### T E X A S C O U R T O F A P P E A L S , T H I R D D I S T R I C T , A T A U S T I N

NO. 03-10-00051- CV

Ashley B. Pat ten; The P atte n Law F irm , P .C.; P atte n and Kar lseng, P.C .; Kar lseng Law F irm , P .C.; Rober t C. K arlseng; K arlseng, LeBlanc & Rich, LLC;

and L eBlanc & K arlseng, P .C., Appellants

v. David Christoph er K

idd , Appellee

F ROM TH E DISTRI CT COURT O F TRAVIS CO UNTY, 98TH JUDICI AL DISTRICT NO. D-1 -GN-0 9-0 0009 0, H ONO RAB LE JEF F L. RO SE, JUDGE P RESIDING

M E M O R A N D U M O P I N I ON

After a bench trial on damag es, the trial court awa rded appellants $400 in damag es 1

on their libel per se claim ag ainst David Christopher Kidd. They contend that the awa rd was leg ally and fac tually insufficient and not b as ed o n a proper damag es model. They further contend that they wer e entitled to exemplary damag es beca use Kidd’s statements damag ed their profe ssional reputa tions. W e af

firm. Appellants include individuals who have past and prese nt business rela t ionships throug h the appellant law firms and other businesses. Kidd asser ts that he has bee n a par

tner with

Appellants are Ashley B. Patten; the Patten L aw Firm, P.C .; Patten and Kar lseng , P.C.; 1 Kar lseng L aw Firm, P.C.; Robert C. Kar lseng ; Kar lse n g, L eB l anc & Rich, L L C; and L eB lanc & Kar lseng , P.C.and, mos t rec ently , an employ ee of some appellants. Kidd fi l ed t h i s suit afte r he was fired by the

Patten L aw F irm, but later nonsuited his claims.

Appellants counter claimed, alleg ing that Kidd made false and/or mis l ea ding
statements that he knew wer e false, but w hich he published any way . Kidd undisputedly posted an item dated J an u ar y 11, 2009, on www.r ipoffre port.com, a site wher e consumers can publish
comments or article s about their interac tions with businesses. Kidd’s post be came the top hit on a web se arc h for some a

ppellants. Kidd’s pos t included statements about a ppellants and other s that appellants c ite as def

amatory in their motion for summary judgme nt, including:

Consumers, rea l estate a

nd mortg ag e prof

essionals are encour ag ed to not use t hese companies a s they

are eng ag ed in fra

udulent activities. Ashley Patten and Robert “B ob” Ka rl s en g lost a 22 + Milli on dollar lawsuit in 2/2008 for committing fra ud ag ainst their business partne r J onathan Cooke. I n addition to fra

ud, brea ch of contra ct, and conver sion all valid transg ressions ag ainst Mr. Cooke, they have wrong ed seve ral other business partne rs during the course of their nine y ear s in the titl e insuranc e business. Currently , they are involved in at least two other lawsuits wher e they have brea ched contra cts, violated non-compe tes and literally used the law to steal companies awa y from their a ssociates a

nd business partner s. The Texas Depa

rtment of I nsuranc e, the reg ulatory body for insurance in Texas, has done almost ever

y thing they can to run these g uy s off but they continue to circ umvent the law and are still prac ticing attorney s in T exas. I n addition, the y have used their deep pockets to manipulate the t i t l e i n s uranc e rules, and continue to run title opera tions in Tex as and throug hout the United States. They continue to violate employ ment ag ree ments and push their other b u s i ness owner s into bankruptc y by using State Ba r rules in a manner in which they wer e not meant. Sending y our title business or ref err ing y our clients to use these lawy ers is a mistake as they are only conce rned with money and will not be there in the future. Their bad

2reputa tion will ultimately cau s e y o u r clients and the end consumer to question

judgme nt in the selection proc ess.
Ap p en ded to the post is an elec tronic version of a judgme nt confirming a $22 milli on arbitra t i o n

awa rd to J onathan Cooke from Patten, Kar lseng , Kar lseng L aw Firm, an d Patten & Kar lseng for those a

ppellants’ fr audulent conduct and breac h of contract. Kidd later attempted to have his 2 post re moved, but the webmaste r declined, stating that remova l was ag ainst the site’s policy

. On May 29, 2009, Kidd filed an update in which he noted that the arbitra tion awa rd had been reve rsed and rema nded for further proc ee d i ng s, and that Patten and Kar lseng “ar e not judicially g uilty of 3
fra ud, brea ch of contra ct, and conver sion, nor are the law firms m en t ioned i n the original report.”
He state d that

the Patten L aw Firm, Claude Rich, Maver ick National Service s, and Claude Rich the fee attorney for Capital Title wer e never acc used o r s u ed for Fr aud, Br eac h of Contract or conver sion nor are they prese ntly being ac cu s ed or sued for such things.

. . . [T] he author has no knowledg e of any case s pending or otherwise that would implicate these pa

rties of a ny fra ud or conve rsion.

The text of the purported judgme nt append ed t o t h e p o s t is identical to the copy of the 2 judgme nt in Cooke v. Karlseng , No. 06-02783-L (193rd Di s t

. C t ., Dallas Count y , Fe b. 22, 2008), appende d to appellants’ motion for summary judgme nt. The Dallas court of appea ls reve rsed the trial court’s confirma tion of the arbitra tion awa rd 3 afte r co n cluding that the trial court abused its discretion by deny ing appellants’ motion for continuance to investiga te t he evident partiali ty of t he arbitrator. Karlseng v. C ooke , 286 S.W .3d 51, 58 (Tex. A

pp.—Dallas 2009, no pet.). The court found that the trial court should have g rante d the continuanc e af

ter being prese nted uncontra dicted evidenc e that the ar bitrator fa iled to disclose a p ri o r rela tionship with Cooke’s lead counsel. Id. at 52. The court rema nded the cause to the trial court f

or fur ther proc eeding s. Id. at 58. 3Kidd also stated that he was awa re o f o n l y o n e lawsuit pending ag ainst Patten and Kar lseng for brea ch of contra ct other than the Cooke suit, and that “[t] here is curr ently no J udicial action pedning [si c] or ot herw ise that would conclusively implicate t he above parties for any wrong doing in any
capa city .” Appellants arg ued that these statements disparag e them in their profe ssional capa city and

are , there fore , libelous pe r se. The trial court g rante d summary judgme nt on liability only , and the

case proce eded to a

trial on damag es bef

ore the court. 4
The trial cou rt hear d testimony from Tiffa ny Stil lwell, the Patten L aw Firm’s direc tor of business development; Ashley Patten, the Patten L aw Firm’s name partne r; Claude Rich,
appe l l ants’ attorney who testified on behalf of Kar lseng , L eB lanc & Rich; and Kidd. After revie wing additional briefing on damag es, the trial court order ed that appellants “re cover damag es from Counter-De fenda

nt, David Christopher Kidd, in the amount of $400.00” without specify ing if
any of the awa

rd was for exemplary dam age s . No fi ndings of fac t or conclusions of law wer e
reque sted or filed.

Appellants contend on appea l that the evidenc e s h o we d they deser ved more than $400 in total damag es. They contend that the evidenc e is leg ally and fac tually insufficient to support this “paltry ” aw ard, a

nd arg ue that the trial court err ed by not a pply ing a proper damag es model in

a libel pe r se c ase. The y

contend that, e ven if the e vidence wer e leg ally and fa ctually

sufficie nt to support an award of only $400 in actua l damag es, Kidd’s evident malice would entitle them to an

awa rd of e x emplary

damag es.

Visiting J udg e Gus Strauss presided over the s u m m ary judgme nt on liability , while 4 J udg e Jeff Rose pre sided over the trial on damag es. 4I n a nonjury trial wher e, as in this case , no finding s of fac t or conclusions of law are

filed or reque sted, we will infer that the trial court made all t h e n ec es s ar y finding s to support its judgme nt. Holt Atherton Indus., Inc. v. Heine , 835 S.W .2d 80, 83 (Tex. 1992). Be cause a repor ter’s

rec ord was filed, t hese impl ied findi ng s may be chall en g ed for evidentiar y sufficie ncy . Id. at 84. The standards of revie w are the same as those applied to jury finding s and a court’s express finding s of fact. W

ade v. C o mm i s s ion for Lawyer Discipline , 961 S.W .2d 366, 374 (Tex. App.—Houston [1st Dist.] 1997, no writ). When the implied finding s of fac t are supported b y t h e ev i d en ce, we
must aff irm the judgme nt on any theory of law applicable to the case . In re W .E.R. , 669 S.W .2d 716, 717 (Tex. 1984).

When revie wing a leg al sufficie ncy finding , we examine the re co rd for evidenc e supporting the finding that rea sonable jurors could believe, disreg arding all contra ry evidenc e that

rea sonable jurors could i g nore. City of Keller v. W ilson , 168 S.W .3d 802, 807 (Tex. 2005). I f no evidenc e supports the finding on an issue on which the appellant bore the burden of proof, we revie w
t o s ee i f t h e contra

ry proposition is established as a matter of law. Dow Chem. Co. v. Francis , 4 6 S.W .3d 237, 241 (Tex. 2001). I f the proposition contra ry to the verdic t is established as a matter of la

w, we must re nder judg ment for that pr oposition. Id. When r eviewing a challeng e to the fa ctual suff iciency of the e vidence supporting a judgme nt, we consider and weig h all the evidenc e, both supporting and ag ainst the finding s, in order
to decide whether th e awa rd should be set aside. Pool v. Ford Motor Co. , 715 S.W .2d 629, 635 (Tex. 1986). A party attacking the factual suffi ci en cy of an adver se finding on an is sue on which it has the burden of proof m u s t d em o n strate on appea l that the adver se finding is ag ainst the

5g rea t weig ht and preponde ranc e of the evidenc e. Dow , 46 S.W .3d at 242. We can set aside a verdic t

only if the evidenc e is so wea k or if the finding is so ag ainst the g rea t weig ht and preponde ranc e of the evidenc e that it is clea rly wrong and unjust. See Pool , 715 S.W .2d at 635. We will uphold the

awa rd unless it is so ag ainst the g rea t weig ht and preponde ranc e of the evidenc e that it is manifestly unjust or shocks the conscie nce. Id. We may not substitut e our judgme nt for that of the fac t-finder

. Id. The fac t-finder is the sole judge of the cre dibilit y of witnesses and the weig ht to be g iven to their testimony

. See G olden Eagle Arc hery, I nc. v. J ackson , 116 S.W .3d 757, 761 (Tex. 2003). Wit h defa

matory per se statements, g ener al damag es for injury to char acte r, reputa tion, fee lings, mental suffe ring or an gu i s h , or other wrong s not susceptible to monetary valuation ar e p resumed, althoug h the damag es awa rded may be nominal. Texas Disposal Sys. Landfil l, Inc. v. W

aste Mgmt. Holdings, Inc. , 219 S.W .3d 563, 584 (T ex . App.—Aust in 2007,
p et

. denied)

. Gene ral damag es include mental ang uish and injury to a person’ s reputa tion that
natura lly flow from the libel. Morrill v. Cisek , 226 S

. W

. 3 d 545, 550 (Tex. App.—Houston [1st Dist.] 2006, no pet.). Once injury to reputation is established, a de fame d person may rec over
g ener al damag es without proof of other injury

. Leyende cke r & Assocs., Inc. v. W echte r , 683 S.W .2d
3 6 9 , 3 7 4 (T ex . 1984). I n a case wher e the amount of the actua l damag es is not capa ble of definite asce rtainment, and prima fac ie liability is established, the deter minat i o n o f t h e amount is nece ssarily lodge d in t h e d i s cr et i on of the fac t-finder

. Bradbury v. Scott , 788 S.W .2d 31, 39 (Tex. App.—Houston [1st Dist.] 1989, writ denied) (citing Freem an v. Schwenk er , 73 S.W .2d 609, 611 (Tex. Civ. App.—Austin 1934, no writ)).

6Altho u g h appellants’ witnesses’ testimony cente red on rea ction to Kidd’s post on

www.r ipoffre port.com, they also testified about emails he sent to firm employ ees and other actions. After being fired, Kidd filed employ ment discrimination claims, a complaint with the state bar, and
two lawsuits ag ainst one or more appellee s. He wrote posts on websites and sent numerous emails and faxes to t h e P att en L aw Firm’s office

. Stil lwell testified that Kidd also sent an email to the entire fi rm s t at i n g that he had been wrong ed by Patten, that their reputa tion would be stained by employ ment at the Patten L aw Firm, and that they would be unable to obtain employ ment elsewhe re

as a result. The court admi t t ed an email from Kidd to Patten and others stating, “I wanted to hurt
y ou in that article , I wanted y ou to suffe r.” Patten testified that reputa tion was critica l in his business beca use reg ulations require that all title insurance companies must char g e the same price

. He testified that, whene ver a client or potential client rese arc hes him or his firm, the www.r ipoffre port post comes up and he has to explain it awa y rathe r than explain the value of his service s. He testified that he cannot measure the damag es in money becau s e h e d o es not know how many clients will
not return his calls or will move on to another title company . He st at ed that he could try to hire a public rela tions fir

m to make www.r ipoffre port.com not the first hit on a we b sear ch. He asser ted that a lawsuit ag ainst www.ripof fre port.com could c ost severa l hundred thousand dollar s. Claude Rich testified that he had to field questions fro m fa m i l y , friends, curr ent
customers and clients, and former customers and clients about the www.r ipoffre port.com post. He said that someone reads the post every d ay . He t es t i fied that his curr ent l aw firm lost a relatively larg e client a s a re sult of the post. He said that he ex plained to the client that Kidd had filed f alse and misleading information to injure any one associate d with K arlseng and Patten, and a ssured the

7client that the post should not aff ect their business rela tionship. The client’s assistant later told Rich that the client could not put his reputa tion in question by continuing to do business with him. Rich believed that Kidd’s statements wer e the cause . Rich testified that the loss was more than $10,000
per month. On cr o s s -ex amination, Rich conce ded that the client had not specific ally told him that the post was the rea son he was no longe r g oing to use the firm. He also acknow ledg ed that the

www.r ipoffre port.com post ref err ed to an arbitra tion awa rd ag ainst some appell an t s t h at was
appea led and aff

irmed by the trial court, but he was not sure of the curr ent status of that judgme nt. He also acknow ledg ed that there was a finding of brea ch of contra ct by Kar lseng and Patten as well as an indica tion of fra

ud. Kidd testified that he asser ted in the www.r ipoffr ep o rt

. com post that appellants committed theft ag ainst Cooke becau s e h e b elieved that appellants had stolen assets from him d u ri n g business dealing s, and it was “saf e to assume” that Cooke’s assets wer e stolen too. He

conce ded that the trial court did not specific ally find theft, but arg ued that it could be “cove red” by the fra ud finding

. He was not cer tain whether there wa s a finding of conver sion (there was not). Kidd testified that in his post he named sever al l ega l en t i ties in addition to the defe ndants in the Cooke suit beca

use Patten and Kar lseng have “a long history of cre ating and dissolving leg al entities
t o av o i d prosec ution in lawsuits for fra ud and various other things.” He felt it important fo r the public to know of the various entities t h at we re fo rm ed by the individuals even though they

wer e not parties to the C o o k e j u dg ment. He testified that he was sure that a suit ag ainst

www.r ipoffre port.com would be “ cost prohibitive.”

8Appellants have not shown that the g rea t weig ht and preponde ranc e of the evidenc e

shows that the damag e awa rd is so inadequa te that it is manifestly unjust or shocks the conscie nce. Appellants cite d a

ma g e a w a r d s in c a s es in which testimony showed that defa matory communications

cause d questions to be raised and conce rned phone calls to be made about the subject matter of the communications. Morrill , 226 S.W .3d at 550-51 ($25,000 a war d upheld); Bradbury , 788 S.W .2d
at 34 ($40,000 awa

rd upheld). Those case s do not control here , howeve r, becaus e appellants

are asking us to find that the trial court err ed in its damag e awa rd. That one fac t-finder ’s five-f igur e damag e awa

rd did not shock one appellate court’s conscie nce does not mean that this fa ct-finde r’s three -fig ure damag e awa rd must shock the conscie nce in this case . The summary judgme nt conclusion that Kidd is “liable” does not mean that he i s re s p o n s ible for ever y loss appellants suffe red. Although damag es from libel per se are presumed and need not be specific ally proven, there was no evidenc e of a discrete $400 d am age t o appellants. There was not clea r testimony
reg arding damag es to eac h appellant. There was gen er al t est imony that some appellants endure d multipl e inquiries about and explanations of the www.r ipoffre port.com post, but there w as almost

no evidenc e of quantified damag es attributed to Kidd’s writing the post. Rich testified that Kidd’s post cause d a $10,000/month client to chang e title companies. Howeve r, on cross examination, Rich admitted that he had no direc t knowledg e that Kidd’s writing s cause d t h at cl i en t to move its business. Fur

ther, it is not clea

r whether the inquiries and loss of business wer e prompted by Kidd’s
comments or the text of the Dallas district court’s order confirming the arbitra tion awa rd including the $22 milli on judgme nt for brea ch of contra ct and fra ud. Be cause the court has found Kidd liable for libel per se, appellants are entitled to at least nominal damag es. Texas Disposal Sys. , 219 S.W .3d

9at 584. Be y ond that, beca use t he damag e caused by Kidd to appellants’ psy ches, reputations, and businesses is difficult to quanti fy , deter mination of the amount of actua l damag es is nece ssarily lodge d in the discretion of the fac t-finder

. Bradbury , 788 S.W .2d at 39; Freem an , 73 S.W .2d at 611. Appellants have not demonstrated that the tr ial court’s de termination was e rror .

Appellants contend that the trial court err ed in not apply ing a proper damag es model in a libel per se cause of action. They do not offe r such a m o d el except to asser t that $57.15
per appellant is paltry

. They conce de that the amount of their damag es is unquantifiable, but contend that the cour

t misquantified it. Appellants have not shown er ror. Appellants contend that the y c le a r ly established that Kidd acte d with malice, entitling them t o ex em p lary damag es. The recor d does not ref lect that appellants called t o the t rial court’s
at tention the alleg ed omission of exemplary damag es throug h post-judgme nt motion s u ch as a 5
motion to modify , corr ect, or ref orm the judgme nt, a motion for new trial, or a reque st for finding s of fact and conclusions of law. Appellants failed to prese rve this err or for re v i ew on appea l. See Briggs Equip. Trust v. Harris County Appraisal Dist. , 294 S.W .3d 667, 674 (Tex. App.—Houston [1st Dist.] 2009, pet. fil ed); see also Air Park-D allas Zoning Comm. v. C row Billingsl ey Airp ark,

The trial court awa

rded “dama g es.” I t is not clea r whether this awa

rd was limit ed to 5 actua l damag es or also included exemplary damag es. There are no separ at e fi n d ings of fac t and co n cl usions of law clar ify ing that issue. Reg ardle ss, the amount of exemplary damag es is larg ely within the trial court’s discretion. Ethicon, Inc. v. Martinez , 835 S.W .2d 826, 83 5 (Tex. App.—Austin 199 2 , wr i t denied)

. But see Tex. Civ. Prac. & Rem. Code Ann. § 41.008 (West Supp. 2009), § 41.010 (West 2008). Even if the trial court awa rded a total of $400 in actua l and ex emplary damag es and tha t decision wer e pre serve d for a ppeal, we conclude that this rec ord does not requir e that we reve rse that a war d. 10Ltd. , 109 S.W .3d 900, 912 (Tex. App.—Dallas 2003, no pet.); W LR, In c. v. Borders , 690 S.W .2d 663, 668-69 (Te x . App.—Waco 1985, wr it ref’ d n.r.e.) ; see ge nerally Tex. R. App. P . 33.1.

Affir med.

G. Alan Waldrop, Just ice
Be fore Chief J ustice Jones, J ustices Pemberton a nd Waldrop Affir med Filed: Aug ust 18, 2010

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