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affirming award of benefit-of-bargain damages based upon defendants' promise to repay investment to plaintiff after sale of business, even though business was never actually sold
Summary of this case from Clear Lake City Water Authority v. Friendswood Development Co.Opinion
No. 01-04-00267-CV.
February 16, 2007.
On Appeal from County Civil Court at Law No. 4 Harris County, Texas Trial Court Cause No. 752102.
Panel consists of Chief Justice RADACK and Justices TAFT and NUCHIA.
MEMORANDUM OPINION
Appellants, Lang Van Huynh ("Lang") and Sonny Van Huynh ("Sonny") (together "the Huynhs"), appeal from a judgment for fraud and breach of contract in favor of appellee, Tho Thi Phung ("Tho"). We determine whether the trial court erred because (1) the evidence is legally insufficient to support fraud; (2) the award of actual damages was improper; and (3) the award of exemplary damages violated constitutional due process or was factually insufficient. We modify the judgment to reduce the amount awarded to $20,000 in actual damages against the Huynhs, jointly and severally, and affirm the judgment as so modified, conditioned on a remittitur of $100,000 of the $200,000 exemplary damages awarded against each of the Huynhs. In the event that a remittitur is not filed with the Clerk of this Court within 20 days from the date of this opinion, we will reverse the judgment and remand the case to the trial court for a new trial.
Background
Tho sued to recover damages against the Huynhs for breach of contract and fraud, alleging that she had entered into an agreement with the Huynhs to invest $20,000 in the Huynhs' business in exchange for repayment of the loan and a percentage of profits. The Huynhs pleaded novation as an affirmative defense, claiming that they were not liable to Tho because she had substituted the debt that was the subject of her cause of action for a promissory note executed by a third party.
The evidence at trial showed that in either November or December of 1996, the Huynhs asked Tho to invest $100,000 in a shrimping dock business ("the business"). The Huynhs told Tho that once they had enough capital, they would purchase the business for $800,000 and then re-sell it within three months for $1,000,000.
Tho agreed to invest $20,000 on the condition that, within approximately three months, she would receive her initial investment back plus 10% of the projected $200,000 profit. After the three months had passed, Tho requested repayment from the Huynhs several times, but was denied. On or around June 1, 1997, Lang signed a $20,000 check ("the check") in repayment of Tho's initial investment, but that check was not paid by the bank because of insufficient funds. At the time of the trial, Tho neither had been repaid the $20,000 investment, nor had she received the money from the expected proceeds of the sale.
At trial, the Huynhs characterized the money exchange as a loan to another person, not an investment in their business. Specifically, the Huynhs claimed that Tho loaned money to Thomas Nguyen and that Lang was merely a guarantor. As evidence of this, the Huynhs introduced a promissory note that had handwritten comments in Vietnamese at the bottom. They claimed that this note, along with the additional comments, released Lang from the loan and therefore constituted a novation. However, Tho introduced the original note, which did not contain the additional handwriting at the bottom.
The jury found in favor of Tho on the breach-of-contract and fraud causes of action. The jury awarded out-of-pocket damages in the amount of $20,000, benefit-of-the-bargain damages in the amount of $20,000, and exemplary damages of $2,500,000. Tho elected to recover for fraud, instead of breach of contract, and voluntarily remitted exemplary damages to $200,000 per defendant, pursuant the statutory exemplary-damages cap. See TEX. CIV. PRAC. REM. CODE ANN. § 41.008 (Vernon 2002).
In the trial court's initial judgment, it awarded $20,000 in actual damages and $4,732.98 in interest against the Huynhs, jointly and severally, and $200,000 in exemplary damages against Sonny and Lang individually. Then, in its first amended judgment, the trial court awarded $20,000 in actual damages and $2,394.52 in interest, reducing interest to five percent. The exemplary-damages award remained the same.
Tho filed a motion to disregard the jury findings and to modify the judgment, stating that the "jury misunderstood the questions and mistakenly entered an amount less than intended" and that the "jury misguidedly took Plaintiff's counsel's suggestions literally." In a second amended judgment, the trial court awarded $40,000 in actual damages and $5,090.41 in interest against the Huynhs, jointly and severally, and $200,000 in exemplary damages against Sonny and Lang individually.
Legal-Sufficiency Challenge
In points of error one and two, the Huynhs allege that the trial court erred because there is no evidence to support the jury's liability finding on fraud and breach of contract.
A. Standard of Review and Law
A legal-sufficiency point must be sustained (1) when there is a complete absence of a vital fact; (2) when rules of law or evidence preclude according weight to the only evidence offered to prove a vital fact; (3) when the evidence offered to prove a vital fact is no more than a scintilla; or (4) when the evidence conclusively establishes the opposite of the vital fact. Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). Legal-sufficiency review in the proper light must credit favorable evidence if reasonable jurors could and disregard contrary evidence unless reasonable jurors could not. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). If the evidence would enable reasonable and fair-minded persons to differ in their conclusions, then jurors must be allowed to do so. Id. at 822. A reviewing court cannot substitute its judgment for that of the trier of fact, so long as the evidence falls within this zone of reasonable disagreement. Id. Although the reviewing court must "consider evidence in the light most favorable to the verdict and indulge every reasonable inference that would support it[,] . . . if the evidence allows of only one inference, neither jurors nor the reviewing court may disregard it." Id. Fraud must be proved at trial by a preponderance of the evidence. Browder v. Eicher, 841 S.W.2d 500, 502 (Tex.App.-Houston [14th Dist.] 1992, writ denied); see TEX. CIV. PRAC. REM. CODE ANN. § 41.003(a) (Vernon 2003); Sparks v. Dawson, 47 Tex. 138 (1877); Frankfurt v. Wilson, 353 S.W.2d 490, 496 (Tex.Civ.App. Dallas 1961, no writ). The following elements are required to prove fraud: (1) a material misrepresentation was made; (2) the misrepresentation was either known to be false when made or was asserted without knowledge of its truth; (3) the misrepresentation was intended to be acted upon; (4) the misrepresentation was relied upon; and (5) the misrepresentation caused injury. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001).
We recognize that proving fraud for exemplary damages requires proof by clear and convincing evidence, while proving fraud for actual damages requires proof only by a preponderance of the evidence. See Browder v. Eicher, 841 S.W.2d 500, 502 (Tex.App.-Houston [14th Dist.] 1992, writ denied); see TEX. CIV. PRAC. REM. CODE ANN. § 41.003(a) (Vernon 2003) (stating that exemplary damages are authorized when claimant proves by clear and convincing evidence that harm results from fraud, malice, or gross negligence).
Here, the jury made two separate findings regarding fraud. First, the jury found that the Huynhs committed fraud by a preponderance of the evidence. Then, the jury made a separate finding that the harm to Tho resulted from fraud by clear and convincing evidence and awarded exemplary damages. Because the Huynhs' first and second points of error and arguments do not concern exemplary damages, but, rather, liability, we do not address the jury's finding that the Huynhs' committed fraud by clear and convincing evidence. The Huynhs challenge regarding exemplary damages is addressed below.
A party to a contract has a duty to abstain from inducing another to enter the contract through the use of fraudulent misrepresentations. Haase v. Glazner, 62 S.W.3d 795, 798 (Tex. 2001). A promise to do an act in the future is actionable fraud when made with the intention, design, and purpose of deceiving and with no intention of performing the act. Formosa Plastics Corp. v. Presidio Eng'rs Contractors, Inc., 960 S.W.2d 41, 46 (Tex. 1998). Thus, to prove fraud in the inducement, a plaintiff must present evidence that is "relevant to [the defendant's] intent at the time the representation was made." Id. at 48. Failure to perform, standing alone, is not evidence of intent not to perform when the promise was made. Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 435 (Tex. 1986). That fact, however, is a circumstance to be considered with other facts to establish intent. Id. Because intent to defraud is usually not susceptible to direct proof, it may be proven by circumstantial evidence. Id. Slight circumstantial evidence of fraud, when considered with the breach of promise to perform, is sufficient to support a finding of fraudulent intent. Id. B. Fraud 1. No Evidence of Lang's Intent to Perform
We construe point of error one to argue only that there is no evidence that Lang did not intend to pay the loan because although "the Huynhs" are mentioned in passing twice in the argument, the subheading specifically names "Lang" and the argument pertains to Lang only.
In point of error one, Lang argues that "[b]ecause the only representation alleged and proved was the intent to repay a loan in the future, there is no evidence of fraud." Specifically, Lang argues that "[t]here is no evidence that [Lang] did not intend to perform at the time the promise was made."
Viewed in a light favorable to the judgment, the evidence showed that the Huynhs represented to Tho that they would repay the $20,000 investment and 10 percent of the profit made from selling the business within approximately three months. They did not repay Tho the initial $20,000 within the time promised, and they did not pay Tho $20,000 in proceeds from the sale of the business because no such sale occurred. When Lang gave a check to Tho in repayment of Tho's $20,000 initial investment with the Huynhs, the check was returned for insufficient funds. Although Lang contends that the check was merely collateral, and not repayment for an investment with Tho, Lang nonetheless testified to the jury he did not have the money in the account when he wrote the check.
In addition, Lang contended that in a meeting on July 4, 1997, Tho agreed to shift liability from Lang to Thomas. Lang testified that David Nguyen, Tho's son, prepared a promissory note to reflect the novation of the security agreement. Thomas testified that he added a notation to the promissory note at the request of Lang and Tho because Lang could not read English. Lang introduced into evidence a promissory note that included a notation that stated in Vietnamese, "This loan of $20,000 since April 7th, 1997 was the amount indicated in the check 225. Signed on [the] 1st, the month of June 1997 under the name of [Lang], Houston, Texas, April 7, 1997." At trial, Tho introduced the original note that did not contain the additional notation. The jury made a specific finding that the promissory note was altered "with intent to defraud or harm another." Tho, David, and Anna Luu, manager of Tho's restaurant at that time, testified that the loan to Thomas was a separate transaction that did not involve Lang. In support of this theory, Thomas admitted that neither he nor his wife had made the interest payments to Tho. Because slight circumstantial evidence of fraud in combination with Lang's failure to perform is sufficient to support a finding of fraudulent intent, we hold, after viewing the evidence in the light most favorable to the judgment, that the above evidence is more than a scintilla of evidence that Lang did not intend to perform at the time that the promise was made.
Thomas had borrowed money from Tho for his son's criminal defense legal fees. A separate lawsuit was filed and judgment entered against Thomas for his loan from Tho.
Because the Huynhs raise no further challenges to the jury's fraud finding against Lang, we further hold that the evidence was legally sufficient to show that Lang committed fraud.
In contrast to Sonny's challenge on appeal, Lang does not challenge the factual sufficiency of the jury's breach-of-contract finding in point of error one, but, rather, argues that Lang's failure to repay the money to Tho was a breach of contract, not fraud.
We overrule point of error one.
2. No Evidence of Sonny's Misrepresentation
In point of error two, Sonny argues that "[b]ecause there is no evidence that [Sonny] made a fraudulent promise or entered into a contract, he should not be included in the judgment." Specifically, Sonny argues that he did not make a material misrepresentation on which Tho relied and that he was not a party to the contract.
Tho and David testified that both Sonny and Lang solicited money from her and that both made requests to borrow money. Tho testified as follows:
[The Huynhs' Attorney]: Did [Sonny] ever indicate that he wanted a loan from you?
[Tho]: Always father and son together.
. . .
[The Huynhs' Attorney]: Did [Sonny] borrow $20,000 or did [Lang]?
[Tho]: [Lang] and [Sonny]. The two together.
[The Huynhs' Attorney]: What did Sonny say to [Tho] that indicated that he wanted to borrow money?
[Tho]: He said that he wanted to buy the dock but didn't have enough money.
Viewed in the required light, the evidence further showed that the Huynhs came to Tho's restaurant and told her that they were co-owners of the business. They approached her together about borrowing $100,000 to buy a business. In December 1996, Tho invested $20,000 in the Huynhs' business. Tho and David visited the shrimping dock, where they met with both Sonny and Lang. Sonny asked Tho for more time so that he and Lang could sell the business. Tho and David again visited the business in June 1997, at which time Sonny gave a check to Lang, who signed the check to Tho. The named account owners on the check are listed as "Lang Van Huynh or Sonny K. Huynh." At the time the check was written, Sonny and Lang told Tho that the money was in the account. Tho also testified:
[The Huynhs' Attorney]: What exactly did [Sonny] say to [Tho] that made her think that he borrowed money from her?
[Tho]: He said that [Lang] and he [sic] in the same corporation, and that they have equal authority.
We hold that there was more than a scintilla of evidence that Sonny made a material misrepresentation on which Tho relied. Because the Huynhs raise no more challenges to the fraud finding against Sonny, we further hold that the evidence was legally sufficient to support the fraud finding against Sonny.
Because we hold that there was legally sufficient evidence to support findings of fraud against the Huynhs, we do not address their challenges under point of error two regarding the finding that Sonny breached the contract.
We overrule point of error two.
Actual Damages
The jury awarded $20,000 in out-of-pocket damages and $20,000 in benefit-of-the-bargain damages to Tho on the fraud cause of action. The trial court originally rendered judgment for $20,000 in total actual damages, reciting in its first two judgments that out-of-pocket and benefit-of-the-bargain damages were alternative measures of damages for fraud and that Tho thus could be awarded only one of them, or $20,000 total. However, in its third and final judgment, rendered upon Tho's motion to disregard the jury verdict on actual damages for fraud, the trial court awarded Tho $40,000 in actual damages. In a separate, but contemporaneous, order on Tho's motion to disregard the referenced jury finding, the trial court recited that Tho was entitled "to recover $40,000 as actual damages, which is composed of $20,000 for the return of her capital and $20,000 for gross profits she was promised."
Jury question four provided, in pertinent part:
QUESTION 4:
What sum of money, if any, if paid in cash, would fairly and reasonably compensate Plaintiff for her damages, if any, that resulted from such fraud?
INSTRUCTIONS:
In answering questions about damages, answer each question separately. Do not increase or reduce the amount in one answer because of your answer to any other question about damages. . . .
1. The amount of money that Defendant(s) received from Plaintiff:
$20,000
2. The difference, if any, in the value that Plaintiff received and the value it [sic] would have had if it had been as represented.
$20,000
The actual-damages question for breach of contract was answered similarly.
In point of error three, the Huynhs argue that "the actual damages in the judgment should be reduced from $40,000 to $20,000." The Huynhs raise four arguments in support. First, they argue that the trial court's judgment impermissibly awarded Tho a double recovery of both out-of-pocket and benefit-of-the-bargain damages for fraud. Second, and alternatively, the Huynhs argue that, even if the jury correctly awarded Tho $20,000 as benefit-of-the-bargain damages based on her testimony that the parties' contract called for her to recover her $20,000 investment in the business, the jury could not have found an additional $20,000 in benefit-of-the-bargain damages for lost profits from the business's sale because no such sale took place. Third, and alternatively, the Huynhs argue that the jury could not have found the additional $20,000 in benefit-of-the-bargain damages for lost profits from the business's sale because Tho's testimony of lost profits was speculative and thus incompetent. Fourth, the Huynhs argue that Tho was estopped from asking the court to disregard the jury's actual-damages award for fraud because her counsel told the jury, in closing argument, to award $20,000 for out-of-pocket damages and $20,000 for benefit-of-the-bargain damages for fraud and for breach of contract. A. Standard of Review
"A trial court may disregard a jury finding only if it is unsupported by evidence . . . or if the issue is immaterial." Spencer v. Eagle Star Ins. Co. of Am., 876 S.W.2d 154, 157 (Tex. 1994); see TEX. R. CIV. P. 301. Accordingly, a trial court may not disregard a jury finding "that has some support in the evidence, even though the great weight and preponderance of the evidence may be to the contrary." Harris County v. McFerren, 788 S.W.2d 76, 78 (Tex.App.-Houston [1st Dist.] 1990, writ denied). Likewise, "[a] trial court may not properly disregard a jury's negative finding and substitute its own affirmative finding unless the evidence conclusively establishes such an affirmative finding." Id.
"A contention on appeal that an answer to a jury question should not have been disregarded presents a `no evidence' point." Id. Therefore, "[t]o sustain the trial court's action in granting a motion to disregard the jury's answer to a specific question, an appeals court must determine that there is no evidence upon which the jury could have made the finding." Id. In making this determination, "all evidence must be considered in the light most favorable to the party against whom the motion is sought, and every reasonable inference deducible from the evidence is to be indulged in that party's favor." Id. B. Lost Profits 1. The Law
"Texas recognizes two measures of direct damages for common-law fraud: the out-of-pocket measure and the benefit-of-the-bargain measure." Formosa Plastics Corp. USA, 960 S.W.2d at 49. "The out-of-pocket measure computes the difference between the value paid and the value received, while the benefit-of-the-bargain measure computes the difference between the value as represented and the value received." Id. "Under the benefit-of-the bargain measure, lost profits on the bargain may be recovered if such damages are proved with reasonable certainty." Id.
Although "a benefit-of-the-bargain measure [of damages] can include lost profits, it only compensates for the profits that would have been made if the bargain had been performed as promised." Id. "[D]etermining whether lost profits have been proved with reasonable certainty is a fact-intensive determination dependent upon the circumstances of a particular case." Id., 960 S.W.2d at 50 n. 3. The bottom line, however, is that "[w]hen a review of the surrounding circumstances establishes that the profits are not reasonably certain, there is no evidence to support the lost profits award." Id. For example, although "`[i]t is not necessary that profits should be susceptible of exact calculation,'" anticipated profits nonetheless "`cannot be recovered where they are dependent upon uncertain and changing conditions, such as market fluctuations, or the chances of business, or where there is no evidence from which they may be intelligently estimated.'" Tex. Instruments, Inc. v. Teletron Energy Mgmt., Inc., 877 S.W.2d 276, 279 (Tex. 1994) (quoting SW. Battery Corp. v. Owen, 115 S.W.2d 1097, 1098-99 (Tex. 1938)) (emphasis added).
Profits which are largely speculative, as from an activity dependent on uncertain or changing market conditions, or on chancy business opportunities, or on promotion of untested products or entry into unknown or unviable markets, or on the success of a new and unproven enterprise, cannot be recovered. Factors like these and others which make a business venture risky in prospect preclude recovery of lost profits in retrospect.
Id. (emphasis added).
2. The Evidence
Tho's lost-profits evidence, viewed in the appropriate light, was as follows. The Huynhs approached Tho for an investment of $100,000 to buy a shrimping dock business for $800,000, which the Huynhs then wished to sell quickly for a profit. Tho instead invested only $20,000, with the understanding that she would get back that capital investment plus 10% of the profit from the business's sale. The Huynhs also told Tho that they anticipated selling the business within three months for $1,000,000. The record is unclear about whether the Huynhs told Tho that they actually had a buyer ready to purchase for $1,000,000 in three months or whether they only anticipated finding a buyer. For example, David testified that Lang " have [sic] a buyer that he could sell the business after three months" and that "he have [sic] a seller [sic] to sell the business," but he also testified that Lang " can have a buyer that he can sell it [sic] for one million dollars" and that "he want [sic] to sell the business for one million dollars. (Emphasis added.) Tho also testified that Lang "said the quickest time [to sell] would be three months." Viewing this unclear testimony in the light most favorable to the jury's finding awarding only Tho's capital investment of $20,000, we must conclude that Lang meant only that he anticipated finding such a buyer, not that he already had one.
Some time after the three months had expired without repayment to Tho, she and David visited the dock and saw the Huynhs working there. The Huynhs told them at that time that they had to wait for the sale to occur because business was slow in the wintertime. Tho and David did not know if the business was ever sold or listed for sale, whether the business was owned or leased by the Huynhs, or whether the business was a corporation or individually owned.
We hold that this evidence is too speculative to prove lost profits from the sale of the Huynhs' business. Tho based her estimate of $20,000 in lost profits only on the Huynhs' estimate that they anticipated selling the business for $1,000,000. Tho provided no evidence of how much the Huynhs actually invested in the business; of anything more specific about the operations of this new business than that the Huynhs bought a dock in Kemah, Texas, where they purchased shrimp wholesale; of how profitable this new business would actually be; or of a fair-market value for such a shrimping and dock business at that time and location. The Huynhs concede on appeal that there is legally sufficient evidence to support the jury's finding on benefit-of-the-bargain damages because of the testimony that the Huynhs agreed to repay Tho her initial investment after they had sold the business. See McFerren, 788 S.W.2d at 78 (indicating that trial court may not disregard jury finding with some evidentiary support). There is no competent evidence, however, of the profits that Tho would have received from the sale of the Huynhs' business. Accordingly, we further hold that the trial court erred in disregarding the jury verdict on the basis that Tho had allegedly conclusively proved an additional $20,000 in lost profits as benefit-of-the-bargain damages. See id. (indicating that trial court may not disregard jury's negative finding and substitute court's own affirmative finding unless evidence conclusively establishes such affirmative finding).
C. Double Recovery
Neither can the trial court's disregard of the jury's actual-damages finding for fraud be supported by awarding Tho both out-of-pocket and benefit-of-the-bargain damages, for a total of $40,000. "A plaintiff may recover either the out of pocket or the benefit of the bargain damages, whichever is greater." Latham v. Castillo, 972 S.W.2d 66, 70 (Tex. 1998). These damages are alternatives: a plaintiff may not recover both. Nelson v. Najm, 127 S.W.3d 170, 176 (Tex.App.-Houston [1st Dist.] 2003, pet. denied); Foley v. Parlier, 68 S.W.3d 870, 885 (Tex.App. — Fort Worth 2002, no pet.). Accordingly, the trial court's judgment disregarding the jury's actual-damages finding for fraud cannot be supported on this ground.
D. Tho's Arguments
In her motion to disregard the jury's actual-damages findings for fraud, Tho argued that "the jury misunderstood the questions and mistakenly entered an amount less than intended"; that the jury "clearly intended to award [Tho] $40,000 . . ."; that the jury "of course, intended to award [Tho] $40,000 . . ."; and that the court should "modify the judgment to reflect the actual damages that the jury intended to award [Tho]." She also urged that $40,000 was "legally established" (which we interpret to mean conclusively proved) by the evidence and also "by the great weight and preponderance of the evidence." On appeal, in response to the Huynhs' point of error three, Tho reasserts these arguments.
Tho's arguments evidence a misunderstanding of the law. Whether the jury was "mistaken" in its award, or whether the great weight and preponderance of the evidence is contrary to the jury's finding, is not the standard for determining whether a trial court erred in disregarding a jury finding. See McFerren, 788 S.W.2d at 78. Rather, the correct standard is whether some evidence, viewed in the most favorable light, supports the jury's finding; if the answer is yes, then the finding may not be disregarded. See TEX. R. CIV. P. 301; Spencer, 876 S.W.2d at 157; McFerren, 788 S.W.2d at 78. Additionally, we have already rejected the argument that Tho conclusively proved $40,000 in benefit-of-the-bargain damages because her testimony of $20,000 in lost profits was speculative and thus incompetent.
Finally, we note that the jury's finding of $20,000 for benefit-of-the-bargain damages for fraud was exactly what Tho's counsel's closing argument asked the jury to find:
The damages are the same for these two questions. It's $20,000 they got from her and $20,000 is what they told her she was going to get. This is the difference in what she would have received.
Tho's counsel made a similar argument concerning contract-breach damages. We find it hard to imagine that, given counsel's explicit instructions to enter only $20,000 for benefit-of-the-bargain damages for fraud, the jury was somehow mistaken or confused in awarding that exact sum. A party cannot ask the jury to award a sum certain and then complain when the jury follows that request. See Tex. Mut. Ins. Co. v. Ray Ferguson Interests, Inc., No. 01-02-00807-CV, 2006 WL 648834, at *14 (Tex.App.-Houston [1st Dist.] Mar. 16, 2006, pet. denied.) (memo. op.) ("In closing argument, the Fund reiterated that the jury could use either method to calculate its attorney's fees. . . . The Fund cannot tell the jury that it may award fees on either of two bases and then, on appeal, challenge the fees that the jury awarded on the ground that the jury chose one of the bases that the Fund itself suggested.").
E. Conclusion
For the reasons stated above, we sustain the Huynhs' point of error three.
Exemplary Damages
The jury awarded a total of $5,000,000 in exemplary damages to Tho — $2,500,000 against each of Huynhs. However, the final judgment awarded Tho $200,000 in exemplary damages because Tho agreed voluntarily to remit exemplary damages to the statutory cap limit. See TEX. CIV PRAC. REM CODE ANN § 41.008 (Vernon Supp. 2006).
In point of error four, the Huynhs argue that "[t]he judgment should be reversed and remanded or remitted, because the award of exemplary damages violates constitutional due process and is not supported by the evidence."
A. Waiver
Tho contends that the Huynhs waived their right to object to the exemplary damages awarded "because it was never plead [sic] and therefore is waived."
Questions of the excessiveness of actual damages and requests for remittitur present challenges to the factual sufficiency of the evidence. Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406 (Tex. 1998); Carter v. Steverson Co., 106 S.W.3d 161, 168 (Tex.App. — Houston [1st Dist.] 2003, pet. denied); Hawthorne v. Guenther, 917 S.W.2d 924, 937 (Tex.App.-Beaumont 1996, writ denied). Because the remedy sought by a factual-sufficiency challenge is a new trial, factual-sufficiency complaints must be preserved by a motion seeking that relief. TEX. R. CIV. P. 1324(b)(4); C.M. Asfahl Agency v. Tensor, Inc., 135 S.W.3d 768, 796 (Tex.App.-Houston [1st Dist.] 2004, no pet.); McDade v. Tex. Commerce Bank, 822 S.W.2d 713, 721 (Tex.App.-Houston [1st Dist.] 1991, writ denied). A request for relief by remittitur must, therefore, be preserved in the trial court by a motion that seeks remittitur, whether filed independently or as part of a motion for new trial. See Hawthorne, 917 S.W.2d at 937. Accordingly, we reject Tho's contention because the Huynhs raised this argument in their "Motion for New Trial/and or Motion for Remittitur," which properly preserved their exemplary-damages complaint.
B. Merits
1. Standard of Review
The Texas Supreme Court has explained, the standard of review for an excessive damages complaint is factual sufficiency of the evidence. Maritime Overseas Corp., 971 S.W.2d at 406. A court of appeals may vacate a damage award or suggest a remittitur only if the evidence for the award is "so factually insufficient or so against the great weight and preponderance of the evidence as to be manifestly unjust." Transp. Ins. Co. v. Meriel, 879 S.W.2d 10, 30 (Tex. 1994) (quoting Pope v. Moore, 711 S.W.2d 622, 624 (Tex. 1986)). Accordingly, in assessing the Huynhs' challenge to the factual sufficiency of the evidence to support the jury's findings of exemplary damages, we must weigh all the evidence both that supporting and that conflicting with the finding, and may set aside the finding only if it is so against the great weight and preponderance of the evidence as to be clearly wrong and manifestly unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Minucci v. Sogevalor, S.A., 14 S.W.3d 790, 794 (Tex.App. — Houston [1st Dist.] 2000, no pet.); see also Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986). In conducting our review, however, we must be mindful of the fact finder's role as the sole determiner of credibility of the witnesses and the weight to give their testimony and may not substitute our opinion for the fact finder's solely because we might have resolved the facts differently. Herbert v. Herbert, 754 S.W.2d 141, 144 (Tex. 1988); M.D. Anderson Hosp. Turnover Inst. v. Felter, 837 S.W.2d 245, 247 (Tex.App.-Houston [1st Dist.] 1992, no pet.).
In the portion of their brief that challenges the sufficiency of the evidence for exemplary damages, the Huynhs argue only that the evidence is factually insufficient under Kraus because it is "against the great weight and preponderance of the evidence."
In considering the Huynhs' challenge to the constitutionality of the jury's findings of exemplary damages, our review is de novo. See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 418, 123 S. Ct. 1513, 1520 (2003); Bunton v. Bentley, 153 S.W.3d 50, 54 (Tex. 2004). Under the Due Process Clause of the Fourteenth Amendment, based on "elementary notions of fairness enshrined in our constitutional jurisprudence," exemplary damages must not be grossly excessive or arbitrarily imposed on the tortfeasor. Campbell, 538 U.S. at 416-17, 123 S. Ct. at 1519-20 (citing Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 433-34, 121 S. Ct. 1678, 1684 (2001)); see Bunton, 153 S.W.3d at 54 (citation omitted) (holding that de novo review is appropriate to "ensure that exemplary damages are not `grossly disproportional' to the gravity of the defendant's conduct"). We assume that a plaintiff is made whole by compensatory damages and that exemplary damages are awarded only for the purposes of deterrence or retribution. Campbell, 538 U.S. at 416, 419, 123 S.Ct. at 1521.
2. Applicable Law
In reviewing whether the jury's finding of exemplary damages violates the Huynhs' due process rights, we examine the three guideposts adopted by the United States Supreme Court: (1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the exemplary damages awarded; and (3) the difference between the exemplary damages awarded by the jury and the civil penalties authorized or imposed in comparable cases. Campbell, 538 U.S. at 418, 123 S. Ct. at 1520 (citing BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 575, 116 S. Ct. 1589, 1598 (1996)); see also Tony Gullo Motors I, L.P. v. Chapa, No. 04-0961, 2006 WL 3751591, at *4 (Tex. Dec. 22, 2006) (holding that Gore guideposts apply to appellate court's remittitur of exemplary damages).
The first Gore guidepost, degree of reprehensibility, is the most important factor in considering the reasonableness of a punitive damages award. See Campbell, 538 U.S. at 419, 123 S. Ct. at 1520 (quoting Gore, 517 U.S. at 575, 116 S. Ct. at 1599). However, we remain mindful that "[t]hese [ Gore] factors are intertwined with each other and cannot be viewed in isolation." Bunton, 153 S.W.3d at 54. To determine the degree of reprehensibility, we consider five factors: (1) whether the harm was physical or economic; (2) whether the conduct constituted an indifference to or reckless disregard of the health or safety of others; (3) whether the target of the conduct was financially vulnerable; (4) whether the conduct was a repeated or an isolated event; and (5) whether the harm was the result of intentional malice, trickery, deceit or mere accident. Campbell, 538 U.S. at 419, 123 S. Ct. at 1521 (citing Gore, 517 U.S. at 576-77, 116 S. Ct. at 1599). The presence of any one of these factors may still not be enough to support an award of exemplary damages. Id. The absence of all of these factors renders the award suspect. Id.
As explained below, the Kraus factors, which provide the framework for our factual-sufficiency review of exemplary damages, are considerations encompassed within the Gore guideposts. See Alamo Nat'l Bank v. Kraus, 616 S.W.2d 908, 910 (Tex. 1981). The Kraus factors include: "(1) the nature of the wrong, (2) the character of the conduct involved, (3) the degree of the culpability of the wrongdoer, (4) the situation and sensibilities of the parties concerned, and (5) the extent to which such conduct offends a public sense of justice and propriety." Kraus, 616 S.W.2d at 910.
For the second Gore guidepost, the disparity between harm suffered and the exemplary damages awarded, we recognize that there is no mathematical formula, bright-line ratio, or rigid benchmark for determining the reasonableness and proportionality of the award. See Campbell, 538 U.S. at 424-25, 123 S. Ct. at 1524. However, single-digit multipliers ( e.g., five-to-one ratio of exemplary damages to actual damages) are more likely to comport with due process. See id. at 425. Ultimately, our determination is based on the facts and circumstances of the defendant's conduct and the harm to the plaintiff. Id.
For the third Gore guidepost, we compare the exemplary damages awarded to civil or criminal penalties imposed in comparable cases. Id. at 428, 123 S. Ct. at 1526. However, we analyze comparable criminal penalties only in the context of seriousness of the action and not for determining the dollar amount of the award. Id.
The factors set forth in Alamo National Bank v. Kraus, 616 S.W.2d 908, 910 (Tex. 1981), provide the framework for our factual-sufficiency review of exemplary damages. See Meriel, 879 S.W.2d at 31(holding that when conducting factual-sufficiency review of exemplary-damage awards, court of appeals must detail relevant evidence and explain why evidence does or does not support award in light of Kraus factors); see also Dillard Dept. Stores, Inc. v. Silva, 148 S.W.3d 370, 373 (Tex. 2004) (stating that Kraus factors have value in determining reasonableness of exemplary-damages award, but are not substitute for threshold inquiry of whether exemplary damages should be awarded in first place). In determining the amount of exemplary damages, the trier of fact considers: (1) the nature of the wrong; (2) the character of the conduct involved; (3) the wrongdoer's degree of culpability; (4) the situation and sensibilities of the parties concerned; (5) the extent to which such conduct offends a public sense of justice and propriety; and (6) the net worth of the defendant. See Kraus, 616 S.W.2d at 910; TEX. CIV. PRAC. REM. CODE ANN. § 41.011 (Vernon 1997). The award of exemplary damages must be specific as to each defendant. Kraus, 616 S.W.2d at 910.
We may reverse an exemplary-damages award or suggest a remittitur if we determine that the evidence supporting the award is so factually insufficient or the verdict is so against the great weight and preponderance of the evidence as to be manifestly unjust. C.M. Asfahl Agency, 135 S.W.3d at 797. When reviewing an exemplary damages verdict for excessiveness, we must detail the relevant evidence and explain why, in light of the Kraus factors, the evidence either supports or does not support the exemplary damages award. Kraus, 616 S.W.2d at 910; Ellis County State Bank v. Keever, 915 S.W.2d 478, 479 (Tex. 1995); see Meriel, 879 S.W.2d at 31.
Accordingly, we review the relevant evidence in light of the Kraus factors and the three guidelines required by Gore. See Apache Corp. v. Moore, 960 S.W.2d 746, 748-49 (Tex.App.-Amarillo 1997, writ denied) (noting first four Kraus factors are addressed by first Gore guideline and deeming Kraus factors to be continuing considerations within framework of Gore guidelines). 3. Factual Sufficiency of Exemplary Damages
We note that "the purpose of punitive damages is to protect society by punishing the offender rather than to compensate the injured party." Hammerly Oaks, Inc. v. Edwards, 958 S.W.2d 387, 391 (Tex. 1997).
We first consider the relevant evidence in light of the Kraus factors. See Kraus, 616 S.W.2d at 910. The Huynhs argue that the evidence is factually insufficient under Kraus to support the exemplary damages findings because the jury's findings and award are "so against the overwhelming weight of the evidence as to be manifestly unjust." After reviewing all the relevant evidence, we conclude that the jury could have found that the evidence supporting the award was factually sufficient under Kraus. See id. The jury made a specific finding that the promissory note was altered "with intent to defraud or harm another." The jury's finding of fraud, and thus implicit finding of malice, evidences some degree of reprehensibility.
We consider the evidence as to the nature of the wrong, the character of the Huynhs' conduct involved, the degree of the Huynhs' culpability, and the extent to which the Huynhs' conduct offends a public sense of justice and propriety. Our review of the factual sufficiency of the evidence shows that the Huynhs did not repay Tho the $20,000 initial investment or 10% of the projected $200,000 profit from the sale of the business because no such sale occurred. Lang testified that as part of his divorce he transferred the business and all of the marital assets to his wife and retained responsibility for all of the liabilities. When asked for repayment, Lang wrote Tho a check from an account with insufficient funds. Lang testified to the jury that he did not have the money in the account when he wrote the check.
Lang was represented by an attorney in the divorce, but his wife was not.
The evidence was also factually sufficient for the jury to have determined that the Huynhs' actions in consciously concealing the nature of the agreement were calculated. In considering the evidence as to the situation and sensibilities of the parties concerned, we note that the Huynhs attempted to claim that they had not borrowed the money and that Tho had released them from liability. At trial, the Huynhs characterized the money exchange as a loan to another person, not as an investment in their business. Specifically, the Huynhs claimed that Tho had loaned money to Thomas and that Lang had been merely a guarantor. Lang testified that he wrote the check as security for a loan to Thomas. The Huynhs introduced a copy of a promissory note that had handwritten comments in Vietnamese at the bottom that stated, "This loan of $20,000 since April 7th, 1997, was the amount indicated in the check 225. Signed on [the] 1st, the month of June, 1997 under name of [Lang]." Thomas and Lang testified that Thomas had added the Vietnamese translation upon the request of Tho and Lang. The Huynhs claimed this note, along with the additional handwritten comments, released Lang from liability. However, Tho introduced the original note, which did not contain the additional handwritten comments at the bottom. The Huynhs could not explain why the terms of the original note did not match those of the copy introduced by the Huynhs.
Sonny claimed that Lang had written the check on December 1, 1996 and post-dated the check for June 1, 1997. Likewise, Lang testified that he had written the check on June 1, 1996 and post-dated it for one year to June 1, 1997.
Tho, David, and Anna testified that Tho had loaned money to Thomas, but that that loan was a separate transaction that did not involve the Huynhs. Tho introduced evidence that Thomas borrowed money from Tho to pay for his son's bail and legal fees. A separate lawsuit was filed against Thomas, and a default judgment was entered against him for that loan.
Lang denied that Sonny was in business with him. Sonny testified that he was not a party to the contract and had no personal knowledge of the check. However, in the Huynhs' first amended petition, Sonny alleged as follows: "I Sonny, testify that the check was actually written and signed on or about December 1st, 1996, but postdated to June 1st, 1997." Lang and Thomas also testified that Sonny was in Vietnam during the time of the transaction. To the contrary, Sonny testified that he was in Texas during the time of the transaction. Sonny produced a copy of his passport, of which several pages were missing for the latter half of 1996. Lang later admitted that Sonny was in the United States in 1997. Additionally, Tho and David visited the shrimping dock where both Sonny and Lang were working. The check that was given to Tho for repayment of her initial investment listed both Lang and Sonny as the account owners.
In considering all the evidence, we conclude that the jury could reasonably have inferred from the evidence that the Huynhs' conduct was reprehensible. We hold that the evidence was factually sufficient to support the jury's exercise of discretion to award exemplary damages against the Huynhs and in favor of Tho. See N. Am. Refractories Co. v. Easter, 988 S.W.2d 904, 920-21 (Tex.App.-Corpus Christi 1999, pet. denied) (applying Kraus factors to find evidence factually sufficient to support exemplary-damages award).
4. Constitutional Excessiveness of Exemplary Damages
Next, we consider the three Gore principles in turn. First, we consider the degree of reprehensibility of the Huynhs' conduct. There is no evidence that the harm to Tho was physical. Neither was there evidence that the harm showed a reckless disregard or indifference for Tho's health or safety or the health or safety of others. The record reflects that Tho was not an overly vulnerable target financially because she dispensed loans on occasion, owned a restaurant, and did not expect to be repaid for the $20,000 in capital that she invested with Lang for at least three months. The transaction was also a one-time event.
David testified that people would borrow money from Tho in cash. He testified that people had asked to borrow money from Tho on several occasions, and would ask him to introduce them to Tho to get a loan.
The jury made a specific finding that the promissory note was altered "with intent to defraud or harm another." That finding, along with the finding of fraud by clear and convincing evidence, evidenced the jury's implicit belief in a degree of reprehensibility sufficient to show malice, trickery, or deceit. The evidence showed that Lang denied ever having borrowed money from Tho. Lang testified that the check was merely collateral for a third-party loan and could be cashed if Thomas defaulted on his interest payments to Tho; yet, the check was returned for insufficient funds when cashed. Lang was unable to verify the date that the check was written and whether there were sufficient funds in the account at that time. Lang asserted that the promissory note with the Vietnamese handwriting at the bottom released his obligation to Tho. Tho introduced the original note, which did not contain the additional notation. Although the jury's finding of fraud, and thus implicit finding of malice, evidences some degree of reprehensibility, we believe that that factor alone is insufficient to support the amount of exemplary damages awarded. This is not to say that no exemplary-damages award is supported by the evidence, but, rather, that the amount awarded was excessive in light of the first Gore guidepost.
In our analysis of the second Gore guidepost, we first reject the Huynhs' argument that damages should be assessed based on a ratio of combined exemplary damages to compensatory damages, rather than, as Tho argues, based on a ratio of individual exemplary damages to compensatory damages. Because exemplary damages are awarded on an individual basis and require separate jury findings as to each defendant, the proper method for reviewing the constitutionality of exemplary damages is to compare the exemplary damages awarded against each individual with the compensatory damages awarded against that individual. Accordingly, the proper comparison here is the amount of the exemplary damages awarded against each of Lang and Sonny ($200,000) to the amount of the compensatory damages that should have been awarded against Lang and Sonny jointly and severally ($20,000). This is a 10-to-one ratio.
We are mindful of the Supreme Court's instruction that "few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process." Campbell, 538 U.S. at 425, 123 S. Ct. at 1524. Because the 10-to-one ratio of damages in this case exceeds single digits, we closely examine the facts and circumstances of this case in determining whether the award of exemplary damages is reasonable and proportionate to the harm. See Gullo Motors I, L.P., 2006 WL 3751591, at *4; Bunton, 153 S.W.3d at 53. The facts and circumstances of this case, as discussed above in the first prong of Gore, indicate that the harm meriting exemplary damages was based on the transaction between Tho and the Huynhs. Although the harm resulted from the Huynhs' malice, trickery, or deceit, there was no physical harm, Tho was not a terribly vulnerable financial target, and the transaction was a one-time event. The harm to Tho was purely economic. Thus, we conclude that the disparity between the harm and the amount of exemplary damages awarded is too great and, therefore, that the award cannot be supported by the second Gore guidepost. Cf. Gullo Motors I, L.P., 2006 WL 3751591, at *4 (holding that amount awarded by court of appeals exceeded constitutional limitations on exemplary damages considering that defendant's fraudulent actions, although deceitful, did not cause physical, rather than economic, harm; did not threaten health or safety of others; did not involve repeated acts; and were not aimed at financially vulnerable plaintiff).
In analyzing the third prong of Gore, we consider comparable criminal penalties. Under section 32.46 of the Texas Penal Code, securing execution of a document by deception is a third-degree felony if the value of the pecuniary interest is $20,000 or more but less than $100,000 and is punishable by a fine of up to $10,000 and two to 10 years in prison. TEX. PEN. CODE ANN. § 12.34 (Vernon 2003); Id. § 32.46 (Vernon Supp. 2006); see, e.g., Myers v. Walker, 61 S.W.3d 722, 732 (Tex.App. — Eastland 2001, pet. denied) (holding that exemplary-damages cap in section 41.008 of Civil Practice and Remedies Code did not apply because defendant's fraudulent conduct fell within exception for securing execution of document by deception (section 32.46 of Texas Penal Code), when defendant's false representations contained within contract induced parties to enter into agreement). We consider the comparable criminal penalties in the context of the seriousness of the Huynhs' actions and not for determining the dollar amount of the award. See Campbell, 538 U.S. at 428, 123 S. Ct. at 1526. But see Gullo Motors I, L.P., 2006 WL 3751591, at *4 (declining to consider possibility that defendant could be found criminally liable for actions upon which plaintiff sued under civil law because plaintiff provided no proof that such sanction was ever awarded in similar case). The comparable criminal penalties are serious because they involve possible time in prison and up to $10,000 in fines.
We recognize that the Huynhs argued below in their "Objections to [Tho's] Proposed Final Judgment" that their conduct was not a felony to which the limits on exemplary damages do not apply. See TEX. CIV. PRAC. REM. CODE ANN. § 41.008 (Vernon Supp. 2006) (limitation-on-amount-of-recovery statute). Specifically, the Huynhs argued that the alteration of a promissory note was not a felony that would except the damages cap under section 32.47 of the Texas Penal Code. TEX. PEN. CODE ANN. § 32.47(a) (Vernon 2003) (pertaining to fraudulent destruction, removal, or concealment of writing and defining writing as (1) printing or any other method of recording information; (2) money, coins, tokens, stamps, seals, credit cards, badges, trademarks; (3) symbols of value, right, privilege, or identification; and (4) universal product codes, labels, price tags, or markings on goods). The record does not reflect that the trial court found that the Huynhs' alteration of the promissory note was not excepted under any of the sections of the Texas Penal Code listed in the limitation-on-amount-of-recovery statute, but, rather, that Tho agreed voluntarily to remit exemplary damages to the statutory cap in a bench memorandum:
Thus, in order to move along and prevent the Defendants from wasting assets, we will agree with Defense counsel and remit the exemplary damages with the cap limits of $200,000 per Defendant. Please do not consider this a waiver of our position regarding exemplary damages as we still consider the jury's assessment of $2,500,000.00 punitive damages against each Defendant is appropriate given the Defendant's [sic] fraudulent conduct made the basis of this lawsuit and testimony regarding the same at trial.
In consideration of all three Gore guideposts, we hold that the award of exemplary damages exceeds the constitutional limitations on exemplary damages and violates the Huynhs' substantive due process rights. Nonetheless, because the Huynhs' conduct was reprehensible and the comparable criminal penalties are serious, some award of exemplary damages is supported.
5. Conclusion
For the reasons stated above, we sustain the Huynhs' point of error four to the extent that it challenges the Constitutional excessiveness of the exemplary-damages award, and we overrule the Huynhs' point of error four to the extent that it challenges the factual sufficiency of the evidence to support the award.
Because there is sufficient evidence to support a lesser award of exemplary damages for the reasons discussed above, we suggest a remittitur of $100,000 exemplary damages awarded against each of the Huynhs, which is five times actual damages. See TEX. R. APP. P. 46.3. Although there is no mathematical formula, bright-line ratio, or rigid benchmark for determining the reasonableness and proportionality of the award, we recognize that the Texas Supreme Court has recently held in Gullo Motors I, L.P. that an appellate court's remittitur was constitutionally excessive in a fraud case in which remittitur was more than four times the total compensatory award and more than 17 times the economic award. See Gullo Motors I, L.P., 2006 WL 3751591, at *4; accord Campbell, 538 U.S. at 424-25, 123 S. Ct. at 1524 (citing Gore, 517 U.S. at 581, 116 S. Ct. at 1602) (stating that award of more than four times amount of compensatory damages might be close to line of constitutional impropriety). But see Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 23-24, 111 S. Ct. 1032, 1046 (1991) (upholding exemplary-damages award that was more than four times compensatory damages and more than 200 times out-of-pocket expenses). However, Gullo Motors I, L.P. is distinguishable because compensatory damages there were made up of three-fourths mental anguish and only one fourth economic damages, while compensatory damages here were entirely economic. See Gullo Motors I, L.P., 2006 WL 3751591, at *4 (observing "that emotional damages themselves often include a punitive element"); cf. Campbell, 538 U.S. at 425-26, 123 S. Ct. at 1524-25 (reversing exemplary-damages award that was 145 times compensatory damages when plaintiffs "suffered only minor economic injuries" and "[t]he compensatory damages for the injury suffered here, moreover, likely were based on a component which was duplicated in the punitive award.").
State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 425, 123 S. Ct. 1513, 1524 (2003) (although declining to impose bright-line ratio that exemplary-damages award cannot exceed, stating, "While these ratios are not binding, they are instructive.").
Conclusion
We modify the judgment to award $20,000 in actual damages against the Huynhs, jointly and severally, and affirm the judgment as so modified, conditioned on a remittitur of $100,000 of the $200,000 exemplary damages awarded against each of the Huynhs. See Texaco, Inc. v. Pennzoil, Co., 729 S.W.2d 768, 866 (Tex.App.-Houston [1st Dist.] 1987, writ ref'd n.r.e.) (holding that considering type of action, conduct involved, and need for deterrence, exemplary damages were excessive and that trial court abused its discretion in not suggesting a remittitur; therefore suggesting conditional remittitur); see also Larson v. Cactus Util. Co., 730 S.W.2d 640, 641 (Tex. 1987) (recognizing that "[i]f part of a damage verdict lacks sufficient evidentiary support, the proper course is to suggest a remittitur of that part of the verdict. The party prevailing in the trial court should be given the option of accepting the remittitur or having the case remanded."); TEX. R. APP. P. 46.3 (stating that appellate court may suggest remittitur on its own motion when appellant complains that there is insufficient evidence to support award and appellate court agrees, but there is sufficient evidence to support lesser award). In the event that a remittitur is not filed with the Clerk of this Court within 20 days from the date of this opinion, we will reverse the judgment and remand the case to the trial court for a new trial.
Several other Texas courts of appeals have remitted exemplary damages. Harris v. Archer, 134 S.W.3d 411, 442, 449 (Tex.App.-Amarillo 2004, pet. denied); Lesikar v. Rappeport, 33 S.W.3d 282, 320 (Tex.App.-Texarkana 2000, pet. denied); Apache Corp. v. Moore, 960 S.W.2d 746, 750 (Tex.App.-Amarillo 1997, writ denied); Johnson v. J. Hiram Moore, Ltd., 763 S.W.2d 496, 503 (Tex.App.-Austin 1988, writ denied); Bank of N. Am. v. Bell, 493 S.W.2d 633, 637 (Tex.Civ App.-Houston [14th Dist.] 1973, no writ); S.W. Inv. Co. v. Neeley, 455 S.W.2d 785, 785-86 (Tex.Civ.App.-Fort Worth 1970, writ dism'd).