Levent Ulusal v. Lentz Engineering, L C ( 2015 )

ACCEPTED
01-15-00597-CV
FIRST COURT OF APPEALS
HOUSTON, TEXAS
12/18/2015 11:54:50 PM
CHRISTOPHER PRINE
CLERK
01-15-00597-CV
IN THE COURT OF APPEALS FILED IN
1st COURT OF APPEALS
FOR THE FIRST COURT OF APPEALS DISTRICT HOUSTON, TEXAS
HOUSTON, TEXAS 12/18/2015 11:54:50 PM
CHRISTOPHER A. PRINE
Clerk
LEVENT ULUSAL,
Appellant,
V.
LENTZ ENGINEERING, L C
Appellee.
REPLY BRIEF OF APPELLANT, LEVENT ULUSAL
ORAL ARGUMENT REQUESTED
Daniel Kistler
Daniel Kistler, Attorney at Law
Office Address:
17041 El Camino Real
Ste. 204
Houston, Texas 77058
Mailing Address:
2617C West Holcombe
No. 421
Houston, Texas 77025
Telephone: (713) 855-0827
Facsimile: (866) 352-5124
kistlerattorney@comcast.net
ATTORNEY FOR APPELLANT
TABLE OF CONTENTS
TABLE OF CONTENTS ......................................................................................... ii
INDEX OF AUTHORITIES .................................................................................... iii
ARGUMENT ............................................................................................................. 1
Ulusal Adequately Briefed All Issues on Appeal ................................................... 1
Service and Citation Were Insufficient to Support a Default Judgment
against Ulusal. ........................................................................................................... 12
The Law Regarding Amended or Corrected Returns of Citation Cannot
Be Ignored ................................................................................................................. 14
Lentz’ Pleadings Do Not Support a Judgment Against Ulusal for Fraud. .......... 16
Lentz’ Pleadings Do Not Support a Judgment Against Ulusal for
Attorney’s Fees. ......................................................................................................... 16
No Evidence Supported an Award of Damages Against Ulusal. .......................... 21
CONCLUSION AND PRAYER FOR RELIEF ..................................................... 23
CERTIFICATE OF SERVICE ............................................................................... 24
CERTIFICATE OF COMPLIANCE ............................................................... 25
ii
INDEX OF AUTHORITIES
CASES
A.G. Servs., Inc. v. Peat, Marwick, Mitchell & Co., 757 S.W.2d 503, 507
(Tex.App.-Houston [1st Dist.]1988, writ denied) ..................................... 17
Barker CATV Constr., Inc. v. Ampro, Inc., 989 S.W.2d 789, 793-94 (Tex.
App. – Houston [1st Dist.] 1999, no pet.) .............................................. 4, 19
Baylor University v. Sonnichsen, 221 S.W.3d 632, 636 (Tex. 2007) ........... 20
Border States Electric Supply of Texas, Inc. v. Coast To Coast Electric,
LLC, Lexis 5681, May 29, 2014, 13-13-00118-CV (Tex. App. – Corpus
Christi 2014, pet. denied) .......................................................................... 25
C. W. Bollinger Insurance Company v. Fish, 699 S.W.2d 645, 647 (Tex.
App. – Austin 1985, no writ) ..................................................................... 12
Campdera v. Reed, 131 S.W.2d 297 (Tex. Civ. App., 1939, writ ref’d n.r.e.)
................................................................................................................... 12
Capitol Brick, Inc. v Fleming Mfg. Co., 722 S.W.2d at 401 (Tex. 1986).... 13,
20
Choy v. Graziano Roofing of Texas, Inc., 322 S.W.3d 276, 282 (Tex.App.-
Houston [1st Dist.] 2009, no pet.) ............................................................. 25
Direct Value, L.L.C. v. Stock Bldg. Supply, L.L.C., 388 S.W.3d 386 (Tex.
App. – Amarillo 2012, no pet.) ........................................................... 24, 25
Gibson v. Cuellar, 440 S.W.3d 150, 156 (Tex.App.--Houston [14th Dist.]
2013, no pet.) ............................................................................................. 21
Hercules Concrete Pumping Serv. v. Bencom Management & General
Contracting Corp., 62 S.W.3d 308 (Tex. App. – Houston [1st Dist.] 2001,
pet. denied), ................................................................................................. 9
Heritage Gulf Coast Props., Ltd. v. Sandalwood Apts., Inc., 416 S.W.3d 642
(Tex. App. – Houston [14th Dist.] 2013, no pet.), ............................... 22, 24
iii
Hofer v. Lavender, 679 S.W.2d 470, 474 (Tex. 1984) ................................. 21
Inpetco, Inc. v. Texas American Bank/Houston, N.A., 729 S.W.2d 300 (Tex.
1987). 16
In Re: E.R., 385 S.W.3d 552, 557 (Tex. 2012) ............................................... 9
In the Interest of E.R., J.B., E.G. and C.L., Children, 385 S.W.3d 552, 556
(Tex. 2012) .................................................................................................. 6
Jackson v. Biotectronics, Inc., 937 S.W.2d 38, 42 (Tex. App. – Houston [14th
Dist.] 1996, no writ) .................................................................................. 14
King v. Acker, 725 S.W.2d 750 (Tex. App. – Houston [1st Dist.] 1988, no
writ) ........................................................................................................... 21
Kreighbaum v. Lester, No. 05-06-01333-CV, 2007 WL 1829729, at *2
(Tex.App.-Dallas June 27, 2007, no pet.) (mem. op.)) ............................. 26
Kubovy v. Cintas Corp., 2003 WL 21299938, 01-00521-CV; (Tex. App. –
Houston [1st Dist.] 2003, no pet.) .............................................................. 18
Mitchell v. LaFlamme, 60 S.W.3d 123 (Tex. App. – Houston [14th Dist.]
2000, no pet.) ............................................................................................. 20
Monsanto Co. v. Milam, 494 S.W.2d 534, 536 (Tex.1973) ................... 23, 24
Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 313 (1950)....... 9
Narmah v. Waller, 257 S.W.3d 267, 273 n. 1)(Tex. App. – Houston [1st
Dist.] 2008, no pet.) ................................................................................... 17
Onwukwe v. Ike, 137 S.W.3d 159, 164 (Tex. App. – Houston [1st Dist.]
2008, no pet.) ............................................................................................. 17
Paramount Pipe & Supply Co, Inc. v. Muhr, 749 S.W.2d 491 (Tex. 1988) . 14
iv
Park v. Mem. Health Sys. of E. Tex., 397 S.W.3d 283, 288 (Tex.App.-Tyler
2013, pet. filed) ......................................................................................... 23
Perry v. Cohen, 272 S.W.3d 585, 587 (Tex. 2008) ........................................ 7
Primate Construction, Inc. v. Silver, 884 S.W.2d 151 (Tex. 1994)........ 10, 11
Republic Underwriters Ins. Inc. v. Mex-Tex, Inc., 150 S.W.3d 423, 427 (Tex.
2004) ............................................................................................................ 5
Roark v. Allen, 633 S.W.2d 804, 810 (Tex.1982). ....................................... 14
Taylor Pipeline Constr., Inc. v. Directional Road Boring, Inc., 438
F. Supp. 2d 696, 715 (E.D.Tex.2006) ......................................................... 25
Transfer Product, Inc. v. Tex Par Energy, Inc., 788 S.W.2d 713 (Tex. App. –
Corpus Christi 1990, no writ) .............................................................. 21, 22
Verburgt v. Dorner, 959 S.W.2d 615, 616-17 (Tex.1997) ......................... 5, 7
Whallon v. City of Houston, 462 S.W.3d 146 (Tex. App. – Houston [1st
Dist.] 2015, no pet.) ................................................................................... 20
STATUTES
§17.044(a)(3), Tex. Civ. Prac. Rem. Code ............................................... 7, 14
§38.001, et seq. Tex. Civ. Prac. Rem. Code ........................................... 18, 25
Chapter 10, Tex. Civ. Prac. Rem. Code. ....................................................... 25
Chapter 162, Tex. Prop. Code....................................................................... 28
v
RULES
Rule 118, Tex. R. Civ. P. ........................................................................ 18, 19
Rule 201, Tex. R. Evid ................................................................................... 8
Rule 30, Tex. R. App. P. ............................................................................... 17
Rule 38.1(a), Tex. R. App. P. ....................................................................... 17
Rule 38.1(i), Tex. R. App. P. ...................................................................... 5, 6
Rule 38.9, Tex. R. App. P. ............................................................................ 16
Rule 45, Tex. R. Civ. P. 47 of the Texas Rules of Civil Procedure.............. 14
Rule 47, Tex. R. Civ. P. 47 of the Texas Rules of Civil Procedure.............. 14
vi
ARGUMENT AND AUTHORITIES
I. ULUSAL ADEQUATELY BRIEFED ALL ISSUES ON
APPEAL.
This is an appeal from a default judgment. In its response brief, first
Lentz argues that Ulusal waived certain issues on appeal (listed on pages 10
and 11 of its brief) by not providing sufficient citations to the record and to
supporting authority.
In his opening brief, Ulusal presented five separate issues on appeal:
I. Does the record on appeal affirmatively establish that Ulusal was
properly served with citation pursuant to §17.044(a)(3), Tex. Civ.
Prac. Rem. Code?
II. Does the record on appeal affirmatively show that Ulusal was
amenable to service of citation pursuant to 17.044(a)(3), Tex. Civ.
Prac. Rem. Code?
III. Does the record on appeal affirmatively show that the default
judgment taken against Ulusal is supported by Lentz’ live pleadings?
IV. Were any legally sufficient causes of action pled against Ulusal?
V. Do the pleadings and proof as shown by the record on appeal
support a judgment against Ulusal?
Imbedded in these issues on appeal, Ulusal discussed the various points
raised within these issues. Lentz cites to several instances where it claims
that some of these subsidiary points or issues were not supported by
1
adequate record citations or citations to authority, as required by Rule
38.1(i), Tex. R. App. P.
“The brief must state concisely all issues or points presented for
review. The statement of an issue or point will be treated as covering every
subsidiary question that is fairly included.” Rule 38.1(f), Tex. R. App. P.;
Fletcher v. Department of Family and Protective Services, 277 S.W.3d 58,
63 (Tex. App. – Houston [1st Dist.] 2009, no pet.).
Rule 38.1(i), Tex. R. App. P. sets forth general briefing standards:
“Argument. The brief must contain a clear and concise argument for
the contentions made, with appropriate citations to authorities and to
the record.”
"We have instructed the courts of appeals to construe the Rules of Appellate
Procedure reasonably, yet liberally, so that the right to appeal is not lost by
imposing requirements not absolutely necessary to effect the purpose of a
rule." Verburgt v. Dorner, 959 S.W.2d 615, 616-17 (Tex.1997)). In
Republic Underwriters Ins. Inc. v. Mex-Tex, Inc., 150 S.W.3d 423, 427 (Tex.
2004), the Texas Supreme Court reversed a finding of waiver of an issue
2
based on the appellant’s citation to a single authority, and that the briefing
requirements of Rule 38.1(i), Tex. R. App. P. had been satisfied. 1
The first objection raised by is that there is no support for any
contention that due process rights were violated because Ulusal did not
receive actual notice of the lawsuit. In response, Ulusal argues that there is
no support in the record for any contention that Ulusal received “actual
notice” of the lawsuit, the only reference being the Secretary of State’s
return which included a statement that the envelope in which notice of the
lawsuit was mailed had the following notation (“Return to Sender,
Unclaimed, Unable to Forward”). (CR-41).
“A complete failure of service deprives a litigant of due process and a
trial court of personal jurisdiction; the resulting judgment is void and may be
challenged at any time.” In the Interest of E.R., J.B., E.G. and C.L.,
Children, 385 S.W.3d 552, 556 (Tex. 2012). So, even though Ulusal did not
cite to this authority in his brief, this case does support the principal that due
process requires proper service of citation.
Lentz’ objection on this point, while technically accurate, runs
contrary to well established case law which requires a liberal application of
the Rules of Appellate Procedure, and disfavors waiver due to a procedural
1
Cf., Lentz brief, page 9: “But merely claiming error and then citing a single legal
authority fails to satisfy this burden.”
3
defect. Verburgt v. Dorner, 959 S.W.3d 615, 616 – 617 (Tex. 1997).
“Appellate Rules are to be construed reasonably, yet liberally, so that the
right to appellate review is not lost by waiver.” Perry v. Cohen, 272 S.W.3d
585, 587 (Tex. 2008).
The first eight such instances are listed on pages 10 and 11 of Lentz’
response brief. They are:
1. “Construction Owner’s (Ulusal’s) due process rights were
violated because he did not receive actual notice of the lawsuit”
2. “Defect in return renders service improper.”
3. “In order for his pleadings to be effective, Draftsman was
required to state the precise date when Construction Owner moved to
New Jersey”
4. “Failure to plead trustee status deprives the district court of
jurisdiction”
5. “Failure to adequately allege all elements of fraud deprives the
district court of jurisdiction”
6. “Draftsman failed to adequately plead entitlement to attorney’s
fees for contract and fraud.”
7. “Draftsman’s petition failed to comply with fair notice
standard”
4
8. “Draftsman failed to adequately prove damages.”
Before discussing these objections to Ulusal’s arguments, it should be
noted that many of the factual allegations set forth in Lentz’ brief, that they
not supported in the record. There is nothing in the record to support Lentz’
unsupported allegations that Ulusal deliberately refused to claim his mail
(e.g., Lentz brief, pages 6 and 7) or that Ulusal fled to New Jersey to avoid
paying his or his company’s debts (e.g., Lentz brief, 5).2
The assertion that “Solidarity Contracting (the other defendant in this
case) is no longer in business, and thus, the judgment as to them is only
worth the paper on which it is written,” (Lentz brief, page 6, footnote 2) is
not supported in the record, and is factually incorrect. Ulusal asks this court
to take judicial notice, pursuant to Rule 201, Tex. R. Evid., of the records of
the Texas Secretary of State, included in Ulusal’s Supplemental Appendix,
filed herewith. These records, which are capable of accurate and ready
determination by resort to sources whose accuracy cannot reasonably be
questioned, Rule 201(b)(2), Tex. R. Evid., establish that Solidarity
Contracting has continuously been in business since it was first founded in
2008.
2
Regarding footnote 2 to Lentz’ brief, I can assure this court that New Jersey is, indeed,
a beautiful state.
5
Returning to Lentz’ objections, taking each in its turn, beginning with
the first objection, involving constitutional rights being violated, there is no
question due process mandates that a party have “notice and opportunity for
hearing appropriate to the nature of the case.” In Re: E.R., 385 S.W.3d 552,
557 (Tex. 2012), quoting Mullane v. Cent. Hanover Bank & Trust Co., 339
U.S. 306, 313 (1950). “When notice is a person's due, process which is a
mere gesture is not due process." Mullane v. Cent. Hanover Bank & Trust
Co., 339 U.S. at 315 (1950). As for the allegation that there are no citations
to the record supporting the factual proposition, Ulusal has repeatedly cited
in the record to the returns of citation showing that he received no actual
notice of the lawsuit, as he never received the envelope served on him from
the Secretary of State.
The second objection raised by Lentz, that a defect in the return of
service renders service improper, Ulusal would show that he has cited to
numerous cases (pages 11 and 12 of Ulusal’s opening brief) in support of his
contention that a return of citation, if inaccurate, was invalid. In Hercules
Concrete Pumping Serv. v. Bencom Management & General Contracting
Corp., 62 S.W.3d 308 (Tex. App. – Houston [1st Dist.] 2001, pet. denied),
cited in Ulusal’s brief on page 12, this court held:
Because the return of citation "fails absolutely" to show service on the
defendant, Hercules Concrete Pumping Service, Inc., the return was
6
fatally defective. See Barker CATV, 989 S.W.2d at 793; Primate, 884
S.W.2d at 152-53. Proper service not being affirmatively shown, there
is error on the face of the record. See Primate, 884 S.W.2d at 153.”3
This point has been adequately briefed, and is not subject to waiver.t
Next, Lentz complains that Ulusal’s argument that a defect in return
renders service improper. This issue is extensively argued, with several
citations to authority, both in Ulusal’s opening brief, and in this reply brief.
Lentz’ objection on this point is without merit.
The third objection raised by Lentz is that Ulusal presented no
authority in support of the argument that: “In order for his pleadings to be
effective, Draftsman was required to state the precise date when
Construction Owner moved to New Jersey.” (Lentz Brief, page 9). The
problem with this objection is that it misunderstands, and accordingly,
misstates the issue raised by Ulusal.
On pages 13 and 14 of his opening brief, Ulusal argued that the
conflict between the statement in Plaintiff’s Original Petition that Defendant
was, at the time the suit was filed, a resident of Harris County, Texas (CR-4)
and the allegation in Lentz’ Second Amended Petition that left the state prior
to the filing of this lawsuit (CR-21) created a fatal variance or conflict in the
pleadings on file that are not rectified in the record. Ulusal has found no
3
Barker CATV Constr., Inc. v. Ampro, Inc., 989 S.W.789 (Tex. App – Houston [1st
Dist.] 1999, no pet.); Primate Construction, Inc. v. Silver, 884 S.W.2d 151 (Tex. 1994).
7
authority specifically on point. However, it is Ulusal’s contention that the
rule demanding strict compliance with the Rules of Civil Procedure
regarding the service of process to support a default judgment, Primate
Construction, Inc. v. Silver, 884 S.W.2d 151, 152 (Tex. 1994), must include
the process by which the Secretary of State is deemed a statutory agent for
service the time this lawsuit was filed.
This issue is germane to Ulusal’s arguments found at pages 13 – 17
of Ulusal’s opening brief concerning whether the Texas Secretary of State
was, pursuant to §17.044(3), Tex. Civ. Prac. Rem. Code, Ulusal’s statutory
agent for service. For the Secretary of State to have been Ulusal’s statutory
agent of service, Ulusal must have been a nonresident before the lawsuit was
filed. §17.044(a)(3), Tex. Civ. Prac. Rem. Code.
“[T]he ultimate question before us is whether the record affirmatively
shows on its face a strict compliance with any statute by which such
jurisdiction may be acquired through substitute service. Whitney v. L
& L Realty Corporation, 500 S.W.2d 94 (Tex.1973); McKanna v.
Edgar, 388 S.W.2d 927 (Tex.1965); Flynt v. City of Kingsville, 125
Tex. 510, 82 S.W.2d 934 (1935). In this form of direct attack upon the
judgment, no presumptions may be indulged in favor of that
judgment. McKanna v. Edgar, supra. Moreover, we may not infer
from a pleaded conclusion of law any fact necessary to sustain that
conclusion. Campdera v. Reed, 131 S.W.2d 297.”4
C. W. Bollinger Insurance Company v. Fish, 699 S.W.2d 645, 647 (Tex.
App. – Austin 1985, no writ). The record here does not make such an
4
Campdera v. Reed, 131 S.W.2d 297 (Tex. Civ. App., 1939, writ ref’d n.r.e.)
8
affirmative showing. The positions taken by Lentz in its Original Petition
and Second Amended Original Petition regarding Ulusal’s residency are in
direct conflict. This issue has been adequately briefed, and Lentz’ objection
is without merit.
The fourth objection is that Ulusal presented no record citation or
authority supporting his argument that the failure to plead trustee status
deprived the court of jurisdiction. Argument on this issue is found on pages
17 through 20 (the last three issues on appeal were combined into one
argument). This issue has been adequately brief, both in Ulusal’s opening
brief and in this reply brief. Lentz’ objections are without merit.
The fifth objection to the sufficiency of Ulusal’s opening brief is to
Ulusal’s issue that an improperly pled fraud claim cannot support a default
judgment. Again, as in the prior objection, this issue was argued on pages
17 through 20 of Ulusal’s opening brief. A default judgment cannot rely on
inadequately pled causes of action. Capitol Brick, Inc. v. Fleming Mfg. Co.,
722 S.W.2d at 401 (Tex. 1986). This issue has been adequately brief, both
in Ulusal’s opening brief and in this reply brief. Lentz’ objections are
without merit.
The sixth objection centers on Lentz’ claim that Ulusal failed to
provide adequate record citations in support of his argument regarding the
9
recovery of attorney’s fees. On page 18 of his opening brief, Ulusal
specifically referenced the Second Amended Petition as being the pleading
on which an award of attorney’s fees was entered, as well as the final
judgment, which awarded joint and several attorney’s fees. Ulusal had
previously cited to both of these items from the record. (Ulusal’s opening
brief, pages 6 and 7). This issue has been adequately brief, both in Ulusal’s
opening brief and in this reply brief. Lentz’ objections are without merit.
The seventh objection raised by Lentz to the sufficiency of Ulusal’s
briefing was with respect to fair notice. As argued in Ulusal’s opening brief:
A plaintiff’s petition will support a default judgment if the petition:
(1) states a cause of action within the court’s jurisdiction, (2) gives
fair notice to the defendant of the claim asserted, and (3) does not
affirmatively disclose the invalidity of the claim on its face. Jackson
v. Biotectronics, Inc., 937 S.W.2d 38, 42 (Tex. App. – Houston [14th
Dist.] 1996, no writ).
In Paramount Pipe & Supply Co, Inc. v. Muhr, 749 S.W.2d 491 (Tex. 1988),
cited in Jackson v. Biotectronics, Inc., 937 S.W.2d at 42, the Court discussed
the fair notice requirements when there has been a default judgment.
Rules 45 and 47 of the Texas Rules of Civil Procedure require that
pleadings give fair notice of the claim asserted. Rule 45 mandates
10
plain and concise language and provides that the fact "[t]hat an
allegation be evidentiary or be of legal conclusion shall not be
grounds for objection when fair notice to the opponent is given by the
allegations as a whole." Rule 47 requires that an original pleading
include "a short statement of the cause of action sufficient to give fair
notice of the claim involved." The purpose of the fair notice
requirement is to provide the opposing party with sufficient
information to enable him to prepare a defense. Roark v. Allen, 633
S.W.2d 804, 810 (Tex.1982).
Paramount Pipe & Supply Co, Inc. v. Muhr, 749 S.W.2d at 494.
What Ulusal argues is that the Second Amended Original Petition did
not give fair notice, as it was inherently misleading with respect to attorney’s
fees. When, in the body of the petition, there was a request for attorney’s
fees, it was solely predicated on §38.001, et seq. Tex. Civ. Prac. Rem. Code.
(CR-25).
An award of attorney’s fee pursuant to Chapter 38, Tex. Civ. Prac.
Rem. Code is limited to claims for (1) rendered services, (2) performed
labor, (3) furnished material, (4) freight or express overcharges, (5) lost or
damaged freight or express, (6) killed or injured stock, (7) a sworn account,
or (8) an oral or written contract. §38.001, Tex. Civ. App. Rem. Code. Two
11
causes of action were alleged against Ulusal individually: violations of the
Texas Construction Trust Act, and common law fraud. (CR-23 through CR-
25). None of the Chapter 38 causes of action allowing for a recovery of
attorney’s fees were alleged against Ulusal. This issue has been adequately
brief, both in Ulusal’s opening brief and in this reply brief. Lentz’
objections are without merit.
Finally, Lentz objects to Ulusal’s point that damages against Ulusal
personally were unclear, unsupported by the record, and not supported by
any legal authority. Again, Ulusal refers this court to Ulusal’s opening brief,
pages 17 – 20, and Ulusal’s specific responses to Lentz’ brief, found below.
This issue has been adequately brief, both in Ulusal’s opening brief and in
this reply brief. Lentz’ objections are without merit.
To the extent that this court finds that one or more of Lentz’
objections to the sufficiency of Ulusal’s brief, then Ulusal respectfully
requests that he be granted leave to amend his brief to correct any such
deficiencies. Rule 38.9, Tex. R. App. P.; Inpetco, Inc. v. Texas American
Bank/Houston, N.A., 729 S.W.2d 300 (Tex. 1987).
Service and Citation Were Insufficient to Support a Default Judgment
against Ulusal.
This is a default judgment suit in which there is nothing in the record
to support any inference that Ulusal received the petition and citation in this
12
lawsuit at any time prior to judgment being entered. Lentz states in its brief
that Ulusal “refused” delivery,” and that he “failed to claim his mail,”
reaching the “obvious” conclusion that “the petition and citation were sent to
Construction Owner’s correct address, Construction Owner refused to claim
his mail, and the such [sic] mail could not be forwarded because the address
was correct.”
Ulusal concedes that Lentz’ theory is logically possible. However, it
is equally possible that petition and citation were mailed to Ulusal to the 75
Jackson Ave., Pompton Plains, New Jersey 07444, but that the mail was
delivered to another, incorrect address, that Ulusal accordingly never
received notice of the items being mailed to him, and as such was never
served.
Both Lentz’ and Ulusal’s speculations are just that, a mind
experiment, since in this limited appeal, the court is restricted to a review of
the record on appeal. Rule 30, Tex. R. App. P.; Onwukwe v. Ike, 137 S.W.3d
159, 164 (Tex. App. – Houston [1st Dist.] 2008, no pet.); Narmah v. Waller,
257 S.W.3d 267, 273 n. 1)(Tex. App. – Houston [1st Dist.] 2008, no pet.).
There is nothing in the record that shows Ulusal refused to accept the
citation mailed to him. There is nothing in the record to show that Ulusal
had actual notice actual notice of this lawsuit.
13
In footnote 4 of Lentz’ brief (page 14 of the Lentz brief), Lentz
appears to be implying that Ulusal is trying to hide his real address by
violating Rule 38.1(a), Tex. R. App. P. by not providing Ulusal’s address in
the brief. Ulusal is not trying to hide his true address by failing to include it
in his brief, in violation of Rule 38.1(a), for the simple reason that Rule
38.1(a) does not require Ulusal to state his address.
“(a) Identity of parties and counsel. The brief must give a complete
list of all parties to the trial court’s judgment or order appealed from,
and the names and addresses of all trial and appellate counsel, except
as otherwise provided in Rule 9.8.”
The Law Regarding Amended or Corrected Returns of Citation Cannot
be ignored.
On page 12 of Ulusal’s opening brief, Ulusal describes how the return
of citation was amended. In doing so Ulusal properly cited to the citation
return as originally filed, but not to the amended citation that is the subject
of this argument. Lentz pointed this out at page 16 of its brief. The omitted
item, the amended return, is found at CR-40.
Lentz relies on Kubovy v. Cintas Corp., 2003 WL 21299938, 01-
00521-CV; (Tex. App. – Houston [1st Dist.] 2003, no pet.) for the
proposition that an amended citation was effective though there was no court
order authorizing any such amendment. Ulusal reads Kubovy differently.
14
In Kubovy, the sole issue on appeal was lack of jurisdiction over the
defendant due to defective service of process. While in the recitation of the
case history the court did state that the citation was amended, there was no
issue raised and no discussion of the propriety of the return. The fact that
the citation had been amended had no bearing on the outcome of the case,
since it was not challenged. It was, at best, dicta.
Lentz argues that its Motion to Retain was a de facto Rule 118, Tex.
R. Civ. P. motion requesting permission to amend the return. Lentz also
argues that through the order granting the Motion to Retain, the trial court
was “implicitly agreeing that such correction would be permitted. (Lentz
Brief, page 18). In the motion to retain, Lentz asked the court to retain the
case on the court’s trial docket in order to allow Lentz time to obtain
certificates from the Secretary of State on both defendants, and to have
Ulusal’s return amended by the process server. Lentz did not request
permission to amend the return, and the trial court did not grant permission
to amend the return. The requirements of Rule 118, Tex. R. Civ. P. were not
met. “Where there is no proof that the trial court allowed the return to be
amended, the amended return is disallowed.” Barker CATV Constr., Inc. v.
Ampro, Inc., 989 S.W.2d 789, 793-94 (Tex. App. – Houston [1st Dist.] 1999,
no pet.).
15
Lentz’ Pleadings Do Not Support a Judgment Against Ulusal for Fraud.
Lentz claims that the business records affidavit of Jarrod Aden (CR-
46 through CR-58) adequately supported damages under its fraud theory.
Ulusal claims, to the contrary, that not only are Lentz’ pleadings inadequate
to support its fraud claim, but the records it offered to support its damages
claim disprove the viability of the fraud claim. The invoices attached to Mr.
Aden’s affidavit total $48,903.38, while Mr. Aden testifies in his affidavit
that the amount due and owing to Lentz, after all just and lawful payments
and credits have been allowed, is $38,353.38.
This is clearly an action on a contractual debt that Lentz artfully pled,
in the alternative, as a fraudulent inducement claim. As the Court has stated,
“The viability of Sonnichsen's fraud claim depends upon the nature of
the damages he seeks to recover. This analysis is consistent with our
holdings that focus the legal treatment of claims on the true nature of
disputes rather than allow artful pleading to morph contract claims
into fraud causes of action to gain favorable redress under the law.”
Baylor University v. Sonnichsen, 221 S.W.3d 632, 636 (Tex. 2007).
Lentz’ Pleadings Do Not Support a Judgment Against Ulusal for
Attorney’s Fees.
As discussed above, a default judgment cannot rely on inadequately
pled causes of action or award damages in excess of those specifically pled.
16
Capitol Brick, Inc. v Fleming Mfg. Co., 722 S.W.2d at 401 (Tex. 1986).
Lentz argues that it sufficiently pled a claim for attorney’s fees. The cases
which Lentz cites to, Whallon v. City of Houston, 462 S.W.3d 146 (Tex.
App. – Houston [1st Dist.] 2015, no pet.), Bancservices Group, Inc. v. Strunk
& Associates, L.P., 2005 WL 2674985 (Tex. App. – Houston [14th Dist.]
2005, no pet.), Mitchell v. LaFlamme, 60 S.W.3d 123 (Tex. App. – Houston
[14th Dist.] 2000, no pet.) all involve situations in which an answer was filed
and the case proceed to judgment; none involved a default judgment.
Ulusal agrees that a claim for attorney’s fees found in a prayer for
relief is sufficient to support an award of attorney’s fees, Whallon v. City of
Houston, 462 S.W.3d 146 (Tex. App. – Houston [1st Dist.] 2015, no pet.),
Ulusal also agrees that a plaintiff need not plead the specific statute under
which attorney’s fees are sought, provided the party pleads facts which, if
true, entitle him to the relief sought. Id, at 165; Gibson v. Cuellar, 440
S.W.3d 150, 156 (Tex.App.--Houston [14th Dist.] 2013, no pet.).
As discussed above, Ulusal was sued under two specific causes of
action: Breach of the Texas Construction Trust Fund Act, §162.001, et seq,
Tex. Prop. Code, and common law fraud. Turning first to the fraud claims,
Lentz cites to Transfer Product, Inc. v. Tex Par Energy, Inc., 788 S.W.2d
713 (Tex. App. – Corpus Christi 1990, no writ) and King v. Acker, 725
17
S.W.2d 750 (Tex. App. – Houston [1st Dist.] 1988, no writ) in support of his
claim that attorney’s fees were properly awarded in this case.
Attorney’s fees formed a separate element of damages awarded in this
case. (CR- 81). After the award of actual damages and prejudgment interest,
Lentz was additionally awarded $5,000.00 in attorney’s fees, with
conditional additional awards in the even of an appeal.
Exemplary damages exist “as an example for the good of the public
and to compensate for inconvenience and attorney's fees.” Hofer v.
Lavender, 679 S.W.2d 470, 474 (Tex. 1984). As such, attorney’s fees may
be added into an award of exemplary damages, if there was such an award.
In this case, no exemplary damages were awarded.
In Transfer Product, Inc. v. Tex Par Energy, Inc., Supra, the Corpus
Christi Court of Appeals recognized the general rule that when requesting an
award for exemplary damages, evidence can be presented on the amount of
attorney’s fees for consideration as to the amount of exemplary damages.
Transfer Product does not stand for the proposition that a finding of fraud
supports a separate award of attorney’s fees. As stated above, it is only
applicable in the context of the amount of an award of exemplary damages.
Since no exemplary damages were awarded, there is no basis for inclusion of
attorney’s fees as damages arising from the alleged fraud.
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Lentz also argues that by generally pleading for attorney’s fees in its
prayer for relief, it met the basic requirements for a valid request for
attorney’s fees. Such would be the case if that was the only basis on which
attorney’s fees were sought. Lentz also, specifically, pled for attorney’s fees
under §38.001, Tex. Civ. Prac. Rem. Code.
In Heritage Gulf Coast Props., Ltd. v. Sandalwood Apts., Inc., 416
S.W.3d 642 (Tex. App. – Houston [14th Dist.] 2013, no pet.), the counter-
plaintiff pled for attorney’s fees under three specific theories of recovery: (1)
pursuant to Chapter 38 of the Civil Practice and Remedies Code, (2)
pursuant to Chapter 10 of the Civil Practice and Remedies Code, and (3) as
an element of punitive damages. Additionally, the counter-plaintiff sought
attorney’s fees generally. The counter-plaintiff did not prevail on any of the
specific theories that authorized an award of attorney’s fees, but did not
prevail on any of those specific claims. However, the contract that was at
issue contained a prevailing party or “loser pays” provision. The counter-
plaintiff argued that since the “loser pays” provision would support an award
of attorney’s fees, fees were recoverable under the general request for fees.
The court rejected this argument, and held:
Although a general pleading is sufficient to support recovery of fees
under any applicable theory, " ‘ [w]hen a party pleads a specific
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ground for recovery of attorney's fees, the party is limited to that
ground and cannot recover attorney's fees on another, unpleaded
ground.’ " Id. at 916 (quoting Kreighbaum v. Lester, No. 05-06-
01333-CV, 2007 WL 1829729, at *2 (Tex.App.-Dallas June 27, 2007,
no pet.) (mem. op.)). Additionally, in a petition, " [t]he specific
allegation controls over the general allegation." Monsanto Co. v.
Milam, 494 S.W.2d 534, 536 (Tex.1973); see Park v. Mem. Health
Sys. of E. Tex., 397 S.W.3d 283, 288 (Tex.App.-Tyler 2013, pet.
filed); A.G. Servs., Inc. v. Peat, Marwick, Mitchell & Co., 757
S.W.2d 503, 507 (Tex.App.-Houston [1st Dist.]1988, writ denied).
Heritage Gulf Coast Props., Ltd. v. Sandalwood Apts., Inc., 416 S.W.3d at
659 – 660). The specific allegation controls over the general allegation.”
Monsanto Co. v. Milam, 494 S.W.2d 534, 536 (Tex.1973).
In the case at bar, Lentz did not plead any causes of action against
Ulusal under which recovery of attorney’s fees could be had pursuant to
Chapter 38, Tex. Civ. Prac. Rem. Code. No other authority was stated in
support of an award of attorney’s fees. The Texas Construction Fund Trust
Act is not one of the enumerated bases for an award of attorney’s fees
pursuant to §38.001, Tex. Civ. Prac. Rem. Code. The general prayer for
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attorney’s fees is disregarded, in favor of the specifically pled grounds. It
was error to award Lentz attorney’s fees from Ulusal.
No Evidence Supported an Award of Damages Against Ulusal.
No contract or quasi-contractual claims were alleged against Ulusal.
Under both of Lentz’ causes of action -- fraud and a violation of the Texas
Construction Trust Fund Act the damages were unliquidated.
Lentz claims that the Texas Construction Trust Fund Act’s measure of
damages are identical to the breach of contract damages that it submitted
with its Motion for Default (Affidavit of Jarrod Aden, CR-46 through CR-
58). In this, Lentz relies on Direct Value, L.L.C. v. Stock Bldg. Supply,
L.L.C., 388 S.W.3d 386 (Tex. App. – Amarillo 2012, no pet.). However, the
court in Direct Value did not address the proper measure of damages in a
Chapter 162, Tex. Prop. Code case.
For that matter, neither did the legislature when it enacted Chapter
162.
“The Act was specifically enacted to serve as a special protection for
subcontractors and materialmen when contractors refuse to pay a
subcontractor or materialman for labor and materials. Choy v.
Graziano Roofing of Texas, Inc., 322 S.W.3d 276, 282 (Tex.App.-
Houston [1st Dist.] 2009, no pet.) (citing Taylor Pipeline Constr., Inc.
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v. Directional Road Boring, Inc., 438 F. Supp. 2d 696, 715
(E.D.Tex.2006)”
Direct Value, L.L.C. v. Stock Bldg. Supply, L.L.C., 388 S.W.3d at 391. In
Choy, cited above, the trial court awarded damages based on the amount of
trust funds that had been received by the defendant as applied to the amount
due and payable to the plaintiff. Id., at 295. In Border States Electric
Supply of Texas, Inc. v. Coast To Coast Electric, LLC, Lexis 5681, May 29,
2014, 13-13-00118-CV (Tex. App. – Corpus Christi 2014, pet. denied), the
Corpus Christi Court of Appeals found that damages under the TCFTA had
not been proved, as there was no evidence of the amount of payments or
loans that would constitute trust funds. Id., at 4.
From these cases it is clear that the measure of damages under the
TCFTA is the amount of trust funds, up to the amount of the claim, as
opposed to the amount of the claim. Since no evidence was presented on the
amount of trust funds to which the TCFTA would apply, no damages can be
awarded against Ulusal on that theory of recovery.
Inasmuch as fraud cannot stand as a cause of action given the nature
of this case, no actual damages can be awarded under that theory of
recovery, either.
22
CONCLUSION AND PRAYER FOR RELIEF
In this reply brief, Ulusal has not reargued all of his issues on appeal.
To the extent that any issues raised in his opening brief have not been
addressed in this reply, Ulusal has not abandoned any of said claims, and
reasserts them in their entirety herein. The default judgment entered in this
cause was fundamentally defective as the rules governing service and return
of citation were not strictly complied with. Lentz’ fraud claims are nothing
more than an attempt to wrongfully morph a breach of contract claim into a
fraud claim, so that defendants and damages not otherwise reachable might
be reached. Any claim for damages under the TCFTA was not supported by
relevant evidence. Accordingly, Ulusal prays that this court reverse the final
judgment entered in this lawsuit, and remand this case to the district court
for a trial on the merits.
Respectfully submitted,
Daniel Kistler
Daniel Kistler, Attorney at Law
Office Address:
17041 El Camino Real
Ste. 204
Houston, Texas 77058
Mailing Address:
2617C West Holcombe
No. 421
Houston, Texas 77025
Telephone: (713) 855-0827
Facsimile: (866) 352-5124
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kistlerattorney@comcast.net
ATTORNEY FOR APPELLANT
CERTIFICATE OF SERVICE
On this 18th day of December, 2015, a true and correct copy of
the foregoing Reply Brief of Appellant Levant Ulusal was served
on all counsel of record and pro se parties by certified mail, return
receipt requested, facsimile transmission, electronic transmission
and/or hand delivery.
Timothy R. Ploch via facsimile: (713) 862-7575 and
Linda M. Talbot email: lawplochstaff@flash.net
Timothy R. Ploch, P.C.
730 N. Post Oak Rd., Ste 100
Houston, Texas 77024
Keith Livesay
Livesay Law Office
Brazos Suites No. 9
McAllen, TX. 78504
Via email to: RGVAppellateLaw@yandex.com
/s/ DANIEL KISTLER
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CERTIFICATE OF COMPLIANCE
I hereby certify that this brief is computer generated, utilizing
Microsoft Word for Mac 2011. This brief contains 6,010 words, all in 14
pt. type, with the exception of footnotes, which are in 12 pt. type.
/s/ DANIEL KISTLER
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