Court Opinion

ID: 9778504
Source: CourtListenerOpinion
Date Created: 2023-08-29 21:10:10.508953+00
Date Added: 2024-06-11T07:33:10.720457
License: Public Domain

*59CHAPA, Justice,
dissenting.
I respectfully dissent.
The majority has concluded that this record contains no evidence to support the jury findings that Home Savings:
1) took “advantage of the lack of knowledge, ability, experience, or capacity of [the Martinezes] to a grossly unfair degree”; and
2) “represented to the [Martinezes] that the contract of February 19, 1986, conferred or involved rights, remedies, or obligations it did not have.”
I disagree.
The Texas Supreme Court set out the standard of review in such cases:
In deciding the question of whether there is evidence of probative force to support a jury finding, we must consider only the evidence and inferences tending to support the finding and disregard all evidence and inferences to the contrary. Garza v. Alviar, 395 S.W.2d 821 (Tex.1965).
Brown v. Galleria, 752 S.W.2d 114, 115-16 (Tex.1988).
The evidence and inferences in the record which tend to support the jury findings are:
1) The Martinezes met with contractor Mickey Gershenson, who assured them he would do a good job in remodeling their home.
2) Gershenson arranged for Home Savings to finance the remodeling of the Martinez’ home and Home Savings prepared all the documents for the entire transaction.
3) Gershenson arranged for the Mar-tinezes to meet him at the Home Savings office on February 19, 1986, to execute all documents for the transaction.
4) Based on a prior arrangement made by Gershenson, he and the Martinezes met at the Home office on February 19, 1986, with Home consumer loan specialist, Mary Margaret (Margo) Hernandez, who explained the transaction to the Martinezes.
5) The Martinezes had serious reservations about entering into any agreement at all, but trusted in Home Savings.
6) Home Savings through Hernandez, “in no uncertain terms” reassured the Mar-tinezes, by misrepresenting that Home had dealt with Gershenson before, that Ger-shenson had a good reputation, and could be trusted.
7) Home Savings through Hernandez, further assured the Martinezes, “that [Ger-shenson would] do the best possible job or [Home would] see to it that if any problems occur, they will [sic] remedy.”
8) Home Savings through Hernandez, also assured the Martinezes that remodeling would make their “house go up in value.”
9) The Martinezes relied upon the representations of Home Savings and on February 19, 1986, executed all the transaction documents which remained with Home Savings throughout the entire period in question.
10) The documents which were prepared and discussed with the Martinezes by Home consumer loan specialist Hernandez, were executed on February 19, 1986 and included:
1) A “Notice of Intent to Improve Real Estate” wherein the Martinezes certify to HSA Service Corporation their agreement to use the money advanced by HSA Service Corporation solely for the improvement of their home.
2) A “Home Improvement Loan Application” wherein the Martinezes apply with Home Savings for a home improvement loan of $20,400.00.
3) A “Truth-in-Lending Disclosure Statement” wherein the Martinezes are notified that they will pay back $35,-832.00 on the loan if all payments are met.
4) A “Contract for Improvements (with Transfer of Lien)” wherein the Martinezes and the contractor agree on a contract price of $20,000.00 and the Mar-tinezes agree to execute a $20,400.00 note to HSA Service Corporation in consideration for HSA advancing the $20,-000.00. This document is notarized by Home consumer loan specialist Mary Margaret Hernandez.
*605) A “Note” executed by the Mar-tinezes to HSA Service Corporation in the amount of $20,400.00 together with interest secured by a Deed of Trust of even date.
6) An “Assignment of Contractor Lien” which is the Deed of Trust of even date wherein the Martinezes (Borrower) and the contractor appoint Howard C. Lee, trustee for the Beneficiary, HSA Corporation to secure the $20,400.00 note executed by the Martinezes. The Mar-tinezes and contractors signatures are notarized by Hernandez on the 19th of February, 1987. The same document reflects a transfer and conveyance of the Note and Deed of Trust to Home Savings Association by one E.R. Neatherlin, Vice President of HSA Service Corporation which is notarized by Hernandez on the 25th of February, 1986.1
7) A “Home Improvement Loan Authorization for Disbursement” wherein the Martinezes agreed that the proceeds from the note to Home would be used solely to pay for their home improvements and authorized the entire amount to be paid to the Martinezes and the contractor. The document is signed by the Martinezes and witnesses by Home's consumer loan specialist, who for some reason signed as “Margo Hernandez.”
11) Although' other clerks at Home Savings make it a practice to conduct background checks on contractors which they finance in transactions such as this, Home closing agent Hernandez failed to review the background check on Gershenson prior to making the misrepresentation to the Martinezes.
12) Home closing agent Hernandez did not deny making the alleged misrepresentations to the Martinezes, but simply could not recall making them.
13) The Contract for Improvement with transfer of lien to Home Savings provides in part:
8. Partial Lien. In the event the improvements are not completed by Contractor according to the plans and specifications and, for whatever reason, it is determined that Lender does not have a lien to the extent of the full amount of the contract price, then Lender shall have a valid lien for the contract price, less the amount reasonably necessary to complete the improvements according to the plans and specifications, or in such event Lender, at its option, shall have the right to complete the improvements, and the lien shall be valid for the contract price. (Emphasis added.)
14) When problems arose with the remodeling efforts, the Martinezes were unable to contact Home’s agent Hernandez but were told by Home’s agent Guerrero that Home had nothing to do with the quality of the contractor’s work.
15) The remodeling work done by the contractor was incomplete and so defective that it would cost up to $24,000 to correct, and had, in fact, deteriorated the value of the Martinez’ home.
16) As a result of this transaction, the Martinezes suffered mental anguish in the form of headaches, sleeplessness, embarrassment, strain on the marriage, and deterioration of their credit.
The question then is whether this evidence and its inferences are sufficient to support the jury’s first finding that Home Savings took advantage of the Martinezes to a grossly unfair degree.
Defining “unconscionable action or course of action” in such cases, the Texas Supreme Court stated:
Unconscionable action or course of action is an act or practice which, to a • person’s detriment:
A. Takes advantage of the lack of knowledge, ability, experience, or capability of a person to a grossly unfair degree;
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*61TEX.BUS. & REM.CODE § 17.45(5). Taking advantage of a consumer’s lack of knowledge to a grossly unfair degree requires a showing that the resulting unfairness was glaringly noticeable, flagrant, complete and unmitigated. Chastain v. Koonce, 700 S.W.2d 579, 584 (Tex.1985).
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Some evidence under [this] definition of unconscionability will support the trial court’s judgment.
Brown v. Galleria, 752 S.W.2d at 116.
In Brown, the consumer Brown, took his automobile for repairs to LaMarque Ford of Texas. While the car was being repaired, LaMarque and several individuals who ultimately incorporated as Galleria Area Ford, Inc. entered into a complicated agreement giving the potential future owners (Galleria) full managerial authority for the daily operation of the business. Brown was unaware of who owned or was running the agency that eventually failed to repair his vehicle. Apparently concluding there was no evidence that Galleria had misrepresented anything about the repairs to Brown’s vehicle directly to Brown, the court of appeals reversed the jury findings in favor of Brown as to Galleria on a no evidence contention.
In finding that there was indeed some evidence to support the jury finding against Galleria, the Texas Supreme Court said:
It is important to note that the Browns were never apprised of this complicated arrangement between LaMarque and Galleria. During trial, Mr. Brown testified that he did not know who owned the Ford dealership at the time he discovered all the problems with the repair work on his truck. The evidence adduced at trial revealed that while the truck was being repaired, the phone at the dealership was answered “Galleria Ford.” In addition, during this same time period, persons employed at Galleria told one of the Browns’ witnesses with respect to the change of the dealership: ‘We are the same happy folks ... here to help you but we changed names ... [Everything else [is] the same.’ In light of the evidence presented by the Browns, we conclude that in representing itself to the public and to the Browns as the new company in charge of the dealership, Galleria took advantage to a grossly unfair degree of the internal working relationship and agreements that allocated responsibility and liability between themselves and LaMarque.
Brown at 116-17.
The majority here correctly recognizes that this court is obliged to consider only the evidence and inferences that support the jury findings and disregard all evidence and inferences to the contrary. They further recognize the misrepresentations of Home to the Martinezes and the consequences thereof. Nevertheless, the majority comes to the extraordinary conclusion that there is no evidence in the record to support the jury finding that Home Savings engaged in any unconscionable conduct. The majority has misplaced their reliance on Chastain v. Koonce, 700 S.W.2d 579 (Tex.1985) to reach such a holding.
In Chastain, the purchasers of some lots brought an action against the vendor alleging unconscionable conduct to their detriment. They contended that the vendor violated his representation which induced them to buy, by making commercial use of a lot in an area he had lead them to believe would be for residential use only. The purchasers further complained that the vendor, at some time after the purchases, had made threats against the buyers for causing him trouble over the lots.
In concluding that there was no evidence to uphold a finding of unconscionable conduct on the part of the vendor, the Texas Supreme Court was careful to note initially that no damages were shown by the purchasers with regard to the purchased lots:
Under the facts of our case, the purchasers failed to show any disparity between the value received and the consideration paid in the transaction. The record is devoid of any expert testimony relating to the value of the property at the time of the purchase. In addition, *62among the purchasers only Gary Chas-tain testified as to the consideration paid for the property. The only relevant testimony concerning land values in the record is expert testimony which explains the value at the time of trial and the land would have attained had the pipeyards not been placed on lot 2. These values were far in excess of the amount which Gary and Georgia Chastain paid for their lot.
Chastain at 582.
The supreme court then made it clear that you can’t have “resulting unfairness to a grossly unfair degree” if there is no showing of resulting injury directly attributable to the unconscionable acts themselves: 2
Taking advantage of a consumer’s lack of knowledge to a grossly unfair degree thus requires a showing that the resulting unfairness was glaringly noticeable, flagrant, complete and unmitigated. Based on the record as a whole, we find no evidence that the Chastains and the other three couples were taken advantage of to a grossly unfair degree.
The purchasers emphasize the telephone conversation between Gary Chas-tain and J.P. Stroud, in which Stroud threatened physical violence and to place a rubber burning plant in the vicinity of Gary Chastain’s land. We find this unpersuasive. The phone conversation occurred approximately one year after the alleged misrepresentations occurred and do not reflect on the unfairness of the original transaction between the purchasers and Koonce and Stroud. As a result, we find no evidence of unconscionability.
Chastain at 584.
However, Chastain is clearly distinguishable from the case before us. Where the buyers in Chastain failed to show any resulting damages from the unconscionable acts of the sellers, the consumers here (Martinez) have presented abundant evidence that they were damaged grossly by the unconscionable acts of Home Savings. It cannot be seriously argued that the damages suffered by the Martinez which resulted directly from the unconscionable acts of Home Savings, are anything but glaringly noticeable, flagrant, complete and unmitigated.
The majority would just simply ignore any evidence in the record of gross disparity between the $35,832.00 debt incurred by the Martinezes and the incomplete defective remodeling received by the Martinezes because the appellees did not pursue findings as to gross disparity. Because appel-lees did not pursue such findings directly is no justification to ignore this evidence when being obligated to consider this evidence and its inferences as a factor in determining if the “resulting unfairness” of Home Savings unconscionable acts took advantage of appellees to a grossly unfair degree.
The majority rejects appellees’ “inextricably intertwined” argument erroneously concluding that such an argument is unavailable to appellees because appellees have failed to establish an independent DTPA violation against Home. I disagree. Further, the majority fails to focus on the totality of the transaction in suggesting that there is no room for a disparity argument because of their erroneous conclusion that there is no connection between the relationship of the Martinezes and the contractor and the Martinezes and Home.
In so doing, the majority ignores the clear, uncontradicted and documented evidence 1) that the sole purpose of this loan was to pay the contractor to remodel the Martinezes home, 2) that it was Home who orchestrated the entire transaction by preparing, explaining, executing, notarizing, and witnessing all the documentation in*63volved, 3) and that it was Home’s misrepresentation that induced the Martinezes to enter into the entire agreement which resulted to their detriment.
Regardless of what may or may not have been argued, the jury here apparently saw this whole thing as one transaction with one purpose; a joint effort by Home and the contractor to induce the Martinezes to borrow the money from Home to pay the contractor without concern for the consequences to the Martinezes. The jury believed that Home’s misrepresentation to the Martinezes in the process of inducing them, was a proximate cause of the Mar-tinezes damages, and the evidence and inferences supports their findings.
Contrary to the majority’s opinion, Brown is more controlling here. In fact, the evidence in this case which established the unconscionable acts of the alleged violator is more glaringly noticeable, flagrant, complete and unmitigated than in Brown. Where in Brown, there was no evidence that Galleria directly misrepresented anything to Brown about his car’s repair, there is abundant evidence in this record of Home’s direct misrepresentation to the Martinezes which resulted to their detriment. The majority argues that Brown is too distant to our case because of the lack of evidence of secret arrangements between Home and the contractor as in Brown. But it cannot be denied that the record shows that Home and the contractor had prior dealings and that their joint efforts, which gained them both a profit, put the Martinezes in the unenviable position they now occupy.
Recently, in Best v. Ryan Auto Group, Inc., 786 S.W.2d 670 (Tex.1989), the Texas Supreme Court reversed the court of appeals on a no evidence contention in a similar case:
In determining a “no evidence” question, however, a court must consider only that evidence and reasonable inferences therefrom that tend to support the jury findings, disregarding all contrary evidence and inferences. King v. Bauer, 688 S.W.2d 845 (Tex.1985). Here, as the court of appeals conceded, there is evidence “that Ryan misrepresented the status that Best would enjoy as a Harley-Davidson dealership, including the ability to buy parts and vehicles.” [Best v. Ryan Auto Group] 768 S.W.2d 956 at 957 [(Tex.App.—Fort Worth 1989) ]. More specifically, Best testified that Ryan misrepresented to him at the time of sale that he would “be able to buy parts and vehicles as Mr. Ryan has been buying.” Clearly, this is some evidence from which the jury could reasonably conclude that Best purchased the dealership with the specific understanding that he would be able to purchase inventory as needed from Harley-Davidson and, therefore, that Ryan’s misrepresentation was a producing cause of Best’s subsequent damages. The court of appeals’ opinion is therefore in conflict with our holding in King v. Bauer, supra.
Best at 671-72.
As in Best, the majority here concedes that “the record contains testimony by Mrs. Martinez that Home’s closing agent, Margo Hernandez, assured her that Ger-shenson was reputable, that he could be trusted, that Home would make him cure any problems that arose,3 and that remodeling would increase the value of the house and therefore would be better than buying a new house. The record also shows that Home Savings did not correct Gershenson’s poor workmanship and that the closing agent was not familiar with his reputability. Mr. and Mrs. Martinez were having second thoughts about entering the transaction, and Home’s reassurances convinced them to enter the contract with Gershen-son.” The evidence further shows that the *64net result to the Martinez was a $35,832.00 debt to Home Savings and an incomplete substandard remodeling effort to their home which would cost $24,000.00 to remedy, and a home with a reduced value.
As in Best, this certainly was some evidence from which the jury could reasonably conclude that the Martinezes indebted themselves to Home Savings because of Home Savings’ misrepresentation and with the understanding that Home Savings would remedy any defects in the contractor’s work. From the evidence, the jury could reasonably conclude that Home’s misrepresentations were a producing cause of Martinez’ subsequent damages.
Therefore, as in Best, the majority opinion here is in conflict with the holding of the Texas Supreme Court in King v. Bauer, 688 S.W.2d 845 (Tex.1985). I would hold that there is abundant evidence in this record to sustain the jury’s first finding that Home took advantage of the lack of knowledge, ability, experience, or capacity of the Martinez to a grossly unfair degree. This finding was sufficient to support the court’s judgment.
However, I would further disagree with the majority’s holding that there is no evidence in this record to sustain the jury’s second finding: that Home “represented to the [Martinezes] that the contract of February 19, 1986, conferred or involved rights remedies or obligations it did not have.”
The favorable evidence and inferences in the record set out above as supporting the jury’s first finding likewise support the jury’s second finding.
Considering the evidence and its inferences, it was reasonable for the jury to believe the Martinezes were mislead and deceived by Home that the documents of the transaction provided that Home would remedy any defects in the construction; and that Home, as the Lendor, would exercise its option under Paragraph 8 of the Contract for Improvements with Transfer of Lien by completing the improvements, and correcting any defects. The majority justifies ignoring this evidence by simply asserting that the Martinezes failed to pursue a cause of action for breach of a verbal contract against Home. This assertion does not change the existence of this evidence and inferences in this record which also supports this jury finding. Therefore, I would hold that the jury finding that Home represented to the Martinezes that the contract conferred or involved rights, remedies, or obligations it did not have was likewise supported by evidence and inference in this record.
The majority would deny these consumers relief because some inculpating words are missing in the misrepresentations made. The majority would require that the misrepresentations of the lender specifically state that the written contract specifically gave the consumer specific rights it did not have in order to establish liability. Such a holding would mean, that any potential violator of the DTPA would be free from liability by falsely inferring, suggesting, insinuating, intimating, or implying anything about a contract as long as no specifics are used. This would violate both the purpose and spirit of the DTPA emphatically recognized by the Texas Supreme Court:
The central purpose of the DTPA is the protection of consumers against false, misleading, and deceptive business practices, and unconscionable actions.
Brown v. Galleria, 752 S.W.2d at 117. For it is the act of falsely inferring, suggesting, insinuating, intimating or implying that misleads and deceives the consumer and it is for juries, as the fact finders, to decide whether the actions of an alleged violator have reached such a point. Here, the jury found the acts of Home Savings reached that point and the evidence and inferences in this record support such findings.
The majority appears to conclude that although Home Savings wronged the Mar-tinezes, they did not wrong them enough; that although the Martinezes were damaged by Home’s wrongs, they were not damaged enough. During a more primitive period of Texas law, “Buyer Beware” was the standard policy which left all consumers without any real rights. The DTPA ended that standard, creating new rights *65and protections for the weary consumer; any eroding of these rights would violate the central purpose of the Act.
I am not convinced that the standard of review for a no evidence point is different when dealing with these types of cases. However, in the event that it is, I am convinced that the favorable evidence and inferences in this record support all the findings of the jury to a sufficient degree to affirm the judgment of 'the trial court.

. Hernandez testified that the transfer and ac-knowledgement to Home Savings Association took place on February 25, 1986 because “that’s the day we get (sic) the money in the bank to cover the check that we disbursed.” Further, HSA Service Corporation was a subsidiary of Home Savings Association, and E.R. Neatherlin was identified in testimony as both a Vice President of HSA Service Corporation and Home Savings Association.

. We note that the language of § 17.45(5), Ch. 17 DTPA reads:
§ 17.45 Definitions.
(5) "Unconscionable action or course of action" means an act or practice which, to a person ⅛ detriment (emphasis added) ...
It thus is logical that before such an act is actionable, it must be to the consumer’s detriment which requires a showing of some damage.

. The actual testimony which the jury apparently believed in this respect was that Home misrepresented to the Martinezes "that [the contractor would] do the best possible job or [Home would] see to it that if any problems occur, they will [sic] remedy."
This is a far cry from the suggestion of the majority that Home simply said that they would help the Martinezes if they had any trouble with the contractor. The deception was in misleading the Martinezes to believe that the transaction documents provided for Home to remedy any defects created by the contractor.