Court Opinion

ID: 2871325
Source: CourtListenerOpinion
Date Created: 2015-09-06 03:57:53.600716+00
Date Added: 2024-06-11T11:35:13.063490
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                      NO. 03-04-00625-CV

  Appellants, Toni Diane Compton and Johnny Compton//Cross-Appellant, Mary Sesso

                                                 v.

    Appellee, Mary Sesso//Cross-Appellees, Toni Diane Compton and Johnny Compton

  FROM THE DISTRICT COURT OF TOM GREEN COUNTY, 119TH JUDICIAL DISTRICT
         NO. B-03-0782-C, HONORABLE RAE LEIFESTE, JUDGE PRESIDING

                            MEMORANDUM OPINION

               This appeal concerns whether Toni Diane Compton committed a breach of fiduciary

duty and fraud against her mother, Mary Sesso, and whether Toni Compton’s husband, Johnny

Compton, acted in a way that renders him liable for any or all of the alleged fraud. Mary Sesso sued

the Comptons,1 and after a nonjury trial, the court determined that (1) Toni Compton committed

fraud and constructive fraud against Mary Sesso and (2) Johnny Compton knew or should have

known of the fraud and he accepted some of the benefits from it. Accordingly, the court awarded

Mary Sesso $72,448.24 in actual damages against Toni Compton and held Johnny Compton jointly

and severally liable for $26,244.60 of that amount. The court also assessed $15,000 in exemplary

       1
         The term “the Comptons” refers to Toni Compton and Johnny Compton but does not
include Toni Compton’s son, Lynn.
damages against Toni Compton. On appeal, the Comptons challenge the sufficiency of the evidence

to support the judgment. By cross-appeal, Mary Sesso contends that the court erred by limiting

Johnny Compton’s liability. She requests that we reform the judgment to hold him jointly and

severally liable for the entire judgment. We will affirm the judgment.

                                         BACKGROUND

                 Toni Compton’s parents, Mary and Tony Sesso,2 lived in a house they owned in Del

Rio. The Sessos had a strained relationship with their daughter, Toni Compton. Mary Sesso testified

that she and her husband changed their will, directing that their estate be divided equally among their

three children, but that Toni Compton’s share would pass to their grandson, Lynn Compton.

                 Mary Sesso testified that, in 2002, Toni Compton persuaded her parents to sell the

house and move to an apartment in San Angelo so that she could care for them. In early September

2002, the Sessos received a check for $76,127.22 from the sale of the house. Toni Compton drove

her parents to Del Rio to complete the transfer of keys and to cash the check. The Sessos used

$2,577.97 of the funds for a cashier’s check to pay a debt to a furniture store and took the remainder

in cash in two bank pouches. A letter prepared in 2003 by the Del Rio bank recites that the Sessos

received $73,549.25—$53,500 in $100 bills, $20,000 in $50 bills, two $20 bills, one $5 bill, four

$1 bills, and a quarter.

                 On September 11, 2002, the Sessos and Toni Compton opened a safe deposit box at

the San Angelo bank where Toni and Johnny Compton had their accounts.3 Mary Sesso testified that

        2
            Toni Compton’s father, Tony Sesso, is now deceased.
        3
        Mary Sesso testified that they cashed the check and rented the safe deposit box on the same
day. When the defense pointed out that the respective bank documents indicated the events occurred

                                                  2
she and her husband let Toni Compton sign the box agreement because Toni Compton wanted access

to the box in case of an emergency. Mary Sesso testified that they put all of the cash they received

from the Del Rio bank into the safe deposit box. Mary Sesso testified that her husband wanted to

keep the money at home. The Sessos had a fixed income of just over $1100 per month and intended

to use the cash only for extraordinary or emergency expenditures.

               Mary Sesso testified that she kept both of the keys to the safe deposit box in their

original envelopes hidden in her jewelry box in her husband’s drawer. She told Toni Compton

where the keys were in case of emergency. Mary Sesso testified that Toni Compton delivered

groceries to their apartment every Friday and went unsupervised into various areas of the apartment.

Mary Sesso testified that she did not authorize anyone to open the safe deposit box and did not know

that anyone had opened it. She testified that she knew that her husband did not authorize anyone to

take funds from the box because he would have told her if he had.

               Mary Sesso testified that she did not attempt to open the box until she needed funds

to pay for her husband’s funeral in June 2003. At that time, she looked for the keys to the box but

found only the empty envelopes in her jewelry box. Toni Compton claimed ignorance when asked

where the keys were. Mary Sesso testified that, after she explained that she needed to go to the bank

in the morning to get the money, Toni Compton told her “you better be early.”

               Toni’s son, Lynn Compton, accompanied Mary Sesso to the bank the next morning.

After the box was drilled open by a locksmith, they discovered that most of the cash was missing.

on consecutive days, Mary Sesso said she believed the dates shown on the documents were
erroneous. She said that, in any event, if a night passed between cashing the check in Del Rio and
placing the money in the rented box in San Angelo, Toni Compton had possession of the cash during
that time.

                                                 3
One of the bank pouches contained only a penny. The other contained about $1100 in bundles. Each

of the bundles had $100 bills on the outside but were filled with $1 bills. According to photographs

taken several days later of the labels binding the bundles, the bundles each contained a hundred

single bills. One of the bundles of bills was stamped as being from the San Angelo bank on October4

15, 2002.

               San Angelo bank employee Rebecca George supervised several events involving the

safe deposit box. She had rented the box to the Sessos and Toni Compton in September 2002. She

had assisted5 Toni Compton in opening the box on October 15, 2002. George also viewed the

contents of the box on June 13, 2003, at Lynn Compton’s insistence about two minutes after the box

was opened. George testified that Mary Sesso and Lynn Compton were very upset after viewing the

contents of the box and ended the rental within minutes. Bank records showed that Toni Compton

had also opened the box on November 13, 2002 and April 15, 2003. There is no record of anyone

else opening the box at any other time.

               Lynn Compton testified that, after learning his mother had previously opened the box,

he called to speak to her. He testified that Johnny Compton, his stepfather, told him that Toni

Compton was busy, but that he heard his mother screaming, “Whatever he’s saying, he’s lying.”

Lynn Compton testified that the Comptons had made several purchases after September 2002,

including a new wooden floor, new furniture, a cement mixer, a barn, a stove, a water purification

       4
          Sesso testified that the bundle was stamped “October,” yet she no longer had the wrappers
by the time of trial. The part of the stamp showing the month is not visible in the photographs of the
bundles, although the day, year, and the San Angelo bank’s name were visible.
       5
         George testified that the safe deposit boxes open with the use of two keys—a “guard key”
used by a bank employee and the customer’s key.

                                                  4
system, a redwood deck, and a Suburban with leather interior. He testified that Johnny Compton

said that the Suburban payments were $480 per month. Lynn Compton described his relationship

with his grandparents as very good, saying that he visited them often. He testified that he may have

been at their apartment in September 2002 when they returned from Del Rio with the cash. He also

testified that, since September 2002, he had bought both a new home (with no downpayment because

of his disabled veteran status) and a new car, both with financing.

               Toni Compton said that her relationship with her father was very good but that her

relationship with her mother was only fair. Toni Compton testified that her parents were looking to

move from Del Rio in part because of a disagreement with their daughter-in-law, who also lived in

Del Rio. Toni Compton said that her parents liked the apartment that Johnny Compton’s mother had

in San Angelo and investigated various retirement communities in that city.

               Toni Compton testified that, although her parents were encouraged to invest the

proceeds of the house sale, her mother insisted on keeping the funds in cash. She testified that her

mother held the cash overnight before they opened the safe deposit box. Toni Compton testified that

she could not be sure how much money was actually placed in the box. Because Mary Sesso

requested that something other than cash be put in the box, Toni added two strands of pearls. She

testified that Mary Sesso gave her one of the safe deposit keys in September 2002 when they rented

the box.

               Toni Compton explained that, in accord with her father’s wish, she took $30,000 in

cash from the box on October 15, 2002, to purchase the Suburban. She said that she discussed the

purchase with her father in front of her son, but not her mother. Toni Compton testified that her

                                                 5
father said he wanted to make sure that she got something from him in case Mary Sesso changed

their will again. Toni Compton testified that her father knew the price range of the vehicle and knew

she took the cash. While taking the $30,000 from the box, she also removed her pearls. Evidence

showed that, in mid-October 2002, Toni Compton deposited $26,000 into her and Johnny Compton’s

checking account and wrote a $26,244.60 check for the Suburban.

               Toni Compton testified that her remaining visits to the safe deposit box involved only

the pearls. She replaced them in November 2002 and removed them in April 2003. She testified that

she saw the cash bags in the box but did not examine their contents or remove any money. She

testified that she did not remove any more money, change the bands on the money, or open the box

at any other time. She claimed to not know what happened to the rest of the money.

               Toni Compton testified that some of the purchases her son described were old

purchases and that the money for other recent home improvements came from her occasional

employment, their income tax refund, her husband’s bonus pay, and their savings. She testified that

the cement mixer cost around $100 and that the water filtration system was only partly paid for. She

said they paid about $5500 for the metal barn/workshop from her husband’s bonus. She testified that

the furniture was several years old as were some other purchases. Toni Compton also testified that

her father had given her $2000 to complete a project to weather-proof the house and to prevent rats

from getting underneath the house.

               Johnny Compton testified that he did not participate in the critical events. He sat at

the table during the discussion about the disposition of the house sale proceeds and said at trial that

he recommended investment, but Mary Sesso rejected the idea in favor of keeping the cash available.

                                                  6
He testified that he had no involvement with the safe deposit box and did not participate in

prepurchase discussions about the Suburban. He claimed that he drove the Suburban occasionally,

but only in his wife’s company. He flatly denied telling anyone that he was making a payment on

the Suburban, much less stating the amount. He testified that the redwood deck was about five years

old and was paid for with income tax money. He said that the wooden floor was paid for by an

income tax refund and his bonus. Johnny Compton testified that, in addition to working for Verizon

as a manager of outside plant construction, he raised and sold goats. He estimated that they netted

about $3500 from the goats in 2002 and that the funds were put in a separate ranch bank account to

be used for more goat-related expenses.

               Johnny Compton testified that they had three bank accounts: the ranch account, a

checking account, and a savings account. He and his wife shared the accounts, putting their income

into the joint checking account and paying for household expenses from that account. He could not

explain where money for deposits in the joint accounts during the early months of 2003 came from

when his wife was not working, but speculated that it could have come from goat sales. He said that

both he and his wife balance the checkbook.

               Johnny Compton testified that Mary Sesso told him that his wife had a key to the safe

deposit box for emergencies. He also knew that Toni Compton opened the box to get the cash for

the vehicle and to retrieve and replace jewelry, but could not remember the exact dates.

               The trial court found that Toni Compton had a fiduciary relationship with her mother

and breached her responsibilities, committing fraud and constructive fraud, by taking cash from the

safe deposit box. The court found that Johnny Compton knew or should have known about that

fraud but accepted the benefits of it. The court assessed actual damages of $72,448.24 against Toni

                                                 7
Compton for the amount missing from the box, plus pre- and post-judgment interest. The court

assessed exemplary damages against Toni Compton. The court placed a constructive trust on the

Suburban, which was undisputedly purchased with funds from the box. The court also found Johnny

Compton partly culpable for knowledge or participation in the fraud, and held him jointly and

severally liable for the price paid for the Suburban, $26,244.60. On appeal, the Comptons challenge

the damage awards against them, while Mary Sesso challenges the limitation of the actual damages

award against Johnny Compton.

               Specifically, the Comptons challenge the trial court’s findings and conclusions that

(1) they used $28,133.60 from the safe deposit box to purchase a Suburban, which was placed in

Toni Compton’s name and used by both Comptons as a family vehicle, (2) Johnny Compton

benefitted from the purchase and use of the Suburban, (3) Johnny Compton knew or should have

known that Toni Compton stole funds from Mary Sesso, (4) Toni Compton committed fraud and

constructive fraud against Mary Sesso, (5) by accepting the benefits of Toni Compton’s fraud,

conversion, and theft, Johnny Compton participated in these acts, (6) the Comptons would be

unjustly enriched if the Suburban remained in Toni Compton’s name, and (7) Johnny Compton is

jointly and severally liable for $26,244.60 of the $72,448.24 principal judgment. Mary Sesso argues

by cross-appeal that Johnny Compton should be jointly and severally liable for the entire amount of

the judgment, rather than just a portion of it.

                                             ANALYSIS

               The Comptons contest the factual sufficiency of the evidence that Toni Compton

committed a breach of fiduciary duty or fraud against Mary Sesso. They also challenge the

                                                  8
sufficiency of the evidence to support the damage amount. They cite gaps in evidence about the

amount of money placed in the box and times during which other people had access to the money.

They point to evidence that the Sessos kept the money overnight before renting the box and that

Lynn Compton was at his grandparents’ apartment that night.

               We review findings of fact by the court in the same manner as we view jury findings.

Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996); Ludwig v. Encore Med., L.P.,191 S.W.3d 296, 300

(Tex. App.—Austin 2006, no pet.). When reviewing a challenge to the factual sufficiency of the

evidence, we must consider, weigh, and examine all of the evidence in the record. Plas-Tex, Inc. v.

U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989). We will set aside the verdict only if the

evidence that supports the finding is so weak as to render the judgment clearly wrong and manifestly

unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). We may not reverse even if we would

find that the evidence preponderates toward a different answer. See Herbert v. Herbert, 754 S.W.2d
141, 144 (Tex. 1988). In a bench trial, the trial court, as fact-finder, is the sole judge of the

credibility of the witnesses. Buffington v. DeLeon, 177 S.W.3d 205, 209 (Tex. App.—Houston [1st

Dist.] 2005, no pet.). We may not pass upon the witnesses’ credibility or substitute our judgment

for that of the fact-finder. Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex. 1998).

But see City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005) (jurors cannot substitute their

opinions for undisputed truth).

               Breach of a fiduciary relationship can constitute fraud because the fiduciary

relationship imposes higher duties, such as duties of good faith, candor, and “full disclosure

respecting matters affecting the principal’s interests and a general prohibition against the fiduciary’s

                                                   9
using the relationship to benefit his personal interest, except with the full knowledge and consent of

the principal.” Flanary v. Mills, 150 S.W.3d 785, 795 (Tex. App.—Austin 2004, pet. denied)

(quoting Chien v. Chen, 759 S.W.2d 484, 495 (Tex. App.—Austin 1988, no pet.)). At common law,

the term “fraud” means an act, omission, or concealment in breach of a legal duty, trust, or

confidence justly imposed, when the breach causes injury to another or the taking of an undue and

unconscientious advantage. Chien, 759 S.W.2d at 495. Common-law fraud includes both actual and

constructive fraud. Actual fraud usually involves dishonesty of purpose or intent to deceive. Archer

v. Griffith, 390 S.W.2d 735, 740 (Tex. 1964). Constructive fraud encompasses those breaches that

the law condemns as fraudulent because they tend to deceive others, violate confidences, or cause

injury to public interests, regardless of the actor’s mental state. Id. When one has a duty to speak

the truth, a false representation of a past or present material fact is fraudulent when another relies

thereon to his detriment. See Chien, 759 S.W.2d at 495.

               Appellants do not challenge that there was a fiduciary relationship between Mary

Sesso and Toni Compton. They argue that gaps exist in the evidence regarding how much money

was placed in the safe deposit box and who might have taken the money. We conclude, however,

that sufficient evidence supports the court’s findings that Toni Compton breached her fiduciary

obligations to Mary Sesso by taking more than $70,000 in cash without permission. The undisputed

evidence is that the Sessos received $73,549.25 in cash from the Del Rio bank, and that Mary Sesso

put the full amount in the box. The evidence reflects that Toni Compton was the only person who

accessed the box before June 2003. She admitted taking $30,000 in cash during the October 2002

visit, and there is evidence indicating that the cash remaining in the box was rebound at that time

                                                 10
with $1 bills used to fill out the bundles. In addition to the evidence that Toni Compton tried to

conceal her removal of funds, when her son called to confront her about the missing funds, there is

evidence that Toni Compton shouted to her husband that her son was lying. Toni Compton claimed

to have her father’s permission to take the $30,000, and denied knowledge of what happened to the

remaining $40,000. There was disputed evidence regarding whether the Comptons made several

large purchases between September 2002 and June 2003 that were inconsistent with their resources.

The Comptons speculated that Mary Sesso originally placed less than the full amount in the box and

that someone else—perhaps Mary Sesso or Lynn Compton—removed the money. The trial court

made a credibility decision and chose to credit Mary Sesso’s and Lynn Compton’s version of events.

The record does not support overturning that decision. We conclude that sufficient evidence

supports the findings that Toni Compton committed fraud through breach of fiduciary duty.

                Both sides challenge the court’s conclusion that Johnny Compton is jointly and

severally liable for the fraud to the extent that it involves the purchase of the Suburban. The court

concluded that Johnny Compton knew or should have known that Toni Compton had taken money

from the box without permission and that, because he benefitted from her wrongful taking of those

funds, he equitably participated in that wrongdoing. The Comptons contend that Johnny Compton

had almost no involvement in any of the relevant transactions and that he did not benefit from the

purchase of the Suburban. Conversely, Mary Sesso contends that Johnny Compton should be held

liable for all of the missing cash.

                A party who benefits from a fraudulent transaction may be a principal in the

fraud and may be held liable as such. In re Arthur Andersen L.L.P., 121 S.W.3d 471, 481

                                                 11
(Tex. App.—Houston [14th Dist.] 2003, no pet.). A party can be liable for the fraudulent

misrepresentations of a third party by mere silent acquiescence when he benefitted from the fraud.

Id. (citing Bransom v. Standard Hardware, Inc., 874 S.W.2d 919, 924 (Tex. App.—Fort Worth

1994, writ denied); Corpus Christi Teachers Credit Union v. Hernandez, 814 S.W.2d 195, 202 (Tex.

App.—San Antonio 1991, no writ)).

               There is evidence that supports the court’s findings that Johnny Compton was aware

of the fraud and knowingly benefitted from it. The connection between the cash removed from the

box and the purchase of the Suburban is undisputed. Johnny Compton benefitted by using it on the

weekends with his wife. Although flatly denied, Lynn Compton’s testimony that Johnny Compton

said he was making payments on the Suburban is inconsistent with the idea that it was a fully-paid

gift. Even if Johnny Compton was initially unaware that the purchase money for the Suburban was

not a gift, he became aware on June 13, 2003, that others did not believe it was a gift. Factually

sufficient evidence supports the trial court’s findings that Johnny Compton accepted the benefits of

Toni Compton’s fraud despite his awareness of the fraud.

               Nevertheless, the evidence also supports the court’s judgment limiting Johnny

Compton’s liability to the purchase price of the Suburban. Unlike the clear evidence connecting the

$30,000 taken by Toni Compton with Johnny Compton’s beneficial use of the Suburban, there is not

sufficient evidence to establish a clear connection between the remainder of the cash taken by Toni

Compton (approximately $40,000) and a particular benefit received by Johnny Compton. There was

testimony that the Comptons purchased several assets and improvements while Toni Compton had

access to the box, but there was competing evidence that the purchases were made at other times or

                                                12
with other funds. Further, there is no direct evidence that Johnny Compton participated in his wife’s

deceptive actions. The only evidence is of peripheral involvement in events surrounding the cash,

such as his presence at the meeting when the funds were discussed and his awareness of the deposits

made by Toni Compton between September 2002 and June 2003, at times when she had access to

the box and was not otherwise earning an income. Yet, it is undisputed that Johnny Compton did

not rent the safe deposit box, was not an authorized user, and did not open it. Thus, factually

sufficient evidence supports the court’s refusal to find that Johnny Compton benefitted from the

remainder of the removed cash and that he knew of or acquiesced in that benefit. Accordingly, the

record supports the court’s refusal to hold Johnny Compton jointly and severally liable for anything

more than the value of the Suburban.

                                         CONCLUSION

               Having resolved all issues presented in favor of the judgment, we affirm the

judgment.

                                              W. Kenneth Law, Chief Justice

Before Chief Justice Law, Justices Patterson and Puryear

Affirmed

Filed: July 21, 2006

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