere nonfeasance under a contract creates liability only for breach of contract.
Crawford, 917 S.W.2d at 13. If the defendant’s conduct would give rise to liability only because
it breaches the parties’ agreement, the plaintiff’s claim ordinarily sounds only in contract. Id.
(citing Sw. Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991)). “An allegation of a
mere breach of contract, without more, does not constitute a ‘false, misleading or deceptive act’
in violation of the DTPA.” Id. at 14 (citing Ashford Dev., Inc. v. USLife Real Estate Servs.,
661 S.W.2d 933, 935 (Tex. 1983)). The same analysis applies to claims for breach of warranty.
See Humble Nat’l Bank v. DCV, Inc., 933 S.W.2d 224, 234 (Tex. App.—Houston [14th Dist.]
1996, writ denied).
In this case, CSM’s statements regarding the delivery date and dimensions that were
presented to the jury are nothing more than representations that CSM would fulfill its contractual
duty to manufacture and deliver the guns. The supposed failure to fulfill that duty is the cause of
Gregory’s alleged injury, and any breach of that duty sounds only in contract law. See
Crawford, 917 S.W.2d at 13-15; see also Humble Nat’l Bank, 933 S.W.2d at 234. Further, to
the extent that Gregory alleges he was promised a refund, the fact that CSM did not refund the
purchase price is also dependent on whether CSM breached the contract. Therefore, the trial
court properly granted a directed verdict on Gregory’s DTPA and breach of warranty claims.
See Prudential Ins. Co. of Am., 29 S.W.3d at 77; see also Sibai, 986 S.W.2d at 705; Edlund,
842 S.W.2d at 724.
As for his fraud claim, Gregory argues that (1) CSM fraudulently induced him into the
purchase by promising that the guns would match the Model 21 and be delivered in September
2012; and (2) Frutuoso promised a full refund if Gregory was dissatisfied with the quality of the
guns. According to Gregory, he planned to return the guns unopened until Frutuoso urged him to
examine the guns and stated that he would be fully refunded if dissatisfied.
Assuming, without deciding, that these representations meet the first five elements of
fraud, there must also be evidence that Gregory suffered damages as a result of relying on these
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representations. In his petition, Gregory sought out-of-pocket damages in the amount of
$40,000, which represents the amount he paid for the two guns. The record contains evidence
indicating that the guns, when new, were worth more than the $40,000.00 Gregory paid. Gregory
introduced no contrary evidence. Therefore, the evidence shows that the value of the guns that
Gregory received is greater than the value that he paid. See Formosa Plastics, 960 S.W.2d at 49.
Absent evidence of damages, the trial court did not err in granting the motion for directed verdict
on Gregory’s fraud claim. See Prudential Ins. Co. of Am., 29 S.W.3d at 77; see also Martin v.
Estates of Russell Creek Homeowners Assoc., Inc., 251 S.W.3d 899, 904 (Tex. App.—Dallas
2008, no pet.) (affirming dismissal of fraud claim absent evidence of damages).
Because the trial court did not err by granting CSM’s motion for directed verdict, we
overrule Gregory’s second issue. For this reason, we need not address his third issue regarding
the trial court’s failure to include fraud, DTPA, and breach of warranty in the jury charge. See
TEX. R. APP. P. 47.1.
DISPOSITION
Having overruled Gregory’s first, second, and fourth issues, we affirm the trial court’s
judgment.
JAMES T. WORTHEN
Chief Justice
Opinion delivered February 8, 2017.
Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.
(PUBLISH)
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COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT OF TEXAS
JUDGMENT
FEBRUARY 8, 2017
NO. 12-15-00304-CV
GEORGE GREGORY,
Appellant
V.
CONNECTICUT SHOTGUN MANUFACTURING COMPANY,
Appellee
Appeal from the 241st District Court
of Smith County, Texas (Tr.Ct.No. 13-1515-C)
THIS CAUSE came to be heard on the appellate record and briefs filed
herein, and the same being considered, it is the opinion of this court that there was no error in the
judgment.
It is therefore ORDERED, ADJUDGED and DECREED that the judgment
of the court below be in all things affirmed, and that all costs of this appeal are hereby adjudged
against the Appellant, GEORGE GREGORY, for which execution may issue, and that this
decision be certified to the court below for observance.
James T. Worthen, Chief Justice.
Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.