Court Opinion

ID: 6322802
Source: CourtListenerOpinion
Date Created: 2022-03-14 08:12:52.652613+00
Date Added: 2024-06-11T09:21:07.257509
License: Public Domain

In the
                   Court of Appeals
           Second Appellate District of Texas
                    at Fort Worth
                ___________________________
                     No. 02-19-00401-CV
                ___________________________

JOE GRISEL, DAVID MORRISON, HMCRT, LLC, ENVISAGE CAPITAL,
   LLC, CYNDEX SERVICES, LLC, WANDA J. BARRERAS, AND C-7
           DEVELOPMENT PARTNERS, LLC, Appellants

                                 V.

          EVEREST INTERNATIONAL, LLC, Appellee

             On Appeal from the 348th District Court
                     Tarrant County, Texas
                 Trial Court No. 348-282711-15

            Before Sudderth, C.J.; Kerr and Birdwell, JJ.
              Memorandum Opinion by Justice Kerr
                           MEMORANDUM OPINION

      Appellee Everest International, LLC supplied Creative Essentials, LLC (CE)

with LapDesk products that CE sold to retailers. When CE started experiencing

financial trouble, it brought in business consultant appellant Joe Grisel and his

company, appellant HMCRT, LLC, to help save CE. Grisel eventually involved other

appellants in the project: David Morrison; Envisage Capital, LLC; Cyndex Services,

LLC; Wanda J. Barreras; and C-7 Development Partners, LLC. From CE’s

perspective, the project failed, and CE never recovered financially.

      Everest claims that while CE verged on financial collapse, Grisel and Morrison

duped Everest into extending additional credit to CE, and that they conspired with

HMCRT, Envisage, Cyndex, Barreras, and C-7 Development to defraud Everest.

After a ten-day trial, a jury agreed and found for Everest on its fraud and negligent-

misrepresentation claims against Grisel and Morrison and on its civil-conspiracy claim

against Grisel, Morrison, HMCRT, Envisage,               Cyndex, Barreras, and     C-

7 Development (collectively, “the Defendants”). The jury awarded Everest over

$430,000 in actual damages and over $1.3 million in exemplary damages against

Grisel. The trial court reduced the exemplary-damage award in accordance with Texas

law and signed a judgment on the verdict awarding Everest actual damages against the

Defendants jointly and severally and exemplary damages against Grisel.

      The Defendants have appealed and raise eight issues: (1) Everest lacked

standing to sue the Defendants; (2) Everest lacked capacity to maintain this suit

                                           2
because it is a foreign entity not registered to do business in Texas; (3) Everest did not

actually and justifiably rely on Grisel’s and Morrison’s alleged representations as a

matter of law; (4) the evidence is insufficient to support the jury’s fraud and negligent-

misrepresentation findings against Morrison; (5) the evidence is insufficient to support

the jury’s civil-conspiracy finding against the Defendants; (6) regarding the jury’s

exemplary-damages predicate finding against Grisel, there is no clear and convincing

evidence to support the jury’s malice and gross-negligence findings, and the jury

charge failed to properly define “fraud”; (7) some of Everest’s comments during

closing arguments were improper, incurable, and harmful; and (8) if we reverse the

jury’s conspiracy findings but affirm the fraud and negligent-misrepresentation

findings, Grisel and Morrison cannot be held jointly and severally liable because

Everest failed to request proportionate-liability findings from the jury. We will reverse

and render in part on Everest’s claims against Barreras and Cyndex and affirm the trial

court’s judgment in all other respects.

                                    I. Background

      Everest—a logistics and import company—is a Florida LLC that does business

in Texas. Everest is owned by Enoch Poon and Pat Sullins. Sullins’s family friend of

25 years, Mike Jennings, owned Arlington-based CE.1 For about 20 years, Everest had

      1
       Jennings died in January 2017.

                                            3
sourced and imported LapDesk products from overseas for CE to sell under its

“LapGear” brand to retailers in the United States. Everest was CE’s sole supplier.

A. CE brings in Grisel and his team

       Sometime in 2013, CE began experiencing financial difficulties, including

mounting debt to lenders, lack of cash flow, and inability to pay its suppliers,

including Everest. In September 2013, Grisel, a self-employed business consultant,

was introduced to Jennings by a mutual friend. After Jennings and Grisel met several

times, Grisel agreed to help CE. To that end, Grisel and Jennings agreed to a

$25,000 flat fee for Grisel’s services from September 2013 through February 2014.

       According to Grisel, he and his company HMCRT2 are business “turnaround

specialists.” The acronym HMCRT represents a “group of people” who are experts in

human resources, marketing, capital, raw materials, and technology. Grisel’s plan to

help CE included acquiring funds for CE and bringing in a group of individuals to

help CE with integration, technology, automation, prototypes, and financial practices.

Among others, Grisel eventually involved the following people and entities in the CE

project:

   • Morrison, a software architect and Grisel’s long-time friend;

   • Morrison’s company Envisage;

       2
        When Grisel started working with CE, HMCRT was not incorporated, and
Grisel considered it a sole proprietorship. HMCRT was incorporated in May 2014.
Grisel is HMCRT’s sole owner.

                                          4
   • C-7 Development, a Grisel-owned company that “does a little bit of
     everything” and that also owned the house in which Morrison lived;

   • Barreras (who is also Morrison’s sister); and

   • Cyndex, a bookkeeping and corporate-setup business that Barreras and her
     husband own.

      Envisage eventually entered into an independent-contractor agreement with

CE, and under this contract, Morrison worked on integrating multiple facets of CE’s

business into one software package, as well as prototyping, automation, and installing

a new phone system. Barreras incorporated HMCRT in May 2014 and designated

Cyndex as HMCRT’s registered agent. Barreras and her husband also controlled the

“C-7 Trust” account, which was opened to “manage whatever assets or money went

in and out” of C-7 Development. According to Barreras, funds deposited into that

account belonged to Grisel even though he was not an account holder or signatory on

the account, and she and her husband held those funds “in trust” for Grisel’s benefit.

Barreras would eventually briefly work as an independent contractor for CE, assisting

with updating the employment manual and obtaining insurance.

      With Jennings’s approval, Grisel also recruited Ken Fazende, Ray Yauk, Ben

Grisel, and Dave Simcho to work for CE. All but Yauk had criminal backgrounds.

Fazende—a former CPA and former special agent for the United States Treasury

Department—had federal felony convictions for a “scheme to conceal and cover up

material facts” and for the “production of sexually explicit depictions of a minor for

importation into the United States.” Fazende was hired to work as CE’s financial

                                          5
manager and used an alias (Ken Phillips) while doing so. Grisel’s younger brother Ben

was an opioid addict and was under a federal indictment for conspiracy to distribute

opioids while he was working at CE selling old inventory and “help[ing] with

spreadsheets.” Ben was in recovery and clean while working at CE but was later

convicted of conspiracy to distribute. Simcho had been convicted of federal bank

fraud and worked as Grisel’s executive assistant under the alias Dave Marion.

B. Grisel meets with Sullins

      By early 2014, CE’s relationship with Everest—CE’s sole supplier—had

become financially strained because CE owed Everest $933,000. On March 4, 2014,

Sullins notified his long-time friend Jennings “with a heavy heart and great regret”

that Everest would not ship any more goods or extend any more credit to CE. A few

days later, Jennings asked Sullins to meet with Grisel.

      On March 11, 2014, Sullins met with Grisel at CE’s offices. According to

Sullins, Grisel represented that he was a highly experienced and successful business-

turnaround expert who had “turned around” many companies over the years. Grisel

claimed to have a team of “experts” in human resources, management, technology,

and capital, which he referred to as HMCRT. Grisel claimed that he and HMCRT

were going to turn CE around, that they would “be in and out . . . in 30 to 60 days,”

and that Sullins “wouldn’t even recognize the company when they were done.”

      Sullins testified that he understood that Grisel was “representing [his] company

and his partner, and they were going to bring their group in and work with [CE] to

                                            6
make improvements, put some money in, and turn it around.” Sullins further

understood that Grisel was authorized to negotiate with him on CE’s behalf and to

work with Everest to re-establish credit.

       During Grisel and Sullins’s meeting, Grisel represented that Morrison was his

partner in HMCRT and was ready to invest $500,000 in CE immediately. Grisel also

claimed that CE had been approved for an SBA loan but that he and HMCRT could

help CE get more favorable loan terms because Morrison had agreed to invest

$500,000 in CE. Grisel further represented that some of the $500,000 would be used

to pay Everest. Grisel also asked Sullins if Everest would extend more credit to CE

and share the interest costs of a bridge loan to cover CE until the SBA loan could be

finalized. Sullins refused and left the meeting.

       At Jennings’s request, Sullins met with Grisel at CE again three days later.

During this second meeting, Grisel repeated his representations from the first

meeting, including Morrison’s imminent $500,000 cash infusion. Grisel further

represented that because of his, Morrison’s, and HMCRT’s involvement and the

money “going in,” CE would be able to timely pay Everest in the future. Grisel also

promised that CE would pay Everest the past-due amounts over the next three

months and that if Everest would extend new credit to CE, CE would pay Everest

“on time going forward.” Grisel represented that Everest’s extension of credit, along

with Grisel and HMCRT’s involvement, would cause CE’s business to grow, which

would in turn lead to more business for Everest.

                                             7
       Based on Grisel’s representations, Sullins was satisfied that “this is a doable

deal” that would get CE “turned around,” and Everest thus reopened CE’s credit in

the form of processing a “huge chunk of purchase orders.” Sullins also agreed that

Everest would pay half the interest on CE’s bridge loan3 and agreed to give CE a

credit to address some quality issues on products Everest had supplied to CE in the

past. After the meeting, Sullins sent Jennings an email outlining what he and Grisel

had discussed. 4

C. Morrison’s $500,000 investment

       Morrison’s $500,000 immediate investment in CE turned out to be a loan from

Morrison’s friend Jim Thompson that didn’t make its way to CE until June 2014. In

March 2014, Thompson loaned the funds not to Morrison but to C-7 Development;

Grisel executed the promissory note on C-7 Development’s behalf, and the loan was

secured by Morrison’s residence, which C-7 Development owned.5 At Grisel’s

direction, Barreras accepted the loan proceeds into the C-7 Trust account and then

(1) distributed about $25,000 of the loan proceeds to Grisel in cash and (2) transferred

       Everest “paid” the interest on the bridge loan by “letting [CE] take it as a
       3

discount” “off of some invoices.”

       Sullins’s outline did not mention Morrison’s $500,000 investment.
       4

       Morrison explained at trial that he had purchased the property in 2001 and had
       5

pledged it as security for a $650,000 transaction with Grisel that “fell through,” which
was how C-7 Development came to own the property. After that, Morrison leased the
property until he moved out in 2015 or 2016.

                                           8
about $18,000 of the loan proceeds into Cyndex’s account—which belonged to

Barreras and her husband—to buy a car for Morrison. Grisel later directed Barreras to

distribute the remaining loan proceeds to CE. In June 2014, Barreras made two

$200,000-plus transfers from the C-7 Trust account to the Cyndex account. In mid-

June, Barreras paid $15,000 from the Cyndex account to CE, and later that month,

she paid $441,000 from the Cyndex account to CE.

D. Everest continues extending credit to CE

      Over the next few months, Grisel and his team continued working with CE.

Grisel’s primary goal for CE was getting an SBA loan so that CE could pay off a

$1.2 million credit line that was in default. During this time, Grisel worked with

Jennings to improve CE’s financials and to complete several SBA loan applications,

which CE submitted to various banks. Also during this time, CE paid Grisel and

Morrison each $10,000 per month in consulting fees,6 along with thousands in fees to

the other members of Grisel’s “team.”

      Meanwhile, Everest continued to extend credit to CE based on Grisel’s and

Morrison’s continued representations. According to Sullins, Morrison reaffirmed

Grisel’s representations that Morrison “was [Grisel’s] business partner in [HMCRT],

his financial guy, his money man, who was going to bring the $500,000 into this

      6
        Morrison was paid through Envisage. CE paid Grisel based on a monthly
invoice from Yauk’s company Dry Fabrication and Welding, Inc. by wiring money to
Grisel’s mother-in-law’s bank account.

                                         9
business deal[].” But CE failed to make payments to Everest as promised. When

Sullins approached Morrison in April or May 2014 about Everest’s not getting paid,

Morrison told Sullins that he did not have the money and was going to have to

borrow it. Sullins later learned that Grisel never intended for CE to pay Everest for

the credit it was extending and was working to move CE’s business away from

Everest and to a new supplier.

E. CE never recovers, and Sullins and Poon buy most of CE’s assets

      When CE failed to obtain an SBA loan, tensions arose between Jennings and

Grisel. In late October 2014, Jennings sent a memo to all CE employees explaining

that over the last year or so, the company had “struggled with financial stability, which

lead [sic] to our engaging the HMCRT group, including [Morrison] and [Fazende]”

but that CE’s financial position had not improved because it had failed to obtain an

SBA loan. On October 31, 2014, Jennings terminated CE’s relationship with the

“HMCRT Group,” which according to Jennings included HMCRT, Grisel, Fazende,

and Morrison.

      By the time CE cut ties with Grisel, CE owed Everest over $1.32 million.

Everest thus stopped extending credit to CE in October 2014 and put CE on cash-

on-delivery terms. In an attempt to mitigate Everest’s losses, Sullins and Poon formed

Creative Manufacturing, LLC (CM), which purchased some of CE’s assets and

inventory in April 2015 and released about $122,000 of CE’s debt to Everest.

                                           10
      CE has never paid Everest the entire balance owed. CE and Everest continued

doing limited business together on a cash basis until Jennings died in January 2017.

F. Everest sues

      It turned out that Grisel’s and Morrison’s representations to Sullins were false:

CE did not have an SBA loan approved in March 2014, and Morrison didn’t have

$500,000 to immediately invest in CE.7 Because Everest had relied on these

representations—along with Grisel’s representations regarding his business-

turnaround expertise and HMCRT’s team of “experts”—in deciding to extend

additional credit to CE, Everest sued Grisel and Morrison for fraud by

misrepresentation, fraud by nondisclosure, and negligent misrepresentation. Everest

also asserted a civil-conspiracy claim against Grisel, Morrison, HMCRT, Envisage,

Cyndex, Barreras, and C-7 Development. Everest sought actual and exemplary

damages.

      At trial, Sullins testified that Grisel had represented that he was authorized to

negotiate on CE’s behalf and that “he was going to be coming into CE with his group

to run the company going forward.” Sullins stated that Grisel’s representation that

Morrison could immediately invest $500,000 in CE was the most important

representation upon which he relied in deciding to extend credit to CE. According to

Sullins, Grisel’s representations that Morrison had $500,000 “in the bank” and was

      7
       Morrison admitted at trial that he did not have $500,000 to invest in CE
because he was on the verge of filing for bankruptcy.

                                          11
“ready to put the money in” were important to Sullins because the quick infusion

would give CE cash flow to pay its bills (especially the monies owed to Everest) and

would help improve CE’s financial health to increase its chance of securing an SBA

loan.

        Sullins further testified that Grisel had represented that Morrison was his

partner in HMCRT, “his financial guy,” and “his money man” who was going to bring

$500,000 into CE and that Morrison “reaffirmed that to me in later meetings and

discussions.” Sullins stated that Everest would not have extended credit to CE if he

had known that Morrison was going to have to borrow the money. He further

testified that he would not have extended credit to CE if he had known that

Morrison’s “investment” was going to take over three months to make its way to CE.

Sullins explained that this three-month delay harmed Everest because

        I got further -- they got further and further behind on me. And once that
        happens, they owe you so much money that if you cut them off, they’re
        going to go out of business. So it’s like now they have me over a barrel
        at that point. And that’s where I was trying not to go on March 14th --
        or on March 4th, when I discontinued business [before Jennings
        persuaded me to meet with Grisel]. I was trying to put a stop to the
        bleeding, because if I let it go any further, it would bury me.

Sullins claimed that Grisel and Morrison “told me many things that weren’t true and

with the express intent of asking me to extend credit to a company that they were

trying to pull a big, huge SBA loan out of so that they could skim money out of that

loan.” Sullins also testified that under Grisel’s guidance, CE falsified its financials to

make the company appear healthier on its SBA loan applications.

                                           12
      According to Sullins, Grisel and his team “ran [CE] into the ground.” 8 Had

Sullins known what he knew at trial about Grisel and HMCRT, he would not have

extended credit to CE. As a result of Grisel’s and Morrison’s representations to

Sullins, Everest paid about $34,000 in bridge-loan interest; credited CE’s account for

over $17,000 to remedy a product-quality issue; and ultimately extended over

$387,000 in credit to CE. Everest’s losses totaled about $439,000 over and above the

$933,000 that CE had already owed it.

      Over the course of the ten-day trial, the jury heard testimony from Sullins;

Grisel; Kris Jennings (Jennings’s son); Fazende; Poon; Barreras and her husband Ray;

Yauk; Morrison; Everest’s counsel; and Wayne Whitaker, a Fort Worth attorney. 9 At

the trial’s conclusion, the jury found for Everest on its fraud and negligent-

misrepresentation claims against Grisel and Morrison and found that Everest had

suffered $439,129.65 in out-of-pocket losses as a result. The jury also found that the

Defendants had civilly conspired to defraud Everest. The jury further found by clear

and convincing evidence that Everest’s harm resulted from Grisel’s malice, fraud, or

      8
       This assertion is supported by CE’s financials: CE’s net loss in 2013 had been
about $240,000; for 2014, it more than tripled to about $774,000. Ultimately, Grisel
and his team “pulled out” almost the “exact amount” they represented to Everest that
they would put into CE.
      9
       Grisel and Whitaker had met several years earlier through a men’s Christian
group. Whitaker and Simcho had tried to start a company together, and Grisel assisted
them with “ideas, spreadsheets, [and] concepts.”

                                         13
gross negligence, and awarded Everest $1,317,388.95 in exemplary damages. The

jury’s verdict was unanimous.

      The trial court signed a final judgment incorporating the jury’s findings and

(1) awarded Everest $439,129.65 in actual damages against Grisel and Morrison (for

the fraud claim) and Barreras, HMCRT, Envisage, Cyndex, and C-7 Development (for

the conspiracy claim), jointly and severally; (2) reduced the exemplary damages to an

amount two times the amount of economic damages in accordance with Texas Civil

Practice and Remedies Code Section 41.008;10 and (3) awarded Everest $878,259.30 in

exemplary damages against Grisel.

      The Defendants moved for judgment notwithstanding the verdict; moved for a

new trial, or alternatively, for a remittitur; and moved to modify, correct, or reform

the judgment. The Defendants’ motions were overruled by operation of law, and they

timely appealed.

                                      II. Standing

      In their first issue, the Defendants complain that Everest lacks standing

because (1) as part of CM’s purchase of CE’s assets in April 2015, Everest released

CE from all claims related to products sold or supplied by Everest before August 1,

2014, which included CE’s debt for products that Everest had supplied to CE on

credit, and (2) Everest failed to establish that the Defendants breached its legal rights.

      10
        See Tex. Civ. Prac. & Rem. Code Ann. § 41.008(b).

                                            14
A. Applicable law and standard of review

       “Standing is a constitutional prerequisite to suit,” and “[a] court has no

jurisdiction over a claim made by a plaintiff who lacks standing to assert it.” Heckman

v. Williamson Cnty., 369 S.W.3d 137, 150 (Tex. 2012). Because standing is a component

of subject-matter jurisdiction, its existence is a legal question that we review de novo.

See Farmers Tex. Cnty. Mut. Ins. Co. v. Beasley, 598 S.W.3d 237, 240 (Tex. 2020). In

evaluating standing, we construe the pleadings in the plaintiff’s favor, and we consider

evidence relevant to the jurisdictional inquiry. See id.

       A standing inquiry “focuses on the question of who may bring an action.”

Vernco Constr., Inc. v. Nelson, 460 S.W.3d 145, 149 (Tex. 2015) (quoting Patterson v.

Planned Parenthood of Hous. & Se. Tex., Inc., 971 S.W.2d 439, 442 (Tex. 1998)).

Generally, unless standing is conferred by statute, a plaintiff must demonstrate that it

“possesses an interest in a conflict distinct from that of the general public, such that

the defendant’s actions have caused the plaintiff some particular injury.” Williams v.

Lara, 52 S.W.3d 171, 178 (Tex. 2001). To have standing, a plaintiff must be personally

aggrieved. Nootsie, Ltd. v. Williamson Cnty. Appraisal Dist., 925 S.W.2d 659, 661 (Tex.

1996). Standing requires “a real controversy between the parties” that “will be actually

determined by the judicial declaration sought,” Austin Nursing Ctr., Inc. v. Lovato,

171 S.W.3d 845, 849 (Tex. 2005) (quoting Nootsie, 925 S.W.3d at 662), and “focuses

on whether a party has a sufficient relationship with the lawsuit so as to have a

‘justiciable interest’ in its outcome,” id. at 848. “Without [a] breach of a legal right

                                             15
belonging to the plaintiff[,] no cause of action can accrue to [its] benefit.” Nobles v.

Marcus, 533 S.W.2d 923, 927 (Tex. 1976).

B. Analysis

      The Defendants first argue that Everest lacks standing to sue them because as a

part of the asset-purchase agreement between CE and CM, Everest released CE from

all claims “in any way related to products sold or supplied by Everest prior to August

1, 2014,” which the Defendants contend would have included CE’s debt related to

products supplied by Everest. Release is an affirmative defense “where the defendant

bears the burden to plead and prove the existence of an effective and valid release.”

Barras v. Barras, 396 S.W.3d 154, 170 n.5 (Tex. App.—Houston [14th Dist.] 2013, pet.

denied) (citing Williams v. Glash, 789 S.W.2d 261, 264 (Tex. 1990)); see Tex. R. Civ. P.

94. Whether the release between Everest and CE released the Defendants goes to the

merits of the case, which we do not consider in determining standing.11 See

DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299, 305 (Tex. 2008) (“A plaintiff does not

lack standing simply because he cannot prevail on the merits of his claim; he lacks

standing because his claim of injury is too slight for a court to afford redress.”). We

thus reject the Defendants’ first standing argument.

      Next, the Defendants argue that Everest lacks standing because it failed to

establish that any of the Defendants breached Everest’s legal rights because none of

      11
         We note that although the Defendants pleaded the affirmative defense of
release, they did not request or obtain a jury finding on it.

                                           16
the Defendants had a relationship with Everest at the time it extended additional

credit to CE. In support, the Defendants rely on Nobles, in which the supreme court

held that the plaintiffs lacked standing to maintain a fraud claim because they were

not the defrauded parties. 533 S.W.2d at 927 (“A suit to set aside a deed obtained by

fraud can only be maintained by the defrauded party. A party who was not defrauded

by the conveyance has not suffered an invasion of a legal right and therefore does not

have standing to bring suit based on that fraud.” (citations omitted)). Based on Nobles,

the Defendants argue that Everest lacks standing because they did not breach

Everest’s legal rights and because any alleged fraud claim belonged to CE, not

Everest. They point out that at the time of Grisel’s alleged representations to Everest,

Grisel was not “an owner of CE, nor a shareholder, officer, director, or employee”

and “had nothing to do with what products CE ordered or when Everest got paid,”

which, according to the Defendants, was Jennings’s decision alone. The Defendants

thus contend that because it was CE that owed Everest money, Everest “failed to

show any breach of a legal right it had by any of the Defendants that would give rise

to a cause of action for damages.” The Defendants further claim that any alleged

fraud claim belonged to CE, not Everest, because CE incurred further debt with

Everest based on the Defendants’ alleged representations.

      Here, in support of its fraud claim, Everest pleaded that Grisel and Morrison

intentionally made material and false representations and omissions to Everest and

that Everest relied on those misrepresentations and omissions in extending additional

                                          17
credit to CE. Similarly, in support of its negligent-misrepresentation claim, Everest

pleaded that Grisel and Morrison negligently made misrepresentations upon which

Everest relied in deciding to extend additional credit to CE. Everest further pleaded

that the Defendants “acted in combination with one another to accomplish improper

or unlawful objects and extract monies and other items of value from [Everest] by and

through one or more dishonest, unlawful[,] or overt acts.”

      “A fraud claim is personal to the defrauded party.” Zaan, LLC v. Sangani,

No. 05-12-00423-CV, 2015 WL 2398652, at *4 (Tex. App.—Dallas May 20, 2015, pet.

denied) (mem. op.) (citing Nobles, 533 S.W.2d at 927). “Consequently, only the

defrauded party has standing to assert a fraud claim.” Id. (citing Nobles, 533 S.W.2d at

927). Here, Everest’s fraud and negligent-misrepresentation claims are based on

Grisel’s and Morrison’s misrepresentations and omissions to Everest, and there was

evidence presented at trial that based on these misrepresentations and omissions,

Everest extended additional credit to CE, helped CE pay bridge-loan interest, and

credited CE’s account to address some product-quality issues. And its civil-conspiracy

claim against the Defendants is predicated on Grisel’s and Morrison’s alleged fraud.

Viewing Everest’s pleadings in its favor and considering the trial evidence, we thus

conclude that Everest had standing to maintain its fraud and negligent-

misrepresentation claims against Grisel and Morrison and its civil-conspiracy claim

against the Defendants. We thus overrule the Defendants’ first issue.

                                          18
                                        III. Capacity

       The Defendants complain in their second issue that Everest lacked capacity to

maintain its suit and to recover judgment because Everest (a Florida limited-liability

company) is not registered to do business in Texas. See Tex. Bus. Orgs. Code

§ 9.051(b); see also Tex. R. Civ. P. 93(1), (2).

       Shortly before trial, the Defendants filed a verified plea in abatement asserting

that because Everest was a Florida LLC doing business in Texas but was not

registered to do business here, Texas Business Organizations Code Section 9.051(b)

prohibited Everest from maintaining or prosecuting this case. That section requires a

foreign entity to register with the Texas Secretary of State to maintain a cause of

action arising out of “the transaction of business” in Texas. See Tex. Bus. Orgs. Code.

§ 9.051(b). Based on Section 9.051, the Defendants argued that Everest could not

maintain its suit and thus asked the trial court to abate the case “pending Everest’s

registration as a foreign limited liability company” in Texas or, alternatively, to dismiss

the suit. At the hearing’s conclusion, the trial court denied the plea in abatement and

dismissal motion “for the time being.” The Defendants re-urged their capacity

challenge in their JNOV motion.

A. Standard of review and applicable law

       The Defendants properly raised their capacity challenge through their verified

plea in abatement. See Duradril, L.L.C. v. Dynomax Drilling Tools, Inc., 516 S.W.3d 147,

157 (Tex. App.—Houston [14th Dist.] 2017, no pet.). We review a trial court’s ruling

                                              19
on a plea in abatement for an abuse of discretion. Wyatt v. Shaw Plumbing Co.,

760 S.W.2d 245, 248 (Tex. 1988); Anglo-Dutch Petroleum Int’l, Inc. v. Case Funding

Network, LP, 441 S.W.3d 612, 621 (Tex. App.—Houston [1st Dist.] 2014, pet. denied).

A trial court abuses its discretion if it acts without reference to any guiding rules or

principles—that is, if its act is arbitrary or unreasonable. Low v. Henry, 221 S.W.3d 609,

614 (Tex. 2007); Cire v. Cummings, 134 S.W.3d 835, 838–39 (Tex. 2004). As the parties

challenging capacity, the Defendants had the burden to prove Everest’s lack of

capacity. See Christi Bay Temple v. GuideOne Specialty Mut. Ins. Co., 330 S.W.3d 251,

253 (Tex. 2010); Anglo-Dutch Petroleum, 441 S.W.3d at 621.

       In Texas, “a foreign filing entity” cannot “maintain an action, suit, or

proceeding in a court of this state . . . on a cause of action that arises out of the

transaction of business in this state unless the foreign filing entity is registered in

accordance with” Chapter 9 of the Texas Business Organizations Code. Tex. Bus.

Orgs. Code Ann. § 9.051(b). Foreign LLCs must register under Chapter 9 to transact

business in Texas. Id. § 9.001(a)(1). The registration of a foreign filing entity (other

than a foreign limited-liability partnership) “is effective when the application filed

under [Business Organizations Code] Chapter 4 takes effect.” Id. § 9.008(a). With

exceptions not applicable here, “[a] filing instrument submitted to the secretary of

state takes effect on filing.” Id. § 4.051. If the secretary of state finds that the filing

instrument conforms to applicable code provisions and rules and that “all required

fees have been paid,” the secretary of state must “file the instrument by accepting it

                                            20
into the filing system adopted by the secretary of state and assigning the instrument a

date of filing.” Id. § 4.002(a).

B. Analysis

       Everest’s live pleading stated that it was a Florida LLC doing business in

Tarrant County, Texas. The Defendants pointed to this statement in their plea in

abatement, to which they also attached as supporting evidence (1) correspondence

from the Texas Secretary of State’s office stating that its records reflected that Everest

was not registered to do business here and (2) Sullins’s deposition testimony in which

he stated that Everest was a Florida corporation that operated in Texas.

       In response, Everest pointed out that the Business Organizations Code

expressly provides that specific activities “do not constitute transaction of business in

this state,” including maintaining an action or suit, maintaining a bank account, and

“transacting business in interstate commerce.” Id. § 9.251(1), (3), (9). Everest

explained that although it did business in Tarrant County, “[a]t all relevant times” its

principal office and all its administrative functions were based out of Florida, and its

business activities in Texas and Florida involved interstate commerce. Thus, Everest

argued, it was not required to register in Texas as a foreign LLC to maintain its suit.

But “out of an abundance of caution, in order to avoid any argument over the matter

and [to] avoid any unnecessary delay or abatement of this lawsuit,” Everest filed with

the secretary of state on January 28, 2019, an “Application for Registration of a

Foreign Limited Liability Company,” along with the required filing fees. As proof,

                                           21
Everest provided a copy of its application, which was stamped “RECEIVED” by the

secretary of state, and a prepaid invoice from Austin-based Lawyer’s Aid Service, Inc.

reflecting that the service had filed the application and paid the filing fees to the

secretary of state on Everest’s behalf.

      During the plea-in-abatement hearing, the Defendants’ attorney argued that

although Everest had filed its application, he had not “received any confirmation from

the Secretary of State or -- or acceptance of that application.” Everest’s attorney

countered that Everest has taken “steps to cure any alleged defect” by filing the

registration application along with all required fees. The trial court ruled from the

bench, stating

      Well, for the time being, the plea in abatement and the motion to dismiss
      will be denied. I think that up until the time of judgment it can be cured.
      So we’re going to go ahead and proceed to trial, and if it’s not cured by
      the time judgment is rendered, we will revisit the issue.

During trial, Sullins testified that Everest was “licensed to operate in Texas.” The

Defendants re-urged their capacity argument in their JNOV motion.

      On appeal, the Defendants assert that because Everest never established that it

had complied with Section 9.051(b)’s registration requirement, it failed to establish its

capacity to maintain suit and to recover under the judgment. Everest counters that it

did establish compliance but that even if it didn’t, the Defendants failed to preserve

their capacity complaint because they did not object to the jury charge, which

assumed that Everest had capacity to sue. See Damian v. Bell Helicopter Textron, Inc.,

                                           22
352 S.W.3d 124, 141–42 (Tex. App.—Fort Worth 2011, pet. denied) (explaining that

when a defendant challenges capacity though a verified denial, the plaintiff bears the

burden of proving at trial that it is entitled to recover in the capacity in which it has

sued but that, to preserve a capacity complaint, the defendant must object to jury

questions that assume the capacity pleaded). But cf. Bossier Chrysler Dodge II, Inc. v.

Rauschenberg, 201 S.W.3d 787, 798 (Tex. App.—Waco 2006) (“If a verified plea in

abatement is filed, the filing party should seek a hearing on the plea. If the plea is

overruled, then the matter has been preserved for appellate review.”), rev’d in part on

other grounds, 238 S.W.3d 376 (Tex. 2007).

       Assuming that the Defendants have preserved their capacity complaint for our

review and that Everest was required to register to do business in Texas to maintain

suit, we conclude that the trial court did not abuse its discretion by denying the

Defendants’ plea in abatement. The Defendants bore the burden to prove that

Everest lacked capacity. The Defendants presented evidence that Everest was not

registered to conduct business in Texas, and in response, Everest presented evidence

that it had submitted an application to the secretary of state and had paid the required

fees. See Tex. Bus. Orgs. Code Ann. § 4.051 (stating that “[a] filing instrument

submitted to the secretary of state takes effect on filing”); see also id. § 4.002(a) (stating

that the secretary of state “shall” file a filing instrument upon finding that it conforms

to applicable code provisions and rules and that all required fees have been paid). The

Defendants never brought forward any evidence that Everest’s application was not in

                                             23
fact filed by the Texas Secretary of State. We thus conclude that the trial court did not

abuse its discretion by denying the Defendants’ plea in abatement.

        Additionally, on our own motion and for the first time on appeal we may take

judicial notice of adjudicative facts that are matters of public record. See Tex. R. Evid.

201; Rockstar Remodeling & Diamond Decks, LLC v. Taddia, No. 03-19-00657-CV,

2020 WL 1540740, at *2 n.2 (Tex. App.—Austin Apr. 1, 2020, no pet.) (mem. op.). A

search of Everest’s franchise-tax-account status on the Texas Comptroller’s website

shows that Everest’s right to transact business in Texas is “active” and that Everest’s

effective registration date with the Texas Secretary of State was January 28, 2019. We

take judicial notice of these facts showing that Everest was in fact registered to do

business.

        We overrule the Defendants’ second issue.

                           IV. Sufficiency of the Evidence

        The Defendants’ third, fourth, fifth, and sixth issues challenge the sufficiency

of the evidence supporting several of the jury’s findings. We address each issue in

turn.

A. Standards of Review

        We may sustain a legal-sufficiency challenge—that is, a no-evidence

challenge—only when (1) the record bears no evidence of a vital fact, (2) the rules of

law or of evidence bar the court from giving weight to the only evidence offered to

prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a mere

                                           24
scintilla, or (4) the evidence establishes conclusively the opposite of a vital fact. Shields

Ltd. P’ship v. Bradberry, 526 S.W.3d 471, 480 (Tex. 2017); see also Ford Motor Co. v.

Castillo, 444 S.W.3d 616, 620 (Tex. 2014) (op. on reh’g); Uniroyal Goodrich Tire Co. v.

Martinez, 977 S.W.2d 328, 334 (Tex. 1998) (op. on reh’g). In determining whether

legally sufficient evidence supports the finding under review, we must consider

evidence favorable to the finding if a reasonable factfinder could and must disregard

contrary evidence unless a reasonable factfinder could not. Cent. Ready Mix Concrete Co.

v. Islas, 228 S.W.3d 649, 651 (Tex. 2007); City of Keller v. Wilson, 168 S.W.3d 802, 807,

827 (Tex. 2005). We indulge “every reasonable inference deducible from the

evidence” in support of the challenged finding. Gunn v. McCoy, 554 S.W.3d 645,

658 (Tex. 2018).

       When reviewing an assertion that the evidence is factually insufficient to

support a finding, we set aside the finding only if, after considering and weighing all

the pertinent record evidence, we determine that the credible evidence supporting the

finding is so weak, or so contrary to the overwhelming weight of all the evidence, that

the finding should be set aside and a new trial ordered. Pool v. Ford Motor Co.,

715 S.W.2d 629, 635 (Tex. 1986) (op. on reh’g); Cain v. Bain, 709 S.W.2d 175,

176 (Tex. 1986); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965).

B. Everest’s Reliance

       In their third issue, the Defendants argue that no evidence supports the jury’s

fraud and negligent-misrepresentation findings because Everest’s reliance on Grisel’s

                                             25
and Morrison’s alleged misrepresentations and omissions was not actual or justified.

The Defendants contend that because Sullins and Poon—who are experienced,

sophisticated businessmen—raised and ignored multiple “red flags,” justifiable

reliance was negated as a matter of law.

   1. Applicable law

      To prevail on its claims for fraud by misrepresentation, fraud by nondisclosure,

and negligent misrepresentation, Everest had to prove (among other things) that it

actually and justifiably relied on Grisel’s and Morrison’s misrepresentations or

omissions.12 See, e.g., Grant Thornton LLP v. Prospect High Income Fund, 314 S.W.3d 913,

923 (Tex. 2010) (op. on reh’g) (stating that fraud and negligent misrepresentation

require a showing of actual and justifiable reliance); Schlumberger Tech. Corp. v. Swanson,

959 S.W.2d 171, 181 (Tex. 1997) (explaining that fraud by nondisclosure is a

subcategory of fraud and that because reliance is an element of fraud, it is likewise an

element of fraud by nondisclosure); BP Am. Prod. Co. v. Zaffirini, 419 S.W.3d 485,

506 (Tex. App.—San Antonio 2013, pet. denied) (stating that like common-law fraud,

fraud by nondisclosure includes the element of justifiable reliance). Justifiable reliance

      12
        The (unobjected-to) fraud question to the jury was a broad-form question in
which the jury was instructed that fraud included fraud by misrepresentation and
fraud by nondisclosure. Thus, the jury’s fraud findings against Grisel and Morrison
could be based on either or both theories.

                                            26
usually presents a fact question for a jury to decide.13 Barrow-Shaver Res. Co. v. Carrizo

Oil & Gas, Inc., 590 S.W.3d 471, 497 (Tex. 2019) (citing JPMorgan Chase Bank, N.A. v.

Orca Assets G.P., L.L.C., 546 S.W.3d 648, 654 (Tex. 2018)). But the element can be

negated as a legal matter when circumstances exist under which reliance cannot be

justified. Orca Assets, 546 S.W.3d at 654. “Red flags” indicating that reliance is

unwarranted is one such circumstance. See Barrow-Shaver Res., 590 S.W.3d at 501 (citing

Orca Assets, 546 S.W.3d at 655).

       13
         When, as here, the court’s charge is submitted to the jury without objection,
we measure the sufficiency of the evidence against the court’s charge. See Romero v.
KPH Consolidation, Inc., 166 S.W.3d 212, 221 (Tex. 2005) (citing Wal-Mart Stores, Inc. v.
Sturges, 52 S.W.3d 711, 715 (Tex. 2001)). The charge tracked the Texas Pattern Jury
Charges for fraud by misrepresentation, fraud by nondisclosure, and negligent
misrepresentation. See Comm. on Pattern Jury Charges, State Bar of Tex., Texas Pattern
Jury Charges: Business, Consumer, Insurance & Employment PJC 105.2, 105.4, 105.19 (2018).
In conformity with the pattern charges, the fraud-by-misrepresentation and fraud-by-
nondisclosure instructions did not explicitly instruct the jury that Everest’s reliance
must have been justifiable. See id. PJC 105.2, 105.4. Nevertheless, we will assume
without deciding that Everest was required to prove that its reliance was justified to
prevail on its fraud claim. See Nelson v. McCall Motors, Inc., 630 S.W.3d 141, 147–
48 (Tex. App.—Eastland 2020, no pet.) (concluding that although the jury charge did
not explicitly instruct the jury that the plaintiff’s reliance must be justifiable, the fraud
instruction requiring the plaintiff to prove reliance “necessarily included the inquiry as
to whether any reliance was justifiable” and thus considering whether justifiable
reliance was negated as a legal matter (citing Ginn v. NCI Bldg. Sys., Inc., 472 S.W.3d
802, 829–31 (Tex. App.—Houston [1st Dist.] 2015, no pet.))); see also Lake v. Cravens,
488 S.W.3d 867, 895 (Tex. App.—Fort Worth 2016, no pet.) (op. on reh’g)
(“[R]eliance is a necessary element of a statutory fraud claim, and we assume that the
reliance must have been justifiable.”). But see Harstan, Ltd. v. Si Kyu Kim, 441 S.W.3d
791, 799 (Tex. App.—El Paso 2014, no pet.) (refusing to consider whether there was
sufficient evidence of justifiable reliance when measuring the sufficiency of the
evidence supporting a fraud finding because no party complained of the jury charge’s
failure to require that the plaintiff’s reliance was justified); Ghosh v. Grover, 412 S.W.3d
749, 756 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (same).

                                             27
      “In measuring justifiability, we must inquire whether, ‘given a fraud plaintiff’s

individual characteristics, abilities, and appreciation of facts and circumstances at or

before the time of the alleged fraud[,] it is extremely unlikely that there is actual

reliance on the plaintiff’s part.’” Grant Thornton, 314 S.W.3d at 923 (quoting Haralson v.

E.F. Hutton Grp., Inc., 919 F.2d 1014, 1026 (5th Cir. 1990)). In an arm’s-length

transaction, a plaintiff must exercise ordinary care to protect its own interests. Orca

Assets, 546 S.W.3d at 654. Mere confidence in the defendant’s honesty and integrity

does not excuse a plaintiff’s failure to exercise reasonable diligence. Id. (citing Nat’l

Prop. Holdings, L.P. v. Westergren, 453 S.W.3d 419, 425 (Tex. 2015)). “[W]hen a party

fails to exercise such diligence, it is ‘charged with knowledge of all facts that would

have been discovered by a reasonably prudent person similarly situated.’” Id. (quoting

AKB Hendrick, LP v. Musgrave Enters., Inc., 380 S.W.3d 221, 232 (Tex. App.—Dallas

2012, no pet.)). A party “cannot blindly rely on a representation by a defendant where

the plaintiff’s knowledge, experience, and background warrant investigation into any

representations before the plaintiff acts in reliance upon those representations.” Id.

(quoting Shafipour v. Rischon Dev. Corp., No. 11-13-00212-CV, 2015 WL 3454219, at

*8 (Tex. App.—Eastland May 29, 2015, pet. denied) (mem. op.)).

      But “[o]ne does not have to conduct an independent investigation or audit to

justifiably rely on another party’s false, material representation when the

misrepresentations are not ‘outlandish, preposterous, or so patently and obviously

false’ that one would have to close his or her eyes to avoid discovering their

                                           28
falseness.” Spicer v. Maxus Healthcare Partners, LLC, 616 S.W.3d 59, 120 (Tex. App.—

Fort Worth 2020, no pet.) (op. on reh’g) (quoting Hannon, Inc. v. Scott, No. 02-10-

00012-CV, 2011 WL 1833106, at *8 (Tex. App.—Fort Worth May 12, 2011, pet.

denied) (mem. op.)).

   2. Analysis

      As the Defendants point out, Sullins and Poon are educated, experienced

businessmen: Sullins has a bachelor’s degree in business management; Poon has

degrees in mathematics and computer science, a law degree, and a business-

management certificate. Both men have been in the import business together since

the early 2000s and jointly own Everest, a business that sources, manufactures, and

ships products globally.

      As evidence of “red flags” negating Everest’s justifiable reliance as a matter of

law, the Defendants point to two email exchanges that occurred in between Sullins’s

two meetings with Grisel in March 2014—the first email being between Sullins and

Jennings and the second among Sullins, Poon, and Jennings. In the first, which

occurred immediately after Sullins’s first meeting with Grisel, Sullins wrote to

Jennings to express his frustration that CE owed Everest money and to let Jennings

know that Sullins felt like Jennings had “set [him] up for an ambush” because during

the meeting, Grisel had asked for a discount on the amounts CE owed Everest. In

response, Jennings assured Sullins that Everest’s sharing the cost of the bridge loan

was Grisel’s idea and was not a “premeditated set-up to ambush” Sullins. Jennings

                                         29
stated, “I believe the best chance for CE to survive[,] and in short term thrive, is to

engage with [Grisel’s] group. I trust them completely.” Because this exchange raised

no questions about Grisel’s alleged assurances, it has no “red flags.”

      Just before Sullins and Grisel’s second meeting, Sullins, Poon, and Jennings

exchanged emails. Sullins stated that he had questions about a trade-credit program

that Grisel had mentioned in their first meeting; specifically, Sullins wanted an

explanation of how the program worked and written proof that CE had been

accepted into the program. For his part, Poon was “looking for some concrete

assurances of payment” and had concerns about Grisel’s liquidity because Grisel “did

not seem to have the liquid capital that a normal equity investor possesses when

investing into a venture. As such, we may need to have letters of credit or standby

letters of credit before accepting and fulfilling orders for CE.” 14 Jennings responded

that he was “confident that we can get this thing back on good footing and instill

confidence by paying within agreed[-]to terms going forward” and that he and Grisel

“had come to an agreement in principal [sic]” but that it was “dependent on finalizing

stability with Everest.” Jennings continued,

      On one hand you are looking for assurances from [Grisel] and his group
      but on the other hand they are looking for assurances from Everest. I
      am concerned that you are only looking from one perspective and not
      seeing that they to[o] will have capital risk going forward and do not
      know you any better than you know them.

      14
        According to Poon, no representations were made directly to him, and Sullins
had relayed everything to him.

                                           30
Jennings ended with, “I am confident that if [Sullins] will work with [Grisel] to iron

out all details, we can move forward to all parties[’] satisfaction.”

       Regarding this second email exchange, Sullins’s questions about the trade-credit

program are irrelevant because, as Sullins explained at trial, “it turned out that this was

nothing that would have benefited me anyway, so it didn’t matter.” After this

exchange, Grisel and Sullins met for a second time, and as noted, Grisel reiterated his

representations from their first meeting. Among them were (1) Grisel was going to

bring in his group of “experts” to turn CE around, and (2) Morrison was going to

immediately invest $500,000, some of which would be used to pay Everest. And after

this meeting both Grisel and Morrison continued to make assurances to Sullins, with

Morrison reaffirming Grisel’s representation that he was Grisel’s business partner and

“was going to bring the $500,000 into this business deal[].”

       No evidence shows that Everest asked for letters of credit or some other

confirmation of Grisel’s or Morrison’s liquidity. Sullins testified that he did not believe

that any “cheating” was involved or that he “needed a written agreement.” He further

testified that he “thought [Grisel] was being honest with [him]” and that Grisel was

“very persuasive and charismatic, and so I fell for the whole deal, hook, line, and

sinker, like an idiot.” Although mere confidence in a defendant’s honesty and integrity

does not excuse a plaintiff’s failure to exercise reasonable diligence, see Orca Assets,

546 S.W.3d at 654, the jury could have found that Everest exercised reasonable

diligence and was not willfully blind, for at least two reasons. First, Jennings—who

                                            31
had been working with Grisel for months and had done business with Sullins for

about 20 years—told Sullins that he trusted Grisel’s group “completely” and believed

that it was the “best chance for CE to survive.” Second, Grisel did obtain the

$500,000 shortly after his second meeting with Sullins—albeit through a loan to C-

7 Development from Morrison’s friend rather than an investment from Morrison—

but Grisel withheld the funds from CE for three months. In other words, access to

funds was not an issue; Grisel had access to the funds but withheld them from CE.

And Morrison assured Sullins that the money was on its way.

      Accordingly, viewing the evidence in a light most favorable to the verdict, we

hold that the evidence was sufficient for a reasonable jury to find that Everest actually

and justifiably relied on Grisel’s and Morrison’s misrepresentations and omissions. We

thus overrule the Defendants’ third issue.

C. Morrison’s Fraud and Negligent Misrepresentations

      In their fourth issue, the Defendants challenge the sufficiency of the evidence

supporting the jury’s fraud and negligent-misrepresentation findings against Morrison.

First, the Defendants argue that Morrison never made a false, material representation

to Everest and never supplied false information to Everest. Second, the Defendants

contend that Morrison had no legal duty to disclose material facts to Sullins but that

even if he did, Morrison “did not know any of the facts relating to the $500,000 that

were discussed by Sullins and Grisel during the March 14, 2014 meeting.”

                                             32
   1. Fraud by misrepresentation and negligent misrepresentation

      To recover on its fraud claim against Morrison under a fraud-by-

misrepresentation theory, Everest had to prove, among other things, that Morrison

made a material, false representation to Everest. See Orca Assets, 546 S.W.3d at 653. To

succeed on its negligent-misrepresentation claim against Morrison, Everest had to

prove, among other things, that Morrison—in the course of his business or in a

transaction in which he had a pecuniary interest—supplied to Everest false

information for guidance in a business transaction. See id. The Defendants argue that

because Morrison had no contact with Everest until after Sullins’s second meeting

with Grisel, Morrison could not have made any misrepresentations upon which

Sullins relied in deciding to reopen credit with CE. The Defendants thus contend that

the evidence is legally and factually insufficient to support the jury’s fraud-by-

misrepresentation and negligent-misrepresentation findings.

      Here, the evidence enabled the jury to reasonably infer that Sullins continued

extending credit to CE based on Morrison’s representations after Sullins’s second

meeting with Grisel. According to Sullins, at some point after that meeting, Morrison

reaffirmed Grisel’s representations that Morrison “was [Grisel’s] business partner in

[HMCRT], his financial guy, his money man, who was going to bring the

$500,000 into this business deal[].” When CE failed to make promised payments to

Everest, Sullins approached Morrison, who told him in April or May 2014 that he did

not have the funding but would get it. Sullins also testified that Grisel and Morrison

                                          33
“told me many things that weren’t true and with the express intent of asking me to

extend credit to a company that they were trying to pull a big, huge SBA loan out of

so that they could skim money out of that loan.”

      Viewing this evidence in a light most favorable to the verdict, the evidence was

sufficient for a reasonable jury to conclude that Morrison made representations on

which Everest relied in continuing to extend credit to CE, and the evidence thus

sufficed   to   support    the   jury’s   fraud-by-misrepresentation    and   negligent-

misrepresentation findings against Morrison. Likewise, considering and weighing all

the evidence, the evidence supporting these findings is not so weak that the findings

are clearly wrong and manifestly unjust. We overrule this part of the Defendants’

fourth issue.

   2. Fraud by nondisclosure

      To prevail on its fraud-by-nondisclosure claim against Morrison, Everest had to

establish, among other things, that Morrison failed to disclose material facts to

Everest that he had a duty to disclose. See Bombardier Aerospace Corp. v. SPEP Aircraft

Holdings, LLC, 572 S.W.3d 213, 219 (Tex. 2019). The Defendants argue for the first

time on appeal that the evidence is legally insufficient to support the jury’s fraud-by-

nondisclosure finding against Morrison because as a matter of law, he had no duty to

disclose material facts to Everest.

      “As a general rule, a failure to disclose information does not constitute fraud

unless there is a duty to disclose the information. . . . Whether such a duty exists is a

                                           34
question of law.” Bradford v. Vento, 48 S.W.3d 749, 755 (Tex. 2001) (citations omitted);

see also Comm. on Pattern Jury Charges, supra, PJC 105.4 cmt. (explaining that failure-

to-disclosure instruction should accompany common-law fraud question “if the court

finds that there is a duty to disclose”). To preserve this matter-of-law issue for our

review, the Defendants were required to raise it in the trial court through one or more

of the following methods: (1) a motion for directed verdict; (2) a JNOV motion;

(3) an objection to submitting the question to the jury; (4) a motion to disregard the

jury’s answer to a vital fact question; or (5) a new-trial motion. See, e.g., T.O. Stanley

Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 220 (Tex. 1992). Although the Defendants

challenged the sufficiency of the evidence to support the jury’s fraud-by-

nondisclosure finding, they never complained in the trial court that, as a legal matter,

Morrison owed Everest no duty to disclose. By not raising this legal issue in the trial

court, the Defendants failed to preserve this argument for our review. See id.; see also

Tex. R. App. P. 33.1; Battaglia v. Alexander, 93 S.W.3d 132, 140 (Tex. App.—Houston

[14th Dist.] 2002), aff’d in part, rev’d in part sub nom. Carl J. Battaglia, M.D., P.A. v.

Alexander, 177 S.W.3d 893 (Tex. 2005).

      The Defendants also challenge the sufficiency of the evidence supporting the

fraud-by-nondisclosure finding arguing that “the record conclusively established that

Morrison had no knowledge relating to [Grisel and Sullins’s] alleged ‘agreement’ (or its

terms or related representations) and, thus, could not be liable for failing to disclose

information he did not have.” But, as described above, Morrison reaffirmed Grisel’s

                                           35
representations regarding the quick infusion of $500,000 into CE. Morrison admitted

at trial that Grisel’s representation that Morrison would invest $500,000 in CE was

false because Morrison was financially incapable of “putting in money to” CE “as

equity or a loan” at that time. And Morrison knew that the funds were a loan from his

friend Thompson because he had arranged that loan. And because Morrison had

arranged the loan, he would have known that Grisel had already obtained the funds

but had not paid them to CE. Even so, Morrison failed to disclose this information to

Everest.

      Viewing all this in a light most favorable to the verdict, the evidence was

sufficient for a reasonable jury to conclude that Morrison failed to disclose material

facts to Everest, and the evidence was thus sufficient to support the jury’s fraud-by-

nondisclosure finding against Morrison. Likewise, considering and weighing all the

evidence, the evidence supporting this finding is not so weak that the finding is clearly

wrong and manifestly unjust.

      We overrule the rest of the Defendants’ fourth issue.

D. Conspiracy

      At trial, Sullins explained that Everest’s conspiracy claims involved the

Defendants’ use of the $500,000 “loan” to convince Everest to re-open credit to CE.

The jury found that each of the Defendants had conspired to defraud Everest, and

their fifth issue challenges those findings. Specifically, the Defendants contend that

                                           36
the evidence is insufficient to support the specific-intent and meeting-of-the-minds

conspiracy elements.

   1. Applicable law

       A civil-conspiracy claim has five elements: (1) a combination exists of two or

more persons; (2) those persons seek to accomplish an object or course of action;

(3) those persons reach a meeting of the minds on the object or course of action;

(4) one or more unlawful, overt acts are taken in pursuance of the object or course of

action; and (5) the plaintiff is damaged as a proximate result of the wrongful act. First

United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 222 (Tex. 2017) (citing

Tri v. J.T.T., 162 S.W.3d 552, 556 (Tex. 2005)). “An actionable civil conspiracy

requires specific intent to agree to accomplish something unlawful or to accomplish

something lawful by unlawful means.” Id. (citing ERI Consulting Eng’rs, Inc. v. Swinnea,

318 S.W.3d 867, 881 (Tex. 2010)). This “requires a meeting of the minds on the object

or course of action.” Id. (citing Swinnea, 318 S.W.3d at 881). An actionable civil-

conspiracy claim thus exists “only as to those parties who are aware of the intended

harm or proposed wrongful conduct at the outset of the combination or agreement.”

Id. (citing Firestone Steel Prods. Co. v. Barajas, 927 S.W.2d 608, 614 (Tex. 1996)).

       Conspiracy is typically proved by circumstantial evidence. Schlumberger Well

Surveying Corp. v. Nortex Oil & Gas Corp., 435 S.W.2d 854, 858 (Tex. 1968).

“Circumstantial evidence may be used to establish any material fact, but it must

constitute more than mere suspicion.” Transp. Ins. Co. v. Faircloth, 898 S.W.2d 269,

                                             37
278 (Tex. 1995); see Browning-Ferris, Inc. v. Reyna, 865 S.W.2d 925, 927 (Tex. 1993)

(“[S]ome suspicion linked to other suspicion produces only more suspicion, which is

not the same as evidence.”); Schlumberger Well Surveying Corp., 435 S.W.2d at

858 (stating that “vital facts may not be proved by unreasonable inferences from other

facts and circumstances” and that any vital fact must be proved “by evidence

amounting to something more than a mere scintilla”). “When viewing meager

circumstantial evidence, if ‘circumstances are consistent with either of two facts and

nothing shows that one is more probable than the other, neither fact can be

inferred.’” Transp. Ins., 898 S.W.2d at 278 (quoting $56,700 in U.S. Currency v. State,

730 S.W.2d 659, 662 (Tex. 1987)). Circumstantial evidence can include the alleged

conspirators’ acts or statements. Int’l Bankers Life Ins. Co. v. Holloway, 368 S.W.2d 567,

581 (Tex. 1963) (“The general rule is that conspiracy liability is sufficiently established

by proof showing concert of action or other facts and circumstances from which the

natural inference arises that the unlawful, overt acts were committed in furtherance of

common design, intention, or purpose of the alleged conspirators.”).

   2. Analysis

       The Defendants argue that no evidence shows that any of them knew that the

object of their actions “was to defraud Everest into extending further credit to CE

with the use of the $500,000 loan and cause Everest to lose money” and that no

evidence establishes any point in time “at the outset of the agreement”—that is,

Grisel and Sullins’s March 2014 meetings—“when all the alleged co-conspirators

                                            38
reached an agreement on a preconceived plan to defraud Everest and cause damages.”

In short, the Defendants argue that “Everest failed to present evidence that each

alleged conspirator knew at the beginning about some plan to defraud Everest in

connection with the $500,000 loan, specifically intended to do it, and understood that

all the others had a common purpose and plan.”

      The first paragraph of the civil-conspiracy instruction in the charge followed

the pattern jury charge, 15 but the second paragraph permitted the jury to find a

conspiracy even if the party was not in on it from the beginning:

            To be part of a conspiracy, an individual named below and
      another person or persons must have had knowledge of, agreed to, and
      intended a common objective or course of action that resulted in the
      damages to Plaintiff. One or more persons involved in the conspiracy
      must have performed some act or acts to further the conspiracy.

             A party may join a conspiracy already in progress and upon
      joining the conspiracy, the party becomes a party to every act previously
      or subsequently committed by any of the other conspirators in pursuit of
      the conspiracy.

Because the Defendants did not object to the charge, we must review the evidentiary

sufficiency supporting the jury’s civil-conspiracy findings in light of the charge

submitted. See Romero, 166 S.W.3d at 221.

      Here, the evidence showed that Grisel, with the intent to induce Everest into

extending additional credit to CE, represented to Sullins that Morrison would infuse

$500,000 into CE and that Grisel and his team of experts were going to turn CE

      15
        See Comm. on Pattern Jury Charges, supra, PJC 109.1.

                                            39
around. Grisel further represented that CE would use the $500,000 for two purposes:

(1) to pay some of what it owed Everest and (2) to improve CE’s financials so that

CE could secure more favorable terms on its already-approved SBA loan. According

to Sullins, Morrison reaffirmed Grisel’s representations that Morrison “was [Grisel’s]

business partner in [HMCRT], his financial guy, his money man, who was going to

bring the $500,000 into this business deal[].” When CE failed to pay Everest as

promised, Sullins approached Morrison, who told him in April or May 2014 that he

did not have the funding but would get it. Additionally, the jury heard Jennings’s

written statement, which his son read to the jury, that “Morrison confirmed that a

previous deal he was in with [Grisel] lost money and this (CE) deal was a way to get

[Morrison’s] money back.” See Int’l Bankers, 368 S.W.2d at 582 (“Inferences of

concerted action may be drawn from joint participation in the transactions and from

enjoyment of the fruits of the transactions . . . .”). The jury also heard evidence that

Grisel and Morrison started meeting regarding CE in March 2014. From this

evidence, a jury could reasonably conclude that Grisel and Morrison agreed to work

together to convince Everest to extend credit to CE to keep CE in business long

enough to secure the SBA loan, all the while skimming as much money as possible

from CE in the form of their monthly $10,000 consulting fees.

      Viewing the evidence in a light most favorable to the verdict, we thus hold that

the evidence was sufficient for a reasonable jury to conclude that Grisel and Morrison

knew about, agreed to, and intended the common objective of defrauding Everest

                                          40
into reopening and into continuing to extend credit to CE with the promise of a quick

$500,000 infusion into CE, and the evidence is thus sufficient to support the jury’s

civil-conspiracy findings against Grisel and Morrison. Likewise, considering and

weighing all the evidence, the evidence supporting these findings is not so weak that

the findings are clearly wrong and manifestly unjust. And because the jury was

instructed that corporate entities act through their agents16 and that a party could join

a conspiracy already in progress, we conclude that the evidence was sufficient to

support the jury’s conspiracy findings as to HMCRT and Envisage.

       16
         Regarding the corporate entities, the Defendants argue that, as a legal matter,
a corporation cannot conspire with itself through its agent. We agree that this
correctly states the law. See Tex. Integrated Conveyor Sys., Inc. v. Innovative Conveyor Concepts,
Inc., 300 S.W.3d 348, 381 (Tex. App.—Dallas 2009, pet. denied) (op. on reh’g) (“As a
general rule, a corporation cannot conspire with itself through its agents.”); see also
Crouch v. Trinque, 262 S.W.3d 417, 427 (Tex. App.—Eastland 2008, no pet.); Fojtik v.
First Nat’l Bank of Beeville, 752 S.W.2d 669, 673 (Tex. App.—Corpus Christi 1988), writ
denied, 775 S.W.2d 632 (Tex. 1989). But if an agent acts for his own personal gain,
rather than on behalf of the company, then the corporation can conspire with its
agent. See Fojtik, 752 S.W.2d at 673; see also Tex.–Ohio Gas, Inc. v. Mecom, 28 S.W.3d
129, 138 (Tex. App.—Texarkana 2000, no pet.) (agreeing that the law is that “a
corporate agent can conspire with its corporation if the agent is not acting in his
corporate capacity”).

       Even so, the Defendants did not raise this matter-of-law point in the trial court.
As noted, to preserve a matter-of-law issue for our review, the Defendants were
required to raise it in the trial court through one or more of the five methods we listed
previously. See, e.g., T.O. Stanley Boot Co., 847 S.W.2d at 220. Although the Defendants
challenged the evidentiary sufficiency to support the jury’s conspiracy findings, they
failed to complain in the trial court that, as a legal matter, a corporation cannot
conspire with itself through its agents. By not doing so, the Defendants failed to
preserve this argument for our review. See id.

                                               41
      We likewise conclude that the evidence was sufficient as to C-7 Development.

Grisel testified that “[t]he money came from C[-]7 Development Partners, which was

me, which I took from my company and put into [CE],” and that he believed that he

had “personally” invested $500,000 into CE. We thus conclude that viewing the

evidence in the light most favorable to Everest, a reasonable jury could have

concluded that C-7 Development knew about, agreed to, and intended the common

objective of defrauding Everest into reopening and into continuing to extend credit to

CE with the promise of a quick $500,000 infusion into CE. Likewise, considering and

weighing all the evidence, the evidence supporting the conspiracy finding against C-

7 Development is not so weak that the finding is clearly wrong and manifestly unjust.

      We cannot, however, so conclude about Barreras and her company Cyndex.

Although both had a role in holding and transferring the $500,000, this is insufficient

to prove that either of them knew about, agreed to, and intended a common objective

that damaged Everest. As noted, Thompson loaned the funds to C-7 Development,

and Grisel executed the promissory note on C-7 Development’s behalf. Barreras

testified that, at Grisel’s direction, she accepted the loan proceeds from Thompson

into the C-7 Trust account and then (1) distributed about $25,000 of the loan

proceeds to Grisel in cash and (2) transferred about $18,000 of the loan proceeds into

Cyndex’s account—which belonged to Barreras and her husband—to buy a car for

her brother, Morrison. Grisel later directed Barreras to distribute the remaining loan

proceeds to CE, and in June 2014, Barreras made two $200,000-plus transfers from

                                          42
the C-7 Trust account to the Cyndex account. Shortly thereafter, Barreras paid

$15,000 from the Cyndex account to CE, and later that month, she paid

$441,000 from the Cyndex account to CE. Barreras testified that although she

received and deposited the $500,000 loan, made withdrawals and payments from the

C-7 Trust account, transferred funds from the C-7 Trust account to Cyndex’s

account, and issued checks from Cyndex’s account to CE, she did so at Grisel’s

direction, did not know anything about the loan, and did not know what happened to

the money after she sent it to CE. And although Barreras incorporated HMCRT in

May 2014, designated Cyndex as HMCRT’s registered agent, and briefly worked as an

independent contractor for CE, this is insufficient to prove that Barreras was in on

the conspiracy.

      Although both direct and circumstantial evidence may be used to establish any

material fact, Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004), a fact is

established by circumstantial evidence when it can be fairly and reasonably inferred

from other facts proved in the case, Russell v. Russell, 865 S.W.2d 929, 933 (Tex. 1993).

But to withstand a legal-sufficiency challenge, circumstantial evidence still must

consist of more than a scintilla. Blount v. Bordens, Inc., 910 S.W.2d 931, 933 (Tex. 1995).

Here, the evidence of Barreras’s and Cyndex’s involvement with the other defendants

is circumstantial evidence of their participation in the conspiracy, but it cannot be

fairly and reasonably inferred from that evidence that Barreras and Cyndex knew

about, agreed to, and intended a common objective or course of action to defraud

                                            43
Everest into reopening and into continuing to extend credit to CE. Accordingly, we

conclude and hold that while the evidence is legally and factually sufficient to support

the jury’s civil-conspiracy findings against Grisel, Morrison, HMCRT, Envisage, and

C-7 Development, there is no evidence to support the findings against Barreras and

Cyndex. We thus sustain the Defendants’ fifth issue in part and overrule it in part.

E. Exemplary Damages

       The Defendants’ sixth issue challenges the jury’s affirmative answer to the

exemplary-damages predicate question because “neither malice, fraud, nor gross

negligence lawfully support[s] an award of punitive damages.” Concerning malice and

gross negligence, the Defendants argue that Everest “presented no evidence, much

less clear and convincing evidence,” to support an affirmative answer to the predicate

question based on either malice or gross negligence. Regarding fraud, the Defendants

contend that “fraud could not provide a lawful predicate for any award of punitive

damages” because the instructions defined fraud as including constructive fraud,

which is not a proper predicate for exemplary damages under Chapter 41 of the Texas

Civil Practice and Remedies Code. See Tex. Civ. Prac. & Rem. Code Ann.

§§ 41.001(6), .003(a)(1). We address the Defendants’ fraud-related argument first

because it is dispositive of this issue.

   1. The charge

       The jury answered “yes” to the exemplary-damages predicate question, which

read as follows:

                                           44
               Answer the following question only related to [the fraud question
        as to Grisel] or [the negligent-misrepresentation question as to Grisel]
        only if you unanimously answered “Yes” to [the fraud question as to
        Grisel] and/or [the negligent-misrepresentation question] as to
        Defendant Grisel. Otherwise, do not answer the following question.

                  ....

               Do you find by clear and convincing evidence that the harm, if
        any, found in [the fraud question as to Grisel] to Plaintiff Everest
        resulted from malice or fraud, or the harm, if any, found in [the
        negligent-misrepresentation question as to Grisel] resulted from gross
        negligence by Defendant Grisel?

                “Clear and convincing evidence” means the measure or degree of
        proof that produces a firm belief or conviction of the truth of the
        allegations sought to be established.

              “Malice” means a specific intent by Defendant Grisel to cause
        substantial injury or harm to Plaintiff Everest;

                  “Fraud” is as defined in [the fraud question].

                  “Gross negligence” means an act or omission by Defendant
        Grisel,

                  (a) which when viewed objectively from the standpoint of
                      Defendant Grisel at the time of its occurrence involves an
                      extreme degree of risk, considering the probability and
                      magnitude of the potential harm to others; and

                  (b) of which Defendant Grisel had actual, subjective awareness
                      of the risk involved, but nevertheless proceeds with
                      conscious indifference to the rights, safety, or welfare of
                      others.

        The instructions accompanying the fraud question stated that fraud occurs

when:

        a.   a party makes a material misrepresentation, and

                                               45
      b.   the misrepresentation is made with knowledge of its falsity or made
           recklessly without any knowledge of the truth and as a positive
           assertion, and

      c.   the misrepresentation is made with the intention that it should be
           acted on by the other party, and

      d.   the other party relies on the misrepresentation and thereby suffers
           injury.

The instructions further stated that fraud also occurs when,

      a.   a party fails to disclose a material fact within the knowledge
           of that party, and

      b.   the party knows that the other party is ignorant of the fact
           and does not have an equal opportunity to discover the truth;
           and

      c.   the party intends to induce the other party to take some
           action by failing to disclose the fact, and

      d.   the other party suffers injury as a result of acting without
           knowledge of the undisclosed fact.

   2. Analysis

      The Defendants do not challenge the sufficiency of the evidence supporting an

affirmative answer to the predicate question based on either fraud definition. They

argue, however, that because the charge included an inappropriate theory of

recovery—fraud by nondisclosure—along with an appropriate theory of recovery—

fraud by misrepresentation—fraud cannot support Everest’s recovery of exemplary

                                          46
damages.17 See id. § 41.001(6) (“‘Fraud’ means fraud other than constructive fraud.”),

§ 41.003(a)(1) (providing that fraud is a ground for recovery of exemplary damages);

see also Comm. on Pattern Jury Charges, supra, PJC 105.4 cmt. (noting in comment

accompanying fraud-by-nondisclosure instruction that constructive fraud cannot serve

as a predicate for recovery of exemplary damages and that “[a]ccordingly, if fraud is

an underlying theory of liability as well as a predicate for recovery of exemplary

damages, constructive fraud should be submitted separately from intentional or

statutory fraud”); PJC 115.37B cmt. (noting same in comment accompanying

exemplary-damages predicate question and instruction).

      If a broad-form question incorporates both valid and invalid bases for liability,

such commingling may result in harmful error. See Crown Life Ins. Co. v. Casteel,

22 S.W.3d 378, 388 (Tex. 2000) (op. on reh’g) (holding that “when a trial court

submits a single broad-form liability question incorporating multiple theories of

liability, the error is harmful and a new trial is required when the appellate court

cannot determine whether the jury based its verdict on an improperly submitted

invalid theory”). The supreme court has determined that the Casteel harmful-error

analysis applies to broad-form damages questions mixing valid and invalid elements of

damages. See Harris Cnty. v. Smith, 96 S.W.3d 230, 232–35 (Tex. 2002) (extending

       The Defendants do not dispute that malice and gross negligence are
      17

appropriate grounds for recovery of exemplary damages here. See Tex. Civ. Prac. &
Rem. Code Ann. §§ 41.001(7), (11), .003(a)(2), (a)(3).

                                         47
Casteel’s reasoning to damages questions); see also Burbage v. Burbage, 447 S.W.3d 249,

255 (Tex. 2014) (citing Smith for the proposition that “broad-form damages

questions” that incorporate both valid and invalid damages elements may result in

harmful error). But to preserve such a complaint for appellate review, a party must

raise a Casteel-type objection to the charge. See Burbage, 447 S.W.3d at 256.

      Here, we cannot possibly determine whether and to what extent the jury’s

affirmative answer to the predicate question was based on a fraud-by-nondisclosure

finding. See Smith, 96 S.W.3d at 234 (holding that a single broad-form question mixing

valid and invalid damages elements constitutes harmful error because an appellate

court cannot determine the extent to which the jury’s damages award was based on an

invalid, or unsupported, element). But because the Defendants did not object to the

charge in the trial court, they have failed to preserve this issue for our review and thus

cannot now complain about the charge. 18 See Burbage, 447 S.W.3d at 256 (“[I]n

situations where a party does not raise a Casteel-type objection, that party surely cannot

raise a Casteel issue when it failed to preserve a claim of an invalid theory of liability

      18
        Citing United Scaffolding, Inc. v. Levine, 537 S.W.3d 463 (Tex. 2017), the
Defendants contend that they weren’t required to object to the charge and preserved
their complaint by raising it in their JNOV motion. In Levine, the supreme court
determined that when “the wrong theory of recovery was submitted and the correct
theory of recovery was omitted entirely, the defendant has no obligation to object.”
Id. at 481. The court held that the appellant had preserved error by raising the
argument in a JNOV motion. Id. at 482. Here, however, there were multiple correct
exemplary-damage theories—fraud by misrepresentation, malice, and gross
negligence—submitted in the predicate question. We thus conclude that Levine does
not apply.

                                            48
that forms the basis of a Casteel-type error.”); see also Tex. R. App. P. 33.1; Tex. R. Civ.

P. 274. And because the Defendants have not challenged the sufficiency of the

evidence supporting the jury’s affirmative answer to the exemplary-damages predicate

question based on fraud, we thus overrule their sixth issue.

                             V. Incurable Jury Argument

       In their seventh issue, the Defendants contend that Everest’s counsel engaged

in incurable jury argument by suggesting during closing that Grisel should not be

believed and was untrustworthy because he had invoked his Christian religious beliefs

to persuade the jury that he was “pious and good.” The Defendants argue that these

“statements—particularly when coupled with other comments—were of such a

nature, degree, and extent that an instruction from the [trial] court or a retraction

could not remove their prejudicial effects” on the Defendants.

A. Everest’s Jury Argument

       The Defendants complain that during closing argument, Everest’s counsel

referred to the Defendants as “crooks,” “frauds,” and “liars” and accused them of

“crookery,” “snookering,” and lying to the jury during “every day of the trial.” The

Defendants further complain about this part of Everest’s closing argument:

             Well, I wonder what [the Defendants] thought that proved this
       morning, having you come back from last Friday to hear this one
       witness, some lawyer in Fort Worth that they were headed down a
       business path with that -- that Grisel had directed him to his good friend
       Simcho, a convicted felon, and they had this -- the lawyer about to go in
       business with him.

                                            49
            [Grisel and the Fort Worth lawyer] met at a Bible study. Where
      have we heard the injection of religion injected for your benefit? And
      you see it all the time in jury trials where some sanctimonious defendant
      caught in fraud will say: Well, I go to Bible study.

             “I know the day that Christ is returning,” do you remember that
      testimony? That -- that was when Mike Jennings, in his statement, said
      and [his son] Kris Jennings said: That’s when I knew that this guy Joe
      Grisel was a fraud. He told us through his numerology he knew the day
      Christ would return.[19]

      19
        According to Jennings’s written statement read into evidence at trial by his
son, Jennings and Grisel “had a casually mutual agreement that religion and business
could mix,” but that Jennings later learned, “as we spent significant amounts of time
together, that [Grisel’s] spiritual opinions were extreme and it sometimes led to
uncomfortable conversations that included [Grisel’s] claiming that he was certain of
the time when Christ was going to return.”

        Regarding Grisel’s involvement at CE, Jennings’s son, who also worked at CE,
testified that he too became a skeptic:

             There were two family members that I saw as probably carrying
      some deadweight that I kind of felt like, okay, finally, we’re getting a
      consulting firm in here, which usually a consulting firm will come in and
      there’s no more family biasness, so some things could get cleaned up.

             And when I saw Joe being more buddied up with my uncle that
      didn’t really do anything, it was more of a kissing-up game to my dad to
      keep the con on as long as he could to drain as much money as he could.

            And then when he was doing his numerology on the white board
      in my dad’s office claiming that he knew the exact day and time Jesus
      was going to return, I -- I -- I was pretty much just done at that point.

            So to answer the question, it was the dragging on of claiming to
      be a consulting group and then not -- not being that at all definitely
      drained the last bit of life, of possible turnaround or some value that my
      dad could have had in the company, could have kept on through a
      percentage of it, but bleeding it that dry left him no choice but to lose it
      completely.

                                          50
             It is a sad travesty when frauds and crooks are willing to call the
      name of religion and the name of Christ into a jury to make you believe
      that somehow they’re pious and good people. They are not.

At no point during Everest’s closing argument did the Defendants object or request

an instruction to disregard Everest’s counsel’s comments or argument. Instead, they

moved for a new trial, arguing only postjudgment that the jury arguments were

incurable.

B. Applicable law

      Control of counsel’s conduct during jury argument rests in the trial court’s

sound discretion. Wells v. HCA Health Servs. of Tex., Inc., 806 S.W.2d 850, 854 (Tex.

App.—Fort Worth 1990, writ denied); see Tex. R. Civ. P. 269. The test for improper

jury argument is whether the argument could have persuaded a juror of ordinary

intelligence to agree to a verdict contrary to that to which he would have agreed but

for the argument. See Phillips v. Bramlett, 288 S.W.3d 876, 883 (Tex. 2009). Reasonable

inferences and deductions from the evidence are allowed in closing argument, as is

hyperbole. In re I.C., No. 02-15-00300-CV, 2016 WL 1394539, at *18 (Tex. App.—

Fort Worth Apr. 28, 2016, no pet.) (per curiam) (mem. op.). Reversal is required only

when the entire record shows that (1) the argument was improper, uninvited,

unprovoked, and incurable by instruction, withdrawal, or trial-court reprimand and

       Jennings’s son further testified that he agreed with Jennings’s written statement
that “[d]ue to [Grisel’s] gross misrepresentations and fraudulent behavior, I lost the
business that I built over the past 43 years of my business career.”

                                          51
(2) the complaint about the argument was preserved. See Standard Fire Ins. Co. v. Reese,

584 S.W.2d 835, 839 (Tex. 1979). Further, an appellant must show that the argument

constituted harmful error by its nature, degree, and extent. Id. The party seeking

reversal based on an allegedly improper argument must show that the probability that

the improper argument caused harm is greater than the probability that the verdict

was grounded on the proper proceedings and evidence. Id. at 840.

      Ordinarily, a complaint regarding improper jury argument must be preserved

by a timely objection that is overruled. Living Ctrs. of Tex., Inc. v. Peñalver, 256 S.W.3d

678, 680 (Tex. 2008). But in rare cases, an improper jury argument is considered

incurable, and a contemporaneous trial objection is not required; a party may preserve

the argument for appeal by raising it in a motion for new trial. See id.; see also Tex. R.

Civ. P. 324(b)(5); Gen. Motors Corp. v. Iracheta, 161 S.W.3d 462, 472 (Tex. 2005)

(holding that plaintiff’s personally addressing the all-Hispanic jury in Spanish during

her lawyer’s closing argument to thank the jurors on behalf of her deceased daughter

and deceased grandchildren was error that could not be repaired and therefore did not

need to be objected to).

C. Analysis

      Because the Defendants did not object, they must show that Everest’s jury

argument was incurable. See PopCap Games, Inc. v. MumboJumbo, LLC, 350 S.W.3d 699,

721 (Tex. App.—Dallas 2011, pet. denied). Incurable jury argument occurs when

comments are so inflammatory that an instruction to disregard cannot cure their

                                            52
harmful nature. Columbia Med. Ctr. of Las Colinas v. Bush, 122 S.W.3d 835, 862 (Tex.

App.—Fort Worth 2003, pet. denied). The test for incurability is whether the

argument strikes at a court’s impartiality, equality, and fairness and, if not corrected,

inflicts damage beyond the parties and the individual case under consideration.

Peñalver, 256 S.W.3d at 681. Examples of incurable jury arguments include appeals to

racial prejudice, extreme unsupported personal attacks on parties or witnesses, and

unfounded accusations of manipulating a witness. See id.; PopCap Games, 350 S.W.3d at

721; see also Cottman Transmission Sys., L.L.C. v. FVLR Enters., L.L.C., 295 S.W.3d 372,

380 (Tex. App.—Dallas 2009, pet. denied) (recognizing that incurable argument can

include unsupported charges of perjury and inflammatory epithets such as “liar,”

“fraud,” and “cheat”). But see Clark v. Bres, 217 S.W.3d 501, 510 (Tex. App.—Houston

[14th Dist.] 2006, pets. denied) (concluding that jury argument referring to party “as a

liar, a cheat, a thief, and a fraud was not error or improper because the argument

discussed matters in evidence”).

      But incurable jury argument is rare. Peñalver, 256 S.W.3d at 681. As the parties

claiming incurable harm, the Defendants must show that, based on the record as a

whole, the offensive arguments could have persuaded a juror of ordinary intelligence

to agree to a verdict contrary to that to which he would have agreed but for the

argument. See Phillips, 288 S.W.3d at 883. Here, Everest’s statements are reasonable

inferences and deductions from the evidence, see I.C., 2016 WL 1394539, at *18;

Clark, 217 S.W.3d at 510, and, although personal attacks on the parties, are supported

                                           53
by the evidence, see Peñalver, 256 S.W.3d at 681. We thus cannot say, after viewing the

entire record, that those arguments could have persuaded a juror of ordinary

intelligence to agree to a verdict contrary to that to which he would have agreed but

for the argument. See Phillips, 288 S.W.3d at 883. Accordingly, we overrule the

Defendants’ seventh issue.

                             VI. Joint and Several Liability

       The Defendants argue in their eighth issue that if we reverse the jury’s

conspiracy findings against Grisel and Morrison but not the fraud and negligent-

misrepresentation findings against them, we should nevertheless reverse the judgment

against them because Everest failed to secure a proportionate-responsibility finding.

See Tex. Civ. Prac. & Rem Code Ann. §§ 33.002(a)(1), .013(b)(1). But because we have

concluded that the evidence is sufficient to support the conspiracy findings against

Grisel and Morrison, we need not address the Defendants’ eighth issue. See Tex. R.

App. P. 47.1.

                                    VII. Conclusion

       Having sustained the Defendants’ fifth issue as to the jury’s conspiracy findings

against Barreras and Cyndex because the evidence is legally insufficient to support

those findings, we reverse the trial court’s judgment as to Barreras and Cyndex and

order that Everest take nothing against them. Having overruled the Defendants’

dispositive issues, we affirm the rest of the trial court’s judgment.

                                            54
                                 /s/ Elizabeth Kerr
                                 Elizabeth Kerr
                                 Justice

Delivered: March 10, 2022

                            55