U.S. Auto Insurance Services, Inc. v. Les Marks Chevrolet ( 2003 )

Affirmed and Memorandum Opinion filed August 26, 2003.

In The

Fourteenth Court of Appeals

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NO. 14-02-00644-CV

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U.S. AUTO INSURANCE SERVICES, INC., Appellant

V.

LES MARKS CHEVROLET, Appellee

On Appeal from the County Civil Court at Law Number One

Harris County, Texas

Trial Court Cause No. 754,847

M E M O R A N D U M   O P I N I O N

This is a restricted appeal from a default judgment in favor of appellee, Les Marks Chevrolet (AMarks@).  Appellant, U.S. Auto Insurance Services (AU.S. Auto@) brings two grounds: (1) it did not participate in the default judgment hearing and (2) error is apparent on the face of the record.  We affirm.

Facts

Marks agreed to sell a car to Keith Jones only after verifying through Aranda Insurance (AAranda@) that he had proper insurance.  Aranda confirmed that Jones had collateral protection with U.S. Auto and provided a written binder reflecting such coverage. Shortly after Jones received the car, he completely destroyed it in an accident.  Marks then sued U.S. Auto, claiming it had a duty to pay under the collateral protection policy.  U.S. Auto was served with citation on July 26, 2001.  On January 23, 2002, after U.S. Auto failed to respond, the trial court signed a no-answer default judgment.

Restricted Appeal

A.  Standard of Review

A party against whom a default judgment has been rendered may bring a restricted appeal.  See Tex. R. App. P. 30.  In order to successfully appeal, an appellant must establish (1) that the petition is brought within six months from the signing of the judgment; (2) that the party filing the petition was a party to the lawsuit; (3) that the party did not participate in the trial on the merits; and (4) that there is error apparent on the face of the record.  Id.  Campbell v. Fincher, 72 S.W.3d 723, 724 (Tex. App.CWaco 2002, no pet.). 

B.  Application

U.S. Auto lists two reasons for its appeal: (1) it did not participate in the trial on the merits and (2) error is apparent on the face of the record. Because Marks agrees that U.S. Auto did not participate in the trial, we need only address whether error is apparent on the face of the record.  Accordingly, we must consider all papers on file in the record.  Norman Communications v. Tex. Eastman Co., 955 S.W.2d 269, 270 (Tex. 1997) (per curiam).

U.S. Auto first contends that error is apparent on the face of the record because there is no reporter=s record of the default judgment hearing.  If damages are unliquidated, a court rendering a default judgment must hear evidence on damages.  Tex. R. Civ. P. 243; Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992). U.S. Auto asserts that a reporter=s record is necessary when a trial court hears pleadings, evidence, and arguments of counsel.  See Smith v. Smith, 544 S.W.2d 121, 123 (Tex. 1976); Alvarado v. Reif, 783 S.W.2d 303, 304B05 (Tex. App.CEastland 1989, no writ) (reversing default judgment where there was no record of unliquidated damages and no reporter=s record made).  However, the judgment in this case reflects that the trial court considered only the pleadings and Asufficient evidence in the form of affidavits to establish Plaintiff=s damages.@  A trial court may award unliquidated damages in a default judgment based on affidavits.  See Tex. Commerce Bank Nat. Ass=n. v. New, 3 S.W.3d 515, 516B17 (Tex. 1999) (in no‑answer default judgment, affidavits satisfy Rule 243=s requirement of evidence of unliquidated damages). Further, the pleadings and affidavits constitute a record upon which the court may base a default judgment. Barganier v. Saddlebrook Apartments, 104 S.W.3d 171, 173 (Tex. App.CWaco 2003, no pet. h); Naficy v. Braker, 642 S.W.2d 282, 285 (Tex. App.CHouston [14th Dist.] 1982, writ ref=d n.r.e.).  In a case such as this, a reporter=s record is unnecessary.  See Barganier, 104 S.W.3d at 173B74.  Thus, we overrule U.S. Auto=s first argument.

Second, U.S. Auto contends there is no evidence that the $9,975 awarded was a Areasonable and necessary@ expense.  In his affidavit, Marks=s general manager avers the car Awas totally destroyed@ and the amount Adue and unpaid@ for it is $9,975.  Essentially, U.S. Auto is asserting that a car dealer must prove that the unpaid balance of the car=s sale price is reasonable and necessary.  However, the cases U.S. Auto cites address only whether repair costs are reasonable and necessary.  See Jackson v. Guiterrez, 77 S.W.3d 898, 904 (Tex. App.CHouston [14th Dist.] 2002, no pet.); Castanon v. Monsevais, 703 S.W.2d 295, 297 (Tex. App.CSan Antonio 1985, no writ).  These cases are inapplicable because the car in this case was destroyed, not repaired.  It is well settled that an automobile owner can testify as to its market value. Coleman v. Journet, 859 S.W.2d 550, 551 (Tex. App.CHouston [14th Dist.] 1993, writ dism=d w.o.j.). Accordingly, we overrule this argument.

Third, U.S. Auto contends Marks failed to plead that it was owed a duty or that Aranda was U.S. Auto=s agent; and thus there is insufficient evidence of a causal link between it and Marks=s damages.  These arguments are unavailing.  It is well established that a default judgment operates as an admission of the material facts alleged in plaintiff=s petition.  Stoner v. Thompson, 578 S.W.2d 679, 684B85 (Tex. 1979).  Marks states in its petition:

(1)       Marks verified with Aranda that the buyer had insurance before it allowed him to take possession of the car.

(2)       Aranda, who was U.S. Auto=s agent, confirmed there was coverage through U.S. Auto.

(3)       Marks relied on U.S. Auto=s representations, but was denied its claim for damages after the buyer Atotaled@ the car.

Based on the above admissions, there was sufficient evidence of a causal link. We overrule U.S. Auto=s third argument. 

Next, U.S. Auto contends the trial court erroneously awarded attorney=s fees for two reasons.  It asserts that Marks cannot recover because Marks failed to plead the authority under which it is entitled to attorney=s fees.  Generally, attorney=s fees are not recoverable unless authorized by contract or statute. Willacy County Appraisal Dist. v. North Alamo Water Supply Corp., 676 S.W.2d 632, 640 (Tex. App.CCorpus Christi 1984, writ ref=d n.r.e.).  A party need not plead the specific statute under which attorney=s fees are available, if the party pleads facts which entitle him to relief.  Mitchell v. LaFlamme, 60 S.W.3d 123, 130 (Tex. App.CHouston [14th Dist.] 2000, no pet.); O=Connell v. Hitt, 730 S.W.2d 16, 18 (Tex. App.CCorpus Christi 1987, no writ).  The Texas Insurance Code provides for award of attorney=s fees to prevailing parties.  See Tex. Ins. Code Ann. art. 21.21, ' 16 (Vernon Supp. 2003). Further, Marks pleaded violations of articles 21.21 and 21.55 of the Texas Insurance Code.  Article 21.21, _ 3 prohibits unfair or deceptive acts under the Insurance Code.  Under article 21.21, _ 4(1), such a deceptive act includes misrepresenting terms of a policy. Tex. Ins. Code Ann. art. 21.21, ' 4(1) (Vernon Supp. 2003). Because we take the facts pleaded as true in Marks=s petition, U.S. Auto misrepresented the coverage of the collateral protection policy.  We find Marks pleaded sufficient facts under the Texas Insurance Code which entitled it to recover attorney=s fees.  Mitchell, 60 S.W.3d at 130.

U.S. Auto also contends the evidence was insufficient for an award of $1,000 in attorney=s fees.  It alleges that the affidavit of Marks=s counsel was incomplete because it did not delineate the number of hours worked, his hourly rate, or a statement that the work was necessary.  We disagree.  U.S. Auto cites no authority supporting its assertion that a default judgment creditor must provide such information in an attorney=s fee affidavit.  Further, the trial court has discretion to fix the amount of reasonable attorney=s fees.  Budd v. Gay, 846 S.W.2d 521, 524 (Tex. App.CHouston [14th Dist.] 1993, no writ).  Marks=s attorney submitted an affidavit that reflects his 28 years of experience, the specific work done in this case, and his familiarity with fees charged in Harris County for such work.  For example, he stated that he filed the Original Petition, obtained service, prepared all relevant affidavits, and prepared and filed the proposed Final Judgment.  He further stated that $1,000 was a reasonable fee based on such factors as:

(a)       The time and labor required, the novelty and difficulty of the questions involved and the skill requisite to perform the legal services properly;

(b)       The fee customarily charged in the locality for similar legal services;

(c)       The amount of the claim by Plaintiff against the Defendant;

(d)       The time limitation imposed by the client;

(e)       The experience of the attorney performing the services.

Such information is sufficient evidence supporting the trial court=s judgment for attorney=s fees.  Tex. Commerce Bank Nat. Ass=n., 3 S.W.3d at 517B18; see also Columbia Rio Grande Reg=l Hosp. v. Stover, 17 S.W.3d 387, 396B97 (Tex. App.CCorpus Christi 2000, no pet.).  Accordingly, we overrule U.S. Auto=s final point of error. 

Having overruled each of U.S. Auto=s issues and sub-issues, we affirm the judgment of the trial court.

/s/ Charles W. Seymore

Justice

Judgment rendered and Memorandum Opinion filed August 26, 2003.

Panel consists of Justices Anderson, Seymore, and Guzman.