Ezequiel Castillo, Individually, Maria De Los Angeles Castillo, Individually and as Next Friend for Ashley Castillo and Ezequiel Castillo Jr., and Rosa Silvia Martinez, Individually v. Ford Motor Company ( 2015 )

NUMBER 13-10-00232-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
EZEQUIEL CASTILLO, INDIVIDUALLY, MARIA
DE LOS ANGELES CASTILLO, INDIVIDUALLY
AND AS NEXT FRIEND FOR ASHLEY CASTILLO
AND EZEQUIEL CASTILLO JR., AND ROSA
SILVIA MARTINEZ, INDIVIDUALLY, Appellants,
v.
FORD MOTOR COMPANY, Appellee.
On appeal from the 404th District Court
of Cameron County, Texas.
MEMORANDUM OPINION ON REMAND
Before Chief Justice Valdez and Justices Garza and Benavides
Memorandum Opinion on Remand by Chief Justice Valdez
Appellants, Ezequiel Castillo, individually, Maria De Los Angeles Castillo,
individually and as next friend for Ashley Castillo and Ezequiel Castillo Jr., and Rosa Silva
Martinez, individually, appeal a take-nothing judgment in favor of appellee, Ford Motor
Company (“Ford”). Appellants contend on remand from the Texas Supreme Court that
the evidence was factually insufficient to support the jury’s finding that Ford proved its
affirmative defense of fraudulent inducement. We affirm.
I. BACKGROUND
After being involved in a roll-over accident, appellants sued Ford for design defects
of their Ford Explorer’s roof and in its handling or stability, and a jury trial was held (“Ford
I”). Ford Motor Co. v. Castillo, 444 S.W.3d 616, 618 (Tex. 2014). At the time of the trial,
appellants’ attorney, Mark Cantu, began negotiating with Ford’s managing counsel, Pete
Tassie, for a settlement agreement. Id. Eventually, after several rejections of his offers,
Cantu offered to settle for $1.96 million and Tassie offered to settle for $1.5 million. Id.
In addition, Tassie recalled that Cantu had repeatedly stated that if the jury were to send
a note about damages, his demand would increase to $3 million. Id. The next day, during
the jury’s deliberations, the jury foreperson, Cynthia Cruz Cortez, sent a note to the judge
asking, “What is the maximum amount that can be awarded?” Id. at 619.
Ford’s trial counsel, Eduardo Rodriguez, “immediately called Tassie in Michigan,
and, without hesitation, Tassie obtained authority from his supervisor to settle the case
for $3 million—the amount Cantu had said the day before he would demand if the jury
were to ask a question about damages.” Id. Shortly thereafter, “Cantu, who had been
unavailable all morning, called Tassie. Cantu initially stated that his demand should be
$10 or $15 million, but quickly agreed to settle the case for $3 million.” Id. After
discovering that the jurors were not discussing damages and that many of the jurors had
voted in favor of Ford, Ford refused to pay the $3 million settlement. Id.
2
Appellants then sued Ford for breach of contract (“Ford II”), and in its defense,
Ford claimed, among other things, fraudulent inducement. Id. A jury trial was held in
Ford II. As set out by the Texas Supreme Court, during the Ford II trial, many of the jurors
from Ford I testified to the following:
Cortez kept trying to bring up the damages issue on her own, and sent the
note against their specific requests that she not do so. These jurors also
testified that all other notes were sent by unanimous agreement. One juror
testified that on the morning the case settled—after the day-long recess
caused by Cortez's absence—Cortez arrived in a “very happy, very upbeat”
mood, and told the other jurors, “This will be settled today.”
Id. at 620. The Texas Supreme Court summarized Cortez’s testimony during the Ford II
trial as follows:
Unlike the other jurors who testified, Cortez could not recall any of the
pertinent details of the trial or the jury deliberations. Notably, Cortez could
not recall why she sent the note in question, why exactly she did not show
up for the second full day of deliberations, or why she had left the courtroom
so quickly after the settlement was announced. Cortez also could not recall
her cell phone number or carrier at the time, but signed a release permitting
Ford to search for all cell-phone records registered to Cortez during the time
of the products-liability trial, using her name, address, and date of birth.
After denying that she spoke with any attorneys during the trial, Cortez was
asked to explain a phone call on September 21, 2004 to the purported
private cell phone of attorney and State Representative Jim Solis. Initially,
Cortez explained that her husband probably made the call. When other
evidence made that explanation unlikely, she speculated that the phone
records were those of another Cynthia Cortez.
Id.
The Ford II jury found in favor of Ford, and entered a take-nothing judgment against
appellants on their breach of contract claim. Id. Appellants appealed, and we reversed
finding that the evidence was legally insufficient to support the jury’s finding that Ford
justifiably relied on the juror note. Id. The Texas Supreme Court reversed our judgment
finding that the evidence was legally sufficient to support the jury’s verdict that Ford was
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fraudulently induced to enter the settlement agreement, and it remanded the case to this
Court to address appellants’ factual sufficiency challenge to the evidence. Id. at 623.
II. STANDARD OF REVIEW
We examine the entire record, considering both the evidence in favor of, and
contrary to, the challenged finding in our factual sufficiency review. Maritime Overseas
Corp. v. Ellis, 971 S.W.2d 402, 406–07 (Tex. 1998). In reviewing a factual-sufficiency
challenge to a finding on an issue on which the appellant did not have the burden of proof,
we will set aside the verdict “only if it is so contrary to the overwhelming weight of the
evidence as to be clearly wrong and unjust.” Cain v. Bain, 709 S.W.2d 175, 176 (Tex.
1986).
The fact-finder is the sole judge of the witnesses’ credibility and may choose to
believe one witness over another. Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d
757, 761 (Tex. 2003). We may not substitute our own judgment for that of the jury, even
if we would reach a different answer based on the evidence. GTE Mobilnet of S. Tex.
Ltd. P’ship v. Pascouet, 61 S.W.3d 599, 616 (Tex. App.—Houston [14th Dist.] 2001, pet.
denied) (citing Maritime Overseas Corp., 971 S.W.2d at 407).
III. DISCUSSION
In its supplemental brief on remand, appellants cite evidence in the record that
they allege was favorable to them. However, it is clear that, as the finders of fact, the jury
rejected this evidence and instead believed the witnesses and evidence that supported
Ford’s fraudulent inducement claim. The Texas Supreme Court concluded that the
evidence was legally sufficient as follows:
On the first element [of fraudulent inducement], the jury was
instructed that a material misrepresentation is a “false statement of fact.”
4
Castillo argues that the note sent by Cortez asked a question, and therefore
cannot be a false statement of fact. Although the note does ask a question,
statements of fact are clearly implied. . . . Because the note implies
material statements that were false, we conclude that some evidence exists
of the first element of fraudulent inducement.
On the second element, Ford was required to produce evidence
establishing that the note was sent by or at the direction of the plaintiffs or
their agents or representatives with knowledge it was false. Ford’s theory
was that Cantu, as plaintiffs’ representative, directed Cortez to send the
note.
....
Here, there is enough circumstantial evidence to establish a
pattern—a pattern that reasonably implicates Cantu in Cortez’s fraudulent
scheme to send the note.
....
Contrary to the court of appeals’ view, the trial evidence did not
establish that Cantu’s comments the day before the settlement were
customary of plaintiff’s attorneys, but rather the opposite. Tassie, who had
negotiated for Ford for more than ten years, including several prior dealings
with Cantu, had never heard such a specific contingency. Moreover, neither
Cantu nor any of the other attorneys involved in the case had ever seen
such a jury note before. Yet Cantu’s comments forecast such a note and
elaborated on the effect it would have on settlement negotiations. But the
unusual nature and prescient timing of Cantu’s statement is not the only
circumstantial evidence supporting the jury’s finding.
On the brink of a Ford victory, Cortez precipitated a day-long recess
because of some serious illness or injury to one of her two children. At the
trial of this case, however, Cortez could not recall the illness or injury that
kept her at the hospital all night. The same day, Cantu, who had refused to
lower his settlement demand below $15 million during weeks of previous
negotiations, became more agreeable, reducing his demand to less than $2
million in just a matter of hours. Moreover, even after the surprising jury
note inquiring as to the maximum amount of damages it could award in a
case alleging damages of $35 million, Cantu remained agreeable to a
settlement of less than ten percent of that amount. Viewing this
circumstantial evidence in light of all the surrounding circumstances, the
jury could reasonably infer from the evidence that Cortez initiated the recess
in order to give Cantu more time to negotiate a settlement before the jury
foreclosed that possibility.
5
The inferences become stronger when the circumstantial evidence
raises the inference of fraud, and the parties alleged to have engaged in the
fraud fail to offer any proof of their legitimate or honest motives. Here, the
explanations offered for Cantu and Cortez’s unusual and apparently
coordinated conduct were lacking.
For instance, Cortez was unwilling to offer any explanation for her
actions. Even when she was summoned to testify, she offered no
explanation, claiming instead that she could not remember any of the
relevant details of the trial or deliberations. As for Cantu, he denied ever
making the prediction about the note, instead admitting that it would have
been unreasonable to make such a statement. He further justified his
willingness to discount the extremely favorable note, and accept a fraction
of his original demand, on fear that one of his expert’s testimony might
provide Ford a fruitful appellate argument. While this concern possibly
explains his settlement preference, it does not explain his willingness to give
Ford such an extreme discount of the damages pled. The circumstantial
evidence here is some evidence from which the jury could have reasonably
inferred collusion between Cortez and Cantu in producing the fraudulent
note.
Having found evidence that Cortez colluded with Cantu, who
unquestionably knew that jury notes would be shown to Ford’s attorneys,
we necessarily find evidence of the third element—that Cortez sent the
fraudulent note with the intent that Ford rely upon it.
As to the fourth element—that Ford did not know the representation
was false and actually and justifiably relied upon the representation—there
is legally sufficient evidence of reliance for the same reasons we have found
some evidence of a material misrepresentation. Castillo argues that any
reliance on the note which induced Ford to enter the settlement was
unjustified because Ford could not assume that the note containing the
damages question indicated that the jury had reached any particular
determination in the sequence of its deliberations nor could Ford assume
that the note indicated the views of the jury collectively. As discussed
above, however, the note did impliedly state these very facts that the jury
was deliberating damages and intended to award the maximum amount, as
well as that the note was from the jury collectively. Accordingly, because
there is some evidence that Ford had no knowledge that these implications
were false, there was some evidence that Ford was justified to rely on these
implications in entering the settlement agreement.
Ford Motor Co., 444 S.W.3d at 621–23.
6
Appellants argue that the evidence was factually insufficient as to all elements of
fraudulent inducement1 because there was evidence of the following: (1) “A group of
jurors wanted to ask about damages”; (2) “This group was led by [another juror,] Ofelia
Ramos”; (3) “They wanted to send out a jury note about damages, and they ultimately
did”; (4) “They had the same kind of concerns that ordinary jurors have in civil trials across
the state”; (5) “They wanted to know about the money”; (6) “Anybody who has watched
civil juries knows that this is a common concern of normal jurors”; (7) “Nobody on the jury
had the slightest idea that the jury notes were visible to the litigants”; (8) the jury note
constituted a question and could not have been a statement2; (9) Ramos directed Cortez
to send out the complained-of note; (10) Cortez’s lack of recollection of the events that
transpired proves nothing3; (11) “Ford likely got its ‘votes’ [against finding liability for
appellants’ accident] because some jurors were using a criminal burden of proof. But
jurors are not locked in until the end”4; (12) Cortez was unaware that the parties and
attorneys would read the note5; and (13) “Ford had no right to assume that the note
1 Ford prevailed on its fraudulent inducement claim because the jury found the following: (1) there
was a material misrepresentation; (2) “sent by or at the direction of [appellants] or their agents or
representatives with the knowledge it was false”; (3) “with the intent that [Ford] rely on the representation”;
(4) “that [Ford] did not know the representation was false and actually and justifiably relied upon the
representation”; and (5) “that [Ford] detrimentally relied upon the representation by entering into the
settlement agreement.” Ford Motor Co. v. Castillo, 444 S.W.3d 616, 621–23 (Tex. 2014).
2 Appellants state, “There was no misrepresentation. The jury’s question made no representation
at all, let alone a false or material one.” However, as set out above, the Texas Supreme Court concluded
that the jury note implied material statements that were false, and it concluded that the note constituted
some evidence to support the jury’s finding that there was a misrepresentation.
3 The Texas Supreme Court disagreed and concluded that Cortez’s inability to recall any details of
her jury service or explain what had occurred combined with other circumstantial evidence was “some
evidence from which the jury could have reasonably inferred collusion between Cortez and Cantu in
producing the fraudulent note.” Id. at 623.
4 Appellants cite no evidence in the record supporting this claim.
5However, the Texas Supreme Court found that the evidence supported a finding by the jury that
Cortez colluded with Cantu to defraud Ford and that Cantu “unquestionably knew that jury notes would be
7
indicated the position of all 12 jurors as opposed to a subset” and “Ford had no right to
assume that the jurors could not even discuss damages along the way at any time they
wanted.”6
Although appellants cite to the above-listed evidence as not supporting the jury’s
findings on each element of fraudulent inducement, they have not acknowledged any of
the evidence cited by the Texas Supreme Court that it found legally sufficient to support
the jury’s findings of each element. In addition, appellants have not explained how the
above-cited evidence is so contrary to the verdict as to make it clearly wrong and unjust.
See Golden Eagle Archery, Inc., 116 S.W.3d at 761 (explaining that in order for this Court
to properly apply our factual sufficiency review, when reversing on the basis of factual
insufficiency, we must in our opinions, “state in what regard the contrary evidence greatly
outweighs the evidence in support of the verdict”); Maritime Overseas Corp., 971 S.W.2d
at 407 (“[W]hen reversing a trial court’s judgment for factual insufficiency, the court of
appeals must detail all the evidence relevant to the issue and clearly state why the jury’s
finding is factually insufficient or so against the great weight and preponderance of the
evidence that it is manifestly unjust[, and] [t]he court of appeals must explain how the
contrary evidence greatly outweighs the evidence supporting the verdict.”). Moreover,
the above-cited evidence was rejected or disbelieved by the jury in this case as explained
by the Texas Supreme Court, including evidence that Ramos directed Cortez to send the
note. And, as the supreme court set out, the jury heard evidence supporting the following:
shown to Ford’s attorneys.” Id.
6 The Texas Supreme Court disagreed, stating: “As discussed above, however, the note did
impliedly state these very facts that the jury was deliberating damages and intended to award the maximum
amount, as well as that the note was from the jury collectively.” Id.
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(1) Cortez sent the note on her own initiative and without the other jurors’ permission and
over their objections; (2) Cantu predicted the “maximum damages” note on the evening
before the note was sent by Cortez; (3) prior to sending the note, Cortez predicted that
the case would “settle that day”; (4) the note constituted a material misrepresentation; (5)
Cortez and Cantu exhibited unusual and suspicious behavior before Cortez sent the
“maximum damages” note; (6) Cortez colluded with Cantu who unquestionably knew that
the note would be provided to Ford’s attorneys, which supported a finding that Cortez
sent the note with an intent that Ford rely upon it; (7) the note impliedly stated that the
jury was deliberating damages and intended to award the maximum amount and that the
note was sent collectively; (8) Ford’s attorneys entered the settlement agreement in
response to the note; (9) Ford’s attorneys understood the note to mean that the jury was
deliberating damages; (10) a note such as Cortez’s note is an extremely rare occurrence
and “none of the lawyers had ever encountered one before”; and (11) all the other notes
were sent by unanimous agreement of the jury.
Examining the entire record, considering both the evidence in favor of, and
contrary to each element of fraudulent inducement, we cannot conclude that the weight
of the evidence is so contrary to the jury’s findings as to make those findings clearly wrong
and unjust. Dow Chem. Co., 46 S.W.3d at 242; Maritime Overseas Corp., 971 S.W.2d at
406–07; Cain, 709 S.W.2d at 176. Thus, we conclude that the evidence was factually
sufficient to support the challenged jury findings.7 We overrule appellant’s sole issue on
remand.
7 Appellants contend that “[t]here is no evidence of intent as required by the jury charge.” However,
the Texas Supreme Court has already disposed of this issue concluding that “Cortez sent the fraudulent
note with the intent that Ford rely upon it.” See id.
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IV. CONCLUSION
We affirm the trial court’s judgment.
/s/ Rogelio Valdez
ROGELIO VALDEZ
Chief Justice
Delivered and filed the
12th day of November, 2015.
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