Sanjay Joshi v. Southlake Automotive, LLC ( 2020 )

In The
Court of Appeals
Seventh District of Texas at Amarillo
No. 07-19-00222-CV
SANJAY JOSHI, APPELLANT/CROSS-APPELLEE
V.
SOUTHLAKE AUTOMOTIVE, LLC, APPELLEE/CROSS-APPELLANT
On Appeal from the County Court at Law No. 1
Tarrant County, Texas1
Trial Court No. 2016-006369-1, Honorable Don Pierson, Presiding
October 14, 2020
MEMORANDUM OPINION
Before QUINN, C.J., and PARKER and DOSS, JJ.
In this appeal from a bench trial, both appellant, Sanjay Joshi, and cross-appellant,
Southlake Automotive, LLC, claim the trial court erred in entering a take-nothing
judgment. Joshi appeals the denial of his claims for breach of contract, DTPA violations,
and attorney’s fees, while Southlake appeals the denial of its claims for unjust enrichment,
breach of contract, and fraudulent inducement. We affirm in part and reverse in part.
1
Originally appealed to the Second Court of Appeals, this case was transferred to this Court by the
Texas Supreme Court pursuant to its docket equalization efforts. See TEX. GOV’T CODE ANN. § 73.001
(West 2013).
Background
This case arises out of a transaction involving Southlake’s sale of a Ferrari 458
Spider to Joshi. The parties dispute certain details of the transaction, but the evidence
shows that around October 7, 2015, Joshi contacted Southlake regarding the purchase
of a car for his teenage son. Joshi spoke with Corey Calahan, a salesman for Southlake,
and Brandon Koke, the sales manager. Joshi wanted a red Ferrari 458 with a tan interior
and low mileage. The Southlake representatives testified that Joshi needed to get the
car soon because he wanted it in time for his son’s high school homecoming parade, but
Joshi disputed this at trial. Joshi and Calahan also discussed a potential trade-in of other
vehicles Joshi owned.
According to Joshi, he specifically told Calahan that the car needed a built-in
navigation system. However, both Calahan and Koke testified that Joshi did not indicate
that navigation was a necessity when they became involved in the search for a car that
met Joshi’s requirements.
On October 12, Koke contacted Joshi about a 2014 model with 2600 miles on it.
In several email exchanges between himself and Koke, Joshi set forth additional features
he wanted in the car, such as parking sensors, the Ferrari symbol embroidered on the
seats, carbon fiber across the dash, and twenty-inch diamond cut wheels. He did not
mention navigation.
Southlake purchased the 2014 car and brought it to Texas from Florida. Southlake
took possession of the car on October 17.
2
Koke testified that, at some point, he called “the experts at Ferrari,” who told him
that in 2014 and newer vehicles, navigation systems were standard. Based on this
representation, Southlake informed Joshi that navigation was standard.
On October 20, Joshi inspected the car in a metal warehouse. At that time, Joshi
had not signed any documents. Calahan testified, “Mr. Joshi showed up. We looked
around the car. He asked me to start it up and kind of go over some of the features, and
then he asked me to show the navigation. I did[;] it said unavailable.” According to Joshi,
Calahan told him not to worry, because they had already confirmed that the car had
navigation. However, Calahan offered to take the car out of the warehouse to test the
navigation system. Joshi declined to do so. Koke testified that Joshi was in a hurry to
get the vehicle for the homecoming parade. Calahan testified that he knew that Joshi
wanted navigation, but Joshi never told him that lack of navigation would be a
dealbreaker.
After his inspection, Joshi signed a contract to purchase the Ferrari for $268,000.
The contract included a disclaimer of warranties and an integration clause stating that it
contained the entire agreement between the parties related to the sale of the vehicle.
Southlake gave Joshi a trade-in allowance of $166,000 toward the sales price for his
trade-ins of two other vehicles, a Maserati Ghibli and a Lamborghini Gallardo. As a result
of the trade-ins, the taxable sale price of the car was reduced from $268,000 to $102,000.
Joshi’s first monthly payment was due on December 1.
Southlake delivered the car to Joshi’s home pursuant to a temporary spot delivery
agreement the next morning, October 21, and it was used in Joshi’s son’s homecoming
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parade later that same day.2 The following day, Southlake picked up the vehicle to
complete the usual process done on pre-owned vehicles, such as the state inspection,
detailing, and, in this case, a complimentary maintenance and inspection procedure by
Ferrari. In addition, Joshi requested clear wrap paint protection film for the car, which
Southlake was to provide for $1,250.
On November 5, while the car was still at the Ferrari dealership for maintenance,
Southlake learned that it did not have navigation. Calahan informed Joshi that same day.
Joshi was upset when he learned that there was no navigation. Koke testified that he
then offered Joshi two solutions: Southlake could install an aftermarket navigation system
or it could unwind the deal. By “unwinding the deal,” Koke meant Southlake would take
the Ferrari back, return Joshi’s trade-in vehicles or their dollar value to him, void all the
paperwork, and the parties could go their separate ways. At that time, no finance charges
had been incurred. However, Joshi testified at trial that “nobody does unwinding” and
that Southlake did not make such an offer.
Joshi rejected the offer to provide an aftermarket navigation system, but accepted
delivery of the Ferrari on November 6. Koke agreed to attempt to find another buyer for
the car and to continue to search for a 458 Spider with the same features plus a navigation
system. Joshi testified that he accepted delivery of the car because he had already paid
for it. He said, “I was paying the insurance and interest charges and everything.”
However, he was unable to identify any payments he had made and did not know whether
the check he tendered to Southlake had been cashed.
2 The spot delivery agreement permitted Joshi to take delivery of the vehicle even though financing
for the purchase of the vehicle was not yet finalized.
4
On December 9, Southlake bought the car back from Joshi for $268,000, the same
amount he had paid for it. Southlake sold the car to another buyer on December 15 for
$270,000. Later in December, Joshi received an invoice from Southlake for $1,250 for
the clear wrap protection he had ordered. At trial, he acknowledged that he did not pay
the invoice. In February, Joshi purchased a different car, a Lamborghini, from another
dealership. Calahan testified that Southlake could have applied the tax savings from
Joshi’s trade-ins to the purchase of the Lamborghini and offered to do so, but Joshi
declined.
Joshi sued Southlake for violating the Texas Deceptive Trade Practices Act
(“DTPA”). See TEX. BUS. & COM. CODE ANN. § 17.46(b) (West Supp. 2020). He alleged
that Southlake violated section 17.46(b) of the DTPA by (1) representing that the goods
or services are of a particular standard, quality, or grade, or that goods are of a particular
style or model, if they are of another; (2) representing that a guarantee or warranty confers
or involves rights or remedies which it does not have or involve; (3) representing that work
or services have been performed on, or parts replaced in, goods when the work or
services were not performed or the parts replaced; and (4) failing to disclose information
concerning goods or services which was known at the time of the transaction with the
intention to induce the consumer into a transaction into which the consumer would not
have entered had the information been disclosed. See id. He further alleged that
Southlake breached the implied warranty of fitness for a particular purpose and an
express warranty that the vehicle he purchased “came equipped with the very features
that Plaintiff advised Defendant were material to Plaintiff’s decision to purchase the
subject vehicle.” In addition to his DTPA claims, Joshi asserted claims for breach of
contract, fraudulent inducement, common law fraud, and negligent misrepresentation.
5
Joshi alleged that he was damaged in the amount of $16,750, representing $6,375 in
taxes paid on the replacement vehicle he purchased from another dealership and $10,375
in tax savings he lost in that second transaction as a result of having traded in two vehicles
to Southlake.
In its counterclaim, Southlake brought claims for unjust enrichment, fraudulent
inducement, and breach of contract. Southlake asserted that Joshi was unjustly enriched
by his use of the Ferrari for thirty-three days. The Ferrari had a rental value of $1,500 per
day, bringing Southlake’s claim to $49,500. Southlake also sought $1,250 in breach of
contract damages for the outstanding invoice for the clear wrap that Joshi requested for
the car.
The case was tried to the bench. The trial court determined that neither Joshi nor
Southlake met their burden of proof for affirmative relief, and entered a take-nothing
judgment from which both parties appealed. On appeal, Joshi argues that the trial court
erred by ordering that he take nothing from Southlake with respect to his DTPA claims,
breach of contract claim, and claim for attorney’s fees. Southlake argues that the trial
court erred by issuing a take-nothing judgment on its unjust enrichment claim, breach of
contract claim, and fraud in the inducement claim.
Standard of Review
When neither findings of fact nor conclusions of law have been filed or requested,
the judgment of the trial court after a bench trial implies all necessary findings of fact to
support itself. Schoeffler v. Denton, 813 S.W.2d 742, 744 (Tex. App.—Houston [14th
Dist.] 1991, no writ). A trial court’s implied findings of fact in a bench trial have the same
force and dignity as a jury’s verdict upon a jury question. Anderson v. City of Seven
6
Points, 806 S.W.2d 791, 794 (Tex. 1991). Therefore, the trial court’s implied findings are
similarly reviewed for legal and factual sufficiency of the evidence. Catalina v. Blasdel,
881 S.W.2d 295, 297 (Tex. 1994); see also City of Keller v. Wilson, 168 S.W.3d 802, 807
(Tex. 2005) (legal sufficiency of evidence is to be reviewed in the light most favorable to
the challenged finding, crediting favorable evidence if a reasonable factfinder could and
disregarding contrary evidence unless a reasonable factfinder could not); Ortiz v. Jones,
917 S.W.2d 770, 772 (Tex. 1996) (per curiam) (fact findings may be overturned only if
they are so contrary to the overwhelming weight of the evidence as to be clearly wrong
and unjust). We will affirm the trial court’s judgment if it can be upheld on any legal theory
supported by evidence. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990). The trial
court, as factfinder, was entitled to believe or disbelieve all or any part of the witnesses’
testimony. Dwairy v. Lopez, 243 S.W.3d 710, 713 (Tex. App.—San Antonio 2007, no
pet.).
Analysis of Joshi’s Claims
DTPA Claims
In his first issue, Joshi claims that the trial court erred in entering a take-nothing
judgment on his DTPA claims, because he proved all the elements. The elements of a
DTPA claim are (1) the plaintiff was a consumer, (2) the defendant either engaged in
false, misleading, or deceptive acts or engaged in an unconscionable action or course of
action, and (3) the DTPA violation or unconscionable action was a producing cause of the
plaintiff’s injury. Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 649 (Tex. 1996). Joshi
alleged both a “laundry list” violation under section 17.46 of the Texas Civil Practice and
Remedies Code and a claim for breach of an express or implied warranty. As to the first,
7
Joshi alleges that Southlake made repeated misrepresentations to him about the car’s
navigation system, namely that the car had one, that it was a standard feature of the car,
and that it would work after service on the car. As to the second, Joshi asserts that
Southlake, in order to induce him to purchase the car, made an express warranty that the
navigation system on the car would work after the car was serviced. He concludes that
Southlake breached this warranty because after service was performed, the car still had
no functioning navigation system.
Southlake raised several defenses and affirmative defenses to Joshi’s DTPA
claims. Our analysis will focus only on whether Joshi established that any DTPA violation
was a producing cause of any damages to him.
The basis for both of Joshi’s claims is that Southlake’s employees misrepresented
to him the existence of a functioning navigation system in the Ferrari. This
misrepresentation was corrected by Southlake prior to Joshi’s acceptance of the car on
November 6. There was evidence at trial that Joshi, upon being informed that the car
had no navigation system, had the option to refuse delivery of the car, cancel the
transaction, and avoid any damages.
A plaintiff in a DTPA suit is required to mitigate damages. Pinson v. Red Arrow
Freight Lines, Inc., 801 S.W.2d 14, 15 (Tex. App.—Austin 1990, no writ). When an injured
party fails to comply with the duty to mitigate damages, recovery is not permitted as to
that part of damages that could have been avoided or was incurred as a result of the
failure to mitigate. Id. Here, Southlake presented evidence, which the trial court could
have accepted as true, that Joshi could have avoided any damages he allegedly incurred
by accepting Southlake’s offer to unwind the transaction. Thus, we conclude that the
8
evidence supports the trial court’s determination that Joshi did not establish entitlement
to relief on his DTPA claims. We overrule Joshi’s first issue.
Breach of Contract
In his second issue, Joshi claims that the trial court erred in entering a take-nothing
judgment on his breach of contract claim, because he proved all the elements. The
elements of a breach of contract claim are (1) the existence of a valid contract, (2)
performance or tendered performance by the plaintiff, (3) breach of contract by the
defendant, and (4) damages to the plaintiff resulting from that breach. Domingo v.
Mitchell, 257 S.W.3d 34, 39 (Tex. App.—Amarillo 2008, pet. denied).
Joshi alleges that he “entered into a contract with Southlake to purchase the [c]ar,
one part of which was that the [c]ar would have a functioning built-in navigation system.”
Southlake responds that, while the parties had a valid contract for the sale of the car, the
contract did not include any requirement that the car have a navigation system. We thus
begin our analysis by examining the parties’ agreement and determining whether
Southlake promised to provide a car with a navigation system.
The promise of a built-in navigation system is not expressed in the text of the
parties’ written contract. The contract includes a section listing the car’s options,
accessories, and services, but no mention of navigation is made therein. Joshi does not
dispute this, but relies on extrinsic evidence, specifically, his testimony, to establish the
existence of an agreement for Southlake to provide a car with a navigation system.
Southlake and Joshi entered a written contract representing the final and complete
expression of all the terms agreed upon by the parties. The written contract expressly
provides that the contract “contains the entire agreement between you and us relating to
9
the sale and financing of the vehicle.” “When parties have entered into a valid, written,
integrated contract, the parol evidence rule precludes enforcement of any prior or
contemporaneous agreement that addresses the same subject matter and is inconsistent
with the written contract.” West v. Quintanilla, 573 S.W.3d 237, 243 (Tex. 2019). In such
cases, extrinsic evidence is not admissible to add to, vary, or contradict the terms of a
written contract that is clear on its face. Guisinger v. Hughes, 363 S.W.2d 861, 865 (Tex.
Civ. App.—Dallas 1962, writ ref’d n.r.e.). The term alleged by Joshi was an addition to
the terms of the parties’ written contract and thus unenforceable under the parol evidence
rule.
We therefore conclude that the evidence supports the trial court’s decision that
Joshi did not establish entitlement to relief on his breach of contract claim. We overrule
Joshi’s second issue.
Attorney’s Fees
In his third issue, Joshi contends that the trial court erred by denying his claim for
attorney’s fees. Because Joshi was not a prevailing party on his DTPA claim, the trial
court did not err in denying his claim for attorney’s fees under the DTPA. See TEX. BUS.
& COM. CODE ANN. § 17.50(d) (West 2011) (providing for award of court costs and
reasonable and necessary attorneys’ fees for consumers who prevail on claims).
Similarly, the trial court did not err in denying Joshi’s claim for attorneys’ fees under
section 38.001 of the Civil Practice and Remedies Code because Joshi failed to
successfully prosecute his claim. See Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390
(Tex. 1997) (entitlement to fees under section 38.001(8) requires that party prevail on a
10
cause of action for which attorney’s fees are recoverable and recover damages). We
therefore overrule Joshi’s third issue.
Analysis of Southlake’s Claims
Unjust Enrichment
In Southlake’s first issue, it argues that the trial court erred in issuing a take-nothing
judgment on its unjust enrichment claim. Southlake contends that Joshi wrongfully
obtained a benefit, namely the use of the Ferrari, for his son’s homecoming parade and
for the thirty-three-day period after he learned of the lack of navigation. The evidence
showed that the car had a fair market rental value of $1,500 per day.
Unjust enrichment is an equitable theory of recovery available when a party has
obtained a benefit from another by fraud, duress, or the taking of unfair advantage, and
the receipt of those benefits is not governed by contract. Mason v. Mason, No. 07-12-
00007-CV, 2014 Tex. App. LEXIS 413, at *13-14 (Tex. App.—Amarillo Jan. 13, 2014, no
pet.) (mem. op.) (citing Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41
(Tex. 1992); and Lone Star Steel Co. v. Scott, 759 S.W.2d 144, 154 (Tex. App.—
Texarkana 1988, writ denied)). Here, Southlake and Joshi entered into an express
contract that governed the sale and financing of the vehicle. Because the transaction
was governed by a contract, we agree with the trial court that Southlake is not entitled to
recovery under the theory of unjust enrichment. We overrule Southlake’s first issue.
Breach of Contract
In its second issue, Southlake claims that it established it was damaged in the
amount of $2,200 for Joshi’s breaches of contract. First, Southlake contends that it was
11
undisputed that Joshi requested the addition of clear wrap paint protection for the car at
a cost of $1,250 and that, although Southlake provided the clear wrap, Joshi did not pay
for it. Second, according to Southlake, it established that it incurred a sales fee of $875
and a $75 cost for “accounts receivable” as a result of selling the car.
Again, the elements of a breach of contract claim are (1) the existence of a valid
contract, (2) performance or tendered performance by the plaintiff, (3) breach of contract
by the defendant, and (4) damages to the plaintiff resulting from that breach. Domingo,
257 S.W.3d at 39. Koke testified that Joshi ordered the $1,250 clear wrap for the car
after he inspected it in October and that Southlake provided it. Calahan testified that the
invoice for the service was emailed to Joshi by the dealership’s accounting office. Joshi
admitted that he did not pay for the clear wrap. He testified that he “was suppose[d] to
pay for the clear wrap” but that he received the invoice for it after the car had been sold
to someone else. The evidence at trial established that the parties had an oral agreement
that the clear wrap would be provided and that Southlake provided it at a cost of $1,250.
This evidence is all that is needed for Southlake to prove its claim of breach of contract
regarding the clear wrap.
We conclude that Southlake conclusively proved each essential element of its
breach of contract claim as to the parties’ agreement regarding clear wrap. Accordingly,
we reverse the trial court’s judgment as to this portion of Southlake’s breach of contract
claim and render judgment for Southlake in the amount of $1,250.
We next consider the evidence of Southlake’s other breach of contract claim, with
alleged damages of $950. Southlake argues that it established that the parties’ written
contract included a clause allowing Southlake “to enforce reasonable out of pocket
12
expenses related to holding or selling the vehicle.” The provision relied upon by
Southlake addresses the event of Joshi’s default under the written contract and provides:
DISPOSITION OF THE VEHICLE. If you don’t pay us to get the vehicle
back, we can sell it or take other action allowed by law. We will send you
notice at least 10 days before we sell it. We can use the money we get from
selling it to pay allowed expenses and to reduce the amount you owe.
Allowed expenses are expenses we pay as a direct result of taking the
vehicle, holding it, preparing it for sale, and selling it. If any money is left,
we will pay it to you unless we must pay it to someone else. If the money
from the sale is not enough to pay all you owe, you must pay the rest of
what you owe us plus interest. If we take or sell the vehicle, you will give
us the certificate of title and any other document required by state law to
record transfer of title.
At trial, Southlake elicited testimony from Koke that, after Southlake bought the car
back from Joshi for $268,000, Southlake resold the car to another buyer, just days later,
for $270,000. Southlake paid a $875 sale fee and “account receivables $75” in
connection with this second sale of the car.
We observe that these figures indicate that the resale of the car was made without
financial loss to Southlake. As such, the evidence strongly tends to show that no
damages were caused by the sale. Even if we were to assume that Joshi breached the
parties’ written contract, and further assumed that the contractual provision relied upon
by Southlake applied, the evidence supports a determination that Southlake failed to
establish that it was damaged by any such breach. Therefore, we conclude that the trial
court did not err by denying this portion of Southlake’s breach of contract claim.3
3 In connection with its breach of contract argument, Southlake requests “a remand to the trial court
in the amount of its attorneys’ fees.” The general rule is that attorneys’ fees are to be requested and proved
in the initial trial. See Varner v. Cardenas, 218 S.W.3d 68, 69-70 (Tex. 2007). Here, the record contains
no evidence of the attorneys’ fees incurred by Southlake and Southlake has not explained in its brief why
it is entitled to a remand on the issue. Therefore, Southlake’s request for a remand is denied.
13
Fraud in the Inducement
In its final issue, Southlake argues that the trial court erred in issuing a take-nothing
judgment on Southlake’s fraud in the inducement claim. The elements of fraud in the
inducement are: (1) the defendant made a material misrepresentation that was false, (2)
the defendant knew the representation was false when made or made it recklessly as a
positive assertion without any knowledge of its truth, (3) the defendant intended to induce
the plaintiff to act upon the representation, and (4) the plaintiff actually and justifiably
relied upon the representation and thereby suffered injury. Taft v. Sherman, 301 S.W.3d
452, 457 (Tex. App.—Amarillo 2009, no pet.).
The entirety of Southlake’s argument on the elements of this claim reads as
follows: “Southlake established that Sanjay Joshi represented on November 5, 2015, that
he would accept the Ferrari with actual knowledge that the Ferrari did not have a
navigation system. Joshi made the representation to induce Southlake to deliver the
Ferrari to him for his personal use for over a month knowing he would later want to resell
it and/or sue Southlake for it.” Southlake provides no references to the record in support
of these assertions, nor does it offer evidence of damages; it simply “requests a finding
in its favor [on] its fraud in the inducement claim in the amount of $2,200.”
Failure to adequately brief an issue results in a waiver of that issue on appeal. See
TEX. R. APP. P. 38.1(i) (obligating appellant to proffer argument with appropriate citations
to authorities and to the record); Sunnyside Feedyard, L.C. v. Metropolitan Life Ins. Co.,
106 S.W.3d 169, 173 (Tex. App.—Amarillo 2003, no pet.) (holding that the failure to
proffer explanation and citation waives the complaint). We conclude that Southlake’s
14
failure to provide citations to the evidence or to legal authority in support of its claim has
effected a waiver of this issue. Southlake’s third issue is therefore overruled.
Conclusion
We reverse the trial court’s judgment to the extent that it denies the clear wrap
portion of Southlake’s breach of contract claim, and we render judgment in Southlake’s
favor on such claim in the amount of $1,250. In all other respects, we affirm the judgment
of the trial court.
Judy C. Parker
Justice
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