Court Opinion

ID: 4395565
Source: CourtListenerOpinion
Date Created: 2019-05-09 23:47:35.681145+00
Date Added: 2024-06-11T14:52:06.145490
License: Public Domain

Appeal Dismissed in Part, Affirmed and Memorandum Opinion filed May 9,
2019.

                                In the

                 Fourteenth Court of Appeals

                         NO. 14-17-00843-CV

   GLORIA C. ZERMEÑO, RICARDO GUZMAN, AND SOLID ROCK
                 READY MIX, INC., Appellants
                                  v.

   NOELIA GARCIA, MARIO ZERMEÑO, AND Z READY MIX, INC.,
                         Appellees

                                 and

   NOELIA GARCIA, MARIO ZERMEÑO, AND Z READY MIX, INC.,
                        Appellants

                                  v.

   GLORIA C. ZERMEÑO, RICARDO GUZMAN, AND SOLID ROCK
                 READY MIX, INC., Appellees
                        On Appeal from the 281st District Court
                                Harris County, Texas
                          Trial Court Cause No. 2015-07827

                      MEMORANDUM OPINION

       This case arises out of a family concrete business owned by two sisters-in-
law. Both sides of the family sued each other and one of the implicated concrete
companies. Both sides filed notices of appeal: (1) Gloria Zermeño, Ricardo
Guzman, and Solid Rock Ready Mix, Inc. (“appellants”) and (2) Noelia Garcia,
Mario Zermeño, and Z Ready Mix, Inc. (“appellees”).1

       Before the trial court, Gloria and Ricardo alleged Noelia and Mario had
breached a settlement agreement, and Z Ready Mix alleged that Gloria had
breached her fiduciary duty. These claims were tried to a jury. The jury found
Noelia and Mario had not breached the settlement agreement, but that Gloria had
breached her fiduciary duty. The trial court rendered a final judgment that Gloria
pay $467,000 to Noelia, Mario, and Z Ready Mix.

       Gloria, Ricardo, and Solid Rock Ready Mix appeal this portion of the
judgment. However, this portion only affects Gloria’s interests. Therefore, we
dismiss Ricardo’s and Solid Rock Ready Mix’s appeal for want of jurisdiction.

       Gloria brings six issues on appeal; appellees bring one conditional issue.
Gloria did not preserve five of her issues, leaving only a factual-sufficiency issue,
which we overrule. Consequently, we do not reach appellees’ conditional issue.2

       1
          Although each of the six parties to this case is both an appellant and an appellee, to
simplify the opinion we use the terms “appellants” and “appellees” to refer to the primary issues
in the appeal.
       2
          Appellees assert the trial court’s final judgment is proper. Appellees argue in the
alternative that if this court should reverse and remand the case to trial, the trial court abused its
                                                  2
We affirm.

                                    I.    BACKGROUND

       Gloria Zermeño and Mario Zermeño are sister and brother. Ricardo Guzman
and Noelia Garcia are their respective spouses. Years ago, Gloria and Mario started
a concrete company together, Z Ready Mix, Inc. Gloria handled the company’s
administrative matters, and Mario managed operations. Half of the company was
owned by Gloria, and half of the company was owned by Mario’s wife, Noelia.

       In 2014, Gloria and Mario had a falling out. Noelia and Mario, individually
and on behalf of Z Ready Mix, sued Gloria and Ricardo; almost immediately
thereafter, Gloria and Ricardo sued Noelia and Mario. The suits were consolidated,
with Noelia, Mario, and Z Ready Mix as plaintiffs. Ultimately, the parties settled
after mediation. The settlement agreement divided the assets and debts of Z Ready
Mix between the parties. Z Ready Mix owned two concrete plants on the same
land, so one plant was awarded to Gloria and Ricardo, and the other plant was
awarded to Noelia and Mario. The parties agreed to evenly divide the cash in the
company’s accounts, accounts receivable, and the company’s debts. Both couples
planned to start new concrete companies, Solid Rock Ready Mix, Inc. for Gloria
and Ricardo, and Diamond Ready Mix, Inc. for Noelia and Mario. As part of the
settlement, the parties planned to build a fence between the two plants to create
two separate spaces for the new companies. Because electricity and water sources
were located only on the property Noelia and Mario received in the settlement,
Noelia and Mario agreed that all utilities would “stay connected” to Gloria and
Ricardo’s plant until new connections were established.

       Afterwards, Gloria and Ricardo had trouble with the supply of power and

discretion by refusing to allow them to amend their petition to add a breach-of-contract claim.

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water to their concrete plant. Gloria and Ricardo fought with Noelia and Mario
over the electricity and water problems. One day after the parties moved for
dismissal of their claims pursuant to the settlement agreement, Gloria and Ricardo
asserted a new claim against Noelia and Mario for breach of the settlement
agreement, particularly the agreement to keep utilities connected. The trial court
later signed an order dismissing the claims asserted before June 5, 2015 (the settled
claims).

       Z Ready Mix subsequently asserted a new claim against Gloria for breach of
fiduciary duty. 3 In support of this claim, Z Ready Mix asserted that after
settlement, Gloria collected cash payments from Z Ready Mix customers, but did
not deposit the payments in Z Ready Mix’s bank account. Z Ready Mix also
asserted that Gloria accepted payment in the form of services to her new concrete
company, Solid Rock Ready Mix, for debts owed to Z Ready Mix. Z Ready Mix
alleged that Gloria breached her fiduciary duty “when she converted accounts
receivables for her benefit, and for that of her company, Solid Rock Ready Mix.”

       At the conclusion of trial, the jury found Noelia and Mario had not breached
the settlement, but that Gloria had breached her fiduciary duty. The jury
determined the amount of money to “fairly and reasonably compensate Z Ready
Mix, Inc./Noelia Garcia/Mario Zermeno [sic]” for the breach was $467,000. The
trial court rendered a final judgment ordering Gloria to pay Noelia, Mario, and Z
Ready Mix $467,000 in actual damages.4

       3
          Appellees also asserted a claim for conversion. The trial court granted a motion for
directed verdict on this claim at trial, and appellees did not appeal this ruling.
       4
         The final judgment also ordered that appellants took nothing on their claims against
appellees and appellees took nothing on their claims against Ricardo.

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                            II.    PARTIAL DISMISSAL

      “An appealing party ‘may not complain of errors which do not injuriously
affect him or which merely affect the rights of others.’” Buckholts Indep. Sch. Dist.
v. Glaser, 632 S.W.2d 146, 150 (Tex.1982) (quoting Jackson v. Fontaine’s Clinics,
Inc., 499 S.W.2d 87, 92 (Tex. 1973)); Branch v. Monumental Life Ins. Co., 422
S.W.3d 919, 922 (Tex. App.—Houston [14th Dist.] 2014, no pet.) (same).
Although Ricardo and Solid Rock Ready Mix were parties to this action in the trial
court, they have standing to appeal only if the judgment prejudiced their own
interests. See Branch, 422 S.W.3d at 922.

      The portion of the judgment under review prejudiced only Gloria’s interests.
The portion under review does not affect Ricardo’s or Solid Rock Ready Mix’s
rights. Because Ricardo and Solid Rock Ready Mix do not have standing to appeal
a ruling that is adverse only to Gloria’s interest, we lack subject-matter jurisdiction
over their appeal. See id. (dismissing appeal for lack of subject-matter jurisdiction
as to appellant whose rights were not affected by judgment). We accordingly
dismiss Ricardo’s and Solid Rock Ready Mix’s appeal for want of jurisdiction. See
Tex. R. App. P. 42.3(a).

                                  III.   ANALYSIS

A.    Preservation of error

      Next, we address preservation of error. With respect to several of Gloria’s
issues, appellees assert Gloria failed to preserve error because she did not make
these complaints in the trial court and receive a ruling. See Tex. R. App. P. 33.1.
We agree.

      To preserve error for appellate review, the complaining party must make a
timely request, objection, or motion to the trial court that “state[s] the grounds for

                                           5
the ruling that the complaining party [seeks] from the trial court with sufficient
specificity to make the trial court aware of the complaint, unless the specific
grounds were apparent from the context.” Id. Error generally is preserved when the
complaining party “‘made the trial court aware of the complaint, timely and
plainly, and obtained a ruling.’” Thota v. Young, 366 S.W.3d 678, 689 (Tex. 2012)
(quoting State Dep’t of Highways v. Payne, 838 S.W.2d 235, 241 (Tex.1992) (op.
on reh’g)).

      Gloria failed to timely object to the trial court on grounds she now asserts in
issues one, three, and four. In her first issue, Gloria asserts appellees’ live pleading
was its first amended petition, not its second amended petition, and the first
amended petition contained no allegations to support appellees’ breach-of
fiduciary-duty claim. In her third issue, Gloria contends the settlement agreement
precluded the existence of her fiduciary duty. In her fourth issue, Gloria argues the
settlement agreement imposed a “best efforts” standard on her and, therefore, she
should not have been held to any standard of fiduciary duty. Gloria did not raise
any of these issues in the trial court. Consequently, these issues are waived. See
Tex. R. App. P. 33.1.

      Gloria’s fifth issue is likewise waived. In this issue, Gloria asserts that the
Question No. 6 of the jury charge included harmful error because it asked the jury
to award damages to all three appellees. Gloria explains that it was improper to
include Noelia and Mario in Question No. 6 because neither was alleged to be
owed a fiduciary duty by Gloria. Gloria points out that the predicate question asked
only if she breached a fiduciary duty to Z Ready Mix.

      To preserve an alleged jury-charge error, a party must take some action to
apprise the trial court of the alleged error in a way that provides the trial court with
the opportunity to correct it. Burbage v. Burbage, 447 S.W.3d 249, 257 (Tex.

                                           6
2014) (“[T]he objection must apprise the trial court of the error alleged such that
the court has the opportunity to correct the problem.”). “There should be but one
test for determining if a party has preserved error in the jury charge, and that is
whether the party made the trial court aware of the complaint, timely and plainly,
and obtained a ruling.” Transcon. Ins. Co. v. Crump, 330 S.W.3d 211, 226–27
(Tex. 2010) (quoting Payne, 838 S.W.2d at 241).

       At trial, Gloria objected that no evidence existed to support the submission
of Question No. 6, but did not object that it was improper to include Noelia and
Mario. 5 Gloria objected only that “there is insufficient evidence . . . to prove . . .
that Gloria Zermeño . . . actually caused any damages from a breach of fiduciary
duty.” Gloria gave the trial court no plain indication that she objected to the
inclusion of Noelia and Mario in the question. As such, Gloria waived this issue.

B.     Subject-matter jurisdiction6

       In her second issue, Gloria contends the trial court lacked subject-matter
jurisdiction over appellees’ breach-of-fiduciary duty claim because (1) the claim
was extinguished by the parties’ mediated settlement agreement and order of
dismissal with prejudice, (2) appellees did not demonstrate capacity or standing,
and, (3) appellees had no right to amend their pleadings after the suit was
dismissed.

       In an apparent effort to avoid the error-preservation requirements of Rule

       5
         Gloria more specifically objected to the question in post-trial motions, but such motions
do not preserve error. The rules require an objection to the charge be made before the charge is
read to the jury. See Tex. R. Civ. P. 272. Consequently, an objection to a jury charge in a post-
trial motion is untimely and does not preserve issues for review. Mitchell v. Bank of Am., N.A.,
156 S.W.3d 622, 627–28 (Tex. App.—Dallas 2004, pet. denied).
       6
        Subject-matter jurisdiction is a threshold issue which we consider first. We explain our
primary analysis of subject-matter jurisdiction second in this instance only to clarify the
argument’s relationship to the preservation issues addressed above.

                                                7
33.1, Gloria’s first argument regarding subject-matter jurisdiction conflates the
defenses of release or res judicata with the separate and distinct concept of subject-
matter jurisdiction. Subject-matter jurisdiction is “essential to a court’s power to
decide a case.” Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553–54 (Tex.
2000). A court acting without such power commits fundamental error that we may
review for the first time on appeal. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852
S.W.2d 440, 443–44 (Tex. 1993). In contrast, res judicata and release are
affirmative defenses that must be pleaded and proved. Tex. R. Civ. P. 94. Unlike
subject-matter jurisdiction, res judicata and release are subject to waiver. Here,
neither res judicata nor release was raised in the trial court. Because these defenses
were waived in the trial court, they may not be raised for the first time on appeal.

      Gloria next argues that appellees failed to prove standing or capacity. A
plaintiff must have both standing and capacity to bring suit. Austin Nursing Ctr.,
Inc. v. Lovato, 171 S.W.3d 845, 848 (Tex. 2005). Standing focuses on whether a
party has a sufficient relationship with the lawsuit so as to have a justiciable
interest in the outcome, whereas capacity is a procedural issue addressing the
personal qualifications of a party to litigate. Id.

      With regard to standing, Gloria argues that only Z Ready Mix had legal
standing to bring a breach-of-fiduciary-duty claim against her. Appellees agree,
stating that only Z Ready Mix asserted the claim against Gloria and the jury was
only asked whether Gloria failed to comply with her fiduciary duty to Z Ready
Mix. Gloria further argues that neither Noelia nor Mario had standing or capacity
to sue on behalf of Z Ready Mix. This argument concerning the qualification of
Noelia and Mario to litigate on behalf of Z Ready Mix is a challenge to capacity.
Unlike a challenge to standing, a challenge to capacity must be raised in a verified
answer before the trial court. See Tex. R. Civ. P. 93. Because Gloria did not file a

                                            8
verified answer challenging capacity, this argument has not been preserved for our
review. See Tex. R. App. P. 33.1.

      Finally, Gloria argues that appellees had no right to amend their pleadings
after the settled claims were dismissed. Gloria cites several cases for various
propositions of law in support of this argument. Appellees correctly point out that
none of the cases cited involved the situation when, as here, the court dismissed
claims arising before a certain date while appellants had live counterclaims not
affected by the dismissal and appellees later filed new claims independent of the
claims previously dismissed.

      First, Gloria cites Thomas v. Cook, 350 S.W.3d 382 (Tex. App.—Houston
[14th Dist.] 2011, pet. denied), and General Agents Insurance Company of
America, Inc. v. El Naggar, 340 S.W.3d 552 (Tex. App.—Houston [14th Dist.]
2011, pet. denied), to argue: (1) for a litigant to have standing, a controversy must
exist between the parties at every stage of the legal proceedings; (2) a case is not
ripe when its resolution depends on contingent or hypothetical facts, or upon
events that have not come to pass; and (3) a case becomes moot when it appears
that one seeks to obtain a judgment on some controversy when none exists. In this
case, at the time the settled claims were dismissed, appellants had already asserted
a claim for breach of contract. Because the dismissal order on the settled claims
specifically dismissed only claims asserted prior to June 5, 2015, and appellants’
counterclaim was pending before appellees filed their amended petition, a
controversy existed between the parties at every stage of the legal proceedings. The
parties did not attempt to resolve contingent or hypothetical facts. The parties did
not seek a judgment on a controversy that did not exist.

      Second, Gloria cites Trigg v. Moore, 335 S.W.3d 243 (Tex. App.—Amarillo
2010, pet. denied), Joachim v. Travelers Insurance Company, 279 S.W.3d 812

                                         9
(Tex. App.—Amarillo 2008), rev’d on other grounds, 315 S.W.3d 860 (Tex.
2010), and Rosenthal v. Ottis, 865 S.W.2d 525 (Tex. App.—Corpus Christi 1993,
no pet.), for the proposition that a motion for nonsuit is effective the moment is it
filed; at that instant, the action is extinguished, and only collateral matters or
claims for affirmative relief previously initiated by the opposing party and
independent of the plaintiff’s cause of action remain pending. These cases are
easily distinguished as no nonsuit was filed in the instant case. Moreover, none of
these cases involved any live counterclaim or new claims asserted by the plaintiff.

      Third, Gloria cites Hennigan v. Fast Pace Reporting Service Co., No. 14-00-
01206-CV, 2002 WL 15870 (Tex. App.—Houston [14th Dist.] Jan. 3, 2002, no
pet.) (mem. op., not designated for publication), and United States Fidelity &
Guaranty Company v. Beuhler, 597 S.W.2d 523 (Tex. App.—Beaumont 1980, no
writ), for the proposition that when a plaintiff’s suit has been terminated, either
voluntarily or involuntarily, by formal order of dismissal, the case cannot be
further prosecuted by filing an amended petition. Hennigan does not involve any
amended petition and Gloria concedes “it is true that in Buehler the record did not
show, as in the instant case, that the defendant had live counterclaims yet to be
tried at the time of the dismissal of the plaintiff’s claims.” As such, none of the
case authority relied on by Gloria applies to the facts of this appeal.

      Our own independent review of subject-matter jurisdiction leads us to the
conclusion that the trial court as a court of general jurisdiction had subject-matter
jurisdiction over the breach-of-fiduciary-duty claim. See Dubai Petroleum Co. v.
Kazi, 12 S.W.3d 71, 76–77 (Tex. 2000) (“‘The right of a plaintiff to maintain a
suit, while frequently treated as going to the question of jurisdiction, has been said
to go in reality to the right of the plaintiff to relief rather than to the jurisdiction of
the court to afford it.’” (quoting 21 C.J.S. Courts § 16, at 23 (1990))). We overrule

                                            10
Gloria’s second issue.

C.    Factual sufficiency

      In her sixth and final issue, Gloria argues the evidence presented to the jury
was factually insufficient to support the jury’s finding that Gloria breached her
fiduciary duty or that appellees suffered damages of $467,000. This issue was
preserved in appellants’ motion for new trial.

      In a factual-sufficiency review, we must consider and weigh all of the
evidence to determine whether the evidence is insufficient. See Pool v. Ford Motor
Co., 715 S.W.2d 629, 635 (Tex. 1986). We will set aside the verdict and remand
for a new trial only if we conclude that the verdict is “so against the great weight
and preponderance of the evidence as to be manifestly unjust.” Golden Eagle
Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003) (quoting In re King’s
Estate, 244 S.W.2d 660, 661 (Tex. 1951)).

      Gloria argues that appellees should have been barred from seeking direct
damages at trial because they failed to plead or pray for direct (or general)
damages. Gloria points out that at a pretrial hearing, appellees represented to the
trial court that the damages they would seek at trial amounted to $26,000 plus
attorney’s fees, and Gloria asserts appellees should be bound by that
representation. Neither of these points relates to factual sufficiency, nor was either
preserved in the trial court.

      Regarding the evidence at trial, Gloria asserts that the testimony given by
appellees’ expert witness on damages, Rubik Yeriazarian, was lacking in
foundation and illogical. Gloria complains that Yeriazarian relied on QuickBooks
entries to support damages, while only bank account records would show whether
that money was removed from Z Ready Mix’s bank account or pecuniary harm had

                                         11
occurred. Gloria asserts Yeriazarian’s opinions were conclusory and without
foundation because no witness testified affirmatively that the deleted QuickBooks
entries were ever actually due or owing. Gloria asserts Yeriazarian did not testify
that the QuickBooks entry deletions were improper. Rather, he testified that he did
not know what Gloria “[did] with the money” and would have had to undertake “a
full accounting” to determine what happened. Gloria also asserts there was no
evidence to show that Gloria actually made the QuickBooks entries at issue.

      Gloria further complains that Yeriazarian “did not specify when the entries
regarding any of the alleged payments . . . were made or received.” Gloria
complains that if the relevant timing was before the settlement date, damages
related to amounts before that time “might have been compromised and fully
barred, and thus including them in his damages calculations would completely
invalidate such calculations.”

      Appellees respond that as a corporate officer, Gloria had a formal fiduciary
duty to Z Ready Mix. See Ritchie v. Rupe, 443 S.W.3d 856, 883 (Tex. 2014)
(corporate officers owe fiduciary duties to the corporation). Appellees also point to
testimony supporting the damages award.

      Yeriazarian testified that based on his analysis, approximately $249,000 in
previously-unaccounted-for payments were made from Ready Mix’s bank account
to vendors after Z Ready Mix closed on June 6, 2015. Yeriazarian testified that
credit memos totaling $42,000 were issued to customers after June 6, 2015.
Yeriazarian testified that Z Ready Mix’s QuickBooks audit trail showed that Gloria
had made entries representing $643,000 in payments purportedly made to state
taxing authorities on behalf of Z Ready Mix, but these payments were not actually
made. Yeriazarian added all these amounts for a total of $934,000 and testified that
appellees were owed half of the total amount ($476,000) according to the terms of

                                         12
the settlement agreement. Yeriazarian testified that he did not include transactions
that occurred before the settlement in his damages model.

        Yeriazarian explained he could not do a “full accounting” because Gloria
had deleted most of the documentation for Z Ready Mix. Gloria confirmed in her
testimony that she had destroyed approximately 90 percent of Z Ready Mix’s
invoices.

        Noelia testified that Gloria had improperly issued credit memos for Z Ready
Mix after the settlement. Noelia testified that several customers paid Gloria in cash
after the settlement, but there were no cash deposits in the bank account of Z
Ready Mix. Noelia also testified regarding some of tax payments that were not
made.

        Luis Lopez, a Z Ready Mix customer, testified that although he paid off his
account during the relevant time, the company’s documentation showed he had a
$24,756 balance. Lopez also testified that Gloria had issued his company a credit
memo for debt to Z Ready Mix in exchange for work done for Gloria’s new
concrete company, Solid Rock Ready Mix.

        Weighing all the evidence, we hold that the verdict is not so against the great
weight and preponderance of the evidence as to be manifestly unjust. We cannot
say that the damage award was excessive. Gloria’s sixth issue is overruled.

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                                     IV.      CONCLUSION

      We dismiss Ricardo’s and Solid Rock Ready Mix’s appeal for want of
jurisdiction and affirm the trial court’s final judgment.

                                        /s/     Charles A. Spain
                                                Justice

Panel consists of Justices Wise, Zimmerer, and Spain.

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