Melvin J. Scott and Joyce M. Scott v. Carol Spalding and Earnest Spalding ( 2009 )

Opinion filed January 30, 2009
In The
Eleventh Court of Appeals
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No. 11-07-00264-CV
__________
MELVIN J. SCOTT AND JOYCE M. SCOTT, Appellants
V.
CAROL SPALDING AND EARNEST SPALDING, Appellees
On Appeal from the 259th District Court
Jones County, Texas
Trial Court Cause No. 20,544
MEMORANDUM OPINION
We are called upon to address seven issues on appeal in this contract for deed lawsuit. We
reverse and remand that portion of the judgment awarding attorney’s fees. Otherwise, we modify
the amount of damages and affirm the judgment of the trial court.
Melvin J. Scott and Joyce M. Scott owned a building in Hamlin. They entered into a contract
to sell the property to Carol Spalding and Earnest Spalding for $10,000. The purchase price was to
be paid at the rate of $250 per month. The Scotts agreed to deliver a warranty deed to the Spaldings
when the $10,000 purchase price had been paid.
Before the sale of the property to the Spaldings, Jones County had been renting a space in
the building for $300 a month. After the sale of the property to the Spaldings, the Scotts continued
to receive the rent checks from the county but would give the checks to the Spaldings each month.
The Spaldings would then write the Scotts a check for the $250 payment called for under the
contract. It is largely undisputed that the Spaldings paid the Scotts fifty-one payments of $250 each
plus an additional $200 in two other checks, for a total of $12,950 on the $10,000 contract.
At some point in time before the contract price had been paid, the Spaldings had not paid
some of the ad valorem taxes due on the property. The Scotts decided to withhold the Jones County
rent for six months and use that $1,800 to pay those delinquent taxes.
The Spaldings operated a business in the building that they purchased from the Scotts. The
business eventually closed. According to Mrs. Spalding, not long before the business closed, she
told Mrs. Scott that she wanted to settle up and “get the papers on [the building].” Mrs. Scott said
that she would talk to Mr. Scott and get back to her. Subsequently, and while the Spaldings still had
personal property in the building, Mr. Scott went to the Spalding’s home. Mrs. Spalding testified
that she told Mr. Scott that she wanted to settle up and asked him, “[H]ow much more do we have
to pay, or how much have we paid you?” Mr. Scott said that he did not know but that he would get
back to her. Mrs. Spalding’s testimony was that, at that time, Mr. Scott told her that he had “no
intentions of giving [them] a deed to this place.” Mr. Scott said that he made no such statement “that
[he knew] of.”
On a later occasion, Mr. Scott went back to the Spalding’s home. Mr. Scott testified that it
was at this time that Mrs. Spalding surrendered the keys to the property to him. Mrs. Spalding,
however, testified that she did not surrender the keys to him but that she gave Mr. Scott a new key
to the back door of the building because the old lock had been replaced after it had been damaged.
Mr. Scott already had keys to the rest of the building because he and Mrs. Scott still had some
property stored there.
The Spaldings wrote their last check to the Scotts in February 2003. Later, Mr. Scott
discovered that the Spaldings had not paid several years of ad valorem taxes on the property, and he
paid them. In their briefs, the parties seem to agree that the amount of the taxes paid was $2,562.33.
The Spaldings submitted exhibits showing that they had written checks to the Scotts in the
total amount of $12,950. Additionally, as we have noted, the Scotts redirected $1,800 due to the
Spaldings and paid it over to taxing authorities. Even though the Spaldings had paid $14,750,
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$4,750 more than was due on the contract, the Scotts did not deliver a deed to them but, rather, sold
the property to a third party.
After the Scotts resold the property, the Spaldings sued them claiming that the Scotts
committed various deceptive trade practices, common-law fraud, fraud in a real estate transaction,
and breach of contract.
After a bench trial, the trial court awarded the Spaldings actual damages of $14,250. Because
the trial court found that the Scotts’ actions were committed knowingly, it also awarded the
Spaldings additional damages of $8,000. Finally, the court awarded the Spaldings $8,000 in
attorney’s fees.
Seven issues are brought to us by the Scotts. They are the following: (1) there is either no
evidence or insufficient evidence to support the trial court’s findings regarding deceptive trade
practices; (2) the finding that the Spaldings did not abandon the property is against the great weight
and preponderance of the evidence; (3) the Spaldings are not entitled to additional damages because
the record does not show that the Scotts acted knowingly; (4) the evidence does not support the
finding that the Scotts’ actions were the producing cause of the Spaldings’ damages; (5) there is a
variance between the conclusions of law and the judgment; (6) the trial court should have considered
evidence of offsets and credits in favor of the Scotts; and (7) the trial court should not have taken
judicial notice of the amount of attorney’s fees awarded to the Spaldings.
Because findings of fact in a bench trial have the same force and dignity as a jury verdict, we
review them for legal and factual sufficiency of the evidence under the same standards we apply in
reviewing a jury’s findings. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). When
reviewing the legal sufficiency of the evidence, we consider the evidence in the light most favorable
to the challenged finding and indulge every reasonable inference that would support it. City of
Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005). We must credit favorable evidence if a
reasonable factfinder could and disregard contrary evidence unless a reasonable factfinder could not.
Id. at 827. We must determine whether the evidence at trial would enable reasonable and
fair-minded people to find the facts at issue. Id. The factfinder is the only judge of witness
credibility and the weight to give to testimony. Id. at 819.
When reviewing a challenge to the factual sufficiency of the evidence, we examine the entire
record, considering both the evidence in favor of and contrary to the challenged finding. Cain v.
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Bain, 709 S.W.2d 175, 176 (Tex. 1986). After considering and weighing all the evidence, we set
aside the fact finding only if it is so contrary to the overwhelming weight of the evidence as to be
clearly wrong and unjust. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986). As in a legal
sufficiency review, the trier of fact is the sole judge of the credibility of the witnesses and the weight
to be given to their testimony. GTE Mobilnet of S. Tex. Ltd. P’ship v. Pascouet, 61 S.W.3d 599,
615-16 (Tex. App.—Houston [14th Dist.] 2001, pet. denied). We may not substitute our own
judgment for that of the trier of fact, even if we would reach a different answer on the evidence.
Mar. Overseas Corp. v. Ellis, 971 S.W.2d 402, 407 (Tex. 1998). The amount of evidence necessary
to affirm a judgment is far less than that necessary to reverse a judgment. Pascouet, 61 S.W.3d at
616.
The Scotts’ complaints are directed specifically at Findings of Fact Nos. 7 through 13, 17,
and 20 through 22.
In its Finding of Fact No. 7, the trial court found that the Scotts had represented to the
Spaldings that they would provide a warranty deed after the principal was paid and that the
representation was not true. In Finding of Fact No. 8, the trial court found that the contract had uses
or benefits that it did not have. And, in Finding of Fact No. 9, the trial court found that the contract
conferred rights and obligations that it did not have.
The contract between the parties provided that, when the sum of $10,000 had been paid to
the Scotts, they would issue a deed to the Spaldings. Therefore, the trial court did not err when it
found in its seventh finding of fact that the Scotts had represented to the Spaldings that they would
furnish a warranty deed to them when the purchase price was paid. The trial court had testimony
before it that the Scotts never offered to deliver a deed to the Spaldings, even though more than the
contractual purchase price had been paid. The trial court also had testimony before it from both of
the Spaldings that Mr. Scott said that he never intended to give them a warranty deed. Mr. Scott’s
testimony was that he did not say that, “that [he knew] of.” Furthermore, the Scotts sold the property
to someone else even though the Spaldings had paid more than the entire purchase price. As the only
trier of fact, the trial court was free to believe or disbelieve the witnesses. The evidence is both
legally and factually sufficient to support the seventh finding of fact that the Scotts represented they
would deliver a warranty deed to the Spaldings when the purchase price was paid and that the
representation was untrue. Because we have found legal and factual support in the evidence for the
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trial court’s seventh finding, we need not address Findings of Fact Nos. 8 and 9. The Scotts’ first
issue on appeal is overruled.
We must now decide whether the misrepresentations that the trial court found in its seventh
finding were a producing cause of injury to the Spaldings, as the trial court found in its tenth finding
of fact. In the Scotts’ brief, they give this definition of producing cause: “Producing cause is a
substantial factor that brought about the injury and without which the injury would not have
occurred.” Citing Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156, 161 (Tex.
1995). Under this issue, the Scotts seem to argue that, since the payments that the Spaldings made
to the Scotts were paid out of the Jones County rent checks, the Spaldings were not actually out any
money. Because the Jones County rent money was the Spaldings’ money, the argument is based
upon a false premise. See Graves v. Diehl, 958 S.W.2d 468, 472 (Tex. App.—Houston [14th Dist.]
1997, no writ). If the Spaldings had been told before they entered the contract for deed that they
were not going to get a deed, there can be little doubt that they would have declined to enter this
transaction and pay the purchase price, and the injury would not have occurred. The fourth issue on
appeal is overruled.
In issue two, the Scotts claim that the trial court’s finding that the Spaldings did not abandon
the property was against the great weight and preponderance of the evidence. They inform us of the
standard of review but cite us to no authority on the issue of abandonment. The complaint is waived.
TEX . R. APP . P. 38.1(h). Even if the point were not waived, the trial court heard the contradicting
testimony regarding the keys to the property and other testimony regarding abandonment. As the
trier of fact, the trial court was the judge of the credibility of the witnesses and the weight to be given
to their testimony. The Scotts had the burden of proof on the issue of abandonment. Abandonment
is an affirmative defense. TEX . R. CIV . P. 94; San Jacinto Sand Co. v. Sw. Bell Tel. Co., 426 S.W.2d
338, 344 (Tex. Civ. App.—Houston [14th Dist.] 1968, writ ref’d n.r.e.). The trial court failed to find
abandonment. The Scotts’ complaint in this issue is framed as a factual sufficiency complaint.
When a party attacks the factual sufficiency of an issue upon which it had the burden of proof, it
must demonstrate that the adverse finding is against the great weight and preponderance of the
evidence. Marrs & Smith P’ship v. D.K. Boyd Oil & Gas Co., 223 S.W.3d 1,14 (Tex. App.—El Paso
2005, pet. denied). The evidence that we have outlined above shows that the Scotts have not met
this burden. The second issue on appeal is overruled.
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In issue three, the Scotts argue that the Spaldings were not entitled to additional damages
under TEX . BUS. & COM . CODE ANN . § 17.50(b)(1) (Vernon Supp. 2008). Specifically, the argument
is that the record does not support a finding that the Scotts acted knowingly. As in the second issue,
except to state the law generally, the argument here is not supported by citations to authority, and
we find no record references regarding the evidence. The issue is waived. Rule 38.1(h). Even if
the issue is not waived, the Scotts cannot prevail. Again, the trial court had before it testimony that
Mr. Scott told the Spaldings on at least one occasion that he never intended to furnish a deed. This
testimony, which the trial court as the trier of fact was entitled to believe, together with the
undisputed facts that no deed was ever tendered even though the property was paid for and that the
property was sold to another after the Spaldings had paid for it, supports the trial court’s finding that
the Scotts acted knowingly. We overrule issue three.
In their fifth issue on appeal, the Scotts assert that there is a conflict between the ninth
conclusion of law and the judgment. In the judgment, the trial court awarded the Spaldings $8,000
in additional damages. In a subsequent conclusion of law, the trial court concluded that the
additional damages should be $6,000. When conclusions of law are in conflict with an earlier filed
judgment, the conclusions are controlling over the judgment. Dickerson v. DeBarbieris, 964 S.W.2d
680, 684 (Tex. App.—Houston [14th Dist.] 1998, no pet.). The Scotts’ fifth issue on appeal is
sustained, and the trial court’s judgment is modified to reflect the additional damages award of
$6,000.
In their sixth issue on appeal, the Scotts ask us to hold that the trial court erred when it failed
to consider offsets and credits in rendering its judgment. The argument is that the Spaldings paid
only $8,387.67 on the purchase price. They reach this conclusion by using, as the starting point of
their argument, the $12,750 represented by the fifty-one checks of $250 each as the total amount paid
by the Spaldings on the purchase price.1 Although they do not count the $1,800 rent money from
Jones County that they diverted away from the Spaldings as being paid toward the purchase price,
the Scotts argue that the trial court should have offset that amount. As the Scotts have constructed
their argument, an $1,800 offset would reduce the total amount paid by the Spaldings on the
purchase price to $10,950. Next, the Scotts claim that the $2,562.33 they paid for taxes should be
1
We have not been told why the amount of the two checks totaling $200 of additional payments are not included in the
judgment.
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offset and, thereby, reduce the amount paid by the Spaldings to $8,387.67, an amount less than the
$10,000 purchase price. Therefore, the Scotts conclude that the purchase price was never paid and
that they were never obligated to deliver a warranty deed to the Spaldings because the purchase price
was never paid.
First, the $1,800 belonged to the Spaldings, and an offset would not be proper. Even if we
were to agree that the voluntary payment of taxes should be offset, which we do not, the fifty-one
checks less the $2,562.33 paid taxes equals $10,187.67, an amount in excess of the purchase price.
Furthermore, although the Scotts have cited us to one case regarding the standard of review
applicable to this issue, they have presented us no authority to show us why the trial court’s failure
to offset the amount of the taxes, paid voluntarily by the Scotts after the Spaldings had performed
under the contract, was error. We consider the issue to be waived. See Rule 38.1(h).2 The Scotts’
sixth issue on appeal is overruled.
In the seventh issue on appeal, the Scotts urge this court to hold that the trial court erred when
it awarded attorney’s fees to the Spaldings. The Spaldings presented no evidence on the issue of
attorney’s fees. Instead, they claim that the trial court could take judicial notice that the attorney’s
fees sought were usual, customary, necessary and reasonable under TEX . CIV . PRAC. & REM . CODE
ANN . §§ 38.003-.004 (Vernon 2008). TEX . CIV . PRAC. & REM . CODE ANN . § 38.001 (Vernon 2008)
provides that reasonable attorney’s fees may be recovered if the claim is for the following:
(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.
Section 38.003 creates a rebuttable presumption that the usual and customary attorney’s fees
for a claim of the type described in Section 38.001 are reasonable. Section 38.004 allows the court
to take judicial notice of the usual and customary attorney’s fees. At least two courts have held that
these provisions are not limited to those claims set out in Section 38.001. See, e.g., Main Place
Custom Homes, Inc. v. Honaker, 192 S.W.3d 604, 622 (Tex. App.—Fort Worth 2006, pet. denied);
Lefton v. Griffith, 136 S.W.3d 271 (Tex. App.—San Antonio 2004, no pet.); Copeland v. Alsobrook,
3 S.W.3d 598 (Tex. App.—San Antonio 1999, pet. denied). However, we agree with those courts
2
We note that, although the Scotts sought an offset and credit, they made no counterclaim for the taxes they had voluntarily
paid after the Spaldings had paid for the property.
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that hold that, unless the claim is one set forth in Section 38.001, the court may not take judicial
notice that the usual and customary fees are reasonable but, rather, the party must offer legally and
factually sufficient evidence on the issue. See, e.g., Charette v. Fitzgerald, 213 S.W.3d 505, 514-15
(Tex. App.—Houston [14th Dist.] 2006, no pet.); Hasty Inc. v. Inwood Buckhorn Joint Venture, 908
S.W.2d 494, 502 (Tex. App.—Dallas 1995, writ denied); Leggett v. Brinson, 817 S.W.2d 154, 159
(Tex. App.—El Paso 1991, no writ). Because the trial court’s judgment is based upon violations of
the DTPA, this case is not a claim that is described in Section 38.001. The trial court abused its
discretion when it awarded attorney’s fees based only on judicial notice under Sections 38.003 and
38.004. The Scotts’ seventh issue on appeal is sustained.
Normally, when we find that there is no evidence to support a finding, the remedy is to
reverse and render on the point. However, the award of attorney’s fees under the DTPA presents a
unique situation. This is so because an award of attorney’s fees is mandated. TEX . BUS . & COM .
CODE ANN . § 17.50(d) (Vernon Supp. 2008). The trial court shall award reasonable and necessary
attorney’s fees. Id. Therefore, here, the proper action is to remand the issue of attorney’s fees to the
trial court for a determination of the reasonable and necessary attorney’s fees to be awarded. See
Leggett, 817 S.W.2d at159. The seventh issue on appeal is sustained, and the cause is remanded to
the trial court for a determination of attorney’s fees in accordance with this opinion.
The judgment of the trial court is reversed with respect to its award of attorney’s fees and
remanded to the trial court for a proper assessment of those fees. We modify the award of additional
damages by reducing the award to $6,000. Otherwise, the judgment of the trial court is affirmed.
JIM R. WRIGHT
CHIEF JUSTICE
January 30, 2009
Panel consists of: Wright, C.J.,
McCall, J., and Strange, J.
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