Hybiscus Food Inc. and Sanjiv Chandan, Individually and Amir Ali Hanjani, Individually v. Atul Saraswat ( 2013 )

Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-12-00644-CV
HYBISCUS FOOD INC. and Sanjiv Chandan, Individually,
Appellants
v.
Atul SARASWAT,
Appellee
From the 225th Judicial District Court, Bexar County, Texas
Trial Court No. 2007-CI-03159
Honorable Laura Salinas, 1 Judge Presiding
Opinion by: Patricia O. Alvarez, Justice
Sitting: Catherine Stone, Chief Justice
Sandee Bryan Marion, Justice
Patricia O. Alvarez, Justice
Delivered and Filed: November 6, 2013
AFFIRMED
Appellants Hybiscus Food, Inc. and Sanjiv Chandan were sued by Appellee Atul Saraswat
for breach of contract and multiple torts over a sale of HFI stock shares to Saraswat. After a bench
trial, the court awarded Saraswat a “lump sum monetary amount of $54,811.00.” Neither party
requested findings of fact, and the trial court did not state how it calculated damages. Appellants
claim the evidence is legally and factually insufficient. We affirm the trial court’s judgment.
1
The Honorable Martha Tanner presided at the trial and signed the final judgment.
04-12-00644-CV
BACKGROUND
This case concerns the sale of shares in a corporation that owns a convenience store in
Waelder, Texas. Appellant Sanjiv Chandan is the president and sole shareholder of Hybiscus
Food, Inc. (HFI). HFI owns the Hybiscus Food Mart d/b/a The Right Choice Food Mart #8 in
Waelder, Gonzales County, Texas. Chandan is also an owner in several other business entities.
Atul Saraswat worked at a San Antonio convenience store controlled by Chandan.
According to Saraswat, in early 2006 Chandan invited him to purchase shares in HFI—which
owned the Waelder store. Chandan created HFI, and it purchased the Waelder store’s assets and
operations, but not the realty, from a third party. Saraswat contends he paid Chandan, or one of
the entities that Chandan controls, more than $150,000 to purchase shares in HFI, but Chandan
never delivered the stock certificates. It is undisputed that Chandan never delivered the stock
certificates to Saraswat.
Saraswat sued Chandan and HFI for breach of contract, common-law fraud, and other torts.
The case was tried to the bench. 2 Saraswat’s evidence included cancelled checks, cash deposit
receipts, and product purchase receipts. Saraswat testified that Chandan accepted the payments
towards Saraswat’s purchase of HFI shares, but Chandan refused to deliver the stock certificates.
The trial court did not make findings of fact or conclusions of law, but the appellate record
contains a statement of facts. The court awarded Saraswat $54,811.00 as a “lump sum monetary
amount,” post-judgment interest, and $394.00 in court costs.
2
The parties tried two cases at the same time: Jessica Elizondo was the plaintiff in cause number 2007CI008478; Atul
Saraswat was the plaintiff in cause number 2007CI03159. This appeal is limited to the parties and issues in Saraswat’s
case.
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A. Parties’ Arguments
Appellants argue that the evidence is legally and factually insufficient to support any of
Saraswat’s causes of action. Appellants’ principal complaint is the alleged payments were made
to various entities, and they amount to no evidence of any purchase money being paid to Chandan
or HFI. Appellants also contend the evidence is legally and factually insufficient to support the
judgment because no combination of cancelled checks, cash deposit receipts, or product purchase
receipts equals the damages the trial court awarded.
Saraswat contends the cancelled checks, cash deposit receipts, and product purchase
receipts show he fulfilled his obligation to pay HFI for the stock shares based on Chandan’s
promise.
APPLICABLE LAW
“‘In a nonjury trial, where no findings of fact or conclusions of law are filed or requested,
it will be implied that the trial court made all the necessary findings to support its judgment.’”
Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992) (quoting Burnett v. Motyka,
610 S.W.2d 735, 736 (Tex.1980)); accord Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990)
(per curiam). An appellate court must affirm the trial court’s judgment “if it can be upheld on any
legal theory that finds support in the [pleadings and the] evidence.” See Worford, 801 S.W.2d at
109; see also TEX. R. CIV. P. 301; Cunningham v. Parkdale Bank, 660 S.W.2d 810, 813 (Tex.
1983) (requiring a trial court’s judgment to be supported by the pleadings). A trial court may not
award an amount that is not supported by the pleadings and the evidence, but it may award an
amount less than the maximum amount pled. Cf. First State Bank v. Keilman, 851 S.W.2d 914,
930 (Tex. App.—Austin 1993, writ denied); David McDavid Pontiac, Inc. v. Nix, 681 S.W.2d 831,
837 (Tex. App.—Dallas 1984, writ ref’d n.r.e.).
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STANDARD OF REVIEW
For a bench trial where no findings of fact or conclusions of law are requested or filed, but
a reporter’s record is filed, an appellant may challenge the legal and factual sufficiency of the
implied findings. Heine, 835 S.W.2d at 83–84; Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex.
1989) (per curiam). We conduct the sufficiency reviews using the same standards applicable to a
jury’s findings. See Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996) (per curiam); Roberson, 768
S.W.2d at 281.
In our review of the legal sufficiency of the implied findings, we credit favorable evidence
that a reasonable fact-finder could and disregard contrary evidence unless a reasonable fact-finder
could not. See City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005); Ingham v. O’Block,
351 S.W.3d 96, 100 (Tex. App.—San Antonio 2011, pet. denied). “[I]f there is more than a
scintilla of evidence to support the finding, the no evidence challenge fails.” BMC Software
Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002); accord Heine, 835 S.W.2d at 84.
We review the factual sufficiency of the findings by considering all the evidence. Ortiz,
917 S.W.2d at 772; Flying J Inc. v. Meda, Inc., 373 S.W.3d 680, 690–91 (Tex. App.—San Antonio
2012, no pet.). If the appellant did not have the burden of proof on the challenged issue, the
appellant must show the allegedly insufficient evidence supporting the implied finding was “so
against the great weight and preponderance of the [other] evidence as to be clearly wrong and
unjust.” See Ortiz, 917 S.W.2d at 772; Flying J Inc., 373 S.W.3d at 690–91.
ANALYSIS
The trial court awarded Saraswat a “lump sum monetary amount of $54,811.00,” post-
judgment interest, and $394.00 in court costs. The judgment does not state the precise formula the
trial court used to calculate damages. However, if the pleadings and the evidence support the
judgment and the evidence is legally and factually sufficient to support the implied findings for
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any of the causes of action pled, we must affirm the judgment. See Worford, 801 S.W.2d at 109;
see also TEX. R. CIV. P. 301; Cunningham, 660 S.W.2d at 813.
Saraswat pled multiple causes of action including breach of contract, common-law fraud,
and other tort claims. He prayed for exemplary damages, attorney’s fees, costs, and pre- and post-
judgment interest. We first address the sufficiency of the evidence for common-law fraud.
A. Common-Law Fraud
To prevail on his claim that Chandan and HFI committed common-law fraud, Saraswat
had to prove the following by a preponderance of the evidence:
(1) Chandan made a false material representation to him that Chandan knew was
false when he made it,
(2) Chandan made it with the intention that Saraswat act upon it,
(3) Saraswat justifiably relied on Chandan’s representation, and
(4) Saraswat suffered damage because of it.
See T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 222 (Tex. 1992); accord Ernst &
Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001). Chandan’s intent at the
time he made a representation to Saraswat was a question of fact for the trial court to resolve. See
Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 434 (Tex. 1986); Matlock Place Apartments,
L.P. v. Druce, 369 S.W.3d 355, 377 (Tex. App.—Fort Worth 2012, pet. denied). The trial court
was free to infer Chandan’s intent at the time he made the promise to sell the interest in HFI from
the circumstantial evidence including Chandan’s “subsequent acts after the representation [was]
made.” See Spoljaric, 708 S.W.2d at 434; Yeldell v. Goren, 80 S.W.3d 634, 637 (Tex. App.—
Dallas 2002, no pet.).
B. Saraswat’s Evidence
Saraswat testified that Chandan promised to sell him shares in HFI—which then owned
the Waelder store’s assets (but not the realty) and controlled its operations—for $150,000.00. He
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testified that he paid Chandan, either directly or indirectly, more than $150,000.00. Saraswat
offered evidence of cancelled checks, cash deposit receipts, and product purchase receipts to show
that he paid HFI as agreed. An October 2, 2006 contract for sale of the Waelder store that was
signed by both Saraswat and Chandan (as president of HFI) was admitted without objection.
Saraswat testified that he suffered damage because he paid Chandan and HFI but did not receive
the HFI stock certificates or control of the Waelder store as promised.
C. Appellants’ Evidence
Chandan testified he is the sole shareholder in HFI—which owns the Waelder convenience
store. Chandan acknowledged that Saraswat wanted to buy the Waelder store, and they agreed on
a sale price of $150,000.00. Chandan disputed Saraswat’s testimony regarding payments for the
Waelder store; he testified that Saraswat failed to pay HFI as agreed.
D. Legal Sufficiency of Implied Findings
If there is more than a scintilla of evidence to support the trial court’s implied finding of
common-law fraud, Appellants’ legal sufficiency challenge must fail. See BMC Software Belgium,
83 S.W.3d at 795; Ingham, 351 S.W.3d at 100. Saraswat testified and presented evidence for each
of the essential elements of common-law fraud. See T.O. Stanley Boot Co., 847 S.W.2d 218 at
222 (fraud elements). He testified that Chandan, who was HFI’s president and sole shareholder,
intentionally and falsely promised to sell him shares in HFI. He testified that he relied on
Chandan’s promise, paid Chandan and HFI as agreed, and was damaged by Appellants’ failure to
transfer the stock shares. See id.; Spoljaric, 708 S.W.2d at 434; Yeldell, 80 S.W.3d at 637.
Viewing the evidence in the light favorable to the judgment, and implying necessary
findings to support the judgment, we conclude there is more than a scintilla of evidence on each
essential element of common-law fraud. See Regal Fin. Co., Ltd. v. Tex Star Motors, Inc., 355
S.W.3d 595, 603 (Tex. 2010); City of Keller, 168 S.W.3d at 827. Therefore, the evidence was
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legally sufficient to support the trial court’s implied finding that Appellants committed common-
law fraud. See BMC Software Belgium, 83 S.W.3d at 795; Ingham, 351 S.W.3d at 100.
E. Factual Sufficiency of Implied Findings
As the fact-finder, the trial court was free to weigh the evidence, to evaluate the witnesses,
and to believe Saraswat and disbelieve Chandan. See Intec Sys., Inc. v. Lowrey, 230 S.W.3d 913,
920 (Tex. App.—Dallas 2007, no pet.); Nathan A. Watson Co. v. Emp’rs Mut. Cas. Co., 218
S.W.3d 797, 801 (Tex. App.—Fort Worth 2007, no pet.). The trial court could have reasonably
believed Saraswat and found that Chandan made a false material representation when he promised
to sell Saraswat shares in HFI and an interest in the Waelder store. See Nathan A. Watson Co.,
218 S.W.3d at 801. It could have reasonably believed that Chandan intentionally and falsely
promised to sell the HFI stock shares so that Saraswat would rely on the promise and make
payments to Chandan and HFI toward the purchase. See id. It also could have reasonably believed
Saraswat’s testimony that he suffered damage from his reliance on Chandan’s promise. See id.
Having reviewed all the evidence, we conclude that the evidence supporting an implied
finding that Appellants committed common-law fraud is not “so against the great weight and
preponderance of the evidence as to be clearly wrong and unjust.” See Ortiz, 917 S.W.2d at 772;
Flying J Inc., 373 S.W.3d at 690–91. The evidence is factually sufficient on each element of
common-law fraud and supports the trial court’s judgment.
F. Unsupportable Judgment Amount
Appellants complain that no combination of cancelled checks, cash deposit receipts, and
product purchase receipts adds up to the amount the trial court awarded to Saraswat. Citing
Keilman, Appellants contend we must reverse the trial court’s judgment because it is “picked out
of thin air” and not supported by the evidence at trial. See First State Bank v. Keilman, 851 S.W.2d
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914, 931 (Tex. App.—Austin 1993, writ denied). But Appellant’s cited proposition in Keilman is
distinguishable.
In Keilman, the jury was presented with two mutually exclusive and collectively exhaustive
bases for determining the amount of unauthorized interest charged to the borrowers. Id. at 929–
31. If the jury believed the borrowers’ evidence, the unauthorized interest amount was $7,161.44.
Id. at 931. If the jury believed the bank, the unauthorized interest amount was $0.00. Id. The jury
found the unauthorized interest amount to be $360.00. Id. The Keilman court concluded that the
jury could have chosen either amount supported by the evidence, $7,161.44 or $0.00, but could
not arbitrarily select another amount because the evidence supported only one of the two choices.
Id.
But Keilman presents another proposition that is applicable: “As a general rule, the trier-
of-fact has broad discretion in assessing damages where the law provides no precise legal measure,
and the [fact-finder]’s findings will not be disregarded merely because the [fact-finder]’s reasoning
in arriving at its figures may be unclear.” See id. at 930; accord David McDavid Pontiac, Inc. v.
Nix, 681 S.W.2d 831, 837 (Tex. App.—Dallas 1984, writ ref’d n.r.e.).
Here, the trial court received evidence on Saraswat’s breach of contract claim and his
multitude of tort claims. It considered evidence of approximately eighteen separate transactions
(e.g., cancelled checks) that Saraswat contended showed his payments to Appellants. The trial
court was free to believe that some of the transactions were payments towards purchasing HFI
shares, and others, such as the cash deposits and products purchases, were either partially or
entirely used for other purposes. See Intec Sys., 230 S.W.3d at 920; Nathan A. Watson Co., 218
S.W.3d at 801.
Although the judgment does not state the precise formula the trial court used to calculate
damages, the award was less than the amount for which there was some legally and factually
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sufficient evidence. See Keilman, 851 S.W.2d at 931; Nix, 681 S.W.2d at 837 (“As a general rule,
a reviewing court will not interfere with a [fact-finder]’s determination of the amount to award as
damages if there is any probative evidence to sustain the award.”). We conclude that the
judgment’s lump-sum amount was not “picked out of thin air”; it was supported by legally and
factually sufficient probative evidence. Cf. Keilman, 851 S.W.2d at 931; Nix, 681 S.W.2d at 837.
CONCLUSION
Having reviewed the evidence under the required standards of review, we conclude that
the evidence is legally and factually sufficient to support an implied finding that Chandan and HFI
committed common-law fraud against Saraswat. Because the evidence is legally and factually
sufficient for one of the causes of action Saraswat pled, we need not analyze the others. See
Worford, 801 S.W.2d at 109 (“The judgment must be affirmed if it can be upheld on any legal
theory that finds support in the evidence.”). Therefore, we affirm the trial court’s judgment.
Patricia O. Alvarez, Justice
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