David Pollitt v. Computer Comforts, Incorporated ( 2018 )

Opinion issued October 4, 2018
In The
Court of Appeals
For The
First District of Texas
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NO. 01-17-00067-CV
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DAVID POLLITT, Appellant
V.
COMPUTER COMFORTS, INCORPORATED, Appellee
On Appeal from the 212th District Court
Galveston County, Texas
Trial Court Case No. 11-CV-1203
MEMORANDUM OPINION
Appellant David Pollitt appeals from the final judgment rendered against
him on fraud and contract claims. He argues that the judgment violated the one-
satisfaction rule by awarding exemplary damages for the fraud claim and
attorney’s fees for the contract claim. He also contends that postjudgment interest
was erroneously awarded from the date of an earlier judgment that was vacated as
the result of a prior appeal.
We sustain the first issue because the amended judgment improperly awards
attorney’s fees, and we overrule the remaining issue because the amended
judgment properly awarded postjudgment interest from the date of the original
judgment.
We modify the amended judgment to delete the award of attorney’s fees, and
otherwise we affirm.
I. One-satisfaction rule
The factual background of this dispute was described in our opinion in a
prior appeal in this case. See Pollitt v. Computer Comforts, Inc., No. 01-13-00785-
CV, 2014 WL 7474073 (Tex. App.—Houston [1st Dist.] Dec. 30, 2014, no pet.)
(mem. op.) (“Pollitt I”). We take judicial notice of the appellate record in the prior
appeal. See Scott Bader, Inc. v. Sandstone Prods., Inc., 248 S.W.3d 802, 806 n.1
(Tex. App.—Houston [1st Dist.] 2008, no pet.). The result of the first appeal was a
remand “for the fact-finder to determine how much in exemplary damages, if any,
should be awarded against Pollitt individually.” Pollitt I, 2014 WL 7474073, at *4.
On remand, the trial court (with a different judge presiding) requested briefing on
the exemplary-damages issue. The trial-court brief filed by appellee Computer
Comforts, Inc. included evidentiary arguments with citations to the reporter’s
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record from the trial on the merits, and Pollitt’s trial-court brief included a proffer
of the reporter’s record and his evidentiary arguments.
The trial court awarded exemplary damages against Pollitt in the amount of
$20,000. Pollitt objected to the judgment proposed by Computer Comforts, and he
argued based on the one-satisfaction rule that there must be an election of remedy
because the trial court could not award both attorney’s fees for breach of contract
and exemplary damages on the fraud claim. The trial court signed the proposed
judgment, allowing Computer Comforts to recover: actual damages from Pollitt
and the other defendants, jointly and severally, in the amount of $40,000;
exemplary damages from the other defendants in the amount of $40,000;
exemplary damages from Pollitt in the amount of $20,000; and attorney’s fees in
the amount of $11,500 from all defendants, jointly and severally. Pollitt filed a
motion to modify the judgment, again relying upon the one-satisfaction rule, but
the motion was overruled by operation of law.
On appeal, Pollitt continues to argue that the trial court erred in rendering a
judgment against him that includes both an award of attorney’s fees for breach of
contract and exemplary damages for fraud because it violates the one-satisfaction
rule. Pollitt asserts that we should vacate the award of attorney’s fees because the
$20,000 exemplary-damages award affords the greater recovery. Computer
Comforts did not file an appellee’s brief to respond to Pollitt’s arguments.
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The one-satisfaction rule provides that a plaintiff is limited to only one
recovery for any damages suffered because of a single injury. Tony Gullo Motors I,
L.P. v. Chapa, 212 S.W.3d 299, 303 (Tex. 2006); Stewart Title Guar. Co. v.
Sterling, 822 S.W.2d 1, 8 (Tex. 1991); TMRJ Holdings, Inc. v. Inhance Techs.,
LLC, 540 S.W.3d 202, 208 (Tex. App.—Houston [1st Dist.] 2018, no pet.); Pollitt
I, 2014 WL 7474073, at *4 (citing Stewart Title, 822 S.W.2d at 7). “The rule
applies when multiple defendants commit the same act as well as when defendants
commit technically different acts that result in a single injury.” Pollitt I, 2014 WL
7474073, at *4 (citing Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 390 (Tex.
2000)).
A party may seek damages based on alternate theories of liability—as
Computer Comforts did—but it is not entitled to a double recovery for a single
injury. See Waite Hill Servs., Inc. v. World Class Metal Works, Inc., 959 S.W.2d
182, 184 (Tex. 1998); Peterson Grp., Inc. v. PLTQ Lotus Grp., L.P., 417 S.W.3d
46, 63–64 (Tex. App.—Houston [1st Dist.] 2013, pet. denied). When a party pleads
and prevails on alternate theories of liability, “a judgment awarding damages on
each alternate theory may be upheld if the theories depend on separate and distinct
injuries and if separate and distinct damages findings are made as to each theory.”
Pollitt I, 2014 WL 7474073, at *4.
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The one-satisfaction rule further precludes a party from mixing damage
elements from different liability theories to maximize recovery of damages. See
Chapa, 212 S.W.3d at 304; McCullough v. Scarbrough, Medlin & Assocs., 435
S.W.3d 871, 916–17 (Tex. App.—Dallas 2014, pet. denied). Thus, a party who has
suffered a single injury cannot recover exemplary damages under a fraud theory
and also recover attorney’s fees for breach of contract. See, e.g., Win Shields
Prods., Inc. v. Greer, No. 05-16-00274-CV, 2017 WL 2774443, at *5–6 (Tex.
App.—Dallas June 27, 2017, pet. denied) (mem. op.) (applying one-satisfaction
rule to fraudulent-inducement and breach-of-contract claims); McCullough, 435
S.W.3d at 916–17 (applying one-satisfaction rule to alternate liability theories of
breach of contract, fraud, and breach of fiduciary duty); see also Chapa, 212
S.W.3d at 304 (noting that plaintiff could recover attorney’s fees but not
exemplary damages for breach of contract and that plaintiff could recover
exemplary damages but not attorney’s fees for fraud).
When a party does prevail on alternate theories, the party is entitled to elect
recovery on the theory affording the greatest recovery. Chapa, 212 S.W.3d at 304,
314; Madison v. Williamson, 241 S.W.3d 135, 158 (Tex. App.—Houston [1st
Dist.] 2007, pet. denied). If the prevailing party fails to elect between the alternate
theories, the court should render judgment using the findings that afford the
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greatest recovery. McCullough, 435 S.W.3d at 917 (citing Birchfield v. Texarkana
Mem’l Hosp., 747 S.W.2d 361, 367 (Tex. 1987)).
The origin of this dispute was an order placed by the Covington entities to
buy computer furniture from Computer Comforts. After the furniture was
delivered, the Covington entities did not pay. Computer Comforts asserted its
breach-of-contract claim against the defendants, including Pollitt, for failure to pay
for the furniture. Its fraudulent-inducement claim was that the defendants,
including Pollitt, ordered the furniture with no intent to pay for it. Computer
Comforts suffered a single injury—the loss associated with receiving no payment
for the furniture—and there is no argument and no evidence that Computer
Comforts suffered separate and distinct injuries resulting from the alternate
liability theories of fraud and breach of contract. See, e.g., Win Shields, 2017 WL
2774443, at *6; McCullough, 435 S.W.3d at 916–17. Based on the facts of this
case, Computer Comforts cannot recover from Pollitt an award of attorney’s fees
for breach of contract in the amount of $11,500 and exemplary damages for fraud
in the amount of $20,000. The trial court erroneously awarded both of those
damages amounts. We therefore sustain Pollitt’s first issue. Because the $20,000
exemplary-damages award for fraud provides the greater recovery, we reverse the
portion of the amended judgment that awarded attorney’s fees.
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II. Postjudgment interest
The judgment on remand awarded postjudgment interest on “the total
amount of the judgment here rendered” “at the rate of 6% from June 10, 2013 until
paid.” June 10, 2013 was the date of the original judgment. Pollitt asserts in his
second issue that postjudgment interest was erroneously awarded from the date of
the original judgment and that it should be awarded from the date of the amended
judgment.
In the first appeal, after finding error in the original judgment’s award of
exemplary damages against all defendants jointly and severally, this court
remanded the case for a determination of how much in exemplary damages, if any,
should be awarded against Pollitt. As noted above, the trial court corrected its error
in the amended judgment, awarding exemplary damages against Pollitt
individually in the amount of $20,000. Postjudgment interest “accrues during the
period beginning on the date the judgment is rendered and ending on the date the
judgment is satisfied.” TEX. FIN. CODE § 304.005(a). In a recent series of cases, the
Supreme Court of Texas formulated rules for which judgment should be used for
postjudgment-interest accrual when there is more than one judgment as a result of
an appellate-court remand. See Ventling v. Johnson, 466 S.W.3d 143, 149–51 (Tex.
2015); Long v. Castle Tex. Prod. Ltd. P’ship, 426 S.W.3d 73, 77–82 (Tex. 2014);
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Phillips v. Bramlett, 407 S.W.3d 229, 238–43 (Tex. 2013); see also Whittington v.
City of Austin, 456 S.W.3d 692, 707–08 (Tex. App.—Austin 2015, pet. denied).
In Ventling, the Court reiterated the rule that it had formulated in Phillips on
which judgment controls for the purpose of postjudgment-interest accrual, noting
that the answer “depends on whether additional evidence is required on remand.”
Ventling, 466 S.W.3d at 149. “‘[W]hen an appellate court remands a case to the
trial court for entry of judgment consistent with the appellate court’s opinion, and
the trial court is not required to admit new or additional evidence to enter that
judgment . . . the date the trial court entered the original judgment is the ‘date the
judgment is rendered,’ and postjudgment interest begins to accrue . . . as of that
date.’” Id. at 150 (quoting Phillips, 407 S.W.3d at 239).
The trial court did not reopen the record on remand; it did not require or
allow new or additional evidence, and thus it possessed a sufficient record as of the
date of the original judgment to render an accurate judgment. See Long, 426
S.W.3d at 76 (“The rationale behind the postjudgment-interest accrual rule and
exception is that a claimant is entitled to postjudgment interest from the judgment
date once the trial court possesses a sufficient record to render an accurate
judgment.”); Whittington, 456 S.W.3d at 707–08 (concluding that postjudgment
interest properly awarded from original judgment’s date because trial court
disposed of condemnation compensation on remand without considering additional
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evidence or reopening record). Therefore the trial court did not err by awarding
postjudgment interest from the date of the original judgment. We overrule Pollitt’s
second issue.
Conclusion
We modify the amended judgment to delete the $11,500 award of attorney’s
fees to Computer Comforts, and we affirm the amended judgment as modified.
Michael Massengale
Justice
Panel consists of Justices Jennings, Higley, and Massengale.
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