Kyle M. Jaeger and Jaeger REO Holding Trust v. Scott Brown

In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-20-00040-CV
__________________
KYLE M. JAEGER AND JAEGER REO HOLDING TRUST,
Appellant
V.
SCOTT BROWN, Appellee
__________________________________________________________________
On Appeal from the 284th District Court
Montgomery County, Texas
Trial Cause No. 18-05-06244-CV
__________________________________________________________________
MEMORANDUM OPINION
Kyle M. Jaeger and the Jaeger Reo Holding Trust (Jaeger Reo
Holding Trust or the REO Trust) appeal from a no-answer default
judgment that involves two written agreements. Under the first of the
two agreements, Jaeger and the REO Trust agreed to purchase a 7.5-acre
tract from the plaintiff, Scott Brown, for $450,000. In the other, Brown
agreed to accept $92,250 in partial payment toward the $450,000 that
1
Jaeger and the REO Trust agreed to pay him for his tract. In its
judgment, the trial court awarded Brown $491,750 in economic damages,
$983,500 in punitive damages, and $13,499 in attorney’s fees plus
prejudgment and post-judgment interest. 1
In six appellate issues, Jaeger and REO Trust argue the trial court
erred in denying their post-judgment motion to set aside the judgment
that Brown obtained after Jaeger and the REO Trust failed to appear or
to answer in response to Brown’s suit. In their brief, Jaeger and the REO
Trust argue: (1) the post-judgment motion adequately explained why
Jaeger and the REO Trust failed to appear when the trial court called the
case for trial; (2) in the default-judgment hearing where the trial court
awarded Brown damages, Brown failed to establish a prima facie case on
the claims raised in his petition; (3) the amounts the trial court awarded
in its judgment are “constitutionally and statutorily infirm” and
excessive; (4) the trial court erred by allowing Brown to recover multiple
times for what the appellants contend is but a single injury; (5) the
officer’s return on the citation for the defendant, the Jaeger Reo Holding
1The record shows that Brown was represented by counsel in the
trial court. Brown, however, did not file a brief in the appeal.
2
Trust, does not show the process server served it with the citation of
service in Brown’s suit; and (6) the evidence is insufficient to support the
attorney’s fees awarded to Brown.
We conclude the appellants’ arguments challenging the trial court’s
decision granting the default (in contrast to their arguments challenging
the amounts of the awards) lack merit. Still, because the evidence is
factually insufficient to support the amounts the trial court awarded
Brown in economic damages, punitive damages, and attorney’s fees, so
we sustain in part the arguments the appellants raise in issues four and
six.
Even though we have found the evidence is factually insufficient to
support the awards, we conclude that two of the awards in the judgment
can still be affirmed if Brown agrees to accept a remittitur of some of the
trial court’s economic and punitive damages awards. If Brown were to
accept the remittiturs, as suggested below, the economic damages award
would be reduced to $409,250 and the punitive damages award would be
reduced to $818,500. But as attorney’s fees, the record contains factually
insufficient evidence to support the trial court’s award of a reasonable
fee.
3
Given the above, should Brown accept the suggested remittiturs,
we will remand the case to the trial court for a new trial solely on the
issue of attorney’s fees. If not, we will reverse the judgment and remand
the case to the trial court for a new trial to redetermine all of Brown’s
damages. 2
Background
Since Jaeger and the REO Trust failed to answer, the allegations in
Brown’s pleadings were undisputed. Thus, the facts we describe here
have been taken from Brown’s pleadings or from the evidence in the
hearing the trial court conducted after defaulting the defendants for
failing to answer and appear. The trial court conducted the hearing on
Brown’s damages in November 2019, allowing Brown to present evidence
to prove the amount of his damages based on the six causes of action he
brought against them in his petition.
The dispute between the parties involves a 7.5-acre tract of real
property in Conroe, Texas. In September 2017, Brown agreed to sell the
tract to Jaeger and the REO Trust. The parties signed a “Real Estate
Purchase Agreement” to convey the tract. Under the Agreement, which
2Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992).
4
Jaeger drafted, Brown agreed to sell Jaeger and the Trust the 7.5-acre
tract for $92,250, with the understanding that Jaeger and the Trust
would purchase the structures on the tract for $357,750 on a later (but
undesignated) date—when Jaeger and the Trust sold a home they owned
in Spring. As to the structures on Brown’s tract, the Agreement states:
“THIS AGREEMENT IS FOR THE LAND ONLY, THE STRUCTURES
WILL BE PURCHASED SEPERATELY FOR THE TOT[A]L[] OF
$357,750, FOLLOWING THE SALE OF [a house Jaeger and the Trust
own in Spring].” As to the dirt comprising Brown’s 7.5-acre tract, Jaeger
and the Trust agreed to pay $92,250 when they closed, which under the
Agreement was scheduled to occur in two days.
Jaeger attached a “Special Warranty Deed” to the Agreement,
which Jaeger signed the same day he signed the Agreement (September
13, 2017). Even though the Agreement states the parties were to close
the transaction on Brown’s tract on September 15, the parties signed a
second agreement that same day. In the second agreement, Jaeger
offered (and Brown accepted) Jaeger’s and the REO Trust’s offer to
exchange five vehicles and cash in place of the promise in the Agreement
where Jaeger and the REO Trust agreed to pay Brown $92,250 in cash.
5
The parties memorialized that second agreement in a “Bill of Sale.” The
five vehicles, which are listed and valued separately in the Bill of Sale,
have a total value of $60,500. And according to Brown, he was to receive
$31,750 in cash in addition to the five vehicles under the agreement the
parties reached in the Bill of Sale. 3
On September 13, 2017, Brown delivered a “Special Warranty
Deed” to Jaeger. The deed is silent about the future payment that are
referred to in the Real Estate Purchase Agreement; instead, the Special
Warranty deed, which Brown testified Jaeger also drafted, recites that
Brown sold the tract to Jaeger and the REO Trust for $92,250. After
Brown delivered the deed, Jaeger and the Jaeger Trust, according to
Brown, recorded the deed and “assumed possession” of the 7.5-acre tract.
3Under the description of the various items of property that Brown
was getting as the “BUYER” in the Bill of Sale, the cash term states:
“CASH TO SELLER $31,750.” During the November 2019 hearing the
trial court conducted on Brown’s damages, Brown testified the Bill of Sale
should have stated “cash to buyer,” not “cash to seller.” Brown explained
that where the Bill of Sale states, “CASH TO SELLER,” the description
is “an error[.]” Even though the parties did not ask the trial court to
provide them with written findings, the trial court’s judgment reflects
that it apparently found the parties intended the Bill of Sale to read
CASH TO BUYER rather than CASH to SELLER, meaning Brown was
to receive $31,750 in the transaction described in the Bill of Sale. And
given the context of the language in the Bill of Sale, the trial court’s
construction of the contract given Brown’s testimony appears reasonable.
6
After recording the deed, Jaeger and the REO Trust mortgaged the tract
and then, according to Brown, “convey[ed] it to a third party.”
For his part, Brown took possession of the vehicles described in the
Bill of Sale. But soon after he took possession of the vehicles, Brown
learned that one of them, a diesel truck, had been reported by its owner
as stolen. Jaeger also never gave Brown the $31,750 cash that Brown
said Jaeger agreed to pay under the terms of the Bill of Sale. Instead, on
September 20, 2017, Jaeger gave Brown a check for $18,125. But when
Brown tried to negotiate the check, it bounced. And as to the remaining
four vehicles, Brown testified that Jaeger stole one of them, a gas-fueled
truck. Brown identified the truck he claimed Jaeger stole from him as
truck number 1222 in the Bill of Sale. The dollar amount listed by truck
number 1222 in the Bill of Sale is $10,250. And the dollar value listed
beside the truck that Brown said was reported stolen in the Bill of Sale,
which Brown explained was a truck to which Jaeger could not deliver a
good title, is $9,500.
In early January 2018, Jaeger and the REO Trust sold the 7.5-acre
tract to Glen and Margaret Adams. According to Brown, since there were
concerns with the Special Warranty Deed that Brown signed, Jaeger
7
forged Brown’s name to a “Correction General Warranty Deed,” dated
December 29, 2017. The Correction General Warranty Deed was
introduced and admitted into evidence in the hearing. In January 2018,
Jaeger recorded the Correction General Warranty Deed, which Brown
said he never signed, in Montgomery County. Then, Jaeger and the REO
Trust used the Correction General Warranty Deed and the Special
Warranty Deed to convey the 7.5-acre tract to the Adams.
In May 2018, Brown sued Jaeger individually and in his capacity
as the trustee of the REO Trust, claiming they defrauded him of his 7.5-
acre tract. Brown’s petition takes a shotgun approach in pleading
Brown’s claims: he pleads multiple causes of actions, but all of them focus
on his loss of his 7.5-acre tract. Essentially, Brown alleged that Jaeger
and the REO Trust purchased the property for $92,250 with the
understanding that they would purchase the structures later for
$357,750 after selling some property they owned in Spring. Brown
claimed Jaeger and the REO Trust never intended to honor their
promises when they made them and then breached the Agreement by
failing to “make payment in full” as the contract required.
8
Besides suing Jaeger and the REO Trust for breaching the contract,
Brown alleged they committed fraud and negligently represented facts
involving a transaction that involved real estate, leading him into signing
an agreement he never would have signed had the misrepresentations
not been made. Along with these claims, Brown included claims for
conversion, statutory fraud in a real-estate transaction, and a claim for
unjust enrichment. And along with naming Jaeger and the REO Trust as
parties, Brown sued Glen and Margaret Adams, the individuals in
possession of his 7.5-acre tract. He alleged they acquired the tract
through Jaeger’s “false deed[.]” As to the Adams, Brown asked the trial
court to award him title and possession to the 7.5-acre tract.
Around six months before Brown moved to default Jaeger and the
REO Trust, the trial court granted the Adams’ motion for summary
judgment against Brown. Brown did not appeal from the trial court’s
order granting the Adams’ motion, and the Adams are not parties to the
appeal. 4
4Aboutsix months before it signed the final judgment, the trial
court granted Glen and Margaret Adams’ Motion for Summary
Judgment. The order the trial court signed granting the Adams’ motion
for summary judgment did not sever Brown’s claims against the Adams
9
As to Jaeger and the Trust, the record shows that in June 2018,
Jaeger was personally served with citation in his individual capacity and
in his capacity as trustee. But as to the REO Trust, the process server
wrote on the return that he served “Jaeger Holding Trust” rather than
writing that he served Jaeger REO Holding Trust, the entity named in
the suit. Despite the way the officer wrote the name on the return, the
citation shows the process server served the Jaeger Reo Holding Trust by
serving its Trustee, Kyle M. Jaeger, “personal[ly], by hand[.]”
In November 2019, the trial court called the case to trial. Jaeger
and the Trust failed to appear. Brown’s attorney moved to default them
into a separate suit. That said, the final judgment the trial court signed
includes the following language: “all relief not granted is hereby denied.”
Based on the language the trial court used in the judgment and the record
before us, we believe the trial court probably intended the judgment to be
final even though it never mentions Brown’s claims against the Adams.
The judgment at issue in the appeal did not result from a conventional
trial on the merits, so the presumption of finality that applies to
conventional trials does not apply here. And the language the trial court
used is not a traditional Mother Hubbard Clause, since such clauses
generally include language signifying the judgment is final, disposes of
all claims and parties, and is appealable. See In the Interest of R.R.K.,
590 S.W.3d 535, 543 (Tex. 2019); Lehmann v. Har-Con Corp., 39 S.W.3d
191, 206 (Tex. 2001). Still, even though this judgment lacks the language
like that often used to indicate finality, it appears the trial court probably
intended its judgment to be final. The appellants have not argued it is
not, and we have construed it as a final judgment for the purposes of the
appeal.
10
for failing to file an answer and for failing to appear. The trial court
granted Brown’s request on both grounds. That same day, the trial court
conducted an evidentiary hearing to determine how much to award
Brown on his claims.
Two witnesses, Brown and his attorney, testified in the hearing.
After considering the evidence and Brown’s pleadings, the trial court
signed a judgment awarding Brown $491,750 in economic damages,
$983,500 in punitive damages, and $13,499 in attorney’s fees. The trial
court did not require Brown to elect one theory of recovery and allowed
him to recover on all six theories: the judgment recites Jaeger and the
REO Trust are liable “for breach of contract, fraud, negligent
misrepresentation, conversion, statutory real estate fraud and unjust
enrichment.”
Less than two weeks later, Jaeger (appearing pro se) used a
preprinted form and moved to set aside the final judgment. The box
Jaeger checked on the form reflects that Jaeger asked the trial court to
set aside the final judgment due to an alleged “Lack of Notice.” Under
that box, Jaeger checked another box on the form that states: “I did not
file an answer because I was not properly served with citation.” Several
11
lines beneath that box allow an individual filling out the form to explain
why they failed to appear or to answer a suit. On these lines, Jaeger
wrote: “I was not served for this court date. Also I was incarcerated from
August 2018 until November 26, 2019. My release came 6 days after this
court date for which I was never served.”
Except for Jaeger’s complaint that he was not “properly served with
citation,” Jaeger’s post-judgment motion raises no other complaints
about the trial court’s ruling granting the judgment by default. For
instance, in several locations on the form Jaeger could have challenged
the judgment for other reasons than lack of proper service. One of these
allows a person to explain whether they have a “meritorious (good)
defense to this case.” Lines below that box allow the person to explain
their defense. Jaeger left lines and boxes like those providing other
excuses for not appearing blank.
On December 20, 2019, the trial court conducted a hearing on
Jaeger’s motion. A docket entry in the trial court’s docket sheet on
December 20 shows that Jaeger, Brown and Brown’s attorney were
present for the hearing. While the docket sheet reflects the trial court
denied Jaeger’s motion, the appellate record lacks a written order on
12
Jaeger’s post-judgment motion. Since the record lacks a written order, by
rule, Jaeger’s motion was overruled by operation of law.5
After Jaeger appealed, his attorney asked the court reporter to
prepare a transcript from the November 2019 hearing. But Jaeger’s
attorney did not ask the reporter for a transcript of the hearing the trial
court conducted in December on the motion Jaeger filed to set the default
judgment aside. For that reason, the appellate record is incomplete since
it lacks a reporter’s record of the December hearing on Jaeger’s post-
judgment motion to set aside the judgment. Without a record from the
December hearing, we must presume the evidence from the hearing
supports the trial court’s decision to overrule Jaeger’s and the REO
5“A trial judge’s oral pronouncement granting a motion for new
trial or motion to modify, reform, or correct a judgment and a docket
entry indicating that such motion was granted cannot substitute for a
written order required by Rule 329b.” Faulkner v. Culver, 851 S.W.2d
187, 188 (Tex. 1993). Regardless of the trial court’s failure to sign a
written order denying Jaeger’s motion, his motion was overruled by
operation of law seventy-five days after the trial court signed the
judgment. Tex. R. Civ. P. 329b(c). That said, the better practice would be
for trial courts to memorialize their rulings on post-judgment motions
with written orders since we are unable to accept their oral
pronouncements on post-judgment motions in hearings as the equivalent
of a ruling.
13
Trust’s post-judgment motion claiming they weren’t properly served,
even though their motion was overruled by operation of law.6
Standard of Review
In general, rulings denying a party’s motion for new trial are
reviewed for abuse of discretion. 7 A trial court cannot grant a default
judgment against a defendant that will be upheld on appeal unless the
record shows the defendant was properly served with the plaintiff’s suit.8
In a direct appeal from a judgment the plaintiff obtained by default, there
is no presumption of proper service. 9 That said, the certificate or affidavit
of service from the process server who served the defendant with process
is prima facie evidence of the fact the defendant was served, and the
“recitals in a process server’s return create[] a presumption that service
was performed.”10 Without a presumption favoring proper service, Texas
6See Bennett v. Cochran, 96 S.W.3d 227, 229 (Tex. 2002) (per
curiam) (explaining that the Texas Rules of Appellate Procedure require
the reviewing court to presume the omitted portions of the reporter’s
record support the trial court’s findings).
7Dir., State Employees Workers’ Comp. Div. v. Evans, 889 S.W.2d
266, 268 (Tex. 1994).
8Tex. R. Civ. P. 124.
9See Primate Constr., Inc. v. Silver, 884 S.W.2d 151, 152 (Tex. 1994)
(per curiam).
10Sozanski v. Plesh, 394 S.W.3d 601, 604 (Tex. App.—Houston [1st
Dist.] 2012, no pet.).
14
law requires that the record show the party who filed the suit complied
with the Rules of Procedure, as it is those rules that control the manner
defendants are to be served and that control when trial courts may grant
a judgment by default.11
Here, the post-judgment motion that Jaeger signed asked the trial
court to set aside the judgment for one reason—Jaeger claimed the
defendants were not “properly served with citation” in the suit. To obtain
a new trial, the party who has been defaulted must establish all of the
following: “(1) the failure to appear was not intentional or the result of
conscious indifference, but was the result of an accident or mistake, (2)
the motion for new trial sets up a meritorious defense, and (3) granting
the motion will occasion no delay or otherwise injure the plaintiff.”12
When the motion satisfies these requirements, the trial court must grant
the motion.13
As mentioned, the post-judgment motion Jaeger signed does not
argue the defendant had meritorious defenses to Brown’s claims. And
11Id.
12Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922, 925 (Tex. 2009)
(citing Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (Tex.
1939)).
13Strackbein v. Prewitt, 671 S.W.2d 37, 39 (Tex. 1984).
15
had the motion included additional arguments like that, there should
also have been facts alleged in the motion to support any additional
defenses. When Jaeger appeared for the December hearing on his motion,
he was required to provide the trial court with evidence establishing that
he had a meritorious defense.14 On this record, we must presume that
Jaeger, on behalf of himself and for the REO Trust, failed to do so.
Analysis
Liability Issues
Were Jaeger and the REO Trust to prevail on their first and fifth
issues, they would be entitled to a new trial requiring a factfinder to
decide whether they are liable to Brown on his claims. Since these issues
involve their liability to Brown, not just the damages Brown recovered,
we start with issues one and five. In Jaeger’s first issue, he argues the
trial court should have granted his motion for new trial because he
provided the trial court with an adequate explanation for his and the
REO Trust’s failure to appear in response to Brown’s suit.
In Jaeger’s post-judgment motion, he alleged that Brown failed to
properly serve him with the suit. But the return of service that the
14See Ivy v. Carrell, 407 S.W.2d 212, 214-215 (Tex. 1966).
16
process server signed, which was filed of record, shows the process server
personally handed Jaeger “a true copy of the citation with the date of
delivery endorsed, together with the accompanying copy of the Plaintiff’s
Original Petition[.]” According to the information in the return, Jaeger
was served with process at a jail on Criminal Justice Drive in
Montgomery County. The return shows it was filed with the District
Clerk’s Office on July 27, 2018. Thus, documents in the Clerk’s Record
show that Jaeger was personally served with the citation and the
petition. And the record shows the return of citation was filed with the
District Clerk’s Office for more than ten days before the default judgment
was signed.15
On appeal, Jaeger argues for the first time there are reasons that
excuse his failure to answer and appear that are not raised in his post-
judgment motion. He notes the trial court dismissed the case before
granting the judgment by default but then reinstated the case on the
docket. He claims that as a result, he thought the case was dismissed and
contends that’s why he failed to appear. But that’s not the argument he
raised in his post-judgment motion. Instead, his motion alleged one
15See Tex. R. Civ. P. 107.
17
claim, which was that he failed to appear because he “was not properly
served with citation.” And since Jaeger failed to obtain a reporter’s record
from the December hearing the trial court conducted on his post-
judgment motion, we must presume that whatever occurred in the
December hearing does not support the argument he raises for the first
time in his appeal. To the contrary, even if the trial court allowed Jaeger
to present evidence on a matter he failed to raise in his post-judgment
motion (which we doubt), we must presume that whatever the evidence
he presented allowed the trial court to find that Jaeger’s failure to answer
and to appear was nonetheless still intentional, resulted from his
conscious indifference, and that his failure to answer or to appear was
not the result of an accident or a mistake. 16 Assuming the trial court
heard evidence in the December hearing, those questions were then
decided and resolved as questions of fact.17 As the factfinder, the trial
court had the right to believe all, some, or none of the testimony
presented to it in the hearing. 18
16Id. 324(b)(1).
17Pekar v. Pekar, No. 09-14-00464-CV, 2016 Tex. App. LEXIS 600,
at *10 (Tex. App.—Beaumont Jan. 21, 2016, no pet.).
18Id.
18
When considering the foregoing rules, Jaeger and the REO Trust
failed to discharge their burden of both pleading and setting up in the
hearing facts sufficient to establish that they have a meritorious defense
to Brown’s suit. 19 We overrule appellants’ first issue.
In issue five, REO Trust takes a slightly different tack. According
to the appellants, the return tied to the citation served on the REO Trust
is insufficient to show that the “Jaeger REO Holding Trust” is the entity
the process server served with the citation.
The return shows the process server served the citation and petition
on “Trustee Kyle M. Jaeger[.]” The typewritten portion of the citation is
addressed to “Jaeger Reo Holding Trust.” In addition, the “Jaeger Reo
Holding Trust” is the name found typed on the return. Despite the names
typed on the return, on the line where the process server wrote the person
whom he served, he wrote: “Jaeger Holding Trust” rather than writing
Jaeger Reo Holding Trust. Although the process server should have
written the name on the return in the way the name is identified in the
citation, he did not do so.
19Lerma, 288 S.W.3d at 926.
19
The appellants argue that because the return is not signed in the
exact same way as the citation is addressed, the trial court erred in
granting Brown’s request to default Brown. According to the appellants,
the trial court should have refused Brown’s request because the record
then before the trial court when Brown moved for the default did not
affirmatively demonstrate that Brown had obtained proper service of the
suit on Jaeger Reo Holding Trust.
We disagree. The variance the appellants rely on simply doesn’t
show that Jaeger, as the trustee of the REO Trust, was not served with
the citation or the petition in his capacity as trustee for the Jaeger Reo
Holding Trust. Instead, while it’s true the process server failed to write
the REO Trust’s name down exactly in the way it’s typed in the citation,
the discrepancy the appellants point to does not show that Jaeger was
misled, meaning that Jaeger did not know the Jaeger Reo Holding Trust
was being served with the suit.
When Jaeger was in the trial court, the post-judgment motion he
filed never set up a claim that he was confused about whether Brown was
suing the Jaeger Reo Holding Trust when the process server served him
with the suit. In fact, there’s no evidence that noted or saw the way the
20
process server signed the return, and no evidence showing that the way
the return was signed caused Jaeger to be confused about whether the
Jaeger Reo Holding Trust, who is the named party in the petition, was
being sued. And since we don’t have a transcript of the hearing the trial
court conducted, the record does not show the appellants raised this claim
in the trial court.20
The citation with which Jaeger was served for the REO Trust
commanded “Jaeger REO Holding Trust” to file “a written answer to the
petition” on the Monday following twenty days of the date Jaeger was
served. As we’ve mentioned, we must presume that any evidence the trial
court admitted in the hearing it conducted on Jaeger’s post-judgment
motion established that Jaeger was not misled by any discrepancy in the
return. 21 Because the arguments Jaeger and the REO Trust raise in their
first and fifth issues were either not properly preserved, or they lack
merit, the issues are overruled.
20See Lerma, 288 S.W.3d at 925; Tex. R. Civ. P. 324(b)(1).
21See Bennett, 96 S.W.3d at 229; Williams v. Williams, 150 S.W.3d
436, 445 (Tex. App.—Austin 2004, pet. denied).
21
Multiple Claims Without an Election
In issues two and four, the appellants complain the trial court erred
in allowing Brown to recover against them on all six of his claims. In issue
two, Jaeger and the REO Trust complain that Brown failed to establish
a prima facie case on any of his six claims. Texas follows the one-
satisfaction rule, so when the plaintiff sues the defendant under multiple
theories of liability, the plaintiff is entitled to only one recovery for the
damages caused by a particular injury. 22
When a trial court grants a default judgment on an unliquidated
claim, “all allegations of fact set forth in the petition are deemed
admitted, except the amount of damages.” 23 So the “default judgment
admits that the defendant’s conduct caused the event upon which the
plaintiff’s suit is based.” 24 Damages are considered unliquidated when
they are not proven by an instrument in writing.25 On the other hand, if
the claim “is liquidated and proved by an instrument in writing, the
22See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 303 (Tex.
2006).
23Heine, 835 S.W.2d at 83.
24Morgan v. Compugraphic Corp., 675 S.W.2d 729, 732 (Tex. 1984).
25Tex. R. Civ. P. 243.
22
damages shall be assessed by the court[.]”26 A claim is liquidated when
the damages can be accurately calculated based on the allegations of fact
in the petition and the written instrument before the court. 27
The appellants argue that Brown failed to include sufficient facts
in his petition to support a judgment by default. And to obtain a judgment
by default, the plaintiff must allege sufficient facts in the petition to state
a cause of action. 28
In Texas, courts follow a “fair notice” standard, “which looks to
whether the opposing party can ascertain from the pleading the nature
and basic issues of the controversy and what testimony will be
relevant.” 29 Thus, “[m]ere formalities, minor defects, and technical
insufficiencies will not invalidate a default judgment where the petition
26Id. 241.
27Oliphant Fin., LLC v. Galaviz, 299 S.W.3d 829, 836 (Tex. App.—
Dallas 2009, no pet.); Freeman v. Leasing Associates, Inc., 503 S.W.2d
406, 408 (Tex. App.—Houston [14th Dist.] 1973, no pet).
28Fairdale Ltd. v. Sellers, 651 S.W.2d 725, 725-26 (Tex. 1982)
(reversing default judgment where the petition contained no allegation
that the defendant owed a duty to the plaintiff or an allegation of breach).
29Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 896 (Tex.
2000); see also Tex. R. Civ. P. 47(a) (a pleading “shall contain a short
statement of the cause of action sufficient to give fair notice of the claim
involved”).
23
states a cause of action and gives ‘fair notice’ to the opposing party of the
relief sought.”30
Brown’s petition alleges six claims—a claim for breach of contract,
fraud, negligent representation, conversion, statutory real estate fraud,
and unjust enrichment. And the petition alleges facts supporting the
claims. For example, Brown alleged that Jaeger and the REO Trust
breached the Agreement the parties executed in September 2017. And he
alleged the defendants never paid the consideration that they agreed to
pay for his tract, yet they still filed the deed he signed and conveyed the
tract to another. Brown also alleged that Jaeger, individually and as the
trustee of the REO Trust, knew the consideration they paid him for the
tract “would fail, but [they] induced him to go forward with the
agreement anyway.” Brown alleged that after Jaeger and the REO Trust
assumed possession of the tract and filed the deed, Jaeger forged Brown’s
name to a correction deed and then used the correction deed to convey
the tract to the Adams.
In addition to these general allegations, Brown’s petition contains
separately numbered paragraphs that he tied to his six claims. In each
30Stoner v. Thompson, 578 S.W.2d 679, 683 (Tex. 1979).
24
paragraph, Brown alleged even more facts fleshing out the details of his
specific claims. All in all, Brown’s petition gave Jaeger and the REO
Trust fair notice of the nature of his claims, the basic issues in
controversy, and the type of testimony they would need to dispute the
claims. We overrule the appellants’ second issue.
In the appellants’ fourth issue, they argue the trial court violated
the one-satisfaction rule by allowing Brown to recover multiple times for
a single injury. To be clear, the trial court never required Brown to elect
the theory on which he wanted to recover his judgment. Even though the
trial court’s failure to require Brown to elect the theory that afforded him
the greatest relief was error, we disagree with the appellants’ suggestion
that the trial court allowed Brown to recover multiple times for the same
injury.
The judgment the trial court signed allows Brown to recover
economic damages, punitive damages, and attorney’s fees—the theory
affording Brown these recoveries is statutory fraud in a transaction that
involved real estate, which in this case is Brown’s 7.5-acre tract.31 Under
Brown’s statutory real estate fraud theory, he had the right to recover
31Tex. Bus. & Com. Code Ann. § 27.01.
25
the three categories of damages the judgment awards—actual damages,
exemplary damages, and punitive damages.32 Additionally, had the
appellants viewed the judgment as allowing Brown multiple recoveries
for a single injury, the rules of error preservation required them to raise
that objection in the trial court to preserve it for their appeal. 33
Even though we disagree with the appellants’ argument claiming
the judgment allows Brown multiple recoveries for the same injury, the
record also does not show the appellants preserved the argument for
appeal. 34 Because the argument has no merit and because it was not
properly preserved, the appellants’ fourth issue is overruled.
Form of the Judgment and the Excessiveness of the Awards
In issue three, the appellants argue the trial court’s damages
awards are excessive. To start, they complain the judgment is excessive
32Id.§ 27.01(b)-(e).
33Waite Hill Servs., Inc. v. World Class Metal Works, Inc., 959
S.W.2d 182, 184 (Tex. 1998) (per curiam) (an objection asserting a failure
to elect a remedy preserves a complaint that the judgment allowed a
double recovery for appeal); Shell Oil v. Chapman, 682 S.W.2d 257, 259
(Tex. 1984) (concluding the appellants waived their complaint that a
judgment allowed a double recovery when it had not properly preserved
the complaint at trial); see also Tex. R. App. P. 33.1(a).
34See Thota v. Young, 366 S.W.3d 678, 698 (Tex. 2012) (cleaned up);
Royce Homes, L.P. v. Humphrey, 244 S.W.3d 570, 582 (Tex. App.—
Beaumont 2008, pet. denied).
26
because the judgment is joint and several. But the judgment does not use
the words joint and several. Instead, the judgment recites that it is
“against Kyle M. Jaeger and the Jaeger Reo Holding Trust[.]” Whatever
the effect of the trial court’s use of the conjunction and in the judgment,
the appellants never complained about the form of the judgment in their
post-judgment motion. As a result, Jaeger and the REO Trust failed to
preserve their complaint about the form of the judgment for the purpose
of their appeal.35
Next, relying on section 41.0016 of the Texas Civil Practice and
Remedies Code, the appellants suggest the trial court was required to
render punitive damages awards “specific as to each defendant[.]” 36 We
agree the trial court should have done so since by statute, punitive
damages awards must be individualized by defendant. 37 But yet again,
the appellants as to their complaint about this error have run afoul of the
35Tex. R. App. P. 33.1(a); WCW Int’l, Inc. v. Broussard, Nos. 14-12-
00940-CV, 14-12-01077-CV, 14-12-01139-CV, 2014 Tex. App. LEXIS
5928 (Tex. App.—Houston [14th Dist.] June 3, 2014, pet. denied).
36Tex. Civ. Prac. & Rem. Code Ann. § 41.006 (providing that when
there are “two or more defendants, an award of exemplary damages must
be specific as to a defendant, and each defendant is liable only for the
amount of the award made against that defendant”).
37Id.
27
rules of error preservation. They didn’t object to the trial court’s failure
to make the punitive damages awards specific as to each defendant when
they were in the court below so the trial court could have addressed and
corrected the error there.38 We do not reach their complaint because it
was waived.39
Jaeger and the Trust turn next to the evidence that Brown
presented in the hearing in November 2017 to establish the amount of
his damages. They note that Brown tied his evidence to a benefit-of-the-
bargain measure of loss. Though the appellants argue that under the
Agreement, Brown’s damages are limited to $92,250 for the 7.5-acre
tract, we disagree. The evidence before the trial court in the November
hearing supports a larger award based on Brown’s loss of his 7.5-acre
tract and structures.
Under the parties’ Agreement and the evidence presented in the
November hearing, the trial court could have reasonably found that
Jaeger and the Trust agreed to purchase Brown’s tract with the
38Tex. R. App. P. 33.1(a).
39Id.;Horizon Health Corp. v. Acadia Healthcare Co., Inc., 520
S.W.3d 848, 881 (Tex. 2017) (applying the preservation-of-error rules to
the appellant’s argument under section 41.006).
28
structures on it for $450,000. Even then, however, the evidence in the
hearing doesn’t support the trial court’s $491,750 award.
Even though the evidence doesn’t the full amount of the trial court’s
actual damages award, the evidence Brown presented in the hearing still
supports most of it. During the hearing, Brown established the parties
signed two agreements in September 2017—the Real Estate Purchase
Agreement and the Bill of Sale. The Agreement reflects the parties placed
a $450,000 value on the tract including the structures on it, with Brown
agreeing to sell the dirt for $92,250 and the structures later for $357,750
when Jaeger and the REO Trust sold some property they owned in
Spring.
On the same day the parties signed the Agreement, the parties
signed the Bill of Sale. It shows that Brown accepted five vehicles and
cash in exchange for the $92,250 cash that Jaeger and the REO Trust
were to pay him under the Agreement in partial payment for the dirt
under the 7.5-acre tract. In the Bill of Sale, Brown recognized he was
giving up the $92,250 that he’d agreed to be paid under the Agreement
in return for the vehicles and the payment of $31,750 in the Bill of Sale.
And it’s clear there was an exchange of consideration between the
29
Agreement and Bill of Sale: The Bill of Sale recites it is “FOR AND IN
CONSIDERATION OF the sum of $92,250.00 U.S. Dollars” for Brown’s
tract. Further, in the November hearing, Brown never testified that after
signing the Agreement he and Jaeger agreed to another deal where
Jaeger and the REO Trust agreed to purchase his tract for $491,750.
For the reasons explained above, the starting point for calculating
Jaeger’s damages is $450,000. From that amount, the trial court should
have deducted $92,250, the amount Brown acknowledged receiving in the
Bill of Sale. Given Brown’s testimony in the hearing, the trial court
should have then added back to Brown’s damages the following items:
1) the $31,750 in cash that Brown said he expected to get but
never received from Jaeger under the Bill of Sale;
2) the value of the diesel truck that Brown testified he learned
was stolen, a truck the parties valued in the Bill of Sale at
$9,500;
3) and the value of the gas-powered truck that Brown said
Jaeger stole from his lot, a truck the parties valued in the Bill
of Sale at $10,250. 40
Based on the formula (($450,000-$92,250)+($31,750 + $9,500 + $10,250))
and using the values the parties placed on the real and personal property
40The truck Brown testified Jaeger stole from him is listed as
vehicle number 1222. The truck Brown testified he learned was reported
as stolen is listed as truck number 0393 in the Bill of Sale.
30
in their two written agreements together with the evidence in the
November hearing on damages, Brown’s economic damages equal
$409,250.
The only remaining question is whether other evidence admitted in
the hearing supports an economic damages award exceeding $409,250.
We conclude the answer is no. To be sure, Brown did have a right to
recover more to the extent he proved he suffered additional damages that
he tied to his claim for statutory fraud that involved his 7.5-acre tract.41
But during the hearing, Brown failed to establish any values for any of
his other damage claims. So while Brown’s petition included claims for
other damages, such as damages to Brown’s personal property, Brown
provided the trial court with no evidence that valued his personal
property. And even though Brown could have recovered consequential
damages on his claim of statutory fraud, damages that “result naturally,
but not necessarily, from the defendant’s wrongful acts[,]” Brown
provided the trial court with no evidence valuing any consequential
damages beyond the damages already included in the $409,250 award. 42
41Tex.Bus. & Com. Code Ann. § 27.01(b).
42Arthur Andersen v. Perry Equip. Corp., 945 S.W.2d 812, 816 (Tex.
1997).
31
To be fair, Brown did testify in the November hearing that after
Jaeger took his property, he lost “everything[.]” According to Brown, after
Jaeger took his land, he became “basically homeless[.]” But Brown never
placed a value on any of the personal possessions in his home. And he
never placed a fair rental value on a home of similar size or described
how long he was homeless.43 Finally, during the hearing, Brown did not
argue he was seeking damages beyond a benefit-of-the bargain loss for
his tract. But Brown calculated his “bargain” without subtracting the
values of three vehicles he retained. We conclude the evidence supports
an economic damages award of $409,250. And we conclude the evidence
is factually insufficient to support an award of economic damages
exceeding $409,250.
Turning to the trial court’s punitive damages award, the trial court
awarded Brown punitive damages in an amount of two times its actual
damages award. On appeal, Brown complains the award of punitive
damages is statutorily and constitutionally excessive. The 2:1 ratio
represented by the trial court’s award, however, does not exceed the ratio
43See Humphrey, 244 S.W.3d at 580 (concluding the evidence
provided by a homeowner was legally insufficient to support an economic
damages award when the testimony was “purely speculative”).
32
authorized for punitive damages awards by law. 44 Besides, as the
factfinder in the hearing, the trial court could have accepted Brown’s
testimony about the efforts Jaeger went to deceive him and believed that
Jaeger forged Brown’s name to a deed and then used it to convey title to
an innocent third party, the Adams. The trial court was also entitled to
accept Brown’s testimony that as a result of Jaeger’s acts in inducing him
into a real estate contract that he never intended to fulfill, Jaeger left
Brown and his children homeless.
In the end, the trial court chose to double the economic damages
award. But since we have concluded the economic award is unsupported
by factually sufficient evidence, we conclude the exemplary damages
award lacks sufficient factual support as well.
To sum up: The trial court’s actual damages award is excessive by
$82,500 ($491,750-$409,250). Its punitive damages award is excessive by
$165,000 ($983,500-$818,500). To the extent Brown argues in his fourth
issue that the evidence is factually insufficient to support the trial court’s
economic and punitive damages awards, issue three is sustained.
44Tex. Civ. Prac. & Rem. Code Ann. § 41.008(b)(1)(A).
33
Attorney’s Fees
In issue six, Jaeger and the REO Trust argue the evidence is
insufficient to support the trial court’s award of $13,499 in attorney’s
fees. The record shows that Brown’s attorney testified that he spent 49.4
hours prosecuting Brown’s case, charged Brown $325 per hour, and that
his hourly charge is customary for the services of attorneys in the area
who have the experience, reputation and ability similar to his.
Brown had a right to recover attorney’s fees against Jaeger and the
REO Trust based on his theory that they committed statutory fraud in a
transaction involving real estate. 45 To support their argument the
attorney’s fee award is excessive, the appellants argue that Brown’s
attorney failed to present evidence segregating his fees between Brown’s
six claims. But Jaeger failed to point out that problem in his post-
judgment motion. Because the appellants never pointed out a fee
segregation problem when they were in the trial court, they deprived the
45Tex. Bus. & Com. Code Ann. § 27.01(e).
34
trial court of the opportunity to correct the problem and cannot complain
of the problem for the first time in their appeal. 46
Jaeger and the REO Trust also argue that the evidence Brown
presented to support the trial court’s award is insufficient under the
requirements the Texas Supreme Court established in Rohrmoos Venture
v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469 (Tex. 2019). To be sure,
Brown’s testimony shows he is not the only person in his firm who worked
on Brown’s case. Yet when Brown’s attorney testified, the attorney failed
to provide the trial court with any details or documentation to explain
how much time he and others spent on the various tasks that make up
what he asked the trial court to award, $13,499. Under Rohrmoos, Brown
had the burden to provide the trial court with evidence sufficient to
permit the trial court to use the lodestar method to calculate a reasonable
fee before the trial court could shift the fees Brown incurred to Jaeger
and the REO Trust.47 That required Brown to present evidence proving
46Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 389 (Tex. 1997); Home
Comfortable Supplies, Inc. v. Cooper, 544 S.W.3d 899, 908 (Tex. App.—
Houston [14th Dist.] 2018, no pet.).
47Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d
469, 502 (Tex. 2019); Eaker v. Mangiameli, No. 09-19-00340-CV, 2021
Tex. App. LEXIS 8720, at *32-33 (Tex. App.—Beaumont Oct. 28, 2021,
35
at least (1) what particular services his attorney and the firm performed,
(2) who performed those services, (3) around when the services were
performed, (4) the reasonable amount of time for performing the services,
and (5) the reasonable hourly rate for each person performing such
services.48 The fees that Brown incurred do not themselves establish
their reasonableness or necessity.49
The testimony and the affidavit that Brown’s attorney provided the
trial court to address the fees that Brown’s firm charged Brown fall far
short of the minimum required by Rohrmoos to support an attorney’s fee
award under the lodestar analysis. Brown’s attorney testified about his
hourly rate and the hourly rate he charged for a law clerk. Yet Brown’s
attorney never provided any details about what particular services he
and his law clerk performed. He also never described when the services
were performed. Without this information, the trial court did not have
the “starting point” it needed “for determining a lodestar fee award[.]” 50
no pet.); Shouldice v. Van Hamersveld, No. 09-18-00355-CV, 2020 Tex.
App. LEXIS 622, at *14-15 (Tex. App.—Beaumont Jan. 23, 2020, no pet.).
48Id. at 498.
49See Milliken v. Turoff, No. 14-19-00761-CV, 2021 Tex. App. LEXIS
4188, at *5 (Tex. App.—Houston [14th Dist.] May 27, 2021, no pet.).
50Rohrmoos, 578 S.W.3d at 494.
36
Conclusion
Having concluded there is insufficient evidence to support the full
amount of the damages the trial court awarded Brown for statutory real
estate fraud, we suggest remittiturs of $82,500 of the economic damages
award and $165,000 of the punitive damages award.51 If Brown files
remittiturs of those amounts in this Court as suggested within fifteen
days of this opinion, then our subsequent judgment will reform the trial
court’s judgment in accordance with suggested remittiturs. As reformed,
we will issue a judgment affirming an economic damages award of
$409,250 and a punitive damages award of $818,500.52
Further, we have found the evidence factually insufficient to
support the trial court’s attorney’s fee award and concluded the
attorney’s award is not capable of being reformed by this Court. Instead,
that award must be redetermined in the trial court regardless of whether
Brown accepts the remittiturs we have suggested above. Accordingly, we
51See Tex. R. App. P. 46.3 (“The court of appeals may suggest a
remittitur. If the remittitur is timely filed, the court must reform and
affirm the trial court’s judgment in accordance with the remittitur. If the
remittitur is not timely filed, the court must reverse the trial court’s
judgment.”).
52See id. 46.3, 46.5.
37
must render a judgment remanding the case to the trial court for the
limited purpose of the trial court conducting further proceedings to
determine the amount Brown should recover (if any) in reasonable and
necessary attorney’s fees. If Brown does not agree to the remittiturs we
have suggested, we will reverse the trial court’s judgment and remand
the case to the trial court so that it may conduct a new trial limited to
conducting further proceedings on determining all of Brown’s damages.53
And finally, having overruled Jaeger’s other issues, we affirm the
remainder of the trial court’s judgment.
AFFIRMED CONDITIONALLY IN PART, REVERSED AND
REMANDED IN PART.
_________________________
HOLLIS HORTON
Justice
Submitted on September 28, 2021
Opinion Delivered August 4, 2022
Before Kreger, Horton and Johnson, JJ.
53See Heine, 835 S.W.2d at 86.
38