Court Opinion

ID: 4054872
Source: CourtListenerOpinion
Date Created: 2016-09-29 06:05:54.217142+00
Date Added: 2024-06-11T14:27:25.712312
License: Public Domain

ACCEPTED
                                                            01-14-00931-cv
                                                FIRST COURT OF APPEALS
                                                        HOUSTON, TEXAS
                                                       5/7/2015 2:50:05 PM
                                                     CHRISTOPHER PRINE
                                                                    CLERK

           01-14-00931-CV

                                     FILED IN
                              1st COURT OF APPEALS
   IN THE COURT OF APPEALS        HOUSTON, TEXAS
FOR THE FIRST DISTRICT OF TEXAS
                              5/7/2015 2:50:05 PM
       HOUSTON, TEXAS         CHRISTOPHER A. PRINE
                                      Clerk

      COUNTRY TITLE, L.L.C.
                              Appellant,
                  v.

       MORENIKE JAIYEOBA
                              Appellee.

  On Appeal from the 268th Judicial
  District of Fort Bend County, Texas
      Cause No. 07-DCV-159705

       APPELLANT’S BRIEF

                    LECLAIRRYAN
                    James J. McConn, Jr.
                    james.mcconn@leclairryan.com
                    1233 West Loop South, Suite 1000
                    Houston, Texas 77027
                    Telephone: 713-654-1111
                    Facsimile: 713-650-0027
                    ATTORNEY FOR APPELLANT

 ORAL ARGUMENT REQUESTED
                    IDENTITY OF THE PARTIES

Appellant                   Counsel for Appellant
Country Title, L.L.C.       LeClairRyan
                            James J. McConn, Jr.
                            Bar No. 13439700
                            james.mcconn@leclairryan.com
                            1233 West Loop South, Suite 1000
                            Houston, Texas 77027
                            Telephone: 713-654-1111
                            Facsimile: 713-650-0027

Appellee                    Attorney for Appellee
Morenike Jaiyeoba           Teltschik-Grubbs PLLC
                            L.T. Butch Bradt
                            Bar No. 02841600
                            14015 Southwest Freeway Suite 4
                            Sugar Land, Texas 77478
                            Telephone: 281-201-0700
                            Facsimile: 281-201-1202

                               i
                                   TABLE OF CONTENTS

IDENTITY OF THE PARTIES .................................................................. i
TABLE OF CONTENTS ........................................................................... ii
TABLE OF AUTHORITIES .....................................................................iii
STATEMENT OF THE CASE ................................................................. vi
STATEMENT REGARDING ORAL ARGUMENT ................................ vii
STATEMENT REGARDING THE RECORD ......................................... vii
ISSUES PRESENTED ........................................................................... viii
STATEMENT OF FACTS ......................................................................... 2
SUMMARY OF THE ARGUMENT ........................................................ 12
ARGUMENT ........................................................................................... 13
        I.      Standards of Review. ............................................................ 13
        II.     The Trial Court erred in entering judgment on
                Plaintiff’s gross-negligence claim. (Issue #1)........................ 14
                A.      There can be no finding of gross-negligence
                        without an accompanying finding of
                        ordinary negligence. ..................................................... 14
                B.      Plaintiff’s ordinary negligence claim was
                        barred by the economic-loss rule. ................................ 15
                C.      Plaintiff waived her negligence claim by
                        failing to move for a directed verdict or
                        submit instructions on the issue.................................. 20
        III.    The Trial Court erred in allowing Plaintiff to
                introduce evidence of settlement negotiations.
                (Issue #2.) .............................................................................. 24
        IV.     The Trial Court erred in entering judgment on
                the jury’s award for credit-reputation damages. .................. 28
PRAYER .................................................................................................. 33
CERTIFICATE OF SERVICE................................................................. 34
CERTIFICATE OF COMPLIANCE ........................................................ 35

                                                     ii
                                 TABLE OF AUTHORITIES

Cases
Arbor Windsor Court, Ltd. v. Weekley Homes, LP, 14-13-
  00480-CV, 2015 WL 1245548 (Tex. App.—Houston [14th
  Dist.] Mar. 17, 2015, no. pet. h.) .......................................................... 13
Bank of Tex. v. VR Electric, Inc., 276 S.W.3d 671 (Tex.App.-
 Houston [1st Dist.] 2008, pet. denied) ................................................. 23
Barzoukas v. Found. Design, Ltd., 363 S.W.3d 829 (Tex.
 App.—Houston [14th Dist.] 2012, pet. denied) ................................... 16
Beard Family P'ship v. Commercial Indem. Ins. Co., 116
S.W.3d 839 (Tex. App.—Austin 2003, no pet.) .................................... 24
Chapman Custom Homes, Inc. v. Dallas Plumbing Co., 445
S.W.3d 716 (Tex. 2014) ........................................................................ 16
Citizens Nat'l Bank v. Allen Rae Investments, Inc., 142
S.W.3d 459 (Tex. App.—Fort Worth 2004, no pet.)............................. 31
Doe v. Messina, 349 S.W.3d 797 (Tex.App.–Houston [14th
 Dist.] 2011, pet. denied) ....................................................................... 15
EMC Mortgage Corp. v. Jones, 252 S.W.3d 857 (Tex. App.
 Dallas [5th Dist.] 2008, no pet.)........................................................... 17
First Franklin Fin. Corp. v. United Title Co., Inc., 08-CV-
  01866-PAB-MEH, 2009 WL 3698526 (D. Colo. Nov. 5,
  2009) ......................................................................................... 17, 18, 19
Gary E. Patterson & Associates, P.C. v. Holub, 264 S.W.3d
180 (Tex. App.—Houston [1st Dist.] 2008, pet. denied) ...................... 20
Isenhower v. State, 261 S.W.3d 168 (Tex. App.—Houston
  [14th Dist.] 2008, no pet.) .................................................................... 13
Jones v. Blume, 196 S.W.3d 440 (Tex. App.—Dallas 2006) ................... 26
Ju v. Mark, 1:06CV320 (JCC), 2006 WL 1647266 (E.D. Va.
  June 13, 2006) .......................................................................... 17, 18, 19
LAN/STV v. Martin K. Eby Const. Co., Inc., 435 S.W.3d 234
 (Tex. 2014). ........................................................................................... 15

                                                    iii
LeBlanc v. Lange, 365 S.W.3d 70 (Tex. App.—Houston [1st
  Dist.] 2011, no pet.) .............................................................................. 27
Lehman Bros. Holdings, Inc. v. Hirota, 806CV2030T24MSS,
  2007 WL 1471690 (M.D. Fla. May 21, 2007) ................................. 18, 19
Lerma v. Border Demolition & Envtl., Inc. ___ S.W.3d ___,
  08-12-00105-CV, 2015 WL 737989 (Tex. App.—El Paso
  Feb. 20, 2015, pet. filed)....................................................................... 25
MG Bldg. Materials, Ltd. v. Moses Lopez Custom Homes,
 Inc., 179 S.W.3d 51 (Tex. App.—San Antonio 2005, pet.
 denied) .................................................................................................. 25
Murphy v. Gruber, 241 S.W.3d 689 (Tex. App.—Dallas 2007,
 pet. denied) ........................................................................................... 22
Nowzaradan v. Ryans, 347 S.W.3d 734 (Tex.App.–Houston
 [14th Dist.] 2011, no pet.) .............................................................. 14, 15
Physicians & Surgeons Gen. Hosp. v. Koblizek, 752 S.W.2d
657 (Tex. App.—Corpus Christi 1988, writ denied) ............................ 22
Provident American Ins. Co. v. Castaneda, 988 S.W.2d 189
  (Tex. 1998) ............................................................................................ 29
Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d
407 (Tex. 2011) ..................................................................................... 16
St. Paul Surplus Lines Ins. Co., Inc. v. Dal-Worth Tank Co.,
  Inc., 974 S.W.2d 51 (Tex. 1998) ..................................................... 29, 30
Stauffacher v. Coaduum Capital Fund 1, LLC, 344 S.W.3d
584 (Tex. App.—Houston [14th Dist.] 2011, pet. denied) ............ 17, 21
Taylor v. Alonso, Cersonsky & Garcia, P.C., 395 S.W.3d 178
  (Tex.App.– Houston [1st Dist.] 2012, pet. denied) .............................. 15
Texas Mut. Ins. Co. v. Morris, 287 S.W.3d 401 (Tex. App.—
  Houston [14th Dist.] 2009), rev'd on unrelated grounds,
  383 S.W.3d 146 (Tex. 2012) ................................................................. 31
THPD, Inc. v. Cont'l Imports, Inc., 260 S.W.3d 593 (Tex.
 App.—Austin 2008, no pet.) ................................................................. 23

                                                     iv
Victory Park Mobile Home Park v. Booher, 05-12-01057-CV,
  2014 WL 1017512 (Tex. App.—Dallas Feb. 26, 2014, no
  pet.)....................................................................................................... 20
Yeng v. Zou, 407 S.W.3d 485 (Tex. App.—Houston [14th
  Dist.] 2013, no pet.) .............................................................................. 14
Other Authorities
Restatement (Third) of Torts, Tent. Draft 1 § 5 cmt. A.......................... 16
Rules
Tex. R. Civ. P. 279 ................................................................................... 23
Tex. R. Evid. 408 ..................................................................................... 24

                                                       v
                     STATEMENT OF THE CASE

Nature of the Case     Plaintiff contracted to purchase a home and
and Parties:           hired Country Title to serve as the escrow
                       agent. Country Title failed to record the deeds
                       properly and failed to transfer the loan payoff
                       to the seller’s mortgagee. The seller’s
                       mortgagee, in turn, foreclosed on the property.
                       Plaintiff sued Country Title for breach of
                       contract, negligence, gross negligence, and
                       breach of fiduciary duty.

Trial Court:           The Honorable Brady G. Elliott, 268th Judicial
                       District Court of Fort Bend County, Texas.

Trial Court            The parties stipulated to a breach of contract
Disposition            by Country Title, LLC, to repayment of closing
                       costs of $1,300, and to lost rental of $1,800.
                       The matter was tried to a jury. At the close of
                       evidence, the trial court directed a verdict on
                       Plaintiff’s breach-of-fiduciary-duty and
                       negligence claims. The jury returned a verdict
                       of $30,000 in credit-reputation damage. The
                       jury also found that Country Title had been
                       grossly negligent, necessitating a further trial
                       on exemplary damages. After a separate trial,
                       the jury returned a verdict of $100,000 for
                       exemplary damages. The trial court entered
                       final judgment for (1) actual damages of
                       $32,800.00, (2) pre-judgment interest of
                       $13,102.03, and (3) punitive damages of
                       $100,000.

                                  vi
           STATEMENT REGARDING ORAL ARGUMENT

     Appellant respectfully requests that this Court grant oral

argument, which it believes will assist the Court in evaluating the legal

issues presented in this appeal.

              STATEMENT REGARDING THE RECORD

     The Reporters Record comprises eight volumes, which Appellant

will refer to as (1 RR) through (8 RR), respectively. Volume 8 of the

Reporter’s Record contains all exhibits that were admitted at trial. As

it is not paginated, Appellant will cite trial exhibits by exhibit number.

The Clerk’s Record comprises a single volume, which Appellant will

refer to as (CR). All references to documents in the Appendices will be

referenced as (App.)

                                    vii
                          ISSUES PRESENTED

Issue 1:   Whether the Trial Court erred in entering judgment on the
           Jury’s award of $100,000 in punitive damages for gross
           negligence?

           Sub-Issue A:     Whether the economic-loss rule barred
                            Plaintiff’s gross-negligence claim, where the
                            allegedly breached duties were exclusively
                            contractual in origin?

           Sub-Issue B:     Whether Plaintiff waived her negligence
                            and gross-negligence claims by failing to
                            request a ordinary-negligence charge before
                            the jury retired to consider Country Title’s
                            liability for gross negligence?

Issue 2:   Whether the Trial Court erred in allowing Plaintiff to
           introduce evidence of settlement discussions, including
           evidence that Country Title had requested a release and
           indemnity from Plaintiff as part of a proposed settlement?

Issue 3:   Whether the evidence was sufficient to support the jury’s
           award of $30,000 in credit-reputation damages where
           Plaintiff presented no evidence that the damage to her credit
           reputation caused her any financial injury and, a fortiori,
           presented no evidence to quantify that injury?

                                  viii
                            01-14-00931-CV

                   IN THE COURT OF APPEALS
                FOR THE FIRST DISTRICT OF TEXAS
                       HOUSTON, TEXAS

                       COUNTRY TITLE, L.L.C.
                                                Appellant,
                                    v.

                        MORENIKE JAIYEOBA
                                                Appellee.

                  On Appeal from the 268th Judicial
                  District of Fort Bend County, Texas
                      Cause No. 07-DCV-159705

                        APPELLANT’S BRIEF

TO THE HONORABLE COURT OF APPEALS:

     Appellant Country Title, L.L.C. (“Country Title”), submits this

Appellant’s Brief and respectfully requests that this Honorable Court

reverse the judgment of the trial court and set aside the jury’s award of

$100,000 for exemplary damages and $30,000 for credit-reputation

damages.

                                    1
                        STATEMENT OF FACTS

     In this action, Plaintiff Morenike Jaiyeoba (“Plaintiff”) alleges that

Country Title, acting as escrow agent in a real estate transaction, failed

to discharge its obligation to record certain deeds and to transfer

certain funds. (CR 8-12.)

     The property—a residential dwelling at 1626 Brookstone Lane in

Sugar Land, Texas (“Property”)—was formerly owned by Ayodeji and

Folashade Alli, who had rented it out to tenants (3 RR at 122:20; Pl.’s

Ex. 2.) In mid-2005, the Allis were seriously delinquent in their

payments to their lender and mortgagee, World Savings Bank, FSB

(“World Savings”). (3 RR at 123:21-124:3, 125:5-8.)

     Plaintiff was interested in purchasing the Property as an

investment. (3 RR at 121:11-18; 4 RR at 48:17-20.) The Allis agreed to

sell it to her for $190,000. (Pl.’s Ex. 2.) Plaintiff borrowed money from

EMC Mortgage Corporation (“EMC”), to finance the purchase. (3 RR at

126:3-10.) Closing occurred on August 22, 2005. (Pl’s Ex. 2.)

     Defendant Country Title served as title insurer and escrow agent

for the transaction. (CR 8-12; 4 RR at 391-5.) In its role as escrow

agent, Country Title agreed, among other things, to record the

                                    2
necessary deeds and to deliver a payoff amount of $134,943.21 to the

Allis’ lender, World Savings. (Pl.’s Ex. 2; Pl.’s Ex. 6.)

      This did not happen. (Pl.’s Ex. 6; 3 RR at 134:4-7.) Although

Country Title sent the appropriate documents to the Fort Bend County

courthouse for recording, the courthouse refused to accept them. (5 RR

at 49:10-13.) And although Country Title attempted to wire the funds

to World Savings, the wire did not go through. (3 RR at 129:16-17, 5 RR

at 35:6-24; Pl.’s Ex. 6; Def.’s Ex. 10.)

      The Allis’ former tenants remained in the Property after the

closing, with Plaintiff taking over the lease and accepting rental

payments from them. (3 RR at 129:24-130:8.) Meanwhile, however,

World Bank neither received the payoff amount for the Allis’ loan nor

received any further monthly payments on that loan. (Pl.’s Ex. 14.)

Unaware of the Allis’ sale to Plaintiff, World Bank instituted

foreclosure. (Pl.’s Ex. 6 & 14.) On December 6, 2005, World Bank

purchased the Property for itself at the foreclosure sale. (Pl.’s Ex. 6.)

      A week after acquiring the Property, World Bank evicted the

tenants. (3 RR at 130:9-131:9; Pl.’s Ex. 4.) When the tenants alerted

Plaintiff to this, Plaintiff asked Country Title why they were being

                                       3
evicted. (3 RR at 130:17-131:21.) Only then realizing its error, Country

Title recorded the warranty deed from the Allis and the deeds of trust

for Plaintiff’s lenders. (5 RR at 6:23-7:21) This was too late, and the

recordation complicated matters further. As noted above, the Property

already had been sold to World Savings. Having acquired the property,

World Savings was now trying to find a buyer. (Pl.’s Ex. 22.) The late

filing of the deeds—dead letters because neither Plaintiff nor the Allis

had title—impeded World Savings’ efforts to sell the home. (Id.) To

remove the cloud on the Property’s title, World Savings filed a quiet

title action against Plaintiff. (Pl.’s Ex. 26.)

      Around this time, Plaintiff retained counsel, who demanded that

Country Title deliver clear title to the Property. (Pl.’s Ex. 8.) To that

end, Country Title contacted World Savings and offered to pay the

$134,943.21 it still held in escrow (representing the payoff amount on

the Allis’ loan). (Pl.’s Ex. 6.) But by then World Bank was entertaining

other offers for the Property for significantly more than that—around

$192,500. (Pl.’s Ex. 11; 5 RR at 18:7-11.) Country Title failed to acquire

the property from World Savings. (5 RR at 18:13-14.) Because the

transaction did not close, Country Title paid over $198,000 to Plaintiff’s

                                       4
lender, EMC, to satisfy the loans that she had taken out to pay for the

Property. (4 RR at 52:5-8; 5 RR at 17:14-16; Pl. Ex. 39, 41.) So

although Plaintiff no longer owned the Property; she did not owe any

money on it, either.

     Before Country Title paid off these loans, however, Plaintiff failed

to make certain of her monthly $1600 payments to EMC. (3 RR at

136:6-138:16.) This was because, after World Savings evicted her

tenants, she no longer was receiving rent payments. (3 RR at 137:23-

138:16.) Plaintiff’s repayment delinquency was reported to credit-

rating organizations. (Pl.’s Ex. 34.) At trial, Plaintiff claimed that

these missed payments impaired her credit reputation and prevented

her from obtaining a $197,000 loan. (Tr. 4 RR at 41:12-45:24.)

     During the course of these events, Plaintiff’s counsel and Country

Title’s counsel exchanged correspondence in an unsuccessful attempt

resolve the matter. (Pl.’s Ex. 8, 11, 17, and 20.) One of the issues was

indemnification. (5 RR at 15:21-24.) As part of a settlement, Country

Title wanted Plaintiff to release it from all claims and to indemnify

Country Title against any future claims that might be brought against

                                     5
it arising out of the incident. Id. The parties were unable to reach an

agreement, leading to the present litigation.

              Evidence of Settlement Negotiations at Trial

     Plaintiff’s Amended Petition asserts, inter alia, claims for breach

of contract, breach of fiduciary duty, negligence, and gross negligence.

(CR at 52.) The case was tried in late July 2014 on the issues of

negligence, gross negligence, breach of fiduciary duty, and damages.

     Before trial, Country Title moved to exclude evidence of its

negotiations with Plaintiff to resolve the matter. (CR at 205.) Plaintiff

opposed this motion, arguing that the evidence was germane to her

breach-of-fiduciary-duty claim. In particular, Plaintiff claimed that:

(1) Country Title’s status as closing agent meant that it owed Plaintiff a

fiduciary duty, and (2) as a fiduciary, Country Title could not ask for

indemnity when negotiating a resolution to the dispute. (1 RR at 48:14-

52:1.) The Trial Court reserved ruling on the motion in limine, stating

that it wanted to “see how these facts play out” at trial. (1 RR at 52:22-

53:11; CR at 212.) At trial, it allowed Plaintiff to introduce extensive

evidence of the negotiations between her counsel and counsel for

Country Title. This included the following exhibits:

                                     6
     Pl’s Ex. 8: A January 27, 2006 demand letter from Plaintiff’s
     counsel, Steven Belzer, to Country Title. The letter
     discusses Country Title’s efforts to resolve the matter to date
     and demands additional action.

     Pl’s Ex. 17: A February 14, 2006 letter from Country Title’s
     counsel, Jim McConn, to Belzer requesting information from
     Plaintiff to facilitate transfer of title to her.

     Pl’s Ex. 20: A February 22, 2006 letter from Belzer to
     Country Title’s counsel, Jim McConn, demanding that
     Country Title purchase the Property from World Savings
     and demanding compensation for lost rental and attorney’s
     fees.

Plaintiff also introduced live testimony concerning the settlement

negotiations. She elicited testimony from Thomas Berry, Country

Title’s chief operating officer, that—as part of the negotiations to have

Country Title purchase the Property from World Savings—Country

Title asked for a release from Plaintiff:

     Q     Mr. Berry, you know that Country Title also requested
           a release from Ms. Jaiyeoba before it would purchase
           the property from World Savings Bank, don’t you

     A     I know we requested a release. I do not believe it was
           conditional.

(5 RR at 16:21-17:1.) Later, Plaintiff’s counsel asked Berry whether

Country Title requested indemnity from Plaintiff in order to resolve the

matter:

                                     7
      Q:    Do you know why Country Title asked for an
            indemnification from Ms. Jaiyeoba?

      A     Specifically, I do not.

      Q     But to your knowledge, they asked for one, didn’t they?

      A     To my knowledge, we did.

      Q     And a release?

      A     And a release, correct.

(5 RR at 19:3-10.) Again, the request for a release and indemnity

occurred during negotiations between Plaintiff’s counsel and Defense

counsel about how to resolve the matter.

      Plaintiff’s counsel highlighted these facts during closing

argument. Thus, he used the request for a release and indemnity—a

common request in settlement negotiations—to portray Country Title as

indifferent to Plaintiff’s plight:

      Country Title doesn’t care. Country Title wants a release.
      They want an indemnification. They want to be protected
      from Mr. Alli. They want Ms. Jaiyeoba to protect them, to
      reimburse their costs.

(5 RR at 72:13-16.) He repeats this later in his argument:

      [N]ot only do they do it wrong up front, they do it wrong at
      the end. They go and record the deed, get Ms. Jaiyeoba
      sued. And, okay, so it’s going to damage her credit. We
      want a release and indemnification to—they’re really not
      entitled to.

                                      8
(5 RR at 74:23-75:3.) And again in his rebuttal argument:

     They’re a title company, and they know at the title company
     World Savings Bank is going to sue. They know that the
     tenant’s leaving, and they don’t do anything to stop it except
     ask for a release and indemnification.

(5 RR at 86:19-23.) The settlement negotiations were, in short, a key

part of Plaintiff’s jury arguments.

                Findings of the Trial Court and the Jury

     At the close of evidence, Plaintiff moved for a directed verdict on

her claim for breach of fiduciary duty. (5 RR at 51:8-11.) As grounds

for this motion, Plaintiff’s counsel cited the facts that (1) Country Title

had not properly recorded the deeds or transferred the funds to World

Savings, and (2) Country Title “ask[ed] for a release and an

indemnification,” thereby “putting their self-interest ahead of Ms.

Jaiyeoba’s.” (5 RR at 56:9-11.) The Trial Court granted Plaintiff’s

motion. (5 RR at 58:10.)

     The Trial Court’s proposed charge included an instruction on gross

negligence but no corresponding instruction on ordinary negligence.

(5 RR at 62:2-5.) Country Title objected to this, arguing that there

could be no finding of gross negligence without a predicate finding of

ordinary negligence. (Id.) Plaintiff, however, argued that breach of

                                      9
fiduciary duty could stand in for ordinary negligence as the basis for a

gross negligence finding: “the breach of fiduciary duty is sufficient to get

punitive damages.” (5 RR at 62:7-15.) The Trial Court agreed with

Plaintiff, and instructed the jury on gross negligence without first

giving an ordinary negligence instruction. (App. 2.)

     Country Title also objected to Plaintiff’s instruction on credit-

reputation damages. It reiterated its pre-trial motion objection, which

noted that Plaintiff had not shown any documented loss resulting from

impaired credit. (5 RR at 61:19-20; CR 54-56.) And Country Title

objected to the content of Plaintiff’s credit-reputation instruction. (5 RR

61:1-8.) The Trial Court overruled these objections.

     The charge to the jury asked them to answer three questions:

(1) the amount, if any, of Plaintiff’s credit-reputation damages,

(2) whether Country Title had acted with malice, and (3) whether

Country Title had acted with gross negligence. (App. 2.) The jury

awarded $30,000 in credit-reputation damages and found gross

negligence, but it did not find malice. (App. 2.) The matter then

proceeded to a trial on exemplary damages for gross negligence.

                                    10
     At this point, Country Title reiterated its objection to the jury’s

having been instructed on the gross negligence issue without a

corresponding negligence instruction. (5 RR at 94:23-24.; 6 RR at 9:7-

11.) Although the jury already had found liability on gross negligence,

the Trial Court formally reopened the evidence on negligence and found

that Plaintiff had established negligence as a matter of law. (6 RR at

17:9-10, 20:23-21:4.) Country Title objected to this, arguing that (1) it

was inappropriate to reopen evidence on that issue, and (2) any

negligence claim would be barred by the economic-loss rule. (6 RR at

16:10-18, 18:23-25.) After a trial on exemplary damages, the jury

awarded Plaintiff an additional $100,000. (App. 3.) The Trial Court

entered judgment on the jury’s verdicts. (App. 1.)

     This appeal followed.

                                    11
                   SUMMARY OF THE ARGUMENT

     The Trial Court erred in entering judgment on the jury’s award of

$100,000 in exemplary damages because Plaintiff’s gross negligence

claim was barred by the economic-loss rule. This doctrine bars

negligence claims—and, hence, gross-negligence claims—where the

duties alleged to have been breached arise solely out of a contract

between the parties. In the present case, Plaintiff asserts that Country

Title breached its duty to record documents and transfer funds relating

to the sale of the Property. Those duties, however, arose solely out of

the parties’ oral contract for Country Title to perform closing services.

Accordingly, the breaches cannot support a gross negligence claim. So

the jury’s award of $100,000 for exemplary damages must be set aside.

     The Trial Court further erred in allowing Plaintiff to introduce

evidence of settlement discussions between the parties—including

Country Title’s request for indemnity and a release. Under Rule of

Evidence 408, those discussions were inadmissible. The repeated

introduction of this evidence was prejudicial, as it formed one of the

cornerstones of Plaintiff’s closing arguments. By allowing evidence of

                                    12
settlement negotiations into evidence, the Trial Court committed

reversible error.

     Finally, the Trial Court erred in allowing the issue of credit-

reputation damages go to the jury. Although there was some evidence

that Plaintiff’ was later unable to obtain a loan, there was no evidence

that (1) the loan denial was caused by Country Title’s actions, or

(2) Plaintiff was economically harmed by being unable to obtain the

loan in question. Plaintiff’s evidence was insufficient as a matter of law

to support an award of damages for injury to credit reputation.

                              ARGUMENT

     I.    Standards of Review.

     Issue #1 presents a pure question of law, which this Court reviews

de novo. Arbor Windsor Court, Ltd. v. Weekley Homes, LP, 14-13-00480-

CV, 2015 WL 1245548, at *3 (Tex. App.—Houston [14th Dist.] Mar. 17,

2015, no. pet. h.). Issue #2 concerns the admissibility of evidence, which

this Court reviews for abuse of discretion. Isenhower v. State, 261
S.W.3d 168, 178 (Tex. App.—Houston [14th Dist.] 2008, no pet.). Issue

#3 concerns the sufficiency of evidence, during the consideration of

which this Court views the facts in the light most favorable to the

challenged finding and indulges every reasonable inference that would

                                   13
support it. Yeng v. Zou, 407 S.W.3d 485, 489 (Tex. App.—Houston [14th

Dist.] 2013, no pet.)

     II.   The Trial Court erred in entering judgment on
           Plaintiff’s gross-negligence claim. (Issue #1)

     The jury’s $100,000 exemplary-damages verdict was predicated on

its finding of gross negligence. But, as detailed below, Plaintiff’s gross

negligence claim fails as a matter of law. Thus, the Trial Court should

not have submitted the issue of exemplary damages to the jury and

should not have entered judgment on the jury’s $100,000 in exemplary

damages.

           A.    There can be no finding of gross-negligence
                 without an accompanying finding of ordinary
                 negligence.

     Plaintiff’s gross-negligence claim fails because it lacks a necessary

predicate—Plaintiff does not have a viable underlying claim for

ordinary negligence. “‘[N]egligence and gross negligence are not

separable causes of action but are inextricably entwined.’”

Nowzaradan v. Ryans, 347 S.W.3d 734, 739 (Tex.App.–Houston [14th

Dist.] 2011, no pet.) (quoting Ford Motor Co v. Miles, 967 S.W.2d 377,

390 (Tex. 1998)). Gross negligence is not a freestanding claim; it is a

measure of the extent to which the defendant breached the duty of care.

                                    14
Id. at 740. It follows that a gross negligence claim cannot stand in the

absence of an established claim for ordinary negligence. See Taylor v.

Alonso, Cersonsky & Garcia, P.C., 395 S.W.3d 178 (Tex.App.– Houston

[1st Dist.] 2012, pet. denied) (“Texas law is well settled that, in order to

prevail on a claim for gross negligence, a plaintiff must first show

ordinary negligence.”); Doe v. Messina, 349 S.W.3d 797 (Tex.App.–

Houston [14th Dist.] 2011, pet. denied) (agreeing that “a finding of

ordinary negligence is prerequisite to a finding of gross negligence”)

     In the present case, Plaintiff cannot establish ordinary negligence

because: (1) the economic-loss rule bars this claim, and (2) she waived it

by failing to request a charge (or a directed verdict) on the matter before

the jury retired to consider Country Title’s liability.

           B.    Plaintiff’s ordinary negligence claim was barred
                 by the economic-loss rule.

     Take, first, the economic-loss rule. “Texas courts of appeals have

uniformly applied the economic-loss rule to deny recovery of purely

economic losses in actions for negligent performance of services.”

LAN/STV v. Martin K. Eby Const. Co., Inc., 435 S.W.3d 234, 243 (Tex.

2014). This is because “courts prefer, in general, that economic losses

be allocated by contract where feasible.” Id. at 248 (quoting

                                     15
Restatement (Third) of Torts, Tent. Draft 1 § 5 cmt. A). In cases

involving a “failure to perform a contract,” the “parties’ economic losses

[are] more appropriately addressed through statutory warranty actions

or common law breach of contract suits than tort claims.” Sharyland

Water Supply Corp. v. City of Alton, 354 S.W.3d 407, 418 (Tex. 2011).

     A critical consideration in applying the economic-loss rule is the

source of the duty alleged to have been breached. There can be no tort

claim where the economic losses result from a breach of a contractual

duty: “The economic-loss rule . . . forecloses a negligence claim

predicated on a duty created under a contract to which the plaintiff is a

party when tort damages are sought for an injury consisting only of

economic loss to the subject of the contract.” Barzoukas v. Found.

Design, Ltd., 363 S.W.3d 829, 835 (Tex. App.—Houston [14th Dist.]

2012, pet. denied) (citing Sharyland, 354 S.W.3d at 417-18). In other

words, “the economic-loss rule generally precludes recovery in tort for

economic losses resulting from a party's failure to perform under a

contract when the harm consists only of the economic loss of a

contractual expectancy.” Chapman Custom Homes, Inc. v. Dallas

Plumbing Co., 445 S.W.3d 716, 718 (Tex. 2014). Where the losses flow

                                    16
entirely from a contract breach, plaintiff is limited to a claim for breach

of contract. Stauffacher v. Coaduum Capital Fund 1, LLC, 344 S.W.3d
584, 591 (Tex. App.—Houston [14th Dist.] 2011, pet. denied).

     An escrow agreement is a contract between the escrow agent and

the contracting parties; an escrow agent’s failure to act in accordance

with its terms is a breach of contract. See EMC Mortgage Corp. v.

Jones, 252 S.W.3d 857, 867-68 (Tex. App. Dallas [5th Dist.] 2008, no

pet.). So the economic-loss rule bars a negligence claim against an

escrow agent where, as here: (1) the action is based on the agent’s

failure to act in accordance with the escrow agreement, and (2) the

plaintiff suffered only economic injuries. First Franklin Fin. Corp. v.

United Title Co., Inc., 08-CV-01866-PAB-MEH, 2009 WL 3698526, at *5

(D. Colo. Nov. 5, 2009) (economic-loss rule barred negligence and

breach-of-fiduciary-duty claims brought against closing agent); Ju v.

Mark, 1:06CV320 (JCC), 2006 WL 1647266, at *3 (E.D. Va. June 13,

2006) (holding that economic-loss rule barred tort claims against escrow

agent, and observing that the complaint “alleges conduct that is more

appropriately addressed under contract law.”); Lehman Bros. Holdings,

                                    17
Inc. v. Hirota, 806CV2030T24MSS, 2007 WL 1471690, at *3 (M.D. Fla.

May 21, 2007).

     In First Franklin, for example, the plaintiff sued a closing agent,

claiming that the agent failed to comply with the closing instructions.

As in the present case, the plaintiff asserted a negligence claim and

breach-of-fiduciary-duty claim alongside its contract claim. The

defendant moved for summary judgment on the negligence and breach-

of-fiduciary-duty claims, arguing that they were barred by the

economic-loss rule. The federal district court agreed. After “examining

the nature and source of the alleged duty,” the court found that “it is

clear that First Franklin’s tort claim is not supported by a duty

independent of contractual obligations.” Id. at *5. Instead, the plaintiff

was “simply restating its breach of contract claim.” Id. at *5 (internal

quotation marks omitted). Accordingly, it found that the claims were

“barred by the economic-loss rule.” Id.

     Ju v. Mark was much to the same effect. There, too, the

defendant was a closing agent. 2006 WL 1647266, at *3. There, too,

the plaintiff alleged a breach of a duty arising out of the parties’

agreements concerning the closing of a house refinancing. Id. And

                                     18
there, too, the Court held that the economic-loss rule barred the

plaintiffs’ tort claims. Id. See also Lehman Bros., 2007 WL 1471690

(finding that the plaintiff’s tort and breach-of-fiduciary-duty were

indistinguishable from its contract claims and so were barred by the

economic-loss rule).

     In the present case, as in First Franklin, Ju, and Lehman

Brothers, the gist of Plaintiff’s action is that Country Title failed to

honor its obligations under the parties’ escrow agreement. Country

Title, Plaintiff contends, neither recorded the deeds nor paid off the

Allis’ mortgagee, World Savings. This is what led Home Savings to

institute foreclosure proceedings on the property, to purchase the

property at the foreclosure sale free and clear of Plaintiff’s ownership

interest in the property, and to evict Plaintiff’s tenants. And those

events, in turn, were what led to Plaintiff’s alleged economic injuries

(i.e., losing her tenants, defaulting on her loan obligations to EMC, and

damaging her credit). Thus, all of Plaintiff’s claimed damages can be

traced back to Country Title’s failure to perform its contractual duties

                                     19
under the escrow agreement.1 Because the breached duties arose out of

the parties’ contract—and not any tort duty of care—the economic-loss

rule bars Plaintiff’s negligence claim.

     Without a viable claim for ordinary negligence, however,

Plaintiff’s claim for gross negligence fails as a matter of law. And as

gross negligence was the sole basis for the jury’s award of $100,000 in

exemplary damages, the entry of judgment on that verdict must be

vacated and the damages reduced by $100,000.

           C.    Plaintiff waived her negligence claim by failing
                 to move for a directed verdict or submit
                 instructions on the issue.

     Even if Plaintiff otherwise had a viable negligence claim—and she

does not—she waived that claim by failing to request a jury charge on

1 It is true that, in addition to contractual duties, Country Title owed
certain fiduciary duties vis-à-vis the buyer and the seller. See Gary E.
Patterson & Associates, P.C. v. Holub, 264 S.W.3d 180, 203 (Tex. App.—
Houston [1st Dist.] 2008, pet. denied). But those are irrelevant because
Plaintiff’s injuries did not result from a breach of any of those fiduciary
duties. See Victory Park Mobile Home Park v. Booher, 05-12-01057-CV,
2014 WL 1017512, at *4 (Tex. App.—Dallas Feb. 26, 2014, no pet.)
(existence of fiduciary duties between partners irrelevant for economic-
loss-rule purposes where the breached duty was contractual). Instead,
Plaintiff’s damages arose out of Country Title’s breach of its contractual
obligations under the escrow arrangement.

                                    20
negligence at any time before the jury retired to consider liability

issues.

     As noted above, Plaintiff’s proposed jury charge omitted

negligence instructions. Country Title objected to this omission, noting

that the jury could not consider gross negligence without first finding

ordinary negligence. The Trial Court overruled this objection and

submitted the liability issues to the jury without a negligence

instruction. The Trial Court reasoned that its prior finding—as a

matter of law—that Country Title had breached its fiduciary duty was

tantamount to a finding of negligence, thereby obviating the need for

the jury to make a finding on negligence.

     This was error. To begin with, the trial court erred in finding a

breach of fiduciary duty. As noted above, the duties that Plaintiff

alleged Country Title breached were purely contractual in nature. This

limits Plaintiff to a claim for breach of contract. Stauffacher, 344
S.W.3d at 591 (fiduciary duty claim barred by economic-loss rule).

     Yet even if there had been a breach of fiduciary duty, this still

would not have established Country Title’s negligence. Texas law

carefully distinguishes between negligence and breach of fiduciary duty;

                                    21
the two causes of action are not coextensive. See Murphy v. Gruber, 241
S.W.3d 689, 693 (Tex. App.—Dallas 2007, pet. denied) (“Texas courts do

not allow plaintiffs to convert what are really negligence claims into

claims for fraud, breach of contract, breach of fiduciary duty, or

violation of the DTPA.”) (collecting cases). Thus, contrary to the Trial

Court’s reasoning, a breach-of-fiduciary claim cannot serve as a stand-

in for a negligence claim to support a gross-negligence finding.

     As noted above, the trial court later attempted to fix this missing-

negligence-claim problem by “reopening” the negligence issue. But the

Trial Court did so only after the jury had returned its verdict on

liability. That was too late. Where, as here, a case is submitted to a

jury without the parties having requested that the jury be charged on

an issue, the party waives that issue. Physicians & Surgeons Gen.

Hosp. v. Koblizek, 752 S.W.2d 657 (Tex. App.—Corpus Christi 1988,

writ denied) (trial court erred in interposing finding on “issue which

was never requested by plaintiffs or presented to the jury”).

     Rule 279 provides that any issues excluded from the jury charge

that are “not conclusively established under the evidence and no

element of which is submitted or requested are waived.” Tex. R. Civ. P.

                                    22
279. See also THPD, Inc. v. Cont'l Imports, Inc., 260 S.W.3d 593, 607

(Tex. App.—Austin 2008, no pet.) (“[I]f a party seeking relief fails to

submit any element of his affirmative claim to the jury, it waives that

ground of recovery.”). While there is an exception to this rule when the

evidence conclusively establishes the necessary elements of a claim,

Bank of Tex. v. VR Electric, Inc., 276 S.W.3d 671, 677 (Tex.App.-

Houston [1st Dist.] 2008, pet. denied), such is not the case here. At

most, the evidence established “conclusively” that Country Title

breached its escrow agreement with Plaintiff. But as noted above, the

economic-loss rule forbids a contract breach from serving as the basis

for a tort claim. There was no other duty of care whose breach the

evidence conclusively established. Thus, by failing to request

instructions on the issue, Plaintiff waived her claim for negligence

                               *     *     *

     Because Plaintiff’s ordinary negligence claim was both

substantively barred (by the economic-loss rule) and procedurally

waived (because she failed to request a negligence instruction), and

because a finding of gross negligence requires a corresponding finding of

ordinary negligence, Plaintiff’s claim for gross negligence fails as a

                                    23
matter of law. As the gross negligence claim was the sole basis for the

entry of exemplary damages, this Court should reverse with

instructions that the Trial Court set aside those damages.

      III. The Trial Court erred in allowing Plaintiff to
           introduce evidence of settlement negotiations. (Issue
           #2.)

      The Trial Court also erred in allowing Plaintiff to introduce

evidence of the efforts of the parties’ attorneys to settle the matter.

Rule of Evidence 408 bars the use of evidence of settlement discussions

to establish the existence or extent of liability:

      Evidence of (1) furnishing or offering or promising to furnish,
      or (2) accepting or offering or promising to accept, a valuable
      consideration in compromising or attempting to compromise
      a claim which was disputed as to either validity or amount is
      not admissible to prove liability for or invalidity of the claim
      or its amount.2

Tex. R. Evid. 408. Such evidence may be “admitted for another purpose,

however, such as proving bias or prejudice or negating a contention of

undue delay.” Beard Family P'ship v. Commercial Indem. Ins. Co., 116
S.W.3d 839, 849 (Tex. App.—Austin 2003, no pet.).

2The wording of the rule has been changed, effective April 1, 2015. The
quoted language is from the version in effect at the time of trial.

                                     24
      “The purpose of Rule 408 is to encourage settlement of disputed

claims.” MG Bldg. Materials, Ltd. v. Moses Lopez Custom Homes, Inc.,

179 S.W.3d 51, 61 (Tex. App.—San Antonio 2005, pet. denied).

Settlement negotiations would be chilled if parties knew that the

communications could be used against them at trial. For purposes of

Rule 408, a settlement offer is a proposal that “create[s] a quid pro quo

situation purporting to resolve the dispute in its entirety.” Lerma v.

Border Demolition & Envtl., Inc. ___ S.W.3d ___, 08-12-00105-CV, 2015
WL 737989, at *3 (Tex. App.—El Paso Feb. 20, 2015, pet. filed).

     In the present case, the Trial Court allowed Plaintiff to introduce

extensive evidence of communications between Plaintiff’s counsel and

Country Title’s counsel regarding how to resolve the present dispute—

including evidence that that Country Title demanded a release and

indemnity as part of such a deal. Allowing Plaintiff to present these

materials to the jury was an abuse of discretion. At trial, however,

Plaintiff argued that the use of this evidence was warranted because it

supported her claim of breach of fiduciary duty. She argued that, while

attempting to resolve the dispute, Country Title continued to owe

Plaintiff a fiduciary duty to act in her best interests. And she claimed

                                    25
that Country Title breached its duty during the negotiations by

requesting indemnity and a release.

     Not so. An escrow agent is not a general agent. The scope of its

agency is narrow, encompassing only those acts necessary to carry out

the obligations under the escrow agreement. Jones v. Blume, 196
S.W.3d 440, 448 (Tex. App.—Dallas 2006) (“ An escrow agent's duties

are strictly limited to those set forth in the escrow agreement.”). By the

time the parties were negotiating over how to resolve the present

dispute, however, the time for Country Title to have performed its

obligations under the escrow agreement had long since passed. Indeed

it no longer was possible for Country Title to comply with its obligations

under the agreement—the Property was now legally owned by a third

party. So any fiduciary duties that Country Title once may have owed

to Plaintiff vis-à-vis transferring title to her had long since lapsed.

     Nor would it make any sense for Country Title to owe a fiduciary

duty to Plaintiff during settlement negotiations. Both sides were

represented by counsel. And they both were engaged in arms-length

negotiations about how to remedy the situation brought about by

Country Title’s failure to comply with the terms of the escrow

                                     26
arrangement. No fiduciary duty exists between parties engaged in

arms-length settlement negotiations. LeBlanc v. Lange, 365 S.W.3d 70,

84 (Tex. App.—Houston [1st Dist.] 2011, no pet.) (holding that plaintiff’s

former attorney and business partner did not owe him fiduciary duty

where the parties were engaged in arms-length settlement negotiations

and both were represented by counsel).

     At trial, Plaintiff’s counsel argued that Country Title had a

fiduciary obligation to buy back the property from World Savings.

Again, this is not so. As escrow agent, Country Title’s obligations

regarding title to the Property were simply: (1) to properly record the

deeds, and (2) to forward payment to the appropriate entities. Country

Title’s failure to do so—coupled with World Savings’ actions that

rendered belated recording and delivery impossible—transformed

Plaintiff’s inchoate contractual rights vis-à-vis Country Title into a

cause of action for breach of contract. At that point, the issue just

became one of damages: how best to repair the problems created by

Country Title’s breach. Country Title did not owe—and could not owe—

Plaintiff a fiduciary duty while negotiating how best to resolve her

claim against it.

                                    27
     The Trial Court's error in allowing Plaintiff to introduce evidence

of settlement negotiations was not harmless. During closing argument,

Plaintiff’s counsel emphasized the fact that Country Title had requested

a full release and indemnity from Plaintiff during negotiations to

resolve the present dispute. He insinuated that Country Title’s

insistence upon such terms demonstrated its indifference to Plaintiff’s

situation. He sounded this theme repeatedly.

     Allowing parties to introduce evidence of these sorts of

communications would have a chilling effect on settlements. It is

routine for a defendant to request a waiver and indemnity as part of a

settlement agreement—indeed, this often is a make-or-break issue. But

if such a request could be turned against a defendant at trial, he may

opt not to negotiate at all. This is exactly the result that Rule 408 is

intended to prevent. Accordingly, the Trial Court erred in allowing

Plaintiff to introduce evidence of settlement negotiations.

     IV.   The Trial Court erred in entering judgment on the
           jury’s award for credit-reputation damages.

     Finally, the trial court erred in entering judgment on the jury’s

$30,000 award for injury to Plaintiff's credit reputation. Although

parties may, in an appropriate case, recover damages for injury to

                                    28
credit, they must present sufficient evidence: (1) to show a loss flowing

from the injured credit reputation, and (2) to quantify that loss. See St.

Paul Surplus Lines Ins. Co., Inc. v. Dal-Worth Tank Co., Inc., 974
S.W.2d 51, 53 (Tex. 1998) (to recover loss-of-credit damages, there must

be a showing that it “resulted in injury and proof of the amount of that

injury.”); Provident American Ins. Co. v. Castaneda, 988 S.W.2d 189,

199 (Tex. 1998) (absent proof of injury from loss of credit, damages are

only nominal).

     In St. Paul Surplus Lines, for example, the plaintiff sued its

insurer after the insurer had failed to provide the plaintiff with a

defense in a claim brought by a third party. In that earlier suit, the

plaintiff had suffered a default judgment, which it claimed impaired its

credit. As in the present case, however, the plaintiff failed to present

any evidence that it was financially harmed by the inability to obtain

credit—it just presented evidence that it had a lower credit rating.

Despite this absence of evidence, the jury returned a verdict of $500,000

for lost-credit damages, which the Court of Appeals upheld.

                                    29
     On further appeal, however, the Supreme Court of Texas reversed.

It held that being unable to obtain a loan is not, by itself, sufficient

proof of loss-of-credit damages:

     A plaintiff does not suffer actual damage merely from the
     inability to obtain a loan. There must be a showing that
     such inability resulted in injury and proof of the
     amount of that injury.

Id. (emphasis added). Because there was “no evidence that the decline

[in the plaintiff’s credit rating] injured Dal-Worth in any way,” the court

reversed the $500,000 award for lost credit reputation.

     In addition to being controlling law, the holding in St. Paul

Surplus Lines makes good sense. After all, a loan rejection can—in

some instances—be a blessing in disguise. Suppose, for example, that a

party is turned down for a loan to purchase stock. Suppose, further,

that immediately thereafter the stock’s value plummets. In such a

circumstance, the party was helped, not hurt, by his inability to obtain

the loan. The impaired credit prevented him from obtaining the very

rope with which to hang himself. This example shows why a plaintiff

alleging damages resulting from a credit injury must do more than

merely show that he was turned down for a loan. He make the further

showing of how being turned down for the loan affected him financially.

                                     30
See Texas Mut. Ins. Co. v. Morris, 287 S.W.3d 401, 429 (Tex. App.—

Houston [14th Dist.] 2009), rev'd on unrelated grounds, 383 S.W.3d 146

(Tex. 2012) (reversing damages award for injury to credit reputation

because “neither Morris, nor any witness in his behalf, put a dollar

amount on the injury he claimed to have sustained because of his

inability to obtain the washing-machine loan or to have his name on his

home mortgage.”).

     In the present case, Plaintiff presented no evidence to connect her

allegedly impaired credit to any financial loss. It is true that Plaintiff

testified that she was denied a $197,000 loan in 2007. But there was no

evidence as to why the bank declined the loan. See Citizens Nat'l Bank

v. Allen Rae Investments, Inc., 142 S.W.3d 459, 482 (Tex. App.—Fort

Worth 2004, no pet.) (holding that plaintiff failed to establish credit-

injury damages where no evidence that damaged credit rating was

reason for the declined loan). Moreover, the denial might have been a

blessing in disguise. As in the above example, the house price may have

plummeted soon after Plaintiff was turned down for the loan, resulting

in an underwater mortgage. Plaintiff, however, failed to present any

                                     31
evidence connecting her loan denial to any financial loss.3 So there was

no basis for the jury to find that the damage to Plaintiff’s credit

reputation caused her any financial injury.

     The jury, however, awarded Plaintiff $30,000 for impaired credit.

It is unclear how the jury came up with this number—neither Plaintiff

nor Country Title suggested this as an amount. More to the point, the

$30,000 award is not supported by any evidence of actual loss. For all

the record shows, Plaintiff might have benefitted from her impaired

credit, as it may have prevented her from entering into an inadvisable

loan for an overpriced investment. If so, the $30,000 constitutes a

windfall. Plaintiff bore the burden of showing financial injury, yet

failed to do so. Accordingly, the Trial Court erred in entering judgment

on the jury’s $30,000 award for injury to credit.

3At trial, Plaintiff’s counsel argued that the measure of the loss should
be the amount of the loan: $197,000. (5 RR at 73:16-24.) This is a non-
starter. The amount of the loan cannot be an appropriate measure of
damages because even if Plaintiff had been able to take out the loan,
she still would have had to pay it back, with interest.

                                    32
                                PRAYER

     For the reasons stated above, Appellant Country Title prays that

this Court reverse the Trial Court’s judgment, vacate the $100,000

punitive damages award, vacate the $30,000 award for injury to

Plaintiff’s credit reputation, and order such further relief as it deems

appropriate.

                                  Respectfully submitted,

                                  LECLAIRRYAN

                                  By:    /s/ James J. McConn, Jr.
                                  JAMES J. MCCONN, JR.
                                  Bar No. 13439700
                                  james.mcconn@leclairryan.com
                                  1233 West Loop South, Suite 1000
                                  Houston, Texas 77027
                                  Telephone: 713-654-1111
                                  Facsimile: 713-650-0027
                                  ATTORNEY FOR APPELLANT

                                    33
                      CERTIFICATE OF SERVICE

     As required by Texas Rule of Appellate Procedure 6.3 and 9.5(b),

(d), and (e), I certify that I have served this document on all other

parties, who are listed below, on May 7, 2015.

                                           /s/ James J. McConn, Jr.
                                             James J. McConn, Jr.

L.T. Butch Bradt
Teltschik-Grubbs PLLC
Bar No. 02841600
14015 Southwest Freeway Suite 4
Sugar Land, Texas 77478

                                    34
                   CERTIFICATE OF COMPLIANCE

      As required by Texas Rule of Appellate Procedure 9, I certify that

this document complies with the typeface requirements of Tex. R. App.

P. 9.4(e) because it has been prepared in a convention al typeface no

smaller than 14-point for text and 12-point for footnotes. This

document also complies with the word-count limitations of Tex. R. App.

9.4(i) because it contains 6,242 words, excluding those parts exempted

by Tex. R. App. P. 9.4(i)(1).

                                         /s/ James J. McConn, Jr.
                                           James J. McConn, Jr.

                                   35
                    01-14-00931-CV

          IN THE COURT OF APPEALS
       FOR THE FIRST DISTRICT OF TEXAS
              HOUSTON, TEXAS

               COUNTRY TITLE, L.L.C.
                                       Appellant,
                           v.

                MORENIKE JAIYEOBA
                                       Appellee.

           On Appeal from the 268th Judicial
           District of Fort Bend County, Texas
               Cause No. 07-DCV-159705

                INDEX OF APPENDIX

APPENDIX          DESCRIPTION              RECORD CITE
 NUMBER

   1        Final Judgment                  CR 435-37

   2        Jury Charge (Initial)           CR 415-22

   3        Jury Charge (Exemplary          CR 426-28
            Damages)

                           36
Appendix 1
Appendix 2
Appendix 3