Melinda Herrera v. Wendell Legacy Homes, LLC ( 2021 )

In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-19-00250-CV
__________________
MELINDA HERRERA, Appellant
V.
WENDELL LEGACY HOMES, LLC, Appellee
__________________________________________________________________
On Appeal from the 284th District Court
Montgomery County, Texas
Trial Cause No. 17-06-06862-CV
__________________________________________________________________
OPINION
Appellant Melinda Herrera appeals the trial court’s take-nothing judgment on
her claims against Wendell Legacy Homes, LLC (“Wendell Homes”). In two issues
on appeal, Herrera argues that the trial court erred by failing to disregard the jury’s
findings of no actual damages and zero attorney’s fees. We affirm the trial court’s
judgment.
1
BACKGROUND
In June 2017, Wendell Homes filed a breach of contract claim against Herrera
seeking damages for allegedly breaching an agreement to purchase a home and pay
for substantial modifications that Herrera had requested. Herrera filed counterclaims
against Wendell Homes and third-party defendants Joshua Matthew Wendell
(“Josh”), Blake Wilcox Properties, LLC (“Wilcox Properties”), and Marcus
Howell. 1 Herrera alleged that Wendell Homes and Josh had breached the contract
by failing to timely close on the home, deposit $50,000 of earnest money into an
escrow account, and comply with the contract. According to Herrera, the contract
provides that she could terminate the contract and receive back all the earnest money
should Wendell Homes default by failing to timely close, but Wendell Homes had
refused to return her earnest money.
Herrera also filed a claim for fraud in a real estate transaction against Wendell
Homes, Josh, Wilcox Properties, her real estate broker, and Howell, her real estate
agent. Herrera alleged that Wendell Homes, Josh, Wilcox Properties, and Howell
1
Third-party defendants Joshua Matthew Wendell, Blake Wilcox Properties,
LLC (“Wilcox Properties”), and Marcus Howell are not parties to this appeal. The
record reflects that during the trial, Wilcox Properties and Howell reached a
settlement agreement with Herrera and Wendell Homes and that Herrera and
Wendell Homes dismissed all claims against Wilcox Properties and Howell. The
record further reflects that Wilcox Properties and Howell dismissed all claims
against Herrera, and Herrera dismissed all her claims against Josh in his individual
capacity.
2
falsely represented past or existing facts to induce her into entering an agreement to
purchase the new construction of the residence and that she relied on the false
statements. Herrera also alleged that Wendell Homes, Josh, Wilcox Properties and
Howell falsely promised to do an act, the false promise was material, made with the
intention of not fulfilling it, made for the purpose of inducing her to enter into an
agreement to purchase the mineral acres, and Herrera relied on the promise to place
earnest money in the proper account pursuant to the new home contract. According
to Herrera, Wendell Homes, Josh, Wilcox Properties, and Howell were liable for
actual and exemplary damages as well as attorney’s fees under section 27.01 of the
Texas Business and Commerce Code for making false representations and false
promises with actual awareness of the falsity and benefiting from the same. Herrera
also filed counterclaims for conspiracy to commit statutory fraud, breach of fiduciary
duty, and negligent misrepresentation.
In its amended petitions, Wendell Homes alternatively sought damages under
promissory estoppel and the equitable remedy of quantum meruit for the costs
incurred in making Herrera’s requested modifications to the home in accordance
with the Americans with Disabilities Act (“ADA”). The record shows that Wendell
Homes filed a motion for partial summary judgment on Herrera’s claims for fraud
in a real estate transaction, conspiracy to commit statutory fraud, breach of fiduciary
duty, and negligence. The trial court granted Wendell Homes’s motion for summary
3
judgment as to Herrera’s claims for negligence, negligent misrepresentation, and
breach of fiduciary duty, but denied summary judgment on Herrera’s causes of
action for statutory fraud and conspiracy to commit fraud, including her claim for
exemplary damages. Herrera also filed a motion for summary judgment on Wendell
Homes’s breach of contract claim, arguing that the contract sales price was
$350,000, not $400,000 as claimed by Wendell Homes, and that the contract
required a $50,000 escrow payment. Herrera agreed that the sales price was
$400,000, including the ADA modifications. Herrera argued that Wendell Homes
could not recover under quantum meruit or promissory estoppel because there was
a valid express contract. The trial court denied Herrera’s motion for summary
judgment.
The trial court conducted a jury trial. Herrera testified that in 2014, she was in
a car accident that left her in a wheelchair, and after settling a lawsuit in 2017, she
asked Howell to help her find property in Montgomery, Texas, because she wanted
to build her dream home. Herrera explained that Howell and his boss, Joshua Blake
Wilcox (“Wilcox”), introduced her to Josh of Wendell Homes, who helped her look
at properties, but when Herrera could not find the property she wanted, Howell
suggested that Herrera purchase 115 Silverwolf Cove Place (“Silverwolf Home”), a
home being constructed by Wendell Homes that was approximately thirty percent
complete, so that Herrera could make decisions regarding the needed ADA changes.
4
Herrera testified that before she entered into a contract to buy the Silverwolf Home
from Wendell Homes, she entered into an agreement to make nine renovations to
make the home ADA accessible. According to Herrera, Josh told her that she would
have to pay $10,000 for the ADA changes.
Herrera testified that she wanted her attorneys to look over the agreements
before she entered into them, and at Josh’s request, Herrera had her attorney, David
Harris, send Josh a letter stating that she had enough funds to purchase the home for
$400,000. Herrera explained that after her attorney sent the letter, she gave Josh a
cashier’s check for $10,000, and that Howell told her to make the check payable to
Wendell Homes. Herrera also explained that when she gave Josh the check, she told
Josh that he was not going to take advantage of her and that she would sue him if he
did anything wrong. Herrera testified that before she entered into a contract to buy
the Silverwolf Home, Howell told her to wire Josh $40,000, and Herrera explained
that Davis gave her legal advice before she transferred the money.
Herrera testified that she signed a contract with Wendell Homes in February
2017, which was after she agreed to have Wendell Homes make her requested ADA
changes and after she paid $50,000. Herrera explained that Josh and Howell told her
she had to pay $40,000 so that Josh would “hold the house.” According to Herrera,
Howell told her that the money was going to be placed into an escrow account, but
there was no written agreement binding any party to deposit the money into an
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escrow account. Herrera agreed that the written contract provides that she was
responsible for depositing $50,000 as earnest money with Providence Title, but
Herrera testified that she never made the deposit because Howell and Josh told her
they were going to make the deposit. Herrera also testified that the $350,000
purchase price indicated in the written contract was incorrect, and Herrera knew that
it was incorrect when she signed the contract.
Herrera explained that Wendell Homes breached the contract by failing to
close on March 31, but Herrera testified that she agreed to close in May because Josh
had to rehire workers to finish the sheetrock work. Herrera also testified that she was
still making selections for the Silverwolf Home in April. Herrera explained that
while the Silverwolf Home was being built, she purchased the Rabon Chapel
property that she wanted to build on, and she did not tell Josh and Howell that she
no longer wanted to buy the Silverwolf Home until after she closed on the Rabon
Chapel property in May. According to Herrera, she decided not to buy the Silverwolf
Home in May because “[t]here was a lot of stuff that I didn’t like[,]” and the
inspection showed that “it had a lot of things wrong with it.” Herrera testified that
on May 17, which was the same day she got the Silverwolf Home inspection report,
she sent Josh a text telling him that she regretted getting the Silverwolf Home.
Herrera explained that Josh and Wendell Homes tried to accommodate her requests,
but she was angry with Howell.
6
On cross-examination, Herrera testified that she did not know that Howell was
also representing Josh. Herrera explained that she believed that the $50,000 she paid
would be escrowed and credited as earnest money in the contract. Herrera also
explained that she understood that Josh was not going to charge her more than
$400,000 for the ADA changes, and the $350,000 contract price along with the
$50,000 earnest money is what she, Josh, and Howell had agreed to. According to
Herrera, prior to the lawsuit, neither Josh nor Howell alleged that she was in breach
of the contract for failing to pay the earnest money. Herrera testified that if the
Silverwolf Home was not closed by March 31, 2017, the contract provided her the
right to terminate the contract and receive the earnest money back, and she exercised
her right to terminate the contract because she gave them plenty of time to finish the
Silverwolf Home, but there were a lot of things wrong with it, and she “just wanted
to get out.” Herrera also testified that she did not receive legal advice regarding the
purchase of the Silverwolf Home, and she only spoke with Harris because she
needed money to make the purchase.
Herrera also explained that Josh and Wilcox tried to get her to go into business
with them and to invest her money in building a subdivision on the Rabon Chapel
property, but Herrera refused the deal, which she claimed was not related to her
purchasing the Silverwolf Home for $400,000. Although Herrera testified that she
was never told that to purchase the Silverwolf Home for $400,000, she had to let
7
Josh build her dream home, Herrera later testified that she had agreed to let Wendell
Homes build her dream home after the Silverwolf Home was complete. Herrera
explained that Howell betrayed her trust by also representing Josh and telling Josh
that she did not want Josh to build her dream home because she was not satisfied
with the quality of his work. Herrera also explained that she made complaints about
the Silverwolf Home prior to the closing date, and in mid-April, she told Josh that
she no longer wanted the Silverwolf Home because he was not complying with what
she wanted. According to Herrera, she did not terminate the contract in mid-April
because Josh told her he would fix it. Herrera testified that she did not give Josh a
copy of the inspection report, and she did not know if Wendell Homes had an
opportunity to address the issues raised in the report.
Herrera testified that she never signed any change orders to the Silverwolf
Home contract. Herrera testified that she should be bound by her agreement to let
Wendell Homes complete the Silverwolf Home and to build her dream home, but
Herrera explained that she never signed a written agreement with Wendell Homes
to build her dream home and she did not agree to buy the Silverwolf Home for less
than the actual sales price. Herrera further testified that Wendell Homes does not
have a claim to the $50,000 earnest money for the ADA improvements or other
changes to the Silverwolf Home because the $50,000 did not apply to the
construction of the home. Herrera also explained that she knew that when she was
8
dealing with Josh that he was acting as a representative for Wendell Homes. Herrera
agreed that Wendell Homes had performed work at the Silverwolf Home, but she
testified that Wendell Homes should only be paid for the work that was done
correctly.
Wilcox testified that he is a real estate broker with Wilcox Properties, and
Howell was one of the agents he managed. Wilcox testified that he had a limited
listing agreement with Josh to list and market Wendell Homes’s properties, but
Wilcox Properties did not represent Wendell Homes in the contract negotiations.
Wilcox explained that the transaction involving Herrera occurred before he agreed
to list Wendell Homes’s properties, but Wilcox Properties listed the Silverwolf
Home after Josh and Herrera negotiated the terms of the contract. According to
Wilcox, Howell acted as Herrera’s agent and created the contract for the Silverwolf
Home because Josh did not have his contract ready. Wilcox testified that Howell
told him that Josh wanted to write his own Greater Houston Building Association
contract (“GHBA”), which is builder specific, but Howell used the Texas Real Estate
Commission (“TREC”) contract because that is the contract that was available.
Wilcox explained that Howell and Herrera negotiated with Josh to specially
price the Silverwolf Home for $400,000, because Josh was going to find Herrera
land on which she could build her dream home. Wilcox testified that Wendell Homes
is a reputable builder that builds custom homes, and the custom homebuilding
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process takes approximately thirteen months to complete because the purchaser
makes all the selections to suit her needs and tastes. According to Wilcox, builders
require an upfront deposit to build a new construction home because the selections
are taste specific, and if the buyer refuses to accept the property, the builder can
recoup any loss. Wilcox explained that Herrera made changes to the Silverwolf
Home to meet specific ADA requirements. Wilcox also explained that he had never
done a contract that required the earnest money to be paid prior to the contract, and
if money is exchanged prior to a contract, then there is some kind of agreement
between the parties. Wilcox testified that the $50,000 Herrera paid is the earnest
money listed in the contract. According to Wilcox, Josh used the money to build the
home. Wilcox also explained that he never saw any signed change orders.
Wilcox further testified that he spoke with Herrera about her option to use the
Rabon Chapel property for an investment opportunity to build a subdivision.
According to Wilcox, his office owed Herrera a fiduciary duty and always acted
according to Herrera’s best interest during the Silverwolf Home transaction, and that
Wilcox Properties never represented or negotiated on Josh’s or Wendell Homes’s
behalf. Wilcox explained that he did not have a fiduciary duty to Josh and that the
only duty Wilcox owed to Josh or Wendell Homes was to list and market the homes
for a one percent commission. Wilcox testified that the Silverwolf Home did not
close on time and that the closing date was never amended. According to Howell,
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Herrera was unhappy with the inspection report and made complaints about the
home prior to exercising her option to terminate the contract, and Herrera did not
give Wendell Homes an opportunity to correct any issues on the report. Howell
testified that after Herrera terminated the contract, his company sold the Silverwolf
Home for $460,000.
Howell testified that he was working as Herrera’s agent and looking for
property for Herrera when Wilcox introduced him to Josh of Wendell Homes.
Howell explained that Herrera agreed to buy the Silverwolf Home after she and Josh
entered into an agreement to have Wendell Homes make ADA renovations to the
Silverwolf Home. Howell also explained that the $10,000 was for the ADA changes
and to hold the house. Howell testified that he prepared the sales contract, but he did
not instruct Herrera to wire $40,000 to Josh. Howell explained that he told Herrera
to consult with her attorney, and Howell knew that Herrera was in constant
communication with her attorneys. Howell also explained that he represented
Herrera during the purchase of the Rabon Chapel property, and according to Howell,
Herrera’s attorney called him and asked about Wendell Homes and the price of the
Rabon Chapel property. Howell testified that he did not conduct any contract
negotiations on behalf of Wendell Homes, and that he only represented Herrera’s
interests.
11
Howell explained that he heard Herrera and Josh agree that she would
purchase the Silverwolf Home from Wendell Homes for a special rate, that Wendell
Homes would make the ADA changes, and that Wendell Homes would build
Herrera’s dream home when she found property. According to Howell, the
agreement was not in the contract because “[i]t was a handshake[,]” and the
agreement to build another house was never put in an addendum. Howell further
testified that the contract was supposed to be amended to reflect the $400,000 sales
price and the deposits, but the contract was never amended. Howell testified that he
understood that Josh used the money Herrera paid him to complete the home. Howell
explained that shortly after Herrera closed on the Rabon Chapel property, he told
Herrera she had $27,351.09 in overages for the selections she made on the Silverwolf
Home, and Herrera told him she did not think so and that she was going to get her
attorney to look at it. Howell explained that the contract provided that any change
orders or overages had to be signed by Wendell Homes and Herrera to be
enforceable, and Howell testified he never saw any change orders that were agreed
to and signed by Herrera. According to Howell, two days after he told Herrera about
the overages, Herrera decided that she did not want the Silverwolf Home because
Wendell Homes failed to close on time. Howell testified although Herrera had a right
to terminate the contract, he advised Herrera not to terminate the contract because
Wendell Homes had done work on the home, and she could lose her money.
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Josh testified that he operates and manages Wendell Homes, which specializes
in designing and building custom homes. Josh testified that in January 2017, he met
with Herrera, Wilcox, and Howell to discuss Herrera’s plan to buy property and
build a home in Montgomery County. Josh testified that when he found out that
Herrera was looking for an ADA home to rent, he showed Herrera the Silverwolf
Home that was under construction, and Josh told Herrera that he could make some
adjustments to fit her needs. Josh explained that Herrera agreed to buy the Silverwolf
Home for $400,000, and on January 5, 2017, Josh agreed to complete Herrera’s
specific requests to make the home ADA compliant.
According to Josh, he told Herrera that his standard deposit is $10,000 to take
the house off the market and that he always requires a ten percent builder’s deposit
when changes are requested to guarantee payment for the changes. Josh testified that
Herrera paid the $10,000 deposit to hold the home before they entered into a
contract, and when Herrera handed him the $10,000 cashier’s check payable to
Wendell Homes, she told him if anything went wrong, she would sue him. Josh
explained that Wendell Homes had to fund Herrera’s requested changes, and when
he received the $10,000, he began working on Herrera’s changes. Josh further
explained that there were many changes that needed to be made to accommodate
Herrera’s ADA requests for the Silverwolf Home, and since the Silverwolf Home
was not going to be Herrera’s permanent home, the changes needed to be made in a
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fashion that could be quickly undone because some ADA modifications are
unattractive to buyers. According to Josh, Herrera also wired $40,000 to Wendell
Homes before they had a contract.
Josh testified that he wanted to use the GHBA contract, but he agreed to let
Howell prepare a TREC contract, which Herrera signed on February 13, 2017. Josh
explained that after he accidently signed the contract electronically, he immediately
notified Howell that the contract included the wrong price and that it did not show
the deposits, and Howell told him that he would amend the contract. According to
Josh, the price should have been $400,000, and the contract should have included
the $10,000 hold deposit and the ten percent builder’s deposit, but Howell never
amended the contract. Josh explained that the custom-building industry does not deal
with escrow because any deposits are used to make changes to build a “one-off
home[]” that is unlike any other.
Josh testified that he got confirmation from Herrera before installing her
selections in the Silverwolf Home, and Herrera’s selections amounted to overages
totaling $27,351.09. Josh also testified that the overages from Herrera’s selections
were not signed by Herrera. Josh explained that Herrera had made some complaints
before she told him that she did not want the Silverwolf Home, but Herrera had never
complained about the construction being behind schedule. Josh further explained
that Howell told him that Herrera was terminating the contract in mid-May right
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before closing, and Josh testified that Herrera never provided an explanation or gave
him an opportunity to address any issues with the inspection report. Josh testified
that he did everything he could to assist Herrera and that he wanted to do things right
because her story tugged on his heartstrings.
According to Josh, he sued Herrera because Wendell Homes did work that
Herrera did not pay for, and it cost $59,854.80 for Wendell Homes to reverse
everything and put the Silverwolf Home back into sellable form after Herrera walked
away. Josh testified that he sold the Silverwolf Home for $460,000 after adding a
workshop in the garage and a second story, which included a game room, study, full
bath, and a full staircase. Josh agreed that the damages he was seeking are not
consistent with the terms of the contract. Josh also testified that he passed on the
opportunity to buy the Rabon Chapel property before Herrera purchased it. Josh
explained that he talked with Herrera about development opportunities for the Rabon
Chapel property, but Josh claimed that he did not pressure Herrera in any way or
receive any commission from the sale.
Harris testified that he sent a letter to Josh confirming that Herrera had
$400,000 to purchase the Silverwolf Home. Harris testified that he did not have any
discussions with Josh about earnest money or a construction deposit. Harris further
testified that he never reviewed the real estate contract or discussed the contract with
Josh or Herrera.
15
The record shows that Wendell Homes and Herrera agreed to submit affidavits
regarding their requests for attorney’s fees and that Herrera’s attorney, Reynaldo A.
Pena, requested that the attorney’s fees be segregated. Herrera also moved for a
directed verdict on her breach of contract claim, and the trial court denied Herrera’s
motion. The jury returned a verdict finding that there was a new home contract
between Wendell Homes and Herrera, Herrera did not fail to comply with the
agreement, and Wendell Homes failed to comply with the agreement. The jury
awarded Herrera zero damages resulting from Wendell Homes’s failure to comply
with the agreement. The jury found that Wendell Homes did not perform
compensable work for Herrera for which it was not compensated, Herrera promised
to pay for the ADA modifications and upgrades to the property, Herrera reasonably
foresaw that Wendell Homes would rely on her promise to pay for the modifications
and upgrades, Wendell Homes substantially relied on Herrera’s promise and made
some, if not all, of the requested modifications and upgrades, and that the reasonable
value of Wendell Homes’s compensable work and services based on Herrera’s
promise on which it substantially relied in performing was zero.
The jury also found that Wendell Homes committed fraud against Herrera by
making a false promise to do an act, that zero dollars would fairly and reasonably
compensate Herrera for any damages that were proximately cause by such fraud, and
that Wendell Homes did not have actual awareness of the falsity of the promise. The
16
jury further found that Wendell Homes did not intentionally misapply the $50,000
Herrera paid in a manner that involved substantial risk of loss to Herrera, secure the
execution of a document by deception, or make a negligent misrepresentation on
which Herrera justifiably relied. The jury found that a reasonable fee for the
necessary services of both Wendell Homes’s and Herrera’s attorneys was zero.
After the jury returned its verdict, Herrera filed a motion to disregard the jury
findings and enter judgment. In a written motion for judgment notwithstanding the
verdict (“JNOV”), Herrera argued that no evidence supports the jury’s findings of
zero damages on her claims for breach of contract and statutory fraud because the
undisputed evidence shows that she paid Wendell Homes $50,000. Herrera argued
that the trial court should disregard the jury’s finding of zero damages and find that,
as a matter of law, she suffered damages of $50,000, which is the amount she paid
to Wendell Homes under the contract. Herrera further contended that as a prevailing
party on her statutory fraud and breach of contract claims, she is entitled to attorney’s
fees. Herrera also asserted that the trial court should disregard the jury’s findings as
to promissory estoppel because Wendell Homes cannot recover under promissory
estoppel when the jury found that a contract exists between the parties.
Wendell Homes also filed a motion to disregard the jury findings and enter
judgment as well as a response to Herrera’s motion, arguing that the evidence
submitted in total supports the jury’s verdict of zero damages and zero attorney’s
17
fees as to Herrera. Wendell Homes argued that the trial court should disregard the
jury’s fraud finding because the record contains no evidence that Wendell Homes
made any representations of material fact that induced Herrera to enter into the
contract. According to Wendell Homes, the actions about which Herrera complains
all occurred after Herrera entered into the contract. Wendell Homes also argued that
Herrera failed to meet her burden of proof on all the elements of fraud because injury
and damages are elements of fraud, and the jury awarded Herrera zero damages.
Wendell Homes further argued that the jury’s findings regarding its claims for
quantum meruit and promissory estoppel also supports its request to disregard the
jury’s fraud finding because the great weight of the evidence shows that Herrera
knew what Wendell Homes used the money for and that Herrera did not rely on any
representations to the contrary to enter into the contract. The trial court rendered a
final judgment ordering that Wendell Homes take nothing on its claims against
Herrera and that Herrera take nothing on her claims against Wendell Homes and
Josh.
ANALYSIS
In issue one, Herrera argues that the trial court erred by failing to disregard
the jury’s findings of no actual damages because she established $50,000 in actual
damages as a matter of law. In issue two, Herrera argues that the trial court erred by
failing to disregard the jury’s findings of zero attorneys’ fees because she prevailed
18
against Wendell Homes’s breach of contract claim for which Wendell Homes
received zero damages. According to Herrera, Pena’s affidavit provides undisputed
evidence that the attorney’s fees she incurred were reasonable and necessary, and
since Wendell Homes failed to challenge Pena’s affidavit, her evidence of attorney’s
fees must be taken as true as a matter of law.
Appellate courts review a trial court’s decision on a motion for JNOV under
a legal-sufficiency standard. City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex.
2005). Under this standard, appellate courts must view the evidence in the light most
favorable to the jury’s verdict, indulging every reasonable inference that would
support the jury’s verdict. Id. at 822. In a legal-sufficiency review, appellate courts
must credit evidence that supports the verdict if reasonable jurors could do so and
disregard contrary evidence unless reasonable jurors could not. Id. at 827. We will
uphold the jury’s finding if more than a scintilla of competent evidence supports it.
Tanner v. Nationwide Mut. Fire Ins. Co., 289 S.W.3d 828, 830 (Tex. 2009).
“When a party that bore the burden of proof at trial seeks a judgment
notwithstanding the verdict, it must show that the record establishes as a matter of
law a proposition that contradicts the jury’s finding.” Ginn v. NCI Bldg. Sys., Inc.,
472 S.W.3d 802, 843 (Tex. App.—Houston [1st Dist.] 2015, no pet.). Stated another
way, “‘[a] trial court may not properly disregard a jury’s negative finding and
substitute its own affirmative finding unless the evidence conclusively establishes
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the issue.’” Id. (quoting Henry v. Masson, 333 S.W.3d 825, 849 (Tex. App.—
Houston [1st Dist.] 2015, no pet.)). “[E]vidence is conclusive only if reasonable
people could not differ in their conclusions, a matter that depends on the facts of
each case.” City of Keller, 168 S.W.3d at 816. We must first examine the record for
any evidence supporting the jury’s finding while ignoring all evidence to the
contrary. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001). If there is no
evidence to support the challenged finding, we must then examine the entire record
to determine whether the contrary proposition is established as a matter of law. Id.ZERO ACTUAL DAMAGES
In issue one, Herrera contends that the jury answered “0” to the damages
question premised on a finding that Wendell Homes breached the contract despite
the undisputed evidence that Herrera paid $50,000 pursuant to the new home
contract. Herrera also complains that despite the jury determining that Wendell
Homes committed fraud in the sale of real estate against her, the jury answered “0”
as to the amounts she paid pursuant to the contract. According to Herrera, the trial
court erred in failing to disregard the jury’s findings of no actual damages because
she established $50,000 in damages as a matter of law. Wendell Homes argues that
while Herrera demonstrated that she made a $50,000 deposit under the new home
contract and that Wendell Homes breached the contract, Herrera ignores the fact that
Wendell Homes prevailed against her on its promissory estoppel claim. According
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to Wendell Homes, since there was extensive evidence that it spent the $50,000 to
make the ADA modifications and to undo the modifications after Herrera terminated
the contract, the jury could have considered the amounts Herrera avoided under the
contract and the harm Herrera caused Wendell Homes in determining the amount of
damages Herrera was entitled to recover.
Reading the jury’s answers collectively as a whole, we conclude that the jury’s
findings of zero damages for Herrera can be reconciled with its findings in favor of
Wendell Homes’s promissory estoppel claim. The jury answered the charge as
follows:
• The jury answered “Yes” in the response to Question No. 1, which asked:
“Was the New Home Contract a contract between Wendell Legacy Homes,
LLC and Melinda Herrera regarding the Property?” Based on the “Yes”
answer to Question 1, the jury answered Questions 2 and 3.
• The jury answered “No” to Question No. 2, which asked: “Did Melinda
Herrera fail to comply with the agreement as found by you in Question 1?”
• The jury answered “Yes” to Question No. 3, which asked: “Did Wendell
Legacy Homes fail to comply with the agreement as found by you in Question
1?” Based on the “No” answer to Question 2 and the “Yes” answer to Question
3, the jury did not answer Question 4, 5 and 6.
• The jury answered “0” to Question 7, which asked: “What sum of money, if
any, if paid now in cash, would fairly and reasonably compensate Melinda
Herrera for her damages, if any, that resulted from Wendell Legacy Homes,
LLC’s failure to comply as found by you in Question 3?” The jury was
instructed to consider the following element of damages if any: “any amounts
Melinda Herrera paid pursuant to the New Home Contract.”
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• The jury answered “No” to Question 8, which asked: “Did Wendell Legacy
Homes, LLC perform compensable work for Melinda Herrera for which it was
not compensated?” Based on the “No” answer, the jury was instructed not to
answer Question 9.
• The jury answered “Yes” to Question 10, which asked: “Did Melinda Herrera
promise that she would pay for the [ADA] modifications and upgrades to the
Property?”
• The jury answered “Yes” to Question 11, which asked: “Did Melinda Herrera
reasonable foresee that Wendell Legacy Homes would rely on her promise to
pay for these ADA medications and upgrades to the Property?”
• The jury answered “Yes” to Question 12, which asked: “Did Wendell Legacy
Homes substantially rely on Melinda Herrera’s promise and make some, if not
all, the requested ADA modifications and upgrades to the Property?”
• The jury answered “0” to Question 13, which asked: “What is the reasonable
value of Wendell Legacy Homes, LLC’s compensable work and services
based on Melinda Herrera’s promise for which it substantially relied in
performing?”
• The jury answered “No” to Question 13.1, which asked: “Do you find that
Wendell Legacy Homes, LLC has been unjustly enriched and that Melinda
Herrera would be unjustly penalized if Wendell Legacy Homes, LLC was
permitted to retain the benefits of its actions without paying or providing
anything in return?”
• The jury answered “Yes” to Question 14A, which asked: “Did Wendell
Legacy Homes, LLC commit fraud against Melinda Herrera?” Question 14A
instructed the jury that fraud occurs when (1) a party makes a false promise to
do an act; and (2) that promise is material; and (3) the promise is made with
the intention of not fulfilling it; and (4) the promise is made to a person for
the purpose of inducing that person to enter into a contract; and (5) that person
relies on the promise in entering into that contract.
• The jury answered “No” to Question 14B, which asked: “Did Wendell Legacy
Homes, LLC commit fraud against Melinda Herrera?” Question 14B
instructed the jury that fraud occurs when (1) there is a false representation of
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a past or existing material fact; and (2) the representation is made to a person
for the purpose of inducing the person to enter into a contract; and (3) the
representation is relied on by that person in entering into that contract. Based
on the “Yes” answer to Question 14A, the jury was instructed to answer
Questions 16 and 17.
• The jury answered “0” to Question 16, which asked: “What sum of money, if
any, if paid now in cash, would fairly and reasonably compensate Melinda
Herrera for her damages, if any, that were proximately caused by such fraud?”
The jury was instructed to consider the following elements of damages: “[a]ny
amounts Melinda Herrera paid pursuant to the New Home Contract.”
• The jury answered “No” to Question 17, which asked: “Did Wendell Legacy
Homes, LLC have actual awareness of the falsity of the representation or
promise you found to be fraud in Question 14?” Based on the “No” answer to
Question 17, the jury was instructed not to answer Question 18.
• The jury answered “No” to Question 19.1, which asked: “Did Wendell Legacy
Homes, LLC . . . intentionally misapply the $50,000 Melinda Herrera paid in
a manner that involved substantial risk of loss to Melinda Herrera?” The
charge instructed the jury that “‘[m]isapply’ means a person deals with the
money contrary to an agreement under which the person hold[s] the money.”
• The jury answered “No” to Question 19.2, which asked: “Did Wendell Legacy
Homes, LLC . . . secure the execution of a document by deception?” The
charge instructed the jury that “‘[s]ecuring the execution of a document by
deception’ occurs when a person causes another person to sign any document
affecting property, and does so by deception, with the intent to defraud or
harm any person.”
• The jury answered “No” to Question 20, which asked: “Did Wendell Legacy
Homes, LLC make a negligent misrepresentation on which Melinda Herrera
justifiably relied?” Based on the “No” answer to Question 20, the jury was
instructed not to answer Question 21.
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Although promissory estoppel does not apply to a promise covered by a valid
contract between the parties, it does apply to a promise outside the contract. Trevino
& Assocs. Mech., L.P. v. Frost Nat’l Bank, 400 S.W.3d 139, 146 (Tex. App.—Dallas
2013, no pet.). Wendell Homes asserted a promissory estoppel claim for the money
it spent making Herrera’s requested ADA modifications and upgrades to the home.
The jury found that Wendell Homes was entitled to recover on its promissory
estoppel claim after considering evidence that Wendell Homes had performed
Herrera’s requested ADA modifications that were not covered by the contract, and
that Herrera had promised to pay for the modifications. The jury heard Herrera
testify that before she entered into a contract to buy the Silverwolf Home, she entered
into an agreement to make nine renovations to make the home ADA accessible and
paid $50,000 to Wendell Homes. The jury heard Herrera testify that Wendell Homes
had performed work at the Silverwolf Home and that Wendell Homes should only
be paid for the work that was done correctly.
The jury considered Howell’s testimony that Herrera agreed to buy the
Silverwolf Home after she and Josh entered into an agreement to have Wendell
Homes make ADA renovations to the Silverwolf Home. The jury heard Howell
testify that Josh used the money Herrera paid to complete the home, and that Howell
advised Herrera not to terminate the contract because she could lose the money that
Wendell Homes used to complete the work on the home. The jury also heard Wilcox
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testify that Herrera made changes to the Silverwolf Home to meet specific ADA
requirements and that Josh used the $50,000 to build the Silverwolf Home.
The jury considered Josh’s testimony that prior to entering into a contract, he
agreed to complete Herrera’s specific requests to make the home ADA compliant
and that Wendell Homes had to fund Herrera’s requested modifications. The jury
heard Josh testify that Herrera paid $50,000 before signing the contract, and that he
used the funds to begin working on Herrera’s modifications. The jury also heard
Josh testify that Wendell Homes did work that Herrera did not pay for, and it cost
Wendell Homes $59,854.80 to reverse the ADA modifications that Herrera
requested and to put the Silverwolf Home back into sellable form after Herrera
walked away.
Even though the jury found in favor of Herrera on her breach of contract
claim, the jury also found that (1) Herrera promised to pay for the ADA
modifications, (2) Wendell Homes made the modifications, and (3) Wendell Homes
was not unjustly enriched and Herrera was not unjustly penalized by permitting
Wendell Homes to retain the benefits of its actions without paying anything in return.
The evidence showed that Herrera had already paid $50,000 and that Wendell
Homes had used Herrera’s funds to make Herrera’s modifications, and the jury
found that the value of the work that Wendell Homes performed was zero. Based on
the jury’s finding that Wendell Homes was not entitled to any damages on its
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promissory estoppel claim, it follows that the jury also found that Herrera was
entitled to zero damages on her breach of contract claim based on Wendell Homes’s
failure to timely close, because the goal in determining damages for a breach of a
contract claim is just compensation for any loss or damages actually sustained due
to the breach. See Phillips v. Phillips, 820 S.W.2d 785, 788 (Tex. 1991).
Additionally, although the jury found in favor of Herrera on her fraud claim
by finding that Wendell Homes had made a false promise, the jury also found that
Wendell Homes did not have actual awareness of the falsity of its promise. We
conclude that the jury’s refusal to award Herrera damages for fraud can be reconciled
with its finding that Wendell Homes did not intentionally misapply the $50,000
Herrera paid and its finding of zero damages for Wendell Homes’s promissory
estoppel claim. Predicated on those findings, the jury considered what damages to
award Herrera on her fraud claim, and the jury awarded zero damages.
Applying the first step of the conclusively-established-as-a-matter-of-law-
legal-sufficiency-analysis and examining the record for any evidence supporting the
jury’s finding of zero damages for Herrera’s breach of contract and fraud claims, we
hold that some evidence exists from which the jury, as the sole judge and credibility
of the witnesses, could have determined that Herrera suffered zero damages. See City
of Keller, 168 S.W.3d at 822-23; Francis, 46 S.W.3d at 241. Since some evidence
supports the award of zero damages, Herrera has failed to conclusively establish
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entitlement to $50,000 in damages as a matter of law. See Francis, 46 S.W.3d at
241; Ginn, 472 S.W.3d at 843; Masson, 333 S.W.3d at 849. Therefore, the trial court
did not err by refusing to disregard the jury’s findings of no actual damages. We
overrule issue one.
ZERO ATTORNEY’S FEES
In issue two, Herrera argues that the trial court erred by failing to disregard
the jury’s findings of zero for a reasonable fee for the necessary services of Herrera’s
attorneys in their case. According to Herrera, she is entitled to recover attorney’s
fees under section 27.01 of the Texas Business and Commerce Code and as a
prevailing party under the contract. See Tex. Bus. & Com. Code Ann. § 27.01(e).
Herrera contends that Pena’s affidavit provides undisputed evidence that the
attorney’s fees she incurred were reasonable and necessary, and since Wendell
Homes failed to challenge her evidence of attorney’s fees, Pena’s affidavit must be
taken as true as a matter of law.
Generally, attorney’s fees incurred by a party are not recoverable against an
adversary in a breach of contract case unless provided by statute or contract between
the parties. In re Nat’l Lloyds Ins. Co., 532 S.W.3d 794, 809 (Tex. 2017); Turner v.
Turner, 385 S.W.2d 230, 233 (Tex. 1964). The parties’ new home contract provided
for the award of attorney’s fees. The attorney’s fees section of the new home contract
provides that “[a] Buyer, Seller, Listing Broker, Other Broker, or escrow agent who
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prevails in any legal proceeding relating to this contract is entitled to recover
reasonable attorney’s fees and all costs of such proceeding.” Section 27.01 of the
Texas Business and Commerce Code, which concerns fraud in real estate and stock
transactions, also provides that “[a]ny person who violates the provisions of this
section shall be liable to the person defrauded for reasonable and necessary
attorney’s fees[.]” See Tex. Bus. & Com. Code Ann. § 27.01(e).
When attorney’s fees are recoverable under contract as a prevailing party or
by statute, the party seeking to recover those fees bears the burden to establish that
the fees were reasonably incurred and necessary to the prosecution of the case. In re
Nat’l Lloyds Ins. Co., 532 S.W.3d at 809; Arthur Andersen & Co. v. Perry Equip.
Corp., 945 S.W.2d 812, 819 (Tex. 1997). Ordinarily, determining the amount of
reasonable and necessary attorney’s fees presents questions of fact, so the trier of
fact must resolve disputes over attorney’s fees. Garcia v. Gomez, 319 S.W.3d 638,
642 (Tex. 2010); see also Ragsdale v. Progressive Voters League, 801 S.W.2d 880,
881 (Tex. 1990). Generally, the testimony of an interested witness, even when
uncontradicted, merely raises an issue of fact, leaving the amount of the fees that
should be awarded up to the jury when the parties elect to have a jury decide the
dispute. Smith v. Patrick W. Y. Tam. Tr., 296 S.W.3d 545, 547 (Tex. 2009). In some
circumstances, however, the testimony of an interested witness, when the testimony
“is not contradicted by any other witness, or attendant circumstances, and the same
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is clear, direct and positive, and free from contradiction, inaccuracies, and
circumstances tending to cast suspicion thereon, it is taken as true, as a matter of
law.” Ragsdale, 801 S.W.2d at 882. However, “[e]ven uncontroverted expert
testimony does not bind jurors unless the subject matter is one for experts alone.”
City of Keller, 168 S.W.3d at 820. Thus, if Pena’s uncontradicted testimony was
“unreasonable, incredible, or its belief is questionable,” then his testimony raised
only a fact issue leaving the amount Herrera was entitled to recover up to the jury.
See Ragsdale, 801 S.W.2d at 882.
Wendell Homes argues that Herrera’s proof of attorney’s fees is insufficient
to recover under section 27.01 because Pena’s affidavit is too vague and conclusory
to support an award for attorney’s fees on Herrera’s fraud claim. Wendell Homes
argues that Herrera’s proof of attorney’s fees fails to show that the fees are
reasonable and necessary because Pena’s affidavit includes all the fees incurred by
Herrera, including fees incurred on other claims that were dismissed by summary
judgment and as to other parties that had settled during trial. Wendell Homes further
argues that Pena’s affidavit and the attached invoices lack specific details and
explanations referencing the statutory fraud claim that would allow the jury to
calculate what fees were reasonable and necessary for the prosecution of Herrera’s
fraud claim. Wendell Homes contends that the jury was free to review Pena’s
affidavit and determine whether it was too vague and conclusory to support an award
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for Herrera’s fraud claim, and “it is apparent that the short affidavit on fees submitted
to the jury failed to convince the jury that the approximately $87,000 in attorney’s
fees allegedly incurred by Herrera were reasonable or necessary, particularly in light
of the jury’s award of zero damages.”
To show the reasonableness and necessity of attorney’s fees, a party must
show that the fees were incurred while suing the defendant sought to be charged with
the fees on a claim which allows recovery of such fees. See Stewart Title Guar. Co.
v. Sterling, 822 S.W.2d 1, 10 (Tex. 1991). This is especially important in cases where
there are multiple defendants and one or more of the defendants have settled because
the remaining defendant should not be charged fees for which it is not responsible.
See id. at 11. Based on the attendant circumstances, we conclude that Pena’s affidavit
stating that his attorney’s fees are reasonable and necessary is not clear, direct,
positive, and free from contradiction, inaccuracies, and circumstances tending to cast
suspicion on it. See Ragsdale, 801 S.W.2d at 882. We conclude that Pena’s affidavit
is conclusory as to the reasonable and necessary attorney’s fees regarding Herrera’s
fraud claim because it fails to provide underlying facts to support Pena’s conclusion.
See Leonard v. Knight, 551 S.W.3d 905, 911-12 (Tex. App.—Houston [14th Dist.]
2018, no pet.); Padilla v. Metro. Transit Auth. of Harris Cty., 497 S.W.3d 78, 86
(Tex. App.—Houston [14th Dist.] 2016, no pet.). Accordingly, Herrera failed to
establish that she is entitled to recover attorney’s fees under section 27.01 as a matter
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of law. See Tex. Bus. & Comm. Code Ann. § 27.01(e); Ginn, 472 S.W.3d at 843;
Masson, 333 S.W.3d at 849.
Herrera also argues that she established as a matter of law that she is entitled
to recover attorney’s fees as a prevailing party under the contract, because she
successfully defended against Wendell Homes’s breach of contract claim for which
Wendell Homes received a take-nothing judgment. In support of her argument that
a prevailing party refers to a party who is successful in defending an action on the
main issue, Herrera cites Weng Enterprises, Inc. v. Embassy World Travel, Inc., 837
S.W.2d 217, 222-23 (Tex. App.—Houston [1st Dist.] 1992, no writ). Wendell
Homes argues that Weng is distinguishable, and since Herrera also received a take-
nothing judgment, this Court should follow the case law that governs when neither
party prevails. See Walnut Retail Ctr. Gen. Partner, LC, v. LBL, Ltd., No. 04-13-
00878-CV, 2014 WL 5463898, at *3-4 (Tex. App.—San Antonio Oct. 29, 2014, no
pet.) (mem. op.). Wendell Homes argues that the holding in Walnut is consistent
with other established case law which provides that to be a prevailing party, a party
“‘must obtain actual and meaningful relief, something that materially alters the
parties’ legal relationship.’” Id. at *3 (quoting Intercontinental Grp. P’ship v. KB
Home Lone Star L.P., 295 S.W.3d 650, 652 (Tex. 2009)). In other words, “a plaintiff
must prove compensable injury and secure an enforceable judgment in the form of
damages or equitable relief.” Intercontinental, 295 S.W.3d at 652.
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The contract provides that the “prevailing party in any legal proceedings
brought in relation to this Contract may be entitled to recover from the non-
prevailing party all litigation costs and reasonable and necessary attorney’s fees.”
Since the contract does not define the term “prevailing party,” in interpreting the
contract, we presume the parties intended the term’s ordinary meaning. See id. at
653. A party prevails when it secures an enforceable judgment in the form of
damages for its injuries which materially alters the legal relationship of the parties.
See id. at 652.
The Texas Supreme Court has determined that a defendant is a prevailing
party when it obtains actual and meaningful relief that materially alters the parties’
legal relationship by successfully defending against a claim and securing a take-
nothing judgment on the main issue in the case. See Rohrmoos Venture v. UTSW
DVA Healthcare, LLP, 578 S.W.3d 469, 485-86 (Tex. 2019). However, we conclude
that Rohrmoos is distinguishable because, unlike this case, in Rohrmoos, the plaintiff
successfully defended against a breach of contract counterclaim in which no
monetary damages were sought in the jury charge, and the trial court’s judgment
altered the legal relationship of the parties by awarding declaratory relief that
allowed the plaintiff/counter-defendant to terminate the commercial lease. See id. at
476-77, 484-86. We also note that the Intercontinental Court only addressed what a
plaintiff must do to be a prevailing party and other appellate courts have determined
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that Intercontinental is inapplicable to determining whether a defendant who
successfully defended a claim is a prevailing party under the parties’ agreement. We
agree with Wendell Homes that the holding in Walnut controls in a case such as this
one, in which both parties received take-nothing judgments and the trial court’s
judgment did not alter the parties’ legal relationship. See id. at 486; Intercontinental,
295 S.W.3d at 656-57; Walnut, 2014 WL 5463898, at *3-4; see also Fitzgerald v.
Schroeder Ventures II, LLC, 345 S.W.3d 624, 629 (Tex. App.—San Antonio 2011,
no pet.); Silver Lion, Inc. v. Dolphin Street, Inc., No. 01-07-00370-CV, 2010 WL
2025749, at *18 (Tex. App.—Houston [1st Dist.] May 20, 2010, pet. denied).
In this case, Herrera successfully defended against Wendell Homes’s claim
for breach of contract, and Wendell Homes received a take-nothing judgment, which
did not include any relief that altered the legal relationship of the parties.
Additionally, in resolving Herrera’s counterclaim for breach of contract, the jury
found that Wendell Homes failed to comply with the new home contract, but the jury
awarded Herrera zero damages for Wendell Homes’s breach. The jury further found
that a reasonable fee for the necessary services of both Wendell Homes’s and
Herrera’s attorneys was zero. In determining whether attorney’s fees are proper, we
must consider the judgment, not the verdict. Intercontinental, 295 S.W.3d at 656-
57. “A stand-alone finding on breach confers no benefit whatsoever[,]” and an award
of zero damages “necessarily zeroes out” prevailing party status. Id. at 655-56. “[T]o
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prevail in a suit that seeks only actual damages–compensation for provable
economic harm–there must be a showing that the plaintiff was actually harmed, not
merely wronged.” Id. at 656.
Since this case resulted in a take-nothing judgment with no meaningful
judicial relief for Herrera, we conclude that Herrera cannot be deemed a prevailing
party under the contract. See id. at 656-67. We further conclude that Herrera has
failed to establish as a matter of law that she is entitled to recover attorney’s fees as
a prevailing party under the contract. See Ginn, 472 S.W.3d at 843; Masson, 333
S.W.3d at 849. Accordingly, since Herrera failed to establish as a matter of law that
she is entitled to recover attorney’s fees under section 27.01 or as a prevailing party
under the contract, the trial court did not err by failing to disregard the jury’s findings
of zero attorney’s fees. We overrule issue two. Having overruled both of Herrera’s
issues, we affirm the trial court’s judgment.
AFFIRMED.
_________________________
W. SCOTT GOLEMON
Chief Justice
Submitted on May 6, 2021
Opinion Delivered July 29, 2021
Before Golemon, C.J., Kreger and Horton, JJ.
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