Court Opinion

ID: 9772006
Source: CourtListenerOpinion
Date Created: 2023-08-29 17:04:50.818758+00
Date Added: 2024-06-11T07:31:41.270580
License: Public Domain

ENOCH, Justice,
concurring.
While I agree with all parts of the Court’s opinion, I write separately to express an additional reason for reversal. Because Faircloth is a third party claimant, she has no statutory cause of action based on unfair claim settlement practices. Allstate Ins. Co. v. Watson, 876 S.W.2d 145, 149 (Tex.1994). Therefore, Faircloth must establish a common law fraud in order to recover.
The elements of a common law fraud claim are (1) a material representation, (2) that was false, (3) that the speaker knew was false at the time it was made, (4) that was made with the intention of being acted upon, (6) that the party acted in reliance, and (6) that injury was suffered. Trenholm v. Ratcliff, 646 S.W.2d 927, 930 (Tex.1983). That Transport’s agents may have placed a potential value on Faircloth’s claim above $250,000 and that maybe Transport told Faircloth that the $250,000 was a “great deal, that was — that was really top — or top dollar;” is no evidence of a material representation. Transport, an adverse party in the course of negotiation, had no duty to disclose the maximum amount it would pay to settle this claim any more than Faircloth was required to disclose the lowest amount she was willing to accept. See Mileski v. Dorey, 559 A.2d 339, 340 (Me. 1989) (holding that purchaser who paid more to buy than what seller would have actually sold for has no claim for fraud). Regardless, the dissent concedes that general statements regarding the value of a claim without more are nonactionable puffery. 898 S.W.2d 285; see Pennington v. Singleton, 606 S.W.2d 682, 687 (Tex.1980). Faircloth’s claim fails because she introduced no evidence of a material representation. I agree with the Court’s opinion and for this additional reason concur in the judgment of the Court.
HIGHTOWER, Justice, joined by GAMMAGE, J., concurring in part and dissenting in part.
I join Part I of the Court’s opinion; however, I dissent from Part II.B. because I *281believe that there was enough evidence of fraud to submit this case to a jury.1
The judiciary of this state has been intentionally structured to hinder the rendition of judgments in derogation of a jury’s verdict. The intermediate courts of appeal are entitled to determine whether the jury’s verdict is against the great weight and preponderance of the evidence, but they are not entitled to make a positive finding and render judgment. Under our system, juries find facts. Courts of appeal may only unfind facts and remand to a new jury. See Pool v. Ford Motor Co., 715 S.W.2d 629, 634 (Tex. 1986) (citing Robert W. Calvert, “No Evidence” and “Insufficient Evidence" Points of Error, 38 Tex.L.Rev. 361, 368 (1960); St. John Garwood, The Question of Insufficient Evidence on Appeal, 30 Tex.L.Rev. 803, 813-14 (1952)). This Court’s role is still more limited. We are prohibited from determining whether a finding is against the great weight and preponderance of the evidence because the decision of the court of appeals on questions of fact is conclusive. Tex. Const. Ann. art. 5, § 6 (Vernon 1993). In this case, we are called upon only to determine whether there was such a total absence of evidence that resort to a jury was unnecessary.
In deciding this legal question, our scope of review is severely limited. We may not act as de facto jurors, judicially erasing evidence which we might have discounted had we served as trier of fact. Browning-Ferris, Inc. v. Reyna, 865 S.W.2d 925, 928 (Tex. 1993). The evidence within our scope of review is only the evidence and inferences tending to support the jury’s finding, viewing the evidence most favorably in support of the finding and disregarding all contrary evidence and inferences. Browning-Ferris, 865 S.W.2d at 928; Havner v. E-Z Mart Stores, Inc., 825 S.W.2d 456, 458 (Tex.1992). This scope of review is well settled and the recitation of this standard has not varied. See Cameron v. Terrell & Garrett, Inc., 618 S.W.2d 535 (Tex.1981); Transport Ins. Co. v. Mabra, 487 S.W.2d 704 (Tex.1972); Garza v. Alviar, 395 S.W.2d 821 (Tex.1965); Tudor v. Tudor, 158 Tex. 559, 314 S.W.2d 793 (1958). Though the Court recites these rules, an inspection of its opinion reveals that they have not been applied.
The Court’s opinion proceeds, almost in its entirety, upon the theory that it was Paula, not Transport, who rushed the initial settlement negotiations. The Court’s version of events includes or assumes the following:
⅜ Askins recognized the difficulty of establishing that Paula was Judith Kervin’s heir.
⅜ Askins and Caldwell were concerned that Transport would withdraw its settlement offer if they discovered Paula could not establish heirship.
* Transport’s claims manager thought $250,000.00 was the most realistic estimate of its exposure.
* Testimony concerning Askins’ ability merely indicated a belief that Askins was not among the very best lawyers in the state.
To the extent that there is direct evidence for any of these propositions in the record,2 this evidence impeaches rather than supports the jury’s verdict and is outside our scope of review. To the extent that the Court is drawing inferences from other evidence in the record, their inferences are prohibited by *282our scope of review. We are simply not permitted to consider this evidence.
Our no evidence standard of review is just as severe as our no evidence scope of review. A no evidence point will be sustained only if reasonable minds could not differ that the evidence supporting the jury’s finding lacks probative force. Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.1983). When the evidence offered to prove a vital fact is so weak as to do no more than create a mere surmise or suspicion of its existence, the evidence is no more than a scintilla and, in legal effect, is no evidence. Id.; Joske v. Irvine, 91 Tex. 574, 44 S.W. 1059, 1062 (1898). However, there is some evidence, more than a scintilla, if the evidence furnishes some reasonable basis for differing conclusions by reasonable minds as to the existence of the vital fact. Kindred, 650 S.W.2d at 63. See also Robert W. Calvert, “No Evidence” and “Insufficient Evidence” Points of Error, 38 Tex.L.Rev. 359, 363 (1960).
The vital fact in question here is whether there was an actionable misrepresentation of material fact. Although I might not have found fraud had I been a juror in this case, that is not the question before the Court. The question is whether, under the evidence, reasonable persons could reach differing conclusions about whether or not fraud occurred. Thus, the legal definition of fraud is in play. While I would agree that representations made during a settlement negotiation concerning the value of an unliquidated claim, without more, would generally constitute mere puffery, that is not the case we have before us.
An expression of opinion may constitute fraud when the speaker purports to have special knowledge. Trenholm v. Ratcliff, 646 S.W.2d 927, 930 (Tex.1983). Further, when one relies upon the supposed superior knowledge and experience of another and on his statement that it is unnecessary or inadvisable for him to consult a lawyer, what would otherwise be a mistaken expression of legal opinion can become fraudulent statement of fact. Safety Cas. Co. v. McGee, 133 Tex. 233, 127 S.W.2d 176 (1939). Simply stated, opinion is actionable if a defendant makes use of artifice or trickery to prevent further investigation, and so deprives the plaintiff of other sources of information. See William L. Pros-ser, Handbook of The Law of Torts § 109, p. 727 (4th ed. 1971).
There is testimony that Transport’s agents represented the maximum value of Paula’s claim to be less than it was and further represented that she would get nothing at all if she delayed settlement or submitted her claim to a jury.3 There is evidence that at or *283near the time of the representations, Transport’s own attorneys evaluated the claim at twice the value represented to be the maximum by Transport’s agents.4 The claims file specifically reveals a recognition that Allied’s driver may have been grossly negligent,5 and manifests an intent to rush the settlement and maintain control of the negotiations.6 There is evidence that Transport’s agents encouraged Paula to stick with Mr. Askins and promoted his supposed abilities.7 There is further evidence that while Transport engaged in this effort to encourage employment of Askins, they did not consider him to be an outstanding attorney8 and recognized that the settlement value of Paula’s claim would rise and fall with Askins’ level of competence.9 Further, there is evidence that while *284Transport encouraged Paula to use Askins and settle immediately, it recognized that Askins had not discovered the punitive damages potential of Paula’s claim.10 While I do not attempt any definitive declaration concerning the actual abilities of Paula’s attorney, there is enough evidence to infer (in favor of the verdict) that Transport would not have retained Askins to represent it at the time that it was recommending that Paula follow exactly that course. While I do not believe that an insurer bears a general burden to see that its adversaries are adequately represented, it certainly has no privilege to make representations aimed at preventing it.
In Safety Cas. Co. v. McGee, 133 Tex. 233, 127 S.W.2d 176 (1939), this Court found actionable fraud based upon representations (much like Paula received) that the settlement was the maximum amount of compensation to which the plaintiff was entitled. In attempting to distinguish McGee, the Court advances a distinction without a difference. The Court argues that McGee is a workers’ compensation claim, meaning the value of Mr. McGee’s right to sue was ascertainable by a concrete, statutory standard and the representations were therefore different from those involved in this case. 898 S.W.2d at 277-78. Whether or not this is true, this is not the basis upon which the McGee court acted and the Court misapprehends the holding in that case.
McGee recognized the general rule that representations concerning matters of law are not actionable because everyone is presumed to know the law. McGee, 127 S.W.2d at 177. However, the court, quoting authority from as early as 1867, noted that “so harsh a rule, founded upon a presumption so arbitrary, ought to be modified in its application by every exception which can be admitted without defeating its policy.” Id. (emphasis added). The Court resorted to the exception from the general rule for situations “where one who himself knows the law deceives another by misrepresenting the law to him, or knowing him to be ignorant of it, takes advantage of him through such ignorance, or where the person to whom the representations are made relies upon the supposed superior knowledge and experience of the other party and on his statement that it is unnecessary or inadvisable for him to consult a lawyer.” Id. 127 S.W.2d at 178. In judging the comparative levels of knowledge of the parties, McGee recognized that “in each case of fraud dependence must be had upon the special circumstances surrounding it, and no definite rule can be laid down as to what degree of ignorance or condition of mind will vitiate it.” Id. 127 S.W.2d at 180. McGee granted relief based upon the disparity of knowledge between an experienced adjustor and a high school and college educated plaintiff. It did so based on representations which this educated party might have veri*285fied by resort to the statute. This Court refuses to allow the jury to consider Paula’s claim, based on difficult to verify representations, even though this case involves the disparity in knowledge between the adjustors and a 15 year old girl. It does so in the face of evidence that Transport discouraged competent investigation of its difficult to verify statements. The facts may be distinguishable but the rule of law is not.
It is true that none of the defendants withered under cross examination and admitted that they intended to defraud Paula. That type of proof is seldom available. Even so, any ultimate fact may be proven by circumstantial evidence. Our own precedents recognize that any claim of fraud will almost necessarily depend upon circumstantial evidence. See Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 435 (Tex.1986). Our fraud jurisprudence allows us to make reasonable inferences from circumstantial evidence; no evidence review requires it. The adjudicators who came before us, either with knowledge of the law or with proper instructions upon it, found the taint of fraud in this disputed transaction. This court now pronounces that no reasonable person could peruse this evidence and come to any conclusion but that fraudulent misrepresentation did not occur. The law does not require (and does not allow) such a conclusion.
The court’s opinion purports to hold that under traditional tort jurisprudence and under the application of the traditional standards of review, there is no evidence of fraud. I believe the Court has improperly defined fraud, and I believe it has improperly applied no evidence review to its faulty definition. I believe the general law of torts would allow recovery based upon misrepresentations of value where there is both a gross disparity of knowledge and where the defendant, through artifice or trickery, has attempted to limit the plaintiffs sources of information. Reasonable persons could (and reasonable persons have) come to differing conclusions under the evidence in this record, and we are simply not entitled to rely upon evidence and inferences in derogation of the verdict to dilute the evidence upon which the finder of fact was entitled to rely. Therefore, I dissent.

. In this dissent I choose to focus on the manner in which the Court improperly applies "no evidence" review to the elements of fraud. I choose not to discuss (except to point out) the Court’s dicta that evidence of Paula’s parentage was "unquestionably relevant” while conceding that the admissibility of the evidence was neither in play nor determinative of the outcome of this appeal. In addition, I would point out that while many of the "laundry list” provisions in section 17.46(b) concern "goods," "services,” and "consumers," some do not. See, e.g., Tex.Bus. & Com.Code Ann. § 17.46(b)(12) (Vernon Supp.1995) (“representing that an agreement confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law”). The only "laundry list" violation submitted to and found by the jury in this case provides no remedy for one in Paula’s position. The Court does not pass upon the question of whether one in Paula's position could proceed under section 17.46(b)(12).

. Much of this evidence is contained in Transport’s bills of review and was not even heard by the finder of fact.

. The participants in the May 21 settlement meeting were Jones (of Lindsey and Newsome), Maneval (of Transport), Caldwell and Askins.
Q: Who all was talking Paula?
A: Like I say, Mr. Caldwell, Mike Askins, Janet Jones from the insurance company. Like I said, I believe that there was somebody else with Janet Jones. They were like a pair. I vaguely remember somebody — in fact, what I remember is like somebody said, there in a dark suit.
Jones, the adjustor, identified this "dark suit” as Maneval.
Q: On Monday following this collision — I think that's the 21st, is that our memory?
A: Yes, sir.
Q: And you’ve looked back on your notes?
A: Yes, I have.
Q: And your notes show that you went into the home of Rev. Caldwell on the 21st?
A: That's correct.
Q: With Mark Maneval?
A: Correct.
Paula's testimony and the reasonable inferences from it support the proposition that all of the participants in the meeting tried to pressure her to take the offer of settlement quickly because the offer was the maximum amount she could get for her claim, and she would get nothing at all if she delayed or submitted it to a jury. Paula testified:
Q: Were all these people talking? Not at the same time, but were all of them participating in the conversation; or was there just one that was the spokesperson?
A: They were all participating in the conversation.
Q: From their participation in the conversation, from the information they communicated to you and what they said, what impressions did you draw or form from what they were telling you?
sfc ⅜ sjs ⅜: ⅜ sfc
A: They were giving me impressions that I could possibly get a settlement out of this, but I had to settle quickly. I had to use Mike Askins as my attorney; and that if I didn't go ahead and settle quickly, that it would possi*283bly go to court. And if it would go to court, I wouldn’t get anything.
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Q: Were you led to believe that you had any choice about it?
A: No, sir, I wasn’t.

. Quoting from Plaintiff's Exhibit 3, an enlarged memorandum to the claims file:
Beaumont counsel initially evaluated the case at up to $500K possibly higher while Houston Counsel felt comfortable at $350-400K; Houston venue much more conservative than Beaumont.

. Quoting from Plaintiff’s exhibit 2, also an enlarged memorandum to the claims file:
We’re concerned our driver may have pulled out to pass his preceding co. employee, realized there wasn't adequate distance braked and then jackknifed. This, if a plaintiff (abbreviated) could prove, constitutes possibly gross negligence and opens the door for punitive. Claimant (abbreviated) attorney (abbreviated) hasn’t mentioned this so far.

. Also quoting from plaintiff's exhibit 3:
Paula's demand is tenuous since it is predicated on settling and Court approval before one of her brothers contests guardianship which is now being threatened. They see a chance to capitalize and turn an astronomical settlement for themselves.
⅜ sfc Ht ⅜: sjs ⅝
Please call time of essence. I would settle now for 250,000. Preacher has temporary guardianship.
Concerning the meeting on the 21st, Janet Jones testified:
Q: During your visit in the home of Rev. Caldwell on the 21st, am I correct that Dell Jackson came into the home?
A: Yes, he did.
Q: Am I correct that your notes reflect that during that visit, you discussed legal handling?
A: Yes, I did.
Q: Am I correct that your notes regarding that meeting said "Maintain control”?
A: Yes, it did.
In addition, Jones read a portion of her notes into the record which said: "Get it done as fast as possible. Settlement figures on the low side."

. Paula's step-brother testified:
Q: Did you hear any conversations, Dell, between the people that you've identified that were talking to Paula about the settlement of her claim resulting from the tragedy that caused you to be there in the first instance as to who she should hire as a lawyer and why?
A: Yes, sir. They asked all of us, really go with Mike Askins because he was already familiarized with the case, he knew what was going on, and that he at some time or another had been an adjustor for Allied.
* * * * * *
Q: From what you heard, did you get the impression that you had — that Paula and you would be better off and have a better chance of a good settlement if you hired Mr. Askins?
A: Yes, sir.
Q: And at the table, as far as the people that were doing the talking, was Janet Jones participating in these conversations?
A: Yes, Sir.
Q: Did Janet Jones acknowledge and give verification and her blessing to what you just said, that you overheard?
A: Yes, sir.
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Q: Do you feel that Paula got the impression that these folks were concerned and were trying to do what was in her best interests?
A: Yes, sir.
Q: Do you feel that they were trying to make her believe that?
A: Yes, sir, I do.

. Mike Roggen, One of Transport’s managers, testified:
Q: ... What I’m getting at, you did not view Mr. Askins, whether you were putting that factor in the computer, your mental computer of evaluation — you did not evaluate Mr. Askins as being the experienced top gun type trial lawyer that you would have somebody else that had a reputation?
A: That’s true.

. Mike Roggen further testified:
Q: You’re giving me a little laundry list of things that you put into the formula arriving at a fair evaluation of what a claim ought to be settled for.... You would size up the beneficiary or the plaintiff, in this case a 15-year-old little girl who was well liked and well respected, who had nobody but the de*284ceased to care for her. Then you would look at another factor as to the quality or competency of the lawyer representing Paula Trip-pel. That was one of the things you said you’d look at. Now, why would that go into the factor?
A: Simply because various attorneys, Jefferson City, Houston, Michigan, all over the country, have reputations of being outstandingly aggressive, successful, and are in the media often. And they can distinctly affect the value of the claim.
Q: Well, they would make the value go up.
A: That’s right.
Q: All right. So, therefore, in order to be fair and to make certain that you deal fairly and offer the claimant a fair sum of money if that person is not represented by a hot rodder or somebody that's got a big reputation, someone that's only tried two personal injury cases to a verdict in his entire life, is not recognized in a degree of competency by either State Bar certification or otherwise, then you'd want to take that into consideration and before you made a claim offer, wouldn’t you?
A: It would be a factor among the numerous on my little laundry list you referred to, yes.
⅝ ⅜ * ⅜ ⅜ ⅜
Q: It's a lot easier to cut a deal that may not be as fair as it should be to an injured party if they're represented by a person that's not experienced in personal injury or wrongful death law, Yes, sir?
A: That's a fair assumption, yes.

. Quoting again from Plaintiff's exhibit 2:
We’re concerned our driver may have pulled out to pass his preceding co. employee, realized there wasn’t adequate distance braked and then jackknifed. This, if a plaintiff (abbreviated) could prove, constitutes possibly gross negligence and opens the door for punitive. Claimant (abbreviated) attorney (abbreviated) hasn't mentioned this so far.