Jinhui Chen v. Jodi Johnson and Joseph Johnson ( 2013 )


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  •                          COURT OF APPEALS
    SECOND DISTRICT OF TEXAS
    FORT WORTH
    NO. 02-12-00428-CV
    JINHUI CHEN                                                         APPELLANT
    V.
    JODI JOHNSON AND JOSEPH                                             APPELLEES
    JOHNSON
    ----------
    FROM COUNTY COURT AT LAW NO. 2 OF DENTON COUNTY
    ----------
    MEMORANDUM OPINION1
    ----------
    I. INTRODUCTION
    Appellant Jinhui Chen perfected this restricted appeal after a no-answer
    default judgment was entered against him and in favor of Appellees Jodi Johnson
    and Joseph Johnson. Chen raises four issues, claiming error on the face of the
    record. For the reasons set forth below, we will modify the trial court judgment’s
    1
    See Tex. R. App. P. 47.4.
    total damage award by reducing it from $8,600 to $4,600; we will recalculate the
    prejudgment interest award; and we will affirm the trial court’s judgment as modified.
    II. FACTUAL AND PROCEDURAL BACKGROUND
    Chen owned a home located at 1501 Carriage Lane in Savannah, Texas, and
    the Johnsons filled out a rental application to lease the home.           Their rental
    application was given to Angela Fowler with Region Realty, Inc.; Fowler
    subsequently told the Johnsons to pay the application deposit of $1,500 online, and
    they did so. The Johnsons’ plans changed, they no longer desired to lease the
    home, and they sought return of the application deposit. Neither Chen nor Fowler
    returned the application deposit, so the Johnsons sued them.
    Chen failed to file an answer. After a default hearing, the trial court entered a
    default judgment for the Johnsons on their claims for breach of contract, fraud,
    deceptive trade practices, property code violations, and attorney’s fees, awarding
    $8,600 in damages; $380.52 in prejudgment interest; $5,000 in attorney’s fees; and
    $561.55 in court costs.
    III. SCOPE AND STANDARD OF REVIEW
    To prevail on a restricted appeal, an appellant must establish that (1) he filed
    a notice of appeal within six months after the trial court signed the judgment; (2) he
    was a party to the underlying suit; (3) he did not participate in the actual trial or
    hearing that resulted in the judgment and did not timely file any postjudgment
    motions or requests for findings of fact and conclusions of law; and (4) error is
    apparent from the face of the record. See Tex. R. App. P. 26.1(c), 30; Alexander v.
    2
    Lynda’s Boutique, 
    134 S.W.3d 845
    , 848 (Tex. 2004); Vespa v. Nat’l Health Ins. Co.,
    
    98 S.W.3d 749
    , 751 (Tex. App.—Fort Worth 2003, no pet.). The face of the record,
    for purposes of a restricted appeal, consists of all the papers on file in the appeal,
    including the clerk’s record and the reporter’s record. Norman Commc’ns v. Tex.
    Eastman Co., 
    955 S.W.2d 269
    , 270 (Tex. 1997).
    By failing to answer, a defendant admits all factual allegations in the plaintiff’s
    petition except unliquidated damages. Morgan v. Compugraphic Co., 
    675 S.W.2d 729
    , 731 (Tex. 1984); Argyle Mech. Inc. v. Unigus Steel, Inc., 
    156 S.W.3d 685
    , 687
    (Tex. App.—Dallas 2005, no pet.). Because a non-answering defendant admits all
    factual allegations in the plaintiff’s petition regarding liability, a defendant’s liability in
    a no-answer default case is conclusively established. 
    Morgan, 675 S.W.2d at 731
    .
    So long as the facts set out in the petition allege a cause of action, then the default
    judgment conclusively establishes the defendant’s liability. 
    Id. As a
    result, an
    appellant is precluded from challenging the legal and factual sufficiency of the
    evidence supporting liability in a no-answer default judgment. See Holt Atherton
    Indus., Inc. v. Heine, 
    835 S.W.2d 80
    , 83 (Tex. 1992); 
    Morgan, 675 S.W.2d at 731
    ;
    Adame v. Palisades Collection, L.L.C., No. 05-11-00793-CV, 
    2012 WL 2564717
    , at
    *3–4 (Tex. App.—Dallas July 3, 2012, no pet.) (mem. op.); Texaco, Inc. v. Phan, 
    137 S.W.3d 763
    , 770 (Tex. App.—Houston [1st Dist.] 2004, no pet.); Norton v. Martinez,
    
    935 S.W.2d 898
    , 901 (Tex. App.—San Antonio 1996, no pet.).
    When a no-answer default judgment is taken on an unliquidated claim, the
    defendant may challenge on appeal the legal and factual sufficiency of the evidence
    3
    supporting the unliquidated damages award. 
    Heine, 835 S.W.2d at 83
    ; Dawson v.
    Briggs, 
    107 S.W.3d 739
    , 748 (Tex. App.—Fort Worth 2003, no pet.). This is
    because when damages are unliquidated, the judge entering the default judgment
    must hear evidence on the damages. Tex. R. Civ. P. 243; 
    Heine, 835 S.W.2d at 83
    .
    When, however, a no-answer default judgment awards liquidated damages
    proved by an instrument in writing attached to the plaintiff’s pleading, an appellant is
    precluded from attacking the sufficiency of the evidence supporting the liquidated
    damages award. See, e.g., Tex. R. Civ. P. 641; 
    Heine, 835 S.W.2d at 83
    ; Aavid
    Thermal Techs. of Tex. v. Irving Indep. Sch. Dist., 
    68 S.W.3d 707
    , 711–12 (Tex.
    App.—Dallas 2001, no pet.) (explaining that when damages are liquidated, in that
    they can be accurately determined by the trial court from the petition and the
    attached instruments in writing, an evidentiary hearing is not required prior to entry
    of a default judgment). When a default judgment is entered on a liquidated claim,
    ―the rules of the procedure contemplate that the plaintiff be awarded the damages
    without the necessity of a hearing or the presentation of evidence.‖ Taylor v. State,
    
    293 S.W.3d 913
    , 916 (Tex. App.—Austin 2009, no pet.).
    IV. NO DOUBLE RECOVERY OF ACTUAL DAMAGES
    Texas law does not permit a double recovery. See, e.g., Parkway Co. v.
    Woodruff, 
    901 S.W.2d 434
    , 441 (Tex. 1995). A double recovery exists when a
    plaintiff obtains more than one recovery for the same injury. Waite Hill Servs., Inc.
    v. World Class Metal Works, Inc., 
    959 S.W.2d 182
    , 184 (Tex. 1998); Stewart Title
    Guar. Co. v. Sterling, 
    822 S.W.2d 1
    , 7 (Tex. 1991).
    4
    In his first issue, Chen claims that the trial court erred––and that such error is
    apparent on the face of the record––because the judgment signed by the trial court
    awards the Johnsons a double or triple recovery. Chen points out that the actual
    damages proved by the Johnsons constituted only the $1,500 application deposit
    they sought to recover but that the trial court’s judgment awards separate damage
    amounts to them for breach of contract, fraud, deceptive trade practices, property
    code violations, and liability under the Texas Theft Liability Act.
    On appeal, the Johnsons concede that the highest dollar recovery of damages
    to which they are entitled based on their pleadings is the liquidated damage amount
    of $1,500 for the application deposit; plus statutory penalties in the amount of
    $3,000; plus an additional $100 if the judgment is affirmed based on property code
    section 92.354.2 See Tex. Prop. Code Ann. § 92.354 (West 2007). Thus, we
    sustain Chen’s first issue that the judgment awards the same damages to the
    Johnsons under multiple pleaded causes of action, all for the same injury. See, e.g.,
    Waite Hill Servs., 
    Inc., 959 S.W.2d at 184
    ; 
    Parkway, 901 S.W.2d at 441
    ; Stewart
    Title Guar. 
    Co., 822 S.W.2d at 7
    .
    V. SUFFICIENCY OF THE EVIDENCE TO SUPPORT CONTRACT
    AND PROPERTY CODE LIABILITY
    In his third and fourth issues, Chen complains, respectively, that the evidence
    is insufficient to support the finding of a contract between the parties and to
    2
    Although the Johnsons’ brief is not clear on this issue, the Johnsons’ counsel
    candidly represented to the court during oral argument that this was the highest
    dollar amount to which the Johnsons are entitled.
    5
    establish a violation of the property code. Chen asserts that these legal and factual
    insufficiencies constitute error on the face of the record.
    Substantively, Chen cannot raise these complaints. See, e.g., Jackson v.
    Biotectronics, Inc., 
    937 S.W.2d 38
    , 41–42 (Tex. App.—Houston [14th Dist.] 1996, no
    writ) (op. on reh’g). The existence of a contract and breach of contract were
    pleaded by the Johnsons.3 A cause of action asserting a property code violation by
    failure to refund the application deposit was also pleaded by the Johnsons.4 And
    Chen, by not filing an answer, admitted all of the liability facts pleaded by the
    Johnsons concerning their causes of action for breach of contract and property code
    violations; Chen cannot challenge the sufficiency of the evidence to support the
    pleaded liability facts or contest his liability so long as the Johnsons’ pleadings state
    a breach of contract cause of action and a cause of action for violation of the
    property code.5 See 
    Heine, 835 S.W.2d at 83
    ; 
    Morgan, 675 S.W.2d at 731
    ;
    3
    A copy of the Johnsons’ petition is attached hereto as Appendix A to this
    opinion. The breach of contract claim is set forth on pages 3–4 of the Johnsons’
    petition.
    4
    The property code violation alleged is set forth on page 3 of the Johnsons’
    petition and further elaborated on in Jodi’s attached affidavit.
    5
    To the extent Chen also attempts to challenge the sufficiency of the evidence
    to show that Fowler with Region Realty, Inc. was Chen’s agent, Chen admitted this
    fact by failing to file an answer. The Johnsons’ pleading states, ―At all times Ms
    Fowler was acting as the agent of Region Realty and Jinhui Chen.‖ And this
    material fact was admitted by Chen’s failure to file an answer. See U.S. Auto Ins.
    Servs., Inc. v. Les Marks Chevrolet, No. 14-02-00644-CV, 
    2003 WL 22012670
    , at *2
    (Tex. App.—Houston [14th Dist.] Aug. 26, 2003, no pet.) (mem. op.) (explaining that
    claim on appeal that plaintiff failed to plead that ―Aranda was U.S. Auto’s agent‖ was
    ―unavailing‖ because the no-answer default judgment operated as an admission of
    6
    
    Jackson, 937 S.W.2d at 41
    –42; see also, e.g., Texaco, 
    Inc., 137 S.W.3d at 770
    ;
    
    Norton, 935 S.W.2d at 901
    ; Adame, 
    2012 WL 2564717
    , at *3–4.
    To the extent Chen’s third and fourth issues complain about the adequacy of
    the Johnsons’ pleadings to state a breach of contract cause of action and a cause of
    action for violation of the property code, we have reviewed the Johnsons’ petition,
    and it is sufficient to support the default judgment. Although a petition that serves as
    the basis for a default judgment may contain defects in form or substance, the
    default judgment will be held erroneous only if (1) the petition does not attempt to
    state a cause of action that is within the jurisdiction of the court, (2) the petition does
    not give fair notice to the defendant of the claim asserted, or (3) the petition
    affirmatively discloses the invalidity of such claim. Stoner v. Thompson, 
    578 S.W.2d 679
    , 683 (Tex. 1979). In analyzing the sufficiency of a pleading to support a default
    judgment, it has been stated that
    the averments of the pleadings are to be taken as proven or confessed;
    and, if the pleadings do not inform the court what judgment to render,
    that is, if it does not, with sufficient certainty, set forth the cause of
    action as to the name of parties, dates, amounts, etc., to enable the
    court to render judgment without information aliunde, it is not sufficient,
    and the judgment cannot be sustained. C & H Transportation Co., Inc.
    v. Wright, 
    396 S.W.2d 443
    (Tex. Civ. App.—Tyler 1965, writ ref’d
    n.r.e.). It is unnecessary for a plaintiff to allege the evidence upon
    which he relies to establish his asserted cause of action; it is not
    requisite that a petition be technically sufficient to state a cause of
    action in order to sustain a default judgment if it does not show
    affirmatively that the plaintiff had no cause of action. Edwards Feed
    Mill v. Johnson, 
    158 Tex. 313
    , 
    311 S.W.2d 232
    (1958).
    the material facts alleged in the plaintiff’s petition and because the petition stated
    that ―Aranda, who was U.S. Auto’s agent, confirmed there was coverage‖).
    7
    First Nat’l Bank of Irving v. Shockley, 
    663 S.W.2d 685
    , 688 (Tex. App.—Corpus
    Christi 1983, no writ); see also Davis v. Quality Pest Control, 
    641 S.W.2d 324
    , 328
    (Tex. App.—Houston [14th Dist.] 1982, writ ref’d n.r.e.) (―The test is whether an
    opposing attorney of reasonable competence, with the pleading before him, can
    ascertain the nature and the basic issues of controversy and the testimony probably
    relevant.‖).
    Here, the Johnsons’ petition may contain defects of form or substance, but it
    does attempt to state causes of action within the jurisdiction of the court, does give
    fair notice to Chen of the claims asserted, and does not affirmatively disclose the
    invalidity of any such claim.6 We overrule Chen’s third and fourth issues.
    VI. SUFFICIENCY OF THE EVIDENCE TO MONETARY AWARDS
    In his second issue, Chen challenges the sufficiency of the evidence to
    support the monetary awards made in the judgment.
    A. Actual Damages
    The actual damage award, as modified above to total $1,500 and to delete
    any double recovery, is based on liquidated damages—established by documents in
    writing attached to the Johnsons’ petition. Thus, Chen, by not filing an answer,
    admitted this amount of liquidated damages—which is also proved by documents
    6
    Chen argues that the lease application agreement is attached to the
    Johnsons’ pleading and contains the acknowledgement required by the property
    code so that the Johnsons’ pleading does affirmatively disclose the invalidity of their
    property code claim. Chen overlooks the fact that liability under the property code
    may attach despite the existence of the acknowledgement when there is a failure to
    timely return the deposit. See Tex. Prop. Code Ann. § 92.354.
    8
    attached to the Johnsons’ pleading—and Chen is precluded on appeal from
    attacking the sufficiency of the evidence supporting the $1,500 liquidated damages
    award. See, e.g., Tex. R. Civ. P. 641; 
    Heine, 835 S.W.2d at 83
    ; Aavid Thermal
    Techs. of 
    Tex., 68 S.W.3d at 711
    –12.
    B. Statutory Property Code Penalty
    The default judgment awarded the Johnsons a statutory penalty for Chen’s
    violation of the property code. This penalty constitutes unliquidated damages.
    Accord Henry S. Miller Co. v. Hamilton, 
    813 S.W.2d 631
    , 634 (Tex. App.—Houston
    [1st Dist.] 1991, no writ) (explaining that additional damages under the DTPA
    constitute unliquidated damages); Fleming Mfg. Co. v. Capitol Brick, Inc., 
    734 S.W.2d 405
    , 409–10 (Tex. Civ. App.—Austin 1987, writ ref’d n.r.e.) (same). Chen is
    entitled to challenge the sufficiency of the evidence to support unliquidated
    damages. See, e.g., 
    Heine, 835 S.W.2d at 83
    ; 
    Dawson, 107 S.W.3d at 748
    .
    When a defendant attacks the sufficiency of the evidence to support the trial
    court’s determination of unliquidated damages in a default judgment, we must
    review the evidence adduced in support of the judgment. 
    Dawson, 107 S.W.3d at 748
    . In granting a default judgment, the trial court is permitted to consider affidavits,
    like Jodi’s, that are filed with the court, and consideration of such affidavits may
    satisfy the requirement that the plaintiff present proof of unliquidated damages. See
    Tex. R. Civ. P. 243; Tex. Commerce Bank, Nat’l Ass’n v. New, 
    3 S.W.3d 515
    , 517
    (Tex. 1999); Barganier v. Saddlebrook Apartments, 
    104 S.W.3d 171
    , 173 (Tex.
    9
    App.––Waco 2003, no pet.).7 In reviewing the legal sufficiency of the evidence, we
    view the evidence in the light most favorable to the default judgment entered,
    crediting favorable evidence if reasonable jurors could. See City of Keller v. Wilson,
    
    168 S.W.3d 802
    , 807, 827 (Tex. 2005). In a factual sufficiency review, we consider
    all of the evidence and uphold findings by the factfinder unless the evidence is too
    weak to support them or the findings are so against the overwhelming weight of the
    evidence as to be manifestly unjust. Dow Chem. Co. v. Francis, 
    46 S.W.3d 237
    ,
    242 (Tex. 2001).
    To obtain the statutory property code penalty, a plaintiff must prove that a
    landlord in bad faith failed to refund an application fee or deposit in violation of
    subchapter I of the property code. See Tex. Prop. Code Ann. § 92.354. ―Bad faith‖
    is not defined in the list of definitions found in subchapter I. See 
    id. § 92.351
    (West
    Supp. 2012) (setting forth definitions applicable to subchapter I). A statutorily
    undefined term is to be given its ordinary meaning,8 and it ―appears to have been
    7
    Chen argues that Jodi’s affidavit is conclusory so that it is substantively
    defective, did not require him to object, and is not competent evidence. But the
    affidavit’s statements that Chen identifies in his brief as being conclusory are
    statements of fact––i.e., ―Chen has failed and refused to refund the Application
    Deposit.‖ Chen argues that Jodi’s affidavit provides ―no supporting facts for the
    [above quoted] conclusion that Chen failed or refused to refund the deposit.‖ These
    complaints, couched as challenges to the purportedly conclusory statements in
    Jodi’s affidavit, constitute an effort to avoid the long-standing rule that a non-
    answering defendant admits all pleaded liability facts. Chen cannot circumvent this
    rule by recasting his sufficiency of the evidence claims as challenges to statements
    in Jodi’s affidavit on the ground that the statements are conclusory.
    8
    See, e.g., Tex. Lottery Comm’n v. First State Bank of DeQueen, 
    325 S.W.3d 628
    , 635 (Tex. 2010).
    10
    decided by the great weight of authority that willful ignorance is the equivalent of bad
    faith; and that bad faith may be shown by a willful disregard of and refusal to learn
    the facts when available and at hand.‖ Fenner v. Am. Sur. Co. of N.Y., 
    156 S.W.2d 279
    , 282–83 (Tex. Civ. App.—Waco 1941, writ ref’d w.o.m.) (utilizing the above as
    the ordinary meaning of ―bad faith‖ when that term is used, but not defined, in a
    statute). Concerning a landlord’s failure to return a security deposit––as opposed to
    the application deposit here––a landlord acts in bad faith when he retains the
    security deposit in dishonest disregard of the tenant’s rights. See Reed v. Ford, 
    760 S.W.2d 26
    , 30 (Tex. App.—Dallas 1988, no writ).
    The evidence adduced in support of the unliquidated property code penalty
    awarded to the Johnsons––evidence that was attached to the Johnsons’ pleading––
    included the following: Jodi’s affidavit; the application completed by the Johnsons;
    an August 24, 2011 letter to the Johnsons from Fowler; a September 9, 2011 letter
    from the Johnsons’ attorney to Fowler; and two emails showing the Johnsons’
    electronic payment of the application deposit and electronic request for its refund.
    The Johnsons pleaded that Chen’s conduct in failing and refusing to return the
    application deposit was in bad faith. The documentary evidence establishes that the
    Johnsons paid the application deposit on August 10 and that a refund was
    requested on August 14. Jodi’s affidavit avers that ―[n]owhere in this Application did
    it state that an Application Deposit was non-refundable for any reason or that an
    Application Deposit is a reservation of rent. Nor did Defendants inform Plaintiffs of
    any of this orally before the Application was submitted or an Application Deposit was
    11
    paid.‖ The evidence reflects that the Johnsons were given two contradictory
    explanations for Chen and Region Realty’s failure to refund the application deposit.
    First, they were told in Fowler’s August 24 letter that the application deposit was not
    refundable because Chen and Region Realty had accepted the Johnsons’
    application and had taken the house off the market to lease to the Johnsons. But
    the application itself states that ―unless Landlord and Applicant enter into a separate
    written agreement otherwise, the Property remains on the market until a lease is
    signed by all parties.‖ Jodi’s affidavit attests that no such separate agreement
    exists. Second, the Johnsons were told verbally that the application they had
    completed was not a form furnished by Chen and Region Realty. But the Johnsons
    were never provided with a different application. Finally, the September 9, 2011
    letter from the Johnsons’ attorney expressly sets forth a demand for a refund of the
    Johnsons’ $1,500 application deposit and details why a refund is mandated
    pursuant to the terms of the property code. Yet, the Johnsons’ $1,500 application
    deposit was not refunded.
    Viewing the facts in the light most favorable to the Johnsons, more than a
    scintilla of evidence exits that a reasonable factfinder could have credited as
    constituting a bad faith failure by Chen9 to refund the Johnsons’ application deposit.
    9
    To the extent that Chen claims he cannot be liable for the acts of his agent
    Fowler, we note that—as set forth above—by failing to file an answer, Chen
    admitted that Fowler was acting as his agent. See U.S. Auto Ins. Servs., Inc., 
    2003 WL 22012670
    , at *2. And furthermore, Fowler’s August 24 letter to the Johnsons
    indicates that the Johnsons’ application deposit was submitted to the landlord (i.e.,
    12
    See Tex. Prop. Code Ann. §§ 92.353 (West 2007), .354; accord 
    Reed, 760 S.W.2d at 29
    –30 (holding that trial court erred by granting a directed verdict for landlord on
    issue of bad faith failure to return security deposit because evidence existed that
    landlord suggested he would refuse refund of deposit unless tenant renewed lease
    on landlord’s terms—an act of bad faith); Sunrizon Homes, Inc. v. Fuller, 
    747 S.W.2d 530
    , 534–35 (Tex. App.—San Antonio 1988, writ denied) (upholding default
    judgment’s award of additional DTPA damages based on defendant’s knowing
    conduct when evidence included letter from plaintiffs listing defect in the mobile
    home; list of contacts between plaintiffs, defendant, and defendant’s sales agents;
    written catalogue of personal contacts between plaintiffs and defendant’s factory
    representatives; and DTPA notice letter sent by plaintiffs’ attorney). Likewise,
    considering all of the evidence, it is not too weak to support the trial court’s
    determination that Chen ―in bad faith fail[ed] to refund an application fee . . . in
    violation of‖ subsection I of the property code. See Tex. Prop. Code Ann. §§
    92.353, .354; 
    Francis, 46 S.W.3d at 242
    . Thus, the evidence is legally and factually
    sufficient to support the default judgment’s award of $3,100 in statutory penalties for
    Chen’s violation of the property code.10
    Chen) as lost rents; therefore, evidence exists in the record that Chen himself
    retained and failed to refund the application deposit.
    10
    Having determined the the evidence is legally and factually sufficient to
    support the statutory-property-code penalty awarded to the Johnsons in the trial
    court’s default judgment and because the Johnsons concede that if the statutory-
    property-code penalty is upheld they are not entitled to also recover the additional
    damages awarded under the DTPA, we need not address the portion of Chen’s
    13
    C. Attorney’s Fees
    The default judgment awarded the Johnsons $5,000 in attorney’s fees. A
    claim for attorney’s fees, absent a contract therefor, is a claim for unliquidated
    damages. 
    Shockley, 663 S.W.2d at 691
    . The Johnsons’ attorney made and filed an
    ―Affidavit of Attorney’s Fees,‖ setting forth his qualifications, the factors delineated in
    Texas Disciplinary Rules of Professional Conduct Rule 1.04, the time spent on the
    case, and his opinion that the work performed was reasonable and necessary in the
    prosecution of the action and that the sum of $5,000 was a fair and reasonable
    attorney’s fee. The Johnsons’ attorney’s affidavit is sufficient to support the trial
    court’s award of $5,000 in attorney’s fees. See U.S. Auto Ins. Servs., Inc., 
    2003 WL 22012670
    , at *3.
    We overrule Chen’s second issue.
    VII. CONCLUSION
    Having overruled Chen’s second, third, and fourth issues, having sustained
    Chen’s first issue that the Johnsons may recover liquidated damages in the amount
    of only $1,500 for the application deposit, and having found that the evidence is
    legally and factually sufficient to support the default judgment’s award to the
    Johnsons of unliquidated damages in the amount of $3,100 under the property code
    and $5,000 in attorney’s fees, we modify the default judgment to delete the $1,000
    second issue challenging the sufficiency of the evidence to support the judgment’s
    award of additional damages under the DTPA. See Tex. R. App. P. 47.1 (requiring
    appellate court to address only issues necessary to disposition of the appeal).
    14
    award based on Texas Civil Practice and Remedies Code section 134.005 and to
    delete the $3,000 award based on violations of the DTPA. The trial court’s default
    judgment, as modified, reflects an award to the Johnsons of $1,500 in liquidated
    damages; plus $3,100 in unliquidated damages under the property code for total
    damages of $4,600; plus prejudgment interest—recalculated on the modified award
    of $4,600 at the rate of five percent from August 24, 2011 to July 12, 2012—of
    $203.53; plus postjudgment interest on $4,600 at five percent per annum from July
    12, 2012 until paid; plus $5,000 in attorney’s fees; plus $561.55 in court costs, which
    were uncontested on appeal.        As modified, we affirm the trial court’s default
    judgment awarding the Johnsons $10,365.08, plus postjudgment interest on $4,600
    (the $4,600 is included in the $10,365.08) at five percent per annum from July 12,
    2012, until paid.
    SUE WALKER
    JUSTICE
    PANEL: GARDNER, WALKER, and MCCOY, JJ.
    DELIVERED: May 30, 2013
    15
    APPENDIX A
    PETITION
    16
    CV-2011·02750
    JODI JOHNSON and                                   §   In the County
    JOSEPH JOHNSON Plaintiff                           §
    §
    v.                                                 §
    §   Court at Law No. 2
    §
    REGION REALTY, INC, and                            §
    JINHUI CHEN Defendants                             §
    §
    §   Denton County, Texas
    PLAINTIFF'S FIRST AMENDED PETITION
    TO THE HONORABLE COURT
    Comes now, Plaintiffs, Jodi Johnson and Joseph Johnson, and file this
    Petition and show the Court the following:
    Parties
    1.   Plaintiff Jodi Johnson is a resident of 10769 Brighton Knoll Pkwy, Noblesville,
    TN 46060.
    2.   Plaintiff Joseph Johnson is a resident of 10769 Brighton Knoll Pkwy, Noblesville,
    TN 46060
    3.   Defendant Region Realty, Inc. is a Texas corporation ("Region Realty") whose
    address is 8551 Boat Club Rd., Ste. 121-163, Fort Worth,
    TX 76179-3638, which may be served with process by serving the Texas Secretary of
    State, 1019 Brazos Street, Austin, Texas 78701, as its agent for service because
    defendant is required by Texas Business Organizations Code section 5.201 to
    appoint and maintain a registered agent in Texas but it has failed to do so. The
    registered agent appointed by Region Realty has left the state and now lives In North
    Carolina.
    4.   Defendant Jinhui Chen, an individual who is a nonresident of Texas, whose home is
    located at 968 W Ebony Dr., Chandler, AZ 85248-4327 may be served with process
    by serving the Texas Secretary of State at 1019 Brazos Street, Austin, Texas 78701,
    as Defendant's agent for service because Defendant engages in business in Texas
    but does not maintain a regular place of business in Texas or a designated agent for
    service of process, and this suit arose from Defendant's business in Texas.
    PLAINTIFFS' FIRST AMENDED PETITION                                  Page 1
    17
    18
    Discovery-Control Plan
    5.    Plaintiffs intend to conduct discovery under Level 1 of Texas Rule of
    Civil
    Procedure 190.2 because this suit involves only monetary relief totaling
    $50,000 or less, excluding court costs, prejudgment interest, and
    attorney fees.
    Facts
    6.    In August of 2011, Jodi Johnson ("Mrs. Johnson") and her husband Joseph
    Johnson (collectively referred to as "Plaintiffs") sought to rent a home
    located at 1501 Carriage Lane, in Savannah, Texas 76227 (the "Property").
    On August 6, 2011, Plaintiffs filled out the Residential Lease Application (the
    "Application"), attached as Exhibit A.
    7.    The Application was given to Angela Fowler ("Ms. Fowler"), in her capacity
    as the agent and realtor for Region Realty. At all times Ms. Fowler was
    acting as the agent of Region Realty and Jinhui Chen. The application was
    turned in with an application fee of $80. At no point was the Application
    returned to Mrs. Johnson by the Defendants to indicate that the Application
    had been accepted. See Exhibit A.
    8.    The Application states that "unless Landlord and Applicant enter into a
    separate written agreement otherwise, the Property remains on the market
    until a lease is signed by all parties and Landlord may continue to show the
    Property to other prospective tenants and accept another offer." See Exhibit
    A.
    9.    Nowhere in this Application did it state that an Application deposit was non-
    refundable for any reason or that an Application deposit is a reservation of
    rent. Nor did Defendants inform Plaintiffs of any of this orally before the
    Application was submitted or an Application deposit was paid.
    10. On August 9, Mrs. Johnson was contacted by Ms. Fowler and told to pay
    the Application deposit ("Application deposit") online. On August 10, Mrs.
    Johnson did in fact pay a $1,500 Application deposit online, which was
    accepted by all Defendants, as shown by Exhibit B.
    11. On August 14, Mrs. Johnson requested a refund through her own realtor,
    Samantha Wallace.
    12. On August 15 and 16, Mrs. Johnson twice spoke to Ms. Fowler over the
    phone to inform Ms. Fowler that she was concerned that repairs would not
    be made to the property in time for her to move in, and that she may not be
    moving to the area after all. Mrs. Johnson requested the Application deposit
    be returned to her. At that point, Ms. Fowler stated that the Application was
    not a form furnished by Defendants, and was a general application not
    specific to Region Realty, Inc. or any Defendants. Defendants did not
    PLAINTIFFS' FIRST AMENDED PETITION                                         Page 2
    19
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    thereafter furnish an application form that Defendants would accept.
    Defendants accepted the Application deposit on terms not disclosed in the
    Application, and in contravention of all oral and written communications to
    Plaintiff. The Defendants' "Deemed Rejection" of Plaintiffs is demonstrated by
    their failure to return the accepted Application.
    13. It was not until August 24 that Defendants revealed to Plaintiffs that no refund
    was to be provided. See Exhibit C. On Monday, August 15, 2011, and
    September 9, 2011, Plaintiffs made a demand for the refund of the Application
    deposit, shown by Exhibit D and E.
    14. Defendants have failed and refused to refund the Application deposit.
    Violation of The Texas Property Code
    15. Defendants' have violated the Texas Property Code by refusing to refund the
    Application deposit.
    16. All Defendants are Landlords within the definition of the Texas Property
    Code.
    17. Plaintiffs are applicants or rental applicants within the definition of the Texas
    Property Code.
    18. The $1,500 deposit paid in connection with the Application is an Application
    Deposit within the definition of the Texas Property Code.
    19.     Plaintiffs were rejected as applicants by the Defendants, and are therefore
    entitled to a refund of the Application deposit. Defendants did not return the
    Application as accepted, did not furnish Plaintiffs a lease form, and in fact
    rejected Plaintiffs because she did not fill out the correct application form.
    20.     Defendants' are liable to Plaintiffs for the Application deposit because they
    requested that the application deposit be mailed to them, at the address furnished
    by Plaintiffs, in accordance with the Texas Property Code.
    21. Defendants have in bad faith failed to refund the Application Deposit to
    Plaintiffs. Defendants are therefore liable for an amount equal to the sum of
    $100, three times the amount of the Application deposit. and Plaintiffs' reasonable
    attorney's fees in a suit to recover the Deposit.
    Breach of Contract
    22.     In the alternative, and without waiving the foregoing, if the Application was
    accepted by Defendants, and therefore a valid Contract, Defendants are liable
    to Plaintiffs for breach of Contract.
    PLAINTIFFS' FIRST AMENDED                                                   Page 3
    PETITION
    46
    23. The Application provides that the applicant submit an application deposit,
    which was orally agreed to as $1,500.00.
    24. The Application states that "Unless Landlord and Applicant enter into a separate
    written agreement otherwise, the Property remains on the market until a lease is
    signed by all parties and Landlord may continue to show the Property to other
    prospective tenants and accept another offer." Nowhere in this Application did it
    state that the Application deposit was non-refundable for any reason or that the
    Application deposit is a reservation of rent. Nor did Defendants inform Plaintiffs of
    any of this information orally or in writing before the Application was submitted or
    the Application deposit was paid.
    25. Plaintiffs fully performed their obligations under the Application by providing the $80
    application fee and the $1,500 Application deposit.
    26. The Defendants breached the contract by not returned the Application
    Deposit.
    27.     Defendants' breach caused injury to plaintiff, which resulted in the following
    damages: Loss of the Application deposit.
    28. Plaintiffs seek unliquidated damages within the jurisdictional limits of this court.
    29.     Plaintiffs are entitled to recover reasonable attorney fees under Texas Civil
    Practice & Remedies Code chapter 38 because this suit is for breach of a
    written contract. Plaintiffs retained counsel, who presented plaintiff's claim to
    Defendant Region Realty, Inc. and Angela Fowler, Defendant Jinhui Chen's agent.
    Defendants did not tender the amount owed within 30 days of when the claim
    was presented.
    Fraud By Nondisclosure
    30. In the alternative, and without waiving the foregoing, Defendants are liable to
    Plaintiffs because of fraud by nondisclosure.
    31. Defendants concealed and failed to disclose material facts related to the
    Application: that the Application deposit would not be refundable for any reason
    whatsoever or that it was the practice of Defendants not to return application
    deposits.
    32. Defendants had a duty to disclose the information to Plaintiffs because Defendants
    because Defendants' representations to Plaintiffs created a substantially false
    impression by concealing the Defendants' intent to not refund the Application fee.
    Defendants knew Plaintiffs were ignorant of the information and did not have an
    equal opportunity to discover the truth. Defendants' actions indicated to Plaintiffs
    that the Application deposit was refundable.
    PLAINTIFFS' FIRST AMENDED PETITION                                            Page
    4
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    33. Defendants deliberately remained silent and did not disclose the information
    to Plaintiffs. By deliberately remaining silent, Defendants intended for
    Plaintiffs to act without the information.
    34. The information was a material provision of the Application and the contract
    between Defendants and Plaintiff.
    35. Plaintiffs justifiably relied on Defendants' deliberate silence.
    36. By deliberately remaining silent, Defendants proximately caused injury to
    Plaintiffs, which resulted in the following damages: Loss of the Application
    deposit.
    37. Plaintiffs seek unliquidated damages within the jurisdictional limits of this court.
    38. Plaintiffs' injuries resulted from Defendants' actual fraud or malice, which entitles
    Plaintiffs to exemplary damages under Texas Civil Practice & Remedies Code
    section 41.003(a).
    Deceptive Trade Practices
    39. In the alternative, and without waiving the foregoing, Defendants are liable under
    the Texas Deceptive Trade Practices Act ("DTPA").
    40. Plaintiffs are consumers under the DTPA because Plaintiffs are individuals who
    sought goods by lease.
    41. Defendants are individuals and entities that can be sued under the DTPA
    42. Defendants violated the DTPA when Defendants:
    a. engaged in false, misleading, or deceptive acts or practices that Plaintiffs
    relied on to Plaintiffs' detriment. Specifically, Defendants represented
    that that the Application's agreements conferred or involved rights,
    remedies, or obligations that it did not; and also failed to disclose
    information about goods or services that was known at the time of the
    Application and was intended to induce Plaintiffs into a transaction that
    Plaintiffs would not have entered into if the information had been
    disclosed.
    b. engaged in an unconscionable action or course of action that, to
    Plaintiffs' detriment, took advantage of Plaintiffs' lack of knowledge, ability,
    experience, or capacity to a grossly unfair degree. Specifically,
    Defendants took advantage of Plaintiffs' lack of knowledge of the
    "practices" of Defendants.
    PLAINTIFFS' FIRST AMENDED PETITION                                               Page 5
    48
    43. Plaintiffs gave Defendants notice of their claim.
    44. Defendanfs wrongful conduct was a producing cause of plaintiffs injury, which
    resulted in the following damages: Loss of the Application deposit.
    45. Plaintiffs seek unliquidated damages within the jurisdictional limits of this court.
    46.     Defendants acted knowingly and intentionally, which entitles Plaintiffs to
    recover mental-anguish damages under Texas Business & Commerce Code
    section 17.50(b)(1).
    47.     Defendants acted knowingly, which entitles Plaintiffs to recover treble
    economic damages under Texas Business & Commerce Code section
    17.50(b)(1).
    48. Defendants acted intentionally, which entitles Plaintiffs to recover treble economic
    and mental anguish damages under Texas Business & Commerce Code
    section 17.50(b)(1).
    49.     Plaintiffs are entitled to recover reasonable and necessary attorney fees for
    prosecuting this suit under Texas Business & Commerce Code section
    17.50(d).
    Theft
    50. Pleading in the alternative, and without waiving the foregoing, Plaintiffs plead their
    claim under the Texas Theft Liability Act.
    51. Plaintiffs bring this action under the Texas Theft Liability Act for an unlawful
    appropriation of property under Texas Penal Code§ 31.03.
    52.    Plaintiffs were entitled to possession of the Application Deposit, in
    accordance with the Application and her demand under the Texas Property Code.
    53. The Plaintiffs had a possessory right to the Application deposit.
    54. Defendants unlawfully misappropriated the Application deposit by taking it into their
    own account for use and benefit without the Plaintiffs' effective consent.
    55. Defendants' unlawful appropriation was made with the intent to deprive
    Plaintiffs of the property.
    56. The Plaintiffs sustained damages as a result of the theft in excess of $1,500.
    57. Upon proof of actual damages, Plaintiffs are entitled to additional statutory
    damages of up to $1,000 from Defendants under Texas Civil Practice &
    PLAINTIFFS' FIRST AMENDED PET!TION                                          Page 6
    49
    Remedies Code section 134.005(a)(1).
    58.     Plaintiffs seek unliquidated damages within the jurisdictional limits of this
    court.
    Jury Demand
    59. Plaintiffs demand a jury trial and tender the appropriate fee with this petition.
    Conditions Precedent
    60. All conditions precedent to Plaintiffs' claim for relief have been performed or have
    occurred.
    Request for Disclosure
    61.     Under Texas Rule of Civil Procedure 194, Plaintiffs request that Defendants
    disclose, within 50 days of the service of this request, the information or
    material described in Rule 194.2.
    Interest
    62.     As a result of each of the Defendants' conduct, as hereinabove described,
    Plaintiffs have been damaged and are entitled to recover pre-judgment interest.
    Consequently, Plaintiffs seek pre-judgment interest at the maximum lawful rate
    from the date of injury until judgment to prevent the unjust enrichment of the
    Defendants who have had the use of money rightfully due to Plaintiffs during the
    period preceding this lawsuit, and during the pendency hereof. Additionally,
    Plaintiffs are entitled to recover, and seek, post-judgment interest at the maximum
    lawful rate from the date of judgment until paid
    Prayer
    63. For these reasons, Plaintiffs ask that the court issue citation for Defendants to
    appear and answer, and that Plaintiffs be awarded a judgment against
    Defendants for the following:
    1. Actual damages in an amount in excess of the minimum jurisdictional limits of
    this Court;
    2. Three times actual damages;
    3. Exemplary damages;
    4. Additional statutory damages;
    5. All damages available under the DTPA;
    PLAINTIFFS' FIRST AMENDED PETITION                                            Page 7
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    6. Reasonable and necessary attorneys' fees for the prosecution of this action,
    together with additional awards in the event of appeals;
    7, Pre-judgment interest thereon at the maximum lawful rate from the date of injury
    until judgment;
    8. Post-judgment interest at the highest lawful rate from the date of judgment until
    paid;
    9. Costs of suit; and
    10. Such other and further relief to which Plaintiffs may be justly entitled.
    Respectfully submitted,
    LAW OFFICE OF DAN E. MARTENS
    Dan E. Martens
    State Bar No. 13050500
    17101 Preston Road,
    Suite 160S Dallas, TX
    75248
    Telephone: (972) 335-3888
    Fax:       (972) 335-5805
    ATTORNEY FOR PLAINTIFFS
    PLAINTIFFS' FIRST AMENDED                                                      Page 8
    PETITION
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    EXHIBIT A
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