Opinion ID: 1782143
Heading Depth: 1
Heading Rank: 3

Heading: american's counterclaim on the installment contract

Text: The Kishes urge this court to reverse the judgment in favor of American on the installment contract because the evidence and the jury verdict both establish as a matter of law that there was a failure of consideration on the contract. It was incumbent on the Kishes to plead and prove failure of consideration. TEX.R.CIV.P. 94. The requisite verified pleading is contained in the transcript. While there is ample evidence that the pool was worthless, the record contains no evidence that the pool had value in its present condition. Failure of consideration was therefore established as a matter of law. In any event, the uncontroverted evidence shows that neither the bank nor its insurance company qualified as a holder in due course. Furthermore, the installment contract provides on its face that the holder thereof (American) takes subject to all claims and defenses that the Kishes have against Cowboy Pools. The Kishes should therefore have been awarded recovery on their claims and American should have been denied recovery on its claim. However, the various damages must be apportioned among the defendants according to their respective liability. Cowboy Pools violated both the Deceptive Trade Practices Act and the Consumer Credit Code. It is therefore liable for treble the actual damages sustained by the Kishes as a result of its deceptive act. Judgment in the amount of three times the cost of removing the pool and restoring the Kishes' back yard ($4,000), plus three times the amount necessary to remove the lien from the Kishes' property ($8,000), plus three times the amount the Kishes had already paid on the pool ($504.30), for a total of $37,512.90 shall be rendered against Cowboy Pools. In addition, a $4,000 statutory penalty shall be assessed against Cowboy Pools for its Consumer Credit Code violation. The trial court found that the Kishes incurred reasonable attorney's fees totalling $14,000 up through the trial of their lawsuit, 75% of which arose as a result of the DTPA action and 25% of which arose as a result of the Consumer Credit Code action. Cowboy Pools shall be responsible for these attorney's fees. Neither American nor the bank violated the Deceptive Trade Practices Act. We need not address the bank's potential liability for Consumer Credit Code violations because the Kishes did not properly preserve this point. However, the bank did incur contractual liability limited in scope to the sum the Kishes paid it under the installment contract ($504.30). The bank is also jointly liable for the attorney's fees found by the trial court to be reasonable for the appeal of this case. American sued the Kishes for foreclosure on the lien. We render a take nothing judgment as to American on this claim and cancel the lien for two reasons: (1) the note is not supported by consideration; and (2) American's right to recover on the note is, by the terms of that note, made expressly subject to the claims the Kishes could assert against Cowboy Pools. In addition, American is jointly liable for the attorney's fees awarded for the appeal of this case. Thus, we reverse in part the judgments of the courts below and render judgment for the Kishes against Cowboy Pools as follows: (1) treble the amount of damages awarded by the jury for removing the pool ($4,000 × 3); (2) treble the amount the Kishes paid on the installment contract ($504.30 × 3) [1] ; (3) treble the amount of damages awarded by the jury for removing the lien from the Kishes' property ($8,000 × 3) [2] ; (4) a $4,000 statutory penalty for violations of the Consumer Credit Code; and (5) attorney's fees of $14,000 for pre-trial services and the trial of this case. We render judgment for the Kishes against the bank as follows: (1) the amount the Kishes paid on the installment contract ($504.30) [1] ; and (2) attorney's fees of $5,400 for the appeal of this case. We render judgment for the Kishes against American as follows: (1) the $8,000 lien on the Kishes' property is cancelled and the foreclosure set aside; [2] and (2) attorney's fees of $5,400 for the appeal of this case. We hold that Cowboy Pools and American are jointly and severally liable for the $8,000 offset necessary to cancel the lien on the Kishes' property. The Kishes are entitled to an additional $16,000 judgment against Cowboy Pools alone under the trebling provision of the DTPA. Likewise, the bank and Cowboy Pools are jointly and severally liable for the first $504.30 awarded the Kishes to compensate them for payments they had already made on the installment contract. To the extent the Kishes are entitled to statutory trebling of that sum, they may recover an additional $1,008.60 from Cowboy Pools. Finally, the bank and American are jointly and severally liable for the attorney's fees awarded the Kishes on appeal.