Randy Coleman and Jim Coleman Company v. Ralph Dean

ACCEPTED
04-14-00811-CV
FOURTH COURT OF APPEALS
SAN ANTONIO, TEXAS
6/30/2015 10:41:29 AM
KEITH HOTTLE
CLERK
04-14-00811-CV
IN THE COURT OF APPEALS FILED IN
FOURTH DISTRICT 4th COURT OF APPEALS
SAN ANTONIO, TEXAS
SAN ANTONIO
06/30/2015 10:41:29 AM
KEITH E. HOTTLE
Clerk
RANDY COLEMAN
AND JIM COLEMAN COMPANY,
Appellants
V.
RALPH DEAN,
Appellee
On Appeal from Cause No. 11-04-49987-CV
In the 79th Judicial District Court, Jim Wells County, Texas
The Hon. Richard C. Terrell, Presiding Judge
APPELLEE’S BRIEF
Charles C. Webb, Jr. Frank Weathered
Parker S. Webb State Bar No. 20998600
WEBB CASON, PC DUNN, WEATHERED, COFFEY,
710 North Mesquite Street RIVERA & KASPERITIS, P.C.
Corpus Christi, Texas 78401-2312 611 South Upper Broadway
TEL: 361.887.1031 Corpus Christi, Texas 78401
FAX: 361.887.0903 TEL: 361.883.1594
EMAIL: charlie@wcctxlaw.com FAX: 361.883.1599
EMAIL: parker@wcctxlaw.com EMAIL: frank@weatheredlaw.com
ATTORNEYS FOR APPELLEE
ORAL ARGUMENT REQUESTED
TABLE OF CONTENTS
PAGE
Index of Authorities.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
Statement of the Case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
Statement Regarding Oral Argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
Issues Presented.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii
Statement of Facts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Summary of the Argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
I. Sufficiency of the Evidence to Support Liability under the DTPA for Actual
and Additional Damages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
A. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
B. Standard of Review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
C. Laundry List Violations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1. Source, sponsorship, approval . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2. Characteristics, ingredients, uses, benefits, or quantities . . . . . . . . . . 14
3. Rights, remedies, or obligations.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4. Failure to disclose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5. Jim Coleman Company’s Relationship to the Transaction was
Sufficient to Impose DTPA Liability on that Defendant. . . . . . . . . . . 15
D. The Violations were a Producing Cause of Economic Damages. . . . . . . 17
ii
E. Appellants Knowingly Engaged in DTPA Violations. . . . . . . . . . . . . . . . 18
II. Attorney Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
III. The Judgment does not Award Treble (or Double) Recovery. . . . . . . . . . . . 22
Relief Requested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
RULE 9.4(i)(3) CERTIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
CERTIFICATE OF SERVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
iii
INDEX OF AUTHORITIES
PAGE
CASES
Basic Energy Serv., Inc. v. D-S-B Properties, Inc.,
367 S.W.3d 254, 270 (Tex. App.—Tyler 2011, no pet.). . . . . . . . . . . . . . . . . . . . 16
Century 21 Real Estate Corp. v. Hometown Real Estate Co.,
890 S.W.2d 118, 128 (Tex. App.—Texarkana 1994, writ denied).. . . . . . . . . . . . 18
City of Keller v. Wilson,
168 S.W.3d 802, 827 (Tex. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 8
Cox v. State,
448 S.W.3d 497, 505 (Tex. App.—Amarillo 2014, pet. pending). . . . . . . . . . . . . 10
Cullins v. Foster,
171 S.W.3d 521, 535-36 (Tex. App.—Houston [14th Dist.] 2005, pet. denied).. . 20
Ford Motor Co. v. Ledesma,
242 S.W.3d 32, 46 (Tex. 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Fort Worth Elevators v. Russell,
70 S.W.2d 397, 406 (Tex. 1934). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Green Int’l, Inc. v. Solis,
951 S.W.2d 384, 389 (Tex. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Hedley Feedlot, Inc. v. Weatherly Trust,
855 S.W.2d 826, 837 (Tex. App.—Amarillo 1993, pet. denied). . . . . . . . . . . . . . 10
Hennessey v. Vanguard Ins. Co.,
895 S.W.2d 794, 802-03 (Tex. App.—Amarillo 1995, writ denied) .. . . . . 6, 13, 15
Hruska v. First State Bank,
747 S.W.2d 783, 785 (Tex. 1988). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
iv
In re Johnson,
340 S.W.3d 769, 775 (Tex. App.—San Antonio 2011, pet. denied). . . . . . . . . . . . 7
K.C. Roofing Co., Inc. v. Abundis,
940 S.W.2d 375, 377 (Tex. App.—San Antonio 1997, writ denied). . . . . . . . . . . 18
Melody Homes Mfg. Co. v. Barnes,
741 S.W.2d 349, 351 (Tex. 1987). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Siegler v. Williams,
658 S.W.2d 236, 240-41 (Tex. App.—Houston [1st Dist.] 1983, no writ). . . . . . . 18
Smith v. Herco, Inc.,
900 S.W.2d 852, 859 (Tex. App.—Corpus Christi 1995, writ denied). . . . . . . . . 15
Spillman v. Self Serve Fixture Co., Inc.,
693 S.W.2d 656 (Tex. App.—Dallas 1985, writ ref’d n.r.e.). . . . . . . . . . . . . . . . . 22
Todd v. Perry Homes,
156 S.W.3d 919, 922 (Tex. App.—Dallas 2005, no pet.).. . . . . . . . . . . . . . . . . . . 16
Tony Gullo Motors I, L.P. v. Chapa,
212 S.W.3d 299, 311 (Tex. 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 21
Treasure City v. Strange,
620 S.W.2d 811, 814 (Tex. Civ. App.—Dallas 1981, no writ). . . . . . . . . . . . . . . 16
U.S. Fire Ins. Co. v. Millard,
847 S.W.2d 668, 672 (Tex. App.—Houston [1st Dist.] 1993, no writ).. . . . . . . 6, 15
STATUTES
TEX. BUS. & COMM. CODE § 17.45(9).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
TEX. BUS. & COMM. CODE § 17.46(b)(2, 3, 5, 7, 12, 24).. . . . . . . . . . . . . . . . . . . . 10
TEX. BUS. & COMM. CODE § 17.50(a)(1)(A, B). . . . . . . . . . . . . . . . . . . . . . . . . . 6, 7
v
TEX. BUS. & COMM. CODE § 17.50(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
RULES
TEX. R. CIV. P. 324(b)(2).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
vi
STATEMENT OF THE CASE
This is a DTPA case involving a concrete modular home that was never
delivered as promised, despite consumer Ralph Dean’s down payment of more than
half the purchase price. CR 293.1 The trial court rendered a post-answer default
judgment against defendant Randy Coleman; an instructed verdict against defendant
Living Modular; and a judgment based on a jury verdict against defendant Jim
Coleman Company. 4 RR 12-13, 22-24, 31, 35-36; CR 375. Living Modular has not
appealed; Randy Coleman has brought a restricted appeal; and Jim Coleman
Company has filed an ordinary appeal. CR 455, 459. Randy Coleman and Jim
Coleman Company have filed separate briefs, but their issues are the same. Therefore,
plaintiff/appellee Ralph Dean is responding to both appeals with one brief. All the
parties will be referred to herein individually by name (Randy Coleman and Jim
Coleman Company will also sometimes be collectively referred to as Appellants).
STATEMENT REGARDING ORAL ARGUMENT
Appellants have requested oral argument but have not explained why. Dean
submits oral argument is unnecessary because the record is short and simple, and
applicable law is well settled. Dean is therefore requesting oral argument only
“conditionally” in the event the Court grants Appellants’ request.
1
Appellee shall cite the Clerk’s Record as “CR,” the Reporter’s Record as “RR,” and
Plaintiff’s Exhibits as “PX.” There are no defense exhibits.
vii
ISSUES PRESENTED
In addition to the issues stated in Appellants’ briefs, Dean presents the
following additional issues:
1. Have the Appellants waived their factual sufficiency challenges by
failing to include the point in a motion for new trial?
2. Has Jim Coleman Company waived its segregation argument regarding
attorney’s fees by failing to object to the testimony on attorney’s fees or to the charge
of the court?
3. Has Jim Coleman Company waived its challenge to the quality of the
evidence on attorney’s fees by failing to object to the testimony on that ground or
otherwise raise the issue in the trial court?
viii
STATEMENT OF FACTS
While at a hunting show in Houston, Dean and his wife Alisa, who reside in
Sandia, Texas, passed a booth marketing concrete modular homes. 3 RR 16. The
booth had a Living Modular sign, but Randy Coleman, who was present, handed
Dean a Jim Coleman Company business card with Randy’s name on it and told Dean
he was an executive with Jim Coleman Company. PX-1; 3 RR 19- 20, 22, 69-70. Also
present were Wayne Coleman, Randy’s brother, who likewise said he was an
executive with Jim Coleman Company, and Bob Oaks, who appeared to be helping
the Coleman brothers with sales. 3 RR 16-21.
Dean learned that the homes were manufactured in Mexico, then trucked to
their intended sites. 3 RR 22. After visiting with Randy and Wayne Coleman, Dean
returned home and, following discussions with Alisa, eventually decided to look
further into purchasing a modular home to place on some recreational property they
own near Premont, Texas. 3 RR 16-17.
Dean returned to Houston on several occasions to negotiate the purchase of a
modular home. 3 RR 22-24, 30-31, 33, 38, 41-43, 45-46, 71, 88. See PX-3, 4 (sales
brochures). Each time, he met with Jim Coleman Company employees at Jim
Coleman Company facilities. Id. These facilities were located on Jim Coleman
Company premises and contained Jim Coleman Company offices. Id. Jim Coleman
1
Company employees included Randy Coleman, who said he was a vice-president and
part owner of Jim Coleman Company; Wayne Coleman, Randy’s brother who also
said he was an executive (vice-president) with Jim Coleman Company; and Bob
Oaks. 3 RR 21, 26, 40-41, 55-57, 82, 84; PX-4. See PX-10 (Jim Coleman Company
website confirming Randy Coleman’s position and responsibilities with Jim Coleman
Company). Randy Coleman told Dean he maintained an office at these facilities.
3 RR 26, 40. See PX-1 (business card). Oaks was reachable through the Jim Coleman
Company switchboard.
During the on-going negotiations, the Jim Coleman Company employees
represented to Dean that Jim Coleman Company could manufacture and sell awnings
for the modular home. 3 RR 41-42. See PX 2 (brochure containing pictures of
awnings). This was described as a “modular option.” Id. Jim Coleman Company
employees, including Randy Coleman, offered to Dean to make such awnings. 3 RR
41-42.
At no time, did anyone tell Dean there was no affiliation between Jim Coleman
Company and Living Modular. 3 RR 42. To the contrary, Jim Coleman Company
caused Dean to believe that Living Modular was affiliated with and financially
supported by Jim Coleman Company and that he would essentially be purchasing the
modular home from Jim Coleman Company. 3 RR 42, 46-47, 56-58, 78, 85-90.
2
Based upon the confusion created and representations made regarding the
modular home, together with the failure to disclose the lack of any relationship
between Jim Coleman Company and Living Modular, Dean purchased a concrete
modular home for $63,700 in October 2009, making a down payment of $30,000 for
delivery by Thanksgiving 2009. PX-6 (purchase order), 7 (initial deposit). Although
“Living Modular” was printed on the purchase order, it was completed by Bob Oaks,
a Jim Coleman Company employee with an office at Jim Coleman Company in
Houston. PX-6; 3 RR 46. Dean was even given a Jim Coleman Company pen with
which to sign the purchase order. 3 RR 58. A couple of weeks later, Dean paid an
additional $3,000 at Randy Coleman’s request. PX-8. He also incurred out-of-pocket
expenses of $14,659.38. PX-9.
It was also represented to Dean by Jim Coleman Company employees that a
Jim Coleman Company employee, at Randy Coleman’s direction, could custom
design Dean’s modular home using a Jim Coleman Company computer program
located at Jim Coleman Company’s plant. 3 RR 34, 42-43. Following the purchase
order, the design for the modular home purchased by Dean was in fact customized by
a Jim Coleman Company employee using a Jim Coleman Company computer
program at the Jim Coleman Company plant. 3 RR 77, 86-87; PX-5.
3
The modular home was never delivered. 3 RR 36-37, 49, 53-54. Despite
repeated attempts by Dean to ascertain the status of his purchase order, followed by
attempts to learn why the home was never delivered, Dean was never given a straight
answer. Eventually, Randy Coleman, Wayne Coleman, and Bob Oaks quit returning
Dean’s calls. 3 RR 36-37, 49, 53-54.
On the first morning of trial, Jim Coleman Company’s attorney suggested to
the jury for the first time that delivery of the home was disrupted by drug cartels in
Mexico. 2 RR 65. No evidence was ever offered to support this claim, and no one had
ever given Dean that as a reason. 3 RR 37. In fact, Dean specifically asked whether
there was risk entailed in the home being manufactured in Mexico and he was assured
there was not. Id. If he had been told otherwise, he would not have purchased the
home. 3 RR 41.
SUMMARY OF THE ARGUMENT
The evidence is sufficient to support the Jury’s findings of DTPA liability and
damages as to Jim Coleman Company (and the trial court’s corresponding findings
against Randy Coleman). Among other violations, both Appellants, individually and
through vice-principals, knowingly violated the DTPA by causing confusion as to,
and misrepresenting, the source, sponsorship, approval, certification, affiliation,
connection, and status of Living Modular and the modular home in question, as well
4
as Living Modular’s and the modular home’s association with, or certification by, Jim
Coleman Company. This was a producing cause of both benefit-of-the-bargain and
out-of-pocket damages incurred by Dean. The DTPA claims were distinct and
separate from any breach of contract claims, and the DTPA violations were
independent of any contractual relationship between the parties.
Jim Coleman Company’s arguments that Dean failed to segregate his attorney
fees and that the evidence of attorney fees is conclusory were waived at trial and are
being raised for the first time on appeal. Even if those arguments had not been
waived, moreover, there was no duty to segregate attorney fees and the evidence of
fees is not conclusory.
The final judgment does not award double or treble relief. It is plainly a joint
and several judgment, and Dean disavows any right to recover his damages more than
once.
5
ARGUMENT
I. Sufficiency of the Evidence to Support Liability under the DTPA for
Actual and Additional Damages
A. Introduction
Appellants’ chief complaint is the sufficiency of the evidence to support
liability and damages for DTPA violations (Jim Coleman Company’s second and
third issues, and Randy Coleman’s first and second issues).2
In order to establish liability under the DTPA, Dean had to show that (1) Jim
Coleman Company and Randy Coleman violated a specific provision of the Act; (2)
the violation was a producing cause of his injury; and (3) he relied on the false,
misleading or deceptive act or practice to his detriment. TEX. BUS. & COMM. CODE
§ 17.50(a)(1)(A, B). In that event, he is entitled to recover his economic damages,
court costs, and reasonable and necessary attorney’s fees. Id. at §§ 17.50(b)(1), (d).
Upon a “knowingly” finding, he may also recover “additional damages” of not more
than three times the amount of economic damages. Id. at § 17.50(b)(1).
2
In their briefing, both Appellants make reference more than once to Dean’s alternate claim
for breach of contract. In addition to the DTPA claims, an instructed verdict was also granted against
Living Modular, and a post-answer default judgment against Randy Coleman, for breach of contract.
4 RR 12-13, 22-24, 31. As to Jim Coleman Company, however, the trial court refused to submit
breach of contract to the jury, and that is not what the judgment against Jim Coleman Company is
based on. 4 RR 38-39; CR 363-66, 374. A DTPA claim is separate and distinct from an action on
an underlying contract, and is not dependent on any contractual relationship between the parties. E.g.
Hennessey v. Vanguard Ins. Co., 895 S.W.2d 794, 802-03 (Tex. App.—Amarillo 1995, writ denied)
(citing U.S. Fire Ins. Co. v. Millard, 847 S.W.2d 668, 672 (Tex. App.—Houston [1st Dist.] 1993, no
writ)). To the extent Dean discusses breach of contract herein, therefore, it only applies to Randy
Coleman.
6
B. Standard of Review
The Court’s standard of review is well settled. When reviewing a legal
sufficiency or “no evidence” challenge, the Court determines “whether the evidence
at trial would enable reasonable and fair minded people to reach the verdict under
review.” In re Johnson, 340 S.W.3d 769, 775 (Tex. App.—San Antonio 2011, pet.
denied) (quoting City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005)). The
Court views the evidence in the light most favorable to the verdict, crediting
favorable evidence if reasonable jurors could and disregarding contrary evidence
unless reasonable jurors could not. Id. at 775-76. Appellate courts will sustain a legal
sufficiency or “no evidence” challenge only when: (a) there is a complete absence of
evidence of a vital fact; (b) the court is barred by rules of law or evidence from giving
weight to the only evidence offered to prove a vital fact; © the evidence offered to
prove a vital fact is no more than a mere scintilla; or (d) the evidence conclusively
establishes the opposite of the vital fact. Id. at 776.
By contrast, when reviewing a factual sufficiency challenge, the Court
considers all the evidence supporting and contradicting the finding. Id. The Court will
set aside the finding only if the evidence is so weak or the finding is so against the
great weight and preponderance of the evidence that it is clearly unjust. Id. “Jurors
are the sole judges of the credibility of the witnesses and the weight to give their
7
testimony.” Id. (quoting City of Keller, 168 S.W.3d at 819)). “They may choose to
believe one witness and disbelieve another.” Id. “Reviewing courts cannot impose
their own opinions to the contrary.” Id. “Courts reviewing all the evidence in a light
favorable to the verdict thus assume that jurors credited testimony favorable to the
verdict and disbelieved evidence contrary to it.” Id.3
The only witness to testify to liability and damages was Ralph Dean, and the
only documentary evidence admitted was that of the plaintiff. Randy Coleman was
of course not present at trial. As a sanction, in turn, Living Modular (who was
unrepresented by an attorney at trial and barred by law from representing itself pro
se) and Jim Coleman Company were not allowed to present any witnesses, a ruling
Jim Coleman Company has not challenged on appeal. See 2 RR 9-11, 17, 19, 22-23.
In reviewing the sufficiency of the evidence to support the jury’s liability and damage
findings, therefore, the Court is limited to Dean’s testimony and the plaintiff’s
exhibits. Not surprisingly, all of this evidence is favorable to the jury’s verdict.
3
Neither Randy Coleman nor Jim Coleman Company filed a motion for new trial that
included a factual sufficiency point or requested a new trial (post-verdict, Randy Coleman filed
nothing, while Jim Coleman Company filed only a motion for judgment notwithstanding the verdict
seeking rendition of a take nothing judgment, CR 379). Therefore, they have waived any factual
sufficiency challenge. TEX. R. CIV. P. 324(b)(2). Dean is only discussing the standard of review for
factual sufficiency out of an abundance of caution in the unlikely event the Court determines there
was no waiver.
8
C. Laundry List Violations
The jury found that Jim Coleman Company committed one or more of the
following “laundry list” infractions contained in section 17.46(b) of the DTPA (and
the trial court made the same findings in default against Randy Coleman):
(a) causing confusion or misunderstanding as to the
source, sponsorship, approval, or certification of goods
or services;
(b) causing confusion or misunderstanding as to
affiliation, connection, or association with, or
certification by, another;
(c) representing that goods or services have sponsorship,
approval, characteristics, ingredients, uses, benefits, or
quantities which they do not have;
(d) representing that a person has a sponsorship, approval,
status, affiliation, or connection which he does not
have;
(e) representing that an agreement confers or involves
rights, remedies, or obligations which it does not have
or involve;
(f) failing to disclose information concerning goods or
services which was known at the time of the
transaction if such failure to disclose such information
was intended to induce the consumer into a transaction
into which the consumer would not have entered had
the information been disclosed.
9
CR 362. See TEX. BUS. & COMM. CODE § 17.46(b)(2, 3, 5, 7, 12, 24). In finding the
laundry list violations by Jim Coleman Company, the jury was mindful that, as
instructed by the trial court:
Jim Coleman Company can only act or fail to perform a
required act through the action of an agent, servant or
employee of Jim Coleman Company . . . . Liability for a
corporation cannot be created by any act or failure to
perform a required act by any person who is not an agent,
servant or employee.
For the Jim Coleman Company to be liable for damages
caused by an Agent, Servant or Employee, such action or
omission to act must be within the course of the agency or
employment of the Agent, Servant or Employee.
CR 361. See e.g. Hedley Feedlot, Inc. v. Weatherly Trust, 855 S.W.2d 826, 837 (Tex.
App.—Amarillo 1993, pet. denied). Under the law, Jim Coleman Company is liable
for an agent’s DTPA violations within the scope of his agency even if Jim Coleman
Company had no knowledge of the violations. Id. The evidence is more than ample
to support the jury’s finding that Jim Coleman Company, acting through its agents,
including vice-principals, violated the DTPA.
1. Source, sponsorship, approval . . . .
Sections 17.46(b)(2, 3 & 5) of the Act are “primarily concerned with deception
in the origin or endorsement [or affiliation] of a good or service [or person].” See Cox
v. State, 448 S.W.3d 497, 505 (Tex. App.—Amarillo 2014, pet. pending) (construing
10
subdivision (b)(2)). In the case at bar, the evidence is practically conclusive (there
being nothing to contradict it) that Jim Coleman company employees Randy
Coleman, Wayne Coleman, and Bob Oaks caused confusion as to, or misrepresented,
the source, sponsorship, approval, certification, affiliation, connection, and status of
Living Modular and the modular home in question, as well as Living Modular’s and
the modular home’s association with, or certification by, Jim Coleman Company.
While the hunting show booth which first grabbed Dean’s attention had a
Living Modular sign, Randy Coleman handed Dean a Jim Coleman Company
business card with Randy’s name on it (not a Living Modular card) and told Dean he
was an executive with Jim Coleman Company, not Living Modular. PX-1; 3 RR
19-20, 22, 69-70. Wayne Coleman likewise said he was an executive with Jim
Coleman Company, not Living Modular. 3 RR 16-21.
Consistent with this, the several occasions when Dean returned to Houston to
negotiate on a modular home took him each time to meet with Jim Coleman
Company employees at Jim Coleman Company facilities. Id. These facilities were
located on Jim Coleman Company premises and contained Jim Coleman Company
offices. Id. The Jim Coleman Company employees included Randy Coleman, who
said he was a vice-president and part owner of Jim Coleman Company; Wayne
Coleman, who also said he was an executive (vice-president) with Jim Coleman
11
Company; and Bob Oaks, who helped out with sales at Jim Coleman Company. 3 RR
21, 26, 40-41, 55-57, 82, 84; PX-4. See PX-10 (Jim Coleman Company website
confirming Randy Coleman’s position and responsibilities with Jim Coleman
Company). Randy Coleman told Dean he maintained an office at these facilities. 3
RR 26, 40. See PX-1 (business card). Oaks was reachable through the Jim Coleman
Company switchboard.
During these on-going negotiations, the Jim Coleman Company employees
represented to Dean that Jim Coleman Company (not Living Modular) could
manufacture and sell awnings for the modular home. 3 RR 41-42. See PX 2 (brochure
containing pictures of awnings). This was described as a “modular option.” Id. Jim
Coleman Company employees, including Randy Coleman, offered to Dean to make
such awnings. 3 RR 41-42.
All of this caused Dean to believe that he would essentially be purchasing the
modular home from Jim Coleman Company, with which Living Modular was
affiliated and by which Living Modular was financially supported. 3 RR 42, 46-47,
56-58, 78, 85-90. Hence, there was confusion and misrepresentation as to the source,
sponsorship, approval, certification, affiliation, connection, and status of Living
Modular and the modular home in question, as well as their association with, or
certification by, Jim Coleman Company.
12
The jury’s verdict and the trial court’s judgment in the case at bar reflect the
rule that the DTPA only requires acquiescence to false representations of or
confusion caused by another regarding the defendant. Hennessey v. Vanguard Ins.
Co., 895 S.W.2d 794, 803 (Tex. App.—Amarillo 1995, pet. denied). In Hennessey,
the court of appeals held that the consumer had presented sufficient evidence of a
(b)(5) laundry list violation to withstand motion for summary judgment by showing
that the defendant company allowed its logo to appear on an unaffiliated company’s
contract with the consumer. Likewise in the case at bar, Jim Coleman Company
allowed its own vice-principals, Randy and Wayne Coleman, to operate Living
Modular on the business premises of Jim Coleman Company; to use Jim Coleman
Company employees, such as Bob Oaks, to help orchestrate the sale; and to represent
Jim Coleman Company’s availability and expertise to customize the modular home
with custom awnings and design modifications. That Randy and Wayne Coleman
were family members and vice-principals is particularly probative. Hennessey, 895
S.W.2d at 804 (“This is particularly true when there is a close relationship between
the party making the representation and the party whose sponsorship or approval is
being asserted.”).
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2. Characteristics, ingredients, uses, benefits, or quantities
Likewise, these Jim Coleman Company employees misrepresented the
characteristics, ingredients, uses, benefits, or quantities of the modular home ordered
by Dean. For instance, they misrepresented that the home would be transported from
Mexico, delivered to the pad site laid out by Ralph Dean near Premont, and available
for the Dean family’s use and enjoyment. It was never delivered. The Deans have
never even seen in person the home they purchased, let alone enjoyed its use.
3. Rights, remedies, or obligations
These Jim Coleman Company employees also misrepresented that an
agreement (the purchase order, as supplemented by the various verbal understandings
between the parties) conferred or involved rights, remedies, or obligations which it
did not have or involve. It was represented, for instance, that the purchase order gave
Dean the right to delivery of a fully fabricated modular home, as customized by a Jim
Coleman Company employee using a computer program at Jim Coleman company’s
plant in Houston. This of course never happened.
4. Failure to disclose
The evidence shows that Jim Coleman Company employees failed to disclose
information concerning Living Modular which was known to them at the time Dean
entered into the transaction and that such failure was intended to induce Dean into the
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transaction. Specifically, Jim Coleman Company employees failed to disclose to
Dean, at any time, that Living Modular and Jim Coleman Company were not
affiliated and that Jim Coleman Company was not going to support, sponsor, or back
up in any way the manufacture, delivery, or end-quality of the modular home ordered
by him. They also failed to disclose the risks in fabricating modular homes in
Mexico.4
5. Jim Coleman Company’s Relationship to the Transaction was
Sufficient to Impose DTPA Liability on that Defendant
A DTPA claim is separate and distinct from an action on an underlying
contract, and is not dependent on any contractual relationship between the parties.
E.g. Hennessey, 895 S.W.2d at 802-03 (citing U.S. Fire Ins. Co. v. Millard, 847
S.W.2d 668, 672 (Tex. App.—Houston [1st Dist.] 1993, no writ)).
To impose DTPA liability on Jim Coleman Company, therefore, Dean only
needed to prove that (1) he sought goods or services by purchase or lease; (2) the
goods or services formed the basis for his complaint; and (3) Jim Coleman Company
4
Other than failure to disclose, intent is not relevant in this case. Appellants spend time
arguing that the evidence is insufficient to show that they intended to not honor the agreement to
fabricate and deliver the modular home at the time the agreement was made. Intent “has never been
an element of a DTPA ‘laundry list’ claim unless the specific provision requires intent.” Smith v.
Herco, Inc., 900 S.W.2d 852, 859 (Tex. App.—Corpus Christi 1995, writ denied). Other than a
failure to disclose claim, the DTPA requires a showing of intent only where the consumer is seeking
recovery of treble (additional) damages based on a recovery of both economic damages and mental
anguish, taken together. TEX. BUS. & COMM. CODE § 17.50(b)(1). Here, Dean did not recover mental
anguish damages, therefore he neither sought nor recovered any additional damages that take mental
anguish into account.
15
(a) violated one or more of the laundry list practices in connection with the
transaction, or (b) sought a benefit from the transaction. Melody Homes Mfg. Co. v.
Barnes, 741 S.W.2d 349, 351 (Tex. 1987) (elements 1 & 2); Basic Energy Serv., Inc.
v. D-S-B Properties, Inc., 367 S.W.3d 254, 270 (Tex. App.—Tyler 2011, no pet.)
(element 3: “[P]laintiff must show its transaction was connected with the defendant
through (1) a representation by the defendant that reached the plaintiff or (2) a benefit
from the plaintiff’s transaction that reached the defendant.”); Todd v. Perry Homes,
156 S.W.3d 919, 922 (Tex. App.—Dallas 2005, no pet.) (element 3: “Where there is
no contractual privity between the defendant and the consumer, ‘the connection can
be demonstrated by a representation that reaches the consumer or by benefit from the
second transaction to the initial seller.”).
It is undisputed that Randy Coleman, Wayne Coleman and Bob Oaks were all
employees of Jim Coleman Company. Jim Coleman Company’s employment of
Randy and Wayne Coleman as executives was admitted by vice-principals of Jim
Coleman company, namely Randy and Wayne Coleman, both of whom were vice-
presidents of Jim Coleman Company. See generally Treasure City v. Strange, 620
S.W.2d 811, 814 (Tex. Civ. App.—Dallas 1981, no writ) (citing Fort Worth Elevators
v. Russell, 70 S.W.2d 397, 406 (Tex. 1934)) (corporate officers are considered vice-
principals). It was these vice-principals of Jim Coleman Company who not only
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acquiesced in the appearance that Jim Coleman Company’s was affiliated with and
a sponsor of Living Modular, they actively fostered the appearance, and therefore the
confusion.
D. The Violations were a Producing Cause of Economic Damages
The jury was properly instructed that producing cause is “a cause that was a
substantial factor in bringing about the damages, if any, and without which the
damages would not have occurred. There may be more than one producing cause.”
CR 362. See generally Ford Motor Co. v. Ledesma, 242 S.W.3d 32, 46 (Tex. 2007).
The evidence is overwhelming that the enumerated violations of the DTPA by
Jim Coleman Company employees, including vice-principals Randy and Wayne
Coleman, were a producing cause of economic damages to Dean. He and his wife
Alisa paid out $33,000, and spent another $14,659.38 in out-of-pocket expenses, for
a modular home that was never delivered. Dean testified unequivocally that it was the
confusion and misrepresentations, coupled with his ignorance as an innocent
consumer, that led him to place $33,000 down on the modular home and incur the
related out-of-pocket expenses. But for the DTPA violations, the transaction never
would have occurred, and the measures of the damages suffered are classic benefit-
of-the-bargain and out-of-pocket.5
5
As to damages, Appellants assert in their briefs that the amount awarded exceeds the amount
pled. Compare CR 294-95 (total of $39,204 pled) with CR 364, 375 (total of $47,659.38 awarded).
While Dean did not seek or obtain a post-verdict trial amendment to conform the pleadings to the
17
E. Appellants Knowingly Engaged in DTPA Violations
Finally, Appellants challenge the sufficiency of the evidence to support the
jury’s finding that Jim Coleman Company knowingly engaged in violations of the
DTPA’s laundry list (and the trial court’s default finding to the same effect against
Randy Coleman). The evidence, however, is sufficient.
Pursuant to the Act, the jury was instructed that a person acts “knowingly”
whenever he has “actual awareness of the falsity, unfairness, or deceptiveness of the
act or practice. Actual awareness may be inferred if objective manifestations indicate
that a person acted with actual awareness.” CR 363. See TEX. BUS. & COMM. CODE
§ 17.45(9). There was no objection to this instruction.
Actual awareness may be inferred from the circumstances. E.g. K.C. Roofing
Co., Inc. v. Abundis, 940 S.W.2d 375, 377 (Tex. App.—San Antonio 1997, writ
denied). In essence, to act “knowingly” is the converse of acting inadvertently. See
Century 21 Real Estate Corp. v. Hometown Real Estate Co., 890 S.W.2d 118, 128
(Tex. App.—Texarkana 1994, writ denied).
In the case at bar, Jim Coleman Company’s and Randy Coleman’s actual
awareness of its DTPA infractions may be inferred from the circumstances. Randy
Coleman’s awareness of what he was doing speaks for itself. As for Jim Coleman
verdict, Appellants never objected, either by motion to limit the judgment or motion for new trial.
Therefore, any challenge to the amount awarded has been waived. E.g. Siegler v. Williams, 658
S.W.2d 236, 240-41 (Tex. App.—Houston [1st Dist.] 1983, no writ).
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Company, two of the individuals violating the DTPA, Randy and Wayne Coleman,
were its vice-principals. Their knowledge was imputed to their principal. Living
Modular’s operations were conducted on the premises of Jim Coleman Company in
full view of the world. The offices were the same; the switchboard was the same; and
the custom designers were the same. If they had different hats, they kept them on the
hat rack and did not wear them when dealing with the public.
II. Attorney Fees
Appellants’ assault on the trial court’s award of attorney fees is two-fold:
(1) there was a failure to segregate between fees incurred to prosecute breach of
contract and the DTPA, and between fees incurred for prosecuting the three different
defendants, and (2) the testimony of attorney fees was supposedly “conclusory.”
Regarding segregation, that argument was waived at trial, and in any event, there was
no duty to segregate. Regarding the quality of the testimony itself, that argument has
been waived as well, and in any event, there was nothing “conclusory” about the
testimony.
Two witnesses testified concerning attorney fees. The first was Charles Webb,
Mr. Dean’s attorney. The second was Fred Dreiling, a Corpus Christi trial attorney
who was called by Dean as an expert witness. Mr. Webb testified by narrative that a
reasonable hourly rate for his time was $250, and $120 for his associate (and son),
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Parker Webb. 3 RR 93-94. According to Mr. Webb, he had 92 hours in the case,
while his son had 33. Id. In turn, Mr. Dreiling testified that a reasonable hourly rate
for the DTPA case was $250; the range of reasonable fees for preparing and trying
the case was $25,000-$50,000; and for an appeal, $15,000-$25,000. 3 RR
108,110-12. Dreiling also testified that the fees would be the same for the breach of
contract claim. 3 RR 113. The jury awarded $26,900 for attorney fees through trial;
$15,000 for an appeal to the court of appeals; and $10,000 for proceedings in the
supreme court. CR 366.
Appellants’ segregation argument has been waived. Jim Coleman Company
never objected to any of the testimony regarding attorney’s fees on the ground of
failure to segregate, nor was their any such objection to the charge. See 3 RR 92-95
(Webb’s testimony); 3 RR107-14 (Dreiling’s testimony); 4 RR 36-40 (objections to
charge). Absent that, any error regarding failure to segregate is waived. Green Int’l,
Inc. v. Solis, 951 S.W.2d 384, 389 (Tex. 1997); Hruska v. First State Bank, 747
S.W.2d 783, 785 (Tex. 1988); Cullins v. Foster, 171 S.W.3d 521, 535-36 (Tex.
App.—Houston [14th Dist.] 2005, pet. denied).
Even if the argument was not waived, it is groundless. The duty to segregate
attorney’s fees exists only where at least some of the fees incurred “relate solely to
a claim for which such fees are unrecoverable.” Tony Gullo Motors I, L.P. v. Chapa,
20
212 S.W.3d 299, 311 (Tex. 2006). Where the attorney’s fees incurred advanced both
a recoverable and a non-recoverable claim, there is no duty to segregate. Id. at
313-14. Here, the only two claims brought against the defendants were DTPA and
breach of contract, both of which allow for the recovery of attorney’s fees. No claims
were brought which do not allow for attorney’s fees. Moreover, Fred Dreiling
testified that the fees incurred for breach of contract were the same as those incurred
for the DTPA. There was no duty to segregate fees in this case.
Turning to the quality of the testimony on attorney fees, this too is an argument
that has been waived. There was no objection to admissibility during the testimony
of either Charles Webb or Fred Dreiling; the issue was not raised at the end of the
trial through motion for directed verdict; it was not raised during objections to the
charge; it was not raised in the motion for judgment notwithstanding the verdict; and
it was not raised in a motion for new trial. The argument is being urged for the first
time on appeal. It is not timely.
Moreover, the testimony at issue was not “conclusory.” In fact, Jim Coleman
Company actually lodged an objection during the testimony of Fred Dreiling that
Mr. Dreiling’s analysis of the Arthur Andersen factors was not relevant. 3 RR 109.
Of course, the trial court overruled the objection. Id. It appears, however, that Jim
21
Coleman Company believed at trial that the testimony was becoming not too
conclusory, but too detailed and particularized!
III. The Judgment does not Award Treble (or Double) Recovery
Appellants argue that because the trial court’s judgment awards identical sums
of money against each of the three defendants, and does not employ the words
“jointly and severally,” it amounts to a treble recovery. Dean agrees with Appellants
that the injury sued upon was single and indivisible, but there is nothing in the
judgment to suggest that it is anything more than a joint and several judgment. If
Dean successfully collects any sums from Jim Coleman Company, he will not have
the right to then recover the same sums from Randy Coleman or Living Modular. The
only reason the judgment makes the award more than once is that the nature of the
liability of Randy Coleman (default) and Living Modular (instructed verdict) is
distinct from the liability of Jim Coleman Company (jury verdict).
Appellants rely on Spillman v. Self Serve Fixture Co., Inc., 693 S.W.2d 656
(Tex. App.—Dallas 1985, writ ref’d n.r.e.). The judgment in Spillman, however, is
not quoted in the Fifth Court’s opinion, and most importantly, the sums awarded
there were not identical. There were two defendants. The award against one defendant
was for an amount that was the subject of a guaranty, while the award against the
other defendant was for that plus the balance remaining owed. In the case at bar, on
22
the other hand, the sums awarded are identical and it is obvious that the injury
suffered, and the sums awarded for such, are single and indivisible. There is therefore
no potential for double recovery, which Dean disavows.
RELIEF REQUESTED
Appellee Ralph Dean prays that the Court affirm the trial court’s judgment in
all things. He prays for all other relief to which he may be entitled.
Respectfully submitted,
DUNN WEATHERED COFFEY
RIVERA & KASPERITIS, PC
611 South Upper Broadway
Corpus Christi, Texas 78401
TEL: 361.883.1594
FAX: 361.883.1599
EMAIL: frank@weatheredlaw.com
BY /s/ Frank Weathered
Frank Weathered
Texas State Bar No. 20998600
ATTORNEY-IN-CHARGE FOR
APPELLEE RALPH DEAN
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Of Counsel:
Charles C. Webb, Jr.
Texas State Bar No. 21039500
Parker S. Webb
Texas State Bar No. 24085648
WEBB CASON, PC
710 North Mesquite Street
Corpus Christi, Texas 78401-2312
TEL: 361.887.1031
FAX: 361.887.0903
EMAIL: charlie@wcctxlaw.com
EMAIL: parker@wcctxlaw.com
J. Michael Guerra
Texas State Bar No. 08581310
LAW OFFICE OF J. MICHAEL GUERRA
1600 E. Main Street, Suite 227
P.O. Box 1968
Alice, Texas 78333
TEL: 361.668.7344
FAX: 361.664.1003
EMAIL: jmguerra14@gmail.com
RULE 9.4(i)(3) CERTIFICATION
I certify that the foregoing document complies with the typeface requirement
of Texas Rule of Appellate Procedure 9.4(e) because it has been prepared in a
conventional typeface no smaller than 14-point for text and 12-point for footnotes.
This document also complies with the word-count limitations of Texas Rule of
Appellate Procedure 9.4(i) because it contains 5,609 words, excluding those portions
exempted by Texas Rule of Appellate Procedure 9.4(i)(1).
/s/ Frank Weathered
Frank Weathered
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CERTIFICATE OF SERVICE
This is to certify that on JUNE 30, 2015, this document was electronically filed
pursuant to TEX. R. CIV. P. 21(f)(1) and a true and correct copy was served on counsel
of record listed below through the electronic filing manager if the email address is on
file with the electronic filing manager, pursuant to TEX. R. CIV. P. 21a(a)(1). If the
email address of any attorney listed below is not on file with the electronic filing
manager, a true and correct copy of this document was served pursuant to TEX. R.
CIV. P. 21a(a)(2).
/s/ Frank Weathered
Frank Weathered
Mr. Paul R. Lawrence
LAWRENCE & BACA, PLLC
2180 North Loop West, Suite 510
Houston, Texas 77018
FAX: 713.864.0179
EMAIL: prlawrence@lbandd.com
Attorney for Appellants
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