Hang Anthony Tran and Lich Thuy Hoang v. Equivest Properties Inc., Trustee ( 2006 )

Affirmed as Modified and Memorandum Opinion filed April 20, 2006

Affirmed as Modified and Memorandum Opinion filed April 20, 2006.

In The

Fourteenth Court of Appeals

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NO. 14-04-01037-CV

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BANG ANTHONY TRAN AND LICH THUY HOANG, Appellants

V.

EQUIVEST PROPERTIES INC., TRUSTEE, Appellee

On Appeal from the County Civil Court at Law No. 3

Harris County, Texas

Trial Court Cause No. 786,926

M E M O R A N D U M   O P I N I O N

In this restricted appeal, appellants, Bang Anthony Tran and Lich Thuy Hoang, appeal from a post-answer default judgment in favor of appellee, Equivest Properties Inc, in a suit for breach of contract.  In three issues, appellants contend that (1) they are entitled to a new trial because there is no reporter=s record, (2) the trial court lacked jurisdiction over Equivest=s claims, and (3) Equivest received a double recovery.  We modify the judgment and affirm as modified.

I. Background

In October 2002, appellants entered into an agreement with Equivest for the purchase of commercial property located in Harris County, Texas.  Appellants agreed to purchase the property for $1.35 million and deposited $15,000 with an escrow agent as earnest money.  The purchase agreement provided that appellants could terminate the agreement for any reason within thirty days of its effective date; however, after the thirty-day period expired, appellants would accept the property Aas-is.@ The purchase agreement also required Equivest to provide appellants with all previous environmental assessments or studies concerning the property.    

Before closing, but over thirty days after the effective date of the agreement, an environmental services company hired by appellants= lender conducted a survey of the property and determined that it contained asbestos.  Appellants notified Equivest of their intent to terminate the agreement and sought a return of the earnest money.  Appellants also claimed that Equivest failed to provide appellants with previous environmental assessments concerning the property.  Appellants filed suit against Equivest alleging fraud, negligent misrepresentation, and breach of contract.  Equivest filed a counterclaim for breach of contract, claiming that appellants breached the agreement to accept the property Aas-is@ after the thirty-day time period.

Trial was held on April 26, 2004, but appellants failed to appear.  The trial court rendered judgment in favor of Equivest.  As we will discuss, the judgment is unclear, and the parties disagree regarding the amount of damages awarded.  Nonetheless, at most, the trial court awarded Equivest $30,000 plus attorneys= fees, and pre-judgment and post-judgment interest. 

II. Discussion

A party who did not participate in a trial that resulted in a default judgment may appeal the judgment by a restricted appeal.  See Tex. R. App. P. 30.  Equivest does not dispute that appellants meet the requirements for a restricted appeal. See id.  The scope of review in a restricted appeal is the same as that of an ordinary appeal; i.e., the entire case.  Norman Commc=ns v. Texas Eastman Co., 955 S.W.2d 269, 270 (Tex. 1997).  However, error must be apparent from the Aface of the record,@ which consists of all papers on file in the appeal.  Id.         

A.        Reporter=s Record

In their first issue, appellants contend that they are entitled to a new trial as a matter of law because there is no reporter=s record.  See Chase Bank of Texas, N.A. v. Harris County Water Control & Improvement Dist., 36 S.W.3d 654, 656 (Tex. App.CHouston [1st Dist.] 2000, no pet.).  However, after appellants filed their brief, the court reporter=s record was filed. Therefore, we overrule appellants= first issue.

B.        Jurisdiction

In their second issue, appellants contend that the judgment must be vacated because the trial court lacked subject matter jurisdiction over Equivest=s claims.  Specifically, they contend that Equivest Apleaded itself out of court@ by requesting relief in excess of the trial court=s jurisdictional limits.

Equivest filed counterclaims against appellants for breach of contract in a statutory county court.^[1]  A statutory county court has jurisdiction in Acivil cases in which the matter in controversy exceeds $500 but does not exceed $100,000, excluding interest, statutory or punitive damages and penalties, and attorney=s fees and costs as alleged on the face of the petition.@  Tex. Gov=t Code Ann. ' 25.0003 (Vernon 2004).

 Equivest=s live pleading is unclear regarding the amount of relief sought.  In its prayer, Equivest requested Aspecial and consequential damages, including loss of value, loss of use or proceeds of sale, costs of delay, costs of mitigation, costs of substitute performance, reliance damages and out-of-pocket losses, and transactional costs.@  Equivest did not specify a dollar amount for the special and consequential damages.  However, in its background facts, Equivest alleged that appellants agreed to purchase the property for a price of $1.35 million.

Also in its prayer, Equivest requested Aan order releasing and awarding the $15,000 held in escrow to Equivest.@ Further, although Equivest alleged that the breach of contract Acaused [Equivest] damages in excess of the jurisdictional limits of this Court,@ Equivest also alleged that Athe amount in controversy is within the jurisdictional limits of this Court.@ In addition, Equivest included a sentence stating it Aaffirmatively pleads that it seek (sic) monetary [relief] within the jurisdictional limits of this Court.@

AIn any doubtful case all intendments of the plaintiff=s pleading will be in favor of the jurisdiction.@ Peek v. Equip. Serv. Co., 779 S.W.2d 802, 804 (Tex. 1989) (quoting Dwyer v. Bassett & Bassett, 63 Tex. 274, 276 (1885)).  Here, Equivest=s pleadings were ambiguous.  It was not clear whether Equivest was seeking only the $15,000 escrow amount as liquidated damages or additional damages.  Moreover, although Equivest suggested that it sustained damages in excess of the jurisdictional limits of the court, it appeared to request recovery only of the damages that did not exceed the court=s jurisdictional limits. Unless a plaintiff=s original and amended pleadings affirmatively show that the court lacks jurisdiction, the court should construe the pleadings liberally in favor of jurisdiction and retain the case. Cont=l Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 449 (Tex. 1996); Peek, 779 S.W.2d at 804. 

Further, in the absence of special exceptions or other objection, a plaintiff may proceed to trial despite defects in its pleadings.  Peek, 779 S.W.2d at 805.  If jurisdiction is established at trial, a plaintiff may recover even when jurisdiction is not clear from the pleadings.  See id. at 804B05. At trial, Equivest requested the $15,000 held in escrow as liquidated damages.  The trial court awarded Equivest at most $30,000 plus interest and attorneys= fees, an amount within its jurisdictional limits.   Because appellants did not file a special exception or other motion, we hold they have waived their right to complain of defects in Equivest=s pleadings.  See id. at 805 (holding that absent special exceptions or other motion, a defendant waives the right to complain of pleading defects related to jurisdiction when the plaintiff establishes the court=s jurisdiction before resting its case).

Accordingly, appellants= second issue is overruled.

C.        Double Recovery

In their third issue, appellants contend that Equivest received a double recovery.  The trial court=s final judgment included a numbered list of damages awarded in favor of Equivest. The list included liquidated damages in the amount of $15,000, attorney=s fees, and pre-judgment and post-judgment interest.  The paragraph following the numbered list of damages specified that Equivest Ashall receive the $15,000 deposited as earnest money.@

Appellants claim that the trial court=s judgment awarded Equivest the $15,000 in escrow and $15,000 in liquidated damages.   In contrast, Equivest argues the trial court did not award a total of $30,000 in damages, but awarded Equivest the relief it requestedC $15,000 in escrow as liquidated damages.

The trial court=s order is subject to two different interpretations.  However, both parties concede the sales agreement provided that Equivest would receive the earnest money as liquidated damages in the event of a breach, and a judgment awarding Equivest a total of $30,000 would be incorrect. Therefore, we modify the judgment to clarify that Equivest is entitled to the $15,000 in earnest money as liquidated damages, and we affirm the judgment as modified.

/s/        Charles W. Seymore

Justice

Judgment rendered and Memorandum Opinion filed April 20, 2006.

Panel consists of Justices Hudson, Frost, and Seymore.

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^[1]  Counterclaims must independently comport with a trial court=s jurisdiction.  Color Tile, Inc. v. Ramsey, 905 S.W.2d 620, 623 (Tex. App.CHouston [14th Dist.] 1995, no writ).