Opinion
No. 02-04-205-CV
Delivered: June 30, 2005.
Appeal from the 348th District Court of Tarrant County.
Panel A: CAYCE, C.J.; LIVINGSTON and McCOY, JJ.
OPINION
I. Introduction
Appellant Melissa Ann Kitchen appeals from a judgment rendered on a jury verdict whereby the jury failed to award her any remuneration for her work at a health club. In four issues, she asserts that (1) a conflict exists in the answers to the first two jury questions wherein the jury found that she performed compensable work but valued the work at zero dollars, (2) the finding of zero value for her compensable work is against the great weight and the preponderance of the evidence, or alternatively (3) the zero finding is supported by no evidence, and (4) the jury finding of zero for the value of her attorney's fees is also against the great weight and preponderance of the evidence. We will reverse and remand for a new trial.
II. Factual Background
This is the case of Kitchen's complaints about compensation from a Curves club. In June 2000, Melissa Kitchen moved into Steven Frusher's home and became engaged to him three months later. They began discussing opening a health club in Grapevine, Texas, because he had experience in managing health clubs. Thereafter, Frusher purchased a Curves health club franchise in Grapevine. Curves offers thirty-minute fitness workouts and weight loss and nutritional programs that cater to women who do not feel comfortable walking into a traditional health club facility. Frusher was acquainted with Curves because his sister worked in franchise sales for Curves International and his family was involved with Curves International. The signed franchise agreement for the health club was between Curves International, Inc. and Frusher. The club was located in a shopping center; the lease for that space was between Park 114 Joint Venture. Frusher also obtained a $15,000 start-up loan, for which he alone was obligated. He testified that all the original documents connected with the health club indicated that he was the sole owner because he and Kitchen were not yet married, that he had told her no part of the business would be in her name until they were married, and that she had no problem with that. He further testified that the reason for his caution was that Kitchen had been engaged two other times and had broken off those engagements.
On the other hand, Frusher also testified that when he bought the franchise, he told Kitchen that he bought the club for the both of them. He also ordered business cards for Curves that read "Melissa Kitchen and Steve Frusher, Owners." Frusher testified that he had these cards made because he and Kitchen were supposed to be married shortly after they opened the club and that he passed those business cards out to friends and people that might be interested in joining the club. He also ordered a name tag that read "Melissa Kitchen, Owner," which she wore. Kitchen testified that she worked at Curves for two years and during that time considered herself to be a co-owner of the business. She received no salary during that time, nor were social security or medicare taxes paid for her. However, both Kitchen and Frusher used the Curves bank account for their personal expenses. There was no monetary limit regarding what she could spend from the account. She also testified that it was never her intention that the only benefit she would receive from working at Curves was to be able to use the bank account for personal expenses, and she thought that she and Frusher would share in the profits of the business as co-owners.
The health club opened in May 2001 with Kitchen as the manager. Although she had never worked at a health club previously, she had "always worked out." Prior to the club's opening, Kitchen and Frusher helped get it ready by painting the leased space, tearing down walls, cleaning, and laying carpet. After the first six months of operation, Kitchen worked at the club more than Frusher did, and according to Frusher's sister-in-law, Cheryl Frusher, Kitchen was the person who was primarily running the business on a daily basis. Kitchen opened the club most days and would close the club when a part-time employee was not working. She also paid bills, signed up new customers, trained new customers on equipment, hired part-time employees, was primarily in charge of customer service and customer relations, did marketing, advertising and promotion work, and maintained the fitness equipment.
Kitchen and Frusher had planned to be married in Las Vegas at a Curves convention in November 2001, but the wedding did not take place because they could not afford the trip and the time away from the business. No new wedding date was set. From October 2002 through June 2003, Frusher was in Austin, Texas, working on special effects for the movie "The Alamo." While he was away, Kitchen ran the club on a daily basis. When he returned from Austin in June 2003, Kitchen broke off their engagement because they had "grown apart" and they had "personal issues." All this time, Frusher considered her to be an employee of Curves and believed her compensation was the use of the Curves bank account to pay her personal expenses. On the other hand, Kitchen testified that she never considered the use of the bank account to be a salary. By the end of the Kitchen/Frusher relationship, the club had 191 members, according to Frusher, or around 300 members, according to Kitchen, and was generating around $10,000 a month in gross revenue. After the breakup, Frusher asked Kitchen to move out of his house, cut her off from the Curves bank account and changed the locks on the business. He also told her that she was terminated and not to come around to the business and that he was the sole owner of Curves, and she was not entitled to anything.
III. Procedural Background
Kitchen filed suit against Frusher, alleging in her first amended petition that she was entitled to a declaratory judgment that the business was a partnership and that Frusher breached the agreement by excluding her from the business. Alternatively, Kitchen alleged a claim for quantum meruit for the value of her services working at the club. At the time of trial, Kitchen dropped her partnership claim and proceeded only on her quantum meruit claim. Frusher did not plead "payment" as an affirmative defense.
Frusher testified that only after Kitchen hired an attorney did he become aware that Kitchen was claiming that she was entitled to compensation exceeding her Curves account withdrawals.
In the charge of the court, the jury was asked three questions. In response to question one, "Did Melissa Ann Kitchen perform compensable work for Steven Allen Fusher with respect to the Curves business?," the jury answered "Yes." In response to question number two, "What is the reasonable value of such compensable work at the time and place it was performed?," the jury answered "$0.00," which is the same answer the jury gave to question number three inquiring about the reasonable value of attorney's fees for Kitchen's lawyer. No objections were made to the jury verdict, the verdict was accepted, and the jury was discharged. Based upon the jury findings, the court entered a final judgment in favor of Frusher and against Kitchen, resulting in this appeal.
IV. Issues
A. Irreconcilable Conflict
In her first point, Kitchen asserts that there was an irreconcilable conflict between the answers to the first two jury questions, that is, one cannot reconcile the answer to question number one that she performed "compensable work," which was defined as having value, and then find that the "reasonable value of such compensable work" is zero, unless the jury took into account the value of her personal expenses paid from the Curves checking account that Kitchen argues was impermissible because "payment" was not pled as an affirmative defense. The court provided the following definition of "compensable work": "One party performs compensable work if valuable services are rendered for another party who knowingly accepts them and if the party accepting them should know that the performing party expects to be paid for the work."
Frusher initially responds that Kitchen failed to preserve error by not objecting to the conflicting answers prior to the jury's discharge. We agree. We specifically held in Columbia Medical Center of Las Colinas v. Bush, 122 S.W.3d 835 (Tex.App.-Fort Worth 2003, pet. denied), that a complaint of conflicting jury findings was not "preserved for our review because Appellants did not raise any contention concerning conflicting jury findings before the jury was discharged." Id. at 861; see, e.g., Norwest Mortgage, Inc. v. Salinas, 999 S.W.2d 846, 865 (Tex.App.-Corpus Christi 1999, pet. denied); Durkay v. Madco Oil Co., 862 S.W.2d 14, 16 (Tex.App.-Corpus Christi 1993, writ denied). To the extent our holding on this issue in First Texas Service Corp. v. McDonald, 762 S.W.2d 935, 939-40 (Tex.App.-Fort Worth 1988, writ denied), is in conflict with our more recent decision in Bush, it is overruled. Kitchen's first issue is likewise overruled.
See Torres v. Caterpillar, Inc., 928 S.W.2d 233, 244-45 (Tex.App.-San Antonio 1996, writ denied), and Roling v. Alamo Group (USA), Inc., 840 S.W.2d 107, 110 (Tex.App.-Eastland 1992, writ denied), for a discussion of the First Texas Service Corp. holding.
B. Zero Value of Compensable Services
In her second and third points, Kitchen complains that the finding of no value for her compensable work in response to question number two is "against the great weight and preponderance of the evidence so as to be manifestly unjust" and that "there was no evidence supporting the jury's finding."
1. Standard of Review — Factual Sufficiency
In reviewing a point asserting that a finding is "against the great weight and preponderance" of the evidence, that is, a factual sufficiency point, we must consider and weigh all of the evidence and set aside the finding only if the evidence is so weak or the finding is so contrary to the great weight and preponderance of the evidence as to be clearly wrong and unjust. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001); In re King's Estate, 150 Tex. 662, 244 S.W.2d 660, 661 (1951).
2. Analysis
In accordance with the Texas Supreme Court's instruction, we will detail the evidence relevant to the point in consideration and clearly state why the finding is factually insufficient or is so against the great weight and preponderance as to be manifestly unjust, why it shocks the conscience, or why it clearly demonstrates bias. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986) (op. on reh'g); see also Jaffe Aircraft Corp. v. Carr, 867 S.W.2d 27, 28 (Tex. 1993). When there is objective evidence of injury, a jury's award of zero damages is against the great weight and preponderance of the evidence. Horton v. Denny's Inc., 128 S.W.3d 256, 260 (Tex.App.-Tyler 2003, pet. denied); Davis v. Davison, 905 S.W.2d 789, 791 (Tex.App.-Beaumont 1995, no writ).
Frusher testified that a reasonable annual rate of compensation for a full-time manager of Curves with responsibilities identical to Kitchen's would be $24,000 a year based on a good job performance. Frusher testified that he did not believe Kitchen did a good job managing Curves. Yet, Frusher allowed Kitchen to manage the business for two years. Kitchen was in charge of running the business for the nine months he was in Austin working on the "The Alamo." A very important aspect of Curves was customer relations, at which Kitchen did a "pretty good job," according to Frusher. While Kitchen was manager, the club grew from zero members to at least 191. Kitchen testified that she worked fifty to fifty-five hours a week on average as manager, although Frusher gave conflicting testimony on this issue. Kitchen testified that a reasonable hourly range for her services would be $12.00 an hour with time-and-a-half for work over forty hours per week. Heather Whitman, manager of the health club at the time of trial, earned $12.00 an hour in that position, and Frusher testified that she performed the same duties as Kitchen. A part-time employee, according to Frusher, was paid $8.00 an hour. He offered no evidence at the time of trial as to what a reasonable rate of compensation would be for the services Kitchen performed. By the time of their breakup, the club was bringing in $10,000 a month in gross revenue and earned about $20,000 in 2002 and during the first six months of 2003. Six existing or former customers of the health club testified that from their perspective, Kitchen did a really good job of running the business.
While evidence was adduced that Kitchen was able to use the Curves bank account for her personal expenses, the issue of "payment" was not before the jury. Payment is an affirmative defense that was required to be pled and proved. Tex. R. Civ. P. 94; Rea v. Sunbelt Sav., FSB, Dallas, 822 S.W.2d 370, 372 (Tex.App.-Dallas 1991, no writ). Prior to trial, the court found that Frusher had waived the defense of payment by failing to plead it and excluded all evidence of the amount of any payments to her, not permitting Frusher to offer any evidence of any amounts spent by Kitchen for her personal expenses from the Curves bank account. Further, the jury was not asked to determine the value of Kitchen's services after deductions for the amount of her personal living expenses paid for by the health club bank account, but rather simply what was the reasonable value of her compensable work.
After having considered the evidence admitted, we hold that the evidence is factually insufficient to support a $0.00 finding, so as to be manifestly unjust, and sustain Kitchen's second point of error.
3. Standard of Review — Legal Sufficiency
If an appellant is attacking the legal sufficiency of an adverse answer to an issue on which he had the burden of proof, the appellant must overcome two hurdles. Victoria Bank Trust Co. v. Brady, 811 S.W.2d 931, 940 (Tex. 1991). First, the record must be examined for evidence that supports the finding, while all evidence to the contrary must be ignored. Second, if there is no evidence to support the finding, then the entire record must be examined to see if the contrary proposition is established as a matter of law. Dow Chem. Co., 46 S.W.3d at 241; Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989). The issue should be sustained only if the contrary proposition is conclusively established. Dow Chem. Co., 46 S.W.3d at 241-42.
4. Analysis
As articulated in Ponce v. Sandoval, 68 S.W.3d 799 (Tex.App.-Amarillo 2001, no pet.), this point
highlights the difficulty with a legal sufficiency challenge to a jury finding of zero damages by the party with the burden of proof in a tort case. Even if, in accordance with the first prong of our analysis for legal sufficiency, we were to determine that there is no evidence to support the finding, Sandoval does not assert that a particular sum of money has been conclusively established by the evidence. Therefore, his challenge fails the second part of the legal sufficiency analysis which requires that we examine the entire record to see if a different proposition is established as a matter of law. . . . A court of appeals exceeds its authority when it implies a finding of actual damages in tort because a court of appeals cannot make original findings of fact, it can only "unfind facts." Thus, where there is no contrary or different position from the jury finding established as a matter of law so that judgment can be rendered for that different amount, a legal sufficiency challenge will be overruled.
Although this is not a case in tort, the principle remains applicable.
Id. at 809 (citations omitted). Accordingly, because Kitchen does not assert that a particular sum of money has been conclusively established by the evidence, her third issue is overruled. Therefore, having sustained her second point of error, unless independent grounds exist for upholding the verdict, reversal is warranted.
V. Independent Grounds for Upholding the Jury Verdict
Frusher cites four reasons for upholding the jury verdict of zero value for Kitchen's compensable work that were contained in his motion for directed verdict presented at the close of the evidence, which was denied by the trial court.
A directed verdict is proper if no evidence of probative force raises a fact issue on the material questions in the suit. Cherqui v. Westheimer Street Festival Corp., 116 S.W.3d 337, 343 (Tex.App.-Houston [14th Dist.] 2003, no pet.). A directed verdict for a defendant may be proper in two situations: (1) when a plaintiff fails to present evidence raising a fact issue essential to the plaintiff's right of recovery, or (2) the plaintiff admits or the evidence conclusively establishes a defense to the plaintiff's cause of action. Id. In reviewing a point complaining that there was no evidence to support the submission of a question to the jury, the reviewing court looks only to the evidence that tends to support the judgment to determine if the trial court erred in submitting the issue. Broughton Assocs. Joint Venture v. Boudreaux, 70 S.W.3d 324, 327 (Tex.App.-Waco 2002, no pet.).
A. Express Agreement
Frusher first asserts that if a plaintiff and defendant have an express agreement for payment of services, there cannot be a cause of action for quantum meruit as a matter of law. Murray v. Crest Constr., Inc., 900 S.W.2d 342, 345 (Tex. 1995); Garza v. Mut. of Omaha Ins. Co., No. 05-98-01093-CV, 2001 WL 873613, at *6 (Tex.App.-Dallas Aug. 3, 2001, no pet.) (op. on reh'g) (not designated for publication). We agree. However, the lack of existence of an express agreement is not an element of Kitchen's cause of action for quantum meruit, the elements of which are (1) valuable services and/or materials were furnished, (2) to the parties sought to be charged, (3) which were accepted by the parties sought to be charged, and (4) under circumstances that reasonably notified the recipient that the complaining party, in performing, expected to be paid by the recipient. Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992). The existence of an express agreement is an affirmative defense for which Frusher had the burden to plead, prove, and request an instruction. Quantum Chem. Corp. v. Toennies, 47 S.W.3d 473, 481 (Tex. 2001); Garza, 2001 WL 873613, at *6. By failing to plead and make a request on this issue, Frusher waived the defense. Kinnear v. Tex. Comm'n on Human Rights, 14 S.W.3d 299, 300 (Tex. 2000).
B. Expectation of Payment
Frusher next asserts that the evidence conclusively established that he should not have known that Kitchen expected to be paid additional money for her work at Curves above and beyond her expenses drawn from the health club bank account. He points to that part of the instruction in question one discussing "compensable work," which states in part that "the party accepting them [valuable services] should know that the performing party expects to be paid for the work," which is consistent with element four of a quantum meruit claim under Heldenfels, 832 S.W.2d at 41. Frusher asserts that the trial court erred in denying his motion for directed verdict on this ground and in overruling his objection to the submission of jury question number one on this ground. A directed verdict is improper if more than a scintilla of evidence exists, that is, there is a reasonable basis for a differing conclusion as to whether Frusher should have known Kitchen expected to be paid. See Rocor Int'l, Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA, 77 S.W.3d 253, 262 (Tex. 2002). But how she was to be paid is the issue.
Frusher testified that he and Kitchen had an agreement that she would work at the club in exchange for drawing money from the club bank account to pay her expenses, which occurred, and that she never asked for a salary or wage check or ever asked him for, or expressed any expectations of, monies other than from the club checking account. Kitchen testified that she could not remember having a conversation wherein she expressed to Frusher that she wanted a salary or paycheck.
Kitchen asserts that the issue is whether she expected any type of remuneration at all, including personal expense payment from the club checking account, because the issue of "payment" was not pled as an affirmative defense and the amounts were stricken from consideration by the trial court. In other words, the issue is whether she expected to be paid, not whether she expected to be paid additional monies above and beyond the personal expense account payment. Because the issue submitted to the jury did not mention any consideration of payment from the club bank account and because payment was not pled affirmatively, we agree that the only evidence that she needed to adduce was that Frusher was reasonably notified that she expected to be paid for the performance of her duties. Because Frusher asserts that they had an agreement to pay her expenses from the club account, he obviously was on notice of her intent to be paid, in conformance with the requirements of the quantum meruit cause of action. Therefore, this additional ground for affirmance is overruled.
C. Insufficient Evidence
In his third ground, Frusher urges that there was legally insufficient evidence to submit the question of the value of the services to the jury. An assertion that the evidence is "insufficient" to support a fact finding means that the evidence supporting the finding is so weak or the evidence to the contrary is so overwhelming that the answer should be set aside and a new trial ordered. Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965). We are required to consider all the evidence in the case in making this determination, not just the evidence that supports the finding. Mar. Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex.), cert. denied, 525 U.S. 1017 (1998). As previously set forth in detail, there was ample evidence presented as to the reasonable value of Kitchen's services. This ground is overruled.
D. Cohabitation
Finally, Frusher asserts that the fact that persons are living in the same household creates a presumption that services are gratuitous, citing Coons-Andersen v. Andersen, 104 S.W.3d 630, 637-38 (Tex.App.-Dallas 2003, no pet.), and Zaremba v. Cliburn, 949 S.W.2d 822, 825-26 (Tex.App.-Fort Worth 1997, writ denied). These cases involve household-related services, not running an outside business. Further, the Coons-Anderson case holds that "where persons are living together as one household, services performed for each other are presumed to be gratuitous, and an express contract for remuneration must be shown or that circumstances existed showing a reasonable and proper expectation that there would be compensation." Coons-Andersen, 104 S.W.3d at 638. As previously discussed, there was an expectation of remuneration. Zaremba is a palimony suit subject to the statute of frauds, and we find it inapplicable. 949 S.W.2d at 825-26. Therefore, this ground is also overruled.
VI. Conclusion
In light of our holding sustaining Kitchen's second issue and our having overruled Frusher's independent grounds for affirmance, it is unnecessary for us to reach Kitchen's fourth issue. This cause is reversed and remanded for a new trial.