Court Opinion

ID: 4578110
Source: CourtListenerOpinion
Date Created: 2020-10-19 07:11:32.434855+00
Date Added: 2024-06-11T09:28:11.196796
License: Public Domain

Opinion issued October 15, 2020

                                         In The

                                 Court of Appeals
                                        For The

                            First District of Texas
                               ————————————
                                NO. 01-19-00372-CV
                              ———————————
                   PRIME TEXAS SURVEYS, LLC, Appellant
                                           V.
                                TIM ELLIS, Appellee

              On Appeal from the County Civil Court at Law No. 4
                            Harris County, Texas
                        Trial Court Case No. 1069679

                            MEMORANDUM OPINION

      Appellant, Prime Texas Surveys, LLC (“Prime Texas”) challenges the trial

court’s judgment, entered after a jury trial, in favor of appellee, Tim Ellis, in his suit

against Prime for breach of contract, violations of the Texas Deceptive Trade
Practices Act (“DTPA”), and fraud. In four issues, Prime Texas contends that the

evidence is legally and factually insufficient to support the DTPA findings against

it.1 Prime Texas also contends that Ellis’s DTPA claim is barred by the “Economic

Loss Rule.” We affirm.

                                   BACKGROUND

      Ellis hired Prime Texas to complete a survey and replat of his property. At

trial, the parties stipulated to the terms of their agreement as follows:

      In October 2014, Ellis and Prime Texas entered an agreement for
      survey and replatting services for the Property. The terms of the
      agreement were as follows: (i) Ellis agreed to pay $8,485.06 to Prime
      Texas, payable in two installments; (ii) Prime Texas would complete a
      survey of the Property and then obtain and file a City Planning Letter
      for the City of Houston to complete the replatting of the Property.

      Ellis paid the first installment of $4,242.53 to Prime Texas for Prime
      Texas to complete a survey of the Property.

      Ellis received a survey of the property that was completed by Prime
      Texas. Prime Texas also secured and filed a City Planning Letter.

      Once the survey and City Planning Letter were completed, Arthur Urialdes2

contacted Ellis about the second payment. Alberto Alaniz, Prime Texas’s owner,

1
      Prime actually challenges all of the findings against it, including those on the
      breach-of-contract and fraud causes of action. However, Ellis elected to recover on
      his DTPA claim. Thus, if the DTPA findings are legally and factually sufficient, we
      need not address the findings on the other causes of action. See TEX. R. APP. P. 47.1.
2
      Urialdes’s name is spelled several ways in the appellate record and briefs. For
      purposes of this opinion, we will use the spelling in the trial court’s jury charge.
                                            2
testified that Urialdes “was our replat guy.” It is undisputed that Urialdes was an

employee of Prime Texas from February 12, 2014 until he was terminated in April

2015. And, in response to a request for admission, Prime Texas admitted that

Urialdes had “apparent authority” and “was authorized to act of behalf of [Prime

Texas] during all of his meetings and interactions with Ellis.”

      In February 2015, Ellis met with Urialdes in the conference room at Prime

Texas, where Urialdes told Ellis that he needed the second payment before he could

complete the replat. Urialdes asked Ellis to give him a check for $5,442.53 (which

was $1,200.00 more than the balance due). Urialdes also asked Ellis to leave the

payee line blank, explaining that Prime Texas was running behind on replats and

would likely have a subcontractor finish the job. Despite some trepidation, Ellis did

as Urialdes requested.

      Sometime later, Jose Trevino, Prime Texas’s Director of Operations, called

Ellis to ask about the status of the replat because he knew that it was unfinished.

Ellis told Trevino that he had already tendered the second payment to Urialdes at

Prime Texas. Prime Texas refused to complete the replat unless Ellis made the

second payment again. At trial, Trevino testified that Prime Texas never completed

the replat because “we didn’t get paid.”

      Trevino, apparently aware that Urialdes was now conducting replats through

his own business, put Ellis in touch with Urialdes. For a while, Ellis thought that

                                           3
Urialdes was going to complete the replat, but when he did not, Ellis returned to

Prime Texas, explaining that he had already paid and requesting that it finish the

replat. Again, Prime Texas claimed that it had not been paid, but referred Ellis to

other contractors who it said would complete the replat, but only if Ellis paid

additional money.

      Around the same time period that Ellis met with Urialdes at Prime Texas and

tendered the second payment, Urialdes had started his own business, City Plats, and

began diverting replatting business from Prime Texas by telling its customers that

City Plats was a “sister company” to Prime Texas. This was in violation of

Urialdes’s employment agreement with Prime Texas, so, in April 2015, Prime Texas

fired Urialdes. In May 2015, Prime Texas sued Urialdes, alleging breach of contract,

tortious interference with existing contracts, breach of fiduciary duty, and theft.

Prime Texas recovered a judgment against Urialdes for $21,000. Its damages

calculation for the jury in that case included the approximate $5,000.00 that Ellis

had given Urialdes. At trial, Trevino testified that, if the company ever collected on

its judgment against Urialdes, it would give Ellis his money back.

      After Prime Texas refused to complete Ellis’s replat without receiving his

second payment again, Ellis filed suit against Prime Texas alleging breach of

contract, violations of the DTPA, and fraud. The jury found against Prime Texas on

all causes of action, and Ellis elected to recover on his DTPA claims. The trial court

                                          4
entered a final judgment awarding Ellis: (1) $9,685.06 in economic damages,

(2) $20,000 for DTPA conduct that was committed knowingly, and (3) pre- and post-

judgment interests and costs.

                      SUFFICIENCY OF THE EVIDENCE

      In four issues on appeal, Prime Texas contends that the evidence is legally

and factually insufficient to support the jury’s findings that: (1) Urialdes acted

within the “course and scope” of his employment as an employee of Prime Texas;

(2) Prime Texas violated the DTPA; (3) Prime Texas acted “knowingly” in violating

the DTPA, and (4) Ellis suffered compensable damages.

Standard of Review

      When an appellant challenges the legal sufficiency of the evidence supporting

an adverse finding on an issue on which it did not have the burden of proof, he must

demonstrate that no evidence supports the finding. Graham Cent. Station, Inc. v.

Pena, 442 S.W.3d 261, 263 (Tex. 2014). We will sustain a legal sufficiency or “no-

evidence” challenge if the record shows any one of the following: (1) a complete

absence of evidence of a vital fact, (2) rules of law or 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 scintilla, or (4) the evidence establishes

conclusively the opposite of the vital fact. City of Keller v. Wilson, 168 S.W.3d 802,

810 (Tex. 2005). In conducting a legal-sufficiency review, we consider the evidence

                                            5
in the light most favorable to the verdict and indulge every reasonable inference that

supports it. Id. at 822.

       If there is more than a scintilla of evidence to support the challenged finding,

we must uphold it. Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors,

Inc., 960 S.W.2d 41, 48 (Tex. 1998). “[W]hen the evidence offered to prove a vital

fact is so weak as to do no more than create a mere surmise or suspicion of its

existence, the evidence is no more than a scintilla and, in legal effect, is no

evidence.” Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004) (internal

quotations omitted). However, if the evidence at trial would enable reasonable and

fair-minded people to differ in their conclusions, then jurors must be allowed to do

so. City of Keller, 168 S.W.3d at 822. “A reviewing court cannot substitute its

judgment for that of the trier-of-fact, so long as the evidence falls within th[e] zone

of reasonable disagreement.” Id.

       When an appellant challenges the factual sufficiency of the evidence

supporting an adverse finding on an issue on which it did not have the burden of

proof, it must demonstrate that the adverse finding is so contrary to the

overwhelming weight of the evidence as to be clearly wrong and manifestly

unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Levine v. Steve Scharn

Custom Homes, Inc., 448 S.W.3d 637, 653 (Tex. App.—Houston [1st Dist.] 2014,

pet. denied). In conducting a factual-sufficiency review, we examine, consider, and

                                           6
weigh all the evidence that supports or contradicts the fact finder’s

determination. See Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex.

2001); Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989). We note

that the jury is the sole judge of the witnesses’ credibility, and a reviewing court may

not impose its own opinion to the contrary. See Golden Eagle Archery, Inc. v.

Jackson, 116 S.W.3d 757, 761 (Tex. 2003). When presented with conflicting

testimony, the fact finder may believe one witness and disbelieve others, and it may

resolve inconsistencies in the testimony of any witness. McGalliard v. Kuhlmann,

722 S.W.2d 694, 697 (Tex. 1986). We set aside the verdict only if the evidence is so

weak or the finding is so against the great weight and preponderance of the evidence

that it is clearly wrong or manifestly unjust. See Dow Chem. Co., 46 S.W.3d at

242; Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986).

Course and Scope of Employment

      Having found against Prime Texas on two predicate DTPA questions,3 the

jury was asked the following question:

      On the occasion(s) in question, was Arthur Urialdes acting within his
      scope of employment as an employee of Prime Texas?

3
      In jury question no. 3, the jury was asked whether Prime Texas engaged in “any
      false, misleading, or deceptive act or practice that Ellis relied on to his detriment
      and that was a producing cause of damages to Ellis.” In jury question no. 4, the jury
      was asked whether Prime Texas engaged in “any unconscionable action or course
      of action that was a producing cause of damages to Ellis.” The jury answered both
      questions, “Yes.”
                                            7
      “Scope of employment” means an activity of any kind or character that
      has to do with and originates in the work, business, trade, or profession
      of the employer and that is performed by the employee while engaged
      in or about the furtherance of the affairs or business of the employer.

      Intentional or malicious acts committed by an employee that are
      unforeseeable considering the employee’s duties are not within the
      “scope of employment.”

      The jury responded, “Yes.”

      In issue one, Prime Texas contends that it cannot be vicariously liable for

Urialdes’s DTPA misrepresentations or unconscionable course of action because

“[t]he evidence is legally and factually insufficient to support the jury finding that

Urialdes acted in the course and scope of employment as an employee of Prime

Texas.”

      Prime Texas argues that “[e]ssentially Urialdes stole from Ellis monies which

were to have been paid to Prime Texas” and that theft from a client was outside the

scope of Urialdes’s employment. (Emphasis added). However, Prime Texas’s

position rests on the false premise that Urialdes stole the money from Ellis, not from

Prime Texas. This is not the case. A theft occurs when (1) property is

(2) unlawfully appropriated (3) by someone (4) with intent to deprive the owner of

that property. TEX. PENAL CODE § 31.03. A theft is complete when all the elements

have occurred. Anderson v. State, 322 S.W.3d 401, 408 (Tex. App.—Houston [14th

Dist.] 2010, pet. ref’d). When it is alleged that theft of money occurred, but the

evidence shows theft of a check, there must be evidence that the check was endorsed,
                                          8
cashed or negotiated. Johnson v. State, 560 S.W.3d 224, 235 (Tex. Crim. App. 2018)

(Yeary, J., concurring). Here, the money was not stolen until Urialdes wrote his

name on the check and deposited it, all of which occurred after Ellis tendered the

payment to Prime Texas.

      Ellis contends that Urialdes was authorized to receive his payment on behalf

of Prime Texas, that Urialdes did so, and that the fact that Urialdes subsequently

converted the check to his own use did not show that he was unauthorized to receive

the payment on behalf of Prime Texas and was acting outside the scope of his

employment when he did so. We agree with Ellis.

      To show an employee acted within the course and scope of his employment,

the plaintiff must demonstrate the conduct occurred (1) within the general authority

given the employee, (2) in furtherance of the employer’s business, and (3) for the

accomplishment of the object for which the employee was employed. Mata v.

Andrews Transp., Inc., 900 S.W.2d 363, 366 (Tex. App.—Houston [14th Dist.]

1995, no writ); see also Leadon v. Kimbrough Bros. Lumber Co., 484 S.W.2d 567,

569 (Tex. 1972).

      Urialdes’s General Authority

      The issue presented in this element is essentially whether Urialdes had actual

or apparent authority to deal with Ellis regarding payments for the contracted-for

                                         9
replat.4 Prime Texas admitted in a Request for Admissions that he did. When asked

to admit or deny that “Arthur Urialdes was authorized to act on behalf of Prime

Texas Surveys, LLC during all of his meetings and interactions with Ellis,” Prime

Texas responded, “Admit. He had apparent authority. Deny that he was authorized

to commit theft of monies paid by Ellis.” From this admission, the jury could have

concluded that Urialdes had authority to discuss and receive payments from Ellis on

behalf of Prime Texas. The jury could also have concluded that Prime Texas

admitted that the monies were “paid by Ellis” to Prime Texas and then stolen by

Urialdes. The fact that Urialdes embezzled the monies after Ellis paid them has no

relevance to the issue of whether Urialdes had the authority to receive the payment

on behalf of Prime Texas in the first place. Additionally, there was also evidence

that Urialdes submitted the initial plat proposal to Ellis and signed the contract, as

Replat Director, on behalf of Prime Texas. Finally, there was evidence that, when

Ellis tendered the first payment to Prime Texas, he did so, by way of credit card

payment, to Urialdes. Thus, there was evidence that receiving payments on behalf

4
      We note that there was no jury finding regarding Urialdes’s actual or apparent
      authority to act in receiving payments on behalf of Prime Texas. Because, however,
      findings of fact were neither filed nor requested by Prime Texas, the judgment of
      the trial court implies all necessary findings of fact to support it. See Holt Atherton
      Indus., Inc. v. Heine, 835 S.W.3d 80, 83 (Tex. 1992). Whether an agency
      relationship exists is usually a question of fact. Brown & Brown of Tex., Inc. v. Omni
      Metals, Inc., 317 S.W.3d 361, 377 (Tex. App.—Houston [1st Dist.] 2010, pet.
      denied).
                                            10
of Prime Texas from its customers for replatting services was within Urialdes’s

general authority.

      In Furtherance of Prime Texas’s Business

      The parties in this case stipulated in the jury charge that “Ellis and Prime

Texas entered an agreement for survey and replatting services for the Property.”

Urialdes negotiated and signed this contract on behalf of Prime Texas, as its “Replat

Director.” In fulfillment of this contract, Ellis paid the first installment of $4,242,53

to Prime Texas via credit card payment, which Urialdes accepted on Prime Texas’s

behalf. When the second installment became due, Ellis, at Urialdes’s instruction,

tendered a check to Urialdes that left the payee line blank. As discussed above,

Urialdes was authorized by Prime Texas in all his communications with Ellis. The

second payment was necessary before Prime Texas would complete its contractual

obligations. Thus, Urialdes’s receipt of the check was in furtherance of Prime

Texas’s business.

      For the Accomplishment of the Object for which Urialdes was Employed

      Finally, there was evidence from Prime Texas’s owner that Urialdes was first

employed by Prime Texas to aid in business development, but that he was later

designated as “Replat Director” to provide replatting services to Prime Texas’s

customers. Communicating with and receiving payments from Prime Texas’s

                                           11
customers for replatting services part of Urialdes’s duties and was done to

accomplish the purpose for which Urialdes was employed.

      Nevertheless, Prime Texas, citing Millan v. Dean Witter Reynolds, Inc., 90
S.W.3d 760, 768 (Tex. App.—San Antonio 2002, pet. denied), argues that Prime

Texas cannot be held vicariously liable for the tortious conduct of Urialdes. In that

case, Millan, a Dean Witter client, sued the company when her son, a Dean Witter

employee, took money from his mother’s deposits at Dean Witter and deposited

them into a fictious account that he opened himself, from which he wrote himself

checks. Id. at 763. The court held that Dean Witter could not be held vicariously

liable for the son/employee’s actions because, even though opening the brokerage

account was within his general authority, stealing checks from his mother’s

bathroom drawer, writing checks on his mother’s account, depositing his mother’s

checks in his own account, forging his mother’s signature, stealing statements and

sending bogus statements and opening a P.O. box to receive his mother’s mail, “were

not related to [the son/employee’s] duties and were not within his general scope of

authority as a broker for Dean Witter.” Id. at 768. Of course, the distinguishing

factor between Millan and this case is that, in Millan, the employee stole from a

client, for which Dean Witter could not be vicariously responsible. In this case,

Urialdes’s subsequent embezzlement from his employer, Prime Texas, has no

                                         12
bearing on whether he was acting in the course and scope of his employment when

he communicated with and received Prime Texas’s payment from Ellis.

      After reviewing the evidence, we conclude that there is more than a scintilla

of evidence to support the jury’s finding that Urialdes was acting in the course and

scope of his employment. See City of Keller, 168 S.W.3d at 810; Antonov v. Walters,

168 S.W.3d 901, 908 (Tex. App.—Fort Worth 2005, pet. denied) (“Anything more

than a scintilla of evidence is legally sufficient to support the finding.”). We further

conclude that the evidence supporting the jury’s course-and-scope finding is not so

weak as to render the award clearly wrong and manifestly unjust. See Cain, 709
S.W.2d at 176. Accordingly, we hold that legally and factually sufficient evidence

supports the finding that Urialdes was acting in the course and scope of his

employment.

      Accordingly, we overrule issue one.

DTPA Violations

      In issue two, Prime Texas contends that “[s]ince there is legally and factually

insufficient evidence for the jury’s finding that Urialdes was acting in the course and

scope of his employment, there is also legally and factually insufficient [evidence]

for the jury findings” on Ellis’s DTPA and fraud claims. Because issue two assumes

that issue one will be resolved in Prime Texas’s favor, and it was not, we also

overrule issue two.

                                          13
“Knowing” Violation of DTPA

      Having found against Prime Texas on the two predicate DTPA questions and

having awarded damages to Ellis resulting therefrom, the jury was asked the

following question:

      Did Prime Texas engage in the conduct found in response to Question
      No. 3 or No. 4 knowingly?

      “Knowingly” means actual awareness, at the time of the conduct, of the
      falsity, deception, or unfairness of the conduct in question. Actual
      awareness may be inferred where objective manifestations indicate that
      a person acted with actual awareness.

      In answering this question, consider only the conduct that you have
      found was a producing cause of damages to Ellis.

      Five of the jurors answered “Yes,” while one juror answered “No.”5

      In issue three, Prime Texas contends that “[t]he evidence is legally and

factually insufficient to support the jury finding that Prime Texas [] knowingly

violated the DTPA.” Essentially, Prime Texas argues that it was not aware of

Urialdes’s conduct, and that it only became aware of Urialdes’s communications

with Ellis after Urialdes had been fired. Prime Texas’s position is that all the DTPA

violations found in jury questions nos. 3 and 4 were based on Urialdes’s conduct,

and not on its own conduct.

5
      The jury was instructed that “you will render your verdict upon the vote of five or
      more members of the Jury. The same five or more of you must agree upon all of the
      answers made and to the entire verdict.”
                                          14
      However, there was evidence in this case that Prime Texas, itself, knew that

Ellis had tendered his second payment to Prime Texas by giving a check to Urialdes

and that Urialdes was authorized to accept it. Prime Texas also acknowledged that

Urialdes had apparent authority in all his interactions with Ellis. Despite knowing

that Ellis had tendered his second payment to the company by giving a check to

Urialdes, Prime Texas refused to complete the replat unless Ellis paid it again. Thus,

Prime Texas sought to shift the loss caused by its own employee’s embezzlement to

Ellis. There was also evidence that Prime Texas knew that Ellis had paid it because,

when Prime Texas sued Urialdes, its damages calculation included the monies that

Ellis had paid them, but that it alleged that Urialdes had stolen. By seeking to

recover the monies from both Urialdes and Prime Texas, the jury could have

determined that Prime Texas’s own conduct relating to the DTPA violations was

done knowingly.

      Thus, we conclude that there is more than a scintilla of evidence to support

the jury’s finding that Prime Texas knowingly violated the DTPA. See City of Keller,
168 S.W.3d at 810; Antonov, 168 S.W.3d at 908 (“Anything more than a scintilla of

evidence is legally sufficient to support the finding.”). We further conclude that the

evidence supporting the jury’s “knowing” finding is not so weak as to render the

award clearly wrong and manifestly unjust. See Cain, 709 S.W.2d at 176.

                                         15
Accordingly, we hold that legally and factually sufficient evidence supports the

finding that Prime Texas knowingly violated the DTPA.

      Accordingly, we overrule issue three.

Damages

      In jury question no. 6, the jury awarded Ellis $9,685.06 for Prime Texas’s

DTPA violations; in jury question no. 8, the jury awarded Ellis an additional

$20,000.00 in damages because it found that Prime Texas acted “knowingly” in

causing the DTPA damages. In issue four, Prime Texas contends that there is legally

and factually insufficient evidence to support these damages findings.

      In the first subsection of issue four, Prime Texas argues that the award in jury

question no. 6 should be reduced by $4,554.10, which is the value the Prime Texas

contends Ellis received because of Prime Texas’s completion of the survey and c-

City Planning Letter. At trial, Ellis testified that, even though he received the survey

and city planning letter, those items were useless to him because no other company

that he contacted was willing to rely on a survey completed by another company. In

contrast, Prime Texas presented evidence at trial that that other companies could

have used the survey that it completed for Ellis, even though Ellis would have to pay

again for the completion of the replatting.

      When, as here, the jury is presented with conflicting testimony, the fact finder

may believe one witness and disbelieve others, and it may resolve inconsistencies in

                                          16
the testimony of any witness. McGalliard, 722 S.W.2d at 697. Because the jury was

presented with conflicting testimony regarding the value of the survey and City

Planning Letter that Ellis received from Prime Texas, we defer to the fact finder’s

resolution of disputed evidentiary issues. See, e.g., In re H.R.M., 209 S.W.3d 105,

108 (Tex. 2006) (factual sufficiency); In re J.P.B., 180 S.W.3d 570, 573 (Tex. 2005)

(legal sufficiency).

      In the second subsection of issue four, Prime Texas argues that “with regard

to the jury’s finding regarding the damages in Question No. 8, there should have

been no damages awarded because the evidence is clear that Prime Texas did not

commit any knowing DTPA violation.” Because that this argument assumes that

issue three above would be resolved in Prime Texas’s favor, and it was not, we also

overrule this subsection of issue four.

      We conclude that there is more than a scintilla of evidence to support the

damages awarded in jury questions 6 and 8. See City of Keller, 168 S.W.3d at 810;

Antonov, 168 S.W.3d at 908 (“Anything more than a scintilla of evidence is legally

sufficient to support the finding.”). We further conclude that the evidence supporting

the jury’s damage findings is not so weak as to render the awards clearly wrong and

manifestly unjust. See Cain, 709 S.W.2d at 176. Accordingly, we hold that legally

and factually sufficient evidence supports the damages awarded by the jury in jury

questions 6 and 8.

                                          17
      We overrule issue four.

                           ECONOMIC LOSS RULE

      In issue five, Prime Texas contends that “Ellis’[s] DTPA claim is barred by

the Economic Loss Rule” because “Ellis’[s] DTPA counterclaim is predicated on

Prime Texas’s failure to perform under the terms of the Contract” and “any

misrepresentation by Prime Texas as to the replatting work is governed by contract

law, not the DTPA.”

      However, if a party believes that the jury charge presents an improper measure

of damages because it allows the jury to find both tort and contract damages, such

party much timely object and make the trial court award of its complaint in order to

preserve error for appeal. Equistar Chems., L.P. v. Dresser-Rand Co., 240 S.W.3d
864, 868 (Tex. 2007). No-evidence complaints that do not argue the Economic Loss

Rule, by name or in substance, do not clearly and distinctly make the trial court

aware of a contention that the Economic Loss Rule applies. See id.

      In this case, Prime Texas did not object to the jury charge questions on

damages and, in its post-judgment motions, it argued only that the evidence was

legally and factually insufficient to support the “course-and-scope” and “knowing”

findings. Because Prime Texas never argued to the trial court that the Economic

Rule was applicable, that contention is waived on appeal. See id.

      Accordingly, we overrule issue five.

                                        18
                                CONCLUSION

      We affirm the trial court’s judgment.

                                              Sherry Radack
                                              Chief Justice

Panel consists of Chief Justice Radack and Justices Hightower and Adams.

                                        19