$7,794 in US Currency and Kenneth Lewis v. State ( 2012 )

IN THE
TENTH COURT OF APPEALS
No. 10-11-00330-CV
JOHN SHAVERS AND JENS LORENZ,
Appellants
v.
SUNBELT EQUIPMENT MARKETING, INC.,
Appellee
From the 272nd District Court
Brazos County, Texas
Trial Court No. 06-001763-CV-272
MEMORANDUM OPINION
Sunbelt Equipment Marketing, Inc., sued Jens Lorenz and John Shavers in
connection with a contract for the leasing and damage to heavy equipment. Lorenz and
Shavers appeal from the trial court’s judgment rendered against them on June 6, 2011.
Because Lorenz and Shavers entered a general appearance and participated in a
partnership, and because the evidence is sufficient to support Sunbelt’s fraud claim for
which exemplary damages is available, the trial court’s judgment is affirmed.
BACKGROUND
Jesco Disaster Services was awarded a contract to reclaim a beach in Florida after
a hurricane. Sunbelt rented heavy equipment to Jesco for that purpose. Aside from the
payment of the freight charges for the initial shipments of equipment, Sunbelt was
never paid for the lease of the equipment. Further, the equipment was, in Sunbelt’s
opinion, abused by Jesco. In 2006, Sunbelt sued Jesco and its partners, Jerry Frank
Edwards, a resident of Mississippi, and Jens Lorenz, a resident of Louisiana. Lorenz
was served and answered in 2007 and filed a special appearance. Edwards was served,
but never answered. Sunbelt amended its petition and added another Jesco partner,
John Shavers, a resident of Mississippi, as a defendant. For various reasons, Sunbelt
was unable to serve Shavers until 2009. Shavers answered and also filed a special
appearance. After a status hearing, the parties were referred to mediation in late 2009.
A tentative agreement was reached but ultimately fell through.
In late 2010, Sunbelt was granted a default judgment against Edwards. In
January of 2011, Lorenz and Shavers filed a joint motion for summary judgment
contesting personal jurisdiction. Sunbelt filed a motion for partial summary judgment
on the merits of their claims the next month. Both motions were heard in March.
Lorenz’s and Shavers’ joint motion was denied and Sunbelt’s partial summary
judgment motion was granted. The parties proceeded to a bench trial a week later, and
the trial court rendered a judgment in favor of Sunbelt.
Lorenz v. Sunbelt Equipment Marketing, Inc. Page 2
PERSONAL JURISDICTION
Lorenz and Shavers filed separate briefs on appeal but each contend in their first
issue that the trial court erred in denying their special appearances. However, the trial
court never ruled on their special appearances. It ruled on their joint motion for
summary judgment.
There is a procedural anomaly in this case. And because of this anomaly, Sunbelt
argued to the trial court and argues on appeal that Lorenz and Shavers waived their
objection to personal jurisdiction and entered a general appearance.
Lorenz and Shavers each filed special appearances: Lorenz on October 11, 2007
and Shavers on April 21, 2009. Within neither document was a request for a hearing. In
January of 2011, Lorenz and Shavers filed a joint motion for summary judgment. In the
motion, they contended they were “entitled to summary judgment as a matter of law on
the issue of the lack of personal jurisdiction over them,” that there were “no genuine
issues of material fact in the case,” and that they raised “the affirmative defense that
traditional notions of fair play and substantial justice mandate the courts of the State of
Texas do not exercise personal jurisdiction over” them.
When called to task by Sunbelt and, to some extent, the trial court, about the
meaning of this motion at the hearing, Lorenz and Shavers replied that filing a motion
for summary judgment was the correct procedure. On appeal, Lorenz and Shavers
contend that the motion was really just a way to have the special appearance heard. We
Lorenz v. Sunbelt Equipment Marketing, Inc. Page 3
disagree and cannot condone the use of a motion for summary judgment in lieu of or as
a means to go forward with a special appearance. These are two different procedures
with different purposes, different burdens, and different means of review.
Rule 120a
Pursuant to Rule 120a of the Texas Rules of Civil Procedure, a special appearance
may be made by any party, either in person or by attorney, for the purpose of objecting
to the jurisdiction of the court over the person or property of the defendant on the
ground that such party or property is not amenable to process issued by the courts of
this State. TEX. R. APP. P. 120a(1). Any motion to challenge the jurisdiction provided for
by Rule 120a is required to be heard and determined before a motion to transfer venue
or any other plea or pleading may be heard. Id. 120a(2). Every appearance, prior to
judgment, not in compliance with this rule is a general appearance. Id. 120a(1). As
noted above, Lorenz and Shavers each filed a special appearance.
Determining whether a trial court has personal jurisdiction over a defendant
presents a question of law subject to de novo review. BMC Software Belg.,N.V. v.
Marchand, 83 S.W.3d 789, 793 (Tex. 2002). The plaintiff bears the initial burden of
pleading sufficient allegations to bring a nonresident within the provisions of the Texas
long-arm statute. Id.; Cerbone v. Farb, 225 S.W.3d 764, 766-67 (Tex. App.—Houston [14th
Dist.] 2007, no pet.). The burden of going forward then shifts to the nonresident
defendant to negate all bases of personal jurisdiction asserted by the plaintiff. Moki Mac
Lorenz v. Sunbelt Equipment Marketing, Inc. Page 4
River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007). There is nothing in the rule
or in case law that precludes simply requesting a hearing and bringing that request to
the notice of the trial court on the filed special appearance in order to receive a
determination. The specially appearing defendant must not only request a hearing, but
also specifically call that request to the trial court's attention. Bruneio v. Bruneio, 890
S.W.2d 150, 154 (Tex. App.—Corpus Christi 1994, no pet.).
Summary Judgment
We also conduct a de novo review of the trial court’s decision on a motion for
summary judgment. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).
This is where the similarity between a special appearance and a motion for summary
judgment ends. The movant carries the burden of establishing that no material fact
issue exists and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c);
M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000). The
nonmovant has no burden to respond to a summary judgment motion unless the
movant conclusively establishes its cause of action or defense. M.D. Anderson Hosp. &
Tumor Inst., 28 S.W.3d at 23. However, once the movant produces sufficient evidence
conclusively establishing its right to summary judgment, the burden shifts to the
nonmovant to present evidence sufficient to raise a fact issue. Centeq Realty, Inc. v.
Siegler, 899 S.W.2d 195, 197 (Tex. 1995). In reviewing a traditional motion for summary
judgment, which appears to be what Lorenz and Shavers filed, we must consider
Lorenz v. Sunbelt Equipment Marketing, Inc. Page 5
whether reasonable and fair-minded jurors could differ in their conclusions in light of
all of the evidence presented. See Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754,
755 (Tex. 2007). In this type review, we must consider all the evidence in the light most
favorable to the nonmovant, indulging every reasonable inference in favor of the
nonmovant and resolving any doubts against the motion. See Goodyear Tire & Rubber
Co., 236 S.W.3d at 756; Valence Operating Co., 164 S.W.3d at 661.
The most fundamental difference between a hearing on a special appearance and
a traditional motion for summary judgment is that normally, summary judgments and
partial summary judgments are decisions on the merits that bar relitigation of the case.
See Le v. Kilpatrick, 112 S.W.3d 631, 634 (Tex. App.—Tyler 2003, no pet.); Pines of
Westbury, Ltd. v. Paul Michael Constr., Inc., 993 S.W.2d 291, 294 (Tex. App.—Eastland
1999, pet. denied); Fite v. King, 718 S.W.2d 345, 347 (Tex. Civ. App.—Dallas 1986, writ
ref'd n.r.e.).
General Appearance
Sunbelt contends that, as a result of Lorenz and Shavers filing a motion for
summary judgment, they entered a general appearance. We agree. A party enters a
general appearance when it (1) invokes the judgment of the court on any question other
than the court's jurisdiction, (2) recognizes by its acts that an action is properly pending,
or (3) seeks affirmative action from the court. Exito Elecs. Co. v. Trejo, 142 S.W.3d 302,
304 (Tex. 2004); Dawson-Austin v. Austin, 968 S.W.2d 319, 322 (Tex. 1998). Lorenz and
Lorenz v. Sunbelt Equipment Marketing, Inc. Page 6
Shavers chose to file a motion for summary judgment rather than request a hearing on
their special appearances. By doing so, they assumed the burden of conclusively
establishing the trial court’s lack of personal jurisdiction, their “affirmative defense,”
and that they were entitled to judgment as a matter of law. For a proceeding on a
summary judgment motion, Sunbelt had no obligation in response to assert any kind of
jurisdictional basis for personal jurisdiction. The burdens of a 120a special appearance
do not apply to a summary judgment. Further, had Lorenz and Shavers prevailed on
their motion, a summary judgment would have been a final determination and res
judicata to the relitigation of any claims which Sunbelt might have arising out of the
same subject matter of this lawsuit and which could have been litigated in this case. See
Barr v. Resolution Trust Corp., 837 S.W.2d 627, 628 (Tex. 1992). At the very least, by filing
the motion for summary judgment, Lorenz and Shavers recognized that Sunbelt’s suit
was properly pending and sought affirmative relief from the trial court.1
1Had Lorenz and Shavers truly believed that they were merely using a motion for summary judgment to
request a hearing for their special appearance, when they appealed the trial court’s denial of the motion
for summary judgment, they could have provided this Court with an explanation that they were really
appealing a special appearance. See Lorenz v. Sunbelt Equip. Mktg., No. 10-11-00078-CV, 2011 Tex. App.
LEXIS 3397 (Tex. App.—Waco May 4, 2011, no pet.) (mem. op.). As it was, we were informed by Lorenz
and Shavers that they were appealing a plea to the jurisdiction. When we questioned our jurisdiction
about non-governmental employees attempting to appeal the denial of a plea to the jurisdiction, we
received no response from Lorenz and Shavers. Having received no response, we dismissed the appeal
for want of jurisdiction. Id. Further, had we been provided with the actual order that denied their
motion for summary judgment, we would again have questioned our jurisdiction because the denial of a
motion for summary judgment is interlocutory and generally not appealable. See William Marsh Rice
Univ. v. Coleman, 291 S.W.3d 43, 45 (Tex. App.—Houston [14th Dist.] 2009, pet. dism’d); Espinola v.
Latting, 971 S.W.2d 144 (Tex. App.—Waco 1998, no pet.)
Lorenz v. Sunbelt Equipment Marketing, Inc. Page 7
Accordingly, Lorenz and Shavers made a general appearance by seeking relief
through a motion for summary judgment. Lorenz’s first issue and Shavers’ first issue
are overruled.
MOTION FOR CONTINUANCE
Shavers’ second issue complains about the trial court’s denial of Shavers’ oral
motion for continuance. Shavers cites to no authority to support this issue.
Accordingly, it is improperly briefed, presents nothing for review, and is overruled. See
TEX. R. APP. P. 38.1(i). See also Dorton v. Chase, 262 S.W.3d 396, 400 (Tex. App.—Waco
2008, pet. denied); Batto v. Gafford, 119 S.W.3d 346, 350 (Tex. App.—Waco 2003, no pet.).
SUFFICIENCY OF FINDINGS
In his second issue, Lorenz contends that certain findings of fact entered by the
trial court were not supported by legally and factually sufficient evidence. Findings of
fact in a bench trial have the same force and dignity as a jury's verdict upon jury
questions. Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991). A trial
court's findings are reviewable for legal and factual sufficiency of the evidence by the
same standards that are applied in reviewing evidence supporting a jury's answer.
Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994).
In conducting a legal sufficiency review, we view the evidence in the light most
favorable to the verdict, credit favorable evidence if a reasonable juror could, and
disregard contrary evidence unless a reasonable juror could not. City of Keller v. Wilson,
Lorenz v. Sunbelt Equipment Marketing, Inc. Page 8
168 S.W.3d 802, 822, 827 (Tex. 2005). A legal sufficiency issue will be sustained if the
record reveals one of the following: (1) the complete absence of a vital fact, (2) the court
is barred by rules of law or of evidence from giving weight to the only evidence offered
to prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a
scintilla, or (4) the evidence established conclusively the opposite of the vital fact. Id. at
827.
When considering a factual sufficiency challenge, as the reviewing court, we
must consider and weigh all of the evidence, not just that evidence which supports the
verdict. Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-407 (Tex. 1998). We can set
aside the judgment only if it is so contrary to the overwhelming weight of the evidence
that the judgment is clearly wrong and unjust. Id. at 407. We are not a fact finder;
accordingly, we may not pass upon the witnesses' credibility or substitute our judgment
for that of the factfinder, even if the evidence would clearly support a different result.
Id.
Partnership
Lorenz complains in Subpart A of his second issue that the trial court erred in
finding Lorenz and Shavers participated in a partnership.
Sunbelt originally filed suit against Jerry Edwards, a person not a party to this
appeal, and Lorenz in their individual capacities and doing business as Jesco Disaster
Services. Lorenz filed a general denial; Edwards did not answer. In its first amended
Lorenz v. Sunbelt Equipment Marketing, Inc. Page 9
petition, Sunbelt added Shavers as a party and alleged that Lorenz, Shavers, and
Edwards, participated in the partnership of Jesco Disaster Services. Shavers ultimately
filed a general denial; Lorenz did not amend his initial general denial. See TEX. R. CIV. P.
92 (“When the defendant has pleaded a general denial, and the plaintiff shall afterward
amend his pleading, such original denial shall be presumed to extend to all matters
subsequently set up by the plaintiff.”).
The denial of a partnership must be raised by a verified denial. Id. 93(5). Lorenz
and Shavers never filed a verified denial of the existence of a partnership. Because a
verified denial was not filed, the partnership’s existence could not be controverted at
trial. See Fincher v. B & D Air Conditioning & Heating Co., 816 S.W.2d 509, 512 (Tex.
App.—Houston [1st Dist.] 1991, writ denied); Washburn v. Krenek, 684 S.W.2d 187, 191
(Tex. App.—Houston [14th Dist.] 1984, writ ref'd n.r.e.).
Lorenz argues in his reply brief that he sufficiently denied the partnership status
in his special appearance which was verified, relying on a Corpus Christi court opinion
which held that a plea in abatement was adequately presented in a sworn answer
although the separate plea was not verified. See S. County Mut. Ins. Co. v. Ochoa, 19
S.W.3d 452, 461 (Tex. App.—Corpus Christi 2000, no pet.). We disagree with Lorenz.
Unlike the facts of the Corpus Christi case, Lorenz’s denial of the partnership was not
contained in a sworn answer. Further, a special appearance relates solely to personal
jurisdiction, not to the merits of a claim or defense. See TEX. R APP. P. 120a(1). And, a
Lorenz v. Sunbelt Equipment Marketing, Inc. Page 10
denial of a partnership relates to the merits of the plaintiff’s claim and has no bearing on
personal jurisdiction. Thus, the fact that a denial of a partnership was made in the
special appearance which happens to be verified does not satisfy the requirement of
Rule 93(5).
Lorenz also argues in his reply brief that the existence of a partnership was tried
by consent; therefore, it was placed at issue before the trial court and we can review the
sufficiency of the evidence to support it. He relies on the Texas Supreme Court decision
in Ingram v. Deere in support of his argument. Ingram v. Deere, 288 S.W.3d 886, 893 (Tex.
2009). Lorenz is correct that the Supreme Court stated in Ingram that “*w+hen both
parties present evidence on an issue and the issue is developed during trial without
objection, any defects in the pleadings are cured at trial, and the defects are waived.”
Id. But, it also stated that an issue is not tried by consent merely by the hearing of
testimony on the issue—it is only done so when both parties present conflicting
evidence or testimony and allows the issue to be submitted to the jury. Id.
Here, the trial was to the court so no formal issue was submitted. But, J.W.
Gully, the owner and president of Sunbelt, testified Lorenz represented to him that
Lorenz and Edwards were partners with Shavers in Jesco. On cross-examination,
Lorenz questioned Gully about whether any writings indicated Lorenz, Shavers, and
Edwards were partners, to which Gully replied, “no.” Sunbelt then objected to any
testimony or attempts to establish that there was no partnership. Sunbelt specifically
Lorenz v. Sunbelt Equipment Marketing, Inc. Page 11
called to the trial court’s attention that no sworn denial of the partnership was on file in
the case. Sunbelt’s objection was overruled. Lorenz then elicited from Gully that
neither Shavers, nor Lorenz, nor Edwards were the lessees on the lease agreements.
Sunbelt again objected to the questions that appeared to be directed toward the
partnership issue and requested a running objection. Sunbelt explained to the court
that it was trying to prevent testimony designed to establish there was no partnership
when there was no sworn denial of that partnership. A running objection was given.
Lorenz further elicited that neither Lorenz nor Shavers signed a guaranty and that
Shavers did not sign the lease in his individual capacity.
This was all that was presented. After reviewing the testimony, we find the issue
of the existence of a partnership was not tried by consent. This testimony was merely
the hearing of evidence on an issue and was received over the objection of Sunbelt. The
issue of whether Lorenz and Shavers were partners in Jesco was certainly not tried by
consent.
After reviewing the evidence under the appropriate standards, we find the
evidence is legally and factually sufficient to support the trial court’s finding that
Lorenz and Shavers participated in a partnership.
Fraud
In Subpart B of Lorenz’s second issue, Lorenz contends there is legally and
factually insufficient evidence to support a finding of fraud; thus, the award of
Lorenz v. Sunbelt Equipment Marketing, Inc. Page 12
exemplary damages should be reversed. Lorenz’s sole complaint seems to be that there
was no or insufficient evidence of an intent not to perform when the lease agreement
was made.
A promise to do an act in the future is actionable fraud when made with the
intention, design and purpose of deceiving, and with no intention of performing the act.
Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 434 (Tex. 1986); Stanfield v. O'Boyle, 462
S.W.2d 270, 272 (Tex. 1971). While it is the party's intent at the time the representation
was made by the party which must be determined, intent may be inferred from the
party's acts after the representation is made. Spoljaric, 708 S.W.2d at 434. Intent is a fact
question uniquely within the realm of the trier of fact because it so depends upon the
credibility of the witnesses and the weight to be given to their testimony. Id. Failure to
perform, standing alone, is no evidence of the promissor's intent not to perform when
the promise was made. Id. at 435. However, that fact is a circumstance to be considered
with other facts to establish intent. Id.; see also Batto v. Gafford, 119 S.W.3d 346, 348 (Tex.
App.—Waco 2003, no pet.). Since intent to defraud is not susceptible to direct proof, it
invariably must be proven by circumstantial evidence. Id. "Slight circumstantial
evidence" of fraud, when considered with the breach of promise to perform, is sufficient
to support a finding of fraudulent intent. Id.; Batto, 119 S.W.3d at 348.
J.W. Gully, the owner and president of Sunbelt, testified that Sunbelt leased
construction equipment to Jesco Disaster Services to clean small debris from a beach in
Lorenz v. Sunbelt Equipment Marketing, Inc. Page 13
Florida after a hurricane. The agreement was that Jesco would pay everything up front.
Jesco lead Gully to believe that it was a large company that had multi-million dollar
projects all over the country. Gully later learned that this was not true.
In reliance on the representations by Jesco, Sunbelt shipped the equipment to
Jesco. The freight charges were paid by Jesco for the first two loads of equipment.
After Jesco received the equipment, it was supposed to pay for the first month’s rent.
Sunbelt did not get paid. As a result, Gully went to the job site to talk to someone about
the money. He met with Lorenz and Edwards. Lorenz represented that he and
Edwards were partners with Shavers in Jesco. When Gully spoke with Lorenz and
Edwards about being paid, they referred him to Shavers. Ultimately, on one occasion,
Gully spoke to Shavers who informed Gully that Edwards had been instructed to issue
a check for the equipment and that it had been sent. Gully did not receive the check.
Gully testified that he learned the National Park Service had awarded the
contract for the beach clean-up to Jesco and that Jesco had been paid $588,000 for the
contract. Gully also learned that Jesco incorrectly informed the Park Service that all
Jesco’s suppliers and subcontractors had been paid when Sunbelt had not been paid.
Gully further testified that had he known Jesco was not going to pay up front as
was represented, he would not have rented the equipment to Jesco. He believed that
Jesco never intended to pay Sunbelt because after Jesco paid for the freight on the first
two units shipped, it never paid anything else. Jesco received the equipment, and in
Lorenz v. Sunbelt Equipment Marketing, Inc. Page 14
Gully’s words, “abused it, completed the job, got their money; and they never intended
to pay anything from then on.”
Lorenz argues that because Jesco paid the freight charges for the first shipment,
Sunbelt’s claim of an intent not to pay is negated. He relies on a case from 14th Court of
Appeals in Houston for this proposition. See IKON Office Solutions, Inc. v. Eifert, 125
S.W.3d 113, 124 (Tex. App.—Houston [14th Dist.] 2003, pet. denied). However, the
opinion in IKON did not dispose of the case on this theory. Further in the case relied
upon by the IKON court for its statement that “*p+artial performance can negate an
intent not to keep a promise at the time it was made,” the party had performed its
obligation for five years before payment ceased. See Bank One, N.A. v. Stewart, 967
S.W.2d 419, 445 (Tex. App.—Houston [14th Dist.] 1998, pet. denied). This is not the case
here. Jesco owed $68,119.84 for its rental of Sunbelt’s equipment. It only paid the
freight for the initial delivery of two pieces of equipment. Thereafter, it paid nothing.
This initial payment is not the same as paying for five years on a contract. Thus we
cannot conclude that it negates an intent not to perform.
After reviewing the evidence in the appropriate standards, we find the evidence
legally and factually sufficient to prove an intent not to perform when the promise was
made which supports a finding of fraud. Accordingly, Subpart B of Lorenz’s second
issue is overruled.
Lorenz v. Sunbelt Equipment Marketing, Inc. Page 15
EXEMPLARY DAMAGES
Shavers, in his related third issue, simply argues that the trial court erred in
awarding exemplary damages in a breach of contract case. The trial court rendered a
judgment on all of Sunbelt’s claims. One of those claims was fraud. The only challenge
to the fraud claim was to the sufficiency of the evidence to prove an intent not to
perform. We overruled that challenge. Because exemplary damages may be awarded
for damages which results from fraud, Shavers’ third issue is overruled. See TEX. CIV.
PRAC. & REM. CODE ANN. § 41.003 (West Supp. 2011).
CONCLUSION
Having overruled each issue on appeal, we affirm the trial court’s judgment.
TOM GRAY
Chief Justice
Before Chief Justice Gray,
Justice Davis, and
Justice Scoggins
Affirmed
Opinion delivered and filed May 23, 2012
[CV06]
Lorenz v. Sunbelt Equipment Marketing, Inc. Page 16