Opinion
NO. 02-14-00110-CV
01-28-2016
HULCHER SERVICES, INC. APPELLANT v. EMMERT INDUSTRIAL CORP. APPELLEE
FROM THE 236TH DISTRICT COURT OF TARRANT COUNTY
TRIAL COURT NO. 236-228956-08 MEMORANDUM OPINION
See Tex. R. App. P. 47.4.
In two issues that each contain many distinct arguments, appellant Hulcher Services, Inc. (Hulcher) appeals the trial court's money judgment in favor of appellee Emmert Industrial Corp. (Emmert). Hulcher contends that the evidence is legally and factually insufficient to support the jury's answers to questions concerning liability and damages, that the common-law economic loss rule precludes some of Emmert's damages, and that the trial court's award of attorney's fees and costs to Emmert should be set aside or reduced. We modify the trial court's judgment, affirm most of the judgment as modified, and remand the case to the trial court for new trial only on the issue of attorney's fees and for a recalculation of prejudgment interest. See Tex. R. App. P. 43.2(b), (d).
Background Facts
This appeal arises from a derailment and failed rerailment of a railcar that was carrying a 480,000 pound electric transformer. In June 2007, believing that one of its transformers would soon fail, Oncor Electric Delivery (Oncor) hired Emmert to safely and promptly move another transformer from Roanoke to Granbury. Oncor had hired Emmert for many similar jobs in the past; the two companies operated under renewable "work agreements" for smaller jobs, and Emmert bid against other companies for larger jobs. To serve Oncor's needs, Emmert maintained a twelve-axle railcar and multi-axle trailers.
Oncor succeeded TXU. Where appropriate, we use "Oncor" in this opinion to describe references in the record to either Oncor or TXU.
Through the use of a 300-ton crane and a 500-ton crane, Emmert successfully transferred the transformer from a large truck, which was near the middle of a roadway, to a railcar. While resting unsecured on the railcar, the transformer blocked three lanes of the roadway. The police, whom Emmert had hired to assist in the project, approached Emmert's representatives to ask about how long the railcar would block the roadway. Employees of Emmert and of Maxim Crane, which had been hired to assist in the job, discussed the need to move the railcar out of the middle of the roadway.
While the transformer was resting on the railcar and after the cranes had been unhooked from the transformer, an employee of Maxim Crane released the railcar's brake in an attempt to unblock the road. At that point, the railcar had not been properly secured with a winch line, as is the standard procedure, and it starting moving on the track. Several men jumped onto the railcar to attempt to apply the brake, but the brake malfunctioned, and the men eventually jumped off. The railcar continued to move down the track, gained speed, and eventually derailed into some gravel near the track. Upon derailment, the transformer remained on the railcar while leaning toward the side of the track from which the railcar derailed. Oncor ran tests that appeared to show that the transformer had not been damaged.
Gary Weir, who is part of Emmert's management, testified, "[If] the brakes were to be released without a locomotive tied to [the railcar], [the railcar] should have [had] a winch line hooked to it to control it."
Emmert considered rerailing the car with the assistance of Maxim Crane. That plan included building a base of rock in a ditch close to the track, using cranes to lift the transformer off of the railcar, and then rerailing the railcar. The plan would have taken several hours to complete. Emmert secured the transformer to the railcar.
Weir testified that Emmert planned to use the rock base to "improve [the] subbase around . . . the railcar and transformer because it was on virgin soil."
Hulcher specializes in rerailing railcars and has locations throughout North America. It works for Union Pacific (the owner of the railroad line) "day in and day out." When Emmert's railcar derailed, Lloyd Beckett, who lived nearby, called Hubert Clark Jr., a division manager with Hulcher. Clark, who had just completed a rerailment in Sherman and had a crew with him, called Joe Piazza, an employee with Union Pacific, to inform him about the derailment. Neither Piazza nor anyone else with Union Pacific instructed Clark to do anything with respect to Emmert's railcar. In fact, Piazza said that if "[Emmert] derailed it[,] . . . they could put it back on with their cranes." Nonetheless, Clark went to the derailment site while attempting to find work for Hulcher. Clark "told [Union Pacific] what [he] was going to do" with respect to the derailment.
Clark has worked for Hulcher for many years. He testified that a division manager "go[es] out on jobs" and "run[s] the shop."
According to Marcus Pharr, a superintendent with Emmert, when Emmert presented its plans to rerail the car to a Hulcher employee (presumably Clark), that employee told him to "[b]ack off" and said, "[W]e've got this; we're going to put it back on the rail for you." Pharr testified that someone from Hulcher "pretty much told [Emmert that Emmert] didn't have a choice" about allowing Hulcher to attempt to rerail Emmert's railcar.
Sam Watts, who works for Maxim Crane, testified that when Clark arrived at the site, he said, "I was called by [Union Pacific] to come in and clean up your mess." According to Watts, Clark said, "I can get it [rerailed] before you can even get your equipment here." Watts understood that Hulcher was claiming that it had authority from Union Pacific to rerail Emmert's railcar and that Union Pacific had called Clark about the job. Watts testified that although he had a different plan to help Emmert rerail the railcar,
Watts explained that he served as a "mediator between Hulcher and Emmert" after Clark arrived at the site.
[Clark] showed up and . . . just kind of laid it out there. . . . ["W]e do all the railroad's work, the derailment[s], and we're here . . . to clean it up.["] . . . We just kind of backed off at that point.
. . . .
. . . [Clark] basically came to us and said, ["]Look, we do all the [Union Pacific] derailments. And . . . [Union Pacific] called us to come in here. And they said y'all need assistance to put this back on, and that's what we're here to do.["]
. . . .
. . . In other words, [Clark] came and introduced himself with the railroad guy. . . . [Clark indicated that] Hulcher needs to clean this mess up. . . .
. . . .
. . . I've got a game plan together. I've talked to my engineers. I've talked to my other operators. . . . And then [Clark] show[ed] up with the railroad people and said, . . . ["]We need to bring Hulcher in here and they can get this done and get it expedited quickly.["]
Believing that he did not have a choice other than allowing Hulcher to attempt rerailment, Watts called Weir and told him that Hulcher would charge $15,000 to $20,000 to rerail the railcar. Weir asked Watts whether Hulcher would be able to successfully rerail the railcar, and Watts said that he did not know.
Weir testified that Clark represented that Hulcher could successfully rerail the railcar and that Hulcher had sufficient equipment in the area to do so. After Clark told Weir that Hulcher could rerail the railcar, Weir eventually aborted any plan for Emmert to rerail it.
Similarly to Watts, Lonnie Reed, an Emmert employee, testified that when he arrived on the site of the derailment, Clark
Reed's job with Emmert was to oversee rigging and transportation of "super heavy freight." He arrived at the site of the derailment to "assess the situation [and to] determine what was the best course of action to get the transformer . . . onto the railroad tracks."
described what he wanted to do. I voiced my objection [because] the transformer is [Emmert's] responsibility [and because] the railcar belonged to us.
At this point, I was instructed by the gentleman from the [r]ailroad that [Emmert] created this mess [and Hulcher was] going to clean it up. So at that point, I am merely a consulting factor.
Clark knew the weight of the transformer but did not know about its value or how delicate it was. Hulcher used side booms in an attempt to take weight off the railcar. It also used locomotives owned by Union Pacific (and requested by Hulcher) to attempt to pull the railcar onto the rails. Clark directed the rerailment attempts. The first attempt failed; according to Clark, the car "moved some and then . . . it quit." A second attempt likewise failed. According to Reed, Hulcher's attempts to rerail the railcar resulted in it, along with the side booms, sinking deeper into the gravel surrounding the track. He stated,
Every time [Hulcher] made the attempt to move it, it settled more in the gravel and caused the transformer to list more at the point where you get to where it looks like if you keep going, it's going to tip over on its own . . . . Before you get to that point, it was time to stop.
. . . .
. . . [T]hey were going to, through brute force, drag it forward and up onto the tracks. So when they weren't able to pick it up, that tells you [the equipment] wasn't sufficient.
Clark testified that he never spoke to anyone from Oncor concerning the rerailment. He also stated that no one from Emmert ever told him that his method of attempting rerailment was flawed or that Emmert wanted him to "stand down." But Pharr testified that Reed told Clark that Hulcher needed more equipment and that Clark agreed and said that he would get more equipment before attempting to rerail the railcar again. Watts testified that Hulcher was told to stop its rerailing attempts until it had more equipment on site and that even before Hulcher's first attempt, he communicated his concern to Clark that Hulcher did not have enough equipment to rerail the car successfully. According to Watts, Reed also expressed concern to Hulcher about Hulcher's rerailment plan, but Clark said that Hulcher knew what it was doing and that Emmert needed to "get out of [the] way." Reed testified that after Clark's second failed attempt, he told Clark that he needed more equipment before making another attempt at rerailment and flatly instructed him not to proceed further.
Pharr testified that he heard Reed tell Clark that the equipment Hulcher had "wouldn't do it. He said [Clark needed] to get more equipment out. And I think [Clark] agreed to it, that he'd get more equipment out. So that's when we walk[ed] back across the street and we're watching, and then they started pulling on it again."
Watts testified that when Clark began connecting Hulcher's equipment to the railcar, he
[quizzed Clark] on: Is this all the equipment you're bringing out? Because -- And I [asked]: Do you understand we're talking about 700,000 pounds plus that [Hulcher is] going to have to try to pick up and rerail?
And, no, they didn't have to pick it all the way up, but they did have to take half the weight at least. And, you know, my knowledge of looking at the equipment, they didn't have enough equipment to do what they were trying to do.
Reed testified, "After the attempts were made . . . and [they] failed, everything should have stopped right there and a new plan formed." He also stated,
The locomotive, the wheels were spinning on the track such that it actually burned into the track. In other words, it wore the material off of the track. At this point, I discussed with the gentleman from Hulcher that he needed to either get some more equipment over there or allow us to get it with the crane before we go any further and something gets tore up, because you could tell there was not enough equipment.
He said . . . that he had more equipment on the way and that he wanted to give it one more try. And if it didn't work, then they would wait for the additional equipment to show up. My suggestion was we wait until the equipment shows up. If it's already on the way, let's give it however much time this takes for the equipment to show up, let's put everything on it, then proceed.
Weir explained that after Hulcher initially failed to successfully rerail the railcar, he called a Hulcher representative and said, "You're not able to do this, you're spinning your wheels. What is your plan?" According to Weir, the representative stated, "We have more equipment coming. We've made the determination to bring more equipment." When Weir asked what equipment was coming, the representative said that Hulcher had dispatched two more side booms and that Hulcher would wait until those side booms arrived to continue. Clark testified that he continued attempting rerailment instead of waiting for more equipment to arrive because he had "done the same thing before" and because he "felt [Hulcher] could do the job."
According to Watts, because Clark believed that he was "real close" to achieving rerailment, over Watts's and Reed's objections, Clark directed another attempt to rerail the car without waiting for more equipment. When the railcar and transformer rocked, a load line (a cable) on one of the side booms contacted the transformer and broke. The top-heavy transformer toppled off of the railcar and onto the ground, suffering damage beyond any financially-feasible repair.
Clark indicated that he did not know what the lifting capability of this cable was.
Hulcher loaded up an undamaged side boom while leaving a damaged side boom on site, and Hulcher's employees left the site before later returning to retrieve the damaged side boom. Union Pacific officials disconnected the locomotive and also left the site. Emmert's representatives worked the rest of that day and the next day to recover the transformer and railcar. Emmert disassembled the damaged railcar and hauled it away, and it took the transformer to a location where Oncor could perform tests on it.
Clark later described the toppling of the transformer as "just an accident." He opined that the incident could have been prevented had Hulcher waited two or three hours for more equipment before attempting to rerail the car upon which the transformer rested. He testified that he proceeded with attempts to rerail the car before waiting for more equipment because the railroad "needed [its] track back in service" and because he had succeeded on such a rerailing attempt in the past. He said that "[f]rom experience," he believed that the two side booms had enough capacity to hold the railcar and the transformer. Clark explained that a superintendent with Union Pacific had told him that the railcar needed to be rerailed quickly. He testified, "I just felt we could do the job."
The railcar, however, was not blocking Union Pacific's main line; it was blocking "the siding."
Oncor sued Emmert and Hulcher (along with other parties, including Maxim Crane). Oncor pled that Emmert had breached its contract with Oncor in various ways and that Emmert's and Hulcher's negligence had damaged the transformer. Emmert answered the suit and designated Hulcher as a responsible third party. Later, Emmert filed a cross-claim against Hulcher, and Oncor eventually resolved its claims against Emmert and Hulcher.
Emmert pled against Hulcher, among other contentions, that Hulcher had negligently and grossly negligently damaged the transformer and Emmert's railcar while attempting to rerail the railcar; that Emmert had suffered various economic damages flowing from the accident; that Hulcher had breached an oral contract that it had entered into with Emmert; that Hulcher had violated the Deceptive Trade Practices-Consumer Protection Act (DTPA) in various ways; and that Hulcher had breached expressed and implied warranties. Hulcher answered Emmert's petition with a general denial and by pleading that Emmert's damages, if any, were caused in part by negligence of other actors, including Emmert.
See Tex. Bus. & Com. Code Ann. §§ 17.41-.63 (West 2011 & Supp. 2015).
A jury heard evidence and arguments from the parties and found that both Hulcher's and Emmert's negligence had caused the occurrence in question; that Hulcher had engaged in a deceptive act that Emmert had relied on to its detriment and that was a producing cause of damages to Emmert; that Hulcher had breached a warranty; that Hulcher had acted unconscionably; that either Hulcher's deception, its warranty breach, or its unconscionable act was conducted knowingly; and that Hulcher had breached an oral contract with Emmert to rerail the railcar in a competent manner. The jury awarded Emmert $40,000 for expenses related to the post-accident recovery of the transformer and railcar, $200,000 for the use of a 300-ton transporter standby (a trailer on which Oncor's transformer rested after it was damaged), $81,730 for corporate and personnel charges, $30,000 total for two insurance deductibles, $65,671.60 for unbilled services rendered by Emmert to Oncor, and $2 million for Emmert's lost profits. The jury also awarded Emmert $1 million based on the jury's finding that Hulcher's conduct was committed knowingly and $1.5 million as exemplary damages based on the jury's finding of gross negligence.
The parties' first trial ended in a mistrial. The verdict from the jury in the second trial was not unanimous.
The jury found Hulcher 80% responsible for the occurrence and found Emmert 20% responsible.
Emmert elected to recover on its DTPA claim. The trial court rendered a judgment that incorporated the jury's findings. The judgment awarded to Emmert, under its DTPA claim, $1,933,921.28 in actual damages, $1 million in additional damages "because Hulcher's conduct was committed knowingly," $521,097.64 in prejudgment interest, $572,148.89 in attorney's fees incurred in the trial court, additional attorney's fees if Hulcher appealed and Emmert successfully defended the appeal, and costs. Hulcher filed an unsuccessful motion for new trial and brought this appeal.
A plaintiff may not recover damages for a violation of the DTPA and violation of another law "for the same act or practice." Id. § 17.43.
The trial court also rendered judgment for Emmert on Emmert's alternative claims.
Legal and Factual Sufficiency
On appeal, Hulcher argues that the evidence is legally and factually insufficient to sustain the jury's findings on liability and on damages. We may sustain a legal sufficiency challenge only when the record discloses a complete absence of evidence of a vital fact, the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, the evidence offered to prove a vital fact is no more than a mere scintilla, or the evidence conclusively establishes the opposite of a vital fact. Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998), cert. denied, 526 U.S. 1040 (1999); Robert W. Calvert, "No Evidence" and "Insufficient Evidence" Points of Error, 38 Tex. L. Rev. 361, 362-63 (1960). In determining whether there is legally sufficient evidence to support the finding under review, we must consider evidence favorable to the finding if a reasonable factfinder could and disregard evidence contrary to the finding unless a reasonable factfinder could not. Cent. Ready Mix Concrete Co. v. Islas, 228 S.W.3d 649, 651 (Tex. 2007); City of Keller v. Wilson, 168 S.W.3d 802, 807, 827 (Tex. 2005).
Anything more than a scintilla of evidence is legally sufficient to support the finding. Cont'l Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 450 (Tex. 1996); Leitch v. Hornsby, 935 S.W.2d 114, 118 (Tex. 1996). But when the evidence offered to prove a vital fact is so weak as to do no more than create a mere surmise or suspicion of its existence, the evidence is no more than a scintilla and, in legal effect, is no evidence. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003), cert. denied, 541 U.S. 1030 (2004) (citing Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)). More than a scintilla of evidence exists if the evidence furnishes some reasonable basis for differing conclusions by reasonable minds about the existence of a vital fact. Rocor Int'l, Inc. v. Nat'l Union Fire Ins. Co., 77 S.W.3d 253, 262 (Tex. 2002).
When reviewing an assertion that the evidence is factually insufficient to support a finding, we set aside the finding only if, after considering and weighing all of the evidence in the record pertinent to that finding, we determine that the credible evidence supporting the finding is so weak, or so contrary to the overwhelming weight of all the evidence, that the answer should be set aside and a new trial ordered. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986) (op. on reh'g); Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986).
Liability
In its first issue, Hulcher argues, in part, that the evidence is legally and factually insufficient to support the jury's findings that Hulcher violated provisions of the DTPA. A consumer may maintain a cause of action when any of the following constitute a producing cause of economic damages:
(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 [the business and commerce code]; and
(B) relied on by a consumer to the consumer's detriment;
(2) breach of an express or implied warranty; [or]Tex. Bus. & Com. Code Ann. § 17.50(a)(1)-(3); see Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 478 (Tex. 1995) (listing the elements of a DTPA claim).
(3) any unconscionable action or course of action by any person[.]
Consumer status
Hulcher contends that the evidence is insufficient to prove that Emmert is a consumer and argues that Emmert is therefore ineligible to assert a DTPA claim. A consumer is an individual, partnership, or corporation who seeks or acquires by purchase or lease any goods or services. Tex. Bus. & Com. Code Ann. § 17.45(4). Privity of contract with a defendant is not required for the plaintiff to be a consumer. Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 649 (Tex. 1996); see Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909, 925 (Tex. 2013) (stating that a plaintiff establishes his standing as a consumer in terms of his relationship to a transaction, not by a contractual relationship with the defendant). "[M]oney does not need to change hands" for consumer status to be established; instead, "merely seeking to acquire services or goods is sufficient." Dodeka, L.L.C. v. Garcia, No. 04-11-00016-CV, 2011 WL 4825893, at *2 (Tex. App.—San Antonio Oct. 12, 2011, no pet.) (mem. op.). A party's status as a consumer is usually a question of law for a court's determination. See Collums v. Ford Motor Co., 449 S.W.3d 189, 193 (Tex. App.—Houston [14th Dist.] 2014, no pet.).
In its opening brief, Hulcher did not challenge Emmert's status as a consumer. Hulcher raised the challenge in its reply brief, and Emmert responded to the challenge in its sur-reply brief. Although we do not normally consider issues raised for the first time in a reply brief, we may do so when the issue has been fully developed by both parties. See McKelvy v. Barber, 381 S.W.2d 59, 62 (Tex. 1964); Hutchison v. Pharris, 158 S.W.3d 554, 563-64 & n.12 (Tex. App.—Fort Worth 2005, no pet.).
Hulcher contends that the evidence "disproves the existence of any transaction . . . between Emmert and Hulcher at any time during the [rerailing] attempts" and that Hulcher's right to "perform the [rerailing] arose by virtue of Hulcher's agreement with Union Pacific," not Emmert's status as a consumer. Hulcher also argues that Emmert's contentions on appeal disprove consumer status because they show that Emmert "sought to get rid of Hulcher and to avoid having Hulcher perform any service."
We conclude, however, that the evidence is legally and factually sufficient to establish Emmert's consumer status. Clark (Hulcher's representative who directed the rerailment attempts) testified that it was not his understanding that Union Pacific would pay Hulcher for rerailment, that no one from Union Pacific instructed him to go to the derailment site, and that he did not consider Union Pacific to be his customer. Instead, Clark testified that he considered Emmert to be Hulcher's customer. He explained that if Emmert had wanted to stop his work, it could have done so. Clark testified that at all times during the attempts to rerail Emmert's railcar, Emmert's representatives acted as if they understood that Emmert was Hulcher's customer. He explained that he had "no doubt" that Emmert had hired Hulcher to rerail Emmert's railcar.
Although Clark identified Emmert as Hulcher's customer, he testified that he was concerned about Union Pacific's frustration about its track because Hulcher works for Union Pacific "day in and day out."
Hulcher created a job log that identified Emmert as Hulcher's customer, and Clark testified that he "understood [Hulcher was] working for Emmert." Hulcher sent Emmert a bill after the failed rerailment.
Bryan Flynn, an Oncor employee, testified that he believed Hulcher was working for Emmert. Watts, Maxim Crane's employee, described Hulcher as Emmert's subcontractor. According to Watts, Weir (who was part of Emmert's management team) told him that Emmert decided to use Hulcher instead of proceeding with the plan that involved Maxim Crane's assistance because Hulcher proposed to rerail the railcar in a cheaper and faster manner. Watts testified that there was "no doubt" that Emmert was "calling the shots" concerning whether to use Hulcher; he also testified that he had no doubt that "Weir gave approval for Hulcher to go forward." Finally, he testified that Hulcher gave a price for its services to him and that he relayed that price to Emmert before work commenced.
Weir testified that based on Hulcher's statements to him, he believed that Hulcher would perform the rerailment in a good and workmanlike manner and that Hulcher had the experience and capability to perform the work. Weir explained that after Hulcher represented that it could achieve rerailment with equipment that it had in the area, he told Hulcher, "[L]et's see what you can do. Go ahead, go to work." He also testified that he allowed Hulcher to go forward with its plan rather than attempting rerailment with Maxim Crane's assistance because, in part, Oncor needed to get the transformer transported as quickly as possible.
Although some evidence in the record indicates that Emmert allowed Hulcher to attempt rerailment because Clark's statements or Union Pacific's statements caused Emmert to believe that it had no other choice, we conclude that the evidence recited above, along with the other testimony in the record, is legally and factually sufficient to show that Emmert was a consumer because it sought or acquired Hulcher's services. See Tex. Bus. & Com. Code Ann. §§ 17.45(4), .50(a); Coinmach Corp., 417 S.W.3d at 925. We overrule Hulcher's first issue to the extent that it argues to the contrary.
Misrepresentations
In response to question number two in the jury charge, the jury found that Hulcher had engaged in a false, misleading, or deceptive act or practice that Emmert relied on to its detriment and that was a producing cause of damages to Emmert. Hulcher challenges this finding.
Section 17.46(b) of the business and commerce code, the DTPA "laundry list," identifies many deceptive acts that are actionable under the statute, including
(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 the person does not;Tex. Bus. & Com. Code Ann. § 17.46(b)(5), (7), (24); see Kessler v. Fanning, 953 S.W.2d 515, 520 (Tex. App.—Fort Worth 1997, no pet.).
. . . .
(7) representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another; [and]
. . . .
(24) failing to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed[.]
In its live pleading, Emmert referred to subsections (5), (7), and (24) of section 17.46(b) and stated,
The language in these subsections formed the jury charge's definition of "[f]alse, misleading, or deceptive trade or practice."
Emmert would note that Hulcher has a long-standing expertise and knowledge in handling derailments and touts itself as . . . one of the leaders in the industry. Hulcher routinely holds itself out, as it did in the case at hand, as possessing the specialized expertise to handle derailments, that it is capable of handling derailments in a timely and efficient manner, and that it was qualified to handle the derailment of [Emmert's] railcar. Hulcher ultimately performed services knowingly and with actual awareness that it did not have proper equipment or personnel to handle the job, despite its representations to the contrary. . . . After Emmert had been ordered off the job and after Hulcher was on the job and had commenced recovery efforts, Emmert agreed to allow Hulcher to proceed with recovery operations because of its experience and expertise in the area of handling
derailments. Emmert . . . relied upon the representations and expertise of Hulcher. Hulcher misrepresented its abilities and qualifications and engaged in false, misleading, and deceptive acts . . . . [Emphasis added.]
Under the standards recited above, we conclude that the evidence is legally and factually sufficient to prove, just as Emmert pled and argues on appeal, that Hulcher misrepresented its capability and its equipment's capability to rerail Emmert's railcar. See Tex. Bus. & Com. Code Ann. § 17.46(b)(5), (7). Watts, who described himself as a conduit of information between Hulcher and Emmert, testified that Clark stated that he could rerail the railcar (along with the transformer) before Emmert and Maxim Crane could "even get set up to do it." According to Watts, Clark told Reed (an Emmert employee) that Hulcher "[knew] what [it was] doing" and that Emmert needed to "get out of [the] way and let [Hulcher] do [its] job." Watts also explained that although he told Hulcher's representatives about certain problems with Hulcher's equipment and with its methods in attempting rerailment and although Hulcher said that it had "more equipment coming," Hulcher did not wait and continued its attempts with insufficient equipment.
Watts later testified that Hulcher's selling point was that it could "get [the railcar] rerailed before [Maxim Crane could] even get [its] equipment" to the site.
Weir testified that Hulcher "led [him] to believe that [Hulcher] had the proper equipment to do this from the beginning. . . . [Hulcher] went and looked at [the railcar] . . . before [Hulcher] hooked onto it. So in my opinion, I was misled from that point." Weir stated that he told Hulcher's representative about the weights of the railcar and transformer and that based on statements from Hulcher, he believed that Hulcher had the experience and capability to rerail the railcar in a good and workmanlike manner. Weir stated that Hulcher informed him that Hulcher had equipment and procedures in place that would help Hulcher successfully and safely rerail the railcar and explained that Hulcher expressed confidence that it could achieve rerailment. Weir testified, "I told [a Hulcher representative] what we had and what the weights were. He said that's fine, that's what [Hulcher does]. . . . I said: Do you have equipment available to do this? He said: Yes."
Hulcher concedes on appeal that its "equipment was insufficient."
In contrast to these representations, Jim Weithorn, an expert in crane-related accidents, testified that Hulcher should not have used side booms in the manner that it did while attempting to rerail Emmert's railcar and that Hulcher made many other mistakes while attempting rerailment. He concluded that nothing Hulcher did was "remotely associated with a proper lift," explained that the incident resulted from Hulcher's "[v]ery gross errors," and opined that Hulcher violated certain regulations in its attempt to rerail the railcar. Regarding Clark, Weithorn testified, "If he represented that he could move this and do it safely, that would be a gross misrepresentation. . . . [A]s far as taking care of potentially very valuable pieces of equipment, or not damaging things, it appears from everything that I read, he doesn't have that expertise."
William Bilner, who worked in management at Hulcher in 2007, testified that Clark's attempt to rerail Emmert's railcar was not an uncommon aspect of Hulcher's business. But he appeared to concede that Clark should have known an estimation of the weight of the transformer before attempting to rerail Emmert's railcar that held it. He also appeared to concede that Hulcher had modified the equipment that it used in the rerailing attempts; Weir testified that modifying such equipment is "not done" in the industry without the approval of the equipment's manufacturer.
Clark testified that before attempting rerailment, he did not know "for sure" what the center of gravity was on the transformer. He also testified that while the lifting capability of a side boom is limited by the lifting capability of its cable, he did not know what the lifting capability was of cables that he used while attempting to rerail Emmert's railcar. Watts testified that when Hulcher started connecting its equipment to the railcar, he could discern that the equipment was inadequate to achieve rerailment, and he informed Clark about that fact.
We conclude that these facts, along with the remaining evidence in the record, provide legally and factually sufficient evidence to show that when Hulcher represented that it and its equipment then available on the scene had the capability to achieve rerailment on this occasion and under these specific circumstances, it therefore represented that its services had characteristics or uses that they did not have and represented that its services were of a particular standard or quality that they were not. See id.
Emmert's pleading that Hulcher "has a long-standing expertise and knowledge in handling derailments" is not inconsistent with Emmert's allegation that on this occasion and with the equipment it planned to use, Hulcher misrepresented its ability to rerail Emmert's railcar.
Although Hulcher argues that an "accident does not constitute a misrepresentation," a consumer is not required to prove intent to make a misrepresentation to recover under the DTPA. Miller v. Keyser, 90 S.W.3d 712, 716 (Tex. 2002). Thus, a defendant may be held liable under the DTPA even if it did not "intend to deceive anyone." Id.
Furthermore, we conclude that the evidence is legally and factually sufficient to support Hulcher's liability under the DTPA by its failure to disclose known information—Emmert's prerogative to rerail its own railcar—while intending to induce Emmert into entering a transaction. See id. § 17.46(b)(24). Clark testified that when he learned of the derailment, he contacted Piazza, Union Pacific's employee. According to Clark, Piazza did not instruct him to go to the derailment site and told him to do "[n]othing." Instead, Piazza told Clark that if "[Emmert] derailed it[,] . . . they could put it back on with their cranes." Before Clark arrived at the site, Emmert had already made detailed plans to rerail the railcar with Maxim Crane's assistance. Nonetheless, without disclosing Piazza's statements to the contrary, Clark represented that Union Pacific had authorized and instructed Hulcher to go the site and to rerail the railcar. Based on Hulcher's representations of authority from Union Pacific, Hulcher instructed Emmert to "[b]ack off" and expressed that Emmert did not have any other choice but to allow Hulcher to rerail the railcar. Emmert did so. From these facts and the remaining evidence in the record, we conclude that the evidence is legally and factually sufficient to support Hulcher's liability on a failure-to-disclose theory. See id.
Hulcher disputes whether Emmert sufficiently pled its theory that Hulcher failed to disclose Piazza's statements that Emmert could rerail the railcar. Hulcher concedes, however, that at trial, "Emmert claimed that Hulcher violated the DTPA by leading Emmert to believe that Hulcher had an exclusive contract with Union Pacific." Hulcher does not direct us to any place in the record in which it objected to this theory of DTPA liability that Emmert made evident at trial. Emmert's presentation of evidence focused, in part, on Clark's failure to disclose Piazza's statement and the effect of that failure, and at closing argument, without objection, Emmert explicitly relied on Clark's (and therefore Hulcher's) failure to disclose Piazza's position that Emmert could rerail the railcar as a basis for Hulcher's DTPA liability. Thus, even assuming that Hulcher is correct in its position that under the fair-notice pleading standard, Emmert's pleadings do not raise Hulcher's failure to disclose Emmert's right to rerail as a theory of Hulcher's liability, we conclude that this theory of liability was tried by the parties' consent. See Tex. R. Civ. P. 67; Ingram v. Deere, 288 S.W.3d 886, 893 (Tex. 2009); see also Emerson Elec. Co. v. Am. Permanent Ware Co., 201 S.W.3d 301, 309-10 (Tex. App.—Dallas 2006, no pet.) (explaining how the parties' closing arguments showed that an issue was tried by consent); In re T.L.K., 90 S.W.3d 833, 837 (Tex. App.—San Antonio 2002, no pet.) (holding similarly).
SeeTaylor v. Taylor, 337 S.W.3d 398, 401 (Tex. App.—Fort Worth 2011, no pet.) (op. on reh'g).
For all of these reasons, we reject Hulcher's argument that the evidence is legally or factually insufficient to establish a false, misleading, or deceptive act to support DTPA liability. We overrule Hulcher's first issue to that extent.
Because we hold that Hulcher's liability under the DTPA may be sustained by the representations and the failure to disclose identified above, we decline to analyze other alleged misrepresentations that Emmert relies on for liability under the DTPA. See Tex. R. App. P. 47.1; McLeod v. Gyr, 439 S.W.3d 639, 650 (Tex. App.—Dallas 2014, pet. denied) (op. on reh'g) ("Because we have already decided against McLeod on all the issues he raised with regard to his violation of section 17.46(b)(5), we do not need to decide whether there is evidence to support the trial court's conclusion that he also violated other provisions of the DTPA."); Main Place Custom Homes, Inc. v. Honaker, 192 S.W.3d 604, 625 (Tex. App.—Fort Worth 2006, pet. denied) (holding similarly).
Producing cause
Hulcher also challenges the jury's finding that its false or deceptive act, as found by the jury, was a producing cause of damages to Emmert. An act is a "producing cause" of economic damages under the DTPA if the act is a substantial factor that brings about the injury and without which the injury would not have occurred. See Tex. Bus. & Com. Code Ann. § 17.50(a); Doe, 907 S.W.2d at 481; Rice v. Metro. Life Ins. Co., 324 S.W.3d 660, 676 (Tex. App.—Fort Worth 2010, no pet.); see also Honaker, 192 S.W.3d at 616 ("There may be more than one producing cause."). The producing cause standard does not require foreseeability of harm, but it requires more than that the act merely furnished an attenuated condition that made the injury possible. Doe, 907 S.W.2d at 481-82.
We conclude that legally and factually sufficient evidence exists that Hulcher's representation that it and its equipment were capable of achieving rerailment of Emmert's railcar on this occasion was a producing cause—a substantial factor—of some damages to Emmert. See id. at 481. For example, Weir testified that his decision to hire Hulcher was based, in part, on Hulcher's representations that it could rerail the railcar quickly and properly with its equipment. As explained above, Weir also testified that he approved Hulcher to go forward on its rerailment plan only after Hulcher represented that it could safely achieve rerailment with equipment that it had in the area. And although Hulcher attempts to negate causation by arguing on appeal that "Emmert had no choice in the matter" of whether Hulcher could attempt rerailment of the railcar, the jury could have relied on Clark's testimony that he considered Emmert to be Hulcher's customer, that Emmert was giving him directions on the job, and that Emmert could have stopped Hulcher's work on the project.
We note that the jury is the sole judge of the credibility of witnesses and the weight to be given to their testimony and that the jury may accept or reject all or part of testimony provided by any witness. Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003); Miller v. McCarty, 323 S.W.3d 612, 616 (Tex. App.—Texarkana 2010, no pet.).
We also hold that the evidence is legally and factually sufficient to show that Clark's (and therefore Hulcher's) failure to disclose Piazza's statement about Emmert's ability to rerail its railcar was a producing cause—a substantial factor—of Emmert's damages. See Doe, 907 S.W.2d at 481. In its briefing, Hulcher emphasizes that the evidence shows that it had authority from Union Pacific to rerail railcars generally and this one specifically and argues, therefore, that "no matter what Hulcher said, Emmert was obliged to acquiesce in Union Pacific's decision" for Hulcher to rerail the railcar. But as explained above, the evidence shows that on this occasion, Union Pacific, through Piazza, informed Clark that Emmert could rerail, and Clark failed to disclose this information to Emmert. And although Clark testified that he generally considers Union Pacific to be a customer of Hulcher, he viewed only Emmert as Hulcher's customer for the rerailment of Emmert's railcar.
This evidence belies Hulcher's argument on appeal that the "worst evidence is simply that Union Pacific gave Hulcher no affirmative direction to go to the accident site."
Although some evidence shows that Union Pacific's officials eventually made statements supporting Hulcher's authority to attempt rerailment, no evidence contradicts Clark's testimony that Piazza told him that Emmert could rerail its railcar on this occasion or shows that Piazza did not have the authority to allow Emmert, rather than Hulcher, to rerail the railcar on this occasion. Thus, as Emmert contends, the jury could have reasonably found that whatever else Union Pacific's relationship with Hulcher signified, the relationship "could not have required Emmert to use Hulcher because [Union Pacific's] own representative instructed Hulcher to let Emmert rerail."
Although Hulcher argues that "Emmert had already formed its belief about the Hulcher-Union Pacific relationship before Clark had ever arrived at the scene," Pharr testified that Union Pacific's officials arrived at the scene after Clark.
Furthermore, in light of Piazza's statement to Clark, the jury could have reasonably determined that statements by other Union Pacific officials about Hulcher's exclusive right to rerail all railcars or about Hulcher's right to rerail the railcar on this occasion were simply incorrect and therefore not preclusive of a finding that Clark induced Emmert's business through a failure to disclose his conversation with Piazza. Weir testified that Hulcher's representations about its exclusive right to attempt rerailment led to Emmert's decision to hire Hulcher, and Watts indicated that he would not have abandoned his rerailment plan if he had known of Piazza's statement. Thus, the jury could have reasonably found that if Clark had disclosed to Emmert that Emmert could rerail its railcar when Clark first arrived at the scene, Emmert would not have used Hulcher.
We conclude that this evidence, along with other evidence presented at trial, is legally and factually sufficient to prove that Hulcher's representations identified above were a producing cause of at least some damages to Emmert.See Tex. Bus. & Com. Code Ann. § 17.50(a); Doe, 907 S.W.2d at 481. We overrule Hulcher's contention that the evidence is legally and factually insufficient to prove the producing cause element of Emmert's DTPA claim. We overrule Hulcher's first issue to that extent.
We discuss Emmert's distinct theories on damages below.
Conclusion on liability
For all of the reasons stated above and after a careful review of all evidence contained in the record, we conclude that the evidence is legally and factually sufficient to prove that Emmert was a consumer; that Hulcher violated the DTPA's "laundry list" of false, misleading, or deceptive acts; and that Hulcher's acts were a producing cause of damages to Emmert. See Tex. Bus. & Com. Code Ann. §§ 17.45(4), .46(b)(5), (7), (24), .50(a)(1); Uniroyal Goodrich Tire Co., 977 S.W.2d at 334; Pool, 715 S.W.2d at 635. We must therefore affirm the trial court's judgment to the extent that it finds Hulcher liable for violating the DTPA, for which Emmert elected recovery. Because we uphold Hulcher's liability under the DTPA, we decline to address arguments in the remainder of Hulcher's first issue, in which Hulcher contests its liability on Emmert's alternative causes of action.See Tex. R. App. P. 47.1; Smith v. Davis, 462 S.W.3d 604, 617 (Tex. App.—Tyler 2015, pet. denied) (op. on reh'g); Norwest Mortg., Inc. v. Salinas, 999 S.W.2d 846, 865 (Tex. App.—Corpus Christi 1999, pet. denied). We overrule Hulcher's first issue. Damages, attorney's fees, and costs
We note that one of Hulcher's principal arguments on liability concerns the economic loss rule. But in both its opening brief and in its reply brief, Hulcher focuses and limits its discussion of the economic loss rule to Emmert's negligence claim. For example, in its opening brief, Hulcher concludes its discussion of the economic loss rule by stating, "Because Emmert's damages consist entirely of economic losses[,] . . . the economic loss rule bars Emmert's negligence claim." In its reply brief, Hulcher argues that Emmert "cannot recover purely economic losses in negligence" and that the economic loss rule "precludes Emmert from recovering all economic losses in negligence resulting from damage to Oncor's property." Hulcher asks, "With respect to the negligence claim, the primary issue . . . is this: can Emmert recover purely economic losses resulting from damage to Oncor's transformer?" [Emphasis added.] Because Hulcher confines its argument on the economic loss rule to Emmert's negligence claim and because we need not address the negligence claim, we similarly do not address the impact, if any, of the economic loss rule.
In its second issue, Hulcher argues that the evidence is legally and factually insufficient to support the discrete damages awarded in the judgment and that the attorney's fees and costs awarded in the judgment must be reversed or reduced. The jury awarded Emmert $40,000 for expenses related to the recovery of the railcar and transformer, $200,000 for the use of a transporter to hold the damaged transformer after the accident, $81,730 for corporate and personnel charges, $30,000 for Emmert's payment of insurance deductibles, $65,671.60 for Emmert's unbilled services rendered to Oncor, and $2 million in lost profits. Adding these numbers, the trial court's judgment recited that the jury had awarded Emmert $2,417,401.60 in actual damages on its DTPA claim. The trial court then reduced that award by 20% based on the jury's finding that Emmert was 20% responsible, so the judgment decreed that Emmert recover $1,933.921.28 in actual damages. The judgment also awarded Emmert $1 million on its DTPA claim as "additional damages" based on the jury's finding that Hulcher's conduct was committed knowingly. Finally, the judgment awarded Emmert $521,097.64 in prejudgment interest, $572,148.89 in attorney's fees already incurred, additional attorney's fees if Hulcher unsuccessfully appealed, certain costs, and postjudgment interest.
Lost profits
Hulcher argues that the evidence does not support the jury's award of lost profits to Emmert because there are "fundamental issues with Emmert's damage model and proof." Specifically, Hulcher contends, in part, that the lost profits are too causally remote from the events forming the basis of Hulcher's liability to be recoverable. Hulcher also argues that any lost profits were caused by Emmert's choices and Oncor's litigation strategy, not by Hulcher's acts on the date of the failed rerailment.
At trial and on appeal, Emmert has predicated its request for lost profits on a theory that because of Hulcher's role in damaging Oncor's transformer, Emmert later lost business in moving Oncor's heavy equipment. Particularly, Emmert has contended that Hulcher should be responsible for Emmert's lost profits because after the failed rerailment, Oncor sued Emmert, Emmert initially did not settle Oncor's claim for the loss of the transformer, and Oncor thereafter stopped awarding business to Emmert in an attempt to persuade Emmert to settle.
For example, during Emmert's opening statement, its counsel explained its request for lost-profit damages to the jury by stating, "The executives at [Oncor] said, [']It's taking [Emmert] a long time to pay for this transformer, so let's cut them off. We're not going to do business with them.['] And that's what we're asking you for is our lost profits."
The evidence shows that for several months after the failed rerailment damaged Oncor's transformer, Oncor considered Emmert available to continue performing transformer moves, and Emmert performed work for Oncor. Oncor eventually sued Emmert and Hulcher for damages related to the loss of the transformer. When Emmert and Oncor could not resolve their dispute, Oncor pressured Emmert to settle by withholding future jobs from Emmert until Emmert paid Oncor. Emmert's chief financial officer, Howard Winters, calculated Emmert's lost profits from five years after April 30, 2008, when Emmert was "officially notified that [it] would not be eligible to bid on additional [Oncor] jobs."
A spreadsheet admitted at trial appears to show that Winters calculated that Emmert lost some profits between the failed rerailment and when Oncor stopped using Emmert. But on appeal, Emmert has not contended that the failed rerailment caused lost profits at any date before Oncor paused its business relationship with Emmert. Rather, Emmert argues, "When Oncor ceased using Emmert, Emmert lost both its day work and the ability to get bid jobs."
Weir testified that Oncor did not require bidding for "day work," which was work that cost Oncor up to approximately $25,000 per job and that Emmert contracted for in advance. He explained, however, that Oncor used a competitive bidding process for more expensive jobs that Oncor planned to occur months later. Weir estimated that before the June 2007 incident, Emmert won the bid on approximately ninety percent of such jobs. He explained that for approximately six months after the incident, Emmert continued to get Oncor's work, "[a]nd then after that, [Emmert] got no work."
Mike Hamilton, Oncor's manager of transmission equipment support, testified that although Emmert was one of the companies that Oncor had historically used for hauling transformers, Oncor stopped using Emmert in the middle of 2008 (several months after the June 2007 failed rerailment), awarded nineteen contracts of transformer moves from June 2008 through June 2011, and awarded only one of those nineteen contracts to Emmert. Oncor awarded the other eighteen jobs to H. Brown and paid H. Brown between $160,000 and $260,000 for each job.
Hamilton testified that Emmert performed only one move of a transformer for Oncor in 2010. He explained that he had no knowledge of other contracts awarded by Oncor to Emmert from the end of September 2009 through the end of June 2011, although he stated that Siemens, a transformer manufacturer, had awarded Emmert two jobs.
Oncor had not previously used H. Brown to conduct transformer moves.
Hamilton explained that Oncor chose not to award jobs to Emmert starting in the middle of 2008 because "there [were] some . . . suggestions that [Oncor] might want to cease doing business . . . during the . . . pending lawsuit [between Oncor and Emmert]. . . . [T]he recommendation was that [Oncor] cease using Emmert during the course of the litigation." Hamilton explained that Oncor intended to continue using Emmert for moves after Oncor and Emmert resolved their dispute and after Emmert paid Oncor full restitution for the loss of the transformer. Hamilton testified that he wrote an e-mail to other Oncor officials in March 2008 that instructed Oncor's employees to "discontinue the use of Emmert's services pending the outcome of the suit [Oncor had] filed to recover . . . loss on the [transformer]."
When Oncor was considering its decision to stop awarding jobs to Emmert while the lawsuit between those parties remained pending, Dave Murr, an Oncor employee, wrote an e-mail that listed positive and negative considerations concerning the decision. The e-mail stated that Emmert was familiar with Oncor's equipment and with routes in Oncor's area; that Emmert owned specialized railcars that could transport transformers; that Emmert had a qualified network of subcontractors to support Oncor's projects; and that Oncor "represent[ed] a large portion of Emmert's business," which meant that Emmert would give priority to Oncor's projects. The e-mail also stated, however, that there were "other qualified heavy haul rigging contractors available," including H. Brown.
In response, Hamilton wrote an e-mail to Murr in which Hamilton asked questions about using other companies for transformer moves and recognized that eliminating Emmert as an option for the moves could be "necessary due to the stance that Emmert's lawyers and Insurance Company [had] taken regarding [Oncor's] loss of the [transformer]." [Emphasis added.] Later, in a deposition, Hamilton explained that Oncor's decision to exclude Emmert from transformer moves was a tactic to "apply some pressure to Emmert" to settle its suit with Oncor and therefore to "make restitution for [Oncor's] loss." Oncor also requested that Siemens, which manufactures transformers, not use Emmert to haul certain equipment, and Siemens agreed to not do so. By Hamilton's deposition in June 2011, Emmert settled with Oncor, and Oncor was therefore again using Emmert to move transformers under a new contract between those parties.
From these facts revealed by Hamilton's testimony, Hulcher argues that that the intervening causes of "Emmert's refusal to pay Oncor for its share of responsibility and Oncor's decision to put litigation pressure on Emmert . . . destroys any claim of causation." Hulcher contends that it had "nothing to do with any of those acts or decisions." Emmert contends that Hulcher's wrongful conduct was a producing cause of Oncor's decision to withhold business from Emmert; Emmert asserts that Hulcher's acts were the "cause that started the chain of events ultimately resulting in" Oncor's decision.
Emmert does not dispute Hulcher's assertion that by the time Oncor stopped awarding business to Emmert, Hulcher had already settled the claim that Oncor brought against it. Also, Emmert does not challenge the jury's finding that Emmert was 20% responsible for the "occurrence in question."
Emmert contends that this argument is "in the nature of an inferential rebuttal" and that Hulcher needed to plead the argument to raise it on appeal. But inferential rebuttals need not be pleaded. See Perez v. DNT Glob. Star, L.L.C., 339 S.W.3d 692, 700 (Tex. App.—Houston [1st Dist.] 2011, no pet.).
The DTPA allows a prevailing consumer to recover economic damages, meaning compensatory damages for pecuniary loss. See Tex. Bus. & Com. Code Ann. §§ 17.45(11), .50(a); see also Kneip v. Unitedbank-Victoria, 734 S.W.2d 130, 134 (Tex. App.—Corpus Christi 1987, no writ) (stating that pecuniary loss has been broadly defined as meaning "money and everything that can be valued in money"). In some circumstances, lost profits are available as economic damages for a prevailing plaintiff in a DTPA claim. See Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 505-06 (Tex. 2001). But a plaintiff may recover damages under the DTPA only when the act that violates the statute is a producing cause of the damages. Tex. Bus. & Com. Code Ann. § 17.50(a); Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 817 (Tex. 1997) (op. on reh'g) ("[L]osses . . . are recoverable only if the misrepresentation is a producing cause of the loss."); see also Wheaton Van Lines, Inc. v. Mason, 925 S.W.2d 722, 728 (Tex. App.—Fort Worth 1996, writ denied) ("In any cause of action, whether grounded in tort, contract, or a hybrid of the two, there can be no recovery of damages by an aggrieved party against another unless the injuries or damages were caused by the other's actions.").
While the producing cause standard does not contain an element of foreseeability, if "damages are too remote, . . . they cannot be recovered." Arthur Andersen & Co., 945 S.W.2d at 816; see Wheaton Van Lines, Inc., 925 S.W.2d at 728 ("At some point in the causal chain, the defendant's conduct may be too remotely connected with the plaintiff's injury to constitute legal causation."). Whether lost profits are unrecoverable as too remote depends upon the circumstances of each particular case. Tex. Instruments, Inc. v. Teletron Energy Mgmt., 877 S.W.2d 276, 279 (Tex. 1994). An act may not be the producing cause of an injury when after the act occurs, there is a new and independent cause. See Bartlett v. Schmidt, 33 S.W.3d 35, 39-40 (Tex. App.—Corpus Christi 2000, pet. denied).
As explained above, producing cause requires causation-in-fact, which in turn requires proof that an act was a substantial factor in bringing about an injury. Bryant v. S.A.S., 416 S.W.3d 52, 58-59 (Tex. App.—Houston [1st Dist.] 2013, pet. denied); see Transcon. Ins. Co. v. Crump, 330 S.W.3d 211, 223 (Tex. 2010) ("[T]he producing cause inquiry is conceptually identical to that of cause in fact."). For an act to rise to the level of a substantial factor and to therefore provide a legally adequate cause, the act
must be such that reasonable jurors would identify it as being actually responsible for the ultimate harm. The cause must be more than one of the countless ubiquitous and insignificant causes that in some remote sense may have contributed to a given effect as, for example, simply getting up in the morning. That the term substantial factor is given to this commonsense aspect of legal causation simply makes plain to jurors that more than causation in this indirect, "philosophic sense" is required.Transcon. Ins. Co., 330 S.W.3d at 224; see Doe, 907 S.W.2d at 477 (explaining that a wrongful act is a cause in fact of an injury if the injury is the "natural and probable result" of the act). Evidence that
the defendant's conduct did no more than furnish a condition which made the injuries possible does not satisfy the cause-in-fact requirement. Even if the injury would not have happened but for the defendant's conduct, the connection between the defendant and the plaintiff's injuries simply may be too attenuated to constitute legal cause.Bryant, 416 S.W.3d at 59-60 (citation omitted) (also explaining that the length of time between the DTPA violation and the injury may be a factor in determining whether a causal chain is broken).
In Bryant, the plaintiffs sued a church (among other parties) under the DTPA after the church distributed a flyer advertising a teenager's babysitting services, the flyer stated that the babysitter had experience working with children, the plaintiffs hired the babysitter to watch their children five to ten times, and the babysitter molested the children on several occasions. Id. at 54-56. At trial, a jury found that the church had violated the DTPA by making false representations about the babysitter. Id. at 57. The appellate court held that any misrepresentations were not a producing cause of the plaintiffs' damages, explaining that circumstances affecting the relationship between the babysitter and the plaintiffs had developed independently of the church's misrepresentations and that the misrepresentations were therefore too attenuated to cause the injuries. Id. at 59-60 (citing Doe, 907 S.W.2d at 478-81); see also Hawthorne v. Huffines Cmtys, Inc., No. 05-12-01316-CV, 2014 WL 1676932, at *4, *7 (Tex. App.—Dallas Apr. 24, 2014, no pet.) (mem. op.) (holding that wrongful acts were not a legal cause of an injury when the acts were merely the "first of a chain of events leading to" the injury); Higbie Roth Constr. Co. v. Houston Shell & Concrete, 1 S.W.3d 808, 814 (Tex. App.—Houston [1st Dist.] 1999, pet. denied) (holding that damages may be too remote under the DTPA when there are multiple factors affecting the relationship of a nonparty to the plaintiff).
We recognize that Oncor's decision to stop awarding business to Emmert would not have occurred without the damage to the transformer for which the jury found Hulcher partly responsible; nonetheless, we conclude that under the principles recited above, the connection between Hulcher's acts and Emmert's lost profits is too remote and attenuated to constitute legal cause. See Hawthorne, 2014 WL 1676932, at *4; Bryant, 416 S.W.3d at 59-60. Emmert's theory for lost profits depends upon successive events in which Hulcher played no role and that occurred months after the damage to the transformer and months after Emmert and Oncor's business relationship had continued: Oncor asked Emmert to pay for damages to the transformer, Emmert (along with Emmert's insurance company) refused to do so, Oncor sued Emmert, a team of Oncor officials weighed the option of temporarily ceasing its business dealings with Emmert as a litigation strategy to coerce a settlement, Oncor chose to exercise that option, Oncor informed Emmert that it would lose Oncor's business if it did not settle, Emmert still refused to settle, Oncor contracted with another company, and Emmert therefore lost profits. Most simply, Oncor's and Emmert's acts that were responsive toward each other, not Hulcher's acts leading to the toppling of the transformer, comprised the driving force in the impairment of Emmert's business relationship with Oncor.
In its opening statement, Emmert represented, "The transformer will not be submitted to you to ask for damages. . . . That matter has been resolved. What is being . . . submitted to you is the cost that we incurred to [right] the contractual breach."
In the five months immediately after the June 2007 incident that damaged Oncor's transformer, Oncor paid Emmert $614,000 for jobs that Emmert performed for Oncor.
Emmert recognized in its closing argument to the jury that it was "cut off" by Oncor "because of [the] . . . lawsuit." [Emphasis added.]
Even viewing the evidence in the light most favorable to the jury's finding, we cannot conclude that Oncor's decision to pause its business relationship with Emmert under these circumstances was a natural and probable result of the misrepresentations that Emmert relies on to establish Hulcher's liability; rather, the evidence establishes that Oncor's and Emmert's decisions independently altered the natural course of their business relationship. See Doe, 907 S.W.2d at 477; see also Dew v. Crown Derrick Erectors, Inc., 208 S.W.3d 448, 451 (Tex. 2006) (plurality op.) (explaining that a superseding cause is one that produces results that would not otherwise have occurred); Archibeque v. N. Tex. State Hosp.-Wichita Falls Campus, 115 S.W.3d 154, 163 (Tex. App.—Fort Worth 2003, no pet.) (Walker, J., dissenting) (explaining that causation may be too remote when there is a time gap between the wrongful act and the injury, there are intervening events, or there is intentional third-party conduct). A natural and probable result of Hulcher's acts might have been immediate damage to Emmert's business with Oncor but not the attenuated damage that occurred under these circumstances. See Doe, 907 S.W.2d at 477. We conclude that Hulcher's acts that support its liability provided, at most, one condition that later made Emmert's lost profits possible and that the acts were, as a matter of law, not a producing cause of the lost profits.See Tex. Bus. & Com. Code Ann. § 17.50(a); Bryant, 416 S.W.3d at 59-60.
We note that the evidence relating to Oncor's rationale for pausing its business relationship with Emmert is not disputed.
As Hulcher argues, Emmert likewise furnished a condition by allowing the railcar to derail before Hulcher arrived on the scene.
We recognize that there may be more than one cause of a plaintiff's damages. See Honaker, 192 S.W.3d at 616. Although the concurring and dissenting opinion implies that we are deciding this issue under standards not submitted to the jury, we conclude that Hulcher's acts were not a legal cause under the standards articulated above that develop and explain the "producing cause" and "substantial factor" terms that the trial court submitted to the jury.
In reaching this conclusion, we are not, as the concurring and dissenting opinion suggests, resolving the causation issue on a theory that was not considered by the jury. Indeed, the principal subject of Hulcher's closing argument was whether Emmert's lost profits were too attenuated from Hulcher's acts in light of Emmert's and Oncor's superseding business tactics toward each other. The concurring and dissenting opinion cites no authority for the proposition that the jury could not have considered such intervening, superseding, course-altering acts without the inclusion of a defensive-theory instruction in the jury charge.
For all of these reasons, we sustain Hulcher's second issue to the extent that Hulcher argues that the evidence is legally insufficient to support the jury's award of lost profits.See Uniroyal Goodrich Tire Co., 977 S.W.2d at 334.
For the reasons expressed above, we conclude that lost profits are not recoverable under Emmert's DTPA claim and are also not recoverable on Emmert's other claims because they are too remote. See AZZ Inc. v. Morgan, 462 S.W.3d 284, 289 (Tex. App.—Fort Worth 2015, no pet.) (explaining that a "plaintiff may not recover breach-of-contract damages if those damages are remote" and that the "absence of a causal connection between the alleged breach and the damages sought will preclude recovery"); Arguelles v. Kellogg Brown & Root, Inc., 222 S.W.3d 714, 731 (Tex. App.—Houston [14th Dist.] 2007, no pet.) (explaining, with regard to a negligence claim, that the "law does not hold people legally responsible for the remote results of their wrongful acts and therefore draws a line between immediate and remote causes").
Having concluded that the evidence is legally insufficient to show that Hulcher's acts were a producing cause of any lost profits, we need not analyze Hulcher's alternative argument that the lost profits were too speculative. See Tex. R. App. P. 47.1.
DTPA additional damages
In a DTPA suit, if the factfinder determines that the defendant's conduct that violated the statute was committed knowingly, the factfinder may award "not more than three times the amount of economic damages." Tex. Bus. & Com. Code Ann. § 17.50(b)(1); McLeod, 439 S.W.3d at 652. "Knowingly" means "actual awareness, at the time of the act or practice complained of, of the falsity, deception, or unfairness of the act or practice giving rise to the consumer's claim." Tex. Bus. & Com. Code Ann. § 17.45(9); McLeod, 439 S.W.3d at 652. Actual awareness "may be inferred where objective manifestations indicate that a person acted with actual awareness." Tex. Bus. & Com. Code Ann. § 17.45(9). As explained by the supreme court, actual awareness "does not mean merely that a person knows what he is doing; rather, it means that a person knows that what he is doing is false, deceptive, or unfair." St. Paul Surplus Lines Ins. Co. v. Dal-Worth Tank Co., 974 S.W.2d 51, 53-54 (Tex. 1998) (op. on reh'g).
The jury found, in answering question number five of the charge, that Hulcher engaged in DTPA-violating conduct knowingly. Accordingly, in answering question number eleven, the jury awarded Emmert $1 million in additional damages. Hulcher challenges these findings.
Sufficiency of evidence to prove a knowing act
To the extent that Hulcher argues that there is no evidence that any DTPA violation was committed knowingly, our analysis above compels us to disagree. Because the evidence was legally and factually sufficient to show that Hulcher (by Clark) violated the DTPA by failing to disclose information "which was known at the time of the transaction," it necessarily follows that the evidence is sufficient to sustain the jury's finding that Hulcher acted knowingly with respect to a "laundry list" violation. See Tex. Bus. & Com. Code Ann. §§ 17.45(9), .46(b)(24). As we have explained, the evidence shows that although Clark was actually aware that Piazza had told him to allow Emmert to rerail, he failed to disclose that information—and instead made statements about Emmert's necessity of using Hulcher—while intending to induce Emmert's business. We hold that the evidence is legally and factually sufficient to show that Hulcher acted knowingly to that extent. See id. §§ 17.45(9), .50(b)(1); Uniroyal Goodrich Tire Co., 977 S.W.2d at 334; Pool, 715 S.W.2d at 635.
Jury charge complaint
Hulcher also argues, however, that the jury question on additional damages under the DTPA is erroneous. The charge instructed the jury that if it found a DTPA violation either under a "laundry list" violation (question two of the charge), a failure to comply with a warranty (question three), or an unconscionable action (question four), it was to answer question five, which broadly and generally asked, "Did Hulcher engage in any such conduct knowingly?" Hulcher contends that because the trial court used the disjunctive "or" in the predicate to question five and supplied only one answer blank, the question is valid only "if there is sufficient evidence to support each of the jury's answers" to questions two through four (to show a laundry list violation, a warranty breach, and unconscionability).
For this assertion, Hulcher relies on Tanglewood Homes Association, Inc. v. Feldman, 436 S.W.3d 48, 61-62 (Tex. App.—Houston [14th Dist.] 2014, pet. denied). There, Tanglewood Homes Association had rejected expansion plans for a home, and both the homeowners of the affected lot and a trustee of a trust that owned an adjacent lot sued the association. Id. at 54. At trial, the charge asked the jury, "Do you find that [the association's] denial of any of the [homeowners'] and/or the [trustee's] plans was arbitrary or capricious?" Id. at 59 (emphasis added). The charge also asked the jury, "Did [the association] make a negligent misrepresentation on which [the homeowners] and/or [the trustee] justifiably relied?" Id. (emphasis added). The jury answered yes to both questions. Id. Another part of the charge instructed the jury to answer questions on damages if it had answered yes to the prior two questions. Id.
On appeal, the association contended that the jury's verdict was "fatally ambiguous." Id. at 61. The court of appeals agreed, explaining,
The Feldmans and the [t]rustee sought to impose liability on the [a]ssociation. Therefore, each plaintiff had the burden to secure jury findings that could support a judgment in its favor. Here, neither plaintiff did so. Each liability question included "and/or" language and a single answer blank. Thus, it is impossible to know whether the jury's "Yes" answer to Question 1 is a finding that the [a]ssociation's denial of the Feldmans' plans or the [t]rustee's plans—or both—was arbitrary or capricious. Similarly, it is impossible to know whether the jury's "Yes" answer to Question 3 is a finding that the [a]ssociation made a negligent misrepresentation on which the Feldmans or the [t]rustee—or both—justifiably relied. Because the jury's ambiguous answers are not findings of liability to each plaintiff, they cannot support a judgment.Id. (citations omitted).
Similarly here, we cannot discern from the jury's "yes" answer to question five whether the jury determined that the laundry list violation, the warranty breach, unconscionable acts, or all three were committed knowingly. See id. Thus, although we have already concluded that the evidence is sufficient to sustain Hulcher's general liability under the DTPA through laundry list violations, we must now also determine whether the warranty and unconscionability theories were supported by legally sufficient evidence and were therefore validly submitted as part of question five. See id.; see also Thota v. Young, 366 S.W.3d 678, 680 (Tex. 2012) (explaining that "reversible error is presumed when a broad-form question submitted to the jury incorporates multiple theories of liability and one or more of those theories is invalid . . . or when the broad-form question commingles damage elements that are unsupported by legally sufficient evidence"); Romero v. KPH Consolidation, Inc., 166 S.W.3d 212, 215 (Tex. 2005) ("[B]road-form submission cannot be used to put before the jury issues that have no basis in the law or the evidence."); Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 388-89 (Tex. 2000) (op. on reh'g); Acadia Healthcare Co., v. Horizon Health Corp., 472 S.W.3d 74, 99-100 (Tex. App.—Fort Worth 2015, pet. filed) (op. on reh'g) (citing Casteel and holding that a broad-form question that did not segregate between two theories of liability that could support exemplary damages was not erroneous because evidence supported both theories); Benge v. Williams, 472 S.W.3d 684, 688-89 (Tex. App.—Houston [1st Dist.] 2014, pet. filed) (analyzing "Casteel-type charge error" and explaining that a theory may be invalidly submitted in a broad-form question if it is not supported by legally sufficient evidence).
Emmert contends that Hulcher failed to preserve error by not objecting to the form of the "conditioning instruction" in question five. See Tex. R. App. P. 33.1(a). But the supreme court has determined that Casteel-type objections—objections that a broad-form jury question may commingle valid theories of recovery with invalid theories—may be preserved by objecting to the submission of preliminary questions upon which the later broad-form question is premised, just as Hulcher did here. See Burbage v. Burbage, 447 S.W.3d 249, 258 (Tex. 2014); Thota, 366 S.W.3d at 691 (concluding that by "making timely and specific objections that there was no evidence to support the disputed items submitted in the broad-form charge and raising these issues for the court of appeals to consider, Young properly preserved these issues for appellate review"). We conclude that Hulcher preserved this argument for our review.
A consumer may prevail under the DTPA when it shows that a breach of an express or implied warranty was a producing cause of damages. Tex. Bus. & Com. Code Ann. § 17.50(a)(2). The jury found that Hulcher breached a warranty in its answer to question three, but Hulcher contends on appeal, in part, that no evidence exists to support the jury's finding. Specifically, Hulcher argues, in part, that an express or implied warranty exists only where parties have a valid and enforceable contract and that Hulcher and Emmert did not have one.
The trial court instructed the jury that a "[f]ailure to comply with a warranty" meant failing to comply with an express warranty or failing to perform services in a good and workmanlike manner.
A cause of action for a breach of an express warranty is contractual in nature. Med. City Dallas, Ltd. v. Carlisle Corp., 251 S.W.3d 55, 60-61 (Tex. 2008) (stating that an express warranty is a result of a negotiated exchange and is a creature of contract); see also Staton Holdings, Inc. v. Tatum, L.L.C., No. 05-12-01408-CV, 2014 WL 2583668, at *2 (Tex. App.—Dallas June 10, 2014, pet. denied) (mem. op.) ("Express warranties arise out of the terms of the agreement between the parties.").
Emmert argues (and the jury found) that Emmert and Hulcher entered into an oral contract. The elements of a valid contract, whether written or oral, are "(1) an offer; (2) an acceptance in strict compliance with the terms of the offer; (3) a meeting of the minds; (4) each party's consent to the terms; and (5) execution and delivery of the contract with the intent that it be mutual and binding." Hubbard v. Shankle, 138 S.W.3d 474, 481 (Tex. App.—Fort Worth 2004, pet. denied). A contract is legally binding only if its terms are sufficiently definite to enable a court to understand the parties' obligations. Fort Worth ISD v. City of Fort Worth, 22 S.W.3d 831, 846 (Tex. 2000); see Farone v. Bag'n Baggage, Ltd., 165 S.W.3d 795, 802 (Tex. App.—Eastland 2005, no pet.) ("The terms of an oral contract must be definite, certain, and clear as to all essential terms; or the contract will fail for indefiniteness."). The existence of an oral contract may be proved by circumstantial evidence as well as by direct evidence. PGP Gas Prods., Inc. v. Reserve Equip., Inc., 667 S.W.2d 604, 607 (Tex. App.—Austin 1984, writ ref'd n.r.e.).
Clark affirmed that Emmert was Hulcher's customer with respect to the rerailment attempt; he testified that he had "no doubt" that Emmert had hired Hulcher. He also testified that Emmert's representatives knew about Hulcher's ordering additional cranes to assist in the rerailment, that Emmert's representative gave him directions about the job, and that Emmert allowed Hulcher to cut holes in Emmert's railcar.
Weir testified that he talked to one of Hulcher's corporate representatives about Emmert's derailed railcar needing to be rerailed. The representative told Weir that Hulcher could rerail the railcar, and Weir said, "What I'd like you to do is go look at the situation, make sure you're happy with it, and . . . assure me you could rerail it. That's what I want to hear." The Hulcher representative said, "Yes, we'll respond. We'll get people out there." Weir later talked again with the representative and said, "[L]et's see what you can do. Go ahead, go to work." Weir testified that at this point, as far as he was concerned, Emmert had a contract with Hulcher.
Weir testified that he did not ask Hulcher about what it would charge for rerailment because the "most important thing was to get [the railcar and transformer] safely back on the rail as quickly as we could for [Oncor]." But based on his phone conversations with Hulcher's representatives, Weir believed that Hulcher would complete the rerailment in a workmanlike manner. Watts testified that he communicated Hulcher's price to rerail the railcar—$15,000 to $20,000—to Weir. He also testified that Weir told him that Emmert had decided to use Hulcher because Hulcher was cheap and fast. There was "no doubt" in Watts's mind that Emmert was "calling the shots" concerning whether to use Hulcher. After the failed rerailment, Hulcher sent Emmert a bill for Hulcher's services.
We note that parties' failure to specify a price does not necessarily prevent the formation of a contract. See Bendalin v. Delgado, 406 S.W.2d 897, 900 (Tex. 1966); Inimitable Grp., v. Westwood Grp. Dev. II, 264 S.W.3d 892, 899 (Tex. App.—Fort Worth 2008, no pet.).
Based on these facts and other evidence, we conclude that the record contains legally sufficient evidence of a contract between Hulcher and Emmert. See Thota, 366 S.W.3d at 680; Hubbard, 138 S.W.3d at 481; see also UniroyalGoodrich Tire Co., 977 S.W.2d at 334 (reciting the standards for legal sufficiency challenges).
Next, Hulcher argues that no evidence shows that it made an express warranty. An express warranty requires an affirmation of fact or promise by the warrantor that becomes the basis for a bargain. See Fieldtech Avionics & Instruments, Inc. v. Component Control.Com, Inc., 262 S.W.3d 813, 829 (Tex. App.—Fort Worth 2008, no pet.). Under this standard, we conclude that the representations detailed above concerning Hulcher's capability and its equipment's capability to achieve rerailment on this occasion, upon which Emmert relied, qualify as legally sufficient evidence of an express warranty.
These are the only arguments Hulcher presents concerning the jury's finding that Hulcher breached an express warranty. Relying on Casteel, Hulcher also contends that for the jury's overall finding on a breach of warranty to be valid, Emmert must establish a cognizable implied warranty claim because the trial court submitted Emmert's express warranty claim and implied warranty claim together in one question. But while Hulcher's appellate arguments concerning Emmert's implied warranty claim challenge the existence of any such warranty on these facts on public policy grounds, Hulcher's objections to the warranty question in the trial court did not raise these public policy contentions. Instead, those objections challenged only the sufficiency of evidence to prove a breach of a warranty and whether such a breach was a producing cause of damages. Under these circumstances, because Hulcher did not, on a timely basis, place the trial court on notice of the complaint that it now brings on appeal, we conclude that Hulcher did not preserve a Casteel complaint concerning the warranty question in the jury charge (question three) and that we need not determine whether Emmert's implied warranty claim is invalid. See 22 S.W.3d at 389 (requiring a timely and specific objection to a liability question that commingles valid and invalid theories); see also Tex. R. App. P. 33.1(a); Tex. R. Civ. P. 274 ("A party objecting to a charge must point out distinctly the objectionable matter and the grounds of the objection."); In re B.L.D., 113 S.W.3d 340, 349 (Tex. 2003) ("This Court has recently emphasized that complaints of error in broad-form submission must be preserved by objection at trial."), cert. denied, 541 U.S. 945 (2004); Beach Capital P'ship, L.P. v. DeepRock Venture Partners LP, 442 S.W.3d 609, 618 (Tex. App.—Houston [1st Dist.] 2014, no pet.) ("When a party fails to object to an instruction that permits a jury to award damages that are unrecoverable as a matter of law, the objection is waived."); cf. Benge, 472 S.W.3d at 711 ("We conclude that Dr. Benge's complaints were sufficient to alert the trial court to the potential deficiency in the jury charge that set up a Casteel problem, merging valid and invalid theories of liability into a single, broad-form liability question.").
Specifically, Hulcher contends that an implied warranty related to commercial services or professional services does not exist in Texas.
To preserve error on a jury-charge complaint, the objection made in the trial court must comport with the argument on appeal. See JPMorgan Chase Bank, N.A. v. Prof'l Pharmacy II, No. 02-11-00373-CV, 2014 WL 7473779, at *7 (Tex. App.—Fort Worth Dec. 31, 2014, no pet.).
For all of these reasons, we conclude that Emmert's breach of warranty claim was not an invalid component of question five, which asked whether Hulcher "engage[d] in any such conduct knowingly."
We likewise conclude that Emmert's unconscionability claim was not an invalid part of question five. A consumer may recover when a defendant's unconscionable action or course of action is the producing cause of damages. Tex. Bus. & Com. Code Ann. § 17.50(a)(3). An "unconscionable action or course of action" means "an act or practice which, to a consumer's detriment, takes advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree." Id. § 17.45(5). Unconscionability is an objective standard. Rice, 324 S.W.3d at 677. To prove an unconscionable action, a consumer must show that the defendant's acts took advantage of the consumer's lack of knowledge and "that the resulting unfairness was glaringly noticeable, flagrant, complete and unmitigated." Id. In answering question four, the jury found that Hulcher engaged in an unconscionable action or course of action.
We conclude that the facts described above concerning Hulcher's failure to disclose known information—Emmert's prerogative to rerail its own railcar—and Hulcher's affirmative misrepresentation that Union Pacific had sent it to the scene comprise some evidence of an act that took advantage of Emmert's lack of knowledge to a grossly unfair degree. See Tex. Bus. & Com. Code Ann. § 17.45(5); see also Uniroyal Goodrich Tire Co., 977 S.W.2d at 334 (establishing that evidence is legally sufficient to prove a fact when it is more than a scintilla). We likewise conclude that more than a scintilla of evidence of unconscionable conduct arises from Hulcher's insistence to continue rerailment attempts after Emmert instructed Hulcher to stop the attempts and informed Hulcher that its equipment was insufficient and after Hulcher represented that it would wait for more equipment. The legislature "enacted the DTPA to curtail this type of deceptive conduct." See Latham v. Castillo, 972 S.W.2d 66, 69 (Tex. 1998) (holding that there was some evidence of unconscionability when an attorney falsely told clients that he had filed a claim and falsely represented that he was pursuing the claim); see also Tyre v. Yawn, No. 01-08-00914-CV, 2011 WL 662957, at *6 (Tex. App.—Houston [1st Dist.] Feb. 17, 2011, no pet.) (mem. op.) (holding that certain intentional misrepresentations in a business relationship were grossly unfair and therefore unconscionable); Rice, 324 S.W.3d at 677-78 (holding that several misrepresentations concerning insurance coverage qualified as more than a scintilla of evidence of unconscionability).
Because neither Emmert's breach of warranty claim nor its unconscionability claim were invalid (as they were not based on legally insufficient evidence), we reject Hulcher's specific argument that question five was "fundamentally flawed" because there was not sufficient evidence to support the jury's answers to questions three (breach of warranty) or four (unconscionability).
Hulcher argues that "to the extent [we reverse] one but not all of the jury's predicate findings, [the jury's finding of a knowing act] must also be set aside." Hulcher does not, however, contend that we must decide whether there is sufficient evidence to prove a knowing act as to each of the predicate findings, and we decline to undertake such an analysis.
Statutory cap
Finally, Hulcher contends that should we lower Emmert's actual damage award, we should likewise reduce Emmert's award of additional damages. The amount of additional damages under the DTPA may not exceed three times the amount of economic damages. Tex. Bus. & Com. Code Ann. § 17.50(b)(1). Based on our analysis below concerning the discrete types of damages awarded by the jury, the jury's $1 million award of additional damages exceeds three times the amount of economic damages that we affirm. Thus, we will reduce the award of additional damages to comply with section 17.50(b)(1)'s cap.See id.; In re Columbia Med. Ctr. of Las Colinas, 306 S.W.3d 246, 248 (Tex. 2010) (orig. proceeding) ("[D]amages awards that are statutorily capped are required to be recalculated when the actual damages against which they are measured are reduced on appeal."); Gunn Infiniti, Inc. v. O'Byrne, 996 S.W.2d 854, 861 (Tex. 1999) (vacating an award of damages for mental anguish because of legally insufficient evidence and reforming a judgment to reflect recalculated DTPA additional damages at three times actual damages); Tex. Mut. Ins. Co. v. Morris, 287 S.W.3d 401, 429 (Tex. App.—Houston [14th Dist.] 2009) (op. on reh'g) (reducing an award of actual damages for a claim under the insurance code and likewise modifying the award of additional damages), rev'd on other grounds, 383 S.W.3d 146 (Tex. 2012); Mitchell v. Webb, 591 S.W.2d 547, 551-52 (Tex. Civ. App.—Fort Worth 1979, no writ) (reducing the amount of actual damages awarded in a DTPA claim and likewise reducing the amount of trebled additional damages).
Hulcher requests only that we "apply the statutory cap considering any remaining actual damages." Hulcher does not ask us to remand the issue of additional damages based on any reduction of economic damages.
Conclusion
Having rejected Hulcher's arguments concerning the award of additional damages but having concluded that the award must be reduced, we sustain in part and overrule in part Hulcher's second issue to the extent that Hulcher complains about that award.
300-ton transporter standby
The jury awarded Emmert $200,000 for the amount of time that Emmert's transporter held Oncor's damaged transformer. The jury received evidence that Oncor used the transporter to hold the transformer from June 3, 2007 until August 8, 2007 and that Emmert's stand-by rate for use of the transporter is $4,800 per day. Multiplying the days that the transporter was out of service (because it was used by Oncor) by the daily rate, Emmert calculated the damages for the stand-by use of the transformer to be $321,600. Winters, Emmert's chief financial officer, testified that during the sixty-seven days, "the transporter was in use," and the cost was billable. Weir testified that such "demurrage fees" are customary in the industry.
Hulcher argues that Emmert cannot be awarded damages for Oncor's use of the transporter for sixty-seven days but instead may only be awarded damages for when Oncor's use of the transporter precluded Emmert from using it for other jobs. Although Hulcher concedes that Weir's testimony supports the notion that Emmert lost work because it could not use the transporter for other jobs for a portion of the sixty-seven days, it contends that this evidence "at most suggests that Emmert was damaged $96,000 for lost use of the [transporter]."
Weir testified that Emmert could have used the transporter on other jobs two to three times per month with an average of two to three days' use per job.
Hulcher, however, does not direct us to any authority establishing that its measure of damages concerning the transporter (restricting the damages to Emmert's lost use of the transporter for other jobs), rather than Emmert's measure (proposing damages for the unpaid actual use of the transporter by Oncor), is the legally correct one. In other words, Hulcher's briefing provides no support for its implicit argument that only evidence concerning other lost jobs using the transporter, rather than the unchallenged and actual use of the transporter by Oncor for more than two months that resulted directly from the toppling of the transformer, would support recoverable economic damages. Therefore, we conclude that this argument is inadequately briefed, and we overrule Hulcher's second issue to the extent that it complains about this $200,000 award. See Tex. R. App. P. 38.1(i) (requiring an appellant to provide appropriate citations to authorities that support each argument); Ross v. St. Luke's Episcopal Hosp., 462 S.W.3d 496, 500 (Tex. 2015) ("Failure to provide citations or argument and analysis as to an appellate issue may waive it."); Barnett v. Coppell N. Tex. Court, Ltd., 123 S.W.3d 804, 826 (Tex. App.—Dallas 2003, pet. denied) (overruling an issue in which an appellant argued about an allegedly improper measure of damages because the appellant cited no authority for the proposition that the measure was improper); Lujan v. Villa, No. 07-01-00277-CV, 2002 WL 1131005, at *5 (Tex. App.—Amarillo May 29, 2002, no pet.) (not designated for publication) (overruling part of an issue because the appellant did not "cite any legal authority [concerning] the controlling measure of damages").
Corporate and personnel charges
The jury also awarded Emmert $81,730 for "[c]orporate and [p]ersonnel charges." The trial court admitted Emmert's Exhibit 23, which details "Corporate Office Charges Related to Railcar Derailment." Specifically, the exhibit lists names of seven Emmert employees, states each employee's hourly rate, shows the number of hours each employee worked on issues relating to the derailment, multiplies the rate by the hours to reach a dollar sum for each employee, and adds each of those sums to reach the total of $81,730 for the seven employees.
The exhibit does not disclose the basis for computing the hourly rates, which range from $75 per hour to $975 per hour.
Hulcher contends that this single-page exhibit is insufficient to support the award. It argues that Emmert did not present testimony explaining the relationship between the exhibit and the charges and that the exhibit simply "purports to show the amount of time Emmert's [employees] spent on this situation, assigns an arbitrary hourly rate, and totals the numbers." Hulcher also contends that there is no evidence that Emmert "actually incurred any of the [award] it claims to have lost or that this was money that Emmert would not ordinarily have paid out to its corporate employees in its normal course of business."
Emmert contends that Exhibit 23 establishes the amount of time that its salaried corporate employees spent "on this situation based on hourly rates." Along with this exhibit, Emmert directs us to one excerpt of deposition testimony that was admitted at trial. That excerpt establishes that two of the seven employees listed on the exhibit—Terry M. Emmert and Roy Emmert—"spent at least one day at the yard inspecting the damage on the [railcar]."
We cannot conclude that Exhibit 23 and Emmert's selected record excerpt comprise legally sufficient evidence of economic damages—defined as pecuniary loss—produced by Hulcher's DTPA violations. See Tex. Bus. & Com. Code Ann. §§ 17.45(11), .50(a). "Pecuniary loss" is a "loss of money or something having monetary value." Black's Law Dictionary 1088 (10th ed. 2014); see also Penguin Indus., Inc. v. Junge, 589 S.W.2d 842, 848 (Tex. Civ. App.—Waco 1979, writ ref'd n.r.e.) ("[I]t has been . . . well-settled that 'pecuniary' losses may include the loss of services or labor or the loss of other things which may have monetary value."). But Emmert's evidence concerning this category of damages does not establish that it suffered a loss—the evidence does not show whether Emmert actually paid the seven employees for the time they spent on matters related to the derailment, does not show whether any time spent by the employees on this matter was time that they otherwise would not have worked, and does not show whether time spent by the employees on this matter could have been spent on other projects on which Emmert may have profited. As Hulcher argues, "there is no evidence that Emmert actually incurred any of the $81,730.00 it claims to have lost or that this was money that Emmert would not ordinarily have paid out . . . in its normal course of business." Thus, we conclude that the evidence is legally insufficient to support the jury's award of $81,730 for corporate and personnel charges, and we sustain Hulcher's second issue to that extent.
Emmert's unbilled services to Oncor
Next, the jury awarded Emmert $65,671.60 for "Unbilled Services Rendered to TXU/Oncor." The trial court admitted Exhibit 26, which is an invoice from Emmert to Oncor. The invoice, dated "10/24/2007," purports to charge Oncor $65,671.60 for "Pre Acc-see inv for [details]." The second page of the invoice breaks the $65,671.60 amount into several categories, including charges associated with Maxim Crane and a charge for using the railcar. According to Winters, the charges in Exhibit 26 reflect the amount that Emmert planned to charge Oncor before the railcar derailed, but Exhibit 26 does not reflect Emmert's costs related to its work for Oncor either before or after the derailment.
Emmert has directed us to no evidence establishing that it asked Oncor to pay this amount and that Oncor refused or that Oncor would have paid this amount following Emmert's derailment of the railcar but for Hulcher's acts occurring after the derailment. And we have not found such evidence. Furthermore, although the $65,671.60 sum appears to represent the amount of gross revenue that Emmert expected to collect from Oncor for Emmert's work before the derailment, Emmert has not directed us to evidence establishing the value of its costs for that work so as to indicate a net amount of profit. See Hunter Bldgs. & Mfg., L.P. v. MBI Glob., L.L.C., 436 S.W.3d 9, 18 (Tex. App.—Houston [14th Dist.] 2014, pet. denied) ("The calculation of lost-profits damages must be based on net profits, not gross revenue or gross profits."); see also Zeno Digital Sols., L.L.C. v. K Griff Investigations, Inc., No. 14-09-00473-CV, 2010 WL 3547708, at *4 (Tex. App.—Houston [14th Dist.] Sept. 14, 2010, no pet.) (mem. op.) ("Because K Griff failed to meet its burden of proving net profits, from which expenses had been subtracted, we hold that the evidence is legally insufficient to prove lost profit damages."); Texaco, Inc. v. Phan, 137 S.W.3d 763, 773 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (holding that evidence of lost profits damages was legally insufficient because "the Owners failed to meet their burden of proving net profits, from which expenses had been subtracted" to arrive at lost profits). Thus, we cannot conclude that the evidence is legally sufficient to show that Emmert suffered economic damages—a pecuniary loss—relating to its planned bill to Oncor for services rendered prior to the derailment. We sustain Hulcher's second issue to that extent.
Insurance policy deductibles
The jury awarded an aggregate amount of $30,000 for two insurance policy deductibles that Emmert paid. The reporter's record contains receipts indicating that Scottsdale Insurance Company required Emmert to pay a deductible of $25,000. Another exhibit appears to establish Emmert's responsibility to pay a $5,000 deductible. Winters testified that there were a "couple of insurance deductibles related to this event." But we have not located (nor has Emmert directed us to) any evidence in the vast record establishing what these deductibles relate to or that Hulcher's DTPA violations were the producing cause of Emmert's payment of them, nor have we found such evidence.
Furthermore, on appeal, Emmert represents that the $25,000 deductible relates to its general liability insurance policy. To the extent that Emmert contends that Hulcher should pay this amount as a way of compensating Emmert for its settlement with Oncor, Texas law appears to preclude that argument. See Beech Aircraft Corp. v. Jinkins, 739 S.W.2d 19, 22 (Tex. 1987) ("[A] defendant can settle only his proportionate share of a common liability and cannot preserve contribution rights under either the common law or the comparative negligence statute by attempting to settle the plaintiff's entire claim."); Filter Fab, Inc. v. Delauder, 2 S.W.3d 614, 617 (Tex. App.—Houston [14th Dist.] 1999, no pet.) ("Under Texas law it is a well[-]established principle that a joint tortfeasor who settles a lawsuit is not entitled to contribution from other tortfeasors.").
Thus, we conclude that the evidence is legally insufficient to prove that these insurance deductibles qualify as recoverable economic damages under the DTPA, and we sustain Hulcher's second issue to that extent. See Tex. Bus. & Com. Code Ann. §§ 17.45(11), .50(a).
Attorney's fees
The judgment awards $572,148.89 in attorney's fees (as incurred in the trial court) to Emmert. Hulcher challenges this award on the basis, in part, that it must be "remanded for recalculation based on the reduced award of damages." The precedent of our supreme court compels us to agree. See Bossier Chrysler-Dodge II, Inc. v. Rauschenberg, 238 S.W.3d 376, 376 (Tex. 2007); Barker v. Eckman, 213 S.W.3d 306, 314-15 (Tex. 2006); see also Arthur Andersen & Co., 945 S.W.2d at 818 (reciting the factors of the reasonableness of an attorney's fee award under the DTPA, including the "results obtained"); Acadia Healthcare Co., 472 S.W.3d at 104 (remanding a trial court's attorney's fee award for new trial when compensatory and exemplary damages were reduced on appeal); Powell Elec. Sys., Inc. v. Hewlett Packard Co., 356 S.W.3d 113, 129 (Tex. App.—Houston [1st Dist.] 2011, no pet.) ("Because we have meaningfully reduced the amount of HP's damages on appeal, we must reverse the attorney's fees award and remand for a determination of attorney's fees."). We sustain Hulcher's second issue to the extent that we reverse the award of attorney's fees.
Litigation expense
Finally, in its judgment, the trial court awarded Emmert its costs of court as set forth by an attached exhibit. Along with many other costs, that exhibit includes a $15,580.38 cost for the "[t]ime and expense for videographers and equipment during trial." Hulcher contends that Texas law does not authorize this cost to be awarded in a judgment.
A prevailing party to a suit is generally entitled to recover costs. See Tex. R. Civ. P. 131; see also Tex. Bus. & Com. Code Ann. § 17.50(d) (authorizing the award of court costs for a prevailing consumer in a DTPA action). Whether a particular expense is recoverable under a statute or rule as a court cost is a question of law that we review de novo. City of Houston v. Maguire Oil Co., 342 S.W.3d 726, 747-48 (Tex. App.—Houston [14th Dist.] 2011, pet. denied).
The term "costs" has an established meaning; it usually refers to fees and charges required by law to be paid to a court or court officers, the amount of which is fixed by statute or rules. Sterling Bank v. Willard M, L.L.C., 221 S.W.3d 121, 125 (Tex. App.—Houston [1st Dist.] 2006, no pet.); see Bill Miller Bar-B-Q Enters. v. Gonzales, No. 04-13-00704-CV, 2014 WL 5463951, at *4 (Tex. App.—San Antonio Oct. 29, 2014, no pet.) (mem. op.); see also Tex. Civ. Prac. & Rem. Code Ann. § 31.007(b) (West 2015) (describing recoverable costs payable to the county, the court reporter, and other court officers). "Costs, within the meaning of . . . the Rules of Civil Procedure, are those items in the clerk's bill of costs." Pitts v. Dallas Cty. Bail Bond Bd., 23 S.W.3d 407, 417 (Tex. App.—Amarillo 2000, pet. denied) (op. on reh'g), cert. denied, 531 U.S. 1151 (2001). Incidental litigation expenses, such as costs of experts, are not recoverable. Richards v. Mena, 907 S.W.2d 566, 571 (Tex. App.—Corpus Christi 1995, writ dism'd by agr.).
The trial court cited rule of civil procedure 141 to justify the videographer's cost. That rule states that a trial court may, "for good cause, . . . adjudge the costs otherwise than as provided by law or these rules." Tex. R. Civ. P. 141. But rule 141 does not authorize all expenses to be included as costs; instead, the rule gives trial courts discretion concerning which party should pay costs. See May v. Ticor Title Ins., 422 S.W.3d 93, 106 (Tex. App.—Houston [14th Dist.] 2014, no pet.) (stating that under rule 141, the "the power to allocate costs does not encompass the power to tax as costs items that are not allowed as taxable court costs"); see also Whitley v. King, 581 S.W.2d 541, 544-45 (Tex. Civ. App.—Fort Worth 1979, no writ) (noting that power to tax costs does not include power to tax items normally not allowed).
We have found no authority establishing that the expense of using a videographer and the videographer's equipment at trial is recoverable as a court cost. Instead, we conclude that this expense is incidental to litigation and is not recoverable. See Sterling Bank, 221 S.W.3d at 125 (explaining that generally, "expenses incurred in prosecuting or defending a lawsuit are not recoverable as costs"); Richards, 907 S.W.2d at 571. We sustain Hulcher's second issue to that extent.
In the exhibit that the trial court attached to the judgment, the court cited Operation Rescue-National v. Planned Parenthood of Houston & Southeast Texas, Inc., 937 S.W.2d 60, 87-88 (Tex. App.—Houston [14th Dist.] 1996), aff'd as modified, 975 S.W.2d 546 (Tex. 1998). There, a trial court had ordered the rental of a television and video recorder and later included the expense for the rental as a recoverable cost. Id. Emmert does not direct us to any place in the record in which the trial court ordered the videographer's services or equipment; thus, we conclude that Operation Rescue-National is inapposite.
Conclusion
Having overruled Hulcher's first issue, we affirm the trial court's judgment to the extent that the court finds Hulcher liable under the DTPA. Having overruled parts of Hulcher's second issue while sustaining other parts, we modify the trial court's judgment to award Emmert $192,000 in actual damages and $576,000 (three times the amount of actual damages) in additional damages under the DTPA. We reverse the trial court's award of attorney's fees to Emmert and remand the issue of attorney's fees for a new trial. We also modify the trial court's judgment to vacate the $15,580.38 cost, included in Exhibit A to the judgment, for the videographer's services and equipment. Finally, because we have modified the award of actual damages, we reverse the amount of prejudgment interest awarded to Emmert and remand that portion of the judgment to the trial court for a recalculation of prejudgment interest.
The jury awarded $2,417,401.60 in actual damages. The judgment reduced that amount by twenty percent—Emmert's percentage of liability found by the jury—to award Emmert $1,933,921.28 in actual damages. Emmert does not complain about this reduction.
Our analysis above requires us to uphold only the parts of the jury's verdict regarding damages in which the jury awarded $40,000 for "Post-Accident Transformer and Railcar Recovery" (which Hulcher does not challenge on appeal) and $200,000 for "300 Ton Transporter Standby." The sum of those two amounts is $240,000. Like the trial court, we reduce that amount by 20% to reach a sum of actual damages of $192,000.
SeeYoung, 223 S.W.3d at 315; Acadia Healthcare Co., 472 S.W.3d at 104.
SeeSmith v. Davis, 462 S.W.3d 604, 617 (Tex. App.—Tyler 2015, pet. denied) (op. on reh'g); Lee v. Lee, 411 S.W.3d 95, 115-16 (Tex. App.—Houston [1st Dist.] 2013, no pet.) ("Based on the reformed damages award, we vacate the award of prejudgment interest and remand to the trial court for a recalculation of interest."). --------
/s/ Terrie Livingston
TERRIE LIVINGSTON
CHIEF JUSTICE PANEL: LIVINGSTON, C.J.; GARDNER and MEIER, JJ. MEIER, J., filed a concurring and dissenting opinion. DELIVERED: January 28, 2016
Watts explained that after a failed attempt at rerailment, he again informed Clark that Hulcher needed more equipment, and Clark said that he had "two more tractors . . . and . . . [could] get them headed [that] way."