David Vuong and Tommy T. Nguyen v. Taiwai Luk

Opinion issued December 19, 2013
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-11-00178-CV
———————————
DAVID VUONG AND TOMMY T. NGUYEN, Appellants
V.
TAIWAI LUK, Appellee
On Appeal from the 113th District Court
Harris County, Texas
Trial Court Case No. 2008-38471
MEMORANDUM OPINION1
The trial court found appellant Tommy Nguyen liable for violating the
Deceptive Trade Practices Act (“DTPA”) in the course of selling a restaurant to
appellee Taiwai Luk. The trial court further found appellant David Vuong, who
drafted the bill of sale for Nguyen and Luk, liable for legal malpractice. The trial
court entered judgment against Nguyen and Vuong, jointly and severally, for
$62,600, representing the amount Luk invested in the restaurant. The trial court
further ordered Nguyen to pay $125,200 in treble damages for a knowing violation
of the DTPA and $25,000 for Luk’s legal fees relating to that claim. Both Nguyen
and Vuong appeal.
In his sole issue, Nguyen challenges the sufficiency of the evidence to
support the trial court’s judgment. Specifically, he argues that Luk’s incompetence
led to his business failure, that he did not breach his contractual obligations, that
Luk failed to establish his damages, and that the trial court erred in admitting
“expert testimony from unqualified witnesses.”
1
Appellant David Vuong has moved for en banc reconsideration. A majority of the
en banc court, consisting of Chief Justice Radack and Justices Jennings, Keyes,
Higley, Bland, Massengale, Brown, and Huddle, has reviewed Vuong’s motion for
reconsideration en banc, and it is denied. Justice Keyes dissents from the denial of
en banc reconsideration. We withdraw the opinion and judgment issued on
January 17, 2013, and we issue this per curiam opinion and judgment in their
stead.
2
Vuong argues, in three issues, that: (1) the judgment against him is
impermissible because it would award Luk a “double recovery”; (2) his actions
were not the proximate cause of Luk’s damages; and (3) the evidence is legally
insufficient to support the trial court’s findings of legal malpractice.
We affirm.
Background
On December 11, 2007, Gary Rosenbaum leased a restaurant space at 2118
Clinton Drive to Nguyen for the purpose of operating a Wild Wild Wings
restaurant. The lease term was one year beginning on March 1, 2008.
Specifically, the lease provided that Nguyen, as lessee, “shall use the leased
premises for the purpose of operating a restaurant, titled ‘Wild Wild Wings’ and
allied businesses connected therewith.” Paragraph VI of the lease stated: “Lessee
further covenants that he/she will not assign this lease or his/her rights under said
lease, nor sublet the whole or any part of said premises . . . without the consent of
the Lessor in writing and such consent shall not unreasonably be withheld.”
In January 2008, Nguyen met Luk. Luk was interested in purchasing a
restaurant and Nguyen showed him two restaurant locations, including the Wild
Wild Wings restaurant, which was not yet open because Nguyen was remodeling.
Luk decided to purchase the Wild Wild Wings restaurant from Nguyen.
3
On February 2, 2008, Luk agreed to pay Nguyen $60,000 for the Wild Wild
Wings restaurant. That same day, Nguyen and Luk visited the office of attorney
David Vuong to complete the bill of sale and close the transaction. The bill of sale
provided that the transferred business was the Wild Wild Wings Restaurant located
at 2118 Clinton Drive, Galena Park, Texas. The bill of sale further provided that
Seller [Nguyen] shall sell, assign, transfer, convey, and deliver to
Buyer [Luk], and Buyer shall purchase from Seller, on the Closing
Date (defined herein), all of the right, title and interest in and to all of
the assets of Seller, more particularly all the assets of Wild Wild
Wings Restaurant located at 2118 Clinton Dr. Galena Park . . . as
adjusted in the normal course of business prior to Closing, to include,
but not limited to the following:
• Seller agrees to train Buyer for one month and to give recipes to
Buyer; however Buyer promises not to give recipes to anyone else
without the approval of Seller in writing. Exception, if in the
future Buyer is to [sell] the restaurant Buyer is allowed to teach
and train the new Buyers and give recipes to new Buyers.
• One Wok
The bill of sale did not define the term “Closing Date,” but it provided that “Buyer
begins to move in as of February 2, 2008.” The bill of sale also included an “as is”
provision which stated:
WITH THE EXCEPTION OF THE WARRANTIES OF TITLE,
INCLUDING THE WARRANTY THAT NO LIENS EXIST ON
THE TRANSFERRED PROPERTIES EXCEPT AS RECITED,
SELLER HAS MADE NO AFFIRMATION OF FACT OR
PROMISE RELATING TO THE TRANSFERRED PROPERTIES
THAT HAS BECOME ANY BASIS OF THIS BARGAIN, AND
FURTHER, SELLER HAS MADE NO AFFIRMATION OF FACT
OR PROMISE RELATING TO THE TRANSFERRED
4
PROPERTIES THAT WOULD CONFORM TO ANY SUCH
AFFIRMATION OR PROMISE. SELLER DISCLAIMS ANY
WARRANTY OF FITNESS FOR ANY PARTICULAR PURPOSE
WHATEVER WITH RESPECT TO THE TRANSFERRED
PROPERTIES. THE TRANSFERRED PROPERTIES ARE SOLD
ON AN “AS IS” BASIS.
Finally, the bill of sale contained the following representation, among
others: “Seller has authority to convey the Property to Buyer. This contract is, and
all documents required by this contract to be executed and delivered to Buyer at
closing will be, duly authorized, and delivered by Seller.”
Luk paid Nguyen $60,000 in the form of a cashier’s check. At Nguyen’s
direction, the cashier’s check was made payable to Tra My Pham, an associate of
Nguyen. Luk also paid Vuong $300 for his work in drafting the bill of sale.
Nguyen then helped Luk make sauces for one month, filed the proper
paperwork with Harris County to withdraw himself as the owner of the restaurant
as listed on an assumed name certificate, and gave Luk the recipes for the
restaurant as agreed in the bill of sale. Luk also purchased a refrigerator and two
stoves for use in the restaurant.
On February 25, 2008, Luk opened the restaurant. In late March, Nguyen
and Luk met with Rosenbaum to discuss assigning the lease to Luk. Nguyen told
Rosenbaum that Luk was his father and asked permission to “slide” the lease over
to Luk while Nguyen was in Vietnam. Rosenbaum repeatedly refused this request.
Rosenbaum later accepted payment of rent for the month of April 2008 from Luk,
5
believing that Luk was paying on behalf of Nguyen because Nguyen had often paid
in cash or had others pay for him.
On April 4, 2008, Luk informed Rosenbaum that he would no longer operate
the restaurant, returned the keys to the leased space to Rosenbaum, and left the
restaurant. This was the first time Rosenbaum was informed that Luk had been
operating the restaurant and not Nguyen. Rosenbaum called Nguyen, who
reopened the restaurant the next day and continued to operate the restaurant
through the original lease term.
Luk filed suit against Nguyen and Vuong. He later amended his petition to
include Tra My Pham and Chick & Wings, Inc., a company that Nguyen at some
point claimed to represent in the transaction to sell the Wild Wild Wings
restaurant. Pham and Chick & Wings, Inc. failed to appear, and the trial court
entered default judgments against each of them in the amount of $61,100, which
included the cost of purchasing the restaurant, April 2008 rent, and the amount Luk
paid to David Vuong for preparing the bill of sale. These judgments were severed
from the suit against Nguyen and Vuong and became final.
Luk claimed that Nguyen had breached a contract with Luk by not properly
training him and by not providing the correct recipes. He also claimed that
Nguyen had made fraudulent misrepresentations; that he had made negligent
misrepresentations concerning the ability to assign the lease when he stated that
6
Rosenbaum would allow the assignment and would give Luk a lease for five years
at $800 per month; and that Vuong and Nguyen had conspired to commit fraud
against him. He also asserted the Vuong had committed legal malpractice.
At the bench trial, Nguyen testified that Rosenbaum had given him “a note
saying that he—whoever want[s] to come in—as long as me or Mr. Luk who paid
the lease—who paid the rent for the space, it should be okay.” Nguyen testified
that he gave this note to his attorney, but the attorney did not know what Nguyen
was referring to. The note was never produced at trial. Nguyen again stated that
both he and Luk went to Rosenbaum and that Rosenbaum’s only concern was that
he receive the rental payments. Nguyen agreed that he introduced Luk as his father
when they met with Rosenbaum.
Regarding his ownership interest in the Wild Wild Wings restaurant,
Nguyen originally testified that he was not an owner, that he just worked there
doing construction, and that Tra My Pham was the owner. He testified that he was
listed as an owner on the assumed name filing with Harris County because he was
the one who spoke English, so he signed the form. On cross-examination, Nguyen
testified that he was the legal owner of the restaurant, but he did not personally put
any money into the business.
Regarding the deal with Luk, Nguyen testified that he understood that Luk
was paying $60,000 for everything in the restaurant, including the assignment of
7
the lease. He testified that he and Luk signed a purchase agreement on the
morning of February 2, 2008 that he had drafted himself, but Luk did not want to
pay the $60,000 until they had an attorney draw up the papers.2 He testified that
after Luk gave him the cashier’s check made payable to Tra My Pham, Nguyen
completed his obligation to train Luk and then did not visit the restaurant again.
Luk testified that Nguyen represented himself as the owner of Wild Wild
Wings. Luk stated that he asked Nguyen to see the lease, but Nguyen never
provided it, and Luk did not know that he needed the landlord’s written permission
before he opened the restaurant. Luk also testified that Nguyen assured him that
Rosenbaum would allow Luk to operate the restaurant under Nguyen’s lease for
three months and would then give Luk a new lease for five years at the rate of $800
per month.
Luk testified that he went to Vuong’s office because he wanted a lawyer to
witness and memorialize the agreement between Nguyen and himself in order to
show that he had purchased the restaurant. Vuong testified, however, that he acted
as a scrivener in memorializing the transaction between Luk and Nguyen and that
he did not give either of them legal advice. He also testified that he explained that
2
Nguyen offered a copy of the purchase agreement into evidence, but Luk objected,
arguing that there was a line through the second page that appeared to have been
made by a copy machine that was not present on the first page. Luk’s counsel
stated, “We believe that the second page was taken from some other document and
attached to this first page, and we object to the authenticity of this document.”
The trial court sustained the objection.
8
the landlord was the most important person in the transaction and that Luk needed
to have the assignment of the lease in writing. He also explained to Luk and
Nguyen the details of how purchases of businesses that lease space usually occur.
Vuong testified that he encouraged Luk to hire him to pursue obtaining a written
assignment of the lease, for which he would charge Luk $1,500, but Luk refused to
engage his services for that purpose. According to Vuong, Luk was in a hurry to
complete the transaction and did not have the money to pay an additional $1,500 in
legal fees. Nguyen testified that Vuong spoke privately with Luk at one point.
Vuong drafted the bill of sale using a form book and/or his knowledge and
experience as an attorney and received $300 as payment from Luk. There was no
written fee agreement or description of the scope of the relationship between
himself and Luk.
Following the February 2, 2008 transaction, Luk acted as the owner of Wild
Wild Wings. He obtained a business license to operate the restaurant, identifying
himself as the owner. He opened the restaurant at the end of February 2008.
Rosenbaum testified that Nguyen first approached him about assigning the
lease around March 24 or 25, 2008. Nguyen introduced Luk as his father and as
the cook for the restaurant. Nguyen asked if he could “slide” the lease over to his
father and Rosenbaum refused. Rosenbaum testified that he said no “at least 20
times” and “kept saying ‘no’ until they finally left.” He testified that Nguyen
9
could not have been mistaken that Rosenbaum refused to assign the leave and he
“acted very disappointed.”
Rosenbaum testified that Luk met with him once on his own, on April 1,
2008. Luk paid the April rent with a personal check, and Rosenbaum did not
“remember him saying very much.” However, Luk testified that when he
delivered the April rent to Rosenbaum, he asked Rosenbaum about assigning the
lease to him, and Rosenbaum refused. That was when Luk realized that Nguyen
had lied to him about the lease. Rosenbaum did not know at that time that Nguyen
had sold the restaurant to Luk. It was not until Luk returned on April 4, 2008 to
inform him that he quit and to hand over the keys that Rosenbaum knew what had
happened. He testified that he “would never accept Mr. Luk as a tenant” and that
he would have evicted him if he had not already left.
Both Luk and Rosenbaum testified that the restaurant without a lease was
worth nothing. Nguyen objected to this on the grounds that Rosenbaum’s
testimony was speculative and that Luk’s testimony was in response to a leading
question.
Finally, Frederick Dailey, an attorney, testified as an expert witness on
Luk’s behalf. He testified regarding the nature of the relationship between Vuong,
Luk, and Nguyen, and he concluded that Vuong did more than merely write down
Luk and Nguyen’s agreement. Dailey testified that, in his opinion, Vuong and Luk
10
had an attorney-client relationship, that Vuong breached the duties he owed to Luk
in multiple ways, and that Vuong’s acts or omissions were the cause of Luk’s
damages. Dailey testified that Vuong’s negligence in drafting the bill of sale
“without protecting against the potential of not having an approved assumption of
the lease” caused Luk’s damages. Dailey stated that Vuong could have protected
against that potential situation in “a number of different ways” including
conditioning the bill of sale on Rosenbaum’s written approval to assign the lease or
including a clause for refund of the purchase price in the event Rosenbaum refused
the assignment.
The trial court concluded that Luk was a consumer under the DTPA; that he
detrimentally relied upon Nguyen’s false, misleading, or deceptive acts or practices
as enumerated in Business and Commerce Code sections 17.46(b)(2), (5), (12),
(20), and (24), which were a producing cause of Luk’s damages; that Nguyen
breached an expressed warranty, which was the producing cause of Luk’s
damages; and that Nguyen’s violation of the DTPA was knowing. The trial court
also concluded that Vuong formed an attorney-client relationship with Luk; that
“Vuong stepped outside the role of a mere scrivener and into the role of an attorney
with duties owed to the client”; and that Vuong “did not disclaim, waive, or limit
the scope of the attorney-client relationship he formed with Luk.” The court found
that Luk did not waive or consent to the potential conflict of interest as a result of
11
Vuong’s preparation of the bill of sale between Nguyen and Luk and that Luk did
not waive any duty or standard of care owed him by Vuong. The trial court
concluded that Vuong committed legal malpractice that was the cause-in-fact and
proximate cause of Luk’s damages. The trial court also made numerous findings
of fact in support of its conclusions of law.
The trial court held Nguyen and Vuong jointly and severally liable for
$62,600—which represented the amount paid for the restaurant pursuant to the bill
of sale, the stoves and refrigerator Luk had purchased for the restaurant, and
Vuong’s fee for preparing the bill of sale. The court held Nguyen liable for an
additional $125,200 in treble damages based on the finding that Nguyen knowingly
violated the DPTA. Finally, the trial court ordered Nguyen to pay Luk’s attorney’s
fees related to the intertwined DTPA and breach of contract claims in the amount
of $25,000. Both Nguyen and Vuong appealed.
NGUYEN’S APPEAL
In his sole issue, Nguyen argues that the evidence is insufficient to support
the judgment.
A. Standard of Review
A trial court’s findings are reviewable for legal and factual sufficiency of the
evidence by the same standards that are applied in reviewing evidence supporting a
jury’s answer. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). In a legal
12
sufficiency, or “no-evidence” review, we determine whether the evidence would
enable reasonable and fair-minded people to reach the verdict under review. City
of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). In conducting this review,
we credit favorable evidence if a reasonable fact-finder could, and we disregard
contrary evidence unless a reasonable fact-finder could not. Id. We consider the
evidence in the light most favorable to the finding under review and indulge every
reasonable inference that would support it. Id. at 822. We must sustain a no-
evidence contention only if (1) the record reveals a complete absence of evidence
of a vital fact; (2) the court is barred by rules of law or of evidence from giving
weight to the only evidence offered to prove a vital fact; (3) the evidence offered to
prove a vital fact is no more than a mere scintilla; or (4) the evidence establishes
conclusively the opposite of the vital fact. Id. at 810; Merrell Dow Pharm., Inc. v.
Havner, 953 S.W.2d 706, 711 (Tex. 1997). “Anything more than a scintilla of
evidence is legally sufficient to support the finding.” Formosa Plastics Corp. USA
v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998).
In reviewing a challenge to the factual sufficiency of the evidence, we “must
consider and weigh all the evidence and should set aside the judgment only if it is
so contrary to the overwhelming weight of the evidence as to be clearly wrong and
unjust.” Arias v. Brookstone, L.P., 265 S.W.3d 459, 468 (Tex. App.—Houston
13
[1st Dist.] 2007, pet. denied) (citing Cain v. Bain, 709 S.W.2d 175, 176 (Tex.
1986) (per curiam)).
The fact-finder is the sole judge of witnesses’ credibility; it may choose to
believe one witness over another, and a reviewing court cannot impose its own
opinion to the contrary. City of Keller, 168 S.W.3d at 819; Arias, 265 S.W.3d at
468. Because it is the fact-finder’s province to resolve conflicting evidence, we
must assume that it resolved all conflicts in accordance with the verdict if
reasonable people could do so. City of Keller, 168 S.W.3d at 819; Arias, 265
S.W.3d at 468.
Several of Nguyen’s arguments on appeal relate to Luk’s allegations of
breach of contract. Specifically, Nguyen contends that the evidence is insufficient
to show that he breached the bill of sale. He argues that he was not required to
deliver a warranty deed for the restaurant and that he complied with the other terms
of the bill of sale. He further argues that he did not breach any oral agreement with
Luk relating to the assignment of the lease because his obligation to perform had
not yet come due, as Luk abandoned the property before the three-month period
elapsed. However, the trial court did not make any findings that Nguyen breached
the bill of sale or other contract, and the judgment against Nguyen was not based
14
on a breach of contract. 3 It was based on the trial court’s findings that he violated
the DTPA. Therefore, we examine the sufficiency of the evidence to support the
trial court’s judgment under the DTPA.
B. DTPA
The trial court entered judgment against Nguyen based on its findings that
Nguyen violated the DTPA by employing false, misleading, or deceptive acts or
practices and by breaching an express warranty. These two findings are distinct
and either will support recovery. See Mays v. Pierce, 203 S.W.3d 564, 571–72
(Tex. App.—Houston [14th Dist.] 2006, pet. denied); Teague v. Bandy, 793
S.W.2d 50, 54 (Tex. App.—Austin 1990, writ denied). The trial court found that
Nguyen’s violations were the producing cause of Luk’s damages and that Nguyen
committed them knowingly.
The DTPA provides:
(a) A consumer may maintain an action where any of the following
constitute a producing cause of economic damages or damages for
mental anguish:
3
Nguyen also argues that any oral agreement to assign the lease made prior to the
execution of the bill of sale is not valid, and thus the trial court could not find that
Nguyen breached “a contractual provision that did not exist.” We have already
stated that the trial court’s judgment was not based on breach of contract. To the
extent that Nguyen is arguing that the trial court’s finding that he breached an
express warranty was erroneous, we note that “a claim for breach of warranty is
separate from a claim for false, misleading, or deceptive acts,” and “a consumer is
not prevented from bringing a DTPA action against a defendant merely because
the defendant also breached a contract.” Four Bros. Boat Works, Inc. v. Tesoro
Petroleum Cos., 217 S.W.3d 653, 666 (Tex. App.—Houston [14th Dist.] 2006,
pet. denied).
15
(1) the use or employment by any person of a false, misleading,
or deceptive act or practice that is:
(A) specifically enumerated in a subdivision of
Subsection (b) of Section 17.46 of this subchapter; and
(B) relied on by a consumer to the consumer’s detriment;
[or]
(2) breach of an express or implied warranty.
TEX. BUS. & COM. CODE ANN. § 17.50(a) (Vernon 2011).
The trial court found that Nguyen committed false, misleading, or deceptive
acts or practices that violated subsections (2), (5), (12), (20), and (24) of section
17.46(b). The subsections provide that false, misleading, or deceptive acts or
practices include:
(2) causing confusion or misunderstanding as to the source,
sponsorship, approval, or certification of goods or services; . . .
(5) representing that goods or services have sponsorship,
approval, characteristics, ingredients, uses, benefits, or quantities
which they do not have or that a person has a sponsorship, approval,
status, affiliation, or connection which he does not; . . .
(12) representing that an agreement confers or involves rights,
remedies, or obligations which it does not have or involve, or which
are prohibited by law; . . .
(20) representing that a guarantee or warranty confers or
involves rights or remedies which it does not have or involve . . . ;
[and]
(24) failing to disclose information concerning goods or
services which was known at the time of the transaction if such failure
16
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.
Id. § 17.46(b)(2), (5), (12), (20), and (24).
Thus, to establish a DTPA claim under subsection 17.50(a)(1), the plaintiff
must produce evidence: (1) that he was a consumer; (2) that the defendant engaged
in at least one of the “laundry list” items enumerated in section 17.46(b); (3) that
he detrimentally relied on the false, misleading, or deceptive act or practice; and
(4) that the false, misleading, or deceptive act or practice was a producing cause of
his injury. B & W Supply, Inc. v. Beckman, 305 S.W.3d 10, 21 (Tex. App.—
Houston [1st Dist.] 2009, pet. denied).
The producing cause element requires some showing that the defendant’s act
or omission was a cause in fact of the plaintiff’s injury. Id. at 21–22. Producing
cause is “a substantial factor which brings about the injury and without which the
injury would not have occurred.” Doe v. Boys Clubs of Greater Dallas, Inc., 907
S.W.2d 472, 481 (Tex. 1995); Beckman, 305 S.W.3d at 22. The plaintiff need not
establish that the harm was foreseeable. Doe, 907 S.W.2d at 481. There can be
more than one producing cause of an event. Rourke v. Garza, 511 S.W.2d 331,
339 (Tex. Civ. App.—Houston [1st Dist.] 1974), aff’d, 530 S.W.2d 794 (Tex.
1975).
17
If the defendant’s conduct was committed knowingly, the consumer may
recover not more than three times the amount of economic damages. TEX. BUS. &
COM. CODE ANN. § 17.50(b)(1) (Vernon 2011); Brown & Brown of Tex., Inc. v.
Omni Metals, Inc., 317 S.W.3d 361, 396 (Tex. App.—Houston [1st Dist.] 2010,
pet. denied). The DTPA defines “knowingly” as:
[A]ctual awareness, at the time of the act or practice complained of, of
the falsity, deceptions, or unfairness of the act or practice giving rise
to the consumer’s claim or, in an action brought under Subdivision (2)
of Subsection (a) of Section 17.50, actual awareness of the act,
practice, condition, defect, or failure constituting the breach of
warranty . . . actual awareness may be inferred where objective
manifestations indicate that a person acted with actual awareness.
TEX. BUS. & COM. CODE ANN. § 17.45(a)(9) (Vernon 2011); see also St. Paul
Surplus Lines Ins. Co. v. Dal-Worth Tank Co., 974 S.W.2d 51, 53–54 (Tex. 1998)
(per curiam) (defining “actual awareness” as “a person knows that what he is doing
is false, deceptive, or unfair . . . [and does] it anyway”).
C. Analysis
Nguyen does not challenge the trial court’s finding that Luk was a consumer
under the DTPA. Nguyen contends that he believed he had Rosenbaum’s
permission to assign the lease. He also contends that Luk did not detrimentally
rely on his representations regarding assignment of the lease. He argues that Luk
caused his own damages by abandoning the restaurant while he was under no
threat of eviction and by his own incompetence.
18
i. False, misleading, or deceptive act enumerated in section 17.46(b)
The trial court found that Nguyen “represented and warranted that the
landlord agreed to the assignment of the lease and that the landlord was going to
give Luk a lease [for a term of] five years at $800 per month.” The trial court
further found that Nguyen “failed to disclose to Luk the true terms of the lease, that
the lease required the landlord’s prior written consent to the sale of the restaurant
to Luk, and that failure to obtain the landlord’s prior written consent would result
in the immediate termination of the lease without notice.”
Nguyen argues that he believed he had Rosenbaum’s permission to assign
the lease. Nguyen testified that he and Luk spoke to Rosenbaum, and Rosenbaum
stated that he did not care who was paying the rent as long as he got paid. Nguyen
also testified that he had received a written note from Rosenbaum giving him
permission to assign the lease to Luk, but he was unable to produce the note at
trial.
However, Nguyen also testified that he was aware of the terms of his lease
with Rosenbaum and that he knew before he signed the bill of sale that the lease
required him to get Rosenbaum’s permission before he could assign the lease.
Nguyen stated that he understood that the assignment of the lease was part of the
deal he made with Luk.
19
Luk testified that Nguyen represented himself as the owner of Wild Wild
Wings and told him that he could assign the lease. Luk testified that he asked to
see the lease, but Nguyen never provided it, and Luk did not know that he needed
Rosenbaum’s written permission before he opened the restaurant. Luk further
testified that, prior to their execution of the bill of sale, Nguyen assured him that
Rosenbaum would allow Luk to operate the restaurant under Nguyen’s lease for
three months and would then give Luk a new lease for five years at the rate of $800
per month.
Rosenbaum testified that Nguyen did not ask him to assign the lease until the
end of March 2008, more than a month after Luk and Nguyen executed the bill of
sale and Luk began operating the Wild Wild Wings restaurant as the owner.
Rosenbaum testified that he refused to assign the lease to Luk at that meeting and
that he would never have agreed to assign the lease to Luk.
Considering the evidence in the light most favorable to the trial court’s
finding, we conclude that there is more than a scintilla of evidence that Nguyen
made a false, misleading, or deceptive act as enumerated in section 17.46(b)(12).
See TEX. BUS. & COM. CODE ANN. § 17.46(b)(12) (providing that “false,
misleading, or deceptive act” includes “representing that an agreement confers or
involves rights, remedies, or obligations which it does not have or involve, or
which are prohibited by law”); City of Keller, 168 S.W.3d at 822, 827 (providing
20
standard of legal-sufficiency review). Thus the evidence was legally sufficient to
support the trial court’s findings that Nguyen employed a false, misleading, or
deceptive act. See Formosa Plastics Corp., 960 S.W.2d at 48 (providing that
anything more than scintilla of evidence is legally sufficient).
Furthermore, considering and weighing all the evidence, we conclude that
the judgment is not so contrary to the overwhelming weight of the evidence as to
be clearly wrong and unjust. See Arias, 265 S.W.3d at 468. Although Nguyen
testified that he believed he had Rosenbaum’s permission to assign the lease,
Nguyen was never able to produce the note that he allegedly received from
Rosenbaum, and Rosenbaum’s own testimony indicated that he never gave Nguyen
permission to assign the lease. The trial court, acting within its province as fact-
finder, made findings indicating that it did not believe Nguyen’s testimony, and we
assume that it resolved all conflicts in the evidence in accordance with the verdict
if reasonable people could do so. See City of Keller, 168 S.W.3d at 819; Arias, 265
S.W.3d at 468. Thus, the evidence was factually sufficient to support the trial
court’s findings that Nguyen employed a false, misleading, or deceptive act.
ii. Detrimental reliance
The trial court found that Luk detrimentally relied on Nguyen’s
representation that Rosenbaum agreed to assign the restaurant lease to him and that
Rosenbaum would grant Luk a lease for $800 a month for a term of five years.
21
Nguyen argues that Luk did not rely on his representation that he had
permission to assign the lease because Luk was fully aware that Rosenbaum had
the option to refuse the assignment prior to purchasing the restaurant. To support
his argument, Nguyen points to Luk’s testimony that he went to attorney David
Vuong because he wanted a guarantee that he would obtain the lease after three
months. Luk testified that he wanted “to protect [him]self, so that’s why [he went]
to David Vuong’s office to have him prepare a new contract for the purchase of the
restaurant before [he got] the new contract with the landlord.” Nguyen also cites
Vuong’s notes from his meeting with Nguyen and Luk that make a vague reference
to “scenarios of discussing . . . ‘money if landlord rejects’ and then it references a
second store and a third store and something about ‘until moved in.’”
However, the fact that Luk wanted a document drafted by an attorney to
guarantee that Nguyen would perform as he promised, i.e., that Nguyen would
assign him the lease, does not indicate that Luk knew that Rosenbaum could refuse
the assignment. Luk testified that Nguyen told him Rosenbaum had already agreed
to the assignment and to grant him a new lease after three months. Regarding any
discussion of what Luk was told at the meeting with Vuong, Luk testified that
Vuong did not explain to him that he could lose his entire investment if
Rosenbaum refused the assignment or indicate that there were any potential
problems associated with the lease.
22
Vuong himself testified that he did not look at Nguyen’s lease, nor did he
inform Luk that Rosenbaum could reject the transaction. He only told Luk that
“[t]o do it correctly, you need to have—contact the landlord” and that Luk needed
to have the assignment in writing. Vuong testified that both Nguyen and Luk
indicated that they had already talked to Rosenbaum.
Furthermore, Luk testified that, of the two restaurants Nguyen showed him,
he chose the restaurant at 2118 Clinton Drive because the rent offered by Nguyen
was a good deal. He testified that, without the lease, the restaurant was worthless.4
Nguyen also testified that, when Luk accepted the deal, he told Ngueyn “that he
like it so much, the rent is cheap, he like the location, everything [sic],” so they
finished the deal.
Nguyen further argues that, even if Luk relied on those representations, “Luk
did not do so to his detriment since Luk caused his own damages.” Nguyen argues
that Luk abandoned the restaurant of his own volition and that Luk’s incompetence
at running the restaurant was the reason behind Luk’s abandonment. Nguyen cites
4
Nguyen argues on appeal that the trial court erred in allowing both Luk and
Rosenbaum to testify that the value of the restaurant without a valid lease was
“zero” because they were not qualified as experts. However, he did not object on
this basis at trial. At trial, Nguyen objected to the testimony of Rosenbaum as
being speculative and to the questioning of Luk as being leading. Thus, Nguyen
cannot raise an objection to Rosenbaum’s and Luk’s qualifications as experts for
the first time on appeal. See Nissan Motor Co. Ltd v. Armstrong, 145 S.W.3d 131,
143–44 (Tex. 2004) (holding complaint concerning witness’s qualification as
expert was not preserved because pretrial motion to exclude asserted only that
wintess’s opinions were unreliable).
23
Rosenbaum’s testimony that he did not take any action to evict Luk and that Luk
was a terrible cook and told him “everyone’s gone” before he handed over the
keys. Nguyen also argues that Rosenbaum’s act of allowing Nguyen to operate the
restaurant through the end of their lease indicates that Rosenbaum would not have
terminated the lease.
However, Luk testified that, after he met with Rosenbaum while paying the
April 2008 rent and Rosenbaum refused to assign the lease to him, Luk felt that he
had been cheated and that he had no right to the restaurant, so he left. Rosenbaum
testified that he did not attempt to evict Luk before Luk left the restaurant, but that
was only because he was not aware of the sale of the restaurant. Rosenbaum stated
that, once he became aware, on April 4, 2008, that Nguyen had sold the Wild Wild
Wings restaurant to Luk, he would have sought to evict Luk immediately had Luk
not already left. He stated that he would have sought the eviction on the ground
that the lessee, Nguyen, had abandoned the property and that he would never have
assigned the lease to Luk.
Thus, considering the evidence in the light most favorable to the trial court’s
findings, we conclude that there is more than a scintilla of evidence that Luk
detrimentally relied on Nguyen’s representations about the assignment of the lease
in purchasing the restaurant. See City of Keller, 168 S.W.3d at 822 (providing
standard of legal-sufficiency review). Luk’s own testimony supports the trial
24
court’s findings that he detrimentally relied on Nguyen’s representations. See
Formosa Plastics Corp., 960 S.W.2d at 48 (providing that anything more than
scintilla of evidence is legally sufficient). Thus, the evidence is legally sufficient.
The evidence is also factually sufficient. The evidence that Nguyen relies on
to show that Luk was aware Rosenbaum could refuse the assignment—Luk’s
testimony about his reasons for seeking an attorney to draw up the agreement
between himself and Nguyen and his testimony about Vuong’s notes from that
meeting—is not so overwhelming, when viewed in the context of all of the
evidence presented at trial, as to indicate that the judgment was against the great
weight and preponderance of the evidence. See Cain, 709 S.W.2d at 176; Arias,
265 S.W.3d at 468. Vuong himself testified that he did not inform Luk that
Rosenbaum could reject the transaction. Luk likewise testified that he was not
aware of the terms of Nguyen’s lease with Rosenbaum and that he relied on
Nguyen’s representation that Rosenbaum would allow Luk to lease the property.
The evidence also indicated that Luk abandoned the property only after
Rosenbaum refused to assign the lease to him and he became aware that Nguyen
had misled him. Thus, the fact that Rosenbaum had not yet acted to evict him and
Luk’s alleged incompetence at operating the restaurant are irrelevant.
iii. Damages
25
The trial court found that Luk paid $60,000 to Nguyen’s agent, Pham, for
ownership of the restaurant and that Luk purchased $2,300 in equipment in
reliance upon Nguyen’s representation that Rosenbaum would assign the lease to
him. It further found that Luk lost $62,600 (the amounts above plus the fee he paid
to Vuong) when Rosenbaum refused to assign the lease to Luk.
Nguyen does not challenge the trial court’s finding on producing cause, nor
does he challenge the specific amount of damages found by the trial court. Rather,
he argues that Luk failed to mitigate his damages by relocating the restaurant to a
new location. Nguyen cites Frank v. Kuhnreich to support his proposition that a
“lessee has a duty to mitigate the damages, if possible.” 546 S.W.2d 844, 851
(Tex. Civ. App.—San Antonio 1977, writ ref’d n.r.e.). However, when a
defendant fails to prove the amount of damages that could have been avoided, it is
not entitled to any reduction in damages. See Cole Chem. & Distrib., Inc. v.
Gowing, 228 S.W.3d 684, 688 (Tex. App.—Houston [14th Dist.] 2005, no pet.).
Nguyen put forth no evidence at trial to show the amount of damages Luk could
have avoided. Therefore, assuming, without deciding, that Luk had a duty to
mitigate his damages, Nguyen is not entitled to a reduction of the damages award.
See id.
Finally, Nguyen argues that the trial court erred when it did not consider the
default judgments against Pham and Chick & Wings, Inc. when it entered
26
judgment against him jointly and severally with Vuong. He claims this is a
windfall in favor of Luk that must be reversed. However, neither Nguyen nor
Vuong raised this complaint in the trial court. Thus, it has not been preserved for
appellate review. See TEX. R. APP. P. 33.1(a)(1); Reservoir Sys., Inc. v. TGS-
NOPEC Geophysical Co., 335 S.W.3d 297, 308 (Tex. App.—Houston [14th Dist.]
2010, pet. denied) (holding that party cannot raise complaint about double recovery
for first time on appeal).
Therefore, we conclude that the evidence was legally and factually sufficient
to support the trial court’s judgment that Nguyen violated the DTPA.
We overrule Nguyen’s sole issue.
VUONG’S APPEAL
In three issues, Vuong argues that: (1) the judgment against him is
impermissible because it would award Luk a “double recovery”; (2) his actions
were not the proximate cause of Luk’s damages; and (3) the evidence is legally
insufficient to support the trial court’s findings of legal malpractice.
A. Impermissible Recovery
In his first issue, Vuong argues that the judgment against him is
impermissible because it would award Luk a double recovery. Like Nguyen, he
argues that the trial court failed to consider the earlier default judgments against
Pham and Chick & Wings, Inc. in rendering its judgment against himself and
27
Nguyen. Vuong argues that “[i]t was not until a judgment was entered against
[him] that [he] was required to complain, which he does in this [a]ppeal.”
However, he cites no support for the proposition that he was not required to present
a complaint on this ground to the trial court. As we have already discussed, Vuong
failed to raise this complaint in the trial court, either pre- or post-judgment. Thus,
it has not been preserved for appellate review. See TEX. R. APP. P. 33.1(a)(1);
Reservoir Sys., Inc., 335 S.W.3d at 308 (holding that party cannot raise complaint
about double recovery for first time on appeal).
We overrule Vuong’s first issue.
B. Sufficiency of Legal Malpractice Finding
In his second and third issues, Vuong argues that his actions were not the
proximate cause of Luk’s damages and that the evidence is legally insufficient to
support the trial court’s findings of legal malpractice.
i. Legal malpractice
Generally, to recover on a claim of legal malpractice, a plaintiff must prove
that (1) the attorney owed the plaintiff a duty, (2) the attorney breached that duty,
(3) the breach proximately caused the plaintiff’s injuries, and (4) damages
occurred. Alexander v. Turtur & Assocs., Inc., 146 S.W.3d 113, 117 (Tex. 2004)
(quoting Peeler v. Hughes & Luce, 909 S.W.2d 494, 496 (Tex. 1995)); Williams v.
Briscoe, 137 S.W.3d 120, 124 (Tex. App.—Houston [1st Dist.] 2004, no pet.). The
28
attorney-client relationship is a contractual relationship that arises from a lawyer’s
agreement to render professional services for a client. See Kennedy v. Gulf Coast
Cancer & Diagnostic Ctr. at Se., Inc., 326 S.W.3d 352, 357 (Tex. App.—Houston
[1st Dist.] 2010, no pet.); Greene’s Pressure Treating & Rentals, Inc. v. Fulbright
& Jaworski, L.L.P., 178 S.W.3d 40, 43 (Tex. App.—Houston [1st Dist.] 2005, no
pet.). The relationship may be expressly created by contract, or it may be implied
from the actions of the parties. Sutton v. Estate of McCormick, 47 S.W.3d 179,
182 (Tex. App.—Corpus Christi 2001, no pet.); Mellon Serv. Co. v. Touche Ross &
Co., 17 S.W.3d 432, 437 (Tex. App.—Houston [1st Dist.] 2000, no pet.). The
parties should clearly and expressly agree to the nature of the work to be done and
the compensation to be paid, but the agreement may sometimes be implied from
the parties’ conduct. Valls v. Johanson & Fairless, L.L.P., 314 S.W.3d 624, 633–
34 (Tex. App.—Houston [14th Dist.] 2010, no pet.). There must be some
manifestation that both parties intended to create an attorney-client relationship.
Id. at 634. One party’s mistaken belief is not sufficient, by itself. Id. Thus,
whether there was a meeting of the minds between the parties to create an attorney-
client relationship is determined under an objective standard examining what the
parties said and did, not by the parties’ subjective states of mind. See Bright v.
Addison, 171 S.W.3d 588, 596 (Tex. App.—Dallas 2005, pet. denied); Roberts v.
Healey, 991 S.W.2d 873, 880 (Tex. App.—Houston [14th Dist.] 1999, pet. denied).
29
However, an attorney-client relationship is not created when a person hires
an attorney in a non-legal capacity, such as “when a person hires an attorney to
draft an instrument but does not seek the attorney’s advice with respect to that
instrument.” In re Bivins, 162 S.W.3d 415, 419–20 (Tex. App.—Waco 2005, orig.
proceeding) (citing Pondrum v. Gray, 298 S.W. 409, 412 (Tex. Comm’n App.
1927, holding approved), State v. Delany, 149 S.W.3d 655, 662 (Tex. App.—
Houston [14th Dist.] 2004), rev’d on other grounds, 197 S.W.3d 297 (Tex. 2006),
Sutton, 47 S.W.3d at 184–85, and Harlandale Indep. Sch. Dist. v. Cornyn, 25
S.W.3d 328, 332 (Tex. App.—Austin 2000, pet. denied)). “In such cases, the
attorney is considered a ‘mere scrivener.’” Id. at 420. When the evidence does not
conclusively establish that an attorney-client relationship existed that would
impose the duty to inquire into the substance of the contract rather than to serve as
a mere scrivener between two parties, the question is properly submitted to the
fact-finder. Sutton, 47 S.W.3d at 182.
Proximate cause has two elements: cause in fact and foreseeability. W.
Invs., Inc. v. Urena, 162 S.W.3d 547, 551 (Tex. 2005). “These elements cannot be
established by mere conjecture, guess, or speculation.” Id. (quoting Doe, 907
S.W.2d at 477). Thus, expert testimony generally is required to prove causation in
a legal malpractice suit. See Alexander, 146 S.W.3d at 119–20. The test for cause
30
in fact is whether the act or omission was a substantial factor in causing the injury
without which the harm would not have occurred. Urena, 162 S.W.3d at 551.
ii. Trial court’s findings
The trial court found that “Luk did not want to pay the $60,000 purchase
price to Nguyen unless a lawyer drew up their agreement and Nguyen signed it”
and that “Luk wanted a lawyer to witness the promises and representations made
by Nguyen and guarantee that Nguyen sold the restaurant to Luk.” The trial court
found that after Vuong asked Nguyen for the lease to the premises and Nguyen
stated that he forgot to bring it, “Vuong continued with the transaction and did not
again ask to see the lease or any writing from the landlord relating to the proposed
transaction.” Vuong did not contact Rosenbaum, nor did he otherwise verify that
Rosenbaum had consented to assign the lease. The trial court also found that
Vuong knew the importance of Rosenbaum’s consent and advised Luk “that he
needed to have everything related to this transaction in writing,” but he did not
advise Luk that he could lose his investment if Rosenbaum rejected the assignment
of the lease.
The trial court found that Vuong included numerous terms in the bill of sale
that were not suggested or agreed to by Luk and Nguyen, including “a disclaimer
of fact or promises relating to the transferred properties” and a disclaimer of any
representation made by Nguyen, “a clause involving [Probate Code] section 500,”
31
a waiver of jury trial, and a choice of law provision. The trial court further found
that, although Nguyen told Vuong and Luk that he had permission from
Rosenbaum to assign the lease and both Nguyen and Luk considered the
assignment of the lease an essential term of their agreement, the bill of sale
“drafted by Vuong did not include any identification of the lease, the terms of the
lease, or the representations made by Nguyen and relied upon by Luk relating to
the assignment of the lease.” Rather, “Vuong advised Luk and Nguyen that the
document properly memorialized their agreement and that they could close the
transaction.”
The trial court further found that Vuong exercised legal judgment and
discretion in drafting the bill of sale and offered legal advice regarding the
transaction and that Luk relied upon Vuong’s representation that the bill of sale
reflected his understanding of the agreement with Nguyen to purchase Wild Wild
Wings. The trial court found that Luk reasonably relied on Vuong’s legal
education, training, and experience in preparing a document that he could rely
upon as a buyer of a restaurant that leases space and that Luk reasonably relied on
Vuong’s judgment in not asking to see the lease or any written document relating
to the lease, not calling Rosenbaum, and stating that the bill of sale memorialized
the agreement and representations of Nguyen.
32
The trial court found that Luk paid Vuong $300 to prepare the bill of sale
and have the paperwork executed. It found that Vuong “formed an attorney-client
relationship with Luk by offering to perform a legal service for $300, being paid
the fee quoted by the client, performing the services asked of him, not restricting
the scope of representation, not disclaiming the attorney-client relationship, and
offering legal advice or opinion relating to the transaction.” The trial court further
found that Vuong represented both the seller and the buyer in the transaction and
breached various duties in his representation of Luk. The trial court found that “an
attorney of ordinary prudence could not have allowed a client to purchase a
restaurant where there was a foreseeable, substantial risk of loss after paying the
purchase price”; that Vuong could have prevented Luk’s losses, but failed to do so
even though he had a duty to act; and that Vuong’s legal malpractice was a cause-
in-fact and proximate case of Luk’s losses. The trial court found that “the
landlord’s rejection of the assignment and ejection of Luk was a foreseeable
consequence of Vuong’s failure to act or properly advise Luk if Nguyen’s
representations turned out to be false, which they were.”
iii. Attorney-client relationship
Vuong challenges the trial court’s finding that an attorney-client relationship
existed between himself and Luk. He argues that the entire meeting lasted only
twenty-five minutes, and Luk and Nguyen were in a hurry to complete the
33
transaction, so he did not have the time to do anything but draft the bill of sale. He
also argues that Luk simply wanted an attorney to “witness” his purchase of the
business, and Luk paid $300 for the drafting of the contract. Luk did not request
that Vuong perform any due diligence, he refused Vuong’s offer to pursue a
written assignment of the lease from Rosenbaum, and he did not pay the $1,500
Vuong stated would be required for him to conduct the due diligence.
However, Vuong’s arguments ignore evidence from the record that supports
the trial court’s findings that he and Luk had an attorney-client relationship that
was not limited in its scope. Nguyen and Luk both testified that Luk would not
sign an agreement with Nguyen until he had an attorney draft the documents
because he wanted to protect himself. Nguyen also testified that Vuong spoke
privately with Luk about the transaction. Although Vuong testified that he offered
to conduct due diligence for Luk and to obtain the written assignment of the lease
in exchange for $1,500, Luk testified that Vuong made no such offer to him.
Vuong himself testified that he advised Luk that the landlord was the most
important person in the transaction and that he and Nguyen needed to speak to
Rosenbaum and get the agreement in writing. He testified that both Nguyen and
Luk told him Rosenbaum had agreed to the transaction. Vuong stated that he
explained to Luk the proper procedure for purchasing a business that leases space,
including describing documents Nguyen needed to give Luk upon closing the
34
transaction, and he advised Luk not to hurry into the transaction. Finally, Vuong
drafted the bill of sale after discussing with both Nguyen and Luk the terms of their
agreement, and he agreed that he represented to them that the document reflected
their agreement. Both Nguyen and Luk had previously testified that they believed
the assignment of the lease was an essential part of the transaction.
We conclude that there is more than a scintilla of evidence that Vuong’s and
Luk’s objective representations and actions demonstrated an intention to create an
attorney-client relationship. See Bright, 171 S.W.3d at 596; Roberts, 991 S.W.2d
at 880. Vuong’s own testimony, in addition to that of Nguyen and Luk, supported
the trial court’s finding that Luk did more than hire Vuong to act as a “mere
scrivener” in drafting the agreement, but that Luk sought, and Vuong provided,
advice with respect to the bill of sale and the transaction generally. Although
Vuong told Luk that he needed to obtain the assignment of the lease in writing, the
trial court appropriately found that he failed to advise Luk of the consequences of
following through with the transaction before he obtained that document. Vuong
also represented to Luk that the bill of sale properly reflected his agreement with
Nguyen and protected Luk’s interests despite the fact that the document left out the
essential terms related to the assignment of the lease and included several
provisions not discussed by Nguyen or Luk, such as the disclaimers of prior
representations that favored Nguyen. See In re Bivins, 162 S.W.3d at 419–20
35
(holding that attorney-client relationship does not arise when person hires attorney
to draft instrument but does not seek attorney’s advice with respect to instrument).
Furthermore, the evidence is factually sufficient to support the trial court’s
finding of an attorney-client relationship between Vuong and Luk that extended
beyond merely recording the agreement of the parties in the bill of sale. When
viewed in the context of all of the evidence presented at trial, Vuong’s own
testimony that the scope of the relationship, and therefore the scope of his duty to
Luk, was limited by the lack of time and money to conduct due diligence is not so
overwhelming as to indicate that the judgment was against the great weight and
preponderance of the evidence. See Cain, 709 S.W.2d at 176; Arias, 265 S.W.3d
at 468.
iv. Breach
The evidence is legally and factually sufficient to support the trial court’s
findings that Vuong breached the duties he owed to Luk. The trial court found that
“Vuong continued with the transaction to closing without contacting the landlord
to find out if Nguyen’s representations were true or writing those representations
into the Bill of Sale” and that “Vuong advised Luk and Nguyen that the document
properly memorialized their agreement and that they could close the transaction.”
However, as the trial court found, the bill of sale did not include any identification
of the lease, the terms of the lease, or the representations made by Nguyen and
36
relied upon by Luk relating to the assignment of the lease. Rather, the bill of sale
expressly “disclaimed any representation made by Nguyen with respect to the
property, which contradicted the expressed agreement between Nguyen and Luk.”
These findings are supported by the evidence, including the plain language
of the bill of sale and the testimony of Luk, Nguyen, and Vuong. Nguyen testified
that he understood that Luk was paying $60,000 for everything in the restaurant,
including the assignment of the lease. Luk also testified that Nguyen assured him
that Rosenbaum would allow Luk to operate the restaurant under Nguyen’s lease
for three months and would then give Luk a new lease for five years at the rate of
$800 per month. Vuong testified that, at the time he drafted the bill of sale, he
understood that Rosenbaum’s consent to the assignment of the lease was an
important part of Luk and Nguyen’s agreement. However, nothing regarding those
terms was included in the bill of sale. Thus, the evidence was legally sufficient to
support the trial court’s findings. See City of Keller, 168 S.W.3d at 819.
Although Vuong testified, and the trial court found, that he advised Luk that
he should have Rosenbaum’s consent to the assignment of the lease in writing,
Vuong failed to advise Luk regarding the potential consequences of failing to get
the assignment in writing. Vuong also failed to draft the bill of sale to reflect the
entirety of Luk and Nguyen’s agreement. Thus, viewing all of the evidence
37
presented at trial, the trial court’s judgment was supported by factually sufficient
evidence. See Cain, 709 S.W.2d at 176; Arias, 265 S.W.3d at 468.
v. Causation
Finally, Vuong challenges the trial court’s findings that any negligence on
his part was the cause of Luk’s damages. Vuong argues that Luk’s damages were
caused by his abandonment of the premises. He argues that Luk “was not
concerned with a new lease, as he continued [to] operate the restaurant and to pay
the landlord under the terms of the existing lease.” He argues that Rosenbaum did
not seek to evict Luk, but that Luk left because all of his employees had quit.
As we already discussed above, the argument that Luk caused his own
damages by abandoning the lease is unavailing. Luk’s testimony supported the
trial court’s conclusion that Luk was concerned about the lack of a lease. Luk
testified that he asked Rosenbaum to assign the lease when he delivered the April
rent, and Rosenbaum refused. Luk then felt that he had been cheated and had no
right to the restaurant because he could not obtain a lease, so he left the premises.
Rosenbaum likewise testified that he would never have assigned the lease to Luk
and that the only reason he had not already acted to evict Luk from the premises
was because he did not know that Nguyen had sold the restaurant to Luk until the
day that Luk left the property.
38
Furthermore, the trial court made multiple findings of fact regarding
Vuong’s negligence. The trial court found, among other facts, that “Vuong
breached the standard of care or duty owed to Luk by failing to advise Luk that he
could lose his investment if Nguyen did not have the landlord’s prior written
consent to assign the lease to Luk” and that “[a]n attorney of ordinary prudence
would have advised a client that failure to obtain the landlord’s written consent to
purchase a business leasing property before purchasing the business could result in
the lease being terminated without notice to the buyer or seller, and cause the
prospective buyer to lose his investment and start-up capital.” The trial court also
found that these breaches were the proximate cause of Luk’s injuries and that Luk
relied upon Vuong’s representation that the bill of sale reflected the agreement
between himself and Nguyen.
These findings are supported by the evidence we have discussed above.
Despite his advice that Luk “have everything . . . in writing,” Vuong failed to fully
advise Luk regarding the potential consequences of failing to have Rosenbaum’s
written consent to assign the lease. This evidence supports the trial court’s
findings and conclusions that an attorney of ordinary prudence “could not have
allowed” the sale to proceed under these circumstances, when “there was a
foreseeable, substantial risk of loss after paying the purchase price,” and that
39
Vuong breached his duty to Luk “by allowing him” to proceed under such
circumstances.
Furthermore, Luk and Nguyen both testified that Luk would not sign the
agreement with Nguyen until he obtained the services of an attorney. This
testimony supports the trial court’s findings that Luk “relied on Vuong’s legal
education, training and experience in preparing documents he could rely on as a
buyer of a restaurant that leases space” and upon “Vuong’s judgment in not asking
to see the lease or any written document relating to the lease, not calling the
landlord, and being told the Bill of Sale memorialized the agreement and
representations of Nguyen.”
The trial court also found that Luk’s damages were caused not only by
Vuong’s representations and advice concerning the lease, but also by his failure to
incorporate Nguyen’s representations about the assignment of the lease and the
parties’ intentions into the bill of sale. This finding on causation is likewise
supported by the evidence. Both Luk and Nguyen testified that they intended to
include the assignment of the lease as part of the transaction. Luk, Nguyen, and
Vuong all testified that they understood that the assignment of the lease was an
important part of the transaction. Frederick Dailey, Luk’s attorney expert witness,
testified that Vuong’s negligence in drafting the bill of sale “without protecting
against the potential of not having an approved assumption of the lease” caused
40
Luk’s damages. Dailey stated that Vuong could have protected against that
potential situation in “a number of different ways,” including conditioning the bill
of sale on Rosenbaum’s written approval to assign the lease or including a clause
for refund of the purchase price if Rosenbaum refused the assignment.
Thus, there is more than a scintilla of evidence supporting the trial court’s
numerous findings that Vuong’s negligence in drafting the bill of sale and advising
Luk about the transaction was a substantial factor in causing Luk to execute the
agreement with Nguyen, without which the harm would not have occurred. See
Urena, 162 S.W.3d at 551. Nor was the judgment against the great weight and
preponderance of the evidence. See Cain, 709 S.W.3d at 176; Arias, 265 S.W.3d
at 468.
We overrule Vuong’s second and third issues. 5
Conclusion
We affirm the judgment of the trial court.
PER CURIAM
Panel consists of Justices Keyes, Massengale, and Brown.
Keyes, J., concurring in part and dissenting in part.
5
Vuong also challenges the trial court’s finding that he represented both Luk and
Nguyen without making the proper disclosures or obtaining written waivers.
Because we conclude that the evidence relating solely to the relationship between
Vuong and Luk was sufficient to support the judgment, we do not address those
complaints.
41